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U.S. FEDERAL RESERVE STRUGGLES TO REVIVE ECON GROWTH

Posted by Gilmour Poincaree on January 28, 2009

Thursday, January 29, 2009

Agence France-Presse

PUBLISHED BY ‘THE MANILA TIMES’ (Philippines)

WASHINGTON, D.C.: The US Federal Reserve wraps up a two-day policy meeting Wednesday focused on new tools to revive a moribund economy that has so far failed to respond to its zero-interest rate policy.

The Federal Open Market Committee (FOMC) meeting was being held six weeks after the central bank slashed its base-lending rate to a range of zero to 0.25 percent and predicted “exceptionally low” rates to persist.

An announcement was due around 1915 GMT Wednesday.

Joseph Balestrino at Federated Investors said he expected some clues from the Fed on additional efforts to get credit flowing in the economy.

“There’s not much more the central bank can do on the monetary policy front after having lowered its target federal funds rate to a record low,” he said.

“What may be worth noting is the language the Fed uses to describe the state of an economy that, since the two-day meeting that ended December 16, appears to have worsened on most every front.”

Balestrino said Fed chairman Ben Bernanke and his colleagues “are likely to be more explicit about their plans for quantitative easing—that is, using measures such as direct injections into banks and purchases of debt securities to pump more capital into ailing institutions and the markets.”

Sacha Tihanyi, analyst at Scotia Capital, said the market expects the Fed to take further action to help fire up growth.

“With rates going nowhere for some time, the market’s focus will be on whether the Fed will be looking to buy government—or corporate—securities in the near future,” Tihanyi said.

“This is a highly controversial step and some see this as somewhat of a high-risk policy but on the other hand, it is one of the few avenues the Fed has left open to it with regard to further easing monetary conditions.”

Despite the zero-rate policy, Bernanke and others have repeatedly said the central bank is not out of ammunition to fight the crisis. But Bernanke avoided the use of the term “quantitative easing,” saying the Fed has engaged in what he called “credit easing” to spur more lending activity.

The Fed “has already done a lot and will continue to do a lot” in addition to moving on interest rates, said Nariman Behravesh, chief economist at IHS Global Insight.

The central bank has already offered exceptional aid to banks and other firms, and has been buying up mortgage-backed bonds and commercial paper to help unfreeze credit in those areas.

Analysts say this has helped somewhat but that credit markets remain under stress, with lenders and consumers skittish about taking on new risks.

Morgan Stanley economist Ted Wieseman said he expected nothing dramatic from the Fed meeting.

“Obviously rates have already been cut about as low as they can go,” he said.

“If long-end [Treasury bond] yields continue surging higher, the Fed will undoubtedly eventually step in and start buying, but such an announcement probably wouldn’t come in an FOMC statement.”

Economist Joseph LaVorgna at Deutsche Bank said the Fed might not yet be ready for direct purchases of US Treasuries.

“Even though we believe the Fed will eventually be forced to purchase Treasuries in an attempt to cap their yields we do not believe the Fed is going to announce those intentions today,” he said.

He said some members might be uncomfortable with what could be seen as a drastic step.

“Rather, we expect the Fed to repeat the ‘committee is evaluating the potential benefits of purchasing longer-term Treasury securities.’”

Scott Brown, chief economist at Raymond James & Associates, said each word of the Fed statement would be weighed and parsed carefully.

“The wording of the policy statement will signal future intentions,” he said.

“In each statement, the Fed describes its economic outlook. A darkening in that outlook would likely mean that further stimulus efforts are coming. A brighter outlook would suggest that policy will become less accommodative.”

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PUBLISHED BY ‘THE MANILA TIMES’ (Philippines)

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Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, CENTRAL BANKS, COMMERCE, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, MACROECONOMY, NATIONAL DEBT - USA, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF PRIVATE COMPANIES, RESTRUCTURING OF THE PUBLIC SECTOR, STATE TARIFFS, THE FLOW OF INVESTMENTS, THE WORK MARKET, THE WORKING ENVIRONMENT, TRADE DEFICIT - USA, USA | Leave a Comment »

U.S. BUSINESS CLIMATE WORST IN 27 YRS

Posted by Gilmour Poincaree on January 26, 2009

13:17:00 01/26/2009

by Lucia Mutikani – Reuters

PUBLISHED BY ‘THE PHILIPPINE DAILY INQUIRER’

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PUBLISHED BY ‘THE PHILIPPINE DAILY INQUIRER’

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, CRIMINAL ACTIVITIES, CRIMINAL FOREIGN POLICIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SCAMS, FOREIGN POLICIES - USA, FRAUD, HEALTH CARE - USA, HOUSING CRISIS - USA, HUMAN RIGHTS, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL RELATIONS, MACROECONOMY, NATIONAL DEBT - USA, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF PRIVATE COMPANIES, RESTRUCTURING OF THE PUBLIC SECTOR, STATE TERRORISM, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE ISRAELI-PALESTINIAN STRUGGLE, THE OCCUPATION WAR IN IRAQ, TRADE DEFICIT - USA, UNEMPLOYMENT, USA, WAR CRIMES, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

ANALYSIS: HARD TIMES HELP GEITHNER’S TREASURY BID

Posted by Gilmour Poincaree on January 25, 2009

Sunday January 25, 2009

Associated Press

PUBLISHED BY ‘THE STAR’ (Malaysia)

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PUBLISHED BY ‘THE STAR’ (Malaysia)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, FOREIGN POLICIES - USA, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL RELATIONS, MACROECONOMY, NATIONAL DEBT - USA, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF PRIVATE COMPANIES, RESTRUCTURING OF THE PUBLIC SECTOR, THE FLOW OF INVESTMENTS, THE ISRAELI-PALESTINIAN STRUGGLE, THE OCCUPATION WAR IN IRAQ, THE PRESIDENCY - USA, THE WORK MARKET, TRADE DEFICIT - USA, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

WALL ST. SINKS ON OBAMA INAUGURATION DAY

Posted by Gilmour Poincaree on January 21, 2009

Wednesday, 21 Jan, 2009 – 05:53 AM PST

Agence France-Presse

PUBLISHED BY ‘DAWN’ (Pakistan)

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PUBLISHED BY ‘DAWN’ (Pakistan)

Posted in AL QAEDA, BANKING SYSTEM - USA, BANKRUPTCIES - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, HEALTH CARE - USA, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, NATIONAL DEBT - USA, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE ISRAELI-PALESTINIAN STRUGGLE, THE OCCUPATION WAR IN IRAQ, THE PRESIDENCY - USA, TRADE DEFICIT - USA, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

THE NUMBERS ARE HORRIFYING (USA)

Posted by Gilmour Poincaree on January 20, 2009

Jan. 26, 2009

Mohamed A. El-Erian

PUBLISHED BY ‘NEWSWEEK’ – print edition -(USA)

NEWSWEEK – Jan. 26, 2009

GLOBAL INVESTOR

By Mohamed A. El-Erian

THE NUMBERS ARE HORRIFYING

On Tuesday, President-elect Barack Obama inherits an economic calamity, and the situation will get worse in the first few months of his presidency regardless of what he does. How quickly it improves thereafter is not just a matter of which policies he decides to pursue; importantly, it is also a function of how he pursues them. Investors need to pay close attention lest they experience yet another challenging and, in some cases, devastating year.

No one should doubt that we are still in the midst of a historic economic crisis. Having incurred massive losses, individuals and companies around the world are, not surprisingly, saving more—some by choice as they attempt to restore balance to their finances and others by necessity as their credit lines are cut by beleaguered lenders. As detailed elsewhere in this edition of NEWSWEEK, the world has entered an Age of Thrift. Less spending by individuals will mean even lower demand, and the production of goods and services will be cut, again.

The latest economic data vividly illustrate the self-fulfilling nature of this global phenomenon. The numbers are horrifying, and increasingly so. There’s been a violent collapse in industrial production in Europe; the latest monthly data now show annual contractions of 17 percent in Spain, 13 percent in the U.K., 9 percent in France and Italy, and 6 percent in Germany. Emerging economies are now on the same course, with contractions of 9 percent in Russia and 4 percent in Brazil.

At the same time, the labor market is deteriorating dramatically in both Europe and America. The United States has now registered 12 consecutive months of job losses, including more than half a million in December, bringing the 2008 total to 2.6 million—a level not seen for more than 60 years. The crisis continues to catch people by surprise, suggesting that too few people sufficiently understand its dynamics. The U.S. Commerce Department reports that December retail sales declined at more than twice the rate expected by most forecasters, and further extended the record for consecutive monthly declines, now six .and counting. President elect Obama faces the prospect of more corporate defaults, pension losses and personal bankruptcies in the coming months. Fortunately, he has already shown that he has a good understanding of the need for an aggressive fiscal stimulus, and Congress seems to be onboard.

Without massive public stimulus, there is little chance of countering the highly disruptive consequences of a too sudden and too prolonged ascent of the Age of Thrift.

Yet there is a risk that this consensus could break down in quibbling over the details. Specifically, we should stop the bickering over whether to cut taxes or raise spending. Both are required. The tax cuts should work mainly through employment channels, including a cut in the payroll tax as this will directly help employment and limit the fall in consumption. Government spending should focus on sectors that will quickly raise resource productivity, like infrastructure, which helps lower production costs, and social services, which raise human productivity overtime.

Obama also needs to step up efforts to alleviate the credit crunch. This is not about an immediate recovery in the banking system. It won’t happen. The sector is too damaged to act as a conduit of funds to the general economy. Instead, the government must come up with more imaginative ways to provide direct financing, particularly for mortgages and some areas of consumer finance.

Obama’s economic appointments suggest that he understands how important it will be to get the design and implementation of these policies right. The highly capable Larry Summers and Tim Geithner should focus on coming up with a master plan to lead the country out of the crisis. This will ensure that the immediate measures implemented are consistent over time with a resumption of economic growth and rising productivity.

Managing expectations is also more important than ever. In his remarks on the financial crisis in November and December, Obama came across as informed, committed and careful not to over-promise. Yet his efforts have been largely negated by recent talk out of Washington of regulatory clampdowns, potential abrogation of property rights and other non-market solutions. The president-elect will have to step up quickly to the challenge of consistently better communication if he is to instill the confidence that is critical for a meaningful economic turn later this year.

Finally, Obama should signal clearly that he knows a global dislocation requires a global response. What was a U.S. financial crisis has morphed into a challenge to the international market system. An effective solution will not materialize unless the United States takes a policy leadership role on the global stage. It’s a role no other country can credibly play. With Obama as president, the world is exceptionally welcoming to U.S. leadership. He must seize this opportunity for the economic good of America, and the world.

ELERIAN is CEO and co-CIO of PIMCO and author of “When Markets Collide: Investment Strategies for the Age of Global Economic Change,” winner of the 2008 FT/Goldman Sachs business book of the year award.

PUBLISHED BY ‘NEWSWEEK’ – print edition -(USA)

Posted in AGRICULTURE, BANKING SYSTEM - USA, BANKRUPTCIES - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FARMING SUBSIDIES, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES - USA, HEALTH CARE - USA, HOUSING CRISIS - USA, HUMAN RIGHTS, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL RELATIONS, MACROECONOMY, NATIONAL DEBT - USA, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF PRIVATE COMPANIES, RESTRUCTURING OF THE PUBLIC SECTOR, STATE TARIFFS, THE FLOW OF INVESTMENTS, THE ISRAELI-PALESTINIAN STRUGGLE, THE OCCUPATION WAR IN IRAQ, THE PRESIDENCY - USA, TRADE DEFICIT - USA, UNEMPLOYMENT, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

A FABLE IN THE FOLLY – AS A LEADER SEEKS TO BECOME A LEGEND – AS A CARD-CARRYING MEMBER OF THE VAST RIGHT-WING CONSPIRACY, I HAVE A SPECIAL INAUGURATION DAY MESSAGE FOR MY FELLOW CONSERVATIVES: SHUT UP

Posted by Gilmour Poincaree on January 20, 2009

Tuesday, January 20, 2009

by Michael Graham

PUBLISHED BY ‘THE BOSTON HERALD’ (USA)

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PUBLISHED BY ‘THE BOSTON HERALD’ (USA)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES - USA, HEALTH CARE - USA, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, MACROECONOMY, NATIONAL DEBT - USA, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF PRIVATE COMPANIES, RESTRUCTURING OF THE PUBLIC SECTOR, STATE TARIFFS, THE FLOW OF INVESTMENTS, THE PRESIDENCY - USA, THE WORK MARKET, TRADE DEFICIT - USA, UNEMPLOYMENT, USA, USA HUMOR | Leave a Comment »

ISSUES CANNOT BE RESOLVED IMMEDIATELY: OBAMA (USA)

Posted by Gilmour Poincaree on January 19, 2009

0600 PST, Monday, January 19, 2009

The International News

PUBLISHED BY ‘THE INTERNATIONAL NEWS’ (Pakistan)

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PUBLISHED BY ‘THE INTERNATIONAL NEWS’ (Pakistan)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, CRIMINAL FOREIGN POLICIES, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENVIRONMENT, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SCAMS, FOREIGN POLICIES - USA, FRAUD, HATE MONGERING AND BIGOTRY, HEALTH CARE - USA, HOUSING CRISIS - USA, HUMAN RIGHTS, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL RELATIONS, MACROECONOMY, NATIONAL DEBT - USA, PENSION FUNDS, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF THE PUBLIC SECTOR, STATE TERRORISM, THE FLOW OF INVESTMENTS, THE ISRAELI-PALESTINIAN STRUGGLE, THE OCCUPATION WAR IN IRAQ, THE PRESIDENCY - USA, THE WORK MARKET, THE WORKERS, TRADE DEFICIT - USA, UNEMPLOYMENT, USA, WAR CRIMES, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

REPUBLICANS BEND RULES TO MAKE SURE OTHERS CAN’T – SEEN BIG FOOT LATELY? THEN YOU’VE PROBABLY SEEN AN UNDOCUMENTED WORKER USING A FAKE ID TO VOTE (USA)

Posted by Gilmour Poincaree on January 18, 2009

Sunday, January 18, 2009

by John Kelso – American-Statesman Staff

PUBLISHED BY ‘THE AUSTIN AMERICAN-STATESMAN’ (USA)

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PUBLISHED BY ‘THE AUSTIN AMERICAN-STATESMAN’ (USA)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, NATIONAL DEBT - USA, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF THE PUBLIC SECTOR, STATE TARIFFS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, TRADE DEFICIT - USA, USA, USA HUMOR | Leave a Comment »

THE BUSH LEGACY OUT OF AMERICA: AS BARACK OBAMA PREPARES FOR THE WHITE HOUSE, A REVIEW OF HIS PREDECESSOR’S EIGHT YEARS IN POWER SHOWS HE WAS THE LEAST SUCCESSFUL PRESIDENT EVER. HOW DID IT GO SO WRONG?

Posted by Gilmour Poincaree on January 12, 2009

Sunday, 11 January 2009

by Rupert Cornwell

PUBLISHED BY ‘THE INDEPENDENT’ (UK)

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PUBLISHED BY ‘THE INDEPENDENT’ (UK)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, CRIMINAL ACTIVITIES, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES - USA, HATE MONGERING AND BIGOTRY, HEALTH CARE - USA, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL RELATIONS, JUDICIARY SYSTEMS, NATIONAL DEBT - USA, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF THE PUBLIC SECTOR, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE ISRAELI-PALESTINIAN STRUGGLE, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE OCCUPATION WAR IN IRAQ, THE WORK MARKET, THE WORKERS, TRADE DEFICIT - USA, UNEMPLOYMENT, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

2009 BUDGET DEFICIT IS ESTIMATED AT $1.2 TRILLION (USA)

Posted by Gilmour Poincaree on January 8, 2009

January 7, 2009

by Andrew Taylor – Associated Press Writer

PUBLISHED BY ‘THE BOSTON GLOBE’ (USA)

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PUBLISHED BY ‘THE BOSTON GLOBE’ (USA)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, MACROECONOMY, NATIONAL DEBT - USA, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF THE PUBLIC SECTOR, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, TRADE DEFICIT - USA, USA | Leave a Comment »

FIGHTING OFF DEPRESSION (USA)

Posted by Gilmour Poincaree on January 6, 2009

January 5, 2009

by Paul Krugman

PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (UK)

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PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (UK)

Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, BANKRUPTCIES - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, DEPRESSION, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, HEALTH CARE - USA, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, NATIONAL DEBT - USA, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF PRIVATE COMPANIES, RESTRUCTURING OF THE PUBLIC SECTOR, STATE TARIFFS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, THE WORK MARKET, TRADE DEFICIT - USA, USA | Leave a Comment »

HARSH DOSE OF REALITY TO HIT AMERICA AFTER INAUGURATION

Posted by Gilmour Poincaree on January 2, 2009

January 3, 2009

Ian Munro in New York

PUBLISHED BY ‘THE SIDNEY MORNING HERALD’

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PUBLISHED BY ‘THE SIDNEY MORNING HERALD’

Posted in AGRICULTURE, AL QAEDA, BANKING SYSTEM - USA, BANKING SYSTEMS, BANKRUPTCIES - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CENTRAL BANKS, COMMERCE, DEFENCE TREATIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, EDUCATION, ELECTIONS 2008 - USA, ENVIRONMENT, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES - USA, HEALTH CARE - USA, HISTORY, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INDUSTRIES - USA, INTERNATIONAL RELATIONS, MACROECONOMY, NATIONAL DEBT - USA, NATO, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF THE PUBLIC SECTOR, STATE TARIFFS, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE OCCUPATION WAR IN IRAQ, THE PRESIDENCY - USA, THE UNITED NATIONS, THE WORK MARKET, THE WORKERS, TRADE DEFICIT - USA, UNEMPLOYMENT, USA, WAR IN AFGHANISTAN | 1 Comment »

ANALYSTS’ FORECASTS RANGE FROM GLOOM TO DOOM – ECONOMISTS FIND FEW OPTIMISTIC SIGNS FOR NEW YEAR

Posted by Gilmour Poincaree on January 2, 2009

December 31, 2008

by Eric Beauchesne – The Ottawa Citizen

PUBLISHED BY ‘THE OTTAWA CITIZEN’ (Canada)

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PUBLISHED BY ‘THE OTTAWA CITIZEN’ (Canada)

Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, BANKRUPTCIES - USA, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, FOREIGN WORK FORCE - LEGAL, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INDUSTRIES - USA, INTERNATIONAL, MACROECONOMY, NATIONAL DEBT - USA, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, THE WORK MARKET, THE WORKERS, TRADE DEFICIT - USA, UNEMPLOYMENT, USA | Leave a Comment »

VIACOM AND TIME WARNER REACH DEAL TO AVOID BLACKOUT

Posted by Gilmour Poincaree on January 2, 2009

Thu Jan 1, 2009 7:38am ET

by Paul Thomasch and Yinka Adegoke – Editing by Peter Cooney – Reuters

PUBLISHED BY ‘REUTERS’

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PUBLISHED BY ‘REUTERS’

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, COMMUNICATION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENTERTAINMENT INDUSTRIES, ENTERTAINMENT INDUSTRY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INDUSTRIES - USA, NATIONAL DEBT - USA, RECESSION, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, TRADE DEFICIT - USA, USA | Leave a Comment »

ADD UP THE DAMAGE – DOES ANYONE KNOW WHERE GEORGE W. BUSH IS?

Posted by Gilmour Poincaree on January 2, 2009

December 29, 2008

by Bob Herbert – Op-Ed Columnist – The New York Times

PUBLISHED BY ‘THE NEW YORK TIMES’ (USA)

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PUBLISHED BY ‘THE NEW YORK TIMES’ (USA)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, CENTRAL BANKS, CRIMINAL ACTIVITIES, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL SCAMS, FOREIGN DEBTS, FOREIGN WORK FORCE - LEGAL, FRAUD, HATE MONGERING AND BIGOTRY, HEALTH CARE - USA, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, NATIONAL DEBT - USA, NATIONAL WORK FORCES, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, THE WORK MARKET, TRADE DEFICIT - USA, UNEMPLOYMENT, USA | Leave a Comment »

SANCTIONS DON’T STOP HEWLETT-PACKARD FROM SELLING IN IRAN

Posted by Gilmour Poincaree on December 31, 2008

December 29, 2008

by Farah Stockman – The Boston Globe

PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (USA)

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PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (USA)

Posted in BANKRUPTCIES - USA, COMMERCE, COMMODITIES MARKET, DIGITAL INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ELECTRIC / ELECTRONIC INDUSTRIES, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, FOREIGN POLICIES, FOREIGN POLICIES - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, IRAN, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, TRADE DEFICIT - USA, USA | Leave a Comment »

POTENTIAL COLLAPSE OF US AUTOMAKERS CAPS TURBULENT YEAR

Posted by Gilmour Poincaree on December 29, 2008

Monday, December 29, 2008

Agence France-Presse

PUBLISHED BY ‘THE MANILA TIMES’ (Philippines)

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PUBLISHED BY ‘THE MANILA TIMES’ (Philippines)

Posted in AUTOMOTIVE INDUSTRY, BANKING SYSTEM - USA, BANKRUPTCIES - USA, CENTRAL BANKS, DEPRESSION, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SCAMS, FOREIGN WORK FORCE - LEGAL, FRAUD, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, NATIONAL DEBT - USA, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF PRIVATE COMPANIES, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, TRADE DEFICIT - USA, UNEMPLOYMENT, USA | Leave a Comment »

TOLEDO’S JOBLESS RATE IS TOPS AMONG OHIO BIG CITIES (USA)

Posted by Gilmour Poincaree on December 27, 2008

Wednesday, December 24, 2008

by Larry P. Vellequette – Blade Business Writer

PUBLISHED BY ‘THE TOLEDO BLADE’ (USA)

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PUBLISHED BY ‘THE TOLEDO BLADE’ (USA)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FOREIGN WORK FORCE - LEGAL, INDUSTRIAL PRODUCTION - USA, NATIONAL DEBT - USA, NATIONAL WORK FORCES, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, TRADE DEFICIT - USA, UNEMPLOYMENT, USA | Leave a Comment »

CAPITALISM FAILED? OR DID WE FAIL CAPITALISM? (wagging a middle finger at us)

Posted by Gilmour Poincaree on December 27, 2008

Dec. 25, 2008 – 6:21PM

by Loren Steffy – Houston Chronicle

PUBLISHED BY ‘THE HOUSTON CHRONICLE’ (USA)

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PUBLISHED BY ‘THE HOUSTON CHRONICLE’ (USA)

Posted in AL QAEDA, BANKING SYSTEM - USA, BANKING SYSTEMS, BANKRUPTCIES - USA, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, EMPLOYMENT, ENERGY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HEALTH CARE - USA, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INDUSTRIES - USA, NATIONAL DEBT - USA, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF PRIVATE COMPANIES, STOCK MARKETS, THE ISRAELI-PALESTINIAN STRUGGLE, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE OCCUPATION WAR IN IRAQ, THE WORK MARKET, THE WORKERS, TRADE DEFICIT - USA, UNEMPLOYMENT, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

WISDOM SERIES: EDWARD SONSHINE WOULD SPEED UP INFRASTRUCTURE SPENDING

Posted by Gilmour Poincaree on December 27, 2008

Wednesday, December 24, 2008

Garry Marr – The Financial Post

PUBLISHED BY ‘THE FINANCIAL POST’ (Canada)

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PUBLISHED BY ‘THE FINANCIAL POST’ (Canada)

Posted in AGRICULTURE, AUTOMOTIVE INDUSTRY, BANKING SYSTEM - USA, BANKRUPTCIES - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENERGY, ENERGY INDUSTRIES, FARMING SUBSIDIES, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES, FOREIGN WORK FORCE - LEGAL, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, MACROECONOMY, NATIONAL DEBT - USA, NATIONAL WORK FORCES, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STATE TARIFFS, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE ISRAELI-PALESTINIAN STRUGGLE, THE OCCUPATION WAR IN IRAQ, THE WORK MARKET, THE WORKERS, TRADE DEFICIT - USA, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

US DOLLAR LOWER VS EURO IN THIN TRADES

Posted by Gilmour Poincaree on December 27, 2008

11:44:00 12/27/2008

Agence France-Presse

PUBLISHED BY ‘THE PHILIPPINE DAILY INQUIRER’ (Philippines)

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PUBLISHED BY ‘THE PHILIPPINE DAILY INQUIRER’ (Philippines)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, CURRENCIES, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, EURO, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL, NATIONAL DEBT - USA, POUND (Britain), RECESSION, THE EUROPEAN UNION, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, TRADE DEFICIT - USA, UNITED KINGDOM, USA | Leave a Comment »

U.S. WARNING ON SOUTH ASIA TENSION – THE UNITED STATES HAS URGED INDIA AND PAKISTAN TO AVOID UNNECESSARILY RAISING TENSION AMID REPORTS OF TROOP MOVEMENTS TO THE BORDER

Posted by Gilmour Poincaree on December 27, 2008

20:10 GMT, Friday, 26 December 2008

BBC News

PUBLISHED BY ‘BBC NEWS’ (UK)

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PUBLISHED BY ‘BBC NEWS’ (UK)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, FOREIGN POLICIES - USA, HOUSING CRISIS - USA, INDIA, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INDUSTRIES - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, NATIONAL DEBT - USA, PAKISTAN, RECESSION, THE ARMS INDUSTRY, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, TRADE DEFICIT - USA, USA, WEAPONS | Leave a Comment »

SANTA CLAUS BAILOUT HEARINGS

Posted by Gilmour Poincaree on December 26, 2008

 

 

C-SPAN – Coverage of Santa Claus asking Congress for a financial bailout of the North Pole – Present Giving Industry. If they dont approve his aid package, Christmas may be ruined.

Posted in AUTOMOTIVE INDUSTRY, BANKING SYSTEM - USA, BANKRUPTCIES - USA, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIAL SUBSIDIES, INDUSTRIES - USA, NATIONAL DEBT - USA, RECESSION, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, TRADE DEFICIT - USA, USA | Leave a Comment »

THE TOAST OF WALL STREET ENDS UP SLICED (USA)

Posted by Gilmour Poincaree on December 26, 2008

4:00AM Saturday Dec 27, 2008

by Yalman Onaran and John Helyar – Bloomberg

PUBLISHED BY ‘THE NEW ZEALAND HERALD’

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PUBLISHED BY ‘THE NEW ZEALAND HERALD’

Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, BANKRUPTCIES - USA, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, HOUSING CRISIS - USA, INDUSTRIES - USA, NATIONAL DEBT - USA, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, TRADE DEFICIT - USA, USA | Leave a Comment »

FINANCE PIONEER (BRUCE BENT, INVENTOR OF THE MONEY-MARKET MUTUAL FUND) FACES POSSIBLE CHARGES (USA) – ha ha ha ha ha ha ha ha ha ha ha ha ha … aw god … ha ha ha ha ha ha ha ha

Posted by Gilmour Poincaree on December 26, 2008

5:30AM Saturday Dec 27, 2008

by Christopher Condon

PUBLISHED BY ‘THE NEW ZEALAND HERALD’

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PUBLISHED BY ‘THE NEW ZEALAND HERALD’

Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, BANKRUPTCIES - USA, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, HOUSING CRISIS - USA, INDUSTRIES - USA, NATIONAL DEBT - USA, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, TRADE DEFICIT - USA, USA | Leave a Comment »

IS THE BUSH ADMINISTRATION CRIMINALLY LIABLE FOR ITS LAWLESSNESS? – THE CULPABILITY FOR FLOUTING NATIONAL AND INTERNATIONAL CONVENTIONS AGAINST TORTURE AND SPYING IS SHARED AND IS BEING ADDRESSED BY THE PROPER INSTITUTIONS

Posted by Gilmour Poincaree on December 25, 2008

December 24, 2008

L.A. TIMES – Editorial

PUBLISHED BY ‘THE L.A. TIMES’ (USA)

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PUBLISHED BY ‘THE L.A. TIMES’ (USA)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, CENTRAL BANKS, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES - USA, FOREIGN WORK FORCE - LEGAL, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, NATIONAL DEBT - USA, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE OCCUPATION WAR IN IRAQ, THE WORK MARKET, THE WORKERS, TRADE DEFICIT - USA, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

BUSH A CATALYST IN AMERICA’S DECLINING INFLUENCE – THE PRESIDENT OVERSAW A PERIOD OF ERODING ECONOMIC AND POLITICAL POWER, IN WHICH THE RISE OF CHINA, INDIA AND OTHERS WAS A MAJOR FACTOR, BUT ASSISTED BY AN AVERSION TO HIM AND HIS POLICIES

Posted by Gilmour Poincaree on December 25, 2008

December 25, 2008

by Paul Richter

PUBLISHED BY ‘THE L.A. TIMES’ (USA)

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PUBLISHED BY ‘THE L.A. TIMES’ (USA)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL SCAMS, FOREIGN POLICIES, FRAUD, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL RELATIONS, NATIONAL DEBT - USA, RECESSION, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE OCCUPATION WAR IN IRAQ, TRADE DEFICIT - USA, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

US RECESSION GATHERS PACE

Posted by Gilmour Poincaree on December 25, 2008

Wednesday, December 24, 2008 – 06:13 Mecca time, 03:13 GMT

Agencies

PUBLISHED BY ‘ALJAZEERA’ (Qatar)

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PUBLISHED BY ‘ALJAZEERA’ (Qatar)

Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, BANKRUPTCIES - USA, CENTRAL BANKS, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, NATIONAL DEBT - USA, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, TRADE DEFICIT - USA, USA | Leave a Comment »

ECONOMIC HELL, AND THEN WHAT?

Posted by Gilmour Poincaree on December 24, 2008

December 22, 2008 5:02 p.m. PT

by Paul Krugman – Syndicated Columnist

PUBLISHED BY ‘THE SEATTLE POST-INTELLIGENCER’

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PUBLISHED BY ‘THE SEATTLE POST-INTELLIGENCER’

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, 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 DEBT - USA, 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, TRADE DEFICIT - USA, USA | Leave a Comment »

BROADEST MEASURE OF US TRADE DEFICIT FALLS IN 3Q

Posted by Gilmour Poincaree on December 18, 2008

December 17, 2008 – 5:30pm

by Martin Crutsinger – AP Economics Writer

PUBLISHED BY ‘WTOP’ (USA)

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PUBLISHED BY ‘WTOP’ (USA)

Posted in ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, TRADE DEFICIT - USA, USA | Leave a Comment »

RUSSIAN ANALYST PREDICTS DECLINE AND BREAKUP OF U.S.

Posted by Gilmour Poincaree on November 28, 2008

19:31 – 24/ 11/ 2008

PUBLISHED BY ‘RIA NOVOSTI’ (Russia)

MOSCOW, November 24 (RIA Novosti) – A leading Russian political analyst has said the economic turmoil in the United States has confirmed his long-held view that the country is heading for collapse, and will divide into separate parts.

Professor Igor Panarin said in an interview with the respected daily Izvestia published on Monday: “The dollar is not secured by anything. The country’s foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction, it had exceeded $2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse.”

The paper said Panarin’s dire predictions for the U.S. economy, initially made at an international conference in Australia 10 years ago at a time when the economy appeared strong, have been given more credence by this year’s events.

When asked when the U.S. economy would collapse, Panarin said: “It is already collapsing. Due to the financial crisis, three of the largest and oldest five banks on Wall Street have already ceased to exist, and two are barely surviving. Their losses are the biggest in history. Now what we will see is a change in the regulatory system on a global financial scale: America will no longer be the world’s financial regulator.”

When asked who would replace the U.S. in regulating world markets, he said: “Two countries could assume this role: China, with its vast reserves, and Russia, which could play the role of a regulator in Eurasia.”

Asked why he expected the U.S. to break up into separate parts, he said: “A whole range of reasons. Firstly, the financial problems in the U.S. will get worse. Millions of citizens there have lost their savings. Prices and unemployment are on the rise. General Motors and Ford are on the verge of collapse, and this means that whole cities will be left without work. Governors are already insistently demanding money from the federal center. Dissatisfaction is growing, and at the moment it is only being held back by the elections and the hope that Obama can work miracles. But by spring, it will be clear that there are no miracles.”

He also cited the “vulnerable political setup”, “lack of unified national laws”, and “divisions among the elite, which have become clear in these crisis conditions.”

He predicted that the U.S. will break up into six parts – the Pacific coast, with its growing Chinese population; the South, with its Hispanics; Texas, where independence movements are on the rise; the Atlantic coast, with its distinct and separate mentality; five of the poorer central states with their large Native American populations; and the northern states, where the influence from Canada is strong.

He even suggested that “we could claim Alaska – it was only granted on lease, after all.”

On the fate of the U.S. dollar, he said: “In 2006 a secret agreement was reached between Canada, Mexico and the U.S. on a common Amero currency as a new monetary unit. This could signal preparations to replace the dollar. The one-hundred dollar bills that have flooded the world could be simply frozen. Under the pretext, let’s say, that terrorists are forging them and they need to be checked.”

When asked how Russia should react to his vision of the future, Panarin said: “Develop the ruble as a regional currency. Create a fully functioning oil exchange, trading in rubles… We must break HA HA HA HA HA HA HA HA HA HA HA HA .... I GUESS THIS FELLA HAS BEEN WATCHING TOO MANY HOLLYWOOD PRODUCTIONSthe strings tying us to the financial Titanic, which in my view will soon sink.”

(*) – Panarin, 60, is a professor at the Diplomatic Academy of the Russian Ministry of Foreign Affairs, and has authored several books on information warfare.

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Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ELECTIONS 2008 - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, MACROECONOMY, NATIONAL DEBT - USA, NATIONAL WORK FORCES, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, THE WORK MARKET, THE WORKERS, TRADE DEFICIT - USA, USA | Leave a Comment »

FULL EMPLOYMENT AND INFLATION (USA)

Posted by Gilmour Poincaree on November 28, 2008

4:00 p11…4:00 p11

PUBLISHED BY ‘SHAMCHER BEORSE.WordPress’

From the Appendix to Every Willing Hand’, Shamcher’s book advocating full employment for all which is particularly JOBSrelevant today.

A concluding word about inflation. If full employment were, as so often alleged, bound to generate inflation, amending the Employment Act to give it real teeth might have little point. But two recent developments have brought that gloomy thesis into the most serious question — first, the ample demonstration that inflation now tends to occur even without full employment, and second, the not unrelated shift of informed public opinion into favoring an incomes policy of some kind to help maintain price stability. Thus full employment need no longer carry such burdens as do not, properly speaking, belong to it.

More than that, however, it is here submitted that a program of guaranteed full employment along the lines suggested would not only not feed inflation but actually be the best cure for inflation. This is asserted for two reasons in combination. First, the ceilings on employment and on consumer spending that would be imposed under this approach would choke off upward demand spirals almost entirely. That is the built-in “mechanical” aspect. It would limit “demand pull” directly, as already emphasized, and indirectly it would also moderate the wage-demand side of the “cost push” by holding down the prices that make up the worker’s cost of living. Second, there is the psychological point that cannot BUILDERSbe proved but that should appeal to common sense-a point that would arise from the very fact of the government’s readiness to commit itself in this unprecedented way. An agreement on the part of the government to assure a total market adequate for business prosperity, and to assure continuous full employment for labor, should be enough to persuade business and labor leaders to agree to abide by some reasonable set of price and wage guidelines.

Those who blame inflation on the incurable wickedness of Big Business or Big Labor or both often seem unaware of how far the behavior of both has been caused by the malfunctioning of our economy — its cyclical instability combined with secular weakness — the inevitability of which is precisely what needs to be denied. Once the government stood ready to assure continuously adequate total demand for products and for workers, (1) all businesses would have more chance to spread their overhead costs and hold prices down; (2) management in areas of administered pricing could logically give up planning for extra profits in boom times to cushion losses in future slumps; and (3) union leaders would feel less NO JOBSpressure to demand extreme hourly wage rates on the one hand, or annual pay guarantees on the other, to fortify their members against the return of unemployment.

To put this in context — as these words are being written, the country is deep in President Nixon’s economic Phase II. Whether this experiment with a Wage Board and a Price Commission will, be followed soon by selective permanent legal controls or by some other incomes policy is impossible to say. But what the government commitments proposed in this article would in any case contribute, when it comes to resolving the ultimate hard-core part of the “cost push” phenomenon, is to open the door as wide as possible to achieving essential results by voluntary cooperation.

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

EL DÓLAR PIERDE SU ATRACTIVO – La debilidad del billete verde convierte al euro en la moneda favorita de modelos, deportistas y altos ejecutivos a nivel internacional, que ya quieren cobrar sus honorarios en divisa europea.

Posted by Gilmour Poincaree on November 21, 2008

Domingo, 11 de Noviembre de 2007, número 394

por María Canales

El dólar está de capa caída. Desde hace un tiempo, los fajos de billetes verdes están dejando de acumularse en las cajas fuertes. Su valor ya no es el que era. Incluso los grandes bancos centrales del mundo, como el de China, han empezado a cambiar parte de sus reservas de dólares por euros. La divisa, considerada por muchos años una de las más fuertes en los mercados internacionales y un valor refugio, ha visto cómo el euro le ha superado por mucho en los últimos años. Mientras que en julio de 2002, las cotizaciones de la moneda europea y la estadounidense estaban igualadas, el viernes, un euro se pagaba al récord histórico de 1,46 dólares.

Poco a poco, y según los expertos, el euro se está convirtiendo en la moneda favorita no sólo de los inversores, sino también de los ejecutivos, de los deportistas de élite, de los actores y de las modelos a nivel internacional, que ven que es más rentable cobrar en moneda europea.

Así lo manifestaron la semana pasada fuentes cercanas a la modelo brasileña Gisel Bündchen, la mejor pagada del mundo, con unas ganancias de 30 millones de euros (20,5 millones de euros) hasta julio de 2007. Según el semanario brasileño Veja, Bündchen habría pedido a la estadounidense Procter&Gamble cobrar sus honorarios en euros por ser la imagen de su filial de productos para el cabello Pantene. Y lo mismo habría exigido a los italianos Dolce&Gabana por promocionar su perfume.

La supermodelo no es la única que vela por hacer caja en euros. Según el departamento de prensa de la PGA (Asociación Profesional de Golf), en los últimos dos años ha aumentado en un 30% el número de golfistas estadounidenses, australianos y latinoamericanos que participan en el circuito europeo. Jugadores famosos como el estadounidense Scott Verplank -estuvo entre los 20 primeros del mundo- han pasado de jugar de manera permanente uno o dos torneos en Europa en una temporada, a siete. Se gana más dinero.

La Asociación de Tenistas Profesionales (ATP) trata desde hace años de proteger tanto a los jugadores como a los torneos ante las fluctuaciones de las divisas poniendo premios de similar valor, según Jorge Salked, agente del jugador español Tommy Robredo. «Hay que recordar que hace unos años la cosa estaba al revés, el dólar valía mucho más». Los grandes torneos asiáticos pagan en dólares, y algunos como el de Dubai -el que más reparte en premios, 1,4 millones de dólares, después de los cuatro Grand Slam y los nueve Masters Series-, se quedan cortos al convertir los cheques a los ganadores en euros. Al cambio, Dubai reparte 976.000 euros, sólo 300.000 más que el Conde de Godó en Barcelona.

Al futbolista David Beckham no le importa cobrar billetes verdes, aunque cuando firmó el contrato para jugar en el equipo de Los Angeles Galaxi el verano pasado exigió que se le pagara en dólares la misma cantidad que cobraba en el Real Madrid en euros (cerca de ocho millones netos).

Por puro «sentido común», la subida del euro tendrá también su efecto en el sueldo de los altos ejecutivos, según los expertos. «No cabe duda de que si esto se mantiene será algo que se demande por parte de los directivos, sobre todo de nueva contratación. Los expatriados, los embajadores, etcétera serán los primeros en pedir sus sueldos en moneda europea cuando sus puestos estén fuera de la zona euro», asegura Begoña Benito, socia directora general de la consultora Watson Wyatt. Según Benito, será un tema en el que ganen las dos partes, por convertirse en un incentivo de compensación.

La caída del dólar está afectando también a los resultados de empresas. El viernes, Repsol YPF anunció que su beneficio neto de 2.448 millones de euros en los nueve primeros meses del año había caído un 7,7% respecto al mismo periodo de 2006, debido en parte a la depreciación del dólar frente al euro. Por su parte, el consorcio aeronáutico EADS apuntó que su facturación registrará una leve reducción al cierre del ejercicio en comparación con 2006.

¿Cotizará el barril de brent algún día en euros?

En los últimos días, la cotización del euro frente al dólar y la del crudo han batido nuevos récords. Mientras que la divisa europea alcanzó los 1,47 dólares, el barril de Brent rebasaba los 95 dólares y se acerca peligrosamente a la cifra psicológica de los 100 dólares. Sin embargo, el propio Banco Central Europeo reconocía esta semana que un euro tan fuerte suavizaba la subida del crudo.

En los últimos cinco años, el dólar se ha devaluado más de un 30% con respecto al euro. Y el precio del petróleo ha pasado de los 22,6 dólares de noviembre de 2002 a los 95 actuales. Devaluando este precio un 30% resultaría el equivalente a 66,5 dólares de principios de 2006, por lo que la gran parte de esta subida, según los expertos, sería debida a la pérdida de valor del dólar contra el euro y no a problemas de suministro.

La posibilidad de que el petróleo cotice en euros en lugar de en la moneda estadounidense es algo que viene de largo y que muchos países de la OPEP llevan tiempo pidiendo. De hecho, Irán ya vende crudo en euros a China.

Sin embargo, esta iniciativa, de momento, es bastante inalcanzable, según los analistas. «Pese a la presión política para cambiar la referencia del crudo a otra moneda, el tema no es tan fácil. Además de que el coste sería enorme, se da la circustancia de que la profundidad del mercado en dólares es muy superior al mercado en euros», afirma José Luis Martínez, estratega de Citigroup. «Una cosa es que la moneda se aprecie y otra distinta es que la moneda siga siendo fuerte. El dólar continúa siendo una moneda fuerte en términos de intercambio. La gente va todavía a Oriente Medio con dólares, no con euros. Tiene aún valor como moneda refugio, como moneda de reserva, de intercambio. Además, la oferta de dólares tiene entre otras cosas razón de ser en la fuerte demanda de activos internacionales de la economía americana. Es decir, consumen muchos productos asiáticos y crudo, por lo que hay una correspondencia entre la oferta y la demanda de dólares», asegura Martínez.

El experto cree que hoy no hay un mercado lo suficientemente profundo que sustituya al dólar.

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PUBLISHED BY ‘NUEVA ECONOMIA’ (Spain)

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WHO WILL FINANCE AMERICA’S DEFICIT?

Posted by Gilmour Poincaree on November 17, 2008

 

Nov 13, 2008

by David P Goldman

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

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

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

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

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

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

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

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

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

 

 

 

 

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

 

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

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

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

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

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

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

 

 

 

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. The personal savings rate stood at 10%.

2. The current account was in surplus.

3. The top marginal tax rate was 70%.

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

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

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

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

 

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PAULSON’S LILLIPUTIAN MOMENT

Posted by Gilmour Poincaree on November 17, 2008

Nov 14, 2008

by Julian Delasantellis (*)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What cautionary tale does this provide Obama?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

,blockquote>If you can meet with triumph and disaster

And treat these two imposters just the same …

Yours is the earth and everything that’s in it

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

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

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

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

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

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EL PARTO DE LOS MONTES – La reunión de Washington

Posted by Gilmour Poincaree on November 17, 2008

Noviembre 16 de 2008 – 4 y 12 p.m.

Fidel Castro Ruz

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

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

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

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

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

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

De esa forma fueron ubicados los asistentes al banquete.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Lenguaje tecnocrático, inaccesible para las masas.

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

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

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

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

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

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

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

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

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BUSH: LONG CLIMB TOWARD REDEMPTION

Posted by Gilmour Poincaree on November 17, 2008

Article published Sunday, November 16, 2008

by David M. Shribman

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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“LOS COLOMBIANOS VEN LAS NOTICIAS Y SALEN A VENDER SUS ACCIONES A PRECIOS QUE NO DEBERÍAN” – Y llegó la crisis – Las señales de recesión en Estados Unidos tienen temblando al mundo. Mientras los índices de las bolsas de valores caen estrepitosamente, las economías emergentes se preparan para el chaparrón

Posted by Gilmour Poincaree on November 15, 2008

Sábado, 15 de Nov de 2008 – 21 Ene 2008 – 4:32 pm

Por: Angélica Gallón Salazar

Esta semana, la información económica estuvo en la primera página de todos los diarios y logró que muchos desprevenidos que suelen cambiar de canal cuando empiezan las noticias económicas, se llevaran las manos a la cabeza ante los graves anuncios. Los medios llamaron la atención del mundo entero con el aviso de que Estados Unidos oficialmente había entrado en la tan temida y anunciada recesión.

La actual crisis económica estadounidense empezó a fraguarse justamente después de las medidas de ayuda que tomó la Reserva Federal para superar la crisis de 2001, cuando reventó la burbuja de las empresas de internet. Con unas tasas de interés por el suelo y con el repunte histórico de los precios de la finca raíz, varios bancos empezaron a prestarle dinero a gente que no tenía historia crediticia o que estaba reportada.

En medio de la confianza y la tranquilidad, los bancos financiaron hasta el 100% de las hipotecas a cambio de unos puntos más de intereses con los que podrían cubrirse los riesgos. “Los bancos decidieron sacar bonos sobre esos créditos y así obtener una rentabilidad extra, que a la vez los habilitaba para seguir prestando”, explica el analista Álvaro Camaro, de la comisionista de bolsa Stanford.

Camila Pérez, analista de Valores Bancolombia, complementa: “Lo novedoso fue que esos créditos se empaquetaron y se emitieron papeles que con una calificación triple A se ofrecieron como una inversión con un retorno muy bueno”.

El problema empezó a vislumbrarse cuando la gente se atrasó en sus pagos porque la burbuja de la construcción (que hizo que muchos se volcaran a adquirir vivienda alentados por la idea de que al mes siguiente iban a venderla por un 20% más) empezó a desinflarse y los precios a estancarse. “Adicionalmente, el Banco Central había subido las tasas de interés y encareció las hipotecas y la gente tuvo menos posibilidad de refinanciar a menores precios”, asegura Camaro.

Empezó así una gran bola especulativa. La gente no pagaba, y si había un retraso en la cartera, los títulos que se habían emitido sobre esos prestamos empezaron a no poder responder. Pero además, como el riesgo se había transferido de tal manera que, por ejemplo, un crédito que valía un dólar lo convirtieron un papel de 4 ó 5 dólares, no se pudo cuantificar exactamente el monto de las pérdidas. “Hasta ahora empezamos a saber cuáles son los castigos en los balances de los bancos, se habla de US$100 billones”, añade el analista.

Con los precios de la vivienda cayendo, con una pérdida de liquidez del sistema financiero y con una tasa de desempleo del 5%, se terminaron de prender las alarmas, que además, coincidieron con el negro panorama mundial de los precios del petróleo, que llegaron a los US$ 100 por barril; eso, sin contar con la alta devaluación del dólar frente a otras monedas.

“Toda esta coincidencia, más el inicio de reporte de utilidades de los bancos que empezó esta semana, es lo que causa la crisis. El mercado está esperando que se reúna la Reserva Federal a finales de mes y recorte las tasas mínimo en 50 puntos básicos, pero podría ser más agresivo. Eso aliviaría un poco la situación de los mercados”, puntualiza Pérez, de Valores Bancolombia.

El gran dominó

Uno de los primeros efectos visibles ante la inminencia de que Estados Unidos decrezca es que los norteamericanos, por el efecto pobreza, se van a mostrar más austeros y van a consumir menos (el 70% del PIB de EE.UU. está sustentado en el consumo). Si eso sucede, consecuentemente el país empezará a importar menos y, teniendo en cuenta que Estados Unidos es uno de los grandes compradores del mundo, “los precios de las materias básicas como el oro, los alimentos y el petróleo van a bajar; las exportaciones van a valer menos y el nivel de las ventas al exterior de los países emergentes decaerá. Es el gran dominó”, explica Juan Carlos Echeverri, de la firma EConcept

Camaro, por su parte, asegura que en la medida en que países como Colombia empiecen a exportar menos hacia su gran socio estratégico, el déficit de la balanza comercial va a ser cada vez más grande, “con un agravante: que este año el Gobierno colombiano va a hacer una importación de tipo militar de US$ 1.600 millones; luego el hueco se va a hacer gigante y, de ser prolongada la crisis, el déficit de la cuenta corriente en la balanza comercial va a hacer que el tipo de cambio explote”.

El efecto de la recesión sobre los mercados bursátiles también se ha dejado sentir con fuerza. Las GLOBAL MELTDOWNbolsas de Tokio, Australia y Singapur han mostrado números en rojo, igual ha pasado con bolsas como las de Perú y Colombia, que registran caídas del 10% en lo corrido del año. “El efecto en el mercado bursátil colombiano es completamente de contagio psicológico”, explica Camila Pérez, “porque los flujos de los mercados extranjeros hacia Colombia son mínimos en la bolsa (menos del 2% de las transacciones diarias), pero la gente se asusta. Los colombianos ven las noticias y salen a vender sus acciones a precios que no deberían”, explica la experta.

“En Colombia tenemos un entorno muy ridículo”, asegura tajantemente Camaro, porque “tenemos acciones cayendo estrepitosamente, la deuda pública desvalorizándose y la plata yéndose quién sabe para dónde, porque a diferencia de Brasil y México, acá nadie está comprando dólares”. Lo que el analista de Stanford ve que se está dando en el país, es una preferencia por liquidez. “Cuando la gente tiene miedo, se dedica a tener la plata en los bolsillos, en las cuentas de ahorros o corrientes, pero la consecuencia de esto es una devaluación del tipo de cambio”, vaticina Camaro.

Mientras se espera que el Banco Central de Estados Unidos baje las tasas de interés, el analista Juan Carlos Echeverri prevé dos efectos. “El primero es que como en Colombia la inflación va para arriba y las tasas han subido, es posible que los capitales extranjeros busquen tasas de interés más altas y en esa medida migren con fuerza hacia el país”. Pero también se puede dar el efecto contrario, que en teoría se conoce como ‘escape hacia la calidad’, “que consiste en que en los momentos de recesión e incertidumbre, los inversionistas mundiales buscan estar en sitios seguros, y los más seguros, paradójicamente, son los bonos del tesoro americano. Eso implicaría que los capitales salen de los países emergentes para posarse en Estados Unidos”.

Blindaje, ¿efectivo?

Ante la inminencia de la crisis, que sin duda tiene la potencia de afectar a todas las economías del mundo, el Gobierno colombiano ha tomado algunas prevenciones, como la colocación que hizo hace algunas semanas de US$ 1.000 millones a través de bonos, con lo que consiguió, sumado a las US$ 300 millones que traía del año pasado, financiar el 50% de sus necesidades externas para 2008. “En la medida en que el Gobierno tenga menos necesidades de financiar su déficit con requerimiento del exterior, va a ser menos vulnerable a las hostiles condiciones externas”, asegura Álvaro Camaro. Adicionalmente, el Gobierno viene sustituyendo la deuda externa por deuda interna, lo que permitirá que “el día que haya una devaluación muy grande su contribución no se dispare de una manera incontrolada”, añade el analista.

Otra de las estrategias es la consecutiva alza en las tasas de interés, que busca tener un efecto de enfriamiento en el loco consumismo en el que ha entrado el país. Sin embargo, y a pesar de todas estas medidas, los analistas consultados hacen un llamado al Gobierno para que equilibre sus cuentas fiscales (todavía el déficit del Gobierno central es de más de tres puntos del PIB) y promueva la libertad de comercio con otros países. Aunque algunos expertos, menos ortodoxos, le sugieran que “aguante el chaparrón y rece, porque todos dependemos de que China no caiga y Venezuela no nos castigue más”.

¿Qué es una recesión?

“Técnicamente, una recesión es una corrección de las decisiones que se tomaron con base en unas expectativas muy altas que no resultaron tan buenas. También se corrigen las pérdidas que trajeron los riesgos que se tomaron con esas falsas expectativas”, explica Juan Carlos Echeverri, analista de EConcept. La recesión también está ligada a las continuas caídas de los indicadores de crecimiento económico y cuando los empresarios y las familias pierden confianza en el país, lo que afecta las inversiones, el gasto y la demanda.

La Bolsa, en picada

Según los analistas, la precipitada caída de la Bolsa en Colombia no sólo está afectada por el difícil panorama internacional. Además del efecto causado por los continuos aumentos de las tasas de interés, otro de los grandes agravantes tiene que ver con la cantidad de acciones que se han comprado a crédito. “Ahora muchos compradores de acciones a crédito ven que no tienen con qué pagar o muertos de pánico están saliendo a vender acciones como las de Ecopetrol a precios ridículos”, señala el analista Álvaro Camaro.

Los nuevos dueños del mundo

La gran crisis económica de Estados Unidos ha despertado un interesante fenómeno. Los pocos países que tienen capital de sobra para prestar, como Arabia Saudita, Corea del Sur, Singapur y Kuwait, “están comprando por la puerta de atrás a las empresas norteamericanas insignias”, dice el experto Álvaro Camaro.

Ante la inminente necesidad de capitalización de las empresas norteamericanas (Citigroup recibió US$ 14.500 millones de varios inversionistas; Merrill Lynch, la mayor casa de corretaje, recibirá US$ 6.600 millones), los países árabes y asiáticos están encontrando un destino muy atractivo para sus recursos. “Lo que vemos es que los ricos orientales terminaron siendo socios capitalistas de las empresas occidentales a mucho pesar de todos. Habrá que ver el impacto en el manejo de la propiedad de las empresas norteamericanas en unos años”, expresa el analista.

Contra la recesión

El ministro de Comercio, Industria y Turismo, Luis Guillermo Plata, hace un diagnóstico sobre las consecuencias de la crisis estadounidense.

¿Cuáles son las estrategias del Gobierno para afrontar la recesión en Estados Unidos?

La primera estrategia se concentra en la oferta exportable, buscando el aumento de exportaciones con mayor valor agregado y el aprovechamiento del acceso preferencial que se logra con los acuerdos comerciales (se espera culminar las negociaciones de Canadá y EFTA y lograr una implementación de los TLC con Chile y el Triángulo Norte Centroamericano). La segunda estrategia busca el desarrollo de sectores muy dinámicos en los mercados internacionales.

¿Las crisis afectarán la meta de crecimiento del 5% para este año?

Justamente las estimaciones están recogiendo el menor crecimiento de economías como Estados Unidos y el menor crecimiento de las exportaciones a Venezuela. Sin embargo, no podemos predecir de qué tamaño sean las coyunturas que se registran en el mundo, pero sobre el terreno el Gobierno Nacional irá aplicando los correctivos necesarios.

¿Qué estrategia deben seguir los exportadores para enfrentar la coyuntura?

Es un tanto irreal pensar que se debe reorientar el 50% de nuestras exportaciones. De hecho, sería una tarea imposible de lograr en un corto plazo. En el caso de Estados Unidos se prevé una reducción de la tasa de crecimiento en este año, y no un cierre del mercado; por lo tanto, es posible que se reduzca temporalmente la demanda de algunos productos y que ella se recupere posteriormente.

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PUBLISHED BY ‘EL ESPECTADOR’ (Colombia)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, CENTRAL BANKS, COLOMBIA, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INTERNATIONAL, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE WORK MARKET, THE WORKERS, TRADE DEFICIT - USA, USA | Leave a Comment »

UN GIGANTE EN RECESIÓN (USA)

Posted by Gilmour Poincaree on November 15, 2008

15 de Noviembre del 2008

Hedelberto López Blanch

Mientras los servicios, las finanzas y el consumo sufrían enormes dificultades en Estados Unidos a lo Oh no !!!largo de los últimos meses, los discursos oficiales como los del presidente George W. Bush aseguraban que no existían problemas porque la economía del país era muy fuerte y podría resistir cualquier embate

“No se puede tapar el sol con un dedo”, este viejo adagio refleja perfectamente la situación que atraviesa Estados Unidos pese a que sus principales figuras políticas y económicas no quieran reconocerlo.

Mientras los servicios, las finanzas y el consumo sufrían enormes dificultades a lo largo de los últimos meses, los discursos oficiales como los del presidente George W. Bush aseguraban que no existían problemas porque la economía del país era muy fuerte y podría resistir cualquier embate.

El primer reconocimiento de que las cosas no marchan lo realizó recientemente el presidente de la Reserva Federal (FED) o Banco Central de Atlanta, Dennis Lockhart, quien manifestó que “la economía entró realmente en recesión”.

Las declaraciones de Lockhart fueron hechas en un discurso pronunciado en una conferencia ante empresarios en Palm Beach, Florida, horas después de la publicación de la tasa de desempleo, que alcanzó 6, 5 % en octubre, nivel no registrado desde marzo de 1994.

El funcionario señaló que la primera estimación oficial indica que el Producto Interno Bruto (PIB) retrocedió 0, 3 % en el tercer trimestre de 2008 en relación con el anterior y que los datos de octubre sugieren un descenso más fuerte para el cuarto trimestre. La recesión se define tradicionalmente cuando en dos trimestres consecutivos se produce un retroceso del PIB.

“La economía estadounidense se debilitó dramáticamente y las perspectivas a corto plazo no son alentadoras. Los factores de esa contracción provienen de los gastos de consumo, de las inversiones de las empresas, de la producción industrial y de la demanda externa de productos estadounidenses que cayeron fuertemente”, subrayó el también integrante del Comité de política monetaria de la FED estadounidense.

Son muchos y disímiles los enredos que padece Washington desde la llegada en 2001 de Bush y su equipo a la Casa Blanca.

Aunque heredó de su antecesor William Clinton un superávit presupuestal de 128 000 millones de dólares, el déficit alcanza al cierre fiscal del 30 de septiembre pasado, 483 000 millones de dólares, según la Oficina de Presupuesto del Congreso (CBO).

La cuenta corriente de la balanza de pago que contabiliza los intercambios de mercancías y servicios con el exterior alcanzó en 2007 un déficit superior a 750 000 millones de dólares, o sea, 5, 6 % de su PIB.

La deuda nacional se ha incrementado en los últimos ocho años, en más de 65 % hasta casi 9 billones de dólares, sin agregar las deudas de las gigantes hipotecarias financieras Freddie Mac y Fannie Mae.

La deuda total (pública, empresarial y personal) llegó este año a los 48 billones de dólares, 3, 4 veces el PBI norteamericano que es alrededor de los 14 billones.

En sentido general, los indicadores son negativos como la inflación anual que cifra el 6 %, su mayor nivel en 17 años. El desempleo se disparó oficialmente a 6, 5 % que afectan a unas 10 millones de personas, de las cuales 2, 2 millones perdieron sus trabajos en el último año.

Las automotrices General Motors, Ford y Chrysler anunciaron que cesarán a más de 6 000 A rusty and old Chevrolettrabajadores, la farmacéutica Merck dijo que eliminará 7 200 empleos, 12 % de su nómina. Yahoo informó un recorte de por lo menos 10 % de sus trabajadores y Xerox, unos 3 000 y la mensajera DHL a otros 3 000, junto con una larga fila de empresas que están haciendo lo mismo.

Asimismo, el Instituto de Políticas Económicas (EPI) calcula que el subempleo llegó a 17, 1 millones de trabajadores, un incremento de 21 % desde el inicio del año. Además, unos 2 billones de dólares en fondos para pensiones de jubilados se perdieron en el último año y medio.

Con las quiebras de las inmobiliarias solo en el tercer trimestre de 2008 se efectuaron 765 568 juicios hipotecarios donde familias completas pierden sus hogares, un 71 % comparado con el mismo periodo de 2007. Desde la crisis hipotecaria, 3 600 000 personas han sido desalojadas de sus casas.

En una espiral demoledora, continúan cayendo los precios de las viviendas, los bancos reportan pérdidas récord pese a los rescates financieros gubernamentales y se han reportado 800 000 casos de bancarrota en compañías y negocios individuales.

Para el premio Nobel de Economía Joseph Stiglitz, los rescates contribuyen a los déficit crecientes a corto plazo, y a incentivos perversos a largo plazo. Los directores generales, inversionistas y prestamistas se marchan con sus millones, mientras que se pide a los contribuyentes norteamericanos pagar la factura.

Al señalar que el presidente de Freddie Mac, Richard Syron, ganó 14, 5 millones de dólares en 2007 y el director general de Fannie Mae, Daniel Mudd, obtuvo 14,2 millones ese mismo año, Stiglitz puntualizó que “estamos presenciando una nueva forma de sociedad entre la inversión privada y el estado, en la cual el público soporta sobre sus espaldas todo el riesgo, y el sector privado se lleva toda la ganancia”.

Los vientos huracanados continúan soplando sobre Estados Unidos. Tras alcanzar la crisis a compañías de la aeronáutica como Continental Airlines, American Airlines y United Airlines, ahora el turno le ha tocado a las compañías automotrices.

Los gigantes General Motors y Ford reportaron pérdidas de 4, 200 millones y 2, 980 millones de dólares respectivamente durante el tercer trimestre de 2008.

GM dijo que eliminará la mayoría de su personal de oficina y reducirá el gasto en 2. 500 millones en 2009, mientras Ford recortará en 10 % los salarios en Estados Unidos.

La GM, Ford y Chrysler, antes conocidos como “los tres grandes” pidieron al sector un paquete de medidas de rescate para enfrentar los problemas de liquidez y continuar sus operaciones en una “situación económica difícil”.

En definitiva, las malas noticias sobre la economía brotan por doquier en Estados Unidos y ya sus directivos no pueden negar la indeseable recesión.

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PUBLISHED BY ‘OPCIONES’ (Cuba)

Posted in BANKING SYSTEM - USA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION - USA, INFLATION, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE WORK MARKET, TRADE DEFICIT - USA, USA | Leave a Comment »

OTTAWA CONTEMPLATING JOINT CANADA-U.S. AUTO BAILOUT

Posted by Gilmour Poincaree on November 15, 2008

November 14, 2008 at 8:10 PM EST

by Steven Chase and Karen Howlett and Greg Keenan

From Saturday’s Globe and Mail

WINNIPEG AND TORONTO — Federal Industry Minister Tony Clement said Friday he was investigating Workers install rearview mirrors onto the doors at the General Motors Canada assembly line in the Oshawa Truck Assembly Plant. The plant's 3,500 workers produce Chevrolet Silverados, GMC Sierras and GMC Sierra Denalis. (Norm Betts - For The Globe and Mail)the feasibility of a joint Canada-U.S. bailout of the auto industry.

“That’s the $64 question, or something slightly higher than $64,” he said during a Conservative Party policy convention in Winnipeg.

His comments came amid brewing fears that U.S. president-elect Barack Obama will force the Detroit Three auto makers to repatriate jobs by pulling production out of Canada and Mexico in return for American financial aid.

Mr. Clement said he was looking at setting up “direct information-gathering meetings in both Detroit and Washington, D.C., in the upcoming few days” to probe whether a joint bailout would work.

“One of the things I want to do in my information gathering is to see how viable that theory is because people talk about … the need to have an integrated solution,” Mr. Clement said. “From a theoretical point of view that makes sense, but how viable is it? When you drill down on that, what exactly does that mean?” he said.

The Harper government is coming under mounting pressure to provide financial support to the Canadian auto sector, because every other region that produces cars and trucks, including the United States, the European Union and Australia, is putting up billions of dollars to get the industry back on a sound footing.

Mr. Clement said there appears to be growing agreement on the conditions of assistance to the Detroit-based auto sector and its Canadian subsidiaries.

“There is certainly what I am observing is a consensus of views both in the government of Canada and in the Ontario government and also from what president-elect Obama has been stating … it has to be about long-term solutions, not short-term cash infusions,” he said.

The heads of the Canadian subsidiaries of the Detroit Three made their case for financing directly to Ontario Premier Dalton McGuinty Friday during a one-hour meeting at the provincial legislature.

The executives did not attach a dollar figure to their request, Economic Development Minister Michael Bryant told reporters following the meeting. But he made it clear that the province’s taxpayers will not tolerate a bailout of the sector and that any financing will come with strings attached.

“Governments are not the bank of last resort,” Mr. Bryant said.

Reid Bigland, president of Chrysler Canada Inc., said that both the federal and Ontario governments need to step in because the auto industry is such a significant player in the Canadian economy.

“I think [the Premier] fully understands the predicament we’re in,” he said.

Mr. Bigland, the only executive who talked to reporters after the meeting, refused to say what kind of assistance his company, Ford Motor Company of Canada and General Motors of Canada Ltd. are seeking.

The presidents of Honda Canada Inc. and Toyota Canada Inc. were also at the meeting. Mr. Bryant stressed that those companies are not facing a liquidity crisis but wanted to ensure that any aid provided to the Detroit Three does not leave Honda and Toyota at a competitive disadvantage.

Mr. McGuinty said his government won’t provide auto companies with any assistance unless they guarantee that they will maintain operations and jobs in the province.

“We are running a $500-million deficit [and] revenues are shrinking,” he said Friday before the meeting. “If we are going to come to the table in a way that is meaningful to the sector…, they’re going to have to demonstrate to us that that somehow serves the greater public interest.”

Mr. Bryant said the fact that the fact that all the executives met with him and Mr. McGuinty attests to the urgency of the situation. But no decisions were made, other than to keep talking and monitor actions being taken by the U.S. government to bail out Detroit.

Asked about whether a speedy package is necessary, Mr. Clement said it looks like the U.S. is running into stumbling blocks in assembling its auto package –suggesting it may take longer for the American government to put forward aid.

He declined to say how soon the Harper government might cobble together aid for the auto industry.

“The worst thing to do is to make a quick decision that is the wrong decision.”

The industry minister declined to say whether Canada could afford to see the Big Three automakers go bankrupt.

“I think the last thing Canadians need from a government minister is to run around with our hair on fire.”

Mr. Clement said the auto sector will need to be drastically transformed as a result of deliberations currently underway.

“That means some things that are being done now won’t be done in the future and other things that we can only barely contemplate now are going to be the driver, so to speak, of new jobs, new opportunity in the auto sector of the future.”

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PUBLISHED BY ‘THE GLOBE & MAIL’ (Canada)

Posted in AUTOMOTIVE INDUSTRY, BANKING SYSTEM - USA, CANADA, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, THE FLOW OF INVESTMENTS, THE WORKERS, TRADE DEFICIT - USA, USA | Leave a Comment »

OIL PRICES WIDENED U.S. TRADE DEFICIT – When it comes to everything from oil to olives, the U.S. buys more from other countries than it sells to them.

Posted by Gilmour Poincaree on November 14, 2008

Originally published Friday, November 14, 2008 at 12:00 AM

by Ellen Simon

The Associated Press

That’s why we have a trade deficit — the gap between the dollar value of U.S. exports to other OLIVE OIL ... LOTS OF IT ...countries and the value of everything imported to the U.S.

The U.S. has had a trade deficit for most of the last 30 years, as the country started buying more goods manufactured abroad. (There was a brief surplus in 1992.)

The sharp rise in oil prices since 2004 widened the deficit, since that meant we were sending more dollars overseas for each barrel of oil. The related decline in the dollar for much of that stretch exacerbated the deficit further by making imports more expensive for Americans — and U.S. exports cheaper for the rest of the world.

The recent decline in oil prices will help ease the trade deficit, but won’t erase it. As of Thursday, the trade deficit in September was $56.5 billion, down from $59.1 billion in August.

Here are some questions and answers about the trade deficit.

Q. What counts as trade?

A. Some of what’s traded is obvious: stuff. Barrels of oil from Saudi Arabia and containers of coal from West Virginia. Jet engines, TVs, steel beams, toy trains, DVDs, lumber, diamonds, canoes and pens. Tomatoes from Mexico and chocolate from Belgium. Tracksuits from China and cashmere scarves from Scotland. Nuclear-fuel materials.

Also included are royalties and licensing fees. These increased by $900 million between July and August, coinciding with the Beijing Olympics.

Some of the less obvious components are the cost of freight and port services and travel and passenger fares. If you fly to Spain on Iberian Airlines, you’re part of the trade deficit.

Q. With which countries does the U.S. have the largest deficit?

A. The U.S. bought $27.8 billion more goods from China in September than it sold, $13.4 billion more from nations in the Organization of Petroleum Exporting Countries, $8.3 billion more from the European Union and $7.8 billion more from Canada.

The U.S. also has trade deficits ranging from more than $5 billion to $700 million with the following countries, listed in order starting with the largest deficit: Japan, Mexico, Venezuela, Nigeria, Taiwan and South Korea.

Q. Are there any countries the U.S. doesn’t have a trade deficit with?

A. Yes, but those surpluses are nothing to brag about. In August, the U.S. had a $1.7 billion trade surplus with Hong Kong, $900 million with Singapore, $800 million with Australia and $200 million with Egypt.

Q. What’s caused our trade deficit?

A. There’s political debate about what’s behind the trade deficit, but there are factors everyone agrees on. Most notably: The price of oil, which quadrupled between 2002 and 2006, accounted for half the deterioration in the trade deficit during that period, according to the Federal Reserve Bank of San Francisco.

Beyond this, opinions are split. A report in 2000 from a congressional committee on trade deficits issued two statements — one Republican, the other Democratic — on what caused the deficit. Greatly simplified, Republicans said the deficit increased as U.S. wealth increased and Americans bought more, while Democrats blamed a low U.S. savings rate and a decline in manufacturing.

Q. Why does the trade deficit matter?

A. You can think of the trade deficit as a measure of how well U.S. companies are doing relative to their overseas rivals — especially rivals that sell a lot of goods to Americans. A big trade gap might mean, for example, that Japanese and European automakers are selling lots of cars in the U.S. — while American car companies are doing little business in foreign markets.

Copyright © 2008 The Seattle Times Company

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PUBLISHED BY ‘THE SEATTLE TIMES’ (USA)

Posted in COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, FUELS, INDUSTRIES, PETROL, TRADE DEFICIT - USA, USA, VEGETABLE OILS | Leave a Comment »