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ASIAN MARKETS GAIN AFTER US HOUSE PASSES STIMULUS BILL; EUROPE OPENS DOWN

Posted by Gilmour Poincaree on January 29, 2009

January 29, 2009 – 3:45 AM

by Stephen Wright – Associated Press

PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

BANGKOK, Thailand – Asian markets advanced Thursday, with Hong Kong jumping 4.6 percent in a catch-up rally, as the U.S. House of Representatives approved a $819 billion stimulus bill that investors hope will help lift the American economy out of its worst crisis in decades. European markets opened lower.

Japan’s Nikkei 225 stock average rose 144.95 points, or 1.8 percent, to 8,251.24 even as new data showed that retail sales in the world’s second-largest economy sank the most in nearly four years in December.

Hong Kong’s Hang Seng leaped 575.83 points, or 4.6 percent, to 13,154.43 after being closed for three days for the Lunar New Year. Mainland China’s markets are closed all week. South Korea’s Kospi gained 0.7 percent and Australia’s main index rose 0.9 percent.

Sentiment in Asia got a boost as President Barack Obama’s massive stimulus package moved closer to becoming a reality.

The Democratic-controlled House of Representatives approved the bill Wednesday night, sending it to the Senate where debate could begin as early as Monday. Democratic leaders have pledged to have legislation ready for Obama’s signature by mid-February.

“The U.S. stimulus package has a positive psychological impact on markets globally,” said Castor Pang, an analyst at Sun Hung Kai Financial in Hong Kong.

“But there is still going to be bad news in the form of profit warnings and unemployment,” he said. “The unemployment rate is going to continue to climb, making U.S. consumers even more hesitant about spending.”

As trading got underway in Europe, major bourses fell with France’s CAC-40 off 1.1 percent, Germany’s DAX down 1 percent and Britain’s FTSE 100 slipping 1.1 percent.

U.S. stock index futures were down, suggesting Wall Street would open lower Thursday. Dow futures were down 87 points, or 1.1 percent, at 8,235 and S&P500 futures were off 8.6 points, or 1 perc(AP) — ent, at 862.90.

Financial stocks led Asia’s advance Thursday, buoyed in part by hopes of new U.S. efforts to trim bad debt and spur lending.

In Hong Kong, banking giant HSBC jumped 8.4 percent and China’s top lender, Industrial & Commercial Bank of China Ltd., or ICBC, added 5 percent.

In Tokyo, megabank Sumitomo Mitsui Financial Group soared 13 percent, Mitsubishi UFJ jumped 4.8 percent and Mizuho added 5.2 percent.

Japanese exporters such as Sony and Toshiba reported weak quarterly results after the market closed.

Sony Corp.’s net profit tumbled 95 percent in the October-December quarter, as the global slump hurt sales of its core electronics products, while Toshiba Corp. sank into the red in the third quarter and expects a loss for the full year.

Elsewhere, New Zealand’s benchmark index was up 0.8 percent after the central bank slashed its key interest rate by 1.5 percentage points to 3.5 percent to prevent the country’s recession from deepening.

Oil prices slipped below $42 a barrel as rising U.S. crude inventories offset expectations the U.S. stimulus package will revive growth and consumer demand. Light, sweet crude for March delivery was down 34 cents to $41.82 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange.

In currency trading, the dollar fell to 90.02 yen from 90.41 late Wednesday in New York, while the euro declined to $1.3044 from $1.3139.

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PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

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Posted in AGRICULTURE, ASIA, BANKING SYSTEMS, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CHINA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, EUROPE, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, GERMANY, HONG KONG, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, JAPAN, RECESSION, RESTRUCTURING OF PRIVATE COMPANIES, RESTRUCTURING OF THE PUBLIC SECTOR, STOCK MARKETS, THE EUROPEAN UNION, THE FLOW OF INVESTMENTS, THE PRESIDENCY - USA, THE WORK MARKET, UNEMPLOYMENT, UNITED KINGDOM, USA | Leave a Comment »

RUSSIA, CHINA BLAME WOES ON CAPITALISM – SPEECHES CRITICIZE INAPPROPRIATE POLICIES, FOCUS ON DOLLAR’S ROLE; YET PUTIN SENDS OBAMA CONCILIATORY SIGNAL

Posted by Gilmour Poincaree on January 29, 2009

JANUARY 29, 2009

by Marc Champion in Davos, Switzerland; Andrew Batson in Beijing and Greg White in Moscow

PUBLISHED BY ‘THE WALL STREET JOURNAL’ (USA)

The premiers of Russia and China slammed the U.S. economic system in speeches Wednesday, holding it responsible for the global economic crisis.

Both focused on the role of the U.S. dollar, with China’s Premier Wen Jiabao calling for better regulation of major reserve currencies and Russia’s Prime Minister Vladimir Putin calling over-reliance on the dollar “dangerous.”

Speaking on the opening day of the World Economic Forum in Davos, Switzerland, they both urged more international cooperation to escape the downturn. They also talked up the abilities of their own economies to ride out the recession. Mr. Wen said he was “confident” China would hit its 8% growth target for this year even though that was “a tall order.” (See the full text)

The Russian and Chinese leaders also called for cooperation with U.S. President Barack Obama, but it was a chilly reception for the new administration that reflected growing anger in economies that are now getting hit hard by a financial crisis that began with subprime mortgages sold in the U.S.

Mr. Putin was characteristically blunt. He called for the development of multiple, regional reserve currencies in addition to the dollar. “Excessive dependence on a single reserve currency is dangerous for the global economy,” Mr. Putin said. (See the full text)

The Russian leader mocked U.S. businessmen who he said had boasted at last year’s Davos meeting of the U.S. economy’s fundamental strength and “cloudless” prospects. “Today, investment banks, the pride of Wall Street, have virtually ceased to exist,” he said.

Earlier, Mr. Wen called for an expansion of regulatory “coverage of the international financial system, with particular emphasis on strengthening the supervision on major reserve currencies.”

While Mr. Wen never named the U.S., his critique of its failings was as sweeping as Mr. Putin’s. The financial crisis, he said, was “attributable to inappropriate macroeconomic policies of some economies and their unsustainable model of development characterized by prolonged low savings and high consumption; excessive expansion of financial institutions in blind pursuit of profit” – and other excesses.

“The entire economic growth system, where one regional center prints money without respite and consumes material wealth, while another regional centre manufactures inexpensive goods … has suffered a major setback,” Mr. Putin said.

Mr. Wen’s comments came just days after U.S. Treasury Secretary Timothy Geithner accused China of manipulating its currency for economic gain. The Chinese premier gently, but firmly warned that if Washington and Beijing chose confrontation, both would be losers.

But the different tones of the two speeches, and the fact that Mr. Wen didn’t call for replacing the dollar’s role as the world’s reserve currency but regulating it, reflect crucial differences in the important emerging economies.

A spokeswoman for the U.S. Treasury Department declined to comment on the remarks in the speeches. The White House did not respond to requests for comment.

Many of the attendees at Davos took the remarks from Mr. Putin and Mr. Wen in stride. “The sad thing is is that we might have scoffed at this a while ago. But we really dragged the world down” economically, Alan Blinder, former vice chairman of the U.S. Federal Reserve, said in an interview after the speeches.

The rapid collapse of oil and commodities prices has hit Russia hard on top of the ripples of the financial crisis. The government now forecasts the economy will shrink for the first time in a decade this year, after growing 6% last year.

“In a very real sense Russia has been kicked to the margins, while China has become pivotal to any resolution of the financial crisis,” says Bob Lo, Director of the Russia and China programs at the Center for European Reform in London.

Mr. Putin’s government has spent $200 billion of hard currency reserves to defend the Russian currency, the ruble. It has spent as much again in a bailout package that amounts to 15% of gross domestic product, one of the largest responses to the financial crisis in the world. Unlike China, Russia’s economy is too dependent on commodities exports and too small to play a significant role in any global recovery, says Mr. Lo.

Russia also has negligible trade with the U.S., while Chinese exports are heavily dependent on U.S. consumers and Beijing holds $2 trillion in U.S. debt, prompting a much more cautious approach towards Washington and the dollar in Beijing.

The net effect of falling oil prices and the downturn, however, has been to make Russia more vulnerable and the Kremlin weaker, analysts say. Russian officials have begun to send out more conciliatory signals to the new U.S. administration.

“We wish the new team success,” Mr Putin said Wednesday, calling on it to cooperate.

China, too, is suffering from the downturn. Many independent economists, including economists at the International Monetary Fund, question whether Beijing will be able to meet its 8% growth target this year.

Developed nations are increasingly calling for China to do more to stimulate its own economy. On Wednesday, Mr. Wen gave a detailed account of the four trillion yuan ($585 billion) investment program China announced in November. “As a big responsible country” China was actively boosting domestic, and particularly consumer demand, said Mr. Wen.

The headline sum in the program would likely be equivalent to around 3% of gross domestic product in 2009 and 2010. But even government officials aren’t promising that much of a boost to the economy. Zhang Ping, the head of the National Development and Reform Commission, in November estimated it would add about one percentage point to GDP growth this year and next.

That may have seemed like a lot at the time, but expectations for global and Chinese growth have rapidly deteriorated since then. Mr. Wen said growth slowed to 6.8% in the fourth quarter from the same period a year earlier. That’s a little more than half the 13% gain in 2007, at the height of the boom. Some economists believe China could grow by as little as 5% this year, too little to provide jobs for the graduates flooding into the labor market from Chinese universities and schools each year and a further drag on the global economy.

Less noticed in Mr. Geithner’s repetition of Mr. Obama’s campaign-trail assertion that China “manipulates” its currency last week was his argument that the long U.S.-Chinese dispute over currency didn’t matter as much as getting China to do more to boost its economic growth.

“Given the crisis the immediate focus needs to be on the broader issue of stabilizing domestic demand in China and the U.S.,” Mr. Geithner said in his written response to questions during his Senate confirmation process. “A further slowdown in China would lead to a substantial fall in world growth (and demand for U.S. exports) and delay recovery from the crisis.”

Printed in The Wall Street Journal, page A6

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PUBLISHED BY ‘THE WALL STREET JOURNAL’ (USA)

Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CENTRAL BANKS, CHINA, COMMERCE, CURRENCIES, DOLLAR (USA), ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, FOREIGN POLICIES - USA, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INDUSTRIES - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF PRIVATE COMPANIES, RESTRUCTURING OF THE PUBLIC SECTOR, RUSSIA, THE FLOW OF INVESTMENTS, THE PRESIDENCY - USA, USA | Leave a Comment »

OBAMA COMMITTED TO ‘GREEN’ ECONOMY (USA)

Posted by Gilmour Poincaree on January 28, 2009

Tuesday, January 27, 2009

by Xinhua

PUBLISHED BY ‘THE MANILA TIMES’ (Philippines)

LOS ANGELES: The Obama administration is pushing forward with plans to aggressively limit greenhouse gas emissions PRESIDENT OF THE UNITED STATES OF AMERICA, BARACK HUSSEIN OBAMAand fight global warming, US media reported.

The plans would include a cap-and-trade initiative to limit greenhouse gases and raise the cost of pumping more carbon into the atmosphere, the Los Angeles Times said Sunday (Monday in Manila).

Under the initiative, the government would set limits on carbon emissions by power plants, factories and other installations, but allow those who emit more to buy or trade permits with companies and facilities that emitted less than the prescribed limit, according to the newspaper.

But the move would amount to a tax, raising energy costs. And several independent studies have suggested that emissions limits would only increase energy price and be a drag on economic growth, at least in the short term.

Despite such fears, the Obama government believed that a “clean energy economy” move would spur competition and promote investment in renewable alternatives to imported oil.

Two-pronged plan

The administration is expected to move forward with a two-pronged effort to stimulate renewable energy supplies and ensure demand for the megawatts they would produce, the newspaper reported.

The first part is to invest heavily in wind power, solar power and biofuels through the massive stimulus bill, while the second is to help those forms of energy compete with cheaper fossil fuels by pumping up fossil fuel costs to reflect the potential economic damage from global warming, according to the paper.

“If we don’t put a price on carbon,” said Democratic Senator Barbara Boxer, chairman of the Environment and Public Works Committee. “We’ll never get these clean energy sources on line.”

Instead of dragging the economy, the plan to limit greenhouse emissions would stimulate the economy and “allow polluters to transition from a high-polluting environment to a low-polluting environment,” said Andy Stevenson, a former hedge fund manager who is now a finance advisor for the Natural Resources Defense Council in New York City.

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PUBLISHED BY ‘THE MANILA TIMES’ (Philippines)

Posted in AEOLIC, AGRICULTURE, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), BIODIESEL, BIOFUELS, COMMERCE, COMMODITIES MARKET, ECOLOGICAL AGRICULTURE, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENERGY, ENERGY INDUSTRIES, ENVIRONMENT, ETHANOL, FINANCIAL CRISIS - USA - 2008/2009, GLOBAL WARMING, HEALTH SAFETY, HYDROELECTRIC ENERGY, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, MACROECONOMY, NATURAL GAS, POLLUTION, 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, USA | Leave a Comment »

OBAMA GREEN LIGHT FOR TOUGH FUEL LAWS – OBAMA BEGINS ROLLING BACK BUSH CLIMATE POLICY (USA)

Posted by Gilmour Poincaree on January 26, 2009

January 26, 2009

The Times

PUBLISHED BY ‘THE AUSTRALIAN’

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PUBLISHED BY ‘THE AUSTRALIAN’

Posted in AGRICULTURE, BANKING SYSTEM - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), COMMERCE, COMMODITIES MARKET, ECOLOGICAL AGRICULTURE, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENVIRONMENT, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL MARKETS, GLOBAL WARMING, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INDUSTRIES - USA, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF PRIVATE COMPANIES, THE FLOW OF INVESTMENTS, THE PRESIDENCY - USA, USA | 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 »

OBAMA’S ECONOMIC PLAN MEETS GOP PUSHBACK – PRESIDENT SHOWS BIPARTISANSHIP HAS CLEAR LIMITS; ‘I WON. I TRUMP YOU,’ HE TELLS GOP (USA)

Posted by Gilmour Poincaree on January 24, 2009

Jan. 23, 2009

by Jake Tapper, Rick Klein and Jonathan Karl

PUBLISHED BY ‘ABC NEWS’ (USA)

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PUBLISHED BY ‘ABC NEWS’ (USA)

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, FOREIGN POLICIES - USA, FOREIGN WORK FORCE - LEGAL, HEALTH CARE - USA, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, NATIONAL WORK FORCES, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF THE PUBLIC SECTOR, THE FLOW OF INVESTMENTS, THE OCCUPATION WAR IN IRAQ, THE PRESIDENCY - USA, THE WORK MARKET, THE WORKERS, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

OBAMA FIRMA LA ORDEN DE CLAUSURA DE GUANTÁNAMO (USA)

Posted by Gilmour Poincaree on January 22, 2009

22.01.09 – 21:50

Diario Vasco – AGENCIAS – WASHINGTON

PUBLISHED BY ‘DIARIO VASCO’ (Basque Country)

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PUBLISHED BY ‘DIARIO VASCO’ (Basque Country)

Posted in AL QAEDA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES - USA, HOUSING CRISIS - USA, HUMAN RIGHTS, INTERNATIONAL RELATIONS, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, RESTRUCTURING OF THE PUBLIC SECTOR, THE FLOW OF INVESTMENTS, THE OCCUPATION WAR IN IRAQ, THE PRESIDENCY - USA, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

OBAMA NAMES TWO INDIAN-AMERICANS (NEAL KUMAR KATYAL AND PREETA BANSAL) TO KEY POSTS

Posted by Gilmour Poincaree on January 22, 2009

21 Jan 2009, 0120 hrs IST

IANS

PUBLISHED BY ‘THE ECONOMIC TIMES’ (India)

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PUBLISHED BY ‘THE ECONOMIC TIMES’ (India)

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 CRISIS 2008/2009, HOUSING CRISIS - USA, RECESSION, RESTRUCTURING OF THE PUBLIC SECTOR, THE PRESIDENCY - USA, USA | 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 »

A NEW MENACE TO THE ECONOMY: ‘ZOMBIE’ DEBTORS – CALL THEM “ZOMBIE” COMPANIES – MANY MORE HAS-BEEN COMPANIES WILL BE FEEDING OFF TAXPAYERS, INVESTORS, AND WORKERS—SAPPING THE LIFEBLOOD OF HEALTHIER RIVALS

Posted by Gilmour Poincaree on January 19, 2009

January 15, 2009, 5:00PM EST

by Peter Coy

PUBLISHED BY ‘BUSINESSWEEK’ (USA)

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PUBLISHED BY ‘BUSINESSWEEK’ (USA)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL SERVICES INDUSTRIES, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, MACROECONOMY, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF PRIVATE COMPANIES, THE FLOW OF INVESTMENTS, THE PRESIDENCY - USA, USA | Leave a Comment »

U.K. SMARTER THAN U.S.

Posted by Gilmour Poincaree on January 19, 2009

January 18, 3:50 PM

by Scott R. Gingold – Business News Examiner

PUBLISHED BY ‘THE EXAMINER’ (USA)

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MARKET DROP HAS RANCHERS FEELING DOWN (USA)

Posted by Gilmour Poincaree on January 19, 2009

Jan 17, 2009 4:00 AM

Joanne Kelley – Associated Press

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AHMADINEJAD CONGRATULATES HAMAS ON ‘VICTORY’ (Iran)

Posted by Gilmour Poincaree on January 19, 2009

1330 PST, Monday, January 19, 2009

The International News

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ISSUES CANNOT BE RESOLVED IMMEDIATELY: OBAMA (USA)

Posted by Gilmour Poincaree on January 19, 2009

0600 PST, Monday, January 19, 2009

The International News

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OBAMA SUCKED INTO MIDEAST CAULDRON FROM DAY ONE

Posted by Gilmour Poincaree on January 19, 2009

1340 PST, Monday, January 19, 2009

The International News

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A COMMON ENEMY – ISRAEL

Posted by Gilmour Poincaree on January 6, 2009

January 6, 2009

by Fred Hubner

PUBLISHED BY ‘FROM SCRATCH NEWSWIRE’ (USA)

Not being an Arab, a Muslin or a Christian and coming from a Jewish family inquisitorially converted to Christendom some five centuries ago, I feel free to admit that the present events promoted Israel as the one and only enemy of all Arab nations. I also feel free to point an accusing finger to all Arab nations, which criminally just stand by while the open extermination of the Palestinians happens right before their guilty eyes. I also feel pretty much at ease accusing the United Nations for doing nothing, thanks, for so many decades. I also accuse my goverment, Bush’s still lingering ineptness and all previous administratrions for the idea that we should, out of ‘good will’, sell weapons to such a belligerent and criminal state such as Israel’s. So yes, there’s Palestinian blood and guts in the hands of every citizen in the world. So yes, from now on Israel must be seen for what it is … a criminal state and a threat to human kind. So yes, henceforth, Israel is the enemy of all other nations be them Arabs, Christians, Americans, Muslins … and including conscientious Jews.

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FIGHTING OFF DEPRESSION (USA)

Posted by Gilmour Poincaree on January 6, 2009

January 5, 2009

by Paul Krugman

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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

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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

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CBS NEWSMAN’S $70M LAWSUIT LIKELY TO DEAL BUSH LEGACY A NEW BLOW (USA)

Posted by Gilmour Poincaree on December 29, 2008

Sunday 28 December 2008

by Christopher Goodwin – in Los Angeles – The Observer

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Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, COMMUNICATION INDUSTRIES, CORRUPTION, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FRAUD, FREEDOM OF SPEECH AND CONSCIENCE, HISTORY, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, NATIONAL WORK FORCES, RECESSION, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, THE WORKING ENVIRONMENT, USA | Leave a Comment »

2009: BUCKLE UP FOR A BUMPY RIDE

Posted by Gilmour Poincaree on December 28, 2008

Sunday, December 28, 2008 at 12:00 AM

by Jack Broom – Seattle Times Staff Reporter

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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 CRISIS 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, USA | Leave a Comment »

24 FINED OR SCOLDED FOR HELPING NOE WITH FUNDRAISING SCHEME

Posted by Gilmour Poincaree on December 28, 2008

2Saturday, December 27, 2008 9:08 PM

by Mark Niquette – The Columbus Dispatch

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THE RETURN OF REALPOLITIK IN ARABIA – Bush’s ‘diplomacy of freedom’ gives way to Obama’s caution and reticence. The Middle East may test our fatigue

Posted by Gilmour Poincaree on December 16, 2008

DECEMBER 15, 2008, 11:42 P.M. ET

by Amy R. Remo

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Posted in AL QAEDA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), DEFENCE TREATIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES, FOREIGN POLICIES - USA, INTERNATIONAL RELATIONS, RECESSION, THE ARABIAN PENINSULA, THE ISRAELI-PALESTINIAN STRUGGLE, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE OCCUPATION WAR IN IRAQ, THE PRESIDENCY - USA, THE UNITED NATIONS, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

ARMS SALES AND THE FUTURE OF U.S.-TAIWAN-CHINA RELATIONS

Posted by Gilmour Poincaree on December 7, 2008

November 24, 2008 05:01 PM – Age: 13 days

by Jau-shieh Joseph Wu

PUBLISHED BY ‘THE JAMESTOWN FOUNDATION’ (USA)

Publication: China Brief Volume: 8 Issue: 22

Category: China Brief, Featured, Military/Security, China and the Asia-Pacific

The outgoing Bush Administration made an 11th hour decision to notify the U.S. Congress on GEORGE WALKER BUSHOctober 3—a day before Congress went into recess ahead of the groundbreaking November presidential election in the United States—that a raft of arms and weapons systems, which have been effectively frozen since December 2007, will be released for Taiwan. The passage of the arms package provided a temporary reprieve for Taiwanese President Ma Ying-jeou, whose approval rating since assuming office in May has plummeted to 23.6 percent in October (Global View, November 2008). The items released by the U.S. Defense Security Cooperation Agency, at the value of $6.4 billion, includes: 182 Javelin anti-tank missile; 30 Apache helicopters; four PAC-3 anti-missile batteries; 32 submarine-launched Harpoon missiles; and four E-2T radar plane upgrades. But more noticeable than the items released is the absence of the first phase of 8 diesel-powered submarines, Black Hawk helicopters, and two additional PAC-3 batteries that had been originally sought (United Daily News [Taiwan], October 5, 2008; Defense News, October 6). Taipei also requested 66 F-16 C/D jet fighters to add to its current inventory, but the Bush Administration has not received the letter of request for the reason that it would only process the above-mentioned package at the current stage.

The passage of the arms package was received with a sigh of relief in Taipei, which is concerned about the island’s strained relations with the United States,and, had a decision lapsed to the next U.S. president, weary that the package would be approved at all. As expected, Beijing complained bitterly and suspended unspecified military exchange programs with the United States (United Daily News, October 8, 2008), but overall the sale did not upset Sino-U.S. relations, nor did it interrupt the momentum of reconciliatory gestures between the Kuomintang (KMT), the ruling party on Taiwan, and the Chinese Communist Party (CCP). However, the scaling-down of the arms package signifies subtle changes in the geopolitical landscape in East Asia, where the shifting center of gravity may affect the long-term interests of the United States and its relations with the nations in the region.

Arms Sale and Taiwan’s Defense

Although the items approved only represent a fraction of Taiwan’s request and the value is half of what was originally sought, the package nonetheless improves Taiwan’s defense capability and reduces Taiwan’s widening military disparity vis-à-vis China. However, China’s military is rapidly modernizing, with its military defense budget has increased by double digit for more than 15 years while Taiwan’s defense budget has remained low. Therefore, the arms package will be unable to offset the strategic changes in the depth projection of China’s military in the region and encirclement of Taiwan’s sovereignty. Among Taiwan’s most cited threats is the People’s Liberation Army’s (PLA) deployment of more than 1,000-1,400 short-ranged ballistic missiles (SRBM), which have increased at the rate of 100 per year since 2001. These missiles have been aimed at Taiwan from six missile bases in Lepin, Santow, Fuzhou, Longtien, Huian, and Zhangzhou, spanning three southeastern coastal provinces of Jiangxi, Zhejiang, and Fujian [1] (Liberty Times [Taiwan], March 30, 2008). In addition, China has also acquired an estimated 50 advanced submarines, which is more than what military analysts state the PLA needs to blockade the Taiwan Strait. The PLA has also engaged in military exercises and deployments designed to sharpen its defensive capabilities so that even with limited offensive capabilities, China would be able to subdue Taiwan’s defenses in a limited amount of time by denying the access of other maritime powers that may come to Taiwan’s defense [2]. Furthermore, China has—in recent years—ratcheted up its computer-hacking activities against the Taiwanese government’s national security-related agencies and has stolen countless sensitive materials (United Daily News, April 8, 2007), so much so that some Taiwanese security officials describe that a “silent war” has already begun.

Friction between the Democratic Progressive Party (DPP) and the CCP in the Taiwan Strait was to be expected for two parties whose visions for Taiwan and its relationship with China are diametrically opposed. That the result of Taiwan’s presidential election on March 22 was embraced by the embattled U.S. leadership came as no surprise. The KMT’s Ma Ying-jeou appears more conciliatory toward China than his predecessor, Chen Shui-bian of the DPP. Chen stoked tensions in cross-Strait relations prior to the election by advocating that Taiwan join the United Nations as a new member, promoted a national referendum on the issue during the recent presidential election. These tensions have since eased following President Ma’s inauguration. Bush Administration officials—in pubic and in private—conveyed satisfaction to see Taiwan’s KMT government and the CCP re-engaged in cross-Strait dialogue, particularly the resumption of the Strait Exchange Foundation (SEF) – Association for the Relations Across the Taiwan Strait (ARATS) channel, severed by the CCP after former President Lee Teng-hui stated in a major policy speech in 1999 that Taiwan-China relations are “special state-to-state relations.”

Cross-Strait Politics and China’s Legal Warfare against Taiwan

From November 3 to 7, the head of ARATS, Chen Yunlin, serving as China’s special envoy to Taiwan, participated in an unprecedented visit to Taiwan to negotiate cross-Strait aviation, shipping, and food safety agreements. Chen Yunlin’s visit has attracted international attention on the warming relations between a democratic Taiwan and an authoritarian China, and also on a deepening divide in Taiwanese society.

A closer examination of ongoing cross-Strait shuttle diplomacy between the KMT and CCP, and public announcements made by President Ma raises legitimate questions about whether the current trend is in Taiwan’s national interest or for that matter U.S. long-term security interest.

The issue of Taiwan’s sovereignty has always been the focal point of cross-Strait tension, since the PRC claims that Taiwan is a part of China under its interpretation of the “one-China principle.” The Chinese government has engaged in what some analysts call a diplomatic “full-court press,” using a carrot and stick strategy in the form of financial and monetary incentives, to legalize the “one-China principle” in major international organizations and thereby legitimize its claim of sovereignty over Taiwan (Javno, November 16, 2007).

The first such step came in May 2005, when the Chinese government signed a memorandum of understanding (MoU) with the World Health Organization (WHO) Secretariat requiring the WHO to seek Chinese approval before Taiwan, under the name “Taiwan, China,” could participate in any WHO-related activities. The second came in the United Nations, which in March 28, 2007, issued a letter from the Secretariat to Nauru stating that, in compliance with the 1972 UN General Assembly Resolution 2758, “the United Nations considers Taiwan for all purposes to be an integral part of the People’s Republic of China.” The third incident was with the OIE (World Organization of Animal Health). In May 2007, Beijing attempted to pass a resolution “recognizing that there is only one China in the world and the government of the People’s Republic of China is the sole legal government representing the whole of China which includes Taiwan,” changing Taiwan’s membership into “non-sovereign regional member,” and using “Taiwan, China” or “Taipei, China” as Taiwan’s official title in this organization.

As these three examples demonstrate, the “one-China principle” has been used by the PRC as a means of waging its “legal warfare” to incorporate Taiwan and to accomplish its bottom-line goal of de jure unification, as explicitly stated by its CARCEL PARA POSADAdeclared intent to use military force if necessary under the “anti-secession law” of 2005 to “reunify” Taiwan. The examples also illustrate how, if Taipei agrees to the “one-China principle,” it may be interpreted as accepting China’s claim of sovereignty over Taiwan. Under such pretexts, the government under the DPP had to avoid and even repel the “one-China principle” as the precondition for the resumption of cross-Strait talks. The DPP did this by seeking international support for its counter-position, which led to the standoff in cross-Strait negotiations and showed the world that the “one-China principle” effectively became a non-starter.

These efforts notwithstanding, Ma Ying-jeou in his inaugural address reversed the previous administration’s position and accepted the so-called “1992 consensus” as the foundation for cross-Strait reconciliation in spite of the fact that the PRC officially stated that the “1992 consensus” was a consensus realizing (ti-xien) the “one-China principle.” In several private meetings with foreign visitors, Ma even went on to say that he accepted the one-China principle with or without any elaboration on what he meant by it. In addition, Ma stated in September during an interview with a Mexican journal that the relations between Taiwan and China are “non-state to state special relations,” and his spokesperson Wang Yuchi further qualified that statement of policy by saying that relations should be characterized as “region to region” (diqu dui diqu) relations (September 3, 2008, news release, http://www.president.gov.tw). In the effort to participate in international organizations, Ma announced that there is no better title for Taiwan other than “Chinese Taipei” (United Daily News, April 5, 2008). During the August/September effort to participate in the United Nations, the KMT government gave up on the membership drive and pursued only “meaningful participation” in UN-affiliated organizations. Even so, the Chinese Ambassador to the UN, Wang Guang-yia, stated that Taiwan was not qualified to participate in major international organizations, and Taiwan’s participation in the WHO had to follow the MOU signed between the Chinese government and the WHO Secretariat (Liberty Times, August 28, 2008). The Ma administration made no attempt to repudiate the Chinese claim, and Ma’s spokesperson stated that it was not a “non-goodwill” (Liberty Times, August 29, 2008). In addition, when in the negotiations for cross-Strait chartered flights the Ma administration decided to open up six domestic airports in addition to two international airports, the decision apparently fell into the Chinese claim that the cross-Strait flights are domestic flights. In short, the official statements and policy actions by the KMT government on relations between the two sides of the Strait thus put Taiwan within the description of the “one-China principle,” with Taiwan being part of China.

Inner Politics and Arms Sales

In another interview by India and Global Affairs, Ma stated that HOMELESS - USAhe wanted to pursue full economic normalization with China, and that he also wanted to reach a peace agreement within his term (Liberty Times, October 18, 2008). If Ma’s concept on the relations between Taiwan and China falls within the description of the “one-China principle,” a full economic normalization will mean an arrangement similar to the Closer Economic Partnership Agreement (CEPA) between Hong Kong and China. A peace agreement between Taiwan and China within the timetable of his four-year term may necessitate that the United States prepare for an eventual termination of arms sales to and security cooperation with Taiwan. Ma’s statements may be welcomed by the international community as gestures toward peace, but it is actually putting Taiwan’s security in jeopardy. If Taiwan were to sign a peace agreement under the KMT where the conditions are defined by the KMT and CCP, the resulting equation, influenced by a much more powerful China at the other end of the negotiating table, may forfeit Taiwan’s freedom to repudiate China’s claim over Taiwan. Taiwan may be moving dangerously too close to the PRC and may not be able to maintain its current de facto independent status any longer.

The United States has for decades held a policy of refuting the PRC’s claim of sovereignty over Taiwan, as stated in the “six assurances” provided by President Ronald Reagan in 1982 and other private communications with Taiwan (Fredrick Chien Memoir, vol. 2, 2005, 215-6). When China manipulated the UN Secretariat to issue a letter in March 2007, which stated that Taiwan is considered by the UN an integral part of the PRC, the United States protested to the UN Secretariat, arguing that such a declaration is against U.S. policy (Liberty Times, September 6, 2007). But if Taiwan itself accepts one-China principle, the foundation for this U.S. policy may be jeopardized. In other words, Ma’s effort of reconciliation is a short-term relief for the United States at a time when it is not capable of addressing simultaneous international conflicts. However, such efforts may prove to be against U.S. long-term interests, especially if the United States continues to view China’s rapid military modernization with suspicion.

Taiwan’s domestic politics are severely divided over the course of the government’s ongoing rapprochement with China. President Ma has not made any efforts to seek domestic reconciliation or attempt to communicate with the opposition over his intentions on cross-Strait policy. In fact, Ma’s statements and actions angered many people who believe that Taiwan should keep China at arm’s length. Taiwan appears to be more divided than before in the months since Ma’s inauguration, as evidenced by several large-scale, anti-government/anti-China demonstrations. Consequently, Taiwan’s status has been relatively weakened in facing the subtle and not so subtle threats from authoritarian China. A divided and weakened Taiwan severely threatens Taiwan’s national security, and is, by extension, not in the interests of the United States or Japan, its key ally in East Asia. All interested parties should therefore encourage the KMT to engage the opposition DPP in formulating its policy across the Taiwan Strait.

Conclusion

The changes occurring within the strategic landscape of East Asia are quite subtle indeed. U.S. arms sales to Taiwan are one of the most important means LOADING BOMBSfor the United States to demonstrate its security commitment to its key allies and ensure peace and stability in the Taiwan Strait. In order for the United States to continue to maintain peace and stability in the region, the United States has long held the position, as prescribed by the Taiwan Relations Act, that arms sales to Taiwan are evaluated on the merit of Taiwan’s defense needs, not political judgments or as a result of consultations with the PRC. However, the U.S. decision to scale down the volume of weapons that had already been promised may make Taiwan feel uncomfortable about the U.S. commitment at a time when Taiwan needs a strong defense in order to ward off China’s possible aggression. A continued U.S. commitment is also integral in permitting Taiwan to resist China’s political pressure, however remote it may seem, and most importantly enable Taiwan to negotiate with China from a position of strength. The unfinished issue of arms sales to Taiwan thus becomes another pressing matter for the new U.S. administration to address in order to safeguard American interests in reinforcing peace and stability in East Asia.

Notes

1. Tseng Shiang-yin, “The Enhancement of Taiwan’s missile defense,” Taiwan Defense Affairs (Vol 5, No. 3, Spring 2005) pp. 88-117, www.itdss.org.tw/pub/05_3/05_3_p088_177.pdf.

2. Ling Chang-sheng, “Research, Development and Deployment of China’s Cruise Missiles,” Defence International Issue 213 (Taiwan: April 12, 2003), www.diic.com.tw/comment/06/06930412.htm.

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Posted in BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CHINA, COMMERCE, COMMODITIES MARKET, DEFENCE TREATIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES, FOREIGN POLICIES - USA, FORMOSA - TAIWAN, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, MILITARY CONTRACTS, NATIONAL WORK FORCES, RECESSION, STOCK MARKETS, THE ARMS INDUSTRY, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE OCCUPATION WAR IN IRAQ, THE PRESIDENCY - USA, THE WORK MARKET, THE WORKERS, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | 1 Comment »

OBAMA BANKING ON LARGE-SCALE PUBLIC WORKS PROJECT

Posted by Gilmour Poincaree on December 7, 2008

Posted on Sat, Dec. 6, 2008

by Ann Sanner – The Associated Press

PUBLISHED BY ‘PHILLY.COM’ (USA)

OBAMA TRANSITION: CHANGE.GOV

CHICAGO – President-elect Barack Obama said Saturday he wants to revive the economy through a job-creating public works plan on a scale unseen since the building program of the interstate highway system in the 1950s.

He offered no price estimate for the grand plan, how the money might be divided or the effect on the country’s financial health at a time of burgeoning deficits.

The ideas were outlined in the weekly radio address the day after the government reported that employers cut 533,000 jobs in November, the most in 34 years. They are part of a vision for a massive economy recovery plan Obama wants Congress to pass and have waiting on his desk when he takes office Jan. 20.

The president-elect’s address never once used the word “spend,” relying instead on “invest” or “investments,” and pledging wise stewardship of taxpayer money in upgrading roads and schools, and making public buildings more energy-efficient.

“We won’t just throw money at the problem,” Obama said. “We’ll measure progress by the reforms we make and the results we achieve , by the jobs we create, by the energy we save, by whether America is more competitive in the world.”

Obama said his plan would employ millions of people by “making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s.” He said state officials would lose the federal dollars if they did not quickly use the money to repair highways and bridges.

According to the Federal Highway Administration, a 1991 final estimate of the cost of the interstate system put it at $128.9 billion, with a federal share of $114.3 billion. The estimate covered only the mileage (42,795 miles) built under the interstate construction program. Construction of the system began in 1956 under President Dwight Eisenhower.

More than 5,000 highway projects are ready to go today, state transportation officials say, if Congress will pony up $64.3 billion as part of an economic aid plan. The American Association of State Highway and Transportation Officials, which compiled the list, said the projects would provide jobs and help reduce a backlog of crumbling roads and bridges.

A bipartisan group of governors recently met with Obama to press for some $136 billion in infrastructure projects in addition to money for health care costs.

Several governors welcomed Obama’s economic plan.

Virginia Gov. Tim Kaine said the state had more than a billion dollars in “ready-to-go” projects that have been planned for and can be under contract within 180 days. “His plan will put people to work and give the economy a critically important boost,” Kaine said in a written statement.

In a joint statement, New York Mayor Michael Bloomberg, Pennsylvania Gov. Ed Rendell and California Gov. Arnold Schwarzenegger said it would help the U.S. stay ahead of other countries. “To stay competitive globally, the time to repair and modernize our nation’s infrastructure is now,” they said.

In the address, Obama also said he wants to install energy-saving light bulbs and replace old heating systems in federal buildings to cut costs and create jobs.

School buildings would get an upgrade, too. “Because to help our children compete in a 21st century economy, we need to send them to 21st century schools,” Obama said.

As a part of the package, Obama said he wants to expand broadband Internet access in communities. “Here, in the country that invented the Internet, every child should have the chance to get online,” he said.

Hospitals also should be connected to each through the Internet. He said he wanted to ensure the facilities were using the latest technology and electronic medical records.

Obama planned to announce more details of the economic recovery plan in the coming weeks.

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Posted in BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FOREIGN WORK FORCE - LEGAL, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, MACROECONOMY, 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, USA | 1 Comment »

OBAMA SEES BUSH

Posted by Gilmour Poincaree on December 5, 2008

11-11-2008

PUBLISHED BY ‘THE CAGLE POST’

CHARGE BY RAINER HACHFELD – NEUES DEUTSCHLAND, GERMANY

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Posted in BANKING SYSTEM - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, HOUSING CRISIS - USA, INTERNATIONAL HUMOR, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, USA | Leave a Comment »

How Long Will The Recession Last? – And why this doesn’t matter for President-Elect Obama

Posted by Gilmour Poincaree on December 3, 2008

December 3, 2008 at 2:04 pm

By dueconsideration

PUBLISHED BY ‘DUE CONSIDERATION’

 

The best place to start when answering this question is the past. Once we can see what’s happened before, we can begin to assess what might happen next.

The following statistics come from the US National Bureau of Economic Research.

America’s Business Cycle Dates. Duration in Months

Peak                Trough           Peak to          Trough           Trough            Peak

                                                Trough           to Peak           to Trough       to Peak

 

Feb 1945         Oct 1945         8                      80                    88                    93

Nov 1948        Oct 1949         11                    37                    48                    45

Jul 1953           May 1954       10                    45                    55                    56

Aug 1957        April 1958       8                     39                    47                    49

April 1960       Feb 1961        10                    24                    34                    32

Dec 1969         Nov 1970       11                   106                  117                  116

Nov 1973        Mar 1975        16                    36                    52                    47

Jan 1980          Jul 1980           6                     58                    64                    74

Jul 1981           Nov 1982       16                    12                    28                    18

Jul 1990           Mar 1991        8                     92                   100                  108

Mar 2001         Nov 2001        8                    120                  128                  128

As you can see quite clearly, America, like most countries, spends much more time growing (Trough to Peak) than shrinking (Peak to Trough). However, those periods of expansion and contraction vary considerably from business cycle to business cycle.

Americas ten year expansion from March 1991 to March 2001 was the longest for at least 150 years – the length of time the National Bureau has data for.

So, to answer the original question, how long is this recession likely to last? The maximum length of a Peak to Trough in the last 60 years has been 16 months. If we hope that this recession is no worse than that, and there seems to be no evidence that specific factors are going to cause an abnormally long recession (indeed with globalisation, the World’s economy is more diversified than ever and so should be more robust), and given that the National Bureau have decided that the Peak of the Cycle was December 2007, then the Trough should be around March 2009.

Although the US economy will start growing from that point, people probably won’t start feeling the benefit for around another year as the slack (that has developed in the recession) gets taken out of the economy. This slack is measured in unemployed people and companies producing less than their capacity.

Whatever does happen, it won’t matter for Obama – the recession can be blamed on President Bush and by the time his re-election comes around in 4 years the economy will be growing again, probably strongly, making him a shoe-in. The only thing that could stop this happening is if he manages to become generally unpopular in the meantime for unforeseen policy mistakes.

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Posted in BANKING SYSTEM - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CENTRAL BANKS, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, NATIONAL WORK FORCES, RECESSION, THE FLOW OF INVESTMENTS, THE PRESIDENCY - USA, THE WORK MARKET, THE WORKERS, USA | Leave a Comment »

HSBC PRIVATE BANKING PART OF US PROBE

Posted by Gilmour Poincaree on December 3, 2008

Wednesday, December 03, 2008

BenjaminScent

PUBLISHED BY ‘THE STANDARD’ (Hong Kong – China)

The US Justice Department has launched a criminal investigation into whether HSBC’s (0005) private banking division illegally helped American clients avoid paying taxes by hiding their money in undeclared offshore bank accounts, according to media reports.

The investigation began in September and is looking into whether HSBC and Credit Suisse helped rich Americans squirrel away up to US$30 billion (HK$234 billion) in offshore accounts that were not declared in US tax filings, The New York Times quoted two sources as saying.

A London-based spokesman for HSBC declined to comment.

Meanwhile, HSBC said it is cutting 500 jobs from its British operations. The cuts, which account for less than 1 percent of HSBC’s 58,000 workers in the country, are mostly in London. No frontline staff in retail branches or call-center staff are impacted, according to a statement.

Separately, Standard Chartered Bank (Hong Kong) confirmed it is cutting 200 staff in the SAR, with the layoffs spread across different departments and different seniority levels. The bank started notifying the affected staff yesterday, a spokeswoman said. The layoffs account for about 4 percent of Standard Chartered’s staff in Hong Kong.

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Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, CRIMINAL ACTIVITIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HONG KONG, INTERNATIONAL, JUDICIARY SYSTEMS, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, SPAIN, TAX EVADING, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, USA | Leave a Comment »

BOJ EXPANDS LENDING FOR FIRMS (Japan)

Posted by Gilmour Poincaree on December 3, 2008

Wednesday, December 03, 2008

REUTERS, BLOOMBERG

PUBLISHED BY ‘THE STANDARD’ (Hong Kong – China)

The Bank of Japan said it will expand lending by about 3 trillion yen (HK$250 billion) to help companies tide over a year-end BANK OF JAPAN - SPAINcredit squeeze and accept lower rated corporate bonds as collateral for loans.

The central bank, which kept rates steady at 0.3 percent at an emergency meeting yesterday, said it plans to accept triple B-rated corporate bonds as collateral which would make it easier for banks, scarred by the global financial crisis, to lend to companies.

The move in Japan came as a private nonprofit group of economists said the United States is now in recession and the US economy may be in the midst of the longest slump in the post-World War II era as job losses mount and credit dries up. The economic slump began in December 2007, the National Bureau of Economic Research said.

The Federal Reserve might buy Treasury securities to spur growth.

REUTERS, BLOOMBERG

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Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, CENTRAL BANKS, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, INTERNATIONAL, JAPAN, RECESSION, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, USA, YEN (Japan) | Leave a Comment »

CANADA HAULS US TO WTO OVER COUNTRY-OF-ORIGIN LABELING FOR BEEF, PORK

Posted by Gilmour Poincaree on December 3, 2008

Last update: December 2, 2008 – 5:58 AM

by Bradley S. Klapper – Associated Press

PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

GENEVA – Canada filed a complaint with the World Trade Organization on Tuesday over a new U.S. law that requires retailers to provide country-of-origin labeling for fresh beef and pork, officials said.

The Canadian government said it was concerned the U.S. rules were discriminating against Canadian agricultural exporters, who have lobbied hard for a legal challenge at the WTO.

“We believe that the country-of-origin legislation is creating undue trade restrictions to the detriment of Canadian exporters,” Canadian Trade Minister Stockwell Day said in a statement.

The WTO confirmed receipt of Canada’s complaint.

Canadian farm groups say a growing number of meat plants in the U.S. are refusing to accept Canadian cattle and hogs for processing since the Country Of Origin Labeling (COOL) law went into effect on Oct. 1.

Under country of origin labeling, Canadian cattle and pigs must be segregated in U.S. feedlots and packing plants, prompting some firms to only deal with American livestock. Canadian animals are also required to have more documentation about where they come from and, in the case of cattle, must have tags that indicate they are free of mad cow disease.

The Office of the U.S. Trade Representative in Washington could not immediately comment.

Ottawa’s filing at the Geneva-based trade referee initiates a two-month consultation period between the North American neighbors. If they fail to reach a settlement, Canada can ask the WTO for a formal investigation. Such trade disputes can result in punitive sanctions, but usually after years of litigation.

Canada and the U.S. are the world’s biggest commercial partners, but have battled for years over trade issues involving beef, corn, dairy and wheat. In 2006 the two countries signed an accord on softwood lumber, a key component in home-building, ending a decades-long dispute that once fueled talk of an outright trade war.

“We are committed to a respectful working relationship with our American neighbors,” Agriculture Minister Gerry Ritz said, “but have always made it clear that these new regulations must not discriminate against Canadian producers.”

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Posted in CANADA, CATTLE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES, FOREIGN POLICIES - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, PORK, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, USA, WORLD TRADE ORGANIZATION | Leave a Comment »

UN: SERIOUS HUMAN RIGHTS ABUSES ONGOING IN IRAQ – Report cites ongoing widespread ill-treatment, torture of detainees by Iraqi law enforcement authorities

Posted by Gilmour Poincaree on December 2, 2008

First Published 2008-12-02

PUBLISHED BY ‘MIDDLE EAST ON LINE’

GENEVA – Serious human rights abuses including the torture of detainees are ongoing in Iraq, even though the general security situation has improved, a United Nations report published Tuesday said.

There are “ongoing widespread ill-treatment and torture of detainees by Iraqi law enforcement authorities, amidst pervasive impunity of current and past human rights abuses,” said the UN Iraq mission’s report on the human rights situation in Iraq for the first half of this year.

The mission said it found through visits to prisons that many prisoners have been held for many months without recourse to defence, even though some have not even been charged formally with a crime.

Minorities also continue to be targetted by organised armed militia, with members of the minority groups having to pose as Kurdish or Arab to get access to health care or education.

Meanwhile, women also faced harrassment on their mode of dress, while in the Kurdistan region, the mission still gets reports on violent killings, burning and domestic violence of women.

A UN independent expert last month also raised concern on the domestic assault on women, in particular at the rise of honour killings, in which women deemed to have broken moral codes are killed by members of their own family, and the impunity which is afforded the perpetrators.

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Posted in FOREIGN POLICIES - USA, HUMAN RIGHTS, INTERNATIONAL, INTERNATIONAL RELATIONS, IRAQ, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE OCCUPATION WAR IN IRAQ, THE PRESIDENCY - USA, USA | Leave a Comment »

BEYOND THE BAILOUT STATE

Posted by Gilmour Poincaree on December 2, 2008

First Published 2008-12-02

by Steve Fraser – (*)

PUBLISHED BY ‘THE MIDDLE EAST ON LINE’

The American way of life, including its economy of mass consumption, has depended on maintaining the country’s global preeminence by any means possible: economic, political, and, in the end, military, says Steve Fraser.

Roosevelt’s Brain Trust vs Obama’s Brainiacs

On a December day in 1932, with the country prostrate under the weight of the Great Depression, ex-president Calvin Coolidge — who had presided over the reckless stock market boom of the Jazz Age Twenties (and famously declaimed that “the business of America is business”) – confided to a friend: “We are in a new era to which I do not belong.” He punctuated those words, a few weeks later, by dying.

A similar premonition grips the popular imagination today. A new era beckons. No person has been more responsible for arousing that expectation than President-elect Barack Obama. From beginning to end, his presidential campaign was born aloft by invocations of the “fierce urgency of now,” by “change we can believe in,” by “yes, we can!” and by the obvious significance of his race and generation. Not surprisingly then, as the gravity of the national economic calamity has become terrifyingly clearer, yearnings for salvation have attached themselves ever more firmly to the incoming administration.

This is as it should be – and as it once was. When in March 1933, a few months after Coolidge gave up the ghost, Franklin Delano Roosevelt was inaugurated president, people looked forward to audacious changes, even if they had little or no idea just what, in concrete terms, that might mean. If Coolidge, an iconic representative of the old order, knew that the ancien régime was dead, millions of ordinary Americans had drawn the same conclusion years earlier. Full of fear, depressed and disillusioned, they nonetheless had an appetite for the untried. Like Obama, FDR had, during his campaign, encouraged feverish hopes with no less vaporous references to a “new deal” for Americans.

Brain Trust vs Brainiacs

Yet today, something is amiss. Even if everyone is now using the Great Depression and the New Deal as benchmarks for what we’re living through, Act I of the new script has already veered away from the original.

A suffocating political and intellectual provincialism has captured the new administration in embryo. Instead of embracing a sense of adventurousness, a readiness to break with the past so enthusiastically promoted during the campaign, Obama seems overcome with inhibitions and fears.

Practically without exception he has chosen to staff his government at its highest levels with refugees from the Clinton years. This is emphatically true in the realms of foreign and economic policy. It would, in fact, be hard to find an original idea among the new appointees being called to power in those realms – some way of looking at the American empire abroad or the structure of power and wealth at home that departs radically from views in circulation a decade or more ago. A team photo of Obama’s key cabinet and other appointments at Treasury, Health and Human Services, Commerce, the President’s Economic Recovery Advisory Board, the State Department, the Pentagon, the National Security Council, and in the US Intelligence Community, not to speak of senior advisory posts around the President himself, could practically have been teleported from perhaps the year 1995.

Recycled Clintonism is recycled neo-liberalism. This is change only the brainiacs from Hyde Park and Harvard Square could believe in. Only the experts could get hot under the collar about the slight differences between “behavioral economics” (the latest academic fad that fascinates some high level Obama-ites) and straight-up neo-liberal deference to the market. And here’s the sobering thing: despite the grotesque extremism of the Bush years, neo-liberalism also served as its ideological magnetic north.

Is this parochialism, this timorousness and lack of imagination, inevitable in a period like our own, when the unknown looms menacingly and one natural reaction is certainly to draw back, to find refuge in the familiar? Here, the New Deal years can be instructive.

Roosevelt was no radical; indeed, he shared many of the conservative convictions of his class and times. He believed deeply in both balanced budgets and the demoralizing effects of relief on the poor. He tried mightily to rally the business community to his side. For him, the labor movement was terra incognita and – though it may be hard to believe today – played no role in his initial policy and political calculations. Nonetheless, right from the beginning, Roosevelt cobbled together a cabinet and circle of advisers strikingly heterogeneous in its views, one that, by comparison, makes Obama’s inner sanctum, as it is developing today, look like a sectarian cult.

Heterogeneous does not mean radical. Some of FDR’s early appointments – as at the Treasury Department – were die-hard conservatives. Jesse Jones, who ran the Reconstruction Finance Corporation, a Hoover administration creation, retained by FDR, that had been designed to rescue tottering banks, railroads, and other enterprises too big to fail, was a practitioner of business-friendly bailout capitalism before present Treasury Secretary Henry Paulson was even born.

But there was also Henry Wallace as Secretary of Agriculture, a Midwestern progressive who would become the standard bearer for the most left-leaning segments of the New Deal coalition. He was joined at the Agriculture Department — far more important then than now – by men like Mordecai Ezekiel, who was prepared to challenge the power of the country’s landed oligarchs.

Then there were corporatists like Raymond Moley, Donald Richberg, and General Hugh Johnson. Moley was an original member of FDR’s legendary “brain trust” (a small group of the President’s most influential advisers who often held no official government position). Richberg and Johnson helped design and run the National Recovery Administration (the New Deal’s first and failed attempt at industrial recovery). All three men were partial to the interests of the country’s peak corporations. All three wanted them released from the strictures of the Sherman Anti-Trust Act so that they could collaborate in setting prices and wages to arrest the killing deflation that gripped the economy. But they also wanted these corporate behemoths and the codes of competition they promulgated subjected to government oversight and restraints.

Meanwhile, Felix Frankfurter (another confidant of FDR’s and a future Supreme Court justice), aided by the behind-the-scenes efforts of Supreme Court Justice Louis Brandeis, fiercely contested the influence of the corporatists within the new administration, favoring anti-trust and then-new Keynesian approaches to economic recovery. Secretary of Labor Frances Perkins used her extensive ties to the social work community and the labor movement to keep an otherwise tone-deaf president apprised of portentous rumblings from that quarter. In this fashion, she eased the way for the passage of the Wagner Act that legislated the right to organize and bargain collectively, and that ended the reign of industrial autocracy in the workplace.

Roosevelt’s “brain trust” also included Rexford Tugwell. He was an avid proponent of government economic planning. Another founding member of the “brain trust” was Adolph Berle, who had published a bestselling, scathing indictment of the financial and social irresponsibility of the corporate elite just before FDR assumed office.

People like Tugwell and others, including future Federal Reserve Board chairman Marriner Eccles, were believers in Keynesian deficit spending as the road to recovery and argued fiercely for this position within the inner councils of the administration, even while Roosevelt himself remained, until later in his presidency, an orthodox budget balancer.

All of these people – the corporatists and the Keynesians, the planners and the anti-trusters – were there at the creation. They often came to blows. A genuine administration of “rivals” didn’t faze FDR. He was deft at borrowing all of, or pieces of, their ideas, then jettisoning some when they didn’t work, and playing one faction against another in a remarkable display of political agility. Roosevelt’s tolerance of real differences stands in stark contrast to the new administration’s cloning of the Clinton-era brainiacs.

It was this openness to a variety of often untested solutions – including at that point Keynesianism – that helped give the New Deal the flexibility to adjust to shifts in the country’s political chemistry in the worst of times. If the New Deal came to represent a watershed in American history, it was in part due to the capaciousness of its imagination, its experimental elasticity, and its willingness to venture beyond the orthodox. Many failures were born of this, but so, too, many enduring triumphs.

Beyond the Bailout State

Why, at least so far, is the Obama approach so different? Some of it no doubt has to do with the same native caution that caused FDR to navigate carefully in treacherous waters. But some of it may result from the fallout of history. Because the Great Depression and the New Deal happened, nothing can ever really be the same again.

We are accustomed to thinking of the Bush years – maybe even the whole era from the presidency of Ronald Reagan on – as a throwback to the 1920s or even the laissez-faire golden years of the Gilded Age of the late nineteenth century. In some respects, that’s probably accurate, but in at least one critical way it’s not. Back in those days, faced with a potentially terminal financial crisis, the government did nothing, simply letting the economy plunge into depression. This happened repeatedly until 1929, when it happened again.

Since the New Deal, however, inaction has ceased to be a viable option for Washington. State intervention to prevent catastrophe has become an unspoken axiom of political life in perilous times. Of course, thanks to regulatory mechanisms installed during the New Deal years, there was no need to engage in heroic rescues – not, at least, until the triumph of deregulation in our own time.

Then crises began to erupt with ever greater frequency – the stock market crash of 1987, the savings and loan collapse at the end of that decade, the massive Latin American debt defaults of the early 1990s, the collapse of the economies of the Asian “tigers” in the mid-1990s, the near bankruptcy of the then-huge hedge fund, Long Term Capital Management, later in that decade, the dot-com implosion at the turn the century, climaxing with the general global collapse of the present moment. Beginning perhaps with the bailout of the Chrysler Corporation in the late 1970s, these recurring crises have been met with increasingly strenuous efforts to stop the bleeding by what some have called “the bailout state.”

The Resolution Trust Corporation, created to rescue the savings and loan industry, first institutionalized what Kevin Phillips has since described as a new political economy of “financial mercantilism.” Under this new order the state stands ready to backstop the private sector – or at least the financial sub-sector which, for the past quarter century, has been the driving engine of economic growth – whenever it undergoes severe stress.

Today, the starting point for all mainstream policymakers, even those who otherwise preach the virtues of the free market and the evils of big government, is the active intervention of the state to prevent the failure of private-sector institutions considered “too big to fail” (as with most recently Citigroup and the insurance company AIG). So, too, the tolerance level for deficit spending, not only for military purposes but, in extremis, to help stop ordinary people from going under, is infinitely higher than in 1932. Ronald Reagan was prepared to live with such spending, if necessary, even as he removed portraits of Thomas Jefferson and Harry S. Truman from the Cabinet Room and replaced them with a canvas of Calvin Coolidge.

The question for our “new era” – not one our New Deal ancestors would have thought to ask — has become: How do we get beyond the bailout state? This is one crucial realm where genuinely new thinking and new ideas are badly needed.

At the moment, as best we can make out, the bailout state is being managed in secret and apparently in the interests, above all, of those who run the financial institutions being “rescued.” Often, we don’t actually know who is getting what from the Federal Reserve and the Treasury, or on what terms, or even which institutions are being helped and which aren’t, or often what our public monies are actually being used for.

What we do know, however, is anything but encouraging. It includes tax exemptions for merging banks, prices for public-equity stakes in failing outfits that far exceed what is being paid by governments (or even private investors) abroad for similar holdings. Add to this a stark lack of accountability, aggravated by the fact that the US government has neither voting rights (nor even a voice) on boards of directors whose firms would be in bankruptcy court without Washington’s aid.

Living in an Empire of Depression

Are we, then, witnessing the birth of some warped, exceedingly partial version of state capitalism — partial, that is, to the resuscitation of the old order? If so, lurking within this string of bum deals might there not be a great opportunity? Putting the economy and country back together will require massive resources directed toward common purposes. There is no more suitable means of mobilizing and steering those resources than the institutions of democratic government.

Under the present dispensation, the bailout state makes the government the handmaiden of the financial sector. Under a new one, the tables might be turned. But who will speak for that option within the limited councils of the Obama team?

A real democratic nationalization of the banks – good value for our money rather than good money to add to their value – should be part of the policy agenda up for discussion in the Obama era. As things now stand, the public supplies the loans and the investment capital, but the key decisions about how they are to be deployed remain in private hands. A democratic version of nationalizing the financial system would transfer these critical decisions to new institutions created by the Congress and designed to pursue public, not private, objectives. How to subject the flow of credit and investment capital to public control ought to be on the drawing boards if we are to look beyond the old New Deal to a new one.

Or, for instance, if we are to bail out the auto industry, which we should — millions of jobs, businesses, communities, and what’s left of once powerful and proud unions are at stake – then why not talk about its nationalization, too? Why not create a representative body of workers, consumers, environmentalists, suppliers, and other interested parties to supervise the industry’s reorganization and retooling to produce, just as the president-elect says he wants, new green means of transportation – and not just cars?

Why not apply the same model to the rehabilitation of the nation’s infrastructure; indeed, why not to the reindustrialization of the country as a whole? If, as so many commentators are now claiming, what lies ahead is the kind of massive, crippling deflation characteristic of such crises, then why not consider creating democratic mechanisms to impose an incomes policy on wages and prices that works against that deflation?

Overseas, if everything isn’t up for discussion – and it most certainly isn’t – it ought to be. What happens there bears directly on our future here at home. After all, we live in the empire of depression. America’s favorite export for more than a decade has been a toxic line-up of securitized debt. Having ingested it in lethal amounts, every economy in the world from Iceland’s and Germany’s to Russia’s and Indonesia’s is either folding up or threatening to fold up like an accordion under the pressure of economic disaster.

Until now, the American way of life, including its economy of mass consumption, has depended on maintaining the country’s global preeminence by any means possible: economic, political, and, in the end, military. The news of the Bush years was that, in this mix, Washington reached for its six-guns so much more quickly.

A global depression will challenge that fundamental hierarchy in every conceivable way. The United States can try to recapture its imperiled hegemony by methods familiar to the Obama-Clinton-Bush (the father) foreign policy establishment, that is by using the country’s waning but still intimidating economic and military muscle. But that’s a devil’s game played at exorbitant cost which will further imperil the domestic economy.

It might, of course, be possible, as in domestic affairs, to try something new, something that embraces the public redevelopment of America in concert with the global South. This would entail at a minimum a radical break with the “Washington Consensus” of the Clinton years in which the United States insisted that the rest of the world conform to its free market model of economic behavior. It would establish multilateral mechanisms for regulating the flow of investment capital and severe penalties and restrictions on speculation in international markets. Most of all, it would mean lifting the strangulating grip of American military might that now girdles the globe.

All of this would require a capacity for re-imagining foreign affairs as something other than a zero-sum game. So far, nothing in Obama’s line-up of foreign policy and national security mandarins suggests this kind of potential policy deviance. Again, no Rooseveltian “brain trust” is in sight, even though unorthodoxies are called for, not just because of the hopes Obama’s victory have aroused, but because of the urgency of our present circumstances.

If original thinking doesn’t find a home somewhere within this forming administration soon, it will be an omen of an even more troubled future to come, when options not even being considered today may be unavailable tomorrow. Certainly, Americans ought to expect something better than a trip down (the grimmest of) memory lanes into the failed neo-liberalism of yesteryear.

(*) – Steve Fraser is a visiting professor at New York University and the author of Wall Street: America’s Dream Palace. He is a regular contributor to TomDispatch.com and co-founder of the American Empire Project series (Metropolitan Books).

Copyright 2008 Steve Fraser

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HOW LONG, HOW DEEP IS THE US RECESSION?

Posted by Gilmour Poincaree on December 2, 2008

First Posted 11:04:00 12/02/2008

by Rob Lever – Agence France-Presse – PUBLISHED BY ‘THE PHILIPPINE DAILY INQUIRER’

WASHINGTON, United States – The United States officially joined the ranks of the recession-hit economies, but debate is still raging on how long and how deep the downturn will be.

The Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), the panel recognized as the official arbiter of business cycles, said it made the determination the recession began in December 2007.

Although a recession is generally defined as two consecutive quarters of declining activity, the panel has its own criteria for determining a downturn, including data on employment, income and industrial output.

Because of the lag time in officially declaring a recession, some analysts say the worst is generally over by the time the news becomes public.

But John Ogg, analyst at 24/7 Wall Street, said it may not be the case this time: “We still think more pain is on the way.”

That message was hammered home with a survey showing the US manufacturing sector sank to its lowest level of activity in November since 1982.

The Institute of Supply Management (ISM) said its manufacturing index slumped 2.7 points to 36.2 percent, far below the 50- percent level that separates expansion and contraction.

Analysts pointed out the overall economy will have trouble escaping deep recession with manufacturing so weak.

“The worsening credit crisis and deepening global slump have pushed the ISM index below the 41 figure that is consistent with past recessions,” said Sal Guatieri, economist at BMO Capital Markets.

“The fact that the index continues to decline points to more than your garden-variety downturn.”

Many analysts have been saying the recession has been raging for months.

“So far in 2008, employers have slashed 1.2 million jobs, and the bad news is expected to continue when we get employment data for November this Friday,” said Michael Fowlkes, analyst at Investor’s Observer.

“Recession fears have now become a reality, and the questions that remain are just how bad and for how long this recession will linger over us.”

Augustine Faucher at Moody’s Economy.com said his firm expects the downturn to last through the first half of 2009 and to be “the worst of the post-World War II era.”

“Even with a substantial stimulus package, unemployment is likely to peak close to 9.0 percent in early 2010,” he said.

According to official government data, the US economy contracted at a 0.2 percent pace in the fourth quarter of 2007 but grew 0.8 percent in the first quarter and 2.8 percent in the second quarter of 2008. It then contracted 0.5 percent in the third quarter, based on a provisional estimate.

But the gross domestic product (GDP) data may have been skewed by tax rebates that stimulated consumer spending, according to analysts.

A major factor in determining recession is employment, which has been declining since last December, the panel said. Other factors include monthly data on income, manufacturing and retail sales.

The NBER makes no forecast on how long a recession will last, but said that in the past they have run from six to 18 months. The panel said it has no definition of the term “depression.”

Federal Reserve chairman Ben Bernanke said meanwhile the current economic situation bears “no comparison” to the much deeper crisis of the 1930s Great Depression.

“I’ve written books about the Depression and been very interested in this since I was in graduate school, there’s no comparison,” Bernanke told an audience in Austin, Texas.

Bernanke said the situation in the 1930s represented “very difficult circumstances,” because “we didn’t have the social safety net that we have today.”

Brian Wesbury at First Trust Portfolios said there are signs the recession may end soon because of how it developed.

“This time around, the recession is not due to tight monetary policy, higher tax rates, or protectionism,” he said.

“It’s due to a sudden and sharp plunge in the velocity of money — what we have been calling ‘risk aversion hysteria’ – where the speed with which money moves its way through the economy slows down as both consumers and businesses decide they want to increase their cash holdings.”

Wesbury said indications that holiday shopping is better than expected “may be an early sign that the bearishness went way too far.”

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SAUDI ARABIA’S KING WANTS US OVER A $75-PLUS BARREL

Posted by Gilmour Poincaree on December 2, 2008

Sunday, November 30, 2008 – Added 1d 22h ago

by Associated Press PUBLISHED BY ‘THE BOSTON HERALD’ (USA)

CAIRO, Egypt – Saudi Arabia’s king says the price of oil should be $75 a barrel, much higher than it is now, but his oil minister Secretary of Defense Robert M. Gates, left, attends a meeting with King Abdullah bin Abdul al-Saud at the king´s hunting lodge in Saudi Arabia to discuss current issues in the Middle East Jan. 17, 2007
indicated yesterday that no measures will likely be taken until OPEC meets again next month.

Saudi Oil Minister Ali Naimi said that the Organization of Petroleum Exporting Countries will “do what needs to be done” to shore up falling oil prices when the group meets Dec. 17 in Algeria, but for now it was “too early.”

Other ministers at the hastily convened OPEC meeting in Cairo did not entirely rule out production cuts, including Libyan oil official Shokri Ghanem, who, ahead of the meeting, said “all options are open.”

But Naimi, whose country is the world’s largest oil producer, said the bloc needs to wait until the Algeria meeting to assess the impact of earlier production cuts.

Naimi’s comments came after Saudi King Abdullah told the Kuwaiti newspaper Al-Seyassah in an interview published Saturday that oil should be priced at $75 a barrel.

“We believe the fair price for oil is $75 a barrel,” he said, without explaining how the price could be raised.

The price of crude stood at about $147 a barrel in mid-July.

On Friday, the U.S. benchmark West Texas Intermediate crude for January delivery was trading at about $54 per barrel.

© Copyright 2008 Associated Press. All rights reserved.

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MORE SUBURBS, MORE CARS – THE RIGHT’S WAR ON REGULATORS

Posted by Gilmour Poincaree on December 1, 2008

December 1, 2008

by Alan Farago PUBLISHED BY ‘COUNTERPUNCH’

“Anatomy of a CARTOON BY FRED HUBNERMeltdown” in the recent edition of The New Yorker ((Dec 1, 2008) begins, “Some are born radical. Some are made radical. And some have radicalism thrust upon them.” The article goes on at length to explore the rapid evolution of the federal response to the financial crisis, through which formerly free market acolytes in the Treasury Department and Federal Reserve responded with the most sweeping federal intervention in US economic history. It occurs that the point about radicalism is largely missed.

The radicalism distilled through the last decade is the idea that government is the problem. It is an idea that hacked at the foundation of democracy; in the conduct of war, in the repression of individual freedom, in the safety of our air and water, and America’s standing in the world.

The idea that government is the problem is at the heart of the Republican Reformation that began in the 1994 Congressional mid-term elections and propelled Bush political fortunes in Tallahassee and Washington, DC. Its dominant strain defined Republican values; a cause for war against government lead by Karl Rove, Grover Norquist and conservative foundations that still supply bankrupt ideas as intellectual capital.

Then Florida Governor Jeb Bush articulated the cause for war in his 2003 inauguration address when he said: “There will be no greater tribute to our maturity as a society than if we can make these buildings around us empty of workers; as silent monuments to the time when government played a larger role than it deserved or THE REGULATORS - Stephen Kingcould adequately fill.”

The workers he meant to get rid of– the meaning was clear to the invited audience– were regulators. And, mainly, environmental regulators. The Bush assault against environmental regulations represented the high water mark for a Forty Year War; exhausting itself not through any act of environmentalism but because of the financial crisis, triggered by the suppression of regulations. Still, the war is visible most clearly in places like South Florida where the trampling of rules and intimidation of regulators goes on throughout local government without criticism or penalty.

Today General Motors Corp.’s board is meeting in Detroit to discuss a rescue plan to present to Congress that may determine, according to Bloomberg News, “if Chief Executive Officer Rick Wagoner can save the company and keep his job.” I wonder why the board of directors of GM should keep their jobs.

Among GM’s board of directors is Miami’s Armando Codina, who brought Jeb Bush into the real estate industry where he made his fortune and is one of George W. Bush’s strongest supporters. Codina joined the GM board in 2002. According to the GM website, Codina is also a board director of Merrill Lynch.

The fall of GM has its roots in a business model that no one dared to criticize beyond environmentalists who for decades pleaded with Congress and the states to clamp down on selling private ownership of cars and trucks by the pound of metal; the more pounds, the more profit for auto manufacturers, oil producers and gasoline distributers, and production home builders.

More suburbs, more cars. What this easy-to-grasp formula fails to capture is how fiscal stewardship of the largest publicly owned corporations used the mantra “government is the problem” to avoid regulation and spurn protections of the environment while encouraging the proliferation of unsustainable credit based on toxic derivatives; the undoing of Merrill and trillions of value now disappeared.

Today, the Wall Street Journal speculates on whether Rick Wagoner, GM chief, will be able to keep his job. Its fretting is directed to the legacy cost of pensions, healthcare, executive compensation and union agreements hammered out in times when even union leaders could ignore the peril of financial gerrymandering. If taxpayers bail out GM, its board of directors should be asked to leave by Congress, as should the boards of any publicly held that receive the blessing of free market economic ministers now turned radical government interventionists.

Alan Farago writes on the environment and politics from Coral Gables, Florida

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“OOPS, WE MEANT $7 TRILLION!” – WHAT HANK AND BEN ARE UP TO AND HOW THEY PLAN TO PAY FOR IT ALL (USA)

Posted by Gilmour Poincaree on December 1, 2008

November 30th, 2008

by Ellen Brown PUBLISHED BY ‘WEB OF DEBT’

“We make money the old fashioned way. We print it.” – Art Rolnick, Chief Economist for the Minneapolis Federal Reserve Bank

The $700 billion that was arm-twisted from Congress by Treasury Secretary Hank Paulson in October was evidently just the OPScamel’s nose under the tent. According to a November 24 Bloomberg report, the Paulson/Bernanke team is now prepared to pay $7.76 trillion to rescue the financial system.[1] Prepared to pay how? Congress has not raised its debt ceiling to anywhere near that level; but the approval of Congress, which originally voted down the controversial $700 billion bailout, is apparently no longer necessary. The door has been opened, and the Treasury Secretary and Fed Chairman feel they can now pledge whatever they want. Perhaps they are inching up a zero at a time just to see what the public’s tolerance is for unrepayable debt. The new sum – $7.76 trillion – represents $25,000 for every citizen in the country, or half the value of everything produced in the nation last year; yet it’s not clear that a mere half of our net worth will rescue the financial system. One bankrupt bank after another has been bailed out with public money, in a futile effort to prevent a collapse of a massive multi-trillion dollar derivatives pyramid created by the banks.[2] But according to the Comptroller of the Currency, U.S. commercial banks now carry over $180 trillion in derivatives on their books. The public is liable to be bankrupted before this mess is resolved.

On top of the $700 billion initially extorted from Congress, an additional $2 trillion in loans and commitments has already been made by the Federal Reserve and the Treasury. Yet that wall of money has not kept the imperiled banks from collapsing. Citigroup was one of the nine lucky recipients of Paulson’s largesse in October, when he set out to recapitalize the banks by trading dollars for shares. The bank received $25 billion from the Treasury; yet this handout was insufficient to keep its stock from dropping below $4 a share. Citigroup was then bailed out by the Treasury to the tune of another $20 billion, along with a commitment to guarantee $306 billion in toxic assets on its books. That equals half the $700 billion bailout, just for one bank; yet Citigroup’s books, which sport derivative bets of $37 trillion, won’t look much better than before.

Meanwhile, commentators are scratching their heads over where the money is supposed to come from to pay for all this. Congress hasn’t approved these multi-trillion dollar sums, and the Federal Reserve doesn’t HANK PAULSONshow them on its books. Some clues to this mystery came on November 25, when according to The New York Times:

“In the first of two new actions . . . , the Treasury and the Fed said they would create a $200 billion program to lend money against securities backed by car loans, student loans, credit card debt and even small-business loans. The Treasury would contribute $20 billion to the so-called Term Asset-Backed Securities Loan Facility and assume responsibility for any losses up to $20 billion. The Federal Reserve would lend the new entity as much as $180 billion. The new facility would then lend money at low rates to companies that post collateral based on securities backed by consumer debt or business loans.”[3]

It appears that the $20 billion in Treasury money will be serving as the “reserves” to create $200 billion in credit on the books of the Fed and its network of banks. Ten to one is the reserve requirement established by the Federal Reserve for private bank lending under the “fractional reserve” system. The New York Fed has now deleted its earlier discussion of this process from its website, but as it explained the money-creating process in 2004:

“Reserve requirements . . . are computed as percentages of deposits that banks must hold as vault cash or on deposit at a Federal Reserve Bank. . . . As of June 2004, the reserve requirement was 10% on transaction deposits [deposits immediately available to depositors]. . . . If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+ . . . =$1,000).”[4]

In a revealing booklet called “Modern Money Mechanics,” the Chicago Federal Reserve detailed how fractional reserve lending allows money to “expand.” The booklet is now out of print, perhaps because it revealed too much; but it is still available on the Internet. On page 11 of the booklet is a helpful chart (above), which shows that the original deposit is not actually “lent” but remains in the bank throughout the expansion process. What is lent is an additional sum created on the bank’s books valued at 90 percent of the original deposit. Then another sum is lent that is 90 percent of the second deposit, and so forth, until the total sum generated is 10 times the original deposit, with tidy sums collected in interest at each step along the way.

The November 25 New York Times article continued:

“The Treasury secretary, Henry M. Paulson Jr., made it clear that the new lending facility was just a ‘starting point’ BEN BERNANKEand could be expanded to many other kinds of debt, like commercial mortgage-backed securities. . . . It was the first time that the Fed and the Treasury have stepped in to finance consumer debt. The $200 billion program comes close to being a government bank.”

A government bank that makes credit available to all qualified borrowers is not a bad idea. It would seem to be a more useful idea than manipulating interest rates, the conventional tool used by the Federal Reserve to regulate the money supply. When Paul Volcker raised interest rates to 20% in 1980, he bankrupted much of the Third World; and when Alan Greenspan lowered the short-term interest rate to 1% in 2001, he precipitated the housing and derivatives bubbles that are bankrupting the U.S. today. A government-owned bank that put credit into the economy in an open, accountable and impartial way could be just what the doctor ordered. The problem is, the Federal Reserve isn’t government-owned (it is owned by a consortium of private banks[5]); and it is not distributing the public credit openly and impartially. The Fed has kept the recipients of its largesse largely secret (something Bloomberg News is currently suing about under the Freedom of Information Act[6]). However, it is clearly favoring its banking cronies over consumers.

Note that the “consumer debt” the Fed is now supposedly financing does not consist of loans directly to consumers. The loans are to lenders holding consumer debt (“companies that post collateral based on securities backed by consumer debt or business loans”). Like with subprime mortgages, lenders have pushed credit cards and student loans onto anyone who would take them, because the lenders had no intention of keeping those risky loans on their books. They intended to package them up as “securities” and sell them to investors. But the investors are catching onto this scam and are no longer buying; so the Fed is stepping in to underwrite the debt, advancing “credit” created on its books with accounting entries. When these loans are not paid back, we the taxpayers pick up the tab, either directly or through the “hidden tax” of inflation. The benefit goes to the lenders, who get off scot-free for their risky ventures, while the people bear the risk and pick up the losses.

If these investments are too risky for investors, they should also be too risky for the “government bank.” We don’t need more consumer debt to keep the economy going. We need more wages and salaries, and that means more jobs. Rather than propping up the “finance” industry (the business of money making money), the Fed should be furnishing low-interest loans directly to businesses, state and local governments and other qualified members of the producing economy.

Watching the Paulson/Bernanke bailout scenario unfold is a bit like watching the end of the Charlton Heston movie El Cid, where the Spaniards prop up their dead general on his horse and charge the Moors, giving the illusion that the champion is still alive and leading them. In this case, what they are propping up are not national heroes but banking pretenders who are not only unnecessary but have established their incompetence at managing the banking business. Congress could avoid this costly masquerade by either nationalizing the Federal Reserve or setting up its own publicly-owned lending facility, one that created credit on its books just as private banks do now and made it available openly, impartially, and at modest interest rates to all qualified borrowers. Unqualified borrowers should be denied, and that includes insolvent private banks, which should be put into FDIC receivership, had their books washed clean in bankruptcy, and reorganized as truly “national” banks advancing the “full faith and credit of the United States” for the benefit of the people of the United States.

Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her eleven books include the bestselling Nature’s Pharmacy, co-authored with Dr. Lynne Walker, and Forbidden Medicine. Her websites are http://www.webofdebt.com and http://www.ellenbrown.com.

[1] Mark Pittman, Bob Ivry, “U.S. Pledges $7.7 Trillion to Ease Frozen Credit,” Bloomberg.com (November 25, 2008).

[2] See Ellen Brown, “It’s the Derivatives, Stupid! Why Fannie, Freddie and AIG All Had to Be Bailed Out,” http://www.webofdebt.com (September 18, 2008).

[3] Edmund Andrews, “U.S. Details $800 Billion Loan Plans,” New York Times (November 26, 2008).

[4] Federal Reserve Bank of New York, “Reserve Requirements,” http://www.ny.frb.org/aboutthefed/fedpoint/fed45.html (June 2004).

[5] See Ellen Brown, “The Fed Now Owns the World’s Largest Insurance Company – But Who Owns the Fed?”, http://www.webofdebt.com (October 7, 2008).

[6] Mark Pittman, et al., “Fed Denies Transparency Aim in Refusal to Disclose,” Bloomberg.com (November 10, 2008).

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DETERMINATION OF THE DECEMBER 2007 PEAK IN ECONOMIC ACTIVITY (USA)

Posted by Gilmour Poincaree on December 1, 2008

Monday, December 1, 2008

PUBLISHED BY THE ‘NATIONAL BUREAU OF ECONOMIC RESEARCH’ (USA)

The Business Cycle National Bureau of Economic ResearchDating Committee of the National Bureau of Economic Research met by conference call on Friday, November 28. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months.

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.

Because a recession is a broad contraction of the economy, not confined to one sector, the committee emphasizes economy-wide measures of economic activity. The committee believes that domestic production and employment are the primary conceptual measures of economic activity.

The committee views the payroll employment measure, which is based on a large survey of employers, as the most reliable comprehensive estimate of employment. This series reached a peak in December 2007 and has declined every month since then.

The committee believes that the two most reliable comprehensive estimates of aggregate domestic production are normally the quarterly estimate of real Gross Domestic Product and the quarterly estimate of real Gross Domestic Income, both produced by the Bureau of Economic Analysis. In concept, the two should be the same, because sales of products generate income for producers and workers equal to the value of the sales. However, because the measurement on the product and income sides proceeds somewhat independently, the two actual measures differ by a statistical discrepancy. The product-side estimates fell slightly in 2007Q4, rose slightly in 2008Q1, rose again in 2008Q2, and fell slightly in 2008Q3. The income-side estimates reached their peak in 2007Q3, fell slightly in 2007Q4 and 2008Q1, rose slightly in 2008Q2 to a level below its peak in 2007Q3, and fell again in 2008Q3. Thus, the currently available estimates of quarterly aggregate real domestic production do not speak clearly about the date of a peak in activity.

Other series considered by the committee—including real personal income less transfer payments, real manufacturing and wholesale-retail trade sales, industrial production, and employment estimates based on the household survey—all reached peaks between November 2007 and June 2008.

The committee determined that the decline in economic activity in 2008 met the standard for a recession, as set forth in the second paragraph of this document. All evidence other than the ambiguous movements of the quarterly product-side measure of domestic production confirmed that conclusion. Many of these indicators, including monthly data on the largest component of GDP, consumption, have declined sharply in recent months.

The committee’s primary role is to maintain a monthly chronology of the business cycle. For this purpose, the committee mainly relies on monthly indicators. It also considers quarterly indicators and maintains a quarterly chronology. In its deliberations, the committee relied on a number of monthly and quarterly economic indicators published by government agencies. The Appendix to this announcement lists these indicators and their sources. The Appendix also describes the calculations required to reproduce the series that the NBER committee examined in its deliberations.

The Month of the Peak

The committee identified December 2007 as the peak month, after determining that the subsequent decline in economic activity was large enough to qualify as a recession.

Payroll employment, the number of filled jobs in the economy based on the Bureau of Labor Statistics’ large survey of employers, reached a peak in December 2007 and has declined in every month since then. An alternative measure of employment, measured by the BLS’s household survey, reached a peak in November 2007, declined early in 2008, expanded temporarily in April to a level below its November 2007 peak, and has declined in every month since April 2008. For a discussion of the difference between payroll and household survey employment measures, see Mary Bowler and Teresa L. Morisi, “Understanding the Employment Measures from the CPS and CES Surveys,” Monthly Labor Review, February 2006, pp. 23–38.

The committee uses real personal income less transfer payments from the Bureau of Economic Analysis as a monthly measure of output. The deduction of transfer payments places the data closer to the desired measure, real gross domestic income. To adjust personal income less transfer payments from nominal to real terms (that is, to remove the effects of price changes), the committee uses the deflator for gross domestic product. Because this deflator is only available quarterly, the committee interpolates the published series to approximate a monthly price index for GDP. The resulting monthly measure of real personal income less transfers is an imperfect measure of monthly real output because of definitional differences between personal income less transfers and gross national income and because we use the interpolated price index. Our measure of real personal income less transfers peaked in December 2007, displayed a zig-zag pattern from then until June 2008 at levels slightly below the December 2007 peak, and has generally declined since June.

Real manufacturing and wholesale-retail trade sales from the Census Department is another monthly indicator of output. It is an imperfect measure of the production of goods and services for at least three reasons. First, it covers only goods and not services. Second, it does not deduct the sales of imported goods. Because the real value of imports declined substantially over the relevant period, the measure understates the growth of output. Third, the government does not publish a price index corresponding to the coverage of the measure. The committee uses the same interpolated GDP deflator as discussed above. Real manufacturing and wholesale-retail trade sales reached a well-defined peak in June 2008.

The last monthly measure of production is the Federal Reserve Board’s index of industrial production. This measure has quite restricted coverage—it includes manufacturing, mining, and utilities but excludes all services and government. Industrial production peaked in January 2008, fell through May 2008, rose slightly in June and July, and then fell substantially from July to September. It rose somewhat in October with the resumption of oil production disturbed by hurricanes in the previous month. The October value of the industrial production index remained a substantial 4.7 percent below its value in January 2008.

The committee noted that the behavior of the quarterly estimates of aggregate production was not inconsistent with a peak in late 2007. The income-side estimate of output reached its peak in the third quarter of 2007. The product-side estimate reached a temporary peak in the same quarter, but rose to a higher level in the second quarter of 2008.

The Quarter of the Peak

The committee determined that the peak quarter of economic activity was the fourth quarter of 2007. When the monthly peak occurs in the last month of a quarter, the NBER’s long-standing procedures dates the quarterly peak either in the quarter containing the monthly peak or in the subsequent quarter. Thus, the committee could have dated the quarterly peak in 2008Q1 if it had determined that economic activity was higher in that quarter than in 2007Q4. However, the committee determined that this was not the case. Most notably, both payroll employment and the income-side estimate of domestic production were lower in 2008Q1 than in 2007Q4, and the product-side estimate of domestic production was only slightly higher. The committee found that the peak quarter was the one containing the peak month, 2007Q4.

Further Comments

Although the indicators described above are the most important measures considered by the NBER in developing its business cycle chronology, there is no fixed rule about which other measures may contribute information to the process in any particular episode.

Committee members are: Robert Hall, Stanford University (chair); Martin Feldstein, Harvard University and NBER President Emeritus; Jeffrey Frankel, Harvard University; Robert Gordon, Northwestern University; James Poterba, MIT and NBER President; David Romer, University of California, Berkeley; and Victor Zarnowitz, the Conference Board. Christina Romer of the University of California, Berkeley, resigned from the committee on November 25, 2008, and did not participate in its deliberations of November 28.

For more information, see the FAQs below and also see http://www.nber.org/cycles.html.

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PUBLISHED BY ‘NATIONAL BUREAU OF ECONOMIC RESEARCH’ (USA)

Posted in COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, RECESSION, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, USA | Leave a Comment »

MANAGING RISK IN AN UNSTABLE WORLD

Posted by Gilmour Poincaree on December 1, 2008

Monday, December 1, 200

by Michael Barone – (*) – PUBLISHED BY ‘THE WASHINGTON TIMES’ (USA)

How can we reduce risk for individuals? That’s a natural question when a financial crisis has vaporized trillions of dollars of personal wealth in residential real estate and financial instruments. The problem is, when you try to reduce risk for individuals too much, you end up making things much riskier.

Case in point: The financial system over the last decade. Our current difficulties arose from “the idea,” as Nicole Gelinas describes it in the New York Post, “that any loan, bond or other bank asset could be sliced up and turned into an instantly liquid, priceable and tradable security, with all its risks engineered away.” The securitization of mortgages seemed to reduce risk for everyone – for the lender (who avoided risk of nonpayment by selling the mortgage), for the borrower (who got the mortgage at a lower rate than otherwise) and for the purchaser (because all those mortgages couldn’t got belly up at once, could they?).

The problem was that the risk models were based on the experience of only the last seven years or so, and that both the Clinton and Bush administrations and Fannie Mae and Freddie Mac encouraged the granting of mortgages to borrowers who were, by previous standards, uncreditworthy.

So eliminating risk ended up creating huge risk for everyone – so huge that just about no one, even the Treasury armed with $700 billion – wants to purchase the securitized mortgages in bank portfolios.

Or take another case recently in the news. The United Auto Workers, a forward-thinking union, wanted to eliminate the risk for its members of retiring without comfortable pensions and entirely free medical care. So they negotiated contracts with what we used to call the Big Three U.S. auto companies that guaranteed UAW retirees big pensions and free medical care for life.

But that assumed the companies could always fund those benefits. If, as now seems possible, the Detroit Three go bankrupt, those pensions will be replaced by limited government pensions and those free retiree health benefits will vanish altogether. Eliminating risk turned out to be very risky.

That is my answer to those, like Yale Professor Jacob Hacker, who advocate public policies to reduce risk for individuals. In his book “The Great Risk Shift,” Mr. Hacker argues that the move over the last 25 years from defined-benefit pensions (in which an employer pays into a pension fund) to defined-contribution pensions (in which an employer pays into every employee’s personal investment account) makes life unbearably risky for ordinary people. And to be sure, almost everyone’s 401(k) account has shrunk over the last three months.

But are those people worse off than Detroit Three retirees? Their 401(k)s may rise in the years ahead. The Detroit Three pensions are at risk of being permanently slashed.

My own sense is that ordinary Americans are more resilient than some theorists think. They form and act upon what Milton Friedman called the permanent-income theory and Franco Modigliani called the life-cycle theory – that is, they develop a pretty good idea of their long-term earning capacity and their ability to accumulate wealth, and spend accordingly.

They may shift these expectations in a crunch, and may be doing so now, as purportedly risk-free financial products and corporate pensions are revealed as hugely risky. But through thick and thin they’re constantly calibrating and recalibrating how much risk they should take. And while some people make bad decisions, all those decisions put together seem to have proved less risky than Fannie Mae’s securitized mortgages or the UAW’s retiree health care benefits.

There are good arguments for safety net programs like Social Security, which eliminate severe downside risk – or at least eliminate it if Social Security has a sound long-range financing scheme, which it may not. Curiously, most current policymakers seem more concerned about the risks of climate change, about which there is much uncertainty, than the risks of Social Security collapse, about which the numbers seem much more certain.

My larger point is that eliminating risk entirely is an impossibility, and mitigating risk intelligently means not only maintaining sensible safety nets but, more importantly, stoking the engines of economic growth.

Happily, President-elect Obama’s top economic appointees seem to have a similar understanding. A capitalist economic system, which enables risk-taking through intelligently structured and regulated financial markets, has been proven by history to be, as Winston Churchill might have put it, the most risky system except for all those other economic systems ever devised.

Let’s try it again, this time keeping a gimlet eye on those who tell us they have schemes that can eliminate risk altogether.

(*) – Michael Barone is a nationally syndicated columnist.

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PUBLISHED BY ‘THE WASHINGTON TIMES’ (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, 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 PRESIDENCY - USA, THE WORK MARKET, THE WORKERS | Leave a Comment »

AP IMPACT: US DILUTED LOAN RULES BEFORE CRASH – Bush administration rejected tougher mortgage rules in 2005

Posted by Gilmour Poincaree on December 1, 2008

12-01-2008

by Matt Apuzzo, Associated Press Writer – PUBLISHED BY ‘YAHOO NEWS’

WASHINGTON – The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.

“Expect fallout, expect foreclosures, expect horror stories,” California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job.

Bowing to aggressive lobbying — along with assurances from banks that the troubled mortgages were OK — regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.

“These mortgages have been considered more safe and sound for portfolio lenders than many fixed rate mortgages,” David Schneider, home loan president of Washington Mutual, told federal regulators in early 2006. Two years later, WaMu became the largest bank failure in U.S. history.

The administration’s blind eye to the impending crisis is emblematic of its governing philosophy, which trusted market forces and discounted the value of government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s.

Many of the banks that fought to undermine the proposals by some regulators are now either out of business or accepting billions in federal aid to recover from a mortgage crisis they insisted would never come. Many executives remain in high-paying jobs, even after their assurances were proved false.

In 2005, faced with ominous signs the housing market was in jeopardy, bank regulators proposed new guidelines for banks writing risky loans. Today, in the midst of the worst housing recession in a generation, the proposal reads like a list of what-ifs:

_Regulators told bankers exotic mortgages were often inappropriate for buyers with bad credit.

_Banks would have been required to increase efforts to verify that buyers actually had jobs and could afford houses.

_Regulators proposed a cap on risky mortgages so a string of defaults wouldn’t be crippling.

_Banks that bundled and sold mortgages were told to be sure investors knew exactly what they were buying.

_Regulators urged banks to help buyers make responsible decisions and clearly advise them that interest rates might skyrocket and huge payments might be due sooner than expected.

Those proposals all were stripped from the final rules. None required congressional approval or the president’s signature.

“In hindsight, it was spot on,” said Jeffrey Brown, a former top official at the Office of Comptroller of the Currency, one of the first agencies to raise concerns about risky lending.

Federal regulators were especially concerned about mortgages known as “option ARMs,” which allow borrowers to make payments so low that mortgage debt actually increases every month. But banking executives accused the government of overreacting.

Bankers said such loans might be risky when approved with no money down or without ensuring buyers have jobs but such risk could be managed without government intervention.

“An open market will mean that different institutions will develop different methodologies for achieving this goal,” Joseph Polizzotto, counsel to now-bankrupt Lehman Brothers, told U.S. regulators in a March 2006.

Countrywide Financial Corp., at the time the nation’s largest mortgage lender, agreed. The proposal “appears excessive and will inhibit future innovation in the marketplace,” said Mary Jane Seebach, managing director of public affairs.

One of the most contested rules said that before banks purchase mortgages from brokers, they should verify the process to ensure buyers could afford their homes. Some bankers now blame much of the housing crisis on brokers who wrote fraudulent, predatory loans. But in 2006, banks said they shouldn’t have to double-check the brokers.

“It is not our role to be the regulator for the third-party lenders,” wrote Ruthann Melbourne, chief risk officer of IndyMac Bank.

California-based IndyMac also criticized regulators for not recognizing the track record of interest-only loans and option ARMs, which accounted for 70 percent of IndyMac’s 2005 mortgage portfolio. This summer, the government seized IndyMac and will pay an estimated $9 billion to ensure customers don’t lose their deposits.

Last week, Downey Savings joined the growing list of failed banks. The problem: About 52 percent of its mortgage portfolio was tied up in risky option ARMs, which in 2006 Downey insisted were safe — maybe even safer than traditional 30-year mortgages.

“To conclude that ‘nontraditional’ equates to higher risk does not appropriately balance risk and compensating factors of these products,” said Lillian Gavin, the bank’s chief credit officer.

At least some regulators didn’t buy it. The comptroller of the currency, John C. Dugan, was among the first to sound the alarm in mid-2005. Speaking to a consumer advocacy group, Dugan painted a troublesome picture of option-ARM lending. Many buyers, particularly those with bad credit, would soon be unable to afford their payments, he said. And if housing prices declined, homeowners wouldn’t even be able to sell their way out of the mess.

It sounded simple, but “people kind of looked at us regulators as old-fashioned,” said Brown, the agency’s former deputy comptroller.

Diane Casey-Landry, of the American Bankers Association, said the industry feared a two-tiered system in which banks had to follow rules that mortgage brokers did not. She said opposition was based on the banks’ best information.

“You’re looking at a decline in real estate values that was never contemplated,” she said.

Some saw problems coming. Community groups and even some in the mortgage business, like Welch, warned regulators not to ease their rules.

“We expect to see a huge increase in defaults, delinquencies and foreclosures as a result of the over selling of these products,” Kevin Stein, associate director of the California Reinvestment Coalition, wrote to regulators in 2006. The group advocates on housing and banking issues for low-income and minority residents.

The government’s banking agencies spent nearly a year debating the rules, which required unanimous agreement among the OCC, Federal Deposit Insurance Corp., Federal Reserve, and the Office of Thrift Supervision — agencies that sometimes don’t agree.

The Fed, for instance, was reluctant under Alan Greenspan to heavily regulate lending. Similarly, the Office of Thrift Supervision, an arm of the Treasury Department that regulated many in the subprime mortgage market, worried that restricting certain mortgages would hurt banks and consumers.

Grovetta Gardineer, OTS managing director for corporate and international activities, said the 2005 proposal “attempted to send an alarm bell that these products are bad.” After hearing from banks, she said, regulators were persuaded that the loans themselves were not problematic as long as banks managed the risk. She disputes the notion that the rules were weakened.

In the past year, with Congress scrambling to stanch the bleeding in the financial industry, regulators have tightened rules on risky mortgages.

Congress is considering further tightening, including some of the same proposals abandoned years ago.

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PUBLISHED BY ‘YAHOO NEWS’

Posted in ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, USA | Leave a Comment »

US MILITARY CHEM-BIO WARFARE EXPOSURES WEBSITE UNVEILED

Posted by Gilmour Poincaree on November 30, 2008

Friday, November 14, 2008

by Justin Palk – Frederick – News-Post

Posted by Meryl Nass, M.D. at 10:18 AM

From World War II through 1975, thousands of service members and veterans were potentially exposed to chemical or biological weapons as subjects or observers of tests carried out by the Department of Defense.

The department unveiled a new website Monday to provide information about what happened during those tests.

The data on the site is broadly grouped into three sections: chemical agent tests during World War II; chemical and biological agent tests of Project 112 and its naval component, Shipboard Hazard and Defense or Project SHAD; and Cold War-era chemical and biological weapons testing.

The site provides details about specific incidents, such as the release of mustard agent in the Italian port of Bari in 1943 when a U.S. ship carrying the agent to use in response to theoretical German gas attacks was destroyed during a German air raid on the port.

Overview sections give broad outlines of what types of testing were performed at what points in history.

The biological warfare research at Fort Detrick and the Operation Whitecoat disease immunity experiments are listed under the Cold War section of the site, as are Dugway Proving Ground and Edgewood Arsenal, both sites where chemical weapons research was done.

The site does not list the names of service members who might have been exposed to chemical or biological agents. It does, however, include contact information veterans can use to seek help in verifying any potential exposure they may have had, or to provide information they may have about tests the Defense Department conducted.

For information, visit fhp.osd.mil/CBexposures/index.jsp

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PUBLISHED BY ‘Anthrax Vaccine – posts by Meryl Nass, M.D.’

Posted in CRIMINAL ACTIVITIES, FOREIGN POLICIES - USA, INDUSTRIAL PRODUCTION - USA, INTERNATIONAL RELATIONS, THE ARMS INDUSTRY, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, USA, WARS AND ARMED CONFLICTS | Leave a Comment »

DOHA TALKS MAKE HEADWAY

Posted by Gilmour Poincaree on November 29, 2008

Nov 28, 2008 1:19 PM

PUBLISHED BY ‘TVNZ’ (New Zealand)

Talks to unstick the Doha Flag Raising Ceremony The United Nations flag is raised outside the Doha Sheraton Convention Centre, as representatives of the Government of Qatar turn over the facilities to United Nations authorities in preparation for the opening of the Follow-up International Conference on Financing for Development to Review Implementation of the Monterrey Consensus. Representing the Government of Qatar - Mohamed Abdullah Al-Rumaihi Deputy Minister, Ministry of Foreign Affairs -  Representing the United Nations - Shaaban M. Shaaban Under-Secretary-General for General Assembly and Conference Management - Sha Zukang Under-Secretary-General for Economic and Social Affairsworld trade round have made some headway, ambassadors to the World Trade Organisation (WTO) said on Thursday.

New Zealand ambassador Crawford Falconer, who chairs the WTO negotiations on agricultural products, said that countries have begun to budge from their positions in the wake of a high-level political push for an agreement.

“I have seen some material change, but not all the things I would like to have seen have happened,” he told reporters after an evening meeting at the WTO’s Geneva headquarters.

US President George Bush and other leaders have been pushing for a breakthrough in the seven-year-old WTO talks as a means to bolster the troubled global economy.

A new WTO agreement would cut subsidies and tariffs on a wide range of traded goods and cross-border services, prying open food, fuel, transportation and other markets and therefore encouraging global economic activity.

WTO Director-General Pascal Lamy has been looking for signs of movement in technical talks between diplomats before inviting trade ministers to Geneva to hammer out a deal in agricultural and manufactured goods – the two main areas of the Doha accord.

Talks earlier on Thursday skated over sensitive issues such as the levels of US subsidies on cotton, and a controversial facility to let poor countries shield subsistence farmers during crises, envoys said.

“We had more positive discussions than we had before,” Brazil’s WTO ambassador Roberto Azevedo said of those talks.

A dispute about the “special safeguard mechanism” for farmers caused a meeting of ministers in July to fail, with India squaring off against the United States and other countries who said the facility could actually close off existing markets instead of opening up new ones.

Azevedo told journalists that in Thursday’s talks on that mechanism “there wasn’t exactly convergence or agreement, but there was no clear-cut rejection.”

“You learn in these negotiations to read between the lines,” he said. “There was certainly more engagement, more interaction than there was before.”

Diplomats that a ministerial meeting next month could start around December 13, though no dates are expected to be set until Sunday or later.

Estimates of the benefits of the WTO accord vary widely. A recent study from the US-based International Food Policy Research Institute said more than $US1 trillion of trade was at stake.

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PUBLISHED BY ‘TVNZ’ (New Zealand)

Posted in AGRICULTURE, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, G20, INTERNATIONAL, INTERNATIONAL RELATIONS, NEW ZEALAND, QATAR, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, USA, WORLD TRADE ORGANIZATION | Leave a Comment »

THE PLANET IS NOW SO VANDALISED THAT ONLY TOTAL ENERGY RENEWAL CAN SAVE US – It may be too late. But without radical action, we will be the generation that saved the banks and let the biosphere collapse

Posted by Gilmour Poincaree on November 29, 2008

Tuesday November 25 2008 00.01 GMT

by George Monbiot – guardian.co.uk

The Guardian

GEORGE MONBIOT

George Bush is behaving like a furious defaulter whose home is about to be repossessed. Smashing the porcelain, ripping the doors off their hinges, he is determined that there will be nothing worth owning by the time the bastards kick him out. His midnight regulations, opening America’s wilderness to logging and mining, trashing pollution controls, tearing up conservation laws, will do almost as much damage in the last 60 days of his presidency as he achieved in the foregoing 3,000.

His backers – among them the nastiest pollutocrats in America – are calling in their favours. But this last binge of vandalism is also the Bush presidency reduced to its essentials. Destruction is not an accidental product of its ideology. Destruction is the ideology. Neoconservatism is power Alaska North Slope - Photo Date - Spring 1949expressed by showing that you can reduce any part of the world to rubble.

If it is too late to prevent runaway climate change, the Bush team must carry much of the blame. His wilful trashing of the Middle Climate – the interlude of benign temperatures which allowed human civilisation to flourish – makes the mass murder he engineered in Iraq only the second of his crimes against humanity. Bush has waged his war on science with the same obtuse determination with which he has waged his war on terror.

Is it too late? To say so is to make it true. To suggest there is nothing that can be done is to ensure that nothing is done. But even a resolute optimist like me finds hope ever harder to summon. A new summary of the science published since last year’s Intergovernmental Panel report suggests that – almost a century ahead of schedule – the critical climate processes might have begun.

Just a year ago the Intergovernmental Panel warned that the Arctic’s “late-summer sea ice is projected to disappear almost completely towards the end of the 21st century … in some models.” But, as the new report by the Public Interest Research Centre (Pirc) shows, climate scientists are now predicting the end of late-summer sea ice within three to seven years. The trajectory of current melting plummets through the graphs like a meteorite falling to earth.

Forget the sodding polar bears: this is about all of us. As the ice disappears, the region becomes darker, which means that it absorbs more heat. A recent paper published in Geophysical Research Letters shows that the extra warming caused by disappearing sea ice penetrates 1,000 miles inland, covering almost the entire region of continuous permafrost. Arctic permafrost contains twice as much carbon as the entire global atmosphere. It remains safe for as long as the ground stays frozen. But the melting has begun. Methane gushers are now gassing out of some places with such force that they keep the water open in Arctic lakes through the winter.

The effects of melting permafrost are not incorporated in any global climate models. Runaway warming in the Arctic alone could flip the entire planet into a new climatic state. The Middle Climate could collapse faster and sooner than the grimmest forecasts proposed.

Barack Obama’s speech to the US climate summit last week was an astonishing development. It shows that, in this respect at least, there really is a prospect of profound political change in America. But while he described a workable plan for dealing with the problem perceived by the Earth Summit of 1992, the measures he proposes are hopelessly out of date. The science has moved on. The events the Earth Summit and the Kyoto process were supposed to have prevented are already beginning. Thanks to the wrecking tactics of Bush the elder, Clinton (and Gore) and Bush the younger, steady, sensible programmes of the kind that Obama proposes are now irrelevant. As the Pirc report suggests, the years of sabotage and procrastination have left us with only one remaining shot: a crash programme of total energy replacement.

A paper by the Tyndall Centre for Climate Change Research shows that if we are to give ourselves a roughly even chance of preventing more than two degrees of warming, global emissions from energy must peak by 2015 and decline by between 6% and 8% per year from 2020 to 2040, leading to a complete decarbonisation of the global economy soon after 2050. Even this programme would work only if some optimistic assumptions about the response of the biosphere hold true. Delivering a high chance of preventing two degrees of warming would mean cutting global emissions by more than 8% a year.

Is this possible? Is this acceptable? The Tyndall paper points out that annual emission cuts greater than 1% have “been associated only with economic recession or upheaval”. When the Soviet Union collapsed, emissions fell by some 5% a year. But you can answer these questions only by considering the alternatives. The trajectory both Barack Obama and Gordon Brown have proposed – an 80% cut by 2050 – means reducing emissions by an average of 2% a year. This programme, the figures in the Tyndall paper suggest, is likely to commit the world to at least four or five degrees of warming, which means the likely collapse of human civilisation across much of the planet. Is this acceptable?

The costs of a total energy replacement and conservation plan would be astronomical, the speed improbable. But the governments of the rich nations have already deployed a scheme like this for another purpose. A survey by the broadcasting network CNBC suggests that the US federal government has now spent $4.2 trillion in response to the financial crisis, more than the total spending on the second world war when adjusted for inflation. Do we want to be remembered as the generation that saved the banks and let the biosphere collapse?

This approach is challenged by the American thinker Sharon Astyk. In an interesting new essay, she points out that replacing the world’s energy infrastructure involves “an enormous front-load of fossil fuels”, which are required to manufacture wind turbines, electric cars, new grid connections, insulation and all the rest. This could push us past the climate tipping point. Instead, she proposes, we must ask people “to make short term, radical sacrifices”, cutting our energy consumption by 50%, with little technological assistance, in five years.

There are two problems: the first is that all previous attempts show that relying on voluntary abstinence does not work. The second is that a 10% annual cut in energy consumption while the infrastructure remains mostly unchanged means a 10% annual cut in total consumption: a deeper depression than the modern world has ever experienced. No political system – even an absolute monarchy – could survive an economic collapse on this scale.

She is right about the risks of a technological green new deal, but these are risks we have to take. Astyk’s proposals travel far into the realm of wishful thinking. Even the technological new deal I favour inhabits the distant margins of possibility.

Can we do it? Search me. Reviewing the new evidence, I have to admit that we might have left it too late. But there is another question I can answer more easily. Can we afford not to try? No, we can’t.

monbiot.com

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PUBLISHED BY ‘THE GUARDIAN’ (UK)

Posted in ECONOMY, ENVIRONMENT, FOREIGN POLICIES - USA, INDUSTRIAL PRODUCTION, INTERNATIONAL, INTERNATIONAL RELATIONS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE OCCUPATION WAR IN IRAQ, THE PRESIDENCY - USA, USA | 1 Comment »

PATRICE LUMUMBA – STORIA DELLE RIVOLUZIONI DEL XX SECOLO

Posted by Gilmour Poincaree on November 29, 2008

– Romano Ledda

A cura di Roberto Bonchio

(1624, 1625, 1626, 1627)

Mentre nell’ África occidentale si assisteva ad una pioggia di indipendenze conquistate o concessé (il 1° ottobre dei 1960 fu la volta della Nigeria), esplose nell’estate del 1960 la questione congolese. Il Congo « belga » fu tra gli ultimi paesi ad arrivare alla rivendicazione dell’indipendenza, e ad avere un movimento nazionalista. Il sistema coloniale belga si era sempre vantato di aver saputo chiudere le sue colonie in una « gabbia felice », senza problemi. In realtà dentro quella gabbia c’era il razzismo, la miséria, l’assenza di ogni diritto umano, misti ad un ottuso paternalismo.

Congo: documenti sulla barbarie colonialista. Nel sue celebre pamphlet Il soliloquio de re Leopoldo, Mark Twain denunció in termini durissimi ed estremamente efficaci, ciò che si nascondeva nella “opoera di civilizzazione” belga.

Privato di ogni libertà política e religiosa (Simon Kimbangu era congolese), il popolo congolese aveva trovato la sua prima forma di solidarietà contro i dominatori in associazioni culturali, sindacali o di mutuo soccorso, la cui attività, ovviamente, non poteva andare oltre i limiti dei próprio gruppo etnico-tribale nel primo caso, e oltre l’assistenza reciproca, nel secondo. La prima rivendicazione sostanzialmente política di una emancipazione dai belgi, venne próprio da una associazione costituita per lo « sviluppo della língua kikongo, l’Associazione dei Bakongo (ABAKO). Solo nel 1958 cominciarono a profilarsi movimenti a carattere político, le cui origini però rimasero per lo piú etniche o tribali. Le prime richieste furono timide. Il 26 agosto del 1958 diciannove dirigenti nazionalisti chiesero « un piano a lunga scadenza di sviluppo político ed economico che abbia come fine l’indipendenza». Ma la realtà di tutto il continente dove va accelerare i tempi. L’indipendenza guineana, e la conferenza panafricana di Accra del dicembre 1958, scossero profundamente tutta l’Africa nera, e l’eco varcò anche le rigide barriere che i belgi avevano inalzato intorno ai Congo. Un partito, il primo a carattere nazionale, con dichiarati intenti antitribali — il Movimento nazionale congolese (MNC), fondato da Patrice Lumumba — raccolse immediatamente la parola d’ordine dell’ indipendenza totale, e subito.

Leopoldville, 7 gennaio 1959. I congolesi manifestano per l’indipendenza. I fortissimi interessi colonialisti determinati dalle notevoli risorse minerarie di cui il Congo disponeva (soprattutto nel Katanga) e tra lê quali erano l’oro, l’argento, il rame, l’uranio, fecero si che Ia via per l’indipendenza di questo paese fosse piú lunga e difficile che per altri.

Nel gennaio dei 1959 i belgi iniziarono la repressione. Il 4, nel corso di un comizio di Lumumba, la polizia sparò uccidendo 42 congolesi e ferendone 257. Il 12 gennaio l’ABAKO venne sciolta, e i suoi dirigenti esiliati. Fino ai giugno una serie di incidenti insanguinarono le strade di tutte le più importanti città del Congo, finché il governo di Bruxelles non si decise ad aprire trattative. Ma gli ultras belgi del Congo, e soprattutto l’Union Minière, respinsero ogni possibilità di accordo, su qualsiasi base. Nel settembre e nel’ottobre si ebbero così la stragi di Kitona (40 morti e 180 feriti) e di Stanleyville (30 morti e 100 feriti), mentre sanguinosi incidenti scoppiavano un po’ dappertutto: a Matadi (6 morti e 30 feriti), a Luluaburg ( 7 morti e 22 feriti) e cosi via. Il 31 ottobre Lumumba venne arrestato.

Un morto per lê vie di Elisabethville durante gli scontri per lê manifestazioni indipendentiste dei 1960; paracadutisti befgi pattugliano lê strade delia città; un manifestante ferito, arrestato da un poliziotto.

Tuttavia la situazione si era fatta insostenibile per il Belgio. La pressione internazionale, l’inquietitudine dilagante nella colonia indussero il governo belga a modificare atteggiamento e a tentare una operazione di tipo neocoloniale: concedere una indipendenza fittizia, che non intaccasse nulla del potere belga sulle favolose ricchezze congolesi. Dopo una «tavola rotonda» tenutasi a Bruxelles (20 gennaio-20 febbraio 1960), cui partecipò anche Lumumba, portatovi direttamente dal carcere, venne deciso di indire delle elezioni generali per un Parlalamento nazionale che avrebbe proclamato subito la indipendenza. Il 22 maggio esse ebbero luogo, e diedero una vistosa vittoria al MNC, nonostante la violenta campagna fatta dai belgi a favore di partiti e gruppi politici, ch’essi stessi avevano ispirato e costituito, con loro agenti. A elezioni avvenute fu tentato di tutto per impedire che Lumumba assumesse la carica di capo del nuovo governo congolese. Ma il Parlamento gli diede l’incarico, il 22 giugno, a grande maggioranza.

Patrice Lumumba viene nominato capo del nuovo governo congolese il 20 giugno 1960.

Il 30 giugno fu proclamata l’indipendenza. Re Baldovino, personalmente, si reco a Leopoldville, per pronunciarvi un discorso in parte minaccioso, in parte colmo di paternalismo, che nella sostanza diceva: la vostra indipendenza la dovete a noi e alia nostra opera civilizzatrice, e noi resteremo ancora qui, perche voi avete ancora bisogno di essere guidati.

Patrice Lumumba circondato dai giornalisti

Per i congolesi rispose Lumumba. Il suo fu un discorso nobile, appassionato: « Noi siamo fieri — egli disse — fin nell’intimo della nostra anima, di aver condotto una lotta che è stata di lacrime, di sangue e di fuoco, perche era una lotta nobile e giusta, necessária per mettere fine al’umiliante schiavitú che ci era stata imposta con la forza. Questa è stata la nostra sorte in ottanta anni di regime coloniale e le nostre ferite sono troppo fresche e troppo dolorose perche noi possiamo cancellarle dalla memoria. Come potremo dimenticare che abbiamo conosciuto il lavoro spossante in cambio di salari che non ci permettevano di placare la nostra fame, di vestire e abitare con dignità, di allevare i nostri bambini come esseri che ci erano cari? Noi che abbiamo conosciuto le ironie, gli insulti, le frustate, che dovevamo subire dalla mattina alla será, perche eravamo negri? Chi dimenticherà che al negro si dava del tunon come ad un amico, ma solo perche il lei era riservato ai bianchi? Noi che abbiamo visto le nostre terré saccheggiate, con documenti falsamente legali perche fondati sul diritto dei piú forte?». Al re che gli ayeva parlato di civilizzazione, Lumumba elencò le sofferenze, gli orrori dei razzismo, la violenza della repressione. E aggiunse: « Ora il nostro caro paese è nelle mani dei suoi figli. Noi veglieremo perche queste nostre terre diano i loro beni ai loro figli. II nostro governo nazionale e popolare sara la salvezza dei paese». E infine affermò: «L’indipendenza congolese è un passo decisivo verso la liberazione del continente africano ».

Dall’alto in basso, da sinistra a destra: Moise Ciombe, Puomo politico congolese ai servizio dei colonialisti belgi, che capeggiò la sedizione dei Katanga; l’ultima foto di Patrice Lumumba, poço prima dei suo assassínio (febbraio 1961); patrioti congolesi catturati dai mercenari; un aspeito dei villaggio di Ituri dopo uno scontro.

Non solo i belgi, ma tutte le potenze imperialiste si irrigidirono. Un Congo veramente indipendente, non disposto a subire una indipendenza fittizia poteva diventare, col suo immenso potenziale di ricchezze, un fatto assolutamente dirompente nel processo di decolonizzazione del’Africa nera. Il film degli avvenimenti si fece a questo punto incalzante e drammatico: il 7 luglio i paras belgi invasero il Congo, l’11 luglio il Katanga proclamo la secessione, il 17 luglio intervenne l’ONU che fiancheggiò e sostenne l’attacco alia giovane repubblica congolese, il 5 settembre Lumumba venne destituito con un colpo di Stato dei presidente della repubblica Kasavubu e dei generale Mobutu. Non basto, però, aver liquidato la punta piú avanzata dei nazionalismo congolese. La popolarità di Lumumba era tale, la sua influenza ancora così grande (il 14 dicembre a Stanleyville si era costituito un governo lumumbista), che occorreva colpire ancora piú duramente. Nel dicembre Lumumba venne trasferito nella fortezza di Thysville. Dopo due mesi di dura prigionia venne portato nel Katanga, e il 14 febbraio assassinato con due compagni di lotta. Pochi giorni prima aveva scritto alla moglie Pauline: «Non siamo soli. L’Africa, l’Asia e i popoli liberi e liberati di tutti gli angoli del mondo si troveranno sempre a fianco del milioni di congolesi che non cesseranno la lotta se non il giorno in cui non ci saranno piú colonizzatori né mercenari nel loro paese ». E durante la dura prigionia aveva detto: « Se mi uccideranno sarà un bianco che avrà armato la mano di un negro ». E cosi accadde. Il primo grande martire dei risorgimento africano venne assassinato da africani (Ciombe e Munongo), su ordine di una coalizione imperialista che trovo complici tutte le principali potenze coloniali.

Posted in BELGIUM, CONGO, FOREIGN POLICIES, FOREIGN POLICIES - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, THE PRESIDENCY - USA, THE UNITED NATIONS, USA, WARS AND ARMED CONFLICTS | 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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PUBLISHED BY ‘RIA NOVOSTI’ (Russia)

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 »

CHAGOS ISLANDS – STEALING A NATION – THE CORRUPTION THAT MAKES UNPEOPLE OF AN ENTIRE NATION

Posted by Gilmour Poincaree on November 28, 2008

28/11/2008

CHAGOS ISLANDS – STEALING A NATION – by John Pilger

CLICK HERE FOR A HIGH DEFINITION VERSION OF THE ENTIRE VIDEO

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The native islanders of the Chagos archipelago were forcibly removed from the CHAGOS' FLAGislands by the British Government at that time to make way for an American military airbase during the Cold War. They were forgotten about and left to wither in poverty in the slums of Mauritius. They have been fighting to be allowed to return home ever since, and despite the British courts ruling in favour of this the Government has managed to block that decision, and the Chagossians remain in their enforced purgatory to this day.

STEALING A NATION (John Pilger, 2004) is an extraordinary film about the plight of people of the Chagos Islands in the Indian Ocean – secretly and brutally expelled from their homeland by British governments in the late 1960s CHAGOS ARCHIPELAGOand early 1970s, to make way for an American military base. The base, on the main island of Diego Garcia, was a launch pad for the invasions of Afghanistan and Iraq. Stealing a Nation has won both the Royal Television Society’s top award as Britain’s best documentary in 2004-5, and a ‘Chris Award’ at the Columbus International Film and Video Festival. A brochure of the film is available at http://www.bullfrogfilms.com/guides/stealguide.pdf. On April 8, 2008, the Chagos Islanders have launched a national Campaign for Resettlement of their islands – go to www.letthemreturn.com. For more information and updates on the plight of the Chagossians, visit the website of the UK Chagos Support Association at www.chagossupport.org.uk.

Other references and articles on the story are as listed below: CHAGOS ARCHIPELAGO

http://www.chagos.org/home.htm

http://news.bbc.co.uk/1/hi/uk_politic…

Islanders who wait in vain for justice and a paradise lost
Evicted from their tropical idyll in a military deal, victorious in three legal hearings, they now face another battle to be allowed home – From The Times – November 9, 2007

THE CORRUPTION THAT MAKES UNPEOPLE OF AN ENTIRE NATION

27 Nov 2008

In his column for the New Statesman, John Pilger describes the latest chapter in theCHAGOS ARCHIPELAGO extraordinary story of the ‘mass kidnapping’ of the people of the Chagos islands in the Indian Ocean, British citizens expelled from their homeland to make way for an American military base. On 22 October, Britain’s highest court of appeal, the Law Lords, demonstrated how British power words at its apex by handing down a transparently political judgement that dismissed the Magna Carta and banned an entire nation from ever going home.

I went to the Houses of Parliament on 22 October to join a disconsolate group of shivering people who had arrived from a faraway tropical place and were being prevented from entering the Public Gallery to hear their fate. This was not headline news; the BBC reporter seemed almost CHAGOS REFUGEES PROTESTING IN LONDONembarrassed. Crimes of such magnitude are not news when they are ours, and neither is injustice or corruption at the apex of British power.

Lizette Talatte was there, her tiny frail self swallowed by the cavernous stone grey of Westminster Hall. I first saw her in a Colonial Office film from the 1950s which described her homeland, the island of Diego Garcia in the Indian Ocean, as a paradise long settled by people “born and brought up in conditions most tranquil and benign”. Lizette was then 14 years old. She remembers the producer saying to her and her friends, “Keep smiling, girls!”. When we met in Mauritius, four years ago, she said: “We didn’t need to be told to smile. I was a happy child, because my roots were deep in Diego Garcia. My great-grandmother was born there, and I made six children there. Maybe only the English can make a film that showed we were an established community, then deny their own evidence and invent the lie that we were transient workers.”CHAGOS REFUGEES PROTESTING - STANDING IN FRONT OF THE ROYAL COURT OF JUSTICE IN LONDON

During the 1960s and 1970s British governments, Labour and Tory, tricked and expelled the entire population of the Chagos Archipelago, more than 2,000 British citizens, so that Diego Garcia could be given to the United States as the site for a military base. It was an act of mass kidnapping carried out in high secrecy. As unclassified official files now show, Foreign Office officials conspired to lie, coaching each other to “maintain” and “argue” the “fiction” that the Chagossians existed only as a “floating population”. On 28 July 1965, a senior Foreign Office official, T C D Jerrom, wrote to the British representative at the United Nations, instructing him to lie to the General Assembly that the Chagos Archipelago was “uninhabited when the United Kingdom government first acquired it”. Nine years later, the Ministry of Defence went further, lying CHAGOS REFUGEES PROTESTING - Louis Olivier Bancoult, (2nd L) Chairman of the Chagos Refugees Group, holds his grandson Julien aloft outside The High Court in central London, 23 May 2007. Families expelled from the Chagos Islands by the British Government to make way for the Diego Garcia US airbase won their legal battle to return home Wednesday. The decision upholds two previous rulings in favour of the islanders, granting them rights of abodethat “there is nothing in our files about inhabitants [of the Chagos] or about an evacuation”.

“To get us out of our homes,” Lizette told me, “they spread rumours we would be bombed, then they turned on our dogs. The American soldiers who had arrived to build the base backed several of their big vehicles against a brick shed, and hundreds of dogs were rounded up and imprisoned there, and they gassed them through a tube from the trucks’ exhaust. You could hear them crying. Then they burned them on a pyre, many still alive.”

Lizette and her family were finally forced on to a rusting freighter and made to lie on a cargo of bird fertiliser during a voyage, through stormy seas, to the slums of Port Louis, Mauritius. Within A demonstrator demanding her return to the Chagos Islands in the Diego Garcia archipelago shouts during a protest outside the Houses of Parliament in London October 22, 2008. Britain's highest court ruled in favour of the British government on Wednesday, blocking the return of hundreds of Chagos Island people to their homes in the south Indian Ocean after nearly 40 years of exile. The decision by the House of Lords ends a years-long battle to secure the Chagos Islanders the right to return to their archipelago, from where they were forcibly removed in the 1960s and '70s to make way for an American airbase on Diego Garcia.months, she had lost Jollice, aged eight, and Regis, aged ten months. “They died of sadness,” she said. “The eight-year-old had seen the horror of what had happened to the dogs. The doctor said he could not treat sadness.”

Since 2000, no fewer than nine high court judgments have described these British government actions as “illegal”, “outrageous” and “repugnant”. One ruling cited Magna Carta, which says no free man can be sent into exile. In desperation, the Blair government used the royal prerogative – the divine right of kings – to circumvent the courts and parliament and to ban the islanders from even visiting the Chagos. When this, too, was overturned by the high court, the government was rescued by the law lords, of whom a majority of one (three to two) found for the government in a scandalously inept, political manner. In the weasel, almost flippant words of LordChagos Islanders look on while Louis Olivier Bancoult (R), Chairman of the Chagos Refugees Group, addresses the media outside The High Court in central London, 23 May 2007. Families expelled from the Chagos Islands by the British Government to make way for the Diego Garcia US airbase won their legal battle to return home Wednesday. The decision upholds two previous rulings in favour of the islanders, granting them rights of abode Hoffmann, “the rightof abode is a creature of the law. The law gives it and the law takes it away.” Forget Magna Carta. Human rights are in the gift of three stooges doing the dirty work of a government, itself lawless.

As the official files show, the Chagos conspiracy and cover-up involved three prime ministers and 13 cabinet ministers, including those who approved “the plan”. But elite corruption is unspeakable in Britain. I know of no work of serious scholarship on this crime against humanity. The honourable exception is the work of the historian Mark Curtis, who describes the Chagossians as “unpeople”.

The reason for this silence is ideological. Courtier commentators and media historians obstruct our CHAGOS ISLANDERS IN FORCED EXILE - Dervillie Permal and his wifeview of the recent past, ensuring, as Harold Pinter pointed out in his Nobel Prize acceptance speech, that while the “systematic brutality, the widespread atrocities, the ruthless suppression of independent thought” in Stalinist Russia were well known in the west, the great state crimes of western governments “have only been superficially recorded, let alone documented”.

Typically, the pop historian Tristram Hunt writes in the Observer (23 November): “Nestling in the slipstream of American hegemony served us well in the 20th century. The bonds of culture, religion, language and ideology ensured Britain a postwarLouis Olivier Bancoult, Chairman of the Chagos Refugees Group, celebrates outside The High Court in central London, 23 May 2007. The High Court on Wednesday upheld a ruling letting families return to their Indian Ocean island homes, from where they were forced out 30 years ago to make way for a US military base. The Court of Appeal backed a High Court ruling in May last year that allowed the families to return to the Chagos Islands, except for Diego Garcia, a launchpad for US military operations in Iraq and Afghanistan. Britain expelled some 2,000 people from the Chagos Islands, 500 kilometres (310 miles) south of the Maldives, to Mauritius and the Seychelles in the 1960s and 1970s, allowing it to lease Diego Garcia to Washington for 50 years economic bailout, a nuclear deterrent and the continuing ability to ‘punch above our weight’ on the world stage. Thanks to US patronage, our story of decolonisation was for us a relatively painless affair…”

Not a word of this drivel hints at the transatlantic elite’s Cold War paranoia, which put us all in mortal danger, or the rapacious Anglo-American wars that continue to claim untold lives. As part of the “bonds” that allow us to “punch above our weight”, the US gave Britain a derisory $14m discount off the price of Polaris nuclear missiles in exchange for the Chagos Islands, whose “painless decolonisation” was etched on Lizette Talatte’s face the other day. Never forget, Lord Hoffmann, that she, too, will die of sadness.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘JOHN PILGER’S WEB SITE’

Posted in CORRUPTION, CRIMINAL ACTIVITIES, ENGLAND, FOREIGN POLICIES, FOREIGN POLICIES - USA, HISTORY, HUMAN RIGHTS, INDIAN OCEAN ISLANDS, INTERNATIONAL, INTERNATIONAL RELATIONS, IRELAND, JUDICIARY SYSTEMS, MILITARY CONTRACTS, NATIVE PEOPLES, SCOTLAND, THE ARMS INDUSTRY, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE MEDIA (US AND FOREIGN), THE PRESIDENCY - USA, THE UNITED NATIONS, UNITED KINGDOM, USA, WARS AND ARMED CONFLICTS | Leave a Comment »

$800 BILLION MORE, BUT WILL AMERICA’S HOMEOWNERS SEE A DIME ???

Posted by Gilmour Poincaree on November 27, 2008

November 27, 2008

This past short week was remarkable. The Government, lead by General Paulson, promised to cover more than $300 billion of liabilities of Citigroup. Thus, once again, demonstrating that those controlling America’s money, are protected from their own stupidity and risky behavior. Those who had bought C stock last Friday almost doubled their money by betting on Paulson. After he screwed Lehman bondholders and the buyers of the Fannie and Freddie preferred shares, this guru is being smart by not trusting in the benevolence of irrational leadership!!!

General Paulson on Tuesday announced an $800 Billion plan to add capital to the consumer finance markets, student loans, auto loans and small businesses. Once again, it only benefits those finance companies that took risk during the economic expansion, who are looking for someone to buy assets they no longer wish to own!! Sir Paulson’s rational was that by selling these assets, these financiers will begin to lend again. Most others, including this humble writer, believe that they will behave like the banks under TARP. They will take the money, and not take any risks with it. They will hold it, or use it for bonuses, or to buy companies of friends, or buy Treasury bills and bonds, or FDIC guaranteed issuances from other financial institutions.

To assume they would use this money for lending, would be like the Sir Paulson’s team buying a home on the verge of foreclosure, and assuming that the seller would take the proceeds and use it to buy a new real estate investment.

President Elect Obama has promised new spending and infrastructure projects to jump start the economy. I do not know any bridge builders, airport construction workers , or road builders, so I do not know anyone who will benefit directly. Hopefully , those wearing ties to work, and those in the manufacturing sector will benefit as well.

In these times, with all the volatility, risks, threats and uncertainty, we must all stop and say THANKS for all the good we have, for our families and friends, for health and our prosperity, irregardless of how limited it may seem at the moment!!!!

Give Thanks, have faith, and strive to make the world better, without taking unneeded risks.

Have a great day!!!!

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PUBLISHED BY ‘Guru@moneyassistant.org’s’

Posted in BANKING SYSTEM - USA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - 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 PRESIDENCY - USA, THE WORK MARKET, THE WORKERS, USA | Leave a Comment »

MELTDOWN FAR FROM OVER, NEW MORTGAGE CRISIS LOOMS (USA)

Posted by Gilmour Poincaree on November 27, 2008

Thu Nov 27, 1:17 pm ET

by Matt Apuzzo – Associated Press Writer

WASHINGTON – The full scope of the housing meltdown isn’t clear and already there are ominous signs of a new crisis — one that could turn out the lights on malls, hotels and storefronts nationwide.

Even as the holiday shopping season begins in full swing, the same events poisoning the housing market are now at work on commercial properties, and the bad news is trickling in. Malls from Michigan to Georgia are entering foreclosure.

Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages.

That pace is expected to quicken. The number of late payments and defaults will double, if not triple, by the end of next year, according to analysts from Fitch Ratings Ltd., which evaluates companies’ credit.

“We’re probably in the first inning of the commercial mortgage problem,” said Scott Tross, a real estate lawyer with Herrick Feinstein in New Jersey.

That’s bad news for more than just property owners. When businesses go dark, employees lose jobs. Towns lose tax revenue. School budgets and social services feel the pinch.

Companies have survived plenty of downturns, but economists see this one playing out like never before. In the past, when businesses hit rough patches, owners negotiated with banks or refinanced their loans.

But many banks no longer hold the loans they made. Over the past decade, banks have increasingly bundled mortgages and sold them to investors. Pension funds, insurance companies, and hedge funds bought the seemingly safe securities and are now bracing for losses that could ripple through the financial system.

“It’s a toxic drug and nobody knows how bad it’s going to be,” said Paul Miller, an analyst with Friedman, Billings, Ramsey, who was among the first to sound alarm bells in the residential market.

Unlike home mortgages, businesses don’t pay their loans over 30 years. Commercial mortgages are usually written for five, seven or 10 years with big payments due at the end. About $20 billion will be due next year, covering everything from office and condo complexes to hotels and malls.

The retail outlook is particularly bad. Circuit City and Linens ‘n Things have sought bankruptcy protection. Home Depot, Sears, Ann Taylor and Foot Locker are closing stores.

Those retailers typically were paying rent that was expected to cover mortgage payments. When those $20 billion in mortgages come due next year — 2010 and 2011 totals are projected to be even higher — many property owners won’t have the money.

Some will survive, but those property owners whose loans required little money up front will have less incentive to weather the storm.

Refinancing formerly was an option, but many properties are worth less than when they were purchased. And since investors no longer want to buy commercial mortgages, banks are reluctant to write new loans to refinance those facing foreclosure.

California, New York, Texas and Florida — states with a high concentration of mortgages in the securities market, according to Fitch — are particularly vulnerable. Texas and Florida are already seeing increased delinquencies and defaults, as are Michigan, Tennessee and Georgia.

The worst-case scenario goes something like this: With banks unwilling to refinance, a shopping center goes into foreclosure. Nobody can buy the mall because banks won’t write mortgages as long as investors won’t purchase them.

“Credit markets have seized up,” corporate securities lawyer Michael Gambro said. “People are not willing to take risks. They’re not buying anything.”

That drives down investments already on the books. Insurance companies are seeing their stock prices fall on fears they are too invested in commercial mortgages.

“The system has never been tested for a deep recession,” said Ken Rosen, a real estate hedge fund manager and University of California at Berkeley professor of real estate economics.

One hope was that the U.S. would use some of the $700 billion financial bailout to buy shaky investments from banks and insurance companies. That was the original plan. But Treasury Secretary Henry Paulson has issued a stunning turnabout, saying the U.S. no longer planned to buy troubled securities. For those watching the wave of commercial defaults about to crest, the announcement was poorly received.

“He’s created havoc in the marketplace by changing the rules,” Rosen said. “It was the stupidest statement on Earth.”

The Securities and Exchange Commission is considering another option that might ease the crisis, one that would change accounting rules so banks don’t have to declare huge losses whenever the market declines.

But the only surefire remedy is for the economy to stabilize, for businesses to start expanding and for investors to trust the market again. Until then, Tross said, “There’s going to be a lot of pain going forward.”

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

FOUR NEW REPORTS REVEAL BATTERED ECONOMY (USA)

Posted by Gilmour Poincaree on November 27, 2008

Nov 26, 2008 1:54 PM (18 hrs ago)

by Martin Crtsinger, AP

WASHINGTON (Map, News) – The government released a quartet of reports Wednesday that paint a bleak picture of the nation’s economy: Jobless claims remain at recessionary levels, Americans cut back on their spending by the largest amount since the 2001 terrorist attacks, orders to U.S. factories plummeted and new-home sales fell to the lowest level in nearly 18 years.

The Labor Department reported that initial requests for unemployment benefits fell to a seasonally adjusted 529,000 from the previous week’s upwardly revised figure of 543,000. But claims remain at recessionary levels. The four-week average, which smooths out fluctuations, rose to 518,000, its highest level since January 1983, when the economy was emerging from a steep recession.

One minor bright spot showed the number of people continuing to claim unemployment insurance dropped unexpectedly to 3.96 million, from the previous week’s 4.02 million, which was the highest level in 25 years. The labor market has grown by about half since 1983.

Meanwhile, the Commerce Department reported that consumer spending plunged by 1 percent in October, even worse than the 0.9 percent decline that had been expected. Consumer spending accounts for two-thirds of total economic activity.

Orders to U.S. factories for big-ticket manufactured goods also plunged last month by the largest amount in two years. Orders for durable goods dropped by 6.2 percent, more than double the decline economists expected. The Commerce Department report showed widespread declines throughout manufacturing led by decreases in autos and airplanes.

The department also reported that new-home sales decreased 5.3 percent last month to a seasonally adjusted annual sales pace of 433,000 homes, the lowest level since January 1991, another period when the country was undergoing a steep housing downturn.

The median price of a new home sold in October fell to $218,000, down 7 percent from a year ago, and the lowest since September 2004.

The Dow Jones industrial average rose about 50 points in early afternoon trading Wednesday.

With the economy showing further signs that it is headed into a steep swoon, the administration and the Federal Reserve rolled out two new programs Tuesday that would provide up to $800 billion in an effort to get more loans flowing in such critical areas as mortgage lending, credit cards, auto loans and small business loans.

Credit markets liked the new efforts, but private economists said the new moves were not likely Treasury Secretary Henry Paulson appears on a television as a trader works on the floor of the New York Stock Exchange, Tuesday Nov. 25, 2008 - AP Photo - Richard Drewto be the last changes in the government’s vast rescue program, which has already undergone significant alterations since it was passed by Congress on Oct. 3.

Analysts believe more work will need to be done because of their expectations that the economy’s vital signs will continue to worsen as the country slips into what many believe could be the worst recession since the early 1980s.

The unemployment rate has hit a 14-year high of 6.5 percent, putting pressure on personal incomes. The government reported Tuesday that the overall economy, as measured by the gross domestic product, shrank at an annual rate of 0.5 percent in the July-September quarter, reflecting the fact that consumer spending fell at the fastest pace in 28 years.

Nariman Behravesh, an economist at IHS Global Insight, said he was expecting GDP to shrink at a 4 percent rate in the current quarter, reflecting the battering consumers are taking from the worst financial crisis since the 1930s. He predicted that the economy would remain in recession through the first half of next year.

“We are in the early stages of one of the worst recessions in the postwar period, even factoring in a massive stimulus program,” Behravesh.

To revive the economy, President-elect Barack Obama has said a top priority will be working with Congress to enact a stimulus package with the goal of creating 2.5 million new jobs over the next two years. Analysts believe such an effort will require spending between $500 billion to $700 billion, a figure that would be on top of all the money being spent to stabilize the financial system.

In the latest efforts to stabilize the financial system, the Federal Reserve announced Tuesday that it will buy $200 billion in securities backed by different types of debt including credit card loans, auto loans, student loans and loans to small businesses. That market essentially froze in October. These types of loans as a result have become harder to obtain and have carried higher interest rates

The Fed also announced that it will spend $500 billion to buy mortgage-backed securities guaranteed by mortgage giants Fannie Mae and Freddie Mac and another $100 billion to directly purchase mortgages held by Fannie, Freddie and the Federal Home Loan Banks.

This would greatly expand an initial modest effort announced in September with the goal of creating increased demand for mortgage-related assets. The hope is that this will drive down the price of mortgages and make home loans more available.

Analysts predict the Fed program could send mortgage rates down by as much as one-half to a full percentage point in coming months, helping to spur demand in the beleaguered housing market, which is suffering its worst downturn in decades.

The latest federal moves raised U.S. commitments to contain the financial crisis to nearly $7 trillion – though no one thinks the government will actually spend anything like that figure.

In the case of the Federal Reserve, the amount covers huge loans that financial institutions will have to pay back. In the case of the Treasury rescue effort, the government will at some point sell the stock it owns back to the banks, presumably when the banking system is doing better and the stock will be worth more.

Copyright 2008 The Associated Press. All rights reserved.

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PUBLISHED BY ‘EXAMINER.COM’

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

ASSAULT ON THE AMERICAN WORKER

Posted by Gilmour Poincaree on November 27, 2008

24 November, 2008

Posted by lobotero

The events of the past few days have made clear that a proposed $25 billion bailout of the US Businesses in California are lining up to oppose a bill, introduced by Assembly member Fiona Ma, requiring paid sick leave for workersBig Three auto companies is being used to intensify the ruling class offensive against auto workers and the American working class as a whole.

In an entirely cynical manner, the media and politicians of both parties are issuing pseudo-populist denunciations of General Motors, Ford and Chrysler while seizing on the near-collapse of the companies as an opening to rip up union contracts and destroy workers’ pensions, health benefits, wages and working conditions. This is to be the centerpiece of a ruthless restructuring of the industry, involving the closure of more factories and the destruction of tens of thousands more jobs. The aim is to provide, in the form of a far smaller and more highly exploitative industry, a source of profitable investment for Wall Street bankers and speculators.

The destruction of auto jobs and gutting of all that remains of the gains won by generations of auto workers since the mass sit-down strikes of the 1930s will be used as a precedent for similar attacks on workers in every sector of the economy and every part of the country. As with the Chrysler bailout of 1979-80, but on a far broader and even more brutal scale, mass unemployment will be used as a weapon to bludgeon the working class.

Whether through the bankruptcy courts or a bailout bill conditioned on unprecedented concessions — which the United Auto Workers (UAW) will accept and help impose — the workers are to be forced to labor for near-poverty wages and be stripped of basic health and retirement benefits.

President-Elect Barack Obama, for his part, has solidarized himself with demands for sweeping contract concessions, declaring that any auto bailout be contingent on the industry’s future “viability.” Among his chief economic advisers is Paul Volcker, the former Wall Street banker who was appointed chairman of the Federal Reserve by Democratic President Jimmy Cater and engineered a massive rise in unemployment, which was used to break the power of the unions and undermine the resistance of the working class to layoffs and wage cuts. The Chrysler bailout was carried out during his tenure at the Fed.

There is only one way to save the workers from the assaults they are sure to face. And that is?

There is only one policy that can defend the interests of auto workers and the working class as a whole. That is a socialist policy of nationalizing the auto industry and transforming it into a publicly owned enterprise under the democratic control of working people. This must be carried out in conjunction with the nationalization of the banks under public control, so that economic life can be based on the principle of production for human need, not private profit.

The design, engineering and manufacture of automobiles involve tens of millions of people around the world and vast natural, financial and human resources. The only way to guarantee decent living standards for all workers and to end destructive national competition is to unite auto workers internationally on the basis of a socialist program.

I know Irene…not what you want to hear, but put yourself in the place of an autoworker….what would you do to preserve your job?

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PUBLISHED BY ‘LOBOTERO’S INFO INK’

Posted in AUTOMOTIVE INDUSTRY, BANKING SYSTEM - USA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, MACROECONOMY, 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, USA | Leave a Comment »

BAILOUTS: $7 TRILLION AND RISING – Every day brings more news about the government’s efforts to fix the economy. Here is how the plans are taking shape

Posted by Gilmour Poincaree on November 27, 2008

Last Updated: November 26, 2008: 3:29 PM ET

by David Goldman, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) — The U.S. government is now willing to spend more than $7 trillion BURNING DOLLARS AND WASTING MONEY WITH THE BAILOUT PLANSto help rescue the economy. That’s about $23,000 for every American, and more than half of U.S. annual gross domestic product.

It’s a staggering and unprecedented amount of money. The last time the government went on a spending spree to cure a crisis was in the late 1980s and 1990s during the savings and loan crisis. But the $160 billion ($237 billion in today’s dollars) it spent then comes nowhere close to what’s being spent now.

But it may not be as bad as it seems: A substantial portion of that $7 trillion is investment, the government hasn’t spent close to the total allotment yet, and the taxpayer may come out on top in the end.

“It’s a lot of money, but it’s not like it’s out the door, never to be seen again,” said Dean Baker, co-director of the Center for Economic and Policy Research. “A lot will be lost, but we’re not going to lose anywhere close to $7 trillion.”

The government has invested about $3 trillion of the total allotment, and it has already received much of that investment back. For instance, the Fed has gotten back about $1.2 trillion of the $1.6 trillion it has lent banks in its ongoing Term Auction Facility.

The government collects interest on its loans and when it takes an equity stake in a company or takes hold of an asset-backed security, those holdings could mature in value over the duration of the government’s possession of them.

“At the end of the day, it’s an expensive plan, but the government had to step in,” said John Silvia, chief economist at Wachovia. “It’s a difficult thing to estimate, but the government could sell the assets at a decent price once the market’s better.”

Furthermore, some of the $7 trillion will likely never be spent. The government can spend up to $1.4 trillion in purchases of short-term business debt under the Fed’s Commercial Paper Funding Facility, but so far it has spent just $270 billion on the program.

Pessimists say the government is spending too much, putting taxpayer dollars at risk. Some say, that for all the government has spent, the results don’t match the actions.

But optimists argue that much of the bailout serves as a guardrail, preventing the financial system from falling into a total collapse. And most economists argue that the cost of not acting would be far greater.

“We’re doing this to prevent a financial collapse,” said Baker. “Not acting would be much worse, because the financial system would grind to a halt.”

More bailout measures still may be coming, as economists say the serious problems facing financial institutions have not yet subsided.

“More banks will likely fail, and I wouldn’t be surprised if the FDIC has to go to Congress to get recapitalized,” said Baker. “There’s lots more bad debt that has yet to show up.”

There’s also a growing chorus of voices outside of Treasury to spread bailout money around.

The recent struggles of GM (GM, Fortune 500), Ford (F, Fortune 500) and Chrysler have built momentum for a bailout of the U.S. auto industry. Automakers have until Dec. 2 to submit proposals for how they would use – and pay back – $25 billion of government funding. The Bush administration has said it does not want a Detroit bailout to come from TARP funds.

Some government officials like FDIC Chair Sheila Bair have called for TARP money to be used to guarantee mortgages backed by private lenders to encourage them to restructure loans to troubled homeowners.

And President-elect Barack Obama has stated his support for another economic stimulus package in the form of tax rebates to consumers, states and municipalities. Economists believe the bill will cost about $500 billion. The proposal has gained traction in Congress, with hopes that consumer spending and aid to governments will help boost the economy.

Here is how the government has thus far invested billions of dollars to rescue banks, companies, consumers and their homes.

SAVING WALL STREET

The government has taken these steps to aid financial institutions.

Term-auction facility: $1.6 trillion in loans to banks so far in exchange for otherwise unwanted collateral. The Fed increased its monthly auction limit to $300 billion in October, up from $20 billion when the Fed began the program.

Dollar swap lines: Unlimited dollars to 13 foreign central banks to provide liquidity to foreign financial institutions. The Fed lifted its cap after raising it to $620 billion in October from $24 billion in December.

Bear Stearns: $29 billion in a special lending facility to guarantee potential losses on its portfolio. With the lending facility, JPMorgan was able to step in to save Bear from bankruptcy.

Lending to banks: $70 billion lent on average every day to investment banks, after facility opened to non-commercial banks for first time in March. $92 billion a day to commercial banks.

Cash injections: $250 billion allocated to banks from $700 billion rescue package in exchange for equity stake in the financial institutions in the form of senior preferred shares.

Citigroup: $300 billion in troubled asset guarantees and $45 billion in cash-injections to prevent fourth-largest bank from failing.

Fed rate cuts: Down to 1% in October 2008, from 5.25% in September 2007.

SAVING MAIN STREET

Consumers are benefiting from the government’s actions in recent months.

Stimulus checks: $100 billion in stimulus checks made their way to 140 million tax filers to boost consumer spending and help grow the economy.

Unemployment benefits: $8 billion toward an expansion of unemployment benefits, to 39 weeks from 26 weeks. Some states must now offer 39-week benefits after an extension act was passed in November.

Bank takeovers: $15.5 billion drawn down so far from the FDIC’s deposit insurance fund after 22 bank failures in 2008.

Rehab foreclosed homes: $4 billion to states and municipalities in assistance to buy up and rehabilitate foreclosed properties.

Student loan guarantees: $9 billion so far in government purchases of student loans from private lenders. Higher borrowing costs made student loans unprofitable for a number of lenders, many of whom stopped issuing the loans.

Money-market guarantees: $50 billion in insurance for money-market funds. The Fed then began to lend an unlimited amount of money to finance banks’ purchases of debt from money-market funds. The Fed then agreed to purchase up to $69 billion in money-market debt directly. In October, the Fed said it would loan up to $600 billion directly to money-market funds, which was extended for six months in November.

Housing rescue: $300 billion approved for insurance of new 30-year, fixed-rate mortgages for at-risk borrowers. The bill includes $16 billion in tax credits for first-time home buyers. But lenders have been slow to sign on.

Deposit insurance: $250,000 in insurance for interest-bearing accounts, up from $100,000. The FDIC also issued unlimited guarantees on non-interest- bearing accounts and newly issued unsecured bank debt.

Consumer loans: $800 billion extended to consumer loan-backed securities, including $200 billion for assets backed by credit cards and car loans and $500 billion in mortgage-backed securities. The Fed will also buy $100 billion of Fannie Mae and Freddie debt to try to make loans cheaper.

SAVING CORPORATE AMERICA

Uncle Sam has intervened to help companies in the following ways.

Business stimulus: $68 billion in tax breaks to corporations to help loosen the stranglehold on businesses trying to finance daily operating expenses.

Fannie Mae, Freddie Mac: $200 billion to bail out the mortgage finance giants. Federal officials assumed control of the firms and the $5 trillion in home loans they back.

AIG: $152.5 billion restructured bailout, including a direct investment through preferred shares, a easier terms on a $60 billion loan, and new facilities meant to take on the companies exposure to credit-default swaps.

Automakers: $25 billion in low-interest loans to speed the industry’s transition to more fuel-efficient vehicles.

Commercial paper facility: $271 billion in corporate debt purchased so far by the Fed since its so-called Commercial Paper Funding Facility opened. The Fed allocated $1.4 trillion for the program.

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PUBLISHED BY ‘CNN’

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