Perspectives on the global economic meltdown

Yogi_G · Post by **Yogi_G** » 15 Mar 2009 21:46

Dilbu wrote:Can PIL be filed to force GOI to bring out the swiss account details?

Good idea. Also what about the Right to Information act??

I guess in both cases GoI will come back and say Swiss Govt is not accepting onleee

Rahul Mehta · Post by **Rahul Mehta** » 15 Mar 2009 22:31

Dilbu wrote:Can PIL be filed to force GOI to bring out the swiss account details?

Yes. PIL can be filed on ANYTHING.

Now will a PIL be useful in Swiss bank account case? Only if judges or their relatives in Nbjprie dont have Swiss accounts. Do you think that is the case? I think it is other way. So I think that PIL on this issue is unlikely to succeed.

Baljeet · Post by **Baljeet** » 15 Mar 2009 23:26

Rahul
That will be the most awesome thing to happen in this nation. If someone files a PIL in SC to force govt to request all Indians having account in tax haven countries. It will be the first step in reconciling our national hera pheri, corruption etc.

ramana · Post by **ramana** » 15 Mar 2009 23:30

Rahul Mehta, After the elections why dont you file a PIL for this subject? In fact it can be an election plank of yours.

Satya_anveshi · Post by **Satya_anveshi** » 16 Mar 2009 10:17

AIG Discloses $75 Billion in Bailout Payments

The funds were paid from the government's initial $85 billion emergency loan in September and included major firms such as Goldman Sachs, Societe Generale, Deutsche Bank, Merrill Lynch, Morgan Stanley, Bank of America and Barclays.

Yesterday's disclosure was an about-face for AIG and the Fed. In recent weeks, public outrage and pressure from lawmakers demanding to know who benefited from the AIG bailout has reached a crescendo. But until yesterday, AIG executives and federal officials had repeatedly refused to release such details, arguing that trading partners had a right to privacy and that any disclosure could harm their businesses.

Singha · Post by **Singha** » 16 Mar 2009 10:20

the usual cabal of well connected suspects with deep ties into the political power centers.

vsudhir · Post by **vsudhir** » 16 Mar 2009 20:31

Slightly old noose but does seem like the richest state in the states is in deep fin dudu.

California Budget Faces NEW $8-Billion Shortfall

After analyzing recent data showing rapidly rising unemployment and lower-than-expected economic growth, Legislative Analyst Mac Taylor said the state is on track to have even less money than lawmakers anticipated in February.
...
"I went as far back as 1950, and I could not find a situation in which personal income had actually declined in the state, so that's a rather unusual event," Taylor said at a news conference Friday.
...
Beyond the short-term problems, Taylor also projected a grim long-term fiscal outlook for the state, with a $12.6-billion shortfall emerging by mid-2011 and growing to $26 billion three years later.

"Given these budgetary pressures, the state could experience recurring cash flow pressures in the coming months and years," Taylor wrote.

But that's not the novel part.

The budget package relies on the passage of three ballot measures to provide nearly $6 billion in 2009–10 solutions—$5 billion from the borrowing of future lottery profits (Proposition 1C), about $600 million by redirecting dedicated childhood development funds (Proposition 1D), and about $230 million by redirecting dedicated mental health funds (Proposition 1E). If these measures were to fail, the Legislature would need to quickly develop even more solutions before the start of the fiscal year as alternatives.

Mish puts it best:

To "balance" the $42 billion shortfall, California is already counting on borrowing $5 billion from lottery proceedings. What kind of fiscal accounting nonsense is that?

The reality is California is now a minimum of $13 billion in the hole ... and counting. Hang on because it gets worse.

Note those areas in the chart above in pink. I strongly suspect that the forecasts for sales tax personal income taxes will fall far short of estimates. For the sake of argument I will take a shot and suggest a $3 billion shortfall. It's not that the increases will fail to deliver, but rather overall sales tax revenues and income tax collections will drop by that much in spite of the increases.

Also note that California is counting heavily on the sugar daddies in Congress to bail them out. "The package also assumes receipt of $8.5 billion in federal funds from the recent economic stimulus law to help balance the budget."

Link

Singha · Post by **Singha** » 16 Mar 2009 22:18

the balanced budgets for states is a fig leaf anyway when center can deficit spend to Nth degree. why should states miss out on it?

James B · Post by **James B** » 16 Mar 2009 22:52

Rated F for Failure

WHEN Standard & Poor’s, the bond-rating agency, lowered General Electric’s rating to AA+, from AAA, last week, many were shocked at the tarnishing of one of America’s most revered corporations. But the real scandal is how long it took S.&P. to make that minor change — and that the other major ratings firm, Moody’s, still hasn’t — even though G.E.’s dividend has been slashed by two-thirds and its stock price had fallen below $7, from nearly $40 a year ago.

Why, more than a year into the crisis, do regulators and investors continue to rely on ratings? No one has been more wrong than Moody’s and S.&P. Less than a year ago both gave high ratings to 11 of the largest distressed financial institutions. They put the insurance giant A.I.G. in the AA category. They rated Lehman Brothers an A just a month before it collapsed. Until recently, the agencies maintained AAA ratings on thousands of nearly worthless subprime-related securities.

Tells us about the scandals these credit rating agencies carry out in Western economies while being biased against other countries.

satya · Post by **satya** » 17 Mar 2009 02:45

A bit OT , IMVHO& limited experience , most of the money in so called tax heavens is under ''offshore corporations'' & web of other offshore cos are stake holders in one or multiples & lead from one place to another making sure tht real persons behind such offshore Cos never reveal themselves , nutshell only fools open saving a/c in these tax heavens except perhaps in some 80-90s movies . The gimmick of being 'more open' Swiss Banks means nothing in real terms but good for PR no wonder Swiss Banks rally the day it was announced . These tax heavens play a far more imp. role than mere tax heavens , being imp. stake holders in International trade & Currency Trade management. So lets not start dreaming about those billions, trillions suddenly showing up in Indian or any other country's treasury except perhaps FDI & FIIs inflows over the time.

Rahul Mehta · Post by **Rahul Mehta** » 17 Mar 2009 06:50

Baljeet: Rahul, That will be the most awesome thing to happen in this nation. If someone files a PIL in SC to force govt to request all Indians having account in tax haven countries. It will be the first step in reconciling our national hera pheri, corruption etc.

ramana : Rahul Mehta, After the elections why dont you file a PIL for this subject? In fact it can be an election plank of yours.

Looks like a good idea, PIL cant hurt anyone. I will start working on it.

Singha · Post by **Singha** » 17 Mar 2009 10:18

NYT

Goldman Offers Loans to Stretched Employees

By LOUISE STORY
Published: March 17, 2009

Goldman Sachs got its bailout. Now some of its bankers, those aristocrats of Wall Street, apparently need a bit of a bailout too.

Jon A. Winkelried, who recently resigned as a Goldman Sachs co-president, is trying to sell his estate in Nantucket, Mass.

Goldman, which accepted billions of taxpayer dollars last fall and, as learned Sunday, was also a big beneficiary of the rescue of the American International Group, is offering to lend money to more than 1,000 employees who have been squeezed by the financial crisis. The loans, offered via e-mail last week, could range from a few thousand dollars to hundreds of thousands.

Working at Goldman has long been regarded as a sure path to riches. But Goldman’s employees are losing money on their personal investments — particularly in Goldman’s own elite investment funds, which have been considered one of the perks of working at the bank.

Now these funds have stumbled, and some Goldman employees who financed their gilded lifestyles by borrowing in good times are suddenly short on cash needed to meet commitments to their personal investments in the funds. “It’s a problem with the culture of spending,” said Gustavo Dolfino, the president of Whiterock Group, a Wall Street recruitment firm. “No matter how much you have, you spend like you have a lot more.”

The development comes at a tumultuous time for Goldman Sachs, which is struggling to recapture its former glory — and profits — since it became an old-fashioned bank holding company. Goldman is one of the eight banks that were told to accept taxpayer money, and it is trying to pay that money back soon.

At least one of the vehicles, in a group known as the Whitehall funds, sank more than 50 percent last year. Another let its investors withdraw their money this year — at a significant loss.

With a focus on real estate and private equity investments, the funds — which also include Goldman Sachs Capital Partners — have traditionally performed extremely well, sometimes increasing sevenfold in a few years. Goldman even promoted its employee participation in the funds as a selling point to outside investors.

Some Goldman employees got rich before the markets collapsed, allowing them to invest several million dollars in the funds, often on a leveraged basis. Only three years ago, Goldman paid more than 50 employees more than $20 million apiece. In 2007, its chief executive, Lloyd C. Blankfein, collected one of the biggest bonuses in corporate history — nearly $70 million.

But one former Goldman partner estimated that a quarter of the bank’s roughly 100 partners are now worth $5 million or less because of losses on their company stock and other investments. Last year, the bank’s seven top executives received no bonuses. One of them, Jon A. Winkelried, resigned from his position as co-president a few weeks ago, saying he wanted to spend more time with his family. His estate on Nantucket is on the market.

It is unclear how many Goldman bankers and traders will take up the bank’s offer. The funds periodically require investors to add more money, and late last year, Goldman’s most senior management and board began to realize some employees might have trouble living up to this obligation after receiving low bonuses, according to a person briefed on the situation.

Employees in the funds are contractually obligated to meet requests for more capital. Several funds have such capital calls scheduled for April. Employees who fail to make the payments risk losing their jobs, according to a person familiar with the situation.

The new loans at Goldman are being offered to help employees meet capital demands from the internal funds and cannot be used for other personal needs, according to people familiar with the matter.

A spokesman for Goldman Sachs confirmed the existence of the loan program but declined to elaborate. The funds that are the most troubled were raised right before the financial crisis. Goldman raised $20 billion in its most recent private equity fund and some $9 billion in the Whitehall real estate funds in 2007 and 2008.

About a third of the money in the funds typically comes from Goldman and its employees, and since 1991, the bank and its employees have accounted for $7.5 billion of the $26 billion in the Whitehall funds.

Some employees now wish they had not invested. Properties like the Helmsley building, which Goldman helped purchase in 2007, have nose-dived in value. Stuart Rothenberg, the former head of Goldman’s real estate group, warned just before he retired last year about Goldman’s real estate exposure and said Goldman became “for all intents and purposes, almost an enlarged hedge fund,” according to Reuters.

Beyond the drop in the stock market, there are various reasons cash is tight for some Goldman employees. Some traders, for instance, are facing tax bills for bonuses paid in early 2008. They already spent that money, and their bonuses early this year were too small to foot the bill.

Others who borrowed against their stock holdings have been forced to sell at losses or put up more collateral against their loan. Goldman is one of many banks that has issued margin calls on its employees.

The employee loans, of course, may not turn out to be a good investment for Goldman, though Goldman can take employees who do not pay to court or seize money from their brokerage accounts.

To some, the development underscores how many wealthy Wall Streeters got in over their heads.

“Most people investing in Whitehall thought this was a sound and probably even a conservative investment,” said Janet Hanson, a former Goldman employee who is the founder of 85 Broads, an organization for women that takes its name from the address of Goldman’s headquarters. “No one saw the entire thing collapsing.”

Singha · Post by **Singha** » 17 Mar 2009 16:17

marketwatch.com - some good tidbits here. Can anyone point me to
cos that actually grew and did well under PE Funds? it seems all they
want to do is dress up struggling cos, asset strip to the N-th degree
and reward themselves fat bonuses with the current cash flow.

Two chipmakers hurting from debt and auto woes
Commentary: Two private equity deals that did not work in tech

By Therese Poletti, MarketWatch
Last update: 12:01 a.m. EDT March 17, 2009

SAN FRANCISCO (MarketWatch) -- The shakeout from problems in the American auto industry is having a ripple effect across the country -- and straight into the high-tech sector.
The plunge in demand for new cars has led to desperate measures by some in the industry. One car dealer in Nebraska resorted to stealing its own cars, while another in Orange County, Calif., pleaded guilty to charges of bilking finance companies to purchase luxury vehicles. In Pennsylvania, a dealer set fire to some of his inventory.

But often forgotten among the industry's suppliers are semiconductor makers. Chips make up an increasingly significant part of new cars. From sensors to embedded controllers, they power numerous mundane functions like radio tuners. They also enable such tech-centric features as built-in global positioning systems, anti-lock brake systems and rear-view cameras.

Two privately held firms -- NXP B.V. and Freescale Semiconductor Inc., in particular -- are caught in a perfect storm of slumping demand for chip products in general as well as auto-specific products in the future.
Autos make up a large chunk of both their businesses. And both companies are overburdened with debt, due to private equity deals done in better times. These two chipmakers, in fact, are prime examples of why private equity deals don't work well for technology firms with high fixed costs.

Both NXP and Freescale are in the throes of restructuring their debt, which would lower their interest payments and overall indebtedness. Holders of the notes, however, will get less of a return.

High debt levels
The level of debt for each company is quite high. In NXP's debt-exchange offering filed earlier this month, the company said its total indebtedness was $9.16 billion as of Dec. 31. Total revenue for 2008 was $5.4 billion, down 14%.

Freescale's annual report filed with the Securities and Exchange Commission, states that its total debt as of Dec. 31 was $9.8 billion. The Austin, Texas company reported revenue of $5.2 billion, off 8%.
After announcing their debt swaps, both firms subsequently saw downgrades from the major rating agencies. Moody's Investors Service called the NXP debt offer a "distressed exchange." In February, Standard & Poors said in its view, Freescale's proposed exchange offer was "tantamount to default," given that the new terms are at substantial discount to the face value, or par, of the outstanding issue.
NXP B.V. is a Dutch semiconductor company that was initially part of Philips Electronics NV.

In 2006, Philips sold 80.1% of its chip business to a group of private equity investors in a deal worth $10.6 billion at the time.
The consortium included a who's who of dealmakers: Kohlberg Kravis Roberts, Bain Capital, Silver Lake, Apax Partners and AlpInvest Partners. About half the purchase price was financed with debt.
That deal has not fared well, and some investors have lost money. Earlier this month, KKR wrote down its $250 million investment in NXP, which it said was worth $25 million at the end of 2008. Philips also took an impairment charge last year, estimating its 19.8% stake in NXP lost $700 million in value.

The auto industry is not entirely to blame for NXP's woes, but car sale troubles are likely to make things worse. Sales to the automotive and identification industries were nearly a quarter of NXP's revenue in 2008, falling 3.5% to $1.3 billion. That drop is not nearly as bad as sales to mobile phone and PC makers, which tumbled 36.5%. But as car and truck production plunges, the outlook for future sales to auto makers is grim.
While the auto industry was in severe crisis in 2008, production has plunged even further this year. In February, vehicle sales plummeted 40% in the U.S.

Another spinoff
Like NXP, Freescale was formed in 2006 through a spinoff from a public company, in this case Motorola Inc.

Some investors in Freescale also have taken write-downs. Reuters reported earlier this month that Blackstone Group, which led the consortium of private equity investors in the $17.6 billion deal, wrote down the value of the fund that includes Freescale by 35%. Other investors in Freescale include the Carlyle Group, Permira Funds and Texas Pacific Group.

Freescale appears even more exposed to the auto business. Revenue from sales to the auto industry comprised 31% of the company's total revenue in 2008, according to SEC filings.

It expects "weaker demand in the automotive industry and in other of our end markets to persist, which will affect our revenue and profitability into 2009." The company has been trying to sell its cellular handset business since October 2008, but no buyer has yet emerged.
Dave Novosel, an analyst with Gimme Credit, said that fortunately for Freescale, its debt schedule is now lighter.

"There is nothing pressing in the near term for Freescale," he said, adding that its current cash pile of $1.4 billion should help it weather the storm. But further layoffs and severance packages could cut into its cash reserves.

NXP, on the other hand, is having cash issues. In its recent SEC filing, NXP said lower revenue in the second half of 2008 lead to neutral cash flow in the second half and a negative cash flow for the whole year. It did generate significant cash by selling its wireless unit. In November, the company borrowed another $400 million under its revolving credit facility.

But the company said that it believes its cash on hand will fund its current operations, working capital and an ongoing restructuring program, for at least the next 12 months.

No one could have seen the global recession coming as long ago as 2006. But the naysayers who pooh-poohed private equity deals in tech were right. These two companies are both struggling with their debt loads, while grappling with the chip industry's worst downturn.
If auto sales continue to fall, it might get uglier before light even begins to show up at the end of the tunnel.

Therese Poletti is a senior columnist for MarketWatch in San Francisco.

Dilbu · Post by **Dilbu** » 17 Mar 2009 17:01

Rahul Mehta wrote:
Baljeet: Rahul, That will be the most awesome thing to happen in this nation. If someone files a PIL in SC to force govt to request all Indians having account in tax haven countries. It will be the first step in reconciling our national hera pheri, corruption etc.

ramana : Rahul Mehta, After the elections why dont you file a PIL for this subject? In fact it can be an election plank of yours.
Looks like a good idea, PIL cant hurt anyone. I will start working on it.

Happy to know that Mehtaji. I was wondering how to do it coz I am NRI onree and it is not easy to maintain a long term presence in India as this particular case clearly demands. But will do anything for Bharath. Count me in if you need any help in this mission.

Tanaji · Post by **Tanaji** » 17 Mar 2009 18:53

Best of luck with the PIL.

BTW, as someone has mentioned, only the babes unborn and naive will have accounts in Swiss banks. The real money is probably stored there, under holding companies incorporated in places like Bahamas, St. Kitts etc and fronted by a complex facade of intermediary companies. Each company would have had cutouts that point to precisely nowhere. There is fat chance of getting to know of who owns what in that mess.

Just as you know: when Reliance split, there were very very few people who know who owned what. This is with open filing of information. Imagine what happens when companies are incorporated by people at the other end of a phone line using a lawyer as a go between. For example , a company is initially incorporated in places like St. Kitts with lax laws using valid identity documents. The majority holder then promptly sells his stake to the real party. No one now knows who owns what..

Singha · Post by **Singha** » 17 Mar 2009 20:11

WSJ

At Goldman Sachs, Trimming Costs Means Bunking at Embassy Suites
It Ain't the Ritz, but the Hotel Is Nearby, It's Relatively Cheap and Goldman Owns It

By PETER LATTMAN and SUSANNE CRAIG

Staying at the Embassy Suites Hotel in lower Manhattan has its perks: The nightly manager's happy hour features free beer and popcorn. Flash a room key and earn a seat at the complimentary all-you-can-eat breakfast buffet and a 10% discount at the Chevy's Mexican-style restaurant next-door.

Guests can also rub shoulders with the bankers at Goldman Sachs Group Inc., which recently ordered that its employees stay there when visiting New York headquarters.

It's a far cry from the plusher digs Goldman employees used to enjoy at the Ritz-Carlton and the Carlyle. But cost-cutting and government oversight mean finding out how the other half lives.

Some of the bankers aren't happy with the switch. "No one's supposed to complain out loud, but, let's face it, we're spoiled," says one Goldman employee. "They turned us into hotel snobs."

One night recently, a dozen Goldman employees from the Chicago office were yucking it up at happy hour, which starts at 5:30 sharp. The group was huddled around three tables in a cafeterialike room overlooking the headquarters of Merrill Lynch & Co., now owned by Bank of America, drinking free Budweiser out of plastic cups and eating pretzels and tortilla chips.

Another evening, topics of conversation around the bar ranged from Bermuda reinsurers to hedge-fund fraud.

Goldman has more than cost-cutting initiatives in mind. Since 2006, it has owned the 463-room Embassy Suites, located a stone's throw from Goldman's $2.4 billion future headquarters in Manhattan's Battery Park City. Business has been "bumpy" over the past several months, according to a hotel employee, but the Goldman influx has boosted results.

Life was grander back in 2007, when Goldman booked record earnings of $11.6 billion. If visiting a Midtown client, employees could stay at New York's Plaza Athenee, which features "luxurious European fabrics in a French contemporary décor," according to the hotel Web site. Its quoted nightly rate is $795. The Carlyle's current, undiscounted room rate is $755. Those who wanted to be near Goldman's headquarters at 85 Broad St. near Wall Street, could bed down at the downtown Ritz-Carlton, where rooms typically cost $495 a night. (Corporations sometimes negotiate lower room rates at all these hotels.) "Thank goodness, other companies are still appreciating European luxury," said a spokeswoman for the Plaza Athenee, who said that other investment banks -- she wouldn't say which ones -- are still using the hotel.

Now, Goldman's travel services directs its 20,000-odd out-of-town employees -- from partners down to junior analysts -- to the Embassy Suites in lower Manhattan. Nicknamed "Hotel Goldman" by employees, it offers them a special corporate rate of $250 a night. When Goldman people visit other cities, the company directs them to hotels at which it
Below is a comparison of the Ritz Carlton and the Embassy Suites in New York's Battery Park.

Ritz Carlton Battery Park

* Views of New York Harbor and the Statue of Liberty
* Celestron telescopes in rooms
* DVD home theatre system
* 400 thread-count Frette linens, 100% Egyptian cotton
* Bulgari bath amenities
* $11 Irish Oatmeal brulée with berries compote
* $14 the Ritz Carlton martini (gin, muddled cucumber, mint and fresh lime juice)
* Free spicy cashews and marinated olives

Embassy Suites Battery Park

* Views of Merrill Lynch's former headquarters and Jersey City
* No telescopes
* No DVD home theater system
* 250 thread-count Hilton Hotel-brand sheets, 60%/40% cotton-poly blend
* Bloom aromatherapy "energy-rosemary infusion" bath amenities
* Free breakast buffet with piles of sausage and scrambled eggs
* Free Budweiser Draft
* Free popcorn and Chex Mix

Source: WSJ research

Inside Goldman, the hotel has become the butt of jokes. There are grumblings about its accommodations and a wake-up call service that blares "cock-a-doodle-do" into the telephone. For the many Goldman executives who visit New York for meetings in midtown Manhattan, the hotel's location on the far southwestern edge of the island is inconvenient.

Though just a mile from each other, the Ritz-Carlton Battery Park and Embassy Suites Battery Park are worlds apart. Rooms at the Ritz offer views of New York Harbor and the Statue of Liberty; Embassy Suites rooms look out across the Hudson River, at Jersey City, N.J

. Ritz guests luxuriate in 400-thread-count Frette linens made of 100% Egyptian cotton, while at the Embassy Suites guests sleep on 250-thread-count Hilton Hotel-brand sheets made of a 60/40 cotton-poly blend.

And forget free breakfast or drinks at the Ritz, which offers an $11 Irish oatmeal brûlée with berries compote in the morning and a $14 Ritz Carlton Martini (gin, muddled cucumber, mint and fresh lime juice) at night.

While still better off in the current recession than most of its rivals are, Goldman is feeling the pinch. In November, it posted its first quarterly loss since it went public in 1999.

And Goldman has found other ways to pinch pennies. Goldman people working late can only put in for $20 in dinner costs; the old limit was $25. If Goldman employees want to take a hired car home, they have to wait until 10 p.m., an hour later than before. The firm recently slashed the number of computer printers at its New York headquarters, frustrating employees who now have farther to walk in order to retrieve pitchbooks.

"These firms don't want to do anything that harms their ability to produce revenue, but in this environment they have to be incredibly mindful of protecting shareholder value," said Glenn Schorr, an analyst at UBS AG. "If that means buying a hotel like the Embassy Suites and having employees stay there, so be it."

Goldman, which accepted $10 billion in federal bank-rescue funds last year, has also taken great pains to not appear profligate, with all the intense government scrutiny over banks' spending on luxuries. It called off its big Miami hedge-fund conference scheduled for the first week in March and moved a three-day technology conference in late February from the Mandalay Bay casino-resort in Las Vegas to the San Francisco Marriott.

In 2006, Goldman acquired the Embassy Suites in Battery Park City site from Forest City Ratner Cos. for about $225 million. The plan was to turn the hotel into a dormitory for out-of-town Goldman executives once the headquarters building is completed in 2010. The purchase also satisfied security concerns, because it gives the company more control over the site, according to people familiar with the matter. The Embassy Suites is held on the firm's balance sheet as a strategic asset. Other properties it owns, such as the Stratosphere, a hotel and casino in Las Vegas, are categorized as investments.

Goldman employees don't work the front desk. The firm outsources the management of the hotel to Highgate Hotels, a Dallas outfit that handles day-to-day operations including staffing and setting room rates. For use of the Embassy Suites name, it pays a franchise fee to Hilton Hotels Corp., which owns the popular brand. Goldman also benefits from the franchise arrangement; its real-estate fund owns a piece of Hilton alongside the lodging giant's main owners, Blackstone Group LP.

These Wall Street goings-on were lost on Holly Jaye, a 24-year-old schoolteacher from Jasper, Ala., in town for an education conference. Ms. Jaye, who had just sneaked in a trip to the Statue of Liberty, said she had never heard of Goldman Sachs.

"Where I come from, this would be considered a luxury hotel," said Ms. Jaye, standing in the Embassy Suites lobby. "My room is wonderful. I've got a soft bed and a warm bathrobe. I guess I should thank Goldman Sachs."

Singha · Post by **Singha** » 17 Mar 2009 20:14

and a long list of angry comments. I dare say i-bankers are various
financial types are about as popular in the heartland today as Osama
himself.

---

Guys and gals, stop and think about it now: the old adage of you "lie down with dogs, you come up with fleas" will make me think about ever staying at Embassy Suites after the likes of Goldman Sachs now has to have their all night "Power Point" presentation session preparations there, involuntarily, even."

Back to the Marriott, Ritz, etc., and tossing the bedspread on the ground and spraying it with DDT, as I don't know what nefarious activity has been Exceled/PowerPointed/videoed there for Simulus Two.

----

I think everyone should watch the Daily Show (with jim cramer) to see how dishonest investment people really are. We do not need terrorist in this country we have Goldman Sachs and the likes to "leverage" our money. These guys don't work for a living they play all day with other peoples money. So the hotel thing is nonsense.

-----

A far cry from Wal-Mart where executives travelling on company business fly coach and share hotel rooms. Wal-Mart is also profitable and not begging for government money.

Bade · Post by **Bade** » 17 Mar 2009 20:43

Though just a mile from each other, the Ritz-Carlton Battery Park and Embassy Suites Battery Park are worlds apart. Rooms at the Ritz offer views of New York Harbor and the Statue of Liberty; Embassy Suites rooms look out across the Hudson River, at Jersey City, N.J .

Now I can see why vina-saar, has been complaining about Nu Joisy, all the perks that Investment Bankers are used to, make NJ looks like a slum onree all while sucking blood out of the working class commoners who live there.

Singha · Post by **Singha** » 17 Mar 2009 20:48

the shoreline of jersey city opp the hudson isnt too bad imo...some kinda tall towers on redeveloped dockyards, stevens instt of tech in hoboken?.....the real fun is a little further inland and south in places like elizabeth, rahway, newark and patterson...I am kinda "veteran" of the dark underbelly....before marriage used to hang out with a friend a lot in IKEA and sometimes liberty state park(NJ side).
goal of laying around in IKEA was the high density of posh unmarried or just married females flooding in from NYC/richer parts of NJ/CT to buy their cheap chic furniture.

now new haven later got a ikea so part of the cachement area got lost.

being a cunning yindu it was a lot easier and cheaper than catching a
train or driving to NYC proper. plus the fish came to you in a concentrated school rather than you fishing in central park or 5th av.

vsudhir · Post by **vsudhir** » 17 Mar 2009 23:50

Banker stock climbs ever higher in urban legend and modern folklore...

Wall Street Firms Looking to Circumvent TARP Bonus Caps Via Salary Increases

In response to expected bonus restrictions, officials at Citigroup Inc., Morgan Stanley and other financial institutions that got government aid are discussing increasing base salaries for some executives and other top-producing employees, people familiar with the situation said.....

The discussions are at an early stage, partly because the government hasn't yet issued specific rules on the bonus payments that will be allowed at companies that received TARP aid. The talks also are proceeding cautiously because of the political volatility of pay, bonuses and perks on Wall Street, including outrage over American International Group Inc.'s promise to pay $450 million in bonuses to employees in the insurer's financial-products unit.

Hmmm. Must be that base salaries are presently hajaar low onlee only, no?

Most traders and bankers on Wall Street get a base salary of anywhere from $200,000 for managing directors to $1.5 million for a chief executive. But the lion's share of their pay comes in the form of a bonus, a tradition that began when most firms were private partnerships and partners shared directly in the annual income of the firm. {Tradition...right! Even now the tradition is sought ot be maintained when all these firms are on taxpayer life support....wah bhai wah....talk about Baki proportions of entitlement bias}

As banks and securities firms wrestle with growing regulation of compensation practices, substantially increasing the base salaries of top employees could become a popular response, some industry officials say. A larger salary would reduce the relative importance of bonuses but also help financial companies increase those payments, since they usually are calculated as a percentage of total annual compensation.

vsudhir · Post by **vsudhir** » 18 Mar 2009 01:29

UK takes over turks and Caios

Quietly the Brits have taken over the island. Ostensibly for "amorality and incompetence" reasons, says the Guardian.

Money laundering and tax evasion are more like it actually, but the takeover requires overriding existing legal authority.

Easy does it...

vsudhir · Post by **vsudhir** » 18 Mar 2009 02:57

"GE is bankrupt", announces Will Ferrell on CNBC

Youtube link.

Take with salt onlee.

vsudhir · Post by **vsudhir** » 18 Mar 2009 05:51

Moscow pitches new international reserve currency

17 March 2009By Ira Iosebashvili / The Moscow TimesThe Kremlin published its priorities Monday for an upcoming meeting of the G20, calling for the creation of a supranational reserve currency to be issued by international institutions as part of a reform of the global financial system.

The International Monetary Fund should investigate the possible creation of a new reserve currency, widening the list of reserve currencies or using its already existing Special Drawing Rights, or SDRs, as a "superreserve currency accepted by the whole of the international community," the Kremlin said in a statement issued on its web site.

The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries.

The Kremlin has persistently criticized the dollar's status as the dominant global reserve currency and has lowered its own dollar holdings in the last few years. Both President Dmitry Medvedev and Prime Minister Vladimir Putin have repeatedly called for the ruble to be used as a regional reserve currency, although the idea has received little support outside of Russia.

vsudhir · Post by **vsudhir** » 18 Mar 2009 06:09

This is big.

Bankruptcy Judge Rules Calif. City Can Void Union Contracts

In the first ruling of its kind, a bankruptcy judge held the city of Vallejo, Calif. has the authority to void its existing union contracts in its effort to reorganize, holding public workers do not enjoy the same protections Congress gave union workers at private companies.

Municipal bankruptcy is so rare that no judge had yet ruled on whether Congressional reforms in the 1990s that required companies to provide worker protections before attempting to dissolve union contracts also applied to public workers' union contracts

"This will have a huge effect nationwide if it is upheld," said Kelly Woodruff, of Farella, Braun & Martel in San Francisco, representing the firefighters and electrical workers unions. Woodruff said the unions would certainly appeal if the city ultimately voids the existing contracts with the two unions. "And I think we have a good chance of success," she said.

"My understanding is that a lot of cities are watching this and particularly this motion," said Woodruff. "If the city of Vallejo succeeds in using bankruptcy to void union contracts I am sure others will follow," she said.

Vallejo attorney Norman C. Hile of Orrick, Herrington & Sutcliffe's Sacramento, Calif. office said, "This is a decision that is somewhat groundbreaking."

"There are a number of other cities and government entities watching it very closely," he said, but declined to speculate on whether others would take the step Vallejo took of seeking bankruptcy protection.

The decision will be particularly important to cities with large unfunded pension liabilities, according to James Spiotto, of Chapman & Cutler in Chicago and a specialist in municipal bankruptcy who helped advise the Senate Judiciary Committee on Chapter 9 reforms.

He said the unfunded pension liabilities for states and cities was $800 billion a few years ago and may be at $1 trillion today. "The question is whether it is an inability to pay or an unwillingness to pay. If municipalities can't provide basic services and still pay labor costs or pensions then that is a real issue," Spiotto said.

McManus held that because Congress did not impose limits on invalidating union contracts under Chapter 9, cities must only meet the requirements under the U.S. Supreme Court's ruling in NLRB v. Bildisco, 456 U.S. 513 (1984), which gives broader discretion to break the contracts in bankruptcy.

vsudhir · Post by **vsudhir** » 18 Mar 2009 07:06

Did someone jussay generational war?

STEYN: Sticking it to the young

Almost funny if it weren't so serious...

This is the biggest generational transfer of wealth in the history of the world. If you're an 18-year-old middle-class hopeychanger, look at the way your parents and grandparents live: It's not going to be like that for you. You're going to have a smaller house and a smaller car - if not a basement flat and a bus ticket. You didn't get us into this catastrophe. But you're going to be stuck with the tab, just like the Germans got stuck with paying reparations for the catastrophe of World War I.

True, the Germans were actually in the war, whereas in the current crisis you guys were just goofing around at school, dozing through Diversity Studies and hoping to ace Anger Management class. But tough. That's the way it goes.

I mentioned a few weeks ago the calamitous reality of the U.S. auto industry. General Motors has 96,000 employees but provides health benefits to more than a million people. They can never sell enough cars to make that math add up. In fact, selling cars doesn't help, as they lose money on each model.

GM is a welfare project masquerading as economic activity. And, after the Obama transformation, America will be, too.

Satya_anveshi · Post by **Satya_anveshi** » 19 Mar 2009 06:19

If we are go by the market indicators, we will soon have to do IB4TL

USA:1;China:1; UK:0; India:DNB

joshvajohn · Post by **joshvajohn** » 19 Mar 2009 07:00

Indian government has to allow the black money to roll into the market similar to what Chidambaram did when BJP was in power bringing out the Gold from the house and making it as investments. I think Indian govenment, Election Commission and a few others have to sit together and do this as soon as possible making deposits for investments. A few billions might help the market to go up though one cannot help it in a long term business as rumours are still around the corner in the share markets.

vina · Post by **vina** » 19 Mar 2009 08:40

Yawnn... Just as predicted, Unkil is running the printing presses at hyper speed to inflate it's way out of the mess. Basically giving Wampum back for the bonds.

Chipanda are screwed royally . Dump all the treasuries you want. Unkil will print notes and monetize 'em. Selling is like plunging a dagger in Chipanda's own belly.

Fed to Buy $1T in securities to aid economy

The New York Times
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March 19, 2009
Fed to Buy $1 Trillion in Securities to Aid Economy
By EDMUND L. ANDREWS

WASHINGTON — The Federal Reserve sharply stepped up its efforts to bolster the economy on Wednesday, announcing that it would pump an extra $1 trillion into the financial system by purchasing Treasury bonds and mortgage securities.

Having already reduced the key interest rate it controls nearly to zero, the central bank has increasingly turned to alternatives like buying securities as a way of getting more dollars into the economy, a tactic that amounts to creating vast new sums of money out of thin air. But the moves on Wednesday were its biggest yet, almost doubling all of the Fed’s measures in the last year.

The action makes the Fed a buyer of long-term government bonds rather than the short-term debt that it typically buys and sells to help control the money supply.

The idea was to encourage more economic activity by lowering interest rates, including those on home loans, and to help the financial system as it struggles under the crushing weight of bad loans and poor investments.

Investors responded with surprise and enthusiasm. The Dow Jones industrial average, which had been down about 50 points just before the announcement, jumped immediately and ended the day up almost 91 points at 7,486.58. Yields on long-term Treasury bonds dropped markedly, and analysts predicted that interest rates on fixed-rate mortgages would soon drop below 5 percent.

But there were also clear indications that the Fed was taking risks that could dilute the value of the dollar and set the stage for future inflation. Gold prices rose $26.60 an ounce, hitting $942, a sign of declining confidence in the dollar. The dollar, which had been losing value in recent weeks to the euro and the yen, dropped sharply again on Wednesday.

In its announcement, the central bank said that the United States remained in a severe recession and listed its continuing woes, from job losses and lost housing wealth to falling exports as a result of the worldwide economic slowdown.

“In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability,” the central bank said.

As expected, policy makers decided to keep the Fed’s benchmark interest rate on overnight loans in a range between zero and 0.25 percent.

But to the surprise of investors and analysts, the committee said it had decided to purchase an additional $750 billion worth of government-guaranteed mortgage-backed securities on top of the $500 billion that the Fed is already in the process of buying.

In addition, the Fed said it would buy up to $300 billion worth of longer-term Treasury securities over the next six months. That would tend to push down longer-term interest rates on all types of loans.

All these measures would come in addition to what has already been an unprecedented expansion of lending by the Fed. The central bank also said it would probably expand the scope of a new program to finance consumer and business lending, which gets under way this week.

In effect, the central bank has been lending money to a wider and wider array of borrowers, and it has financed that lending by using its authority to create new money at will.

Since last September, the Fed’s lending programs have roughly doubled the size of its balance sheet, to about $1.8 trillion, from $900 billion. The actions announced on Wednesday are likely to expand that to well over $3 trillion over the next year.

Despite a trickle of encouraging data in the last few weeks, Fed officials were clearly still worried and in no mood to cut back on their emergency efforts.

Fed policy makers sharply reduced their economic forecasts in January, predicting that the economy would continue to experience steep contractions for the first half of 2009, that unemployment could approach 9 percent by the end of the year and that there was at least a small risk of a drop in consumer prices like those that Japan experienced for nearly a decade.

The Fed rarely buys long-term government bonds. The last occasion was nearly 50 years ago under different economic circumstances when it tried to reduce long-term interest rates while allowing short term rates to rise.

Ben S. Bernanke, the Fed chairman, has been extremely cautious in recent weeks about predicting an end to the recession, saying that he hoped to see the start of a recovery later this year but warning that unemployment, a lagging indicator, would probably keep climbing until some time in 2010.

In contrast to several recent Fed decisions, with the presidents of some regional Fed banks dissenting, the decision at Wednesday’s meeting of the 10 members of the Federal Open Market Committee, the central bank’s policy making group, was unanimous.

Jan Hatzius, chief economist at Goldman Sachs, said the Fed had adopted a “kitchen sink” strategy of throwing everything it had to jolt the economy out of its downward spiral.

But while Mr. Hatzius applauded the decision, he cautioned that the central bank could not solve the economy’s problems by expanding cheap money.

“Even if the Fed could make interest rates negative, that wouldn’t necessarily help,” Mr. Hatzius said. “We’re in a deep recession mainly because the private sector, for a variety of reasons, has decided to save a lot more. You can have a zero interest rate, but if you just offer more money on top of the money that is already available, it doesn’t do that much.”

Fed officials have been wrestling for months with the fact that lenders remain unwilling to lend and borrowers are unwilling or unable to borrow. Even though the Fed has been creating money at the fastest rate in its history, much of that money has remained dormant.

The Fed’s action is an expansion of its effort to bypass the private banking system and act as a lender in its own right.

The Fed and the Treasury are starting a joint venture this week called the Consumer and Business Lending Initiative in their latest effort to thaw the still-frozen credit markets. The program will start out with $200 billion in financing for consumer loans, small-business loans and some corporate purposes.

Fed officials have said they hope to expand the program next month, possibly to include the huge market for commercial mortgages, and both the Fed and Treasury hope the program will eventually provide up to $1 trillion in total financing.

Singha · Post by **Singha** » 19 Mar 2009 09:22

comments in NYT:

Perhaps the long-awaited demise of the dollar and burst of the T-bonds bubble started today? I simple cannot wrap my mind around all this charade... now it seems that no one is left to fool and no one left to buy those T-bonds and now an organized crime left hand is borrowing from the right hand of the organized crime?

— Roman, Santa Monica

Who's the new economic advisor, Alfred E. Newman ("What Me Worry?")? Monopoly money? Easy come, easy go, phoney dough! Hang on borthers, 'cause when inflation comes back, as it will, it will make a crazed lion look tame by comparison.

— Joseph W. Mathews, Manchester, VT

Can you say "Weimar Republic"?

— Jen, NY

The Fed and the Treasury are trying to reflate when too much debt is the illness. I wish them well, in the sense that they are trying to mitigate the negative effects of a deflation, but I can't help but be nervous about where this will all lead.

The numbers are staggering to my little mind. I think I will just continue to save, reduce debt and prepare for bad times. I have lost all faith and trust and now I think self-preservation is called for.

Sorry, masters of the universe, but I'm going to the mattresses.

Did anyone notice the extraordinary good spirits evident when President Obama spoke to Congress? I like Obama, but I have never seen a happier more prosperous looking group of folks in my life. That is because the focus of everything has shifted to Washington and her 40,000 some odd lobbyists. It is the center of everything now. I suspect that doesn't bode well for me and my small business.

My primary occupation right now is to see that my business survives, that I am able to take care of my employees, and that I can be there for my family. I don't care about much of anything else.

Incidentally, the bail out of AIG was really a bail out of AIG's counterparties. The bonuses are trivial. Think about it. Backstopping AIG's CDS must have resulted in a few champagne corks popping at, say Goldman Sachs, etc.

Best to you all.

— Kurt Schoenaman, Boonville, CA.

I have said it numerous times, and I will say it one more time, Ben Bernanke is "a clueless fool of unimaginable ineptitude".

His gargantuan ego is destroying the very core essence of financial integrity in our country that stood for 225 years. Of all the horrifying Bush blunders, Bernanke is by far the worst.

Creating imaginary "money" out of thin air to buy our own debt. Sometimes there are just no words.

— James, Chicago, IL

Nayak · Post by **Nayak** » 19 Mar 2009 10:27

http://news.bbc.co.uk/2/hi/programmes/w ... 951800.stm

Matt Frei's diary: Japan's recession

By Matt Frei
BBC News, Washington

Living in America one gets used to the exuberant despair of the economic crisis.

A factory in Tokyo's Ota ward
Small factories are suffering in the downturn

Entire neighbourhoods ravaged by the cancer of foreclosure, the feverish ructions of the stock market, the high-pitched protests of politicians channelling popular anger, the low pitched moans of Wall Street titans who claim to be more sinned against than sinning.

Japan, by contrast, suffers quietly, stoically.

The land of the rising sun has, after all, been in it for the long haul.

Here, the bubble burst as long ago as 1990 and the Japanese economy has been as flaccid as a half-inflated airbed ever since.

Before the burst, the Nikkei (Japan's share index) had reached a dizzying 39,000 points, Japanese shoppers trawled the world for Gucci and Louis Vuitton - how we miss them now! - and the large patch of land which housed the Imperial Palace and its gardens in the centre of Tokyo was worth more than the entire economy of California.

Lost decade

The excesses of the bubble era are a distant memory, dimly and guiltily remembered like a frat party that resulted in too much fun, too many indiscretions and a mind-numbing hang-over.

These days, the Nikkei is languishing around 7,000. Property prices are down about 80% in the capital and you will be hard pressed to find Japanese shoppers fighting over handbags in Florence or Rome.

Japan had just emerged from its so called lost decade - the 90s - when it was pummelled by what is commonly referred to here as "the Lehman shock".

I have never seen anything like it - I have no idea how we will cope
Mr Iino
Metal workshop owner

The decline of recent months has felt like a particularly cruel punch in the stomach.

The country had already paid for its past irrational exuberance.

It had been wearing the hair-shirt of abstinence for most of the 90s.

There were no sub-prime loans here. Credit card debt is virtually unknown in a culture that still clings to crisp bills of cash.

The Japanese had been scrimping and saving for years. With interests rates at zero they had been stuffing money under beds and into safes.

I came here in 1998 to do a story about the brisk trade in household safes, because no one really trusted the banks to look after their money.

Ironically, Japan has been punished because it is good at producing things like cars, computers and cameras that other countries want to buy, or rather wanted to buy.

Exports are down a staggering 47% on last year, which is devastating for an economy that relies on them.

Toyota, the car giant, had never had a year in the red until 2008.

'Collapsed'

But it is not just the big names that are suffering. Small companies employing less than 300 employees form the backbone of the Japanese economy. They employ 70% of the workforce and they have been going to the wall by the hundreds every week.

We spent a day in the Ota ward in Tokyo. This warren of tiny factories, "mom and pop" workshops and miniature residential houses is typical of Japan.

The narrow streets are meticulously clean. Beautifully manicured trees stand next to ubiquitous vending machines. The tofu seller pulls his cart through the ward every Wednesday blowing his trumpet.

Despite flat-screen TVs, broadband wi-fi connectivity and cutting edge technology, the place feels like an ancient village steeped in conservative ritual. Flowerboxes with geraniums adorn workshop fronts humming to the sound of electronic chainsaws and hydro-hammers.

Sign outside a cyber cafe in Tokyo that allows people to stay overnight
Cyber cafes offer a cheap place to sleep for the unemployed

Mr Iino loves the Beatles and wears round John Lennon specs. He grew up above the one-room factory where he and four other employees now make metal joints and hinges for sophisticated glass-cutting machinery.

They are skilled craftsmen, masters of a niche market. The atmosphere in their workshop is almost reverential, the attention to detail intense, yet graceful. The four workers dance around each other in this tight space like acrobats in a space station.

They bow deeply when we arrive, briefly interrupting what had turned out to be a very busy day. An order had just come in.

"Had you come the day before, you would have found us all idle and smoking," Mr Iino admitted. "Business has collapsed," he added.

"I have never seen anything like it. I have no idea how we will cope."

I asked him if he will have to lay anyone off. The other workers listened in silence. One of them, a friend from junior high school days, smiled faintly.

"That will never happen," Mr Iino said quietly. "We are all family."

Sacrifices

His resilience is admirable and I am not sure whether this tightly-knit family business culture is a strength or a weakness.

It means that companies like his are far less flexible when it comes to weathering the storm.

On the other hand, they can also call on each other more easily to make sacrifices, like putting up with lower wages in hard times or working shorter hours.

In Ota ward alone there are almost 5,000 such small factories. Some 1,500 have already disappeared - who knows how many more will follow?

Japan is a country almost uniquely torn between post-modernity and deep-rooted tradition.

The images are everywhere.

Shoes placed carefully outside a booth in a cyber cafe where people are allowed to stay overnight
Overnight guests at the cafe leave their shoes outside their booths

Kimono-clad geishas waiting for the bullet train in Kyoto while twittering on a bluetooth phone.

Sushi bars near the Tokyo fish market, where the knife-wielding chefs greet you like travellers from a distant age, where credit cards are not accepted but where the Nikkei scrolls electronically above the fish counter.

Hotels and restaurants in which you have to take off your shoes and put on slippers, but where the toilet cleans itself (and you) with a digital automation that can be, frankly, intimidating and invasive.

It does not help that the instructions are only written in Japanese.

The most poignant place I have seen all week is the cybercafe in Walabi city on the outskirts of Tokyo.

Mr Sato, the dapper owner, who used to be in real estate, will not just give you a computer and a quiet room for an hour. He will also sell you soap, shaving equipment, towels and food.

Cyber homeless

On the floor, pairs of slippers have been carefully placed in front of tiny booths.

When you turn down the piped jazz, you can hear snoring.

Of the 68 coffin-sized, airless, windowless booths, 60 are permanent homes.

Peek over the top and you can see washing hanging up to dry, teddy bears and family photographs.

The tenants are commonly referred to as "cyber homeless".

Most of them are unemployed or partially employed, but manage to scrape together the $500 (£358) a month it costs to live in one of the booths, a fraction of what they would pay for even the cheapest hotel room in a place like Tokyo and preferable to sleeping rough.

They can use the address of the cybercafe when applying for jobs, thus escaping the stigma of being homeless.

It is a clever idea, but this is still a place of quiet despair, intense loneliness and the personal shame of collective economic failure.

It is just one of the many Japanese responses to a global crisis.

Matt Frei is the presenter of BBC World News America which airs every weekday on BBC News, BBC World News and BBC America (for viewers outside the UK only).

Singha · Post by **Singha** » 19 Mar 2009 10:35

The narrow streets are meticulously clean. Beautifully manicured trees stand next to ubiquitous vending machines. The tofu seller pulls his cart through the ward every Wednesday blowing his trumpet.

Despite flat-screen TVs, broadband wi-fi connectivity and cutting edge technology, the place feels like an ancient village steeped in conservative ritual. Flowerboxes with geraniums adorn workshop fronts humming to the sound of electronic chainsaws and hydro-hammers.

how I wish our unruly industrial parks of this nature...compare to peenya and neelamangala - heat, dust, trucks, mud, hordes of people milling around, broken roads, crime......

svinayak · Post by **svinayak** » 19 Mar 2009 10:40

Japanese Women Hunt for Husbands as Refuge From Deepening Slump

By Toru Fujioka
http://www.bloomberg.com/apps/news?pid= ... =exclusive

March 18 (Bloomberg) -- When Yumiko Iwate’s pay was cut last year, she and her female colleagues all agreed there was only one thing to do: find a husband.

“I want to get married soon, hopefully by the end of this year,” said Iwate, a 36-year-old employee at a mail-order retailer in Tokyo. “The recession made me realize I’m not going to make as much money as I expected, and I’d be more stable financially if I had double income to fall back on.”

Women the Japanese call “marriage-hunters” are looking to tie the knot as companies from Toyota Motor Corp. to Sony Corp. fire thousands of workers and the nation heads for its biggest annual economic contraction since 1945. Marriages surged to a five-year high of 731,000 in 2008 as wages stagnated and the unemployment rate rose for the first time in six years.

“Financial concerns are a major reason for the increase in marriage-hunting,” said Toshihiro Nagahama, chief economist at Dai-Ichi Life Research Institute in Tokyo. “Women are motivated more than ever to find a financially sound partner.”

The trend marks a reversal for women who put careers over families after Japan implemented equal labor rights 23 years ago. The number of marriages in the following decade slid 4.5 percent to an annual average of 746,000 compared with the decade before. Despite equal rights, women still make 43 percent less than men, giving them more reason to seek a partner during recessions.

Civil Weddings

Marriages are also increasing in other countries as recessions spread around the world. The number of civil weddings in London’s Westminster Register Office, the city’s most popular, rose 8.5 percent to 1,684 between April 2008 and February 2009 compared with a year earlier, according to Alison Cathcart, the superintendent registrar. “We certainly feel a lot busier,” she said.

Singha · Post by **Singha** » 19 Mar 2009 13:34

here was a guy who earned $750k/annum yet kept no savings
http://abcnews.go.com/Business/story?id=7111098&page=1

now he delivers pizza

milindc · Post by **milindc** » 19 Mar 2009 13:36

vina wrote:Yawnn... Just as predicted, Unkil is running the printing presses at hyper speed to inflate it's way out of the mess. Basically giving Wampum back for the bonds.

Chipanda are screwed royally . Dump all the treasuries you want. Unkil will print notes and monetize 'em. Selling is like plunging a dagger in Chipanda's own belly.

vina guru,

Advise needed on where to move the allocations in 401k considering that I'm 100% in long term treasuries.

Singha · Post by **Singha** » 19 Mar 2009 14:53

how about the US Govt I bonds and corporate bonds of good cos?

vsudhir · Post by **vsudhir** » 19 Mar 2009 17:07

x-post

Steeling for 80% export drop

CHINA'S steel product exports may tumble 80 percent this year as a global slump hurts demand, the China Iron and Steel Association said yesterday.

This was much steeper than its previous forecast of 50 percent, the industry group said in a statement on its Website quoting a speech by its Secretary-General Shan Shanghua.

Wonder how many more such 'deeper [doo doo] than previously thought' surprises will emanate from PRC radiant like the midnight sun....

Meanwhile the Baltic dry Index [arguably the most objective and certainly the most accurate by past record indicator of int'l trade activity] is down 20%.

No wonder Wen timely raised demands for guarantees on US sovereign debt (allegedly the most tightly guaranteed security in the world - so safe its risk premium is benchmarked at zero).

And since relatively speaking, one-eyed dollah is king in ze kingdom of the rest of us, ever more evidence flows in of deepening confidence in the dollah [see below]

China Inoculates Itself Against Dollar Collapse

There is mounting evidence that China’s central bank is undertaking the process of divesting itself of longer-dated US Treasuries in favor of shorter-dated ones.

Wouldn't be surprised, if loyal poodle CPM picks up on its mastels' voice acloss the glate wall and demands RBI divest long term US T bills too....

Singha · Post by **Singha** » 19 Mar 2009 17:43

BBC

Dollar slides after US Fed plan

The dollar has fallen against all major currencies after the US Federal Reserve announced a plan to buy $1.2tn (£843bn) of debt to boost its economy.

The dollar fell by 2.9% against the euro and by 2.5% against the pound.

The US currency also declined against the yen, the Norwegian krone, the Australian dollar and Brazilian real.

The Fed's decision to buy debt means it is effectively creating new money, leading to concern from investors about the over-supply of dollars.
................
BBC economics editor Stephanie Flanders said the decision to buy Treasury bills came as a "shock" to investors.

"Why have this new spending spree at all?" she said. "The answer may be that the Fed - and the administration more generally - is concerned that the apparent improvement in credit conditions the past few months is a false dawn."

vsudhir · Post by **vsudhir** » 19 Mar 2009 18:16

ooh...kin ya feel the love?

Swiss MP in Nazi jibe to Germany over tax controversy...

War of words continues....

Ensoi.

Sophisticated facades reveal themselves as sophistry - hollow and mean. Old wounds reopen with gleeful ferocity.

Document and wield these instances against the psy-ops the sophists launch on us SDREs, I say. And deliver karmic jhappads with attitude.

vsudhir · Post by **vsudhir** » 19 Mar 2009 18:25

Images from the recession

worth a peek. Check back when 'em images wont be from any quaint 'recession' but a full blown meltdown onlee.

Worrisome enough to keep me awake some nights.... have enough on my plate as it is.... can do without depression worries. But left brain tells me depression it will be....

vina · Post by **vina** » 19 Mar 2009 18:47

RamaY wrote:Vina-saar,

What will happen in a hypothetical scenario, where China pulls out its US FX reserves partially (say 50% = $500B), in terms of
- Impact on US economy, value of $
- Impact of PRC FX reserves, reduced value (is this is money lost)
Assuming PRC uses most of this money to fund its own stimulus program,
- What will the additional GDP it can produce, ROI

I am trying to understand how many pounds of flesh US/PRC are trying to extract from the other so they keep supplying oxygen to the other (supposedly)

Thanks

Let me try to put my arms around what is happening and do an "anal" ysis. That is where a Bade Saar like Fyzzics, Engg/Math/Science background is useful.

In fact, to do a root cause analysis, the "Toyota Method" is repeated "Why" ?. For eg, Why did the assembly line stop , Because the automatic switch/fuse tripped. Why did the fuse trip ?. Because the temperature of the hydraulics driving it rose too high. Why did it rise so high ?. Because there was dirt in the oil lines. Why was there dirt?. Because the oil filter was clogged.. So solution to stop frequent tripping of assembly line was to clean /replace the oil filter!.

So if we do a root cause analysis, at the fundamental level, the answer to Why is there an economic crisis ?. Is that asset prices have crashed . That is the fundamental core fact. Get asset prices back up, the math will be back for all the bonds and he banks will be back in the pink of health and everything will be normal.

So the solution to the crisis is to get asset prices up. Now how will you get asset prices up . And that is to reflate the collapsed bubble. Now remember, all the bonds and contracts are at NOMINAL values. So if you drop the value dollar, asset prices will go up in Nominal value. For eg, if you bought a house for $400,000 in 2007 and it had dropped to $300,000 in 2009 dollars, if in 2010, your value of the dollar drops by say the correct amount and you re inflate, your house will be back to $400,000 in 2010 dollars forwards , back to the 2007 levels and the MBS on your property banks and others are holding are back in black and the balance sheet is fine now. But notice however, the difference in value between the 2010 dollah and 2007 dollah. In REAL terms, there is a loss, but in NOMINAL terms you are fine. The US has no other option but to monetize their debts to reflate (ie, print dollahs).

Now coming to the Chicoms. They are in trouble. They know that Unkil is going to do it and that USD is Wampum or near Wampum. So the Atimes and other articles say that they are on a massive shopping spree across the world, trying to buy up REAL assets (like oil fields, coal mines, iron ore mines (they increased share in Rio Tinto) and basically hand over the Wampum to other suckers in exchange for real assets. The Chinese anyway are liquidating their USD treasury , overtly/covertly.

Unkil really made the move to monetize after that. They need to pump Dollahs into the global economy to reflate. So they need to buy Treasure bonds and hand out paper Dollar Wampum. So that is what they are doing. So any sales of treasury will be monetized. Now that raise the costs of the Chinese snapping up assets across the world, because even the dumbest moron will know what the Chinese are trying to do and price it accordingly / be unwilling to give out real assets.

I think the Chinese rejection of the Coke acquisition of the juice guy was the declaration of open war. US insists Chinese keep buying US Treasury (and commit suicide in the long run), and if it doesnt play ball and tries to liquidate treasury will monetize and destroy value of Chinese holding (and make them commit suicide anyways) and also help Unkil's own cause.

When the dust settles and the history of this downturn is written, I think what posterity will say is that US got out of the hole by Shafting Chicoms and other holders of Treasury by monetizing it's way out of obligations (basically a nice way to default in reality, but not on paper) .

For W.Europe, Japan, Korea and Gulf Sheikdoms, the US will say that it is them repaying US for its acts of saving Japan,Germany and Korea from ruin and bringing them untold prosperity for all these years. Fact is in the last 50 years,only those who were integrated with the US trading system prospered. Chipanda latched on, now the US will say that it is pay back time for Chipanda. You rose by tagging on to Unkil's coat tails. When Unkil is in trouble, there is no way in hell, he is gonna let you go scot free, without paying up your share to bail Unkil out . That is the moral of the story.

Beyond the next 1 year, the USD will lose value and there will be inflationary pressures (exactly what Unkil wants) and real assets will appreciate. If you are in the US, I think, this is the time to move to real assets like Real Estate. Go ahead and buy that nice house in SF, NYC, Florida etc . They are a great bargain right now. You will be paying back in monthly payments with Wampum anyways. Buy stocks of Oil and other commodity companies (again dirt cheap now). Get into a commodity ETF /mutual fund ..

India, didnt rise by riding Unkil's coat tails. That is why we have no obligations either!