Perspectives on the global economic meltdown

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 26 Mar 2009 03:53

OK, this is big if true. But is more likely a feint or DDMitis or both.

Geithner open to China proposal on 'super currency'

Geithner, at the Council on Foreign Relations, said the U.S. is "open" to a headline-grabbing proposal by the governor of the China's central bank, which was widely reported as being a call for a new global currency to replace the dollar, but which Geithner described as more modest and "evolutionary."

"I haven’t read the governor’s proposal. He’s a very thoughtful, very careful distinguished central banker. I generally find him sensible on every issue," Geithner said, saying that however his interpretation of the proposal was to increase the use of International Monetary Fund's special drawing rights -- shares in the body held by its members -- not creating a new currency in the literal sense.


Goolsbee noncommital

BLITZER: The Chinese suggesting today, this dollar, U.S. dollar, should be replaced as international currency, because they are beginning to have concerns that you are printing, the U.S. government is simply printing too many of these dollars and will lose its value as an international currency.
What's your reaction?
GOOLSBEE: It strikes me as probably unlikely.
Different people have in the past argued for world currencies or new -- new currencies before. I believe the U.S. at this point is the safest place to invest in the world. And it's likely to remain that the dollar is a critical currency in the years ahead.
BLITZER: So, you -- you don't like some new international currency that some Chinese are proposing?
GOOLSBEE: Well, look...
BLITZER: I assume that's right, right?
GOOLSBEE: I haven't seen the details of what they are proposing.
I mean, the dollar is the dollar. If people don't want to buy it, they don't buy it. But I think you have seen sort of a flight to the dollar in -- in times of trouble.


Dollar falls on Geithner comment

Expect nothing to come off it. IMO, the IMF could be differently structured and PRC given a seat at its grand table.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 26 Mar 2009 04:19

Businessweak peddling FUD on anti-Indian backlash in massaland
India Could Be the Next Target for Angry Americans

When the mob gets tired of pursuing AIG and Madoff, it will look for other targets to bay after. India is at risk. Inciter Lou Dobbs keeps pounding away at the foreigner and immigrant. Meanwhile, US Senators Richard Durbin and Chuck Grassley are crafting new legislation aimed at further tightening H1B and L1 visa rules. It’s expected to be submitted to Congress by April 3. Visa reform is legitimate, if there are abuses. But it becomes dangerous if the legislation ignites an angry broadbased backlash against India and offshoring.

Don’t get me wrong. I think a measured dose of protectionism can be useful at times of crisis or in response to abuses by other nations. It’s legit if it’s done rationally and in a carefully targeted way. It’s not okay if it erects major barriers to trade.


Hmmm.

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Re: Perspectives on the global economic meltdown

Postby svinayak » 26 Mar 2009 07:49

vsudhir wrote:Businessweak peddling FUD on anti-Indian backlash in massaland
India Could Be the Next Target for Angry Americans

When the mob gets tired of pursuing AIG and Madoff, it will look for other targets to bay after. India is at risk. Inciter Lou Dobbs keeps pounding away at the foreigner and immigrant. Meanwhile, US Senators Richard Durbin and Chuck Grassley are crafting new legislation aimed at further tightening H1B and L1 visa rules. It’s expected to be submitted to Congress by April 3. Visa reform is legitimate, if there are abuses. But it becomes dangerous if the legislation ignites an angry broadbased backlash against India and offshoring.

Don’t get me wrong. I think a measured dose of protectionism can be useful at times of crisis or in response to abuses by other nations. It’s legit if it’s done rationally and in a carefully targeted way. It’s not okay if it erects major barriers to trade.


Hmmm.


FUD is going on for a long time. Lou Dobbs was doing what was a planned move for the last 5 years. It targetted Indians e verywhere. We were asked as we came out of MSFT HQ once. One of my freind who is a citizen was asked in a plane seat - "You Indians are taking away all jobs".

It was to put pressure and put Indian negotiation in the defensive. But it helped Indian companies to adapt and also diversify. India should go to other nations first for export before it targets NA.

http://www.cfr.org/publication/18768/da ... ation.html
The Dangers of 'Deglobalization'
March 16, 2009
Author:
Jayshree Bajoria

The Dangers of 'Deglobalization'

(Telegraph Media Group/Matt)

From construction laborers to Harvard-educated bankers, foreign workers are being forced to return home as once-booming economies around the world contract. Globally, 24 million to 52 million people could lose their jobs in 2009, according to the International Labor Organization's latest estimates. And populist sentiment and protectionist moves in countries which relied on foreign laborers during the boom years have put 200 million migrant workers internationally in the crosshairs.

Examples of the new protectionism abound: The United States enacted a law in 2009 imposing strict restrictions on hiring of skilled immigrant workers by companies receiving government bailout money. Malaysia and Saudi Arabia directed companies to lay off foreign workers first if they needed to downsize. In Britain, large-scale protests (Telegraph) were held against the use of foreign workers at an oil refinery. The Philippines reports over 5000 Filipino workers lost their jobs overseas from October 2008 to January 2009. Even Ireland is debating its liberal immigration laws which allowed for massive levels of immigration to sustain the country's economic growth since the late 1990s. In a September 2008 poll, as the country's economy faltered, 66 percent of Irish felt immigration policy should be made more restrictive (IrishTimes).

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Re: Perspectives on the global economic meltdown

Postby Singha » 26 Mar 2009 09:09

http://www.nytimes.com/2009/03/26/us/26tents.html?hp

Cities Deal With a Surge in Shanty Towns
..............
On a recent afternoon, nobody seemed thrilled to be living in New Jack City, a filthy collection of rain- and wind-battered tents in a garbage-strewn lot. Several weary-looking residents sat on decaying sofas as a pair of pit bulls chained to a fence howled.
............

Mr. Stoops, of the homeless coalition, predicted that the population at such new Hoovervilles could grow as those without places to live slowly burned through their options and joined the ranks of the chronically homeless, many of whom are indigent as a result of illiteracy, alcoholism, mental illness and drug abuse.

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Re: Perspectives on the global economic meltdown

Postby Ardeshir » 26 Mar 2009 09:35

I see an opportunity for a 'Dollar Carry Trade' emerging eventually. I have done this in the past over short-time frames, but perhaps the things might change in this regard.

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Re: Perspectives on the global economic meltdown

Postby svinayak » 26 Mar 2009 10:07


IBM: The “I” Stands for “India” [UPDATED]


by John Paczkowski
Posted on March 25, 2009 at 12:40 PM PT

Print Buzz up! Share

When IBM CEO Sam Palmisano advised the Obama transition team that $30 billion in information-technology stimulus handouts Big Blue is angling for could create more than 900,000 new jobs, he didn’t say they’d be created in India. Yet, apparently that’s the case. IBM (IBM) is reportedly planning to sack “a large number” of employees in its Global Business Services division, shifting their duties overseas to workers in India. The breadth of the reduction isn’t yet known, but chatter on the Alliance@IBM boards suggests it could be brutal. Said one commenter, “I talked to two different Band 10s in IBM Global Business Services yesterday who have both said that tomorrow will be a big day for firing in almost all of the GBS business units. Both of them are expecting that they will be cut because the percentages are going to be higher at the higher levels. Both made reference to this could be called a black Thursday.”


http://marketplace.publicradio.org/disp ... _politics/

New office crisis: Boomers won't leave!
Dan Drezner

Many baby boomers who were planning to retire soon will have to hold off, due to the plummeting values of their retirement funds. Commentator Dan Drezner says this may make things worse for Generation X in the office.

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Re: Perspectives on the global economic meltdown

Postby Paul » 26 Mar 2009 10:16

Band 10s are the associate partners who are responsible for managing pre sale and post relationships with the client. The management structure at IBM has always been top heavy with Band 10s dispropotionate nos comapred tpo B9s and B8s.

The shortage of opportunties in this economy reduces the need for more B10s to manage client engagements. Existing accounts are the best option for business development now.

Hence the reduction. Contrast this to IBM India where there are far fewer B10s. This in turn leads to one manager(ill equipped to handle HR issues) managing 100s of people

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Re: Perspectives on the global economic meltdown

Postby Singha » 26 Mar 2009 10:29

news reports claim a 5k RIF. WSJ has a subcriber only piece on it.

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Re: Perspectives on the global economic meltdown

Postby Liu » 26 Mar 2009 15:56

two very interesting pictures.

one published this year.
the world in the eyes of China
Image


one publish in 1976
the world in the eyes of Newyorkers.
Image

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Re: Perspectives on the global economic meltdown

Postby Philip » 26 Mar 2009 17:17

What about submerged Atlantis?

Here's a savage indictment on the UK economy from the Governor of the Bank of England on what I call Gordon Brown's "Latrine Economics" ("quantitative easing").

Matthew Norman: A haunted Prime Minister, marooned on his fantasy island

Not since Howe launched his cricket metaphor have we seen such an attack
Thursday, 26 March 2009

These dusty old monetarists take a lot of winding up, but by Jingo they're lethal assassins once the spring is released. Whether Mervyn King's appearance before the Treasury Select Committee on Tuesday was a warning shot across Gordon Brown's bows or a formal declaration of war, not since Geoffrey Howe launched his cricketing metaphor counterstrike against Margaret Thatcher have we seen so devastating an attack on the judgement of a serving Prime Minister.

Related articles
Failed bond hits Brown's plans to beat the recession

The Bank of England Governor, another deceptively lugubrious-looking buffer blinking amiably away behind the thick specs, avoided any hint of melodrama and was all the deadlier for the deadpan delivery.

What he said, in words measured for impact with exquisite finesse, and in a tone of studied dullness, was this: "I think the fiscal position in the UK is not one where we could say 'Well, why don't we just engage in another significant round of fiscal expansion?" What he meant was: "We're already bankrupt and I'm not sitting idly by while this deranged wastrel leaves future generations in bondage to rampant inflation and crippling debt to save his political hide." Or as Jeremy Thorpe almost put it of Harold MacMillan, greater love hath no man than that he lay down his country's future for his life.

A week today, that heavily-trailed G20 conference will be held in London. Even before Merv the Swerve bowled his inswinging yorker, the cosmetic absurdity of this pow wow was transparent. We are asked to anticipate it as the second Breton Woods, despite the fact that the G20 leaders are meeting for one day when the first BW lasted three weeks in July 1944. The notion that anything more could emerge from so brief a meeting than a meaninglessly bland and abstract communiqué – written and agreed before the event as tradition dictates – was always so foolish that the meeting should strictly be brought forward a day to 1 April.

Once the French and Germans expressed their disdain for any further stimulus packages, however, it took on the pre-emptive flavour of the phantasmal second UN resolution fiasco... a fight between the powerhouses of continental Europe and the Anglo-US alliance in which the battle lines were immovably drawn long in advance of the skirmishing.

And now? Now it's so much worse for Gordon that you could fall to your knees and sob for him. One week today, the self-appointed financial bridgehead between the EU and America – the exact role Mr Tony Blair played to such splendid effect over Iraq – will sit down for what he apparently regards as his last throw of the electoral dice, and have little choice but to argue for what his own central banker has dismissed as a long-range suicide note for the British economy. His only option is to perform a historic U-turn and adopt the more monetarist approach propounded by the Tories and a Governor with whom Gordon, seldom a stranger to raging paranoia, must imagine Messrs Cameron and Osborne are in league.

But it's not just the Tories and Mr King who are cuddling close on this issue. His own Chancellor is snuggling up to the Guv as well. In the aftermath of the Northern Rock debacle to which his response was so languid, Nos 10 and 11 were as one in briefing against Mr King.

Now the allegiances between the three fiscal superpowers have shifted, a bit like those between Eastasia, Oceania and Eurasia in 1984. With Darling and King united against him, Gordon faces his ultimate nightmare. There he is in Room 101, and the wire mesh holding the rats back is rising fast. Small wonder he's frantically trying to ratchet up the terror of terrorism, that classically Blairite diversionary tactic. But it won't divert many of us for long.

Supplying the Newspeak tutorial, meanwhile, is the Chief Secretary to the Treasury. In denying any rift, Yvette Cooper parsed the Governor with linguistic suppleness worthy of the Employee of the Month badge in the Ministry of Truth. "What he [King] said," she interpreted, "is we need to take a sensible approach, which we always do." That, bless her, is precisely what he didn't say. What he did say, in a previous select committee appearance, is, "We entered this crisis with levels of borrowing which were too high and that made it difficult" (his translation of Jilted John's "Gordon is a moron").

He further rued that in 1997, soon after granting the Bank the independence Mr King so lavishly indulged on Tuesday (oh the vicious irony that Gordon's most celebrated masterstroke should mutate into the loudest of death knells), the then Chancellor stripped the Bank of its regulatory powers in creating the tremendously effective Financial Services Authority.

The Governor, then, is now on record expressly blaming Gordon for deepening and widening the slump he has thankfully ceased assuring us Britain is uniquely well placed to withstand; and advising him – instructing him, really – on no account to sub-prime mortgage our long-term economic future for short-term electoral gain.

Much like his namesake, the in- form and imaginatively nicknamed darts star Mervyn "the King" King, the Governor found the bullseye with laconic ease, and at the very moment Gordon was flying off to lecture foreign leaders about the imperative for greater stimuli he is betting the farm on pressing at the G20 next week. That the PM is now pulling in the diametrically opposite direction to the Bank, not to mention the implications of this tug-of-war for sterling, the forthcoming Budget and the Government's general credibility, will take a while to filter through to an electorate that takes a wisely laissez-faire approach to charting the economic meltdown in tedious detail. But filter through, in the usual osmotic way, it will.

If Gordon, ever-more remotely marooned on his fantasy island of vast global influence and unfettered domestic command, backs down and muffles the stimulus hunting cry next week, it will leave him looking, to borrow from the resignation of yet another embittered former Chancellor, in office but not in power. If he doesn't – if he ploughs on with the demand for even more colossal spending and debt – he will be at war with the Bank of England, and at DefCon Two with his next-door neighbour.

There is no obvious way out of this one. He has been on his electoral death bed for ages, of course, ever since that definitive week in October 2007 when he cluck-cluck-clucked his way out of going to the country. But this may well be seen as the week he ran out of appeals for clemency, because the only quantative easing available to him now appears to involve the child-proof lid on that bottle of Downing Street strychnine.

m.norman@independent.co.uk

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Re: Perspectives on the global economic meltdown

Postby Sanjay M » 26 Mar 2009 18:44


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Re: Perspectives on the global economic meltdown

Postby munna » 26 Mar 2009 19:57

A highly interesting take of an MEP on UK-stani Economy, Gordon Brown and his policies. Do watch the enlightening 3 minutes.

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Re: Perspectives on the global economic meltdown

Postby ramana » 26 Mar 2009 21:03

Redcution in H-1B visas leads to outsourcing as firms seek to reduce costs. And that means less viewers for the bile spitter Lou Dobbs.

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Re: Perspectives on the global economic meltdown

Postby Sriman » 26 Mar 2009 21:14

ramana wrote:Redcution in H-1B visas leads to outsourcing as firms seek to reduce costs.

Not sure i agree Ramana. Reduction in H1B will affect outsourcing as well.

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Re: Perspectives on the global economic meltdown

Postby Raghav K » 26 Mar 2009 21:27

GDP Revisions No More Than Statistical Noise.
The BEA’s "final" estimate revision of real (inflation-adjusted) annualized growth in the fourth-quarter 2008 GDP was a statistically-significant decline of 6.34% +/- 3% (95% confidence interval), little changed from the "preliminary" estimate of 6.25% and deeper than the initial "advance" estimate of a 3.80% contraction. Such was against a 0.51% downturn reported in the third quarter. In terms of year-to-year change, the fourth quarter contraction now stands at 0.84%, versus the "preliminary" 0.82% and "advance" 0.18% contractions, and versus the third quarter’s annual gain of 0.75%. The latest revisions were no more than statistical noise.

The fourth-quarter GDP inflation rate (GDP deflator) revised minimally to 0.61% from 0.51%, accounting for the minor downward revision to the real GDP change. The nominal (not-adjusted-for-inflation) GDP, was unrevised in aggregate. The "advance" fourth-quarter deflator estimate was a 0.26% contraction, versus an indicated annualized third-quarter inflation rate of 3.88%.

Based on earlier reporting methodologies and removal of some reporting gimmicks, the SGS-Alternate GDP estimate for the fourth quarter remains an annual (not annualized) contraction of roughly 4.1% versus a 3.3% contraction in the third quarter, against official respective estimates of a 0.8% decline and 0.7% gain. Against reporting of underlying economic series, the annualized quarterly contraction likely was in excess of 7% for the fourth quarter, but the latest revised 6.3% estimate remains the closest to reality reported by the BEA in a long time. Nonetheless, GDP reporting remains virtually worthless and is little more than political propaganda.

From Shadowstats.com

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 27 Mar 2009 01:08

Tent city in Auburn, CA (north of Sacramento), same site as a tent city during the Great Depression in 1936, with matching photos at that


scary.
From boom times to tent city

Meanwhile ze Fwench working class has let out a clarion call of Revolution!

Striking French workers for US manufacturer 3M were holding their boss hostage today at a plant south of Paris as anger over layoffs and cutbacks mounted around the country.


Viva la revoluzione!

Link

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 27 Mar 2009 03:04

Ensoi maadis! Karma coming to collect some elitist trophies....

Swiss banks ban top executive travel over concerns that employees will be detained

:rotfl:

IRS squeezes Swiss bank clients for more money

Aur wahan, the poor Somini Senguptas shall soon seek donations, at this rate...
Layoffs At NYTIMES; Newsroom salaries cut 5%

Who knows what tomorrow brings? Recall Dylan's Times are a' changin'

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Re: Perspectives on the global economic meltdown

Postby ss_roy » 27 Mar 2009 03:48

I think that most of you have yet to fully appreciate the cataclysmic nature of this meltdown.

Between the effects of an adverse demographic profile and the end of classical capitalism due to gains in efficiency, the days when the west could dictate stuff are over! We simply cannot continue down the current path nor can we go back to simpler times, as many in the west dream of.

It is that simple.. It won't come back, inspite of all the efforts that you have seen till now and will see in the next 12-18 months. It is going to be one hell of a shock to the western psyche.

Of course, I do not expect them to graciously step aside, but they will have to- one way or the other. The real question then is - what is next? I have some ideas about the future, but lets see how things turn out.

I think that apart from a few noises and some posturing (and a few incidents) over immigrants, the west is powerless. They require others more than others require them. The smarter people in the west are slowly starting to accept that bitter truth, the dumb majority has yet to capitulate (they will have to). If they do not capitulate their system will implode..

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Re: Perspectives on the global economic meltdown

Postby Gerard » 27 Mar 2009 04:55


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Re: Perspectives on the global economic meltdown

Postby Gaurav_S » 27 Mar 2009 09:07

Yesterday had an opportunity to hear renowed columnist with NYTimes Tom Friedman over this economic meltdown. Below I am trying to convey what he meant.

....

Its time for people of America to re-define their life style for people across the globe. People in America are used to having big houses, big back yards, big cars on big free ways and big big stores like Wal Mart. Big stores like Wal Mart created big manufacturing units in China. Unconsiderate consumption by Americans has created big problem. Its time to re-define life stlye and America needs to take the lead.

There is just not one America now on the globe.There are 9 America on the globe now which includes China, India, Brazil, Argentina etc etc. These countries now are consuming like Americans who have been consuming too much since many years. Hence, we need to slow down and reconsider our consumption...

...

Not sure how to react?

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Re: Perspectives on the global economic meltdown

Postby Singha » 27 Mar 2009 10:06

Image

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 27 Mar 2009 15:50

Sri George Soros feeds off Commercial Realty carcasses with facility....
Billionaire investor George Soros said U.S. commercial real estate will probably drop at least 30 percent in value, causing further strains on banks.
“Commercial real estate has not yet fallen in value,” Soros, speaking at a forum in Washington, said. “It is inevitable, it is written, everybody knows it, there are already some transactions which reflect and anticipate it, so we know, they will drop at least 30 percent.”


Link

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Re: Perspectives on the global economic meltdown

Postby Satya_anveshi » 28 Mar 2009 01:14

Sorry if dup..don't remember seeing it.

The People's Bank of China flexes its muscle in call for a new reserve currency.

Boldly stated, Zhou--backed by Russia, Brazil and India--wants to break the dollar's hegemony in global finance. In a paper grandly called "Reform the International Monetary System," Zhou has called for the creation of an international currency unit that he admits will require "extraordinary political vision and courage." He suggests that we start with a blend of the dollar, pound, yen and euro--the so-called Special Drawing Rights (SDR) created by the IMF in 1969 that borrowed a concept first recommended by famed economist John Maynard Keynes.

We have lent huge amounts of money to the U.S. [and] we are concerned about the safety of our assets," said Wen. Indeed, China has bought $200 billion of Treasuries while selling agency securities over the past six months. But it also lost about a third of its equity holdings, including $5 billion in the Lehman bankruptcy.


In a second address Thursday, Zhou took an even tougher whack at some American institutions and financial concepts. He blasted the way "the global financial system relies heavily on the external credit ratings for investment decisions and risk management." Having three U.S. ratings agencies dominate the world results in "a massive herd behavior at the institutional level. Moreover, the rating models for mortgage-related structured products are fundamentally flawed." All true. The massive write-downs across the globe were the result of these flaws in the American way of doing things.


Then, Zhou really stuck it to Obama-Geithner-Bernanke, as well as to Europe and Japan. "Facts speak volumes and demonstrate that compared with other major economies, the Chinese government has taken prompt, decisive and effective policy measures, demonstrating its superior system advantage when it comes to making vital policy decisions." Talk about gauntlet dropping.

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Re: Perspectives on the global economic meltdown

Postby shyam » 28 Mar 2009 04:55

Why Europe may see more economic pain
Before we go into this, a brief recounting of history is in order. In Eastern Europe, banks were privatised during the 1990s and early 2000s. The preferred method of privatization was the sale of a majority stake in a local state-owned bank to a big foreign banking group, deemed capable of restructuring it and making it profitable.

Consequently, nowadays most banks in the region -- and especially in those countries that are now members of the European Union -- are owned by big Western Europe groups. The Eastern European subsidiaries of all of these banks, often among the largest in their home countries, form a significant share of their assets.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 28 Mar 2009 05:41

Jobless Slump Spreads

The number of U.S. states with a jobless rate exceeding 10 percent almost doubled in February as the worst employment slump in the postwar era spread.

Nevada, North Carolina and Oregon last month joined the four other states that had previously climbed above 10 percent, according to Labor Department data released today in Washington. Michigan, at 12 percent, remained the state with the highest unemployment rate, followed by South Carolina at 11 percent and Oregon at 10.8. California and Rhode Island bring the total number of states to seven.

Forty-nine states and the District of Columbia registered increases in the unemployment rate last month, led by Oregon, North Carolina and New Jersey, the Labor Department said. Nebraska was the only state to post a decrease after the rate jumped the prior month.

“It’s something we’re not accustomed to seeing in this country,” said Mark Vitner, a senior economist at Wachovia. “Double-digit unemployment rates are simply un-American.”


And if you're thinking its worse than it looks, you'd be spot on.

Jobs Contract 14th Straight Month; Unemployment Rate Soars to 8.1%

The official unemployment rate is 8.1%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is.

The government is reporting 8.1% but a far better approximation is 14.8%. Many economists expect the "official" number to hit 10%. If and when that happens where will U-6 be?

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 28 Mar 2009 05:44

Australia blocks Chinese purchase of Oz Minerals

Citing national security, Australia on Friday blocked one of several acquisitions China is seeking in the country's vast natural resources sector.


Something's cookin'. And it ain't yummy. BTW, there's another barrier thats announced itself for turd worlders looking to deploy their enormous savings sums to acquire prime assets in the frust world - 'national security' it be called.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 28 Mar 2009 05:50


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Re: Perspectives on the global economic meltdown

Postby Sanjay M » 28 Mar 2009 07:08

Image

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Re: Perspectives on the global economic meltdown

Postby shyam » 28 Mar 2009 07:55

Title may upset some die-hard Yum-Bee-Yays....

Capitalism needs a ‘Crony’ State

Some interesting quotes:
The outcry prompted Congress to moot a 90 percent tax on these illicit premiums – what is inexplicable here is the Government helplessness in taming a company it owns to the tune of 80%.

RM may get upset with following comment about his heaven on earth, epitom of democracy - USA
Democracy as practiced in many western countries is increasingly being revealed to be nothing more than a Mask for non-transparent governance in key sectors of the polity and economy. If Democracy is not to be exposed as a complete sham, and Capitalism is not to be equated with old-style Robber Barons, new legislations must make it imperative that the annual statements of banks declare the full extent of insider lending – the amounts and terms upon which money has been given to directors or executives, and their businesses.

It would be interesting to know if the bulk of bank borrowings are cornered by such entities. As directors have to approve all insider loans above $500,000, they happily back-scratch – voting mutually on loans for each other or the executives they are supposed to oversee. Cronies make Cool Capitalism.

This means that unknown to the American people, a secret economic oligarchy has been thriving for decades! Such favouritism is utterly dubious, and must be brought under public scrutiny. Unless the loans of directors who are supposed to protect the public interest are known, how can shareholders assess their independence and calibre, particularly when the American people are paying for decades of profligacy?

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Re: Perspectives on the global economic meltdown

Postby Rahul Mehta » 28 Mar 2009 09:36

shyam wrote: RM may get upset with following comment about his heaven on earth, epitom of democracy - USA
Democracy as practiced in many western countries is increasingly being revealed to be nothing more than a Mask for non-transparent governance in key sectors of the polity and economy. If Democracy is not to be exposed as a complete sham, and Capitalism is not to be equated with old-style Robber Barons, new legislations must make it imperative that the annual statements of banks declare the full extent of insider lending – the amounts and terms upon which money has been given to directors or executives, and their businesses.


On the contrary, it is in synch with what I say --- that so called "democracy" without recall, direct law making and Jury is useless. The US does NOT have recall at Federal levels for any positions such as President, VP, Senators, Federal Reserve Chief, Supreme Court judges, Federal regulators and so forth. And this lack of recall is because citizens dont have procedures to enact laws at Senate level.

So the above post ONLY supports my demand that we commons in India should enact procedures by which we can make laws at National level, recall PM, RBI Guv and SCjs. Without these tools, these roaches will east us alive, just as they have eaten American commons.

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Re: Perspectives on the global economic meltdown

Postby A_Gupta » 29 Mar 2009 02:47

Very much worth a read:

http://www.theatlantic.com/doc/200905/imf-advice

....Typically, these countries are in a desperate economic situation for one simple reason—the powerful elites within them overreached in good times and took too many risks. Emerging-market governments and their private-sector allies commonly form a tight-knit—and, most of the time, genteel—oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders. When a country like Indonesia or South Korea or Russia grows, so do the ambitions of its captains of industry. As masters of their mini-universe, these people make some investments that clearly benefit the broader economy, but they also start making bigger and riskier bets. They reckon—correctly, in most cases—that their political connections will allow them to push onto the government any substantial problems that arise.....

......But inevitably, emerging-market oligarchs get carried away; they waste money and build massive business empires on a mountain of debt. Local banks, sometimes pressured by the government, become too willing to extend credit to the elite and to those who depend on them. Overborrowing always ends badly, whether for an individual, a company, or a country. Sooner or later, credit conditions become tighter and no one will lend you money on anything close to affordable terms.

The downward spiral that follows is remarkably steep. Enormous companies teeter on the brink of default, and the local banks that have lent to them collapse. Yesterday’s “public-private partnerships” are relabeled “crony capitalism.” With credit unavailable, economic paralysis ensues, and conditions just get worse and worse. The government is forced to draw down its foreign-currency reserves to pay for imports, service debt, and cover private losses. But these reserves will eventually run out. If the country cannot right itself before that happens, it will default on its sovereign debt and become an economic pariah. The government, in its race to stop the bleeding, will typically need to wipe out some of the national champions—now hemorrhaging cash—and usually restructure a banking system that’s gone badly out of balance. It will, in other words, need to squeeze at least some of its oligarchs.

Squeezing the oligarchs, though, is seldom the strategy of choice among emerging-market governments. Quite the contrary: at the outset of the crisis, the oligarchs are usually among the first to get extra help from the government, such as preferential access to foreign currency, or maybe a nice tax break, or—here’s a classic Kremlin bailout technique—the assumption of private debt obligations by the government. Under duress, generosity toward old friends takes many innovative forms. Meanwhile, needing to squeeze someone, most emerging-market governments look first to ordinary working folk—at least until the riots grow too large.


The US of A finds itself in this classic emerging-markets country scenario.


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Re: Perspectives on the global economic meltdown

Postby svinayak » 29 Mar 2009 07:01


vina
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Re: Perspectives on the global economic meltdown

Postby vina » 29 Mar 2009 08:14

Satya_anveshi wrote:Sorry if dup..don't remember seeing it.

The People's Bank of China flexes its muscle in call for a new reserve currency.

He suggests that we start with a blend of the dollar, pound, yen and euro--the so-called Special Drawing Rights (SDR) created by the IMF in 1969 that borrowed a concept first recommended by famed economist John Maynard Keynes.


Saar. BR ahead of the curve as always! We have already created such a "global currency" here . The difference is , we called it Wampum , instead !. :rotfl: :rotfl:

Atleast the dollar is backed by the good offices of a known sovereign called the US and it's taxation powers. What is Wampum backed by ?. Some "toilet" paper treaties signed on by Chicoms, the Brits and the Euro (trashes) and Japs ?.

The "new" Wampum has me in splits. Atleast the old Wampum, you could exchange for felt/fur. Here you will get nothing, other than maybe Chinese "milk" , and "medicines" and toys laced with "healthy" lead (I would recommend you stay away from those)

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Re: Perspectives on the global economic meltdown

Postby Singha » 29 Mar 2009 10:54

how much of money does US have in social security account? is it all invested in govt bonds only....iirc Bush the second was pushing for some reform there, so
that part could be invested in stock market.

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Re: Perspectives on the global economic meltdown

Postby Mort Walker » 29 Mar 2009 11:52

The US has NO money reserved for social security. The Old Age, Survivors, and Disability Insurance (OASDI) tax levied on annual income of upto $93,000 is collected and then used by the US Treasury as needed. It is essentially put back in to the operational budget. The US Social Security Administration (SSA) estimates how much it needs annually and then receives what it needs from the Treasury. If it needs more, then gets more from the treasury. The way the USG gets away with this is that the Dept. of Treasury provides the SSA with promissory notes. In the future, annual expenditures of the SSA are to exceed the tax collected, so in essence SS is going to be a net drain on the budget. Bush-II was talking about either the govt. or individuals investing in the financial markets, but didn't get far. The reason being, everyone in both parties knows where this money is going. Bush-II saw this as one way of trying to reduce a government agency.

An analogy would be that you earn most of the money for the family, but your pay check goes to SHQ. She then provides you funds to pay for monthly expenditures.

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Re: Perspectives on the global economic meltdown

Postby Singha » 29 Mar 2009 15:25

WSJ

U.S. Deters Hiring of Foreigners as Joblessness Grows
Recipients of Bailout Funds Face Hurdles to Recruit Skilled Guest Workers; Cutbacks Sought From Seasonal Employers

By S. MITRA KALITA

As more Americans lose their jobs, the U.S. government is actively discouraging the recruitment of foreign workers, from dude ranchers and fruit pickers to lifeguards and computer programmers.

At least three avenues of legal immigration have seen roadblocks erected. In the most visible and controversial move, companies receiving federal bailout money now face extra hurdles before they can hire highly skilled guest workers on an H-1B visa. On Friday, the Labor Department will close a public-comment period for a proposal to suspend an agricultural guest-worker program, known as the H-2A.

At J.M. Clayton Seafood in Cambridge, Md., workers, mostly immigrants, pick crab meat from the shell of Chesapeake blue crabs.

The State Department is asking some sponsors of the J-1 visa -- seasonal employers such as hotels, golf resorts and summer camps -- to reduce dependence on foreign labor.
"Basically, because of the economic downturn, it will be difficult to place these people in jobs," said State Department spokesman Andy Lainey, confirming that a letter from the agency asked sponsors to make cuts "voluntarily."

With the unemployment rate at 8.1% and approaching double digits, the U.S. finds its longstanding quandary over immigration growing even more difficult. On one hand, fewer Americans have jobs and competition for available work is intensifying. On the other, the Obama administration says it wants to resist moves toward protectionism -- at least in the trade of goods and services -- and will push that view at next week's London summit with the leaders of the Group of 20 nations.

Immigration advocates say it is hypocritical not to apply the same approach to the flow of people.

"You don't abandon regulations because you have one bad year," said Jeanne M. Malitz, an immigration lawyer in San Diego who represents many growers who are trying to plan their harvests but are uncertain of their labor source. They have relied on the H-2A program, which allows guest agriculture workers to stay as long as 10 months. A spokeswoman for the Labor Department said a decision on whether the program will be suspended for nine months will be made in "a couple of months."

The H-2A program requires growers to try to fill vacancies with Americans first. Some farms, Ms. Malitz said, are seeing U.S. applicants for the first time in years, but remain apprehensive. "Will they stay?" she asks. "They quit in the middle of the season. They don't like it."

Indeed, an economic downturn tests an argument that has been the bedrock of legal, employer-sponsored migration: Americans won't or can't do certain jobs. Among the highly skilled, perhaps they didn't know programming languages such as Java or C++. Among the lower skilled, they didn't want to work with their hands, get dirty, or sweat.

At the Bitterroot Ranch in Dubois, Wyo., owner Bayard Fox said the dude ranch has sponsored equestrians from the U.K. and France, and cooks and housekeepers from Germany, under a summertime J-1 visa -- intended for foreign college students and trainees. But he doesn't plan to do that this year. Business is off, he said, and for a change there are enough Americans applying for jobs. Wyoming's 3.7% unemployment rate is the nation's lowest.

"The American pool may be small for highly qualified equestrian jobs, but has gotten bigger on account of the employment crisis," he said. "Some dude ranches are not getting the bookings, so they are just not opening this year."

Jack Brooks is the rare employer who calls himself "desperate to find people." Every year, the co-owner of the century-old J.M. Clayton Co. in Cambridge, Md., has relied on a dozen seasonal guest workers, mostly from Mexico, to pick the meat out of Maryland blue crabs all day long, March till November. But H-2B visas, as they are known, were all exhausted this year. So Mr. Brooks is trying to find Americans to do the job.

Three people responded to a newspaper advertisement. On the day one was to report to work, she called and said she had found something permanent.

"I can't blame her," said Mr. Brooks. "Imagine losing your job every year around Thanksgiving....I fear if we hire a few locals, they'll be gone as soon as the economy turns around."

Nearby, Bryan Hall, the fourth-generation owner of G.W. Hall & Sons, is in the same predicament. Dorchester County, where the crab-processing industry is based, had a 9.1% unemployment rate in January, second highest in the state. "I know unemployment's up, but I can't find Americans to do this job," Mr. Hall said.

Critics of the visa programs blame sponsors for driving down wages. Mr. Brooks said he offered the no-show hire an entry-level salary of $6.71 plus some incentives by piece and pound, and the potential to double her salary with experience.

"With our competition in Southeast Asia, we can't pay more," he said. "It's just better to close." The irony isn't lost on both sides of the debate: Foreigners are needed so Americans can compete with...foreigners.

To be sure, nearly all players in the global economy have grappled with the question of how open borders should be. In Europe, several countries with steep unemployment rates are paying migrants to return home.

The U.S. government's attitude marks a stark turnaround. During the boom years, Congress actually raised the number of H-1B visas, reserved for highly skilled immigrants. Now, some economists have suggested that allowing more foreigners into the U.S. -- say, an immigrant who buys a house in exchange for a green card -- would actually help jump-start the economy.

But a public beleaguered by lost jobs seems loath to embrace such an idea. The federal economic-stimulus package restricts H-1B hires among companies that receive funds from the Troubled Asset Relief Program. They must prove they have tried to recruit American workers at prevailing wages and that foreigners aren't replacing U.S. citizens.

Write to S. Mitra Kalita at mitra.kalita@wsj.com

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 29 Mar 2009 22:08

Only a united front at the London G20 can save the world from ruin

Industrial production is collapsing faster than during the Great Depression. Social and political devastation will not be far behind, unless the G20 can heal global divisions, writes Ambrose Evans-Pritchard.


Take with salt onlee. Still, a few good points made here and there.

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Re: Perspectives on the global economic meltdown

Postby Singha » 29 Mar 2009 22:18

the cozy old boys club of OECD + russia has to open the gates and stop pretending they can "control" the world economy and reap most of its benefits.

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Re: Perspectives on the global economic meltdown

Postby Singha » 29 Mar 2009 23:03

another article against the worlds current whipping boy - MBAs

http://www.thebigmoney.com/articles/jud ... 25/rip-mba


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