Perspectives on the global economic meltdown

amol.p
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Re: Perspectives on the global economic meltdown

Postby amol.p » 09 Oct 2009 09:45

Fannie and Freddie Continue to Struggle, Lawmakers Told

In the year since the government stepped in to rescue the collapsing mortgage giants Fannie Mae and Freddie Mac, the agencies have taken $96 billion from the Treasury, and may still need more.

That was the somber assessment delivered Thursday by the federal agency charged with overseeing the government-controlled Fannie and Freddie, which have lost a combined $165 billion since July 2007 as their bets on the housing market went bad.

The short-term outlook for the enterprises remains troubled,” said Edward J. DeMarco, acting director of the Federal Housing Finance Agency, in testimony before the Senate Banking Committee.

Their books are still bleeding red as foreclosures rise and homeowners — even the highest-quality borrowers — fall behind on their mortgage payments. Several crucial positions remain vacant, and Mr. DeMarco said the agencies were worried about losing workers because of the uncertainties surrounding their fate.

Right now, 3.1 percent of Freddie Mac loans are seriously delinquent, and Fannie’s seriously delinquency rate is an even higher 4.2 percent, Mr. DeMarco testified. And as unemployment nears 10 percent and homeowners struggle to persuade lenders to refinance their mortgages, delinquency rates are rising.

Fannie and Freddie now manage nearly 100,000 foreclosed properties, and those numbers are almost certain to grow.

http://www.nytimes.com/2009/10/09/busin ... f=business


Hari Seldon
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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 09 Oct 2009 16:13

More on a small event that could trigger bigger crises (have posted on this one before also).

Latvia Goes "No Bid"

LONDON (MarketWatch) -- It's never good news when a government bond auction fails. It's particularly bad news when an auction fails for a note maturing in just six months. And it's really bad news when there isn't any bid at all.

Yet that's what happened Wednesday when Latvia tried to sell close to $17 million of paper. It's not hard to figure out why.

The Baltic country is squabbling with Western -- mostly Swedish -- leaders over spending cuts, and it's a very real possibility that the country may be forced to devalue its euro-pegged currency if emergency global funds don't arrive.

Were Latvia to devalue, that would hit economies in neighboring countries like Lithuania, and Swedish banks would rack up additional losses on the loans they have made throughout the region.

The real nightmare scenario would be the Swedish banks then pulling down other European banks, and then triggering Credit Crunch: Part 2.

There is, of course, a long way before that unwieldy scenario comes to pass. Latvia hasn't devalued -- yet - and, even if it does, that doesn't mean it would drag the Swedish banks under.

Lenders like Swedbank which has more branches in the Baltic countries and Ukraine than in Sweden -- have endured plenty of losses, and Swedbank, for one, just raised more than $2 billion to weather stormier times. See earlier story.

Still, investors might recall a minor matter involving teaser loans that only took down the entire world economy.

Not every domino falls. But there's one that's looking shaky.

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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 09 Oct 2009 17:05

Who knew that banking institutions inside the PRC, which ostensibly operate under the full faith and credit of the people's lepubric, have already defaulted on obligations to greater scamsters across the pacific?

Gotta admit moi felt a chilling sense of admiration for sheer will, clarity and nerve with which the chinis have acted on this one. This one merits greater dissemination, IMHO. No hopes our establishment will do similarly should similar emergencies arise for us in the future.....

China has $2.3 trillion in currency reserves (about 70% in dollars), and China knows how to get its way.

In November 2008, Chinese banks said they would no longer play by our rules. Top tier banks (Bank of China and Industrial and Commercial Bank of China) reneged on derivatives contracts. They failed to come up with billions in collateral on dollar/yen FX trades, which were out of the money after the yen’s October appreciation. This should have been headline news in every financial newspaper, but it wasn’t. Chinese banks defaulted.

They may have been partially motivated by U.S. malfeasance in the capital markets that caused losses in Asia. The U.S. squandered its credibility and our cover-ups have done nothing to restore it.

Most credit support annex agreements would say that closing out these trades would be an event of default, and then the cross default on all the trades would kick in with the same counterparty. But the credit of the Chinese banks was better than many of their counterparties. Everyone was forced to renegotiate contracts with the Chinese banks.

From the perspective of the derivatives markets, this is earth shattering. What would have happened if AIG had done the same thing?


Yup, we know the answer to that last one there, eh? GS itself would've been history baby....

At the end of August 2009, China signaled that state owned oil consumers: Air China, COSCO, and China Eastern could default on money-losing commodities derivatives contracts.

If we had been paying attention, the U.S. should have done everything in its power to correct our mistakes, clean up the mess in our financial system—instead of sweeping it under the carpet—and turned our efforts to maintaining the credibility of the capital markets and the credibility of the dollar.


link

That is the whole point, no? To make oneself strong enough to reject the rules should the game get out of hand? Else what point is there of saving for a rainy day, eh?

Jai Ho, I guess.

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Re: Perspectives on the global economic meltdown

Postby svinayak » 09 Oct 2009 22:15

http://www.reuters.com/article/newsOne/ ... LI20091007

"Consumers are sensitive about the prices, so rising gold prices will definitely hit purchases in India and China. We have seen a rapid drop in India's jewelry consumption in the first half so a similar story could be happening in China," said Zoe Wang, analyst with Shanghai CIFCO Futures.

"But in terms of investment, purchases are rising, as more people are using gold as a hedging tool. Such purchases will obviously increase in China."

China is already the world's biggest gold producer, and in the first half of this year, consumption of the precious metal also became the highest in the world, overtaking India.

Albert Cheng, Far East managing director at the World Gold Council, said Chinese gold purchases for investment reached a record high of 70 metric tons in 2008.

With jewelry sales expected to fall -- even in the biggest market of China, the only one to show any growth in 2008 -- it is investment purchases that continue to drive up prices.


"The Chinese buy more gold bars in banks while Indians buy more jewelry," said Longgold's Yao.

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Re: Perspectives on the global economic meltdown

Postby Katare » 09 Oct 2009 22:40

It's a V! Recovery "A Lot Stronger" Than Consensus, ECRI's Achuthan Says

Aug. trade deficit narrows unexpectedly to $30.7B

Through the first eight months of this year, the trade deficit is running at an annual rate of $357 billion, about half of last year's $695.9 billion imbalance.

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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 10 Oct 2009 07:36

^ katare san, moi here hopes for a sustainable recovery. Keeping fingers crossed only.

Meanwhile, am not one to give much weight to rankings of any sort these days, still, this caught me off guard.

Britain snatches the financial crown from the US

Britain has toppled the United States as the world’s leading financial centre, according to the latest league table from the World Economic Forum (WEF), but the gloss was tarnished as the UK scored worse than Nigeria, Panama and Bangladesh for financial stability. :roll:

Britain was elevated from second to first place, while the US dropped to third place in the overall rankings, with both countries scoring less well than last year, as the financial crisis exposed their frailties.

Australia rose nine rungs to second place, while Singapore and Hong Kong also did well, rising to fourth and fifth respectively. France and Germany were both relegated out of the top ten.

The UK was buoyed by the relative strength of its banking and non-banking activities, such as insurance, {Huh? What? Come again?!?} said the forum, which each year gives scores to countries according to factors, policies and institutions that lead to effective financial intermediation — matching savers with borrowers — and deep and broad access to capital.


Psy-opsing just got more blatant, following the well-heeled heels of the Nobel peerise, seems like. UKstani banks and insurance are in a state of strength (relative or otherwise), say these talking heads? Go on, and TSP's relative strengths in human rights records will be highlighted next or what?

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Re: Perspectives on the global economic meltdown

Postby Singha » 10 Oct 2009 07:50

I think watching the investments (not the words) of transnational 'players' like soros would be a good guide to what clued in insiders know about the 'systemic strengths'. unfortunately they operate via opaque vehicles like hedge funds with no disclosure norms.

for the rest of us 'sheep' - we have these toilet paper reports and ratings agencies - better to avoid than read and worse believe it.

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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 10 Oct 2009 09:12

^^Oh, I agree.

Still, there's something about complex systems that befuddles even the most devious of insiders.

Plenty of billionaires, fatcats and moneybags were laid waste in the meltdown and only keep up appearances now based on gubmint largesse. Soros ain't yet among them but am confident he'll get there, give him time.

And gubmints aren't always into free lunches - their due will come to collect mighty soon I suspect. In this case, gubmints are finally starting to get serious on reaffirming the sanctity of national boundaries and loyalties, even or especially to the globalized transnational capital rerouting hedgie types. Talk is in the air of all sorts of capital controls, money market regulation and the like making quiet comebacks through the backdoor, if not through outright legislation (the frontdoor).

Unkil in particular, a bit dazed now but that won't last long, will likely dig to the bottom of a currency attack scenario that undermines their only holy cow - national security a.k.a. full spectrum dominance a.k.a. the will to power.

The free wheeling dealing happy days of the hedgies and the sorryass soros wannabees are near over, I suspect. The best days of globalized finance are certainly behind us, IMO. Of course, just my 2 centi and other disclaimers.

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Re: Perspectives on the global economic meltdown

Postby Singha » 10 Oct 2009 10:19

I noticed yesterday the form W8BEN that foreign citizens use to inform their trader not to withhold tax does not apply to UK and Swiss citizens. anyone know why? it was in the charles schwab instructions page.

also if a W8BEN type is giving his contact addr in the US, he needs to provide address proof of foreign residence like a utility bill or property tax . this was not there a couple yrs ago iirc.

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Re: Perspectives on the global economic meltdown

Postby shyam » 10 Oct 2009 10:23

Katare wrote:Aug. trade deficit narrows unexpectedly to $30.7B

Through the first eight months of this year, the trade deficit is running at an annual rate of $357 billion, about half of last year's $695.9 billion imbalance.

Isn't this V shaped recovery a great wall street spin? :mrgreen:

Deficit halved implies that imports have almost halved. That means consumption has reduced a lot and NOT that a lot of manufacturing has moved to US. Actually this data is a bad sign.

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Re: Perspectives on the global economic meltdown

Postby Singha » 10 Oct 2009 12:41

NYT - gee havaad fees and not even a hot breakfast to show for it :((

Leaner Times at Harvard: No Cookies
Halle K. Phillips/Harvard Crimson


By ABBY GOODNOUGH
Published: October 8, 2009

CAMBRIDGE, Mass. — Gone are the hot breakfasts in most dorms and the pastries at Widener Library. Varsity athletes are no longer guaranteed free sweat suits, and just this week came the jarring news that professors will go without cookies at faculty meetings.
.

By Harvard standards, these are hard times. Not Dickensian hard times, but with the value of its endowment down by almost 30 percent, the world’s richest university is learning to live with less.

The Faculty of Arts and Sciences, Harvard’s largest division, has cut about $75 million from its budget in recent months and is planning more. With the cuts extending beyond hiring and salary freezes to measures that affect what students eat, where they study and other parts of their daily routine, the euphoria of fall in Harvard Yard is dampened.

The Faculty of Arts and Sciences anticipates a deficit of $130 million over the next two years and is awaiting recommendations from groups of faculty members and students who have been weighing the options.

“Everyone is worried,” said George Hayward, a junior who lives on a part of campus, the Quad, that lost its library to the cuts. “It could be anything next; nobody really knows.”

Harvard is not the only elite university where student life is more austere this fall: Princeton has closed some computer labs, and one of its dining halls on Saturdays. At Stanford, the annual Mausoleum Party, a Halloween gathering at the Stanford family burial site, lost $14,000 in financing and might be canceled.

But many here assumed student life at Harvard, more than at any other institution, was immune from hardship. The loss of scrambled eggs, bacon and other cooked breakfast foods in the dorms of upperclassmen on weekdays seems to have stirred the most ire.

“Students generally feel that if you come to Harvard, for what you’re paying, you should probably have the right to a hot breakfast,” said Andrea Flores, a senior who is president of the Undergraduate Council.
“They want to preserve the things that are at Harvard that you can’t get anywhere else.”

Some students are feeling the cuts more than others. Mr. Hayward said that those who live on the Quad, a 15-minute walk from Harvard Yard, were disproportionately affected because the library there was closed and shuttle bus service to and from the central campus curtailed. (Quad residents are touchy to begin with — “getting quadded,” or assigned to live in that area, is many a student’s nightmare.)

Varsity athletes have also suffered disproportionally, said Johnny Bowman, a junior who is monitoring the cuts for the Undergraduate Council, because they were the biggest devotees of hot breakfast. “It was a big shock,” Mr. Bowman said. “Athletes were accustomed to coming back from early morning practice and getting their nutrients — a solid meal.”

On top of that loss, some club teams find themselves sharing space at the Malkin Athletic Center because it now closes earlier on weeknights. Khoa Tran, president of Harvard Taekwondo, told The Harvard Crimson that his team would have to share practice space with the Crimson Dance Team.

“It will be an interesting mix because they will be playing dance music while we do our routines,” he told the paper. “We ourselves yell every time we kick... and we kick a lot.”

Harvard’s endowment was $26 billion in June 2009, down from $36.9 billion in June 2008, a 27 percent decrease. The loss is especially hard on the Faculty of Arts and Science, which includes Harvard College, the Graduate School of Arts and Sciences and the School of Engineering, because the endowment provides half of its budget.

Though faculty jobs have so far been protected, the university laid off 250 staff members this summer, said Jeff Neal, a Harvard spokesman. He said it was too soon to know whether future cuts would affect students.

“We are working hard to minimize the impact of the global financial downturn on any substantive aspect of student life,” he said in an e-mail message.

Mr. Neal pointed out that despite its budget problems Harvard had increased financial aid to students to $145 million this year, from $136 million last year. More than 60 percent of this year’s freshman class, a record number, is receiving financial aid, he said. The total cost of a year at Harvard is $48,868.

Ms. Flores said that after excluding students from conversations about what to cut last spring, the administration was now seeking their ideas. It scrapped a plan to end weeknight shuttle service at 1:30 a.m. instead of 3:45 a.m. after an outcry, she said, though it did cut service on weekend mornings.

The Faculty of Arts and Sciences has started an online “idea bank” where students can suggest savings. The 170 submissions so far include charging tour groups to enter Harvard Yard and having students clean their own bathrooms instead of paying other students to do it under a work program.

“We understand we have to give up something,” Ms. Flores said. “But students want to be able to say what they’re willing to give up and what they want to protect. As long as that’s part of the discussion, I think the process can hopefully be done peacefully.”

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Re: Perspectives on the global economic meltdown

Postby Neshant » 10 Oct 2009 13:54

Economy Bailout Song: AIG, Freddie Mac, Lehman Bros

http://www.youtube.com/watch?v=Yy2_pLppuCw

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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 10 Oct 2009 16:28

Peter Schiff Sees Gold At $5,000

$5k? I'm like, OMG.

Jai Ho I guess.


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Re: Perspectives on the global economic meltdown

Postby Neshant » 11 Oct 2009 05:46

The only reason this stuff can carry on is because there are vast numbers of ignorant people in the system. They don't know where or how their money is created and where it goes. The powers that be hope to keep them in the dark.



Excellent interview by Max Keiser :

http://www.youtube.com/watch?v=MFMK9uHm5gE

http://www.youtube.com/watch?v=U6SINDNGC88

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Re: Perspectives on the global economic meltdown

Postby svinayak » 11 Oct 2009 07:00

http://www.youtube.com/watch?v=IPsfu4o1p1w
http://www.youtube.com/watch?v=18OR8msJsK4
Finance and Future of dollar

CURRENCY COLLAPSE: How the US Government Is Destroying the Dollar

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Re: Perspectives on the global economic meltdown

Postby svinayak » 11 Oct 2009 11:24


Volcker: Rise Of China May Mean Our Decline

paul volckerIn theory, economics is a positive-sum game. The growth of one country doesn't make the rest of the world poorer.

Still, Former Fed chairman Paul Volcker argues that the rise of China and other emerging economies pose a challenge to the US.

Bloomberg.

"I don’t know how we accommodate ourselves to it. You cannot be dependent upon these countries for three to four trillion dollars of your debt and think that they’re going to be passive observers of whatever you do,” Bloomberg quotes him as saying in an interview with PBS’s Charlie Rose taped yesterday.

“I would like to think that given the history of the past, given the strength, actual and potential of the American economy
, we can still provide a kind of indispensable element of leadership here. But it’s not going to be dictatorial, I’ll tell you that. It is very hard to herd these cats together.”

He also hit on themes he discussed last week, including his support for the Federal Reserve as the key financial regulator.

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Re: Perspectives on the global economic meltdown

Postby Neshant » 11 Oct 2009 12:22

He also hit on themes he discussed last week, including his support for the Federal Reserve as the key financial regulator.


These parasitic goondas should be in jail for the market rigging, money printing and insider trading they promote and engage in. IMO they are desparate to invent a new role for themselves as they see the demise of their traditional role as middle men and money printers coming soon.

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Re: Perspectives on the global economic meltdown

Postby Neshant » 11 Oct 2009 12:29

Britain snatches the financial crown from the US


These lists are worthless and perhaps meants as psy-ops and nothing more. There was a list of 'best banks in the world' released in 2007 and a few banks listed as 'best' have imploded and vanished.

Most of the financial services stuff is a con game. The analysts don't know any more than the average guy on the street where things are headed. You are paying a bunch of guys in armani suit to gamble with your money.

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Re: Perspectives on the global economic meltdown

Postby shyamd » 11 Oct 2009 16:03

Folks, do people know that Shell (Royal Dutch Shell) had its credit rating dropped! I don't think this has kicked up any fuss in the news.

RGE Monitor (Nouriel Roubini) said exports from Australia to China have dropped significantly, indicating China has stopped stock piling. Baltic Dry down 40%. We are heading for a massive fall end of 2009/ early Q1 2010.

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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 11 Oct 2009 21:18

Some random comment I found on ekhanoblog. So funny, decided to x-post only. TIFWIW.

Wow, back in 1990, the US govt seized the Mustang Ranch brothel in Nevada for tax evasion and, as required by law, tried to run it.

They failed, and it closed.

Now we are trusting the economy of our country, the auto industry and the banking system to the same nit-wits who couldn't make money running a whore house and selling whiskey!


:rotfl:

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Re: Perspectives on the global economic meltdown

Postby Katare » 11 Oct 2009 22:37

shyam wrote: Aug. trade deficit narrows unexpectedly to $30.7B

Through the first eight months of this year, the trade deficit is running at an annual rate of $357 billion, about half of last year's $695.9 billion imbalance.

Isn't this V shaped recovery a great wall street spin? :mrgreen:

Deficit halved implies that imports have almost halved. That means consumption has reduced a lot and NOT that a lot of manufacturing has moved to US. Actually this data is a bad sign.


The information is out there and everyone should do their own due-diligence based on the available information and your own interpretation of that information. You can also throw in your own gut feelings to bolster your chances.

If you believe that its all spin than if I were you I'll be investing in gold and land while shorting out every stock under the sun with PE over 10.

There are two possibilities from here – Recovery is real or recovery is fake/spin

Recovery is real – If this is the case than all the “lungi dancers” or ‘bulls” will go laughing all the way to banks. While for dooms-day sayers or bears you have already missed the recover bus – stocks have doubled in the last 7 months. You can take your “doom and gloom” to where ever they take deposits for that.

Recovery is fake/spin – Most investors will loose all of what they have gained in last 7 months and than some. Dooms day sayer, if they are putting their money where their mouth is will laugh all the way to the bank. Almost everyone will come out a looser with 100s of millions loosing jobs, retirements and other wealth. Reality will have sobering affects and newer restrictions and regulations will follow.

Next 4 weeks will reveal whether it’s fake or real. In next 4 weeks most economies will reveal their GDP growth numbers for 3rd quarter. Also private sector companies will come out with their numbers in coming weeks showing some visibility in recovery or lack of it. Recovery would look real if “top line” is growing or at least stabilizing with positive momentum.

We are not outta woods yet but would know pretty soon……
Investors to companies: show us higher sales

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Re: Perspectives on the global economic meltdown

Postby Sanjay M » 11 Oct 2009 23:33

shyamd wrote:Folks, do people know that Shell (Royal Dutch Shell) had its credit rating dropped! I don't think this has kicked up any fuss in the news.

RGE Monitor (Nouriel Roubini) said exports from Australia to China have dropped significantly, indicating China has stopped stock piling. Baltic Dry down 40%. We are heading for a massive fall end of 2009/ early Q1 2010.



Well, if a drop in Australian exports to China presages a significant cutback in Chinese manufacturing output, then it could mean triggering a bursting of a Chinese bubble.

This could have a serious impact on the wider East Asian region, but it could be quite good for India, since some of the FDI going into China would be pulled out and diverted towards India.

I would also think that a cutback in Chinese raw resource purchases would mean a downward correction to commodities prices worldwide. This in turn would give India more room to lower its own interest rates, to stimulate domestic consumption.

Meanwhile, China might face significant political turmoil, which could further hamper its economic policies. Could China see a lost decade, like Japan or the US? Could their political rulers survive such a lost decade, if it did happen?

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Re: Perspectives on the global economic meltdown

Postby Umrao Das » 12 Oct 2009 01:10

Because of dollar weakness imports were less and exports were higher, ther for trade deficit balance was lower than usual.

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Re: Perspectives on the global economic meltdown

Postby Nandu » 12 Oct 2009 03:02

Hari Seldon wrote:Some random comment I found on ekhanoblog. So funny, decided to x-post only. TIFWIW.

Wow, back in 1990, the US govt seized the Mustang Ranch brothel in Nevada for tax evasion and, as required by law, tried to run it.

They failed, and it closed.



Exaggeration. The Feds never tried to run it as a brothel.
http://en.wikipedia.org/wiki/Mustang_Ra ... _tax_fraud

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Re: Perspectives on the global economic meltdown

Postby svinayak » 12 Oct 2009 04:30

http://www.larouchepub.com/eiw/public/2 ... 1_3639.pdf
This Tower of Babble
by Lyndon H. LaRouche, Jr.
Sept. 28, 2009
Unless a purgative system of bankruptcy is put into
effect very soon, the entire world system of nationstates
will soon disintegrate, one after the other, chainreaction
style. It could come as soon as some time in
October. If it is permitted to occur, it will come as a
result of the hyperinflationary collapse, like that of
Weimar Germany in 1923, but not in one isolated nation,
this time; the entire planet will collapse, and leading nations
will simply disintegrate. This could be stopped
now, if my proposal for a reorganization-in-bankruptcy
converts certain leading nations from the present international
monetary system, into a credit-system of the
type prescribed by the U.S. Federal Constitution. Otherwise,
the doom is already inevitable.


http://www.larouchepub.com/eiw/public/2 ... 3_3639.pdf

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Re: Perspectives on the global economic meltdown

Postby Neshant » 12 Oct 2009 07:38

its frightning how wall street has totally taken over the US government :

http://www.pbs.org/moyers/journal/10092009/watch.html

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Re: Perspectives on the global economic meltdown

Postby Ameet » 12 Oct 2009 08:31

Recession-hit govt to sell off state assets: PM

http://news.yahoo.com/s/afp/20091012/wl ... 1012000443

The British government will sell off a raft of state assets to help reduce its debt, Prime Minister Gordon Brown was to announce Monday.

The government is to sell off 16 billion pounds of assets, Brown was to say, according to extracts from a keynote speech he was to give in London.

Brown was to outline details of initial sales that could raise three billion pounds, including the Channel Tunnel linking Britain to France; the 33 percent stake in European uranium corsortium URENCO; the Tote bookmakers; the River Thames crossings at Dartford, and the Student Loans Company.

Brown is aiming to halve Britain's deficit over the next four years.

"We also need a deficit reduction plan that supports growth and jobs, not one that snuffs out recovery before it has started," Brown was to say.

The government will also sell off surplus real estate as market conditions improve.

Brown was to say government should focus on "what it does best".

The funds raised will help pay off Britain's debts, he was to say.

Brown said in a podcast Sunday that his speech would spell out his vision for "enduring and sustainable" economic growth.

"Because it is ultimately growth that is the key to paying down debt," he added.

A spokesman for the main opposition Conservatives said: "As any family knows, selling off things helps in the short-term and, given the state the country is in, is probably necessary but it is no substitute for a long-term plan to get the country to live within its means."

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Re: Perspectives on the global economic meltdown

Postby Neshant » 12 Oct 2009 09:01

I gurantee you the developed countries upto their neck in debt are not going to work their debts off despite the claims. That prescription is only for third world countries in debt. A whole lot of quantitative easing & currency swaps will be going on behind the scenes.

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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 12 Oct 2009 10:36

^^ Totally agree with Neshant above.

What's interesting for moi to see is how even the TFTA are being pushed around - case in the point Iceland and mighty soon a whole bevy of central and eastern oiropean countries.

Heck, should the banking meltdown start in oirope (whose banks have even higher leverages than the khan ones), then there's no saying what'll happen to Med rim EU members like Spain, Greece, Portugal and some Balkanistans.

UKstan screwed Iceland royally over the bank blowup by seizing Icelandic assets from banks not involved in the scam. No honor among thieves aajkal.

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Re: Perspectives on the global economic meltdown

Postby viveks » 12 Oct 2009 12:58

This downturn has caused by the government focussing on negativity. I think the US cannot make progress if its media keeps focussing on negativity about people.

Hari Seldon
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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 12 Oct 2009 14:34

viveks wrote:This downturn has caused by the government focussing on negativity. I think the US cannot make progress if its media keeps focussing on negativity about people.


Quite the contrary. The green shoots rhetoric was stage managed by the gubmint cheered on by sarkari economists. The economic fundamentals are completely ignored by these fundamentalists who then pour vitriol over the so-called doomers and gloomers :((

Anyway, the data show that relative to gold, the US equities mkt hasn't performed well at all during the much touted recovery.

S&P 500 deflated by gold

Meanwhile, reports trickle in saying that phoren central banks are reducing exposure to the USD..... Unkil can relax now....his debt will be inflated away as the USD falls relative to every other major currency and standard (gold) out there....all as per plan onlee

Dollar Reaches Breaking Point as Banks Shift Reserves (bloomberg)
Oct. 12 (Bloomberg) -- Central banks flush with record reserves are increasingly snubbing dollars in favor of euros and yen, further pressuring the greenback after its biggest two- quarter rout in almost two decades.

Policy makers boosted foreign currency holdings by $413 billion last quarter, the most since at least 2003, to $7.3 trillion, according to data compiled by Bloomberg. Nations reporting currency breakdowns put 63 percent of the new cash into euros and yen in April, May and June, the latest Barclays Capital data show. That’s the highest percentage in any quarter with more than an $80 billion increase.

World leaders are acting on threats to dump the dollar while the Obama administration shows a willingness to tolerate a weaker currency in an effort to boost exports and the economy as long as it doesn’t drive away the nation’s creditors. The diversification signals that the currency won’t rebound anytime soon after losing 10.3 percent on a trade-weighted basis the past six months, the biggest drop since 1991.

“Global central banks are getting more serious about diversification, whereas in the past they used to just talk about it,” said Steven Englander, a former Federal Reserve researcher who is now the chief U.S. currency strategist at Barclays in New York. “It looks like they are really backing away from the dollar.”

Tanaji
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Re: Perspectives on the global economic meltdown

Postby Tanaji » 12 Oct 2009 16:32

The Foundation Man will be interested:

http://news.bbc.co.uk/1/hi/uk_politics/8301927.stm

UK to start selling its assets to reduce deficit

Neshant
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Re: Perspectives on the global economic meltdown

Postby Neshant » 12 Oct 2009 16:57


Hari Seldon
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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 12 Oct 2009 19:58

Tanaji wrote:The Foundation Man will be interested:

http://news.bbc.co.uk/1/hi/uk_politics/8301927.stm

UK to start selling its assets to reduce deficit


Tks Tanaji.

UQstani deficit is a concern all right but of greater import perhaps is the credibility deficit the UQ faces. It has even less of a way to repay its debts than the khanate does and the khanate is hardly credible anymore w.r.t. its debt obligations in today's dollars (they'll try to inflate the debt to worthless tomorrow-dollars, see).

UKstan doesn't have too many days left with its own currency. The GBP will go the way of the dodo and the icelandic kronor soon enough, IMO.

SwamyG
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Re: Perspectives on the global economic meltdown

Postby SwamyG » 12 Oct 2009 20:09

Neshant wrote:For a contrarian view, here's a claim that the dollar will rally.

Robert Prechter :
http://www.forbes.com/feeds/reuters/200 ... ATE-1.html

The only reason he has given is that dollar has been over sold - which might be true. So when people realize that the dollar might start going up a bit. But in the long run what is going to happen? He does not say that. His view seems to be quarterly or annually and we at BRF want to know what will happen in 5, 10, 20, 35 years.


Satya_anveshi
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Re: Perspectives on the global economic meltdown

Postby Satya_anveshi » 13 Oct 2009 01:24

I suspect that in order to further bolster confidence in dollar, some currencies are going to get clobbered very soon. Especially vulnerable are those that pose some viable alternative to the dollar. Safe to start with the most probable (top 3)== most vulnerable. I think even the rupee counterfieting fiasco has dimensions in this.

Ameet
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Re: Perspectives on the global economic meltdown

Postby Ameet » 13 Oct 2009 05:33

Money and the crisis of civilization

http://www.realitysandwich.com/money_an ... vilization


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