Perspectives on the global economic meltdown (Jan 26 2010)

[aqkhan]

So right now $7T worth of property is being mortgaged at $11.68T a gap of ~$4.68T? So banks must be making lots of money by not rewriting the loans. In what time period will the $7T equal the $11.68T in mortgages at say 5% growth? If its too long then defaults will increase.

It depends. With most banks having failed in 2008, and with the introduction of new banking bill, I don't think banks will be lending easily now. Not at the expense of going bankrupt themselves.

[SwamyG]

^^^
The bill is an excuse for the banks. They were bailed out by both the administrations; they did not lend as expected. What did they do with the money, huh? They did not even trust each other enough....enuf said.

[aqkhan]

^^^
The bill is an excuse for the banks. They were bailed out by both the administrations; they did not lend as expected. What did they do with the money, huh? They did not even trust each other enough....enuf said.

Most of the money went to dilute the red ink (cover losses). Some leftover are being hoarded to prepare for the upcoming recession. Hoarding by big banks clearly points to signs that recession is coming.

[SwamyG]

^^^
Oopsie. That was a rhetoric, I should not have placed the "?". You could also add "funding the lobbyists" on your list. Looks like banks are making profits.....hey more dollars for the lobbyists and the shareholders.

[svinayak]

http://www.businessweek.com/news/2010-0 ... nters.html

Creating A City
“I’m a big city person, and I always thought Miami didn’t have a real city,” said Dejan Krsmanovic, a 39-year-old biomedical engineer who was on a first date at Segafredo, a busy Italian restaurant and bar that opened in 2008 in the adjacent Brickell neighborhood, where the same trend is playing out.
“Miami Beach is not a city, it’s a resort,” he said. “This is beginning to resemble a city.”
The unsold condos represent almost a third of the 22,079 units in 75 buildings, mostly opened after 2004, tracked in a study released in March by the Miami Downtown Development Authority. The report focused on central neighborhoods including Downtown, Brickell and Wynnwood/Edgewater.
Occupancy rates in the new buildings, including owner- occupants and tenants, increased to 74 percent in February from 62 percent in May 2009, the study shows.
Price Cuts
The development authority estimates that the population of Miami’s urban core jumped to about 70,000 from 40,000 since the 2000 census, said authority spokesman Robert Geitner.
“For us, it doesn’t matter whether they rent or buy,” said Miami Mayor Tomás P. Regalado. “The more people, the more business, the more safety, the more progress.”
The influx of college students, young professionals and empty nesters from the Coral Gables section of the city and the suburbs intensified about 18 months ago when banks that financed the condo projects agreed to let developers slash sales prices by as much as 40 percent, said Peter Zalewski, a principal with consulting firm Condo Vultures LLC in Miami. That spurred demand from foreign buyers and all-cash investors, many of whom are renting out their units until prices rebound, he said.
The Miami metro rental market is one of the strongest in the country, according to Ron Johnsey, president of Axiometrics Inc., an apartment-research firm in Dallas. That’s the case even though unemployment is more than 11 percent, compared with 9.5 percent nationally, and developers are adding to supply by leasing units built for purchase.

[shyam]

The U.S. Economy Is A Dead Horse And The American People Are Starting To Get Really Pissed Off And Frustrated

[svinayak]

http://en.wikipedia.org/wiki/Peter_Sutherland

Peter Sutherland
Peter Sutherland
Director-General of the World Trade Organization
In office

Peter Denis Sutherland, KCMG (hon) (born 25 April 1946) is an international businessman and former Attorney General of Ireland, associated with the Fine Gael party (part of the Christian Democrat bloc). He is a barrister by profession, and is also Senior Counsel at the Irish Bar. He is also known for serving in a variety of business and political roles.

He is non-executive Chairman of Goldman Sachs International (a registered UK broker-dealer, a subsidiary of Goldman Sachs). He was previously non-executive chairman of BP and was a director of the Royal Bank of Scotland Group until he was asked to leave the board when it had to be taken over by the UK government to avoid bankruptcy. He also formerly served on the board of ABB.
He is on the steering committee of the Bilderberg Group [1], a chairman of the Trilateral Commission[2] and vice chairman of the European Round Table of Industrialists.[3]
He is a member of the Comite d'Honneur of the Institute of European Affairs, and an Honorary President of the European Movement Ireland.[4]

Peter Sutherland (left) speaking with Garret FitzGerald (centre) and Will Hutton (right), at the Institute of European Affairs in Dublin in 2006.
He was appointed as a member of the Hong Kong Chief Executive's Council of International Advisers in the years of 1998–2005.[5]
He is President of the Federal Trust for Education and Research, a British think tank. He is Chairman of The Ireland Fund of Great Britain, part of The Ireland Funds.[6] He is a member of the advisory council of Business for New Europe, a British pro-European think-tank.[7]
In 2005, he was appointed as Goodwill Ambassador for the United Nations Industrial Development Organization.[8] In Spring 2006 he was appointed Chair of London School of Economics Council commencing in 2008.[9]

[shyam]

Max Keiser explains how to hit financial industry using market techniques.

[svinayak]

The coming need for TARP 2 - Bend over Taxpayers!

Excerpts from Bloomberg:

July 16 (Bloomberg) -- Liabilities of shadow banks, or institutions without access to central bank loans or permanent federal guarantees, still exceed the traditional banking system’s three years after the financial crisis began, according to a report from the Federal Reserve Bank of New York.

The shadow banking system had about $16 trillion of obligations in the first quarter, compared with $13 trillion for banks, the report said. The gap has narrowed from 2008, when obligations were $20 trillion and $11 trillion, respectively.....

“The shadow banking system was temporarily brought into the ‘daylight’ of public liquidity and liability insurance -- like traditional banks -- but was then pushed back into the shadows,” Fed researchers including Zoltan Pozsar and Tobias Adrian wrote in the report issued earlier this month.

Given the size of this parallel banking system and its vulnerability to further panics, “it is imperative for policy makers to assess whether shadow banks should have access to official backstops permanently, or be regulated out of existence,” the researchers wrote......

It’s an interesting historical document, but if anything it’s a great illustration of what the Fed did wrong,” said Christopher Whalen, managing director at Institutional Risk Analytics. The Fed, along with the Securities and Exchange Commission, allowed banks to create virtually unlimited securities via shadow banking, he said.
Rule changes by the Financial Accounting Standards Board and the SEC are requiring banks to bring many of these obligations onto their own balance sheets. As that happens, the shadow banking system will disappear, according to Whalen.

“The report is a reminder that we’ve taken trillions of dollars of financing out of the economy,” said Whalen. “It’s going to run off in four to five years and it’s not being replaced.”

“When you look at the confused mess of transactions on the map, you have to ask how this was allowed to exist in the first place,” Whalen said.

http://noir.bloomberg.com/apps/news?pid ... 6iLI&pos=6

[ramana]

The flat CPI is turning up scares of deflation.

[aqkhan]

Why U.S. Financial Reform Looks Indian
http://blogs.wsj.com/indiarealtime/2010/07/16/why-us-bank-reform-looks-indian/



Passage in the U.S. Senate of sweeping financial services reform Thursday is set to transform the banking and securities landscape in a way that hasn’t been seen since the Great Depression.

It could also make the U.S. financial system a little more, well, Indian.

In the past, the U.S. and the U.K. have taken a laissez-faire approach to financial regulation that has been in stark contrast to the tight, sometimes overbearing, regulatory regime exercised by the Reserve Bank of India, India’s central bank and banking regulator.

But with the glaring need for reform in the U.S. and U.K. highlighted by the financial and credit crises of the past two years, the regulatory systems in those countries are radically changing. The U.K. already has introduced financial services regulatory reform that broadly mirrors the new U.S. framework. The new U.S. law is expected to be signed into law by President Barack Obama soon.

As a result, the U.S. is set to see a drastically increased number of rules and regulations and much more intrusive supervision. In other words, it is going to become more Indian.

[SwamyG]

^^^
IMO Paul Beckett is a hit man. In this piece, the title seems innocuous so he starts talking about USA and UK and ends up on a note about India. Talking about things India lags. Did he lose his way? Look at his earlier piece India is a terrible place to die.... Paul needs some antacid.

[Hari Seldon]

TAE tweets
http://twitter.com/AutomaticEarth

UK House prices 'to crash 20pc by 2012' as Budget bites, says Capital Economics http://bit.ly/9WiMsH (We're predicting 90pc declines BTW)

Britain ain't 'great' for nothing. And a mere 20% by 2012 is nothing, trust me. 90%? Now, thats 'great', sort of.

Municipal Bond Defaults at Triple the Typical Rate http://bit.ly/aF6nMY (The stirrings of trouble as communities are pushed to the edge)

Muni worries are overdone. DC will bailout the munis by the boatful when push meets shove, IMHO.

Great FDIC Friday bank closure bash so far. 6 banks knocked out today, yearly total to 96. #TGIF

23.5 percent of office space in Las Vegas is now vacant http://bit.ly/drsU2b

Moody's Downgrades $16.7B Of Morgan Stanley's Subprime RMBS as residential market continues to deteriorate http://bit.ly/9Nhlu7

Bank of America Slides as Net Income, Revenue Drop http://bit.ly/cAjsBH (Once again, more creative accounting and mark to fantasy trickery)

Citigroup Profit Falls 38pc as Trading Revenue Drops http://bit.ly/9VGNbv (Even with all their sham accounting & trickery profits fell,LOL)

Yawn, basically.

The rules of the system are designed by those responsible for the greatest looting of public coffers in history. #Tragic beyond words.

There is no justice. There are only lies and deception. The #SEC is a joke and so is any notion of the rule of law. #Goldman #Tragedy

Profound or what?

So that's it? If you or I commit a felony we go to jail. Goldman gets to f***ing 'settle'? $550 Million settlement, they make that in 1 week

Wall St Is Laundering Drug Money And Getting Away With It (Wachovia apparently laundered $380 BN. Fine just $160 mn) http://bit.ly/bv0lQC

Some specifics on big-bank crimes, plz?

Banks repossess homes at record pace: RealtyTrac (Will likely top 1 Million this year) http://bit.ly/9AoR8j

[Neshant]

The flat CPI is turning up scares of deflation.

CPI numbers put out by govt are fake.

The whole point of CPI is to under state the real rate of inflation so people's wealth can be stolen from them with ease through inflating. Anyone who looks at prices knows nothing is going down despite what is supposed to be the biggest deflation since the great depression. Prices, fees, taxes, groceries, medical costs, insurance...etc continue to go up and the only thing going down are wages and employment levels.

The federal reserve wants to point to fake CPI numbers so that they can inflate even more to rip off dollar holders/earners. That way share holding banks of the federal reserve can rob gains in purchasing power from people who earn/save dollars more easily.

[ldev]

When you look back now, the big turning point was when wealth instead of being a bye-product of value addition in manufacturing became a function of asset inflation. The big fear among the global "elitemen" is not deflation in the manufacturing sector (Long Live China) but deflation in asset prices because the global "elitemen" already have created their wealth and want to protect it via inflation in asset prices as opposed to aam janata. The question is, does a "service economy" have to rely on asset inflation to create wealth? Is that when the transition happened?

A return to a gold or a quasi gold standard will put monetary policy into a straitjacket illsuited to the current global economy. But what is certainly needed is a very very strict oversight of the "store of value" which is one of the two primary functions of money. By virtue of its global reserve status the US dollar is a global store of value. Yet, how many portfolio managers today are 100% in cash. That fact or non fact alone will tell you that the currency has lost its store of value function. And this debasement is not confined to the USD but is widespread with the Euro and the Yen also.

[svinayak]

Real answer is here
World Economic Collapse Explained In 3 Minute Video

http://www.norcalblogs.com/gate/2010/07 ... -video.php

[Hari Seldon]

A wag on the web nails it straight out, IMO....

Over a generation ago, a family of four could be supported by a single income.

Soon, it took that same family of four two incomes to get through.

Then, two incomes turned into two incomes + leverage.

Today, that family of four has lost one of those jobs and the leverage blew out 2.5 years ago.

The government is taking on an additional 200bn each month in spending and has gotten what in return?

25% of Americans now have a FICO score below 600 and 100 banks have been closed down this year.

Sales tax revenues are imploding.

blah blah blah

Well, certainly lotsa generalizations, anecdotal evidence and the like out there but hard to fault the grain of truth in the argument's kernel, eh? Just saying only. I expect things to get better in a few yrs. Till then, hang on and ride the storm out. Or so I hope.

[SwamyG]

^^^
hari...you seems to have a change of heart. Why so openly optimistic about maasa?

[Bade]

The three large economies that are guaranteed to survive any extended global recession are going to be China, India and USA.

[Hari Seldon]

^^^
hari...you seems to have a change of heart. Why so openly optimistic about maasa?

hi swamygal,
Change of heart, maybe not. Heart always wanted core khanomy to survive and prosper moderately. Head didn't always agree though....

Anyway, part of my optimism stems from the so-called 'watched pot theory' - the post all expect to boil over and hence watch anxiously typically manages to not boil over, thanks to some sorta endogeneity of anxious attention perhaps.

Also, like the cliched saying goes:

'if i owe $100,000 to the bank, I'm scared of the bank.If I owe $100 million...better still 100s of billions.....the bank better be scared of me.'

I think AEP said it wonderfully well in 1 of his alarmist rants

Well-armed sovereign states can do bloody well anything they want.

lastly, moi fully expects a glowrious revolution to come to yumreeka once things get revolting enough. Best case is a Ron Paul moment. Else a 'gather your arms and march to DC' kinda revolution. 'em khan civilians too own guns by the ton and won't march silently to the gas chambers, no sir.

Anyways, my 2 cents and other disclaimers.

[Tanaji]

Ah, the man from Foundation is back! Where were you saar?

Is gold really in a "bubble"? If stocks are not expected to do well, isnt it expected that gold will at least retain its value?

[Hari Seldon]

Hi Tanaji,

Work pressures in moi line of work are countercyclical onlee....
Anyway, am not yet back to active posting, more like filling time.

Re gold and stocks....nobody knows. After usual disclaimers, my hunches are:
1. USTs will do well. Long bonds too. Yields unlikely to rise in a hurry.
2. Stocks will likely tank based on fundamentals. And stay there for a few yrs, unless the Fed's benami trading desks decide to make a point.
3. Gold will fluctuate but won't see any sustained fall. IOW, its not a bubble yet. Strictly IMHO.
4. Sign to look for when measuring bottom is the bottom i asset prices. When home prices stop falling absent gubmint intervention, then we know the corner has been reached and will be turned provides the gubmint does nothing. Not likely that'll happen though, eh?

Again, my 2 cents onlee.

[Hari Seldon]

Derivatives guru sri satyajit Das opines:
Satyajit Das: Botox Economics – Part 1

Botox is commonly used to improve a person’s appearance by removing facial lines and other signs of aging. The effect is temporary and can have significant side effects. The world is currently taking the “botox” cure. A flood of money from central banks and governments — “financial botox” — has temporarily covered up unresolved and deep-seated problems.The surface is glossy and smooth, the interior decayed and rotten

Botoxonomics?? LOL

The 2009 ‘recovery’ was based on low or zero interest rate policies (“ZIRP”) of major central banks. Massive government intervention also helped arrest the rate of decline of late 2008/ early 2009. Without government support, it is highly probable that most economies would have been in serious recession. Just as China practised capitalism with Chinese characteristics, developed economies discovered socialism with Western characteristics.

Capital injections, central bank purchases of “toxic” assets and explicit government support for deposits and debt issues helped stabilise the financial system. Changes in accounting rules deferred write-downs of potentially bad assets. Despite these actions, the global financial system remains fragile.

Yup, but what sustained gubmint axn did achieve was that it destroyed credibility of accounting standards, numbers and statements - perhaps irretrievably. I know of no serious econo-observer who takes accounting statements, of corporates and esp of gubmints at all levels atface value anymore.

Employment, a key indicator given the importance of consumption in developed economies, continues to decline albeit at a slower pace. In the U.S., unemployment reached 10%.

In many countries enforced reduction in working hours and taking paid or unpaid leave reduced the rise in unemployment levels significantly. Working hours and personal income have fallen.

Changes in the structure of the labour force also distort the real picture. If workers working part time involuntarily and looking for full time employment are included, the U.S. underemployment figure is in the 16-18% range. Long term and youth employment also remains high.

O yes, mark my words, it is unemploymt which will turn the tables on US elites that have gotten away with loot n grand theft and larceny of real wealth from the US middle class on a scale unprecedented since the colonization of India. Its the unemplymt stupid. Indeed.

read it all.

[James B]

The three large economies that are guaranteed to survive any extended global recession are going to be China, India and USA.

Add Germany to that.

[svinayak]

http://www.thetradingreport.com/2010/07 ... s-economy/

50 EYE OPENING STATISTICS ABOUT THE US ECONOMY
Written by TheCrossHairsTrader - 7/12/10
#50) In 2010 the U.S. government is projected to issue almost as much new debt as the rest of the governments of the world combined.

#46) Total U.S. government debt is now up to 90 percent of gross domestic product.

#45) Total credit market debt in the United States, including government, corporate and personal debt, has reached 360 percent of GDP.

#43) There are now 8 counties in the state of California that have unemployment rates of over 20 percent.

#41) In February, there were 5.5 unemployed Americans for every job opening.

#40) According to a Pew Research Center study, approximately 37% of all Americans between the ages of 18 and 29 have either been unemployed or underemployed at some point during the recession.

#39) More than 40% of those employed in the United States are now working in low-wage service jobs.

#37) Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008. Not only that, more Americans filed for bankruptcy in March 2010 than during any month since U.S. bankruptcy law was tightened in October 2005.

#35) RealtyTrac has announced that foreclosure filings in the U.S. established an all time record for the second consecutive year in 2009.

#29) For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.

#25) In 2009, U.S. banks posted their sharpest decline in private lending since 1942.

#24) New York state has delayed paying bills totalling $2.5 billion as a short-term way of staying solvent but officials are warning that its cash crunch could soon get even worse.

#23) To make up for a projected 2010 budget shortfall of $280 million, Detroit issued $250 million of 20-year municipal notes in March. The bond issuance followed on the heels of a warning from Detroit officials that if its financial state didn’t improve, it could be forced to declare bankruptcy.

#19) According to EconomicPolicyJournal.com, 32 U.S. states have already run out of funds to make unemployment benefit payments and so the federal government has been supplying these states with funds so that they can make their payments to the unemployed.

#10) The Dow Jones Industrial Average just experienced the worst May it has seen since 1940.

#4) According to a new report based on U.S. Census Bureau data, only 26 percent of American teens between the ages of 16 and 19 had jobs in late 2009 which represents a record low since statistics began to be kept back in 1948.

#2) During the first quarter of 2010, the total number of loans that are at least three months past due in the United States increased for the 16th consecutive quarter.

#1) According to the Tax Foundation’s Microsimulation Model, to erase the 2010 U.S. budget deficit, the U.S. Congress would have to multiply each tax rate by 2.4. Thus, the 10 percent rate would be 24 percent, the 15 percent rate would be 36 percent, and the 35 percent rate would have to be 85 percent.

You can catch the complete list of 50 here.

[SwamyG]

The three large economies that are guaranteed to survive any extended global recession are going to be China, India and USA.

There is no question about it. I have been saying the same thing. I often wonder if we need to include Russia or Brazil in them. I just don't include them because of their relatively smallish population.

[SwamyG]

Hari:
By the very nature of Empires, however large they have they extend themselves into a situation where the brain sees unhealthiness. Do you think the American Empire can be a example of an Empire that never sets? The moment countries suspect America is just another country and there is no "American Exceptionalism", that the entire World has bought into varying degrees, the ball has started to roll down. The question is how low will the ball ride. How much and what does America constantly have to do to remain at the top is important factor to judge.

Ultimately all countries have to ask the question: What is happening to the people?

[svinayak]

Globalization and the position the USA will be in ?

There is a lot we can do but first we have to win the debate over what is going to be Globalization and the position the USA will be in , Leader of the Free World and its ability to Think Freely about how to developed abundant resources supply in a Finite World , or a follower of a One World Order ?

If you look outside the box of supply-side fundamental growth incentives or the lack of them , there appears to be things going on that would start to make sense as to why we see the Interruptions to economic recovery reestablishing itself with a matrix of mechanisms established by our Policy makers .

Read the argument between Norman and Paul over continuing to feed the world . Paul is a Stanford Professor , and has the ear of President Obama .
http://en.wikipedia.org/wiki/Norman_Borlaug
this is our top cereal grains breeder , in terms of looking at the world as a finite resource read what he says in the paragraph down towards the bottom of this page , and look at the grain yield chart , in this , it shows the increases in yields over the years has flat lined over the past 10 years , and also read the reversal on unsustainable population growth Norman Borlaug is said to have , but in the middle of this reading there is a statement by the current advisory team advising our President like John Holdren and his Co author Paul R. Ehrlich who are quoted here as saying , " The effort to continue to feed the world is over ! "
And then read what Paul says here ; http://blog.islandpress.org/177/paul-eh ... mment-3847 , and here ,http://www.universityworldnews.com/article.php?story=20091211105819323

a colleague of Pauls ; Population growth should be curbed: conservationist Goodall http://search.yahoo.com/404handler?src= ... population
http://www.timesonline.co.uk/tol/news/w ... 350303.ece
http://www.chinadaily.com.cn/china/2009 ... 151129.htm

[Bade]

Russia and Brazil are not big enough in all aspects to join the club, IMO. If you include Russia, then there is no rationale to keep many European nations out. Demography is what is against most of these countries. I can easily see USA getting close to a billion people within the next 100 years or so. Big countries with diverse population can have additional advantages. USA really has an upper hand here.

[Carl_T]

I have nothing against the theory per se; I understand it has assumptions to go with too. Running a country is not the same as running an economy, one reason why when somebody suggests that we should have a successful CEO run the country I get immense takleef.

A great example is nana sa pyara sa maasa. Look what is happening to it, it has dished out major manufacturing jobs to developing countries thinking about the bottom line. People are running out of jobs now. Vast prosperity increased their population, lifestyle and life span. Now it needs jobs to support their standard of living. Building airplanes for rest of the World is not going to feed and provide health for them all.

It is not so much the US that has pushed all these jobs overseas, it is market forces responsible for this, and thus a normal part of economic growth. The solution to this isn't to bring these jobs back, but to retrain workers to do higher level work. That's the part that is always left out.

Pushing manufacturing jobs overseas has also had vast benefits for the US as well, giving the US access to cheap goods therefore reducing cost of living. I think you can imagine what prices might be like if the goods you use were made in US.

The only way to bring manufacturing jobs back to US is to pay relatively high wages, which is untenable as you can imagine, and if you have low wages....who would work there?? Now in a recession with lots of unemployed people, some low wage jobs will probably come back.

The US needs to keep moving low skilled jobs overseas or importing people to do low-skilled work while investing in the skills of its workforce. That has to be done at the same time as reducing budget deficits etc. I think the US will do well in the future as long as deficits are reduced and there is human capital growth.


As for "decline of the American empire" we should certainly hope that is not the case!

[Neshant]

It is not the US that has pushed all these jobs overseas, it is market forces responsible for this, and thus a normal part of economic growth. The solution to this isn't to bring these jobs back, but to retrain workers to do higher level work.

Why would anyone retrain an American worker to do higher level work when its far cheaper to have that higher level work done overseas?

Sounds like you are just spewing forth textbook propaganda.

The only well paying jobs not leaving are medical jobs (although I suspect medical tourism will eventually take off). The medical mafia profession is smart enough to have all kinds of rules & regulations against import of foreign drugs and foreign doctors, limits on the supply of doctors & surgeons so as not to crash wages, running up costs in cooperation with insurance companies and other con-artistry. While it may not work for the people at large, it works well if you are a medical doctor.

Likewise, wall street goons will argue that exporting jobs wholesale is good for the economy... until of course their own jobs get exported or eliminated as their fraud of an industry gets exposed. Ah! then they need a bailout. I'm sure it makes perfect financial sense to export F-22 r&d and manufacturing to China too.

Taken to its logical conclusion, almost everything can be exported including overpriced CEOs as corporations move up the ladder to control the "commanding heights". Except on a national level, a generation which has no opportunity to start its career in any high tech/scientific industry will end up nowhere.

I'm afraid textbook sh&t needs to be thrown out and countries need to understand that not everyone can work for the govt in some office job doing beaurocratic stuff requiring little skill with a fat taxpayer funded pension waiting for them at retirement. Or building roads and bridges when they are not even required and nothing is learnt. Or become a lawyer where nothing scientific or technological is ever invented or exported but a lot of paper piles, useless regulations and fees are generated.

What I expect is a crash in western living standards as wages get diluted down to a point where it becomes cheap enough to hire American workers at roughly the same wages as workers in other countries. Good for corporations and goons up top printing money, fiddling with interest rates and bull&hitting the rest of society with high-rolling, not necessarily good for those who will see the drop in living standards.

[SwamyG]

Bade: You cannot discount Russia and Brazil because they have both population and territorial size to be counted as one of the candidates. They might not be the top notch country though.

[SwamyG]

It is not so much the US that has pushed all these jobs overseas, it is market forces responsible for this, and thus a normal part of economic growth. The solution to this isn't to bring these jobs back, but to retrain workers to do higher level work. That's the part that is always left out.

USA allowed the market to dicate its future. This retraining of people to do higher level work of is nice and dandy on paper. What exact sort of work do you have in mind?

Pushing manufacturing jobs overseas has also had vast benefits for the US as well, giving the US access to cheap goods therefore reducing cost of living. I think you can imagine what prices might be like if the goods you use were made in US.

Yes, you are correct. But it akin to saying, look at the baseball player he can hit a 1000-yd homer. Guess what he is on steroids. When on drugs one can certainly perform better, but the drug will leave an impact on the health of the individual and the nature of the game. It is unnatural.

The US needs to keep moving low skilled jobs overseas or importing people to do low-skilled work while investing in the skills of its workforce. That has to be done at the same time as reducing budget deficits etc. I think the US will do well in the future as long as deficits are reduced and there is human capital growth.

LoL. Are you working for or against Maasa ? "human capital growth"? Between you and me, can you tell me what exactly it means. Remember, what talking to me you have to use simple language. Words from marketing literature and MBA books fly straight over my head like a bouncer. Apart from that I think these days the Western ideas have to be given a second thought.

[shyam]

Hari used count on few true nationalists in massaland to take care of it. Guess what is happening to one of them...
Tim Geithner Opposes Nominating Elizabeth Warren To Lead New Consumer Agency

[Neshant]

Tim Geithner Opposes Nominating Elizabeth Warren To Lead New Consumer Agency

Dr. Elizabeth Warren is one of the few honest persons in the US govt. She's been speaking out against abuses by credit card companies and other wall street scammers trying to game the system and bail themselves out at taxpayer's expense.

This goon geithner is certainly on the payroll of various banks or will soon be after he leaves office. Hence he's doing their bidding as a $100 million/year job probably awaits him at some bank the day he's out of office.

This is the reason financing and banking BS 'industry' needs to be done away with. Its damaging to the real economy as more and more of these trojan horses are packed into govt positions by banks to do their bidding.

Now check out how Elizabeth Warren grills this rat :

http://www.youtube.com/watch?v=pz7ruJw6byQ

[Singha]

brazil has a trump card in being a huge agricultural exporter and has all of the amazonia to slash and burn to grow more bananas and pumpkins to
feed people around the world. purely on the strength of even that, for next few decades atleast, they will be accomodated in the big tent.

likewise Russia is a superpower in natural resources and rare minerals.

[shyam]

If natural resources make a nation powerful, we should have seen a super power Kingdom of Saudi Arabia long back. I don't really believe that Brazil has the stuff that is required to become a powerful nation. Latin America is uncle's backyard and Monroe doctrine ensures that.

[Muppalla]

European equity and credit markets are braced for a volatile day of trading after the International Monetary Fund (IMF) and the European Union dramatically withdrew a €20bn (£17bn) financing deal for Hungary over the weekend.


Euroland's authorities are inflicting a triple shock of fiscal, monetary, and currency tightening on a broken economy. They are doing so in a region where industrial output is still 14pc below its peak, where growth barely scraped above zero over the winter "recovery", and where youth unemployment is at 40pc in Spain, 35pc in Slovakia, 29pc in Italy, and 26pc in Ireland.

[abhischekcc]

Russia has a surplus of the two things that are likely to remain in shorrt supply in the decades to come - energy and food.

Couple that with its low population and high tech military and nukes - and you hav the perfect ingredients for a power that is a super power both in peace and war times. Unlike massa.

[derkonig]

Human resources are the ultimate guarantee of superpowerdom. <Deleted> (Replaced: Religious fevour) counts for zilch in terms of brainpower, hence KSA or other gelf nations are headed no where. Brazil & most of SAmer may have the right demographics, but their leftist idealogy, "revolutionary" spirit & blind hate of US will ensure that they stay behind. Russia is dying out. Sekoolaar EU will sooner or later become eurabia. Only India, China & US can sustain this crisis.