Perspectives on the global economic meltdown- (Nov 28 2010)

Neshant · Post by **Neshant** » 10 Feb 2012 08:06

You don't think markets are manipulated? See it here with your eyes.

Note things literally get crazy after August 5th, 2011.

Good old stock market rigging by the Federal Reserve.

http://news.yahoo.com/mf-global-judge-e ... 47769.html

Singha · Post by **Singha** » 10 Feb 2012 08:43

looks like iran is going to be starved and economically crippled for a decade or more, before the hawks move in for the kill.

Satya_anveshi · Post by **Satya_anveshi** » 10 Feb 2012 09:20

what more is new singha ji? Didn't we see exactly the same with Iraq? Oil for Food program; medicines also get banned; complete isolation; it is just amazing how most countries would fall in line to the super duper hyper power even when their much needed energy needs can be met at cheaper prices. We are not left with an option to have a pure commercial transaction for the fear of bearing the stigma if Iran were to do something stupid.

But US can give aid to pakistan and support in every which way even when it launched 4 wars and perpetrated countless terrorist attacks in India.

Christopher Sidor · Post by **Christopher Sidor** » 10 Feb 2012 16:15

For one whole day, I believed that we are finally getting over the Greek drama. But it seems that this saga has more twist then Chandrakanta + Mahabharat + 1001 Arabian nights put together.

Greece Rebuffed on Aid Over Austerity Vote --- Bloomberg Dated 10-Feb-2011

Greece bailout: Eurozone ministers set tough conditions --- BBC Dated 10-Feb-2012

Why Greece won't go away --- BBC Dated 6-Feb-2012

It does appear that the vacillation demonstrated by the Greeks on the austerity measures had a lot of influence on the hardening European Stance

Greece Rebuffed on Aid Over Austerity Vote --- Bloomberg wrote: “In short: no disbursement without implementation,” Luxembourg Prime Minister Jean-Claude Juncker said in Brussels late yesterday (i.e. on 9-Feb-2012)
...
...
“We can’t live with this system while promises are repeated and repeated and repeated and implementation measures are sometimes too weak,” Juncker said.

Funny part is that even with so-called Greece's partial implementation of the austerity measures, it has an unemployment figure of close to 20%, its economy sank by 6% in the calendar year 2011 and its budget deficit is still about 10%.

And if Greece is not given money, then this is the scary scenario

Greece Rebuffed on Aid Over Austerity Vote --- Bloomberg wrote: Greece “must get this deal agreed really within the next few days to enable them sufficient time and have the new bailout money dispursed before that bond is due,” Tony Stringer, Fitch’s managing director of global sovereigns, said in an interview in Singapore. “If they don’t manage to achieve that, then it could be in the realm of a disorderly default.”

Think of CDS, think of what happened post-Lehman, when AIG failed to honour its obligations which actually led to the great financial freeze across the world.

So what exactly are the demands of Euro-Zone members

Greece bailout: Eurozone ministers set tough conditions --- BBC wrote: The Greek parliament must by Sunday ratify the 130m bailout package agreed by Greece and the "troika" of the European Commission, the European Central Bank and the IMF.

And in addition to the further 325m-euro spending cuts, Mr Juncker sought "strong political assurances from the leaders of the coalition parties on the implementation of the programme".

"These three elements," Mr Juncker said, "need to be in place before we can take decisions".

And if heaping insult on injury is not enough we even have this

Greece bailout: Eurozone ministers set tough conditions --- BBC wrote: While the official view is still that Greece must be saved, he says there is more and more talk on the margins that a Greek default would not be a disaster.

Greece Rebuffed on Aid Over Austerity Vote --- Bloomberg wrote: Fitch Ratings today reiterated its view that Greece will default even with the rescue package.

Continuing on Greek Default story

Why Greece won't go away --- BBC wrote: A debt default would also be catastrophic for the Greeks themselves. It would cut off their one source of cash - rescue loans from the EU and IMF to the Greek government, and from the ECB to the Greek banks. Without these, the government would be unable to pay for basic functions of the state.
....
....
The four statistics that really matter:

since joining the euro in 2001, Greek unit labour costs (a measure of wage competitiveness) have risen 32% compared with Germany

Greece's current account deficit was running at 10% of GDP

Greek households and companies withdrew 28% of the deposits they held in Greek banks in the three years to November last year

Greece's economy shrank 5.5% last year, has shrunk a cumulative 12% since 2008, and is expected to shrink another 2.8% this year
The first tells us that Greek workers cannot compete inside the euro without big wage cuts (or big wage rises in Germany).
....
So Greek workers have priced themselves out of the market.
....
The second statistic is a symptom of that loss of competitiveness. It tells us that Greece is spending far more buying things from abroad than it earns from selling things to the rest of the world.
....
The debt deal may help cut that figure down a bit - perhaps by about two percentage points.
....
In the meantime, the Greek economy as a whole must continue to fund its 10% overspend by attracting an equivalent amount in financial investments - mainly in the form of lending - from the rest of the world.
....
International lenders are not simply worried that the Greek government cannot repay its debts. They are worried that Greece will leave the euro. If that happens, then all Greeks - not just the government - will either default on their debts, or - if it is legally feasible - will convert their debts into new drachmas that are likely to lose over half their value against the euro.
....
Our third statistic makes clear that Greece has seen a slow run on its banks, as companies - and increasingly ordinary Greeks - take their money out in cash, or move it to the safety of a bank account in Germany. So the problem is not just that money has stopped flowing into Greece. Now money is actually flowing out of the country.
....
The final statistic. Greece is in a deep economic slump. The banks aren't lending. Companies aren't investing.
....
Either the pain of spending cuts - by all Greeks, not just the government - continues for years into the future. Or else Greece takes the nuclear option and leaves the euro - the quickest and surest way of regaining competitiveness and eliminating its current account deficit - but also an extremely painful one. Which brings us to one final statistic.

An opinion poll conducted in November found that over three-quarters of Greek voters still support membership of the eurozone.

One of those statistics will have to give.

Suraj · Post by **Suraj** » 10 Feb 2012 22:50

Any coercive austerity measures upon Greece will only kick the can down the road. The simple fact is the Germans and French will have to eat their losses. They can either agree upon a way to do it in a roundabout 'default that's not a default' way, or have Greece default messily, trigger CDSs and have a 2008 redux moment.

Theo_Fidel · Post by **Theo_Fidel** » 10 Feb 2012 23:20

Even if the French and German investor forgive 100% of Greek loans it is only a matter of time before they are back with a begging bowl. You can not run a 10% structural deficit without domestic financing for too long. India, Japan and Italy run large deficits but fund most/all of it internally.

I think the French and Germans understand this. They know the debt is a complete loss but Greece needs to change its lifestyle first. The Greeks know debt write off is coming and are trying to minimize the loss to their cushy lifestyle. Hence the impasse.

Suraj · Post by **Suraj** » 10 Feb 2012 23:30

Today's been an interesting day in the market. In the expectation of a day like this I tightened my trailing stops after riding up the buys I made in late December, and a bunch of my 1-2% trailing stops hit and filled for 7-22% net gains from those buys, while my VIX calls and protective puts are up. I think I'll wait a bit before wading back in.

VikramS: any thoughts/suggestions/ideas ?

VikramS · Post by **VikramS** » 11 Feb 2012 00:18

Very well executed Suraj.

The market is pricing in massive liquidity pumping and it is getting it.

We could very well continue to rocket up and take out the 2007 highs. There is supposedly a lot of under-invested portfolios and they can be suckered in with "good jobs data", a "solution to the Europe" etc. etc.

OTOH the underlying economy is shaky. I think the big wildcard is going to be China. Panda can not continue the same spending binge they had over the past three years, and the markets may not be pricing it.

Suraj · Post by **Suraj** » 11 Feb 2012 00:51

Thanks. Why do you feel the underlying economy is shaky, speaking solely of US ? I agree the S&P500 is primed for a good full year gain, but finding nice entry points are crucial. I don't think the Europe situation will be catastrophic, but there will be some market shocks, perhaps as early as next week when the deal to avert a March 20 default is supposed to be done.

Also, is there a short squeeze going on ? VXX is up 8.5% today, and my then cheap Feb 12 calls are up quite a bit. Everyone suddenly bidding up volatility insurance ? I thought of selling them today, but it seems with all the bidding up, there's more room to run before expiry. As much as I like the gains, it looks like there's a significant correction coming up. All those portfolios need a good entry point...

ramana · Post by **ramana** » 11 Feb 2012 04:32

X-post...

Jhujar wrote:
Economic balance shifts over Middle East
http://www.moneycontrol.com/news/featur ... 65210.html

Looking at the world economy from the Middle East, one can see economic power shifting from west to east. This is not the first time in history that we see a shift in global economic power, but we have to go back centuries to find something similar. Five hundred years ago, Asia dominated the world. China and India together represented about 50% of world gross domestic product. Western Europe and North America accounted for only 20%. But the industrial revolution changed the balance of power.By 1950, western Europe and North America accounted for 50% of the world's production. China and India combined had fallen to as low as 8%, and Japan was about to take over their role of the Asian economic power. By 1980, the world was dominated by the advanced economies.

But then a transformation started. Population growth had declined in rich economies but remained large in emerging markets. China and India saw their GDP per capita levels grow at very high rates, pushing them closer and closer to the advanced economies. Today, China is the second-largest economy in the world and together with India they already account for 20% of the world's GDP. In a few decades - and if recent trends continue - they will regain the status they had back in the year 1500 and account for half of the world's production. And they will do so at the expense of the economic powers that have dominated the world since the industrial revolution: Europe, the US and Japan.Danny Quah, a professor at the London School of Economics, has calculated the economic centre of gravity of the world by using GDP as a measure of the mass or weight of a country and thinking of a world map as a physical object.In his calculations, the centre of gravity in 1980 was in the Atlantic Ocean. Today the centre of gravity is over the Middle East. But four decades from now, it will be on the border of India and China. From the perspective of countries in the Middle East, it is natural to shift focus from declining advanced economies toward Asia. But how sure are we that this trend will continue over the coming decades? What are the risks? As much as this recent trend is solid - and there are many reasons to believe that it will continue in the decades ahead - there are also reasons to be cautious.This is not the first time in history that we see emerging markets doing well for a good number of years before a serious crisis stops their development.This change involves a substantial transformation of the political and societal institutions of these countries. This second step is harder, and we have seen economies in the past stagnating when they reach this level. A good example is the former Soviet Union, which managed to perform well until it reached a level of development that required that second step of institutional change. At that point, the economy stagnated, and was followed by a collapse of its institutions and even the country as a political entity. Will China and India be able to engineer a smooth transition towards a different set of institutions? Time will tell, but if history is an indicator of what to expect, one should at a minimum be cautious and
( Indian National Insitutions like security, Judiciary,Law Enforcement,Election are constantly undemined by Political class/ present dispensation)

My conclusion is how quick the recovery was for Asia. Starting from 1980 to 2050 i.e. 80 years to return to earlier domination.

The West took from 1500 to 1950 to get to 50% of world GDP and they say its due to the Industrial Revolution.

I suggest it was due to military domination also.

Singha · Post by **Singha** » 11 Feb 2012 07:45

military domination, wiping out any competing economic power, rapacious and hassle free access to boundless natural resources of S.america, africa and asia were also major factors. spain for example would have been a basket case had it not been for the tin , silver and gold they stole on a industrial scale from its colonies. they never really had the industrial revolution of northern europe or italy. n.america was also targeted for exploitation but being white settlers at same level of technology, they could eventually fight back, go feral and setup their own shop.

only a few odd cases like brazil and thailand escaped the noose relatively lightly. india and china being productive economies and resource rich were brutally exploited.

Christopher Sidor · Post by **Christopher Sidor** » 11 Feb 2012 21:53

I just finished watching a BBC Documentary about Egyptian revolution. Some things stand out.

One of the Muslim participants of the revolution, a non-Islamic/Muslim Brotherhood/Salafist said that, once this is over we can go back to normal, we can get jobs and get back to our lives.
The mother of this participant, when she went to locate him in the Tahir Square said, "I dont know what they were doing sitting like that on the streets like beggars, Iranians. I have heard that Iranians are not like normal people. This is not Iran."
In the square the same participant said, "We cannot have different opinions over here. We need to have one aim."

When one looks back at the 2008 financial crisis, one sees that its aftereffects are felt all over the world. If we trace back the genesis of the Arab spring, one would find it leading right back to the post-Lehman world. This is eerily similar to what happened approximately 20 years ago. In 1989 there was another massive downturn again centered in the banking universe. Further the 1989 recession was the worst till that time, even beating the 1970s oil shock and perhaps exceeded only by the Great Depression or the panic of 1890s. In 1989 also great geopolitical incidents happened. Soviet Union Ceased to exist. The Tienanmen incident and the ensuring massacre.

But that is what has happened in the past. It is the future that we are going to live in and not history. And if we look at what that woman said, it appears that we can forget India-Pakistan or Hindu - Muslim or China- USA tensions. The next great tension is building right across our neighborhood. It is the clash of the Shia-Sunni interleaved by the Iranian/Persia - Arab conflict. I read a book in the 1990s which made a claim, "Iran and Iraq over a period of 1980s spend a amount exceeding 100 billion USD trying not to destroy Israel, nor west but each other." If in 1980 100 billion dollars could be expended on a futile exercise, which basically ended in a stale mate, imagine what will happen now.

Theo_Fidel · Post by **Theo_Fidel** » 11 Feb 2012 22:41

It is hard to remember that India used to be very similar to these war torn places. Wars and civil wars and conflicts that would not end raged endlessly.

The last 60 years of peace a quiet are very unusual and have allowed India to flourish finally. We are the only zone of peace and quiet between Morocco and Japan. It is useful to remember why.

ramana · Post by **ramana** » 11 Feb 2012 23:53

Singha wrote:military domination, wiping out any competing economic power, rapacious and hassle free access to boundless natural resources of S.america, africa and asia were also major factors. spain for example would have been a basket case had it not been for the tin , silver and gold they stole on a industrial scale from its colonies. they never really had the industrial revolution of northern europe or italy. n.america was also targeted for exploitation but being white settlers at same level of technology, they could eventually fight back, go feral and setup their own shop.

only a few odd cases like brazil and thailand escaped the noose relatively lightly. india and china being productive economies and resource rich were brutally exploited.

Post World WarII, Atlantic Charter outlawed aggression as means of acquiring wealth for the West thought that trading system was under their sway and they could be top dog for a long time to come. Three of the five major UN branches were for trade control.

Neshant · Post by **Neshant** » 11 Feb 2012 23:55

CDS are a proven racket. They are declared null and void as we saw in the recent Greek debt defaults when it suits the interests of the banks issuing the CDS. However when banks are holding these CDS, then they bamboozle governments into paying for it in the form of bailouts to the companies\countries they need to collect from.

The moral of the story is if you are holding CDS, you are holding worthless paper where the rules can be changed to redefine what default means.

All paper promises including paper money inevitably invite theft and dishonesty. A lot banking & financing and other bogus industries milking the real economy spring up to profit from this theft of paper shuffling.

ramana · Post by **ramana** » 12 Feb 2012 03:10

Rick Santorum the Republican candidate for party nomination wrote in his book that women in workforce is a result of feminism and but for that the US wouldnt have the jobs problem.
Next it will be immigrants.

akashganga · Post by **akashganga** » 12 Feb 2012 04:04

ramana wrote:Rick Santorum the Republican candidate for party nomination wrote in his book that women in workforce is a result of feminism and but for that the US wouldnt have the jobs problem.
Next it will be immigrants.

Rick Santorum is a right wing nut case. If he becomes president then neo conservatives will take over and Bush's disasterous policies will return. US will definitely attack Iran. I am hoping and praying Obama gets second term.

Neshant · Post by **Neshant** » 12 Feb 2012 10:41

The irony is that ever since the rise of feminism, the divorce rate has skyrocketed, the birth rate has declined and men resisted marriage due to the financial & legal ramifications. Can't really blame all of it on feminism. It has more to do with economics.

In real terms, despite all the progress & innovation AND the addition of a 2nd income (wife) to the house hold, purchasing power has stayed flat since the 70s. Now with things sliding downhill, standards of living will begin to fall sharply. Its like running faster yet falling further behind.

But why is this so?

Trace the problem to its roots and you will find it is due to central banking which is a mechanism for siphoning off huge amounts of money to people shuffling paper at the top and the growth/bloat of government. Its no co-incidence that as the "financial services industry" has expanded, the real economy has contracted especially post 2000s.

Unless the hugely parasitical banking & financial "industry" is jettissoned and folks plying their trade in this useless industry put to real work instead of ripping off others and offloading their losses on society, things will only get worse. The road to reform is introducing a non-fiat based monetary system and reducing the size of govt. Govt today has turned into a means for enforcing wealth confiscation from the productive by the banking & financing industry.

abhishek_sharma · Post by **abhishek_sharma** » 12 Feb 2012 21:11

Special report: The twilight of the Bond King PIMCO

Theo_Fidel · Post by **Theo_Fidel** » 12 Feb 2012 22:46

Greece is now suffering a 25% poverty rate. People are rooting through garbage and the children are being abandoned on the streets. Much more GDP contraction is required to match up lifestyle with Income. At least another 30% cut in Income is necessary. Greece will become a 3rd world country within Europe.

ArmenT · Post by **ArmenT** » 13 Feb 2012 05:38

Greek MPs pass austerity plan amid violent protests

Greece's parliament has passed a controversial package of austerity measures, demanded by the eurozone and IMF in return for a 130bn-euro ($170bn; £110bn) bailout to avoid default.

Coalition parties expelled over 40 deputies for failing to back the bill.

The vote came amid some of the worst violence seen in Greece in years.

Protesters outside parliament threw stones and petrol bombs, and police fired tear gas. Several people were injured and buildings were set on fire.

SwamyG · Post by **SwamyG** » 13 Feb 2012 07:19

http://synonblog.dailymail.co.uk/2012/0 ... break.html

Germany is being accused of playing nasty politics - try to humiliate Greek politicians and people, so that they cry foul and leave the eurozone.

Theo_Fidel · Post by **Theo_Fidel** » 13 Feb 2012 08:02

Greece does not earn enough to belong in Euro zone or have that sort of lifestyle. They fooled themselves for a few years living beyond their means, now bills are due and Greeks don't have money to pay.

Singha · Post by **Singha** » 13 Feb 2012 08:31

In real terms, despite all the progress & innovation AND the addition of a 2nd income (wife) to the house hold, purchasing power has stayed flat since the 70s. Now with things sliding downhill, standards of living will begin to fall sharply. Its like running faster yet falling further behind.

you hit the nail on head. no growth in real income and a rising tide of higher education, healthcare and consumerism (must have gadgets, bigger homes, bigger everything, annual vacations) have meant women *had* to enter the workforce regardless of their views on feminism. childcare is also not cheap so a good part of 2nd income is tied down into such non negotiable charges like mortages and childcare. meantime home prices kept on rising to keep the gorilla trap shut.

SwamyG · Post by **SwamyG** » 13 Feb 2012 09:29

On Greece, this old post from Washington Post though appearing to be apologistic for the behavior of Greece, paints a good narrative of how Euorpe, precisely Germany viewed the modern Greece: http://www.washingtonpost.com/opinions/ ... story.html. It pins the problem on German and European dreamers in trying to create a Modern Greece based on the Ancient Greece - a severe case of unrealism.

ramana · Post by **ramana** » 13 Feb 2012 10:06

Just did the taxes. SHQ says I quit. no point of paying so much taxes. Lets be normal like Khans.

shyam · Post by **shyam** » 13 Feb 2012 10:49

So, the way they passed austerity vote in Greece is by rigging democracy. Kickout those who oppose the bill.

http://www.businessinsider.com/greek-po ... ers-2012-2

Theo_Fidel · Post by **Theo_Fidel** » 13 Feb 2012 11:15

Ramana... or have Seven kids like Santorum and propose to triple child tax credit... ..Socialist Religious state Conservatives every last one... NYTimes has a wonderful write up about the states that depend the most on Federal help are the most denigrating of government and most faithfully Rebublican. Almost like a death wish. There are a couple of counties near me that get 40% of their income from the government but show up at all the small government tea parties.

I'm struggling through mine and the amount I have to pay is not funny... That said when I compare GOI to GOTUS I'd gladly pay double what I'm paying for the level of service you get in US.

akashganga · Post by **akashganga** » 13 Feb 2012 19:58

Theo_Fidel. Good point. Conservatives are masters of milking the system. Neo conservatives (VP?) under bush milked through their front end Holliburton billions and billions of taxpayer money. Romney for all the tens of millions he made paid only 13% tax. Ultra catholics like Santorum produce so many children, get handouts, etc. Only liberals/progressives are responsible and use their brains to come up with common sense solutions.

Theo_Fidel wrote:Ramana... or have Seven kids like Santorum and propose to triple child tax credit... ..Socialist Religious state Conservatives every last one... NYTimes has a wonderful write up about the states that depend the most on Federal help are the most denigrating of government and most faithfully Rebublican. Almost like a death wish. There are a couple of counties near me that get 40% of their income from the government but show up at all the small government tea parties.

I'm struggling through mine and the amount I have to pay is not funny... That said when I compare GOI to GOTUS I'd gladly pay double what I'm paying for the level of service you get in US.

gakakkad · Post by **gakakkad** » 13 Feb 2012 20:29

plenty of docs are retiring early . Its cheaper that way .

http://money.cnn.com/2012/01/05/smallbu ... iid=HP_MPM

ramana · Post by **ramana** » 13 Feb 2012 23:54

Yeah my doc is planning to quit after his daughter graduates from college.
He says its no fun anymore. Just filling forms to get paid measly sums.

yogi · Post by **yogi** » 14 Feb 2012 11:53

India's Love Affair with Gold - CBS 60 mins piece. Very interesting!

Neshant · Post by **Neshant** » 14 Feb 2012 11:57

I'm rooting for Ron Paul, the only guy who refuses to be bought & sold. The rest of the rift raff from Obama to Obama clones like Romney are financed by banking interests eager to offload more of their gambling losses onto the backs of suckers (taxpayers).

He's the only guy who wants to shut down the Federal Reserve theft oligarchy which none of those other stooges dare even mention.

Love his answers. The guy interviewing him is trying to put words in RP's mouth but he's too smart for it.

Professor admits media censors Ron Paul because he highlights the THEFT of the Federal Reserve

akashganga · Post by **akashganga** » 14 Feb 2012 19:29

yogi wrote:India's Love Affair with Gold - CBS 60 mins piece. Very interesting!

That is a cool video. The gold obsession is essentially a Hindu religious/cultural thing. That is a good thing. In a world with unlimited printed fiat paper money gold is the only hedge against hyperinflation. One day in future fiat money will disappear but gold will be there as long as earth is alive. Those in India holding gold in whatever form will be protected.

Prem · Post by **Prem** » 15 Feb 2012 01:40

http://www.businessinsider.com/5-lesson ... ics-2012-2
5 Lessons From The Rise Of The BRICs

China, India, and Brazil are among the most dynamic and exciting emerging powers in the world. Indeed, to call them "emerging" feels like a slight. India is the world's largest county, China the world's largest manufacturer, and Brazil the Western Hemisphere's most vibrant expanding consumer economy. (Russia, the runt of the group, is beset by awful demographics and a weak private sector outside of its natural resources

1) THE RISE OF THE MIDDLE CLASS
By 2050, half of the global middle class as defined by OECD will live in those two countries. But there are still considerable risks. Food inflation in India and a precarious housing market in China threaten to destabilize both country's fantastic ascents.
TRADE IS EVERYTHING
Rising neighbors in Asia, Africa, and Latin America may seek to engage with the global markets but, rather than opening everything overnight and letting Westerners conquer their entire economies, protect and grow domestic firms that can compete internationally and will funnel money back into development. But the West can learn as well. As free markets -- especially financial markets -- fail and fluctuate, free marketeers in Washington and London and elsewhere may want to ask if a bit more state intervention and regulation is worth considering
STATE CAPITALISM WORKS
Only one of the four BRIC economies could be considered free: India. The other three are deeply capitalist, sure -- finding success on international markets has been a big part of their rise -- but their version of capitalism includes the strong guidance of the government. State capitalism means state-owned firms like the massive China National Petroleum Corporation or Gazprom, but it also means heavy regulation, frequent intervention, and sometimes a degree of state control over markets and firms that doesn't look so capitalist. But this a statist means to a capitalist ends, designed to maximize long-term growth and encourage development. It doesn't always work out that way, but their success is hard to ignore, especially as the great free market stalwarts -- the U.S., Europe, Japan -- fall on increasingly hard times. But the West can learn as well. As free markets -- especially financial markets -- fail and fluctuate, free marketeers in Washington and London and elsewhere may want to ask if a bit more state intervention and regulation is worth considering
CORRUPTION IS THE KILLER
Free-market India is not immune from corruption's terrible effects, either. As investment money rushes in, politicians who feel little-constrained by the country's weak oversight and legal system are cashing in. In 2008, Indian government officials were bribed to sell cellphone bandwidth rights for far below market rates, effectively robbing the state of the $40 billion dollars by which it under-sold to telecom companies. A national protest movement, led in part by activist Anna Hazare, is channeling the country's collective outrage at corruption. But the movement has so far achieved little.

STRONG ECONOMIES NEED STRONG STATES AND STRONGER SOCIETIES
state capitalism is the BRICs' greatest strength, and corruption their greatest weakness, then the lesson may be that healthy government-led economies require healthy governments. That means a state that will manage the economy responsibly and selflessly, something that's not so easy when the only powerful institutions in a country are the state and the industries it must manage. At some point, the relation gets a little too cozy, and the intended beneficiaries -- the actual population of the country -- get forgotten. The best way to keep that from happening, or at least the best way that anyone has come up with so far, is for civil society to become a player in it's own right, strong enough to assert its interests and to pressure both the state and industry to behave responsibly. Civil society is very weak in China and Russia, it is large but struggling in India, and it is relatively successful in Brazil. This may help explain why, of the four BRICs, Brazil seems to enjoy the greatest stability. Compared to China's looming threats from inflation or a transition trap, Russia's demographic crisis, and India's rampant corruption, Brazil is downright boring. Its economy is lightly but competently managed, the hyperinflation crisis of the 1980s is behind it, and both the state and market seem to work in some kind of benign concert. The country has the greatest political rights and civil liberties of the four BRICs, according to the latest rankings from Freedom House, and its civil society actively participate in politics (unlike in India, where citizens vote but often have few other outlets, such as unions, for participation). It's not a cure-all to solve the problems of a developing economy, but a strong and free civil society seems like a good way to at least deter them from getting too bad.

ArmenT · Post by **ArmenT** » 18 Feb 2012 12:08

Record $6 Trillion of Fake U.S. Bonds Seized in Mafia Probe

Feb. 17 (Bloomberg) -- Italian anti-mafia prosecutors said they seized a record $6 trillion of allegedly fake U.S. Treasury bonds, an amount that's almost half of the U.S.'s public debt.

Neshant · Post by **Neshant** » 18 Feb 2012 12:17

I wonder if it is a cover story for the 134 billion of US govt bonds confiscated from Japanese smugglers going from Italy to Switzerland supposedly to offload those bonds. What's strange is those two Japanese turned out to be affiliated with the Ministry of Finance in Japan!

Something fishy is going on with this bond smuggling and alleged unloading.

Nobody counterfeits a 500 billion dollar bond as its not something you can walk into a bank and have encashed or stop by a grocery store and ask for 499 billion in change.

I'm getting increasingly worried about a sudden collapse and dissolution/devaluation of currencies - which usually happens in the blink of an eye judging by history. There's a whole lot of worthless paper floating around out there.

Christopher Sidor · Post by **Christopher Sidor** » 18 Feb 2012 22:37

Just recently some 40 odd buildings were burnt by angry Greek protesters. There are two things riding the current rescue, one apparent and the other not-so-apparent. The apparent one is reduction of Greek's debt. The not-so-apparent one is the improvement in Greece economic condition.
So what happens when Greek fulfills its end of the bargain for the 130 billion EURO rescue but its economy goes for a toss?

krisna · Post by **krisna** » 19 Feb 2012 00:06

gakakkad wrote:plenty of docs are retiring early . Its cheaper that way .

http://money.cnn.com/2012/01/05/smallbu ... iid=HP_MPM

Nowadays many big health organisations are consoildating their hold over the market. They take over the independent practices and employ the docs and staff.
Considering the present state big HMOs are suited to this compared to small independent practices.
There has been a steady decrease in independent practices over the last decade in this respect.

docs are forced to come out of retirement rather than retire due to economic downturn. at least for docs there is no set retirement age.

abhischekcc · Post by **abhischekcc** » 19 Feb 2012 01:44

If the Greece state leaves the citizens out in the fields on a cold winter night, they will find that the citizens will picket their own houses. IOW, Europe is staring down either an economic collapse or a civil war.

Long term, civil war would be better for the west, as the current system consists of evil people who live off the fat of other people. As long as they are not removed, they will continue to leach off the system.