Global Economy

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malushahi
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Re: GLOBAL ECONOMY

Post by malushahi »

Acharya wrote:Check the WB number

http://en.wikipedia.org/wiki/List_of_co ... _(nominal)
4 China (PRC) 3,280,224

http://en.wikipedia.org/wiki/List_of_co ... _GDP_(PPP)

2 People's Republic of China 6,991,0361
I had given the latest projections for 2008 GDP based on IMF's 10/2008 outlook; Wiki has 2007 numbers. I do agree however that the 2008 numbers are dependent on how Q4 pans out.

Be that as it may, I guess I was trying to argue for ramana's viewpoint that the chin-chin-chu stimulus constitutes a significant portion of their GDP (regardless of whether you use the nominal or PPP; the 2007 numbers or the 2008 ones).

Again, it means that the 5kms long airstrips atop the world and the Lhasa-Kasgar rail connection will not be witnessing the same great leap forward.
svinayak
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Re: GLOBAL ECONOMY

Post by svinayak »

It is not just Q4 but the entire year has been a lower number. THe number for 2008 will by short by 50% or more from the projected
malushahi
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Re: GLOBAL ECONOMY

Post by malushahi »

Acharya wrote:It is not just Q4 but the entire year has been a lower number. THe number for 2008 will by short by 50% or more from the projected
Don't quite agree with that one. Sure NX has been down for the first 3 quarters (textiles, plastic and milk scare etc.), but then it is a small portion of the total Y. My belief that Q4 numbers maybe significantly lower is because there has been a flight to quality in FDI and that may hit their Y.
ramana
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Re: GLOBAL ECONOMY

Post by ramana »

OK Bloomberg says its a fifth of the GDP!

China's Bazooka Beats Henry Paulson's Peashooter: William Pesek

China's Bazooka Beats Henry Paulson's Peashooter: William Pesek

Commentary by William Pesek

Nov. 12 (Bloomberg) -- South Korea may owe China a debt of gratitude.

Officials in Beijing managed to do what their counterparts in Seoul couldn't: create a bit of optimism about Korea's economy. They did so with a massive $586 billion stimulus package, a step that upstaged Henry Paulson's $700 billion rescue plan in Asian capitals.

So much for the U.S. Treasury secretary's bazooka. That was the financial weapon Paulson threatened to aim at the U.S. credit crisis in July. Three months on, the Dow Jones Industrial Average is still sliding, U.S. consumers are worried and world leaders are biting their nails.

China's bazooka is proving to pack more firepower among economists. Yet will spending a fifth of gross domestic product to prop up growth work? Not necessarily. Asia should curb its enthusiasm about China's ability to shield the nation's 1.3 billion people from a global slump.

There's a chance some investors are already pricing in that risk. After rallying early this week, stocks slid yesterday on concerns about a worsening global outlook. News that Australian business confidence fell to the lowest level on record was a reminder of obstacles facing the Asia-Pacific region.

It's far from clear that China has the domestic wherewithal to keep growth as close to 10 percent as Communist Party bigwigs would like. Economists generally see 10 percent as what's needed to produce enough jobs to keep living standards rising and to maintain social stability.

External Influences

No one doubts China's financial resources. It has about $2 trillion of currency reserves to lavish on low-rent housing and roads, railways and airports, and tax deductions for purchases of fixed assets such as machinery. It has banks, even the publicly traded ones, at its disposal to plug any economic holes that suddenly appear.

Yet the external picture matters more. China relies heavily on exports to produce growth. Anyone who doubts that need only look at how quickly the government's focus has gone from inflation to deflation.

Data released yesterday show why. China reported the slowest export growth in four months in October, while inflation cooled to the slowest pace in 17 months.

``As the contribution of trade to China's growth dissipates, we expect further measures to be introduced aimed at stimulating consumption and investment in the domestic economy,'' says Jing Ulrich, chairwoman of China equities at JPMorgan Chase & Co. in Hong Kong.

Collision Course

The trouble is, such plans must be financed. That could prompt China to sell hundreds of billions of dollars of U.S. Treasury and agency securities, or at least slow its purchases. The result would be sharply higher U.S. rates.

``China's need for money will collide with the ramp-up of U.S. borrowing, expected to be between $1.5 trillion and $2 trillion because of the massive U.S. budget deficit,'' Tony Crescenzi, chief bond strategist at Miller Tabak & Co. in New York, wrote in a note to clients.

It raises questions about whether the U.S. can really borrow its way out of this crisis, John Maynard Keynes-style. The same goes for monetary policy as the Federal Reserve joins Japan in cutting rates toward zero. Will investors stand for the U.S. passing along massive liabilities to future generations and the dollar's value dwindling?

Steady Yuan

Commodity prices are another wrinkle. By stabilizing world prices, China's stimulus plans will benefit commodity producers more than buyers. Global inflation helped precipitate the U.S.'s financial woes, and drops in the prices of oil, food and other key commodities are a plus for American households. China's pump priming may work at cross purposes with the U.S.

Also, without big upward revaluations in China's currency, stimulus efforts remain more a domestic affair than a global one. If the yuan holds near current levels, it's not clear how Asia, Europe or the U.S. will benefit. That's especially so with spending focused on infrastructure. While some multinational companies may profit from China's largess, the U.S. job market probably won't.

There are other reasons to doubt China's economic omnipotence. China's lack of a thriving secondary debt market to multiply the central bank's efforts is a problem in the best of times. It's an even bigger impediment with global credit markets effectively frozen. Rate cuts by the People's Bank of China may lack the oomph the economy needs.

Bigger Bazooka

The emphasis on boosting growth with new roads, bridges and dams is questionable, too. Such projects didn't enliven growth as much as advertised in the 30 years since China's economic- modernization process began. What propelled growth to recent heights was trade, particularly China's succession into the World Trade Organization in 2001.

That's not to say China's efforts won't be a hit at this weekend's meeting of the Group of 20 nations in Washington.

``China showed the G-20 with this package that it is a big player in the world economy, capable of contributing to global economic stability,'' Carl Weinberg, chief economist at High Frequency Economics in Valhalla, New York, said in a report.

Contributing to the global economy in its time of need is one thing. Saving it is quite another. Just like the outgunned Paulson, China may need to find a bigger bazooka.

(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
However PRC economy is based on exports to US markets and with stores closing left and right there will be trouble. Looks like PRC negelected to develop domestic markets for own goods. Looks like not just a pumped up economy but a bubble gum economy.

Suraj you need to take a third look at all those Rand and GS reports forecasts.
svinayak
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Re: GLOBAL ECONOMY

Post by svinayak »

SwamyG - some of the answers to your questions

http://www.google.com/archivesearch?q=i ... nav=hist10


1600
1600 - It was the imposition of a prohibitive charge for pepper, made by the Dutch, that led to the formation, in 1600, of the " Old or" London " East India Company, and it was the absurd demands of the Hon'ble East India Company and of England, in connection with the ...It was the imposition of a prohibitive charge for pepper, made by the Dutch, that led to the formation, in 1600, of the " Old or" London " East India Company, and it was the absurd demands of the Hon'ble East India Company and of England, in connection with the American supply of tea, that originated the War of Independence (l77S-?S AD) It was the difficulties of trade with China that ultimately suggested to the East India Company the desirability of ascertaining whether ... more Read more less In brief
From A Dictionary of the Economic Products of India - Related web pages
books.google.com/books?id=jvsYAAAAYAAJ&pg=RA1-PA216

1609
Sep 1609 - It was in September, 1609, that Henry Hudson, despatched from Holland by the Dutch East India Company to search for a northwest route to India and China, came sailing up the river which now bears his name, thinking surely that the long looked for ' passage ' was ...It was in September, 1609, that Henry Hudson, despatched from Holland by the Dutch East India Company to search for a northwest route to India and China, came sailing up the river which now bears his name, thinking surely that the long looked for ' passage ' was found at last. But arriving in the vicinity of where Hudson now stands ... more Read more less In brief
From Ocean to Ocean Or, Weekly Excursions to California... - Related web pages
books.google.com/books?id=Q_EMAAAAIAAJ&pg=PA23

1621
Jun 3, 1621 - On June 3, 1621, a twenty-four-year charter was awarded to the Dutch West India Company, a corporation modeled on its great East India predecessor. These two Dutch companies were the world's largest corporations, possessing at least ten times the capital of ...On June 3, 1621, a twenty-four-year charter was awarded to the Dutch West India Company, a corporation modeled on its great East India predecessor. These two Dutch companies were the world's largest corporations, possessing at least ten times the capital of Britain's Virginia Company. The primary purpose of the new enterprise was to expand trade for the Netherlands throughout the vast area between West Africa and Newfoundland. The company decided that a permanent settlement in ... more Read more less In brief
From New York City - Related web pages
books.google.com/books?id=_A1GDIGAyTQC&pg=PA4

1664
1664 - The French East India Company was established in 1664, and the merchants of that country were forwarding their speculations in India, while the British people were even more clamorous than at present for a " free trade," and against the monopoly of the East India ...The French East India Company was established in 1664, and the merchants of that country were forwarding their speculations in India, while the British people were even more clamorous than at present for a " free trade," and against the monopoly of the East India Companies ; there being at this time four distinct classes of merchants, all of whom were entitled to trade to India under certain conditions. However, this noisy and obstinate opposition at home for the maintenance of ... more Read more less In brief
From The Revenue and the Expenditure of the United... - Related web pages
books.google.com/books?id=L_hCAAAAIAAJ&pg=PA357

1757
Jun 23, 1757 - It was a battle that Britain invaded Bengal of India. On June 23, 1757, both sides started a decisive battle in Plassey, but Bengal troops were defeated. As a result of this battle, the British East Indian Company gained twenty-four tax precincts in Bengal ...On June 23, 1757, both sides started a decisive battle in Plassey, but Bengal troops were defeated. As a result of this battle, the British East Indian Company gained twenty-four tax precincts in Bengal and Britain controlled Bengal completely. The forces of other European countries were pushed out completely. Because Britain robbed Bengal of its lots of wealth and manpower, Britain defeated French easily in the tussle of India, and because Britain won the Plassey Battle ... more Read more less In brief
From 英语阅读文化背景词典 - Related web pages
books.google.com/books?id=HunryGsK53AC&pg=PA53

1765
May 1765 - Such were the circumstances under which Lord Clive sailed for the third and last time to India. In May, 1765, he reached Calcutta; and he found the whole machine of government even more fearfully disorganized than he had anticipated. Meer Jaffier, who had some ...Such were the circumstances under which Lord Clive sailed for the third and last time to India. In May, 1765, he reached Calcutta; and he found the whole machine of government even more fearfully disorganized than he had anticipated. Meer Jaffier, who had some time before lost his eldest son Meeran, had died while Clive was on his voyage out. The English functionaries at Calcutta had already received from home strict orders not to accept presents from the native princes. more Read more less In brief
From Critical, Historical, and Miscellaneous Essays - Related web pages
books.google.com/books?id=chg1AAAAMAAJ&pg=PA270

1773
May 1773 - In May, 1773, Parliament passed an act designed to save the East India Company from bankruptcy by changing the way that British tea was sold in the colonies. Under the Tea Act, certain duties paid on tea were to be returned directly to the company. Furthermore ...In May, 1773, Parliament passed an act designed to save the East India Company from bankruptcy by changing the way that British tea was sold in the colonies. Under the Tea Act, certain duties paid on tea were to be returned directly to the company. Furthermore, tea was to be sold only by designated agents, which enabled the East India Company to avoid colonial middlemen and undersell any competitors, even smugglers. The net result was cheaper tea for American consumers. The ... more Read more less In brief
From Revolutionary America, 1763-1815 - Related web pages
books.google.com/books?id=nyI9beOy1oEC&pg=PA40

1783
Dec 1, 1783 - Previously to the above deliverance, on December 1st, 1783, when Burke was Paymaster of the Forces, he had made a great speech on the measure to regulate the Government of India, known as Fox's East India Bill, but which was of course Burke's handiwork. In this ...Previously to the above deliverance, on December 1st, 1783, when Burke was Paymaster of the Forces, he had made a great speech on the measure to regulate the Government of India, known as Fox's East India Bill, but which was of course Burke's handiwork. In this oration he criticises the constitution of the East India Company, and denies its claim to defend its malpractices on the ground of the right conferred by its parliamentary charter. more Read more less In brief
From Edmund Burke, Apostle of Justice and Liberty - Related web pages
books.google.com/books?id=p1kDAAAAYAAJ&pg=PA99

1784
Aug 13, 1784 - Mr. Pitt, who was placed at the head of the new ministry, then brought in his India Bill, on 13th August, 1784. The principal Pitt's In- provisions were, (a) the appointment of dia Bill. a Board of Commissioners, composed of six members of the Privy Council ...Mr. Pitt, who was placed at the head of the new ministry, then brought in his India Bill, on 13th August, 1784. The principal Pitt's In- provisions were, (a) the appointment of dia Bill. a Board of Commissioners, composed of six members of the Privy Council, with power to control all acts, operations and concerns relating to the revenues and civil and military government of India; (6) that all letters sent to, and received from, India, be submitted to the Board, and all ... more Read more less In brief
From Outlines of Indian history - Related web pages
books.google.com/books?id=ZIwBAAAAQAAJ&pg=PA101

1793
1793 - When the East-India Company's charter was last renewed in 1793, those vast regions were given into the hands of the Board of Controul and the Directors of the East India Company ; and though other interests were attended to, those of religion were forgotten by ...When the East-India Company's charter was last renewed in 1793, those vast regions were given into the hands of the Board of Controul and the Directors of the East India Company ; and though other interests were attended to, those of religion were forgotten by the legislature ! and the few missionaries whose zeal has prompted them within these few years, unwarranted by law, and in spite of every discouragement, to labour in the East-Indian field, not being permitted to go out in ... more Read more less In brief
From The Christian observer [afterw.] The Christian... - Related web pages
books.google.com/books?id=fRsEAAAAQAAJ&pg=PA268
Nayak
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Re: GLOBAL ECONOMY

Post by Nayak »

When the cupboard is bare

http://timesofindia.indiatimes.com/Worl ... 701528.cms

12 Nov 2008, 0027 hrs IST, David Cay Johnston, NYT News Service
Print Email Discuss Share Save Comment Single page view Text:
Rebecca Muscarello had long worked as a secretary, so she never imagined that at age 35 she would be left with no choice but to take her two children to a food pantry to get groceries. But like a growing number of Americans whose jobs have evaporated in a shrinking economy, Muscarello ran out of money and then food.

Since the spring, the number of people showing up hungry at food pantries and soup kitchens has surged, straining the capacity of many organisations in the vast, largely unseen and lightly financed network of volunteer emergency feeding operations. Many are newcomers who were reluctant to seek help until they had no choice.

In the four months since June, demand for food aid has risen 20 per cent in areas of the country with the healthiest economies and more than 40 per cent in areas with the weakest, leaders of non-profit food-distribution organisations say. And they predict that the need will keep growing in 2009 if the job market continues to contract, as expected.

Requests are so high that some food centres are turning away the hungry. In Winston-Salem, the Second Harvest Food Bank of Northwest North Carolina posted a notice on its website advising food pantries and soup kitchens of an 8 to 10-week wait to find out whether their membership had been approved.

Kitty Schaller, who runs the Manna FoodBank in Asheville, NC, said that while demand was up, donations had fallen because of the local economy. “We are flat against last year on contributions,” she said. “The trouble is, expenses are going up and it is a very uncertain future in terms of our ability to have enough goods in the warehouse” to meet demand.

Her agency supplies food to more than 330 pantries, soup kitchens, shelters and other such operations in 16 counties, on a budget of just $2.5 million, half of which comes from individual and foundation gifts, with another 5 per cent from the local United Way.

Even when much of America is prospering, hunger is a significant problem, according to annual reports issued by the United States Department of Agriculture.

One American household in nine was “food insecure” (the government avoids the word “hungry”) for part of 2006, and more than a third of these households “had very low food security — meaning that the food intake of one or more adults was reduced and their eating patterns were disrupted at times during the year because the household lacked money and other resources for food,” according to a recent department report.

The federal study estimated that 35.5 million people — nearly as many as live in California — sometimes lack enough to eat and that 10.1 million adults and children, roughly the population of Michigan, often go hungry in America.

What makes the demand so striking this year is not only the suddenness but also the demographic that is seeking help. Most of the newcomers have been employed and have managed to survive dips in the job market. Many of them are couples and single parents who, like Ms. Muscarello, had managed without handouts.

“A lot of people coming to us have never been to a charitable distribution center before,” said Larry Sly, executive director of the Foodbank of Contra Costa and Solano, two counties east of San Francisco where about 1.6 million people live.

“We are getting people whose work is always up and down, and they have lived with that their whole lives because they work construction,” Mr. Sly said. “Construction here has just stopped, and so we have carpenters and masons and electricians who have not worked on a new house in forever. So it is not that they are out of work for some weeks and then they go back to work. There is nothing for them, and they cannot imagine when there will be work again.”

At the core of the problem is the lack of job growth. The number of Americans earning any wage grew by two million a year in the 1990s, but at only half that rate in the first seven years of this decade. In recent months the economy has been shedding jobs at a quickening pace, especially in construction and manufacturing.

At the same time, tax data show that 55 per cent of Americans have no interest-bearing savings accounts to draw on during hard times. Among the bottom half of taxpayers, who make less than $30,000, two-thirds have no interest income.

And every year another major problem further squeezes emergency feeding organizations, a movement that began in the mid-1970s as a temporary solution to hunger and then grew as wages in many industries stagnated and employment became less secure.

The food industry used to be a major source of supplies, donating truckloads of canned goods and other foods with long shelf lives. Then, two decades ago, every part of the food industry except cereal makers began embracing quality control. Improvements in quality control meant there was almost no chance that a ton of spaghetti sauce had a bit too much oregano or that thousands of labels were misprinted.

So the big donations of food that were once easy to come by have now become, like jobs, increasingly scarce, food bank directors say.

“We have been unable in the last several months to obtain the amounts of food on an ongoing basis that we usually did,” said Clyde Fitzgerald, executive director of the Second Harvest food bank in Winston-Salem .

“Our local sources, those major grocery chains, continue to come through wonderfully. But where we’re having difficulty is in the national network of feeding America because the calls we used to get from the national food companies saying ‘We have truckloads of excess product and how much do we send you?’ have stopped.”

Surplus production is often sold to overseas markets at a discount that brings food manufacturers more than the value of the tax deduction of a charitable donation, food bank managers across the country said in interviews.

And donations from grocers have fallen, said Jilly Stephens, executive director of City Harvest in New York, because of two factors. One is the rise of secondary grocers who buy canned and boxed goods whose “best if used by” dates have passed, food that used to be donated. The other is a growing practice of shipping such past-date foods overseas, she and others said.

Food banks are nonprofit wholesalers that gather and store foods, then distribute them to pantries, which act as free grocery stores, and to soup kitchens, which serve meals.

There are roughly a thousand pantries and soup kitchens in New York, said Ms. Stephens. City Harvest collects surplus food from restaurants and grocers and distributes it to nearly half of these volunteer feeding operations. It also operates a twice-monthly farmers’ market in the South Bronx, providing fresh produce at no charge, part of a small but growing trend among emergency food providers.

The Bush administration has also started shifting the federal government’s support of food banks toward more vegetables and fruits, and away from surplus agricultural commodities like nonfat dry milk, butter, peanut butter and lard.

But that does not address, and may even increase, the need for cash to fuel delivery trucks and pay for electricity to run coolers and refrigerate storage rooms, as well as to buy food to supplement what comes from businesses and government.

Each dollar of donated money, many food bank managers said, can be leveraged through barters, buying surplus products and otherwise arranging for $12 or more of food. City Harvest, for example, relies on 100 paid employees and 700 volunteers who gather surplus food and deliver it. “One of the big misconceptions is that we collect waste, which we do not,” Ms. Stephens said.

Ms. Muscarello’s woes began with Hurricane Katrina, which hit Chalmette, La., a tiny refinery town, even harder than New Orleans, a few miles to the west. Her marriage broke up, and she lost her secretarial job and then her job as a cook at a local diner, which closed, like so many other businesses in town.

“I want a job, and I just paid $800 for rent so I have to get a job,” Ms. Muscarello said. “And it’s not just me, it’s like 87 per cent of this community, because there are no jobs right now. People are losing jobs left and right because businesses are shutting down.”

She said that “food stamps get you just so far.” She relies on a food bank for canned goods and similar items, she said, and saves her food stamps for meat, vegetables and fruit.

Not only have jobs disappeared in her area, but so have agencies that offer help.

Natalie Jayroe, president of Second Harvest Food Bank of Greater New Orleans and Acadiana, said that after Hurricanes Katrina and Rita in 2005, the number of agencies that her organization supplied with food had dropped to 270 from 400, across 23 Louisiana parishes.

“There is nothing like being hit with your distribution chain being swept away to make you realize how crucial distribution networks are,” she said.

Over the decades, the way food is obtained and what is eaten has changed significantly. Many people who lived through the Depression, for example, recorded in diaries the way they grew food in their yards, storing cabbages and other vegetables in root cellars to provide vitamins in winter, and canning other foods, some of them gleaned from orchards and fields.

Today, far fewer Americans have experience making foods from scratch, and fewer still understand food preservation, which requires both skill and an investment in steam cookers, jars and lids, said Janet Poppendieck, a Hunter College sociologist who has studied emergency food needs.

“We have seen a major shift in the way people prepare foods and eat foods over the last one or two generations,” said Vanessa Ulmer, policy and advocacy coordinator of Tulane University’s Prevention Research Center, which seeks to reduce obesity by promoting access to fresh, healthy foods.

Her centre is one of many working to change cultural attitudes about food and to revive these skills. But that change could take a generation or longer, she said.
Neshant
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Re: GLOBAL ECONOMY

Post by Neshant »

US wanted to stall any attempts at transparency of its banks & financials which is why they expanded the meeting from G8 to G-20. It is hoped that all kinds of divergent views will emerge and the meeting will fail as a result. But the 2 main points of the meeting are :

EU, Japan - wants global body to oversee banks & financials but to keep the existing IMF which favors them.

India, Russia, China - want a new type of IMF which is more inclusive of them.

------------
Clash of expectations could undermine econ summit

http://biz.yahoo.com/ap/081111/meltdown_summit.html
svinayak
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Re: GLOBAL ECONOMY

Post by svinayak »


Bush administration still working on $700B rescue

Wednesday November 12, 12:43 am ET
By Martin Crutsinger, AP Economics Writer
http://biz.yahoo.com/ap/081112/financial_meltdown.html

Bush administration still struggling to get $700 billion rescue effort up and running

WASHINGTON (AP) -- At a time when most administrations are getting ready to turn out the lights, the Bush administration is still struggling to get the biggest government rescue in history up and running.

Treasury Secretary Henry Paulson, who is leading the effort, is facing a lot of criticism and second guessing at the moment over how well the $700 billion bailout program for the U.S. financial system is being handled. Paulson was scheduled to give an update on the effort on Wednesday.

More than 4 million American homeowners, or 9 percent of borrowers with a mortgage, were either behind on their payments or in foreclosure at the end of June, according to the most recent data from the Mortgage Bankers Association.

The new initiative announced Tuesday followed announcements from several major banks that they plan to do more.

Citigroup said late Monday it is halting foreclosures for borrowers who live in their own homes, have decent incomes and stand a good chance of making lowered mortgage payments.

Nirantar
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Re: GLOBAL ECONOMY

Post by Nirantar »

vina wrote:Cross posting....



China is going to face massive deflation. They have been investing in fixed assets like absolute maniacs. Half the capacity of world's steel, half consumption of coal, more copper consumed than some top 10 countries put together and next to nothing to show for it? That doesn't add up and shows that the economy is shot with inefficiencies. The costs of building all that capacity in steel, the one power plant a week..the massive aluminium smelter capacity (close to half the worlds?), half of the world shoe shops.. sorry. none of that is sustainable. Now you will have to pay back the accounting costs of building those assets or you will have to write them off. Now, with such massive over capacity and the dump to the rest of the world "aka" exports closed, the only way for such capacity to go is internally and that cant happen. Huge write offs is what will happen.

What was that someone sad about bad debt on Chinese banks being close to a trillion dollars ?.. Yeah, China can beat up those and with it's controlled press can hide those kind of data and facts and suppress information. But, the truth is the truth, it will come back and hurt. I think we are start of massive meltdown in China.. Remember, the Soviet union collapsed literally overnight. The superpower was bankrupt, without anyone really knowing it. That is how authoritarian states are. Maybe China is headed that way too. Who knows?
Vina, dont you think that the over-capacity in China will have negative impact for India or the markets targeted by India with much cheaper flooding of goods by China. This all actually may work for them in covering their production for the entire world.
abhischekcc
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Re: GLOBAL ECONOMY

Post by abhischekcc »

The above statements and articles make for scary reading - because I once believed that the world economy is so integrated that the chances of a full scale global trade war was zero.

But now I see that most economies are getting reasons to break out of the world system. Protectionist pressures could increase as people go hungry.

But fortunately India is doing something to protect its interests
India successfully test-fires submarine-launched ballistic missile from land

Now, if only we could restart testing :mrgreen:
shyamd
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Re: GLOBAL ECONOMY

Post by shyamd »

GM Judged Too Big to Fail as Pelosi Embraces Rescue (Update2)
Nov. 12 (Bloomberg) -- House Speaker Nancy Pelosi has thrown her support behind the premise that General Motors Corp., the largest U.S. automaker, is too big to be allowed to fail.

In urging Congress to enact emergency aid for the ailing auto industry, Pelosi rejected calls to let GM collapse and sided with the company and its allies in trying to prevent a ``devastating'' domino effect that would cost millions of jobs.

``Trying to reorganize the auto industry in bankruptcy would be as close to reorganizing the whole U.S. economy as you could get,'' said Alan Gover, a bankruptcy lawyer with White & Case LLP in New York. ``The vast supply chain involves thousands of businesses, millions of existing jobs and just as many retirees, as well as whole communities and states.''

Passage of an industry bailout plan may keep GM from running out of operating cash by year's end, which it says may happen without U.S. help. GM is the second-biggest provider of private health-care benefits and was the third-biggest advertiser in this year's first half.

``It's truly one of those companies that's too big to fail, and everybody understands that,'' said Nariman Behravesh, chief economist at IHS Global Insight Inc. in Lexington, Massachusetts. ``If it does collapse, it could make the recession deeper and longer.''

Recession Fallout

Behravesh said a GM bankruptcy could send the U.S. jobless rate as high as 9.5 percent, up from a 14-year high of 6.5 percent in October, and produce a recession comparable in length to that of 1980-82.

Ford Motor Co. and Chrysler LLC both likely would be forced into bankruptcy eventually if GM were to fail, Mark Oline, a Fitch Inc. credit analyst, said in an interview.

GM rose 14 percent to $3.32 at 8:37 a.m. before regular New York Stock Exchange composite trading. The shares tumbled 13 percent yesterday, extending a slide that has chopped their value almost in half in the past week.

GM, Ford and Chrysler want $50 billion in loans to boost liquidity and cover union retirees' medical costs, people familiar with the matter have said. That would be on top of $25 billion in low-interest borrowing Congress approved in September to help retool plants to build more-efficient vehicles.

The trio employs 240,000 people in the U.S., or about 70 percent of U.S. auto workers, according to the Automotive Trade Policy Council in Washington, the industry group for the U.S. companies. Health insurance for 2 million people is tied to auto workers' jobs.

Job Losses

Another 5 million jobs at dealerships, suppliers and service providers are supported by the automakers, the council estimated. The companies spent $156 billion on auto parts in the U.S. in 2007.

Job losses would total 2.5 million from an automaker failure in 2009, including 1.4 million people in industries not directly tied to manufacturing, according to a Nov. 4 study by the Center for Automotive Research in Ann Arbor, Michigan.

Those disruptions would cost $125.1 billion in lost personal income in the first year, and $275.7 billion over three years, the study concluded. The ``unimaginable consequence'' of a bankruptcy ``motivates us to really come up with cash in every way possible,'' GM Chief Executive Officer Rick Wagoner said in a Nov. 7 Bloomberg Television interview.

`Devastating Impact'

While Pelosi, a California Democrat, didn't cite GM by name in her statement yesterday, she said an automaker collapse would have a ``devastating impact on our economy, particularly on the men and women who work in that industry.''

She didn't specify the size or the rules for the aid package she is seeking for the industry, whose 2008 U.S. sales are headed toward a 17-year low. That slump is overwhelming cost-cutting efforts including elimination of 46,000 U.S. jobs at GM since 2004, when the company last posted an annual profit.

President George W. Bush hasn't said whether he supports more automaker aid. The administration is awaiting details of Pelosi's plan before responding, White House spokesman Tony Fratto said. President-elect Barack Obama talked with Bush on Nov. 10 about the urgency for an assistance package.

Treasury Secretary Henry Paulson has resisted a proposal by Pelosi and Senate Majority Leader Harry Reid to tap the $700 billion bank-rescue fund to help automakers, and investors including New York-based hedge-fund manager Bill Ackman have said GM should reorganize in bankruptcy, not receive a bailout.

``Let the company default, maybe manage the process a little,'' said Martin Fridson, chief executive officer of investment firm Fridson Investment Advisors in New York. ``There's no reason for taxpayer dollars.''

`Textbook' Versus Reality

Such an approach is too risky, said Gary Hindes, managing director of distressed investments at Deltec Asset Management in New York. His firm doesn't own GM bonds.

``With all due respect to the free-market, or moral-hazard types out there, it's all wonderful in a textbook,'' Hindes said. ``But in a real world this would be disastrous.''

A GM failure would ravage an auto-supply base battered by bankruptcies or companies nearing failure, said Maryann Keller, an automotive consultant in Greenwich, Connecticut.

Delphi Corp., GM's largest supplier and former parts unit, has been in court protection since 2005. Automakers and suppliers cut 140,000 jobs in the past 12 months, according to the U.S. Labor Department.

``At the current level of production nobody's healthy, nobody's making money, and many are running out of working capital just like GM,'' Keller said.

Suppliers such as American Axle Manufacturing Holdings Inc. and Lear Corp. would suffer the most in a failure at GM, because it's their largest customer. They also make parts for automakers including Ford, Chrysler and Japan's Toyota Motor Corp.

``We're worried. We're concerned about it,'' said Mike Goss, a spokesman for Toyota's North American manufacturing unit in Erlanger, Kentucky. ``The vehicles we build in North America use about 75 percent local content, and much of that is coming from the same companies that supply the Detroit Three.''
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Re: GLOBAL ECONOMY

Post by ramana »

Economic crisis has warded off PRC's post Olympic victory march.
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Re: GLOBAL ECONOMY

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svinayak
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Re: GLOBAL ECONOMY

Post by svinayak »

ramana wrote:Economic crisis has warded off PRC's post Olympic victory march.
The financial problems exploded only after Sept 8 and on hind sight there may be a connection to keep the Olympics uninterrupted. The troubled Big financial companies started looking for money from DEC 2007.
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Re: GLOBAL ECONOMY

Post by Prem »

Olympic Games are bad luck.
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Post by svinayak »


Tough Times Seen for Big Economies

By DAVID JOLLY
Published: November 13, 2008
http://www.nytimes.com/2008/11/14/busin ... ref=slogin


PARIS — Industrialized countries are facing a major slowdown, the Organization for Economic Cooperation and Development predicted Thursday, as data showed that Germany has already entered a recession.

The O.E.C.D. forecast that gross domestic product for its 30 member countries would decline 0.3 percent in 2009 from 2008, before recovering slightly to grow by 1.5 percent in 2010.

Jorgen Elmeskov, an economist at the organization, said that the outlook depended largely on the depth and duration of the financial crisis.

“The ongoing adjustment in housing markets still has a long way to go,” he said in a statement.

The organization’s report came as the German Federal Statistical Office said Thursday that G.D.P. fell 0.5 percent in the third quarter after a 0.4 percent decline in the second quarter. The commonly accepted definition of recession is two quarters of contraction in G.D.P. The office said that exports, a pillar of German growth, had declined. From a year earlier, Germany’s real G.D.P. climbed 1.3 percent in the third quarter. “Real” data are adjusted for price changes.

“This is the second recession in six years and shatters earlier hopes that Germany might hold up relatively well against the global downturn,” Jennifer McKeown, an economist in London with Capital Economics wrote in a research note.

While Germany is the first of the major economies where a technical recession has been confirmed, she said, data Friday will probably show France and Italy are also in recession. She predicted the German economy would contract next year by 0.5 percent.

The Bank of England also warned that the British economy would shrink significantly next year and that inflation would cool off, stoking expectations that the central bank would lower interest rates further.

The slowdown in Germany had become increasingly obvious as the credit crisis reached a new and particularly destructive phase. Just Wednesday, the IG Metall union, which had been seeking a raise of 7 percent to 8 percent, reached a scaled-down deal with German employers for an increase of 4.2 percent spread over 18 months.

The O.E.C.D. also predicted that the average unemployment rate in its member countries, estimated at 5.9 percent this year, would climb to 6.9 percent next year and reach 7.2 percent in 2010. It said inflation would continue to ease along with the decline in economic activity, and that additional government economic stimulus measures were needed.

The glum news came as officials of the Group of 20 nations were gathering in Washington for a summit meeting Saturday to plot a coordinated response to the economic crisis. Central banks have already engaged in a round of coordinated interest rate cuts and national governments have begun planning stimulus spending to spur growth.
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Re: GLOBAL ECONOMY

Post by Neshant »

this dude is hammering away at the US hoping it will fall. I would not be surprised if the CIA decided to take him out!

-------------------

US Dollar no longer king pin says Sarkozy

http://www.straitstimes.com/Breaking%2B ... 01988.html
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Re: GLOBAL ECONOMY

Post by vsudhir »

India wants US to foot emerging market bill
India is expected to ask the United States to come up with a $200 billion fund for emerging economies to counteract the reversal of private capital flows, at a meeting of heads of state and governments of the Group of 20 Nations (G-20) at Washington this Saturday.

The country may also propose the creation of an Asian Investment Bank to act as a new multilateral agency to lend money to developing countries for their investment needs.

In response to the global concerns arising out of the continuing financial crisis, President George Bush has invited world leaders including Prime Minister Manmohan Singh to the meeting.

Regulatory reforms, capital flows and the international financial architecture are expected to top the agenda. Much of the ground work for this summit was done at a meeting of G-20 finance ministers and central bank governors at Sao Paulo last week.
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Re: GLOBAL ECONOMY

Post by kshirin »

I just read that we plan to combine forces with China to fight West at the Washington Summit. Can someone explain why we want to combine with China, whose unfair manipulation of currency and massive exports was the other half of US excesses? How are they our partners?
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Re: GLOBAL ECONOMY

Post by Suraj »

kshirin: why don't you post the articles you're talking about, that indicate the plan to join with the Chinese during the Nov 20 summit ? That might give us something to start with.
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Soros says deep recession inevitable, depression possible
Thu Nov 13, 2008 11:07am EST
http://www.reuters.com/article/newsOne/ ... IN20081113

WASHINGTON (Reuters) - George Soros, chairman of Soros Fund Management, testified at a House Oversight and Government Reform Committee hearing on Thursday. Highlights:

* Said "a deep recession is now inevitable and the possibility of a depression cannot be ruled out."

* Said hedge funds were an integral part of the financial market bubble which now has burst.

* Said hedge funds will be "decimated" by the current financial crisis and forced to shrink their portfolios by 50-75 percent.

* Said Fed, Treasury Department and the SEC must accept responsibility to prevent market bubbles from growing too big in future.

Said impossible to prevent market bubbles from forming, but they can be kept within "tolerable bounds."

* Said financial engineering should be regulated and new products approved by regulators, and that such regulation should be a high priority of the new Obama administration.

* Said a recent IMF credit facility not large enough to stabilize markets.
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Toward a New International Capitalism


By Steven Pearlstein
Friday, November 14, 2008; Page D01

"This is a decisive moment for the global economy," President Bush declared yesterday in New York as leaders from the 20 largest economies headed toward Washington for an emergency meeting on the unfolding global economic crisis.

It's not only a decisive moment for the economy, but it's the most decisive moment for American-style capitalism since July 1944, when, after 22 days of negotiation at a remote lodge in the White Mountains of New Hampshire, leaders of 44 nations emerged with the blueprint for a new world financial order based on the principles of free markets, free trade and the free flow of capital.

Although things have evolved considerably since that confab at Bretton Woods, the United States has remained the world's most successful economy, and the rest of the world has moved, by reason of its example and its prodding, toward an embrace of its economic model.

Now that is about to change.

As the president acknowledged in his remarks yesterday, the United States, which has gone from the world's largest creditor to its largest debtor, can no longer expect to dominate the instititutions of international finance and will have to share power and influence with rapidly developing countries that generate more of the growth and have more of the world's capital.
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Just as significantly, the rest of the world -- if not a majority of Americans -- is now convinced that the raw, unregulated, laissez-faire capitalism most closely associated with the American model has serious flaws and does not reliably produce the best outcome.

From the Latin American debt crisis of the 1980s to the Asian financial crisis of the 1990s to the Internet craze at the turn of the century to today's economic conflagration, the past 20 years have provided ample evidence that uncontrolled flows of private capital have created massive booms and busts that have overwhelmed the financial system and destabilized the global economy. The booms have misallocated capital, widened the gulf between rich and poor, and eroded the norms of behavior that had contributed to social and political harmony. The busts have brought financial hardship and ruin to innocent businesses and households and saddled governments with huge debts that will take generations to pay off.

In spite of these failings, President Bush remains largely in denial, an unrepentant cheerleader for American-style capitalism. As he sees it, the current crisis does not reflect any fundamental flaw in the American model but instead results from individual failures by lenders, borrowers, financial firms and regulators that can be minimized in the future, not through more regulation but through smarter regulation. And while he gives rhetorical support to the notion that international institutions may need to be updated and strengthened to deal with the crisis that might arise, he also makes clear that reform should not come at the expense of U.S. sovereignty or freedom of action.

Up to a point, Bush's defensiveness is understandable, given the comforting belief in many countries that lax American regulation and Wall Street greed were the sole causes of their own economic misfortunes. Anyone with a passing acquaintance with the real estate bubbles in Ireland and Spain, the stock market bubbles in China and India, and the loose lending practices by banks in Iceland and Russia would appreciate how misguided that view is.

But there is also no denying that American-style capitalism has been undermined by its own success. In its present incarnation, it rewards manipulation over innovation and speculation over genuine value creation, resulting in massive misallocations of capital and the accumulation of unheard-of wealth in the hands of money managers and top corporate executives who are more lucky than they are skilled. No longer is it the entrepreneurial capitalism of Google and Amazon and Nucor Steel that animates the American imagination -- it is the financial capitalism of Enron and Drexel Burnham Lambert, of Goldman Sachs and the Blackstone Group, of publicly traded real estate investment trusts and multibillion-dollar hedge funds. Here in the United States, they have sucked up a disproportionate share of talent and capital, distorted compensation systems, and helped to perpetuate the false notion that companies exist solely to enrich their investors and investment bankers. And now, through the marvels of global financial markets, they have spread their toxic culture and products to economies across the globe.

As they arrive in Washington, the challenge for global leaders is to find a way to tame a financial system that has not only corrupted American-style capitalism but also brought unwelcome instability to the global economy. The flaw in the old "Washington consensus" is that an unfettered flow of investment capital, particularly among countries with different currencies, is not the idea. While product and labor markets work remarkably well when they are left open and lightly-regulated, experience has now demonstrated that a different approach needs to be taken toward financial markets, which suffer from imperfect information, an abundance of moral hazard, and a tendency toward herd behavior and speculative excess.

Creating a new architecture and regulatory framework for the global financial system is complicated and wonky and won't win anyone the next election. After the Asian financial crisis in 1998, there was a lot of brave talk about updating the old Bretton Woods institutions, but petty politics and an improving economy got in the way, and nothing was ever done. Perhaps this time, the prospect of another global depression will focus the minds of world leaders and lead them to create a new model of capitalism that everyone can live with.

Steven Pearlstein can be reached at [email protected].
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A look at economic developments around the worldebpage
Thursday November 13, 1:21 pm ET
By The Associated Press
A look at economic developments, activity in stock markets around the world Thursday

A look at economic developments and stock market activity around the world Thursday:
LONDON -- The pound fell to a six-and-a-half year low against the dollar and a record low against the euro amid mounting fears about the length and depth of the British recession and market talk that the Bank of England could cut interest rates to as low as 1 percent over the next few months. Meanwhile, BT Group, the country's largest phone company said would slash 6,000 more jobs by March on top of 4,000 already made. BT also said quarterly earnings rose 18 percent. The FTSE 100 index of leading British shares closed down 12.81 points at 4,169.21.

MOSCOW -- Russia's battered stock markets suffered another chaotic day of trading Thursday, as regulators shut the exchanges in response to falling share prices then reopened them after initial gains on European markets. The MICEX closed 7.6 percent down, at 598.4 points. The other main exchange, RTS, dropped 2.4 percent to 620 points.

BERLIN -- The German economy, Europe's biggest, tipped into recession in the third quarter as weakening exports fueled a bigger-than-expected fall in national output, government figures showed. Gross domestic product contracted by 0.5 percent in the July-September period, following a 0.4 percent fall in GDP in the second quarter, which was the first decline since late 2004. Meanwhile, industrial conglomerate Siemens AG reported a net loss of 2.4 billion euros ($3 billion) for its fiscal fourth quarter, weighed down by large one-time charges that included money set aside for costs related to a bribery investigation. The DAX finished 28.72 points higher at 4,649.52 despite confirmation that Europe's biggest economy is officially in recession.

PARIS -- The Organization for Economic Cooperation and Development said the world's developed economies, hard hit by the financial crisis, have already entered a recession that will last at least through the first half of 2009. Gross domestic product was likely to fall by 0.3 percent in 2009 for its 30 member countries, the OECD said. The U.S. economy would contract next year by 0.9 percent, Japan's by 0.1 percent and the euro area by 0.5 percent. Meanwhile, the International Energy Agency made new cuts to its global oil demand forecasts for this year and next as rich-world economies sink into recession and growth slows in the developing countries. The agency now expects global oil demand to average 86.2 million barrels a day this year, nearly flat compared to 2007, and 86.5 million barrels a day next year. The CAC-40 in France closed up 1.1 percent, or 35.5 points, to 3269.46.

TOKYO -- Japan's benchmark Nikkei 225 stock average fell 456.87 points, or 5.3 percent, to 8,238.64. Elsewhere, South Korea's main Kospi index fell 3.2 percent to close at 1,088.44 after earlier falling as much as 7.4 percent. So far this year, the index has declined 42.6 percent.

BEIJING -- Growth in China's industrial output slowed to 8.2 percent in October, down from 11.4 percent in September and the lowest in seven years, adding to signs an economic downturn is worsening as Beijing rushes to launch a 4 trillion yuan ($586 billion) stimulus package. The Shanghai Composite Index bucked lower Asian equities, jumping 3.7 percent to 1,927.61.

AMSTERDAM, Netherlands -- SNS Reaal NV, a Dutch financial services company will receive a 750 million euro ($934 million) lifeline from the government to shore up its capital position amid the financial crisis. SNS will be the third Dutch company to take government money in a month, following the larger ING Groep NV and Aegon NV. The Netherlands AEX index settled up by less than 1 percent at 249.96.

HONG KONG -- An investigation will be launched into the sale of financial products linked to collapsed U.S. investment bank Lehman Brothers after lawmakers voted overwhelmingly for a probe. Meanwhile, the head of the Carlyle Group, one of the world's largest private investment firms, said Asia has surpassed the U.S. to become the world's most attractive place for investment given its strong economic growth. In other news, Citic Pacific Ltd., the Hong Kong arm of a Chinese government investment company, said it has secured a $1.5 billion bailout from its parent company to cover losses from bad currency bets. Hong Kong's Hang Seng index dived 5.2 percent to 13,221.35.

MEXICO CITY -- Mexico's Congress approved a 3 trillion peso ($231 billion) spending portion in its 2009 budget Wednesday, a bid to jump-start an economy suffering from a global credit crunch and the U.S. economic slowdown. It is an increase of more than 13 percent over last year.

KUWAIT CITY -- Trading on Kuwait's hard-hit stock exchange was halted by court order on Thursday, a move cheered by many traders but criticized by the government and other investors who urged their privileged countrymen to stop acting like a "spoiled baby." The ruling will remain in effect until another court hearing on Monday.

CANBERRA, Australia -- Rewarding senior finance executives with big salaries for taking big risks was "dumb," Australia's prime minister said. Meanwhile, shareholders of St. George Bank Ltd. approved a 16 billion Australian dollar ($10 billion) takeover by bigger rival Westpac Banking Corp., creating the country's second-biggest bank by assets. Australia's benchmark index slid 5.9 percent to a four-year closing low of 3,697.3 as banks tumbled and lower commodity prices hit miners.

MACAU -- Struggling casino operator Las Vegas Sands Corp. will lay off as many as 11,000 workers after a cash crunch forced the company to halt construction on multibillion dollar projects in the Chinese gambling city.

NEW DELHI -- India, Thailand and five other South and Southeast Asian nations urged the G-20 to strengthen the International Monetary Fund, the World Bank and regional banks to help developing countries weather the global economic meltdown. Reluctance by international institutions to lend money to developing countries would make it difficult for some of them to manage their balance of payments positions, said Indian Prime Minister Manmohan Singh. Meanwhile, the wholesale price index, India's most-watched inflation measure, eased to 9 percent for the week ended Nov. 1, down from 10.7 percent for the prior week. Falling commodities prices helped cool India's inflation, which has been running near a 13-year high. Indian financial markets were closed for a national holiday.

GENEVA -- China has agreed to loosen controls on financial news providers in an out-of-court settlement of a dispute with the United State, the European Union and Canada. China, which has since 2006 required foreign news companies to funnel their data through the state's own agency, will set up an independent regulator next year to create a level playing field for financial information providers.

BRUSSELS, Belgium -- The European Union began talks with Libya about a cooperation pact, which could be concluded in 2009. More than 90 percent of Libya's oil exports go to Europe. The agreement would open up trade and increase economic and political cooperation. It would be similar to deals the EU has with other countries in North Africa and the Middle East.

SAO PAULO, Brazil -- Latin American stocks continued to fall after being battered a day earlier over fears that the region is being hit hard by the global economic slowdown. Brazil's Ibovespa index dropped 1.4 percent. Mexico's IPC index slipped less than 1 percent, while Argentina's Merval index fell 2.2 percent.

NEW YORK -- Asserting the global financial crisis is "not a failure of the free market," President George W. Bush called on the world leaders meeting this weekend to agree on a modest set of reforms aimed at preventing future collapses. Bush's main message to the leaders about to converge on Washington: Reforms won't help if they overreach by abandoning the free market and restricting trade.
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Re: GLOBAL ECONOMY

Post by ramana »

They say Soros made the hit on Bear Stearns and created this September surprise. He is a fine one to talk about deep recession.
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Re: GLOBAL ECONOMY

Post by svinayak »

ramana wrote:They say Soros made the hit on Bear Stearns and created this September surprise. He is a fine one to talk about deep recession.
Talk radios are talking about him. His moveon.org has supported Obama.

This hit job is to take care of US elite and replace with a more global sensitive leadership. It is a kind of coup over the leadership of US
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Post by ramana »

Try to get hold of New York Review of books. They have a storng case that he is the main villan of this economic mentldown. He did something like that to the British Pound but that was minor compared to this. He has an Indian underling called Chaterjee who is very forceful for the nuke deal.
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Re: GLOBAL ECONOMY

Post by svinayak »

US will soon face second "Great Depression"

Mikhail Khazin
13 Nov 2008

Renowned economist Mikhail Khazin predicted the US financial crisis in 2000. He predicted 9/11 on 9/10. Now he says the current economic crisis will have no end. Obama is the sacrificial lamb, in his view, to be blamed for the great collapse. A recent interview:
....
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Re: GLOBAL ECONOMY

Post by Paul »


Forum Moderator


Joined: 01 Jan 1970 12:00 am
Posts: 5283 Try to get hold of New York Review of books. They have a storng case that he is the main villan of this economic mentldown. He did something like that to the British Pound but that was minor compared to this. He has an Indian underling called Chaterjee who is very forceful for the nuke deal.


Swades Chatterji???

Isn't he the doctor reputed for making Jesse Helms modify his opinion on Indian nuclear tests.

Soros is said to be a concentration camp survivor.
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Re: GLOBAL ECONOMY

Post by Kakkaji »

Paul wrote:

Forum Moderator


Joined: 01 Jan 1970 12:00 am
Posts: 5283 Try to get hold of New York Review of books. They have a storng case that he is the main villan of this economic mentldown. He did something like that to the British Pound but that was minor compared to this. He has an Indian underling called Chaterjee who is very forceful for the nuke deal.


Swades Chatterji???

Isn't he the doctor reputed for making Jesse Helms modify his opinion on Indian nuclear tests.

Soros is said to be a concentration camp survivor.
No, it is Purnendu Chatterjee.

http://www.nriinternet.com/Section3Who/ ... hatterjee/
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Re: GLOBAL ECONOMY

Post by ramana »

Yes thats the one.

Meanwhile GOI says Developed world must shield countries like India-FM

I guess he doesn't get why India was invited to the meeting huh? Another midget casting a giant shadow?
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Re: GLOBAL ECONOMY

Post by Neshant »

Developed world must shield countries like India-FM
Wow ...what an idiot.

One would think being at the cusp of a new global economic order, the guy would have something more profound to say. Instead he revives the image of India as a beggar!
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Re: GLOBAL ECONOMY

Post by ramana »

because he belives in "No we cant!"
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Re: GLOBAL ECONOMY

Post by svinayak »


Bretton Woods gold/dollar peg unlikely at G20

Reuters - 1 hour ago
By Frank Tang-Analysis NEW YORK (Reuters) - Gold surged on Friday as world leaders gathered to battle the economic crisis, amid talk of a new Bretton Woods ...


Relaunching Capitalism

Newsweek - 49 minutes ago
Don't expect the G-20 summit to be a new Bretton Woods, but it might still do some good. A look at how an American made crisis has shaken economies the ...

How Bretton Woods reshaped the world

BBC News, UK - 8 hours ago
By Steve Schifferes In the summer of 1944, delegates from 44 countries met in the midst of World War II to reshape the world's international financial ...

G20 Preview: 'Bretton Woods II' Draws Mixed Expectations

ForexTV.com, NY - 3 hours ago
(CEP News) - It's been said that necessity is the mother of invention, and given the variety of economists and pundits comparing the ongoing global downturn ...


Asia's Economy Could Use Its Own Gordon Brown: William Pesek

Bloomberg - 8 hours ago
Nov. 14 (Bloomberg) -- As leaders meet in Washington to rescue the global economy, Asians face a touchy question: Who speaks for us? ...


EU willing to make room for China, others at IMF-IHT

guardian.co.uk, UK - 14 hours ago
BRUSSELS, Nov 14 (Reuters) - Europeans are ready to lower their representation at international financial institutions to make more room for China and other ...
ramana
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Re: GLOBAL ECONOMY

Post by ramana »

George Soros in NY Books:
The Crisis and what to do about it
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Re: GLOBAL ECONOMY

Post by svinayak »

http://www.financialpost.com/most_popul ... ?id=956352


So, while the United States has been blamed for consuming too much over the past decade and wracking up huge trade and current account deficits in the process, the flip side of the argument must hold that China has been producing too much, creating massive trade and current account surpluses.

Ben Bernanke, the current Federal Reserve chairman, has called the situation a "savings glut." Mr. Murenbeeld describes it succinctly: "Indeed, how can the world economy be balanced when, simply expressed, one country does all the producing and another does all the consuming?" Mr. Murenbeeld asks.


China's war chest of foreign exchange reserves from managing its currency has reached nearly US$2-trillion, while OPEC's total is about US$527-billion. Singapore's has vaulted to US$177-billion, Taiwan's US$291-billion and India's US$302-billion; each country manages is currency to suit its purposes though many countries have made some effort to make their regimes more flexible in recent years.
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Re: GLOBAL ECONOMY

Post by shaardula »

neshant...

thanks for the heads up. some major takleef only going on here amongst the NPR and PBS types. rest of the media is ofcourse still mired in incest of americana. cheney met biden. palin sneezed.
even bush himself did some cowboy talk at the manhattan institute. "nu york will always be the financial capital of the world". other smart types talking about 'balance'. :rotfl:
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Re: GLOBAL ECONOMY

Post by svinayak »

http://www.vimeo.com/2081998

A Conversation with George Soros, Nouriel Roubini and Jeffrey Sachs. Moderated by John Roberts (CNN).

An open and frank conversation on the breakdown of financial markets around the world and if we can save the global economy. Will the Wall Street bailout plan work? What steps need to be taken in Europe and Asia to stem the market’s downward spiral? Are we headed for a global recession? Three of the leading minds in global economics will discuss the options.

For more information, visit earth.columbia.edu/worldeconomy/
vsudhir
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Re: GLOBAL ECONOMY

Post by vsudhir »

Was lsitening to yet another talk show on PBS as part of Jim Lehrer's news hr jussnow.

Ex-neocon Niall Fergusson was emphatic that the G18 is a waste of time and that the US should talk directly with PRC to coordinate their stimuli packages so that this crisis remains a recession onlee and doesn't devolve into a depression.

I am inclined to agree at the moment where their domestic stimlu are concerned.

The rest of the G20 is also a creditor to the US economy and a supplier to the pRC. Itis there because if the rules are being rewritten and the int'l regulatory bodies are being rebelanced, we should be there to nudge it in the right direction when it happens.

The last Bretton Woods meet in the early 1970s happened when the US was the world's biggest creditor. Now its its biggest debtor and surely somethng has changed since!
svinayak
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Re: GLOBAL ECONOMY

Post by svinayak »

http://www.financialpost.com/most_popul ... ?id=956352
China, its BRIC brothers -- Brazil, Russia, India -- and other emerging powers may have won a seat at the summit table but the global economy has still not figured how to absorb their growing might without major disruption.

The problem is one of the trickiest and long-standing of global economics: How to encourage countries to allow their currencies to appreciate as their economies mature.

"One of the greatest events in the history of economic development is occurring -- the emergence of the BRIC economies with some three-billion people," wrote Martin Murenbeeld, chief economist of the DundeeWealth Inc. in a recent report. "And it is being [largely] handled with rigid exchange rates. Such a dramatic development requires maximum price flexibility so that the world economy can absorb the "shock" as best as possible."

The immediate cause of the current financial crisis is well known. Financial institutions stocked up on vast quantities of subprime mortgage debt and other related debt securities through the U.S. housing boom of the early 2000s.

As the housing bubble burst, many of those securities became worthless, causing a huge drain on bank balance sheets which, in turn, clogged up transmission of credit around the world.

But the crisis has its roots in the huge financial imbalances that have built up around the world.


Although the U.S. Federal Reserve tried to drive up interest rates as the economy recovered from the tech wreck through 2004, it found it had lost "all control" over its ability to influence longer-term U.S. treasury rates, explained Alan Greenspan during an appearance in Toronto last week.
Singha
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Re: GLOBAL ECONOMY

Post by Singha »

Nytimes.

Joining a rapidly growing list of technology companies reeling from the financial turmoil, Sun Microsystems, which sells server computers, has started a broad overhaul in which up to 6,000 employees could lose their jobs.

Before the stock market opened Friday, Sun disclosed that it would lay off 5,000 to 6,000 workers, or 15 percent to 18 percent of its work force. The company, already dealing with layoffs announced in May, expects to save $700 million to $800 million a year as a result of the moves, while also taking up to $600 million in charges in the next 12 months.

“The focus here is to eliminate some of the inefficiencies that have made it hard to do business with Sun,” said Jonathan I. Schwartz, chief executive at Sun, adding that a “new economic reality” had taken hold in the market. Sun shares were up about 3.9 percent in afternoon trading.

In the last two weeks, several of the technology industry’s biggest names have issued dire forecasts.

Last week, Cisco Systems, the largest provider of network equipment, warned that sales in its current quarter could drop 10 percent. Intel, the world’s largest producer of chips used in PCs and servers, added to the gloom this week saying its sales for the current quarter could plummet as much as 19 percent as both consumer and corporate customers had pulled back on technology spending.

In addition, other Silicon Valley companies tied to the chip industry, including Applied Materials and National Semiconductor, have started layoffs.

While many of the companies focus on corporate sales, others closer to consumer markets are suffering as well. Qualcomm, which makes chips used in cellphones, said mobile device makers have suddenly cut back on their orders. Nokia, a large cellphone maker, confirmed as much Friday by lowering its industrywide sales outlook for the fourth quarter and announcing further cost cuts in 2009.

For many companies, the sudden drop in orders started in October and worsened in November.

“Even during the 2000 bust, the decline was more measured,” said Ashok Kumar, an analyst with Collins Stewart. “This seems to be going into a free fall.”

Sun’s change in strategy follows a period of intense scrutiny for Sun and Mr. Schwartz as the company has fought longer-term problems. Sun, based in Santa Clara, Calif., has battled for years to offset a slow, steady decline in its primary high-end server business.

Defending those sales has become more difficult as Sun’s customers on Wall Street curtailed their technology spending because of the financial turmoil. Sun is more dependent on Wall Street business than rivals like I.B.M., Hewlett-Packard and Dell.

“We were certainly the first to enter this,” Mr. Schwartz said, “and I would like to believe we will be the first to exit it.”

Late last month, Sun reported a first-quarter loss of $1.68 billion and a 7 percent year-over-year drop in revenue to $2.99 billion. At the time, Sun cautioned that it would probably reorganize to bring costs in line.

While Sun has talked of a “new reality,” its investors have been reacting to the company’s larger issues for some time. Sun’s shares have lost more than 80 percent of their value in the last year, reducing the company’s market value to $3 billion.

In its last fiscal year, Sun posted revenue of $13.8 billion and has $2 billion in cash.

Southeastern Asset Management, an investment firm based in Memphis, has increased its stake in Sun to more than 20 percent in the last year. Recently, it disclosed an intention to talk with Sun’s management and possibly other companies about the ways to make the most of Sun’s assets, which include a vast software intellectual property portfolio.

In addition, Relational Investors, founded by the activist investor Ralph V. Whitworth, has purchased close to 15 million shares of Sun since the end of June, giving it close to a 3 percent stake in the company.

Mr. Schwartz maintained that these large Sun investors agree with the company’s strategy. “I just met with Ralph,” Mr. Schwartz said. “We’re all focused on the same thing.”

Sun’s management continues to remain optimistic when speaking about the company’s future, pointing to a number of fast-growing hardware and software businesses. The company has spent the last few years developing products and acquiring software makers, leaving it with what many analysts consider a strong portfolio. The major challenge has been expanding these businesses at a rate strong enough to offset declining sales from Sun’s traditional businesses.

In an effort to move forward, Sun has realigned its management structure to create a pair of software organizations aimed at different parts of the technology market. The moves include the resignation of Rich Green, formerly executive vice president in charge of Sun’s software business. Mr. Green returned to Sun just two years ago in a bid to inject new life into the company’s software business.

Sun has bet on an open-source software strategy where it offers free access to top products such as its Solaris operating system and MySQL database. The company argues that this model increases interest in its products and can translate into hardware sales.

With plenty of cash on hand and a sympathetic board, Sun has rejected calls for more radical action, like selling off part of its hardware business or going private.

Analysts, however, remain concerned that Sun’s costs are too high given current economic conditions and the ongoing decline in sales.

“This by itself is not enough,” Shebly Seyrafi, an analyst with Calyon Securities, said.

Mr. Schwartz declined to delve into all of the specific areas where Sun’s job cuts will occur, although he did say that the sales group would be affected.

“We are not canceling products or exiting businesses,” Mr. Schwartz said, adding that Sun remained committed to using the open-source strategy as a way of trying to attract business.

“We are going to go plow the market and auger it open with the world’s most compelling price tag,” he said.
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