Perspectives on the global economic meltdown

Singha
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Re: Perspectives on the global economic meltdown

Postby Singha » 26 Feb 2009 21:41

er ahem welcome to the Mcmansion 2.0

http://images.businessweek.com/ss/09/02 ... ons/19.htm

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 26 Feb 2009 22:21

Persian Gulf Slowdown Washes Up on India's Shores

The 29-year-old belongs to a growing stream of forced returnees to Kerala, once heralded as a model for developing economies. But this tropical state of 32 million people is uniquely dependent on income from the Gulf: Kerala contributes about half of the five million Indians working in the one-time El Dorado that's now hammered by sinking oil prices and a construction industry bust. The estimated $6 billion a year that Kerala's Gulf-based expatriates send back to their relatives accounts for a staggering quarter of the state's economy, or twice its government budget.


Kerala hit mighty hard.

"Every family here has someone in the Gulf," says Kerala's finance minister, T.M. Thomas Isaac, whose four siblings live in the United Arab Emirates, a federation that includes Dubai.

Kerala officials say they don't know how many workers have already returned, and how many more are on the way. But Chacko T. Varghese, general secretary of the Kerala Manpower Exporters Association, a trade group uniting firms that recruit for Gulf-based employers, calculates that about 500,000 workers will be forced to return to Kerala in a few months.

"Everyone is afraid. There is no money in the market, and we've had no business for the past three months," says Mr. Varghese's business partner, Mohammad Nasir, as he greets a visitor in the deserted offices of his People's Manpower Supply firm that overlooks a construction site in the U.A.E. city of Sharjah.

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Re: Perspectives on the global economic meltdown

Postby bhavani » 26 Feb 2009 22:49

The rating agencies themselves can be rated at the junk level, as these are the ones who rated Lehmann with a 40:1 leverage rates at AAA level.

Singha,

The thing about Indians in Big business schools getting hit, I am in one of the top schools. I have a green card and have pretty good connections with proper white-on-white guys. But still fear graduation and the huge citi-bank loan. There are no jobs especially for MBA's suddently everybody realised that MBA's dont add much real value in many industries.

One will start seeing a huge rise in students not able to pay thier studnt loans and that should blow up the education bubble in US. $100000(including interest) for a good MBA, is the standard going rate. The Student credit bubble and the credit card bubble should bring the giant down. They are already trying to stop the student loan bubble from bursting.

http://www.easybourse.com/bourse-actual ... ers-624307

(Off topic: The day this happens, Then i will be off to country to the lush fields near rajhmundry for farming. The only worthy possessions i have in US is my gun collection, i would sorely miss them in India. I am selling my guns at premiums of upto 200%, My RPD went for $3000 1500 More than what i got it for, I think the US beeble are preparing for Armageddon)

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Re: Perspectives on the global economic meltdown

Postby Singha » 26 Feb 2009 23:07

imho higher education with some trimming of the flab and govt support
need not be so expensive. countries like canada and uk have excellent univs where students are mostly on govt paid scholarships?

the only downside is probably univs would have to scale down enrollment,
reduce faculty benefits and not be able to afford the best of everything.
or maybe lowering the entry std to attract rich pakis and arabs can pick up the gap.

something has to be done..else getting a BS in a top US school is for the ancestrally rich goras only.

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Re: Perspectives on the global economic meltdown

Postby Suraj » 26 Feb 2009 23:23

Nandu wrote:Obama's budget proposal calls for a deficit of $1.75 trillion. That is almost 12% of US GDP.

Yet, the US has a AAA rating, while the S&P is calling for cut of India's sovereign debt rating to junk because India's fiscal deficit is about to go up to 6% of GDP.

Anybody see the logic in all this?

Do as I say, not as I do.

There's only so much such a 'rating' can do. It is just as well S&P's credibility is in the toilet in this manner, because investors will now have to be flexible in using any S&P/Moodys/Fitch 'rating' from now on, because the underlying fundamentals don't match the 'rating'. This is not so bad, because in the long term it satisfies the goal of undermining these ratings agencies through their own stupidity.

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Re: Perspectives on the global economic meltdown

Postby Singha » 26 Feb 2009 23:26

they are just following orders from the big guy. see my first post in this page.

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Re: Perspectives on the global economic meltdown

Postby Suraj » 26 Feb 2009 23:34

You can only put so much lipstick on a pig. Beyond a point the ratings will become so unreliable that the ratings agencies will lose their credibility. It takes a lot of effort to build that credibility, and regaining it once it has been trashed is even harder. What's happening now is a good step in the direction towards undermining those agencies.
derkonig wrote:The worst part about sovreign ratings is that the country rating is usually the upper limit on the rating that cos. from that country can get.

I would be really surprised if that's the case. Why would the fiscal deficit of the central government be a burden on an otherwise exemplarily run private company ?

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 27 Feb 2009 01:57

Drudge headlines make weird reading onlee... class warfare in the USA? Funding class-warrior NGOs in turd world heathen countries didn't cut it yet?

Whuddathunkit?

'09 BUDGET SPENDS $11,833 FOR EVERY AMERICAN...
$25,573.48 PER TAXPAYER...
THE $1.75 TRILLION DEFICIT...
PDF FILE: 'A New Era of Responsibility'...
DICK MORRIS: IT'S OBAMA SPREADING PANIC...


Obama Budget Proposes Up to $750B More Bank-Rescue...

$75.5B More Iraq, Afghanistan Combat Operations...

TAX THE RICH: Take everything they earn, and it still won't be enough...

'It's more Obama Robin Hood'...

$634B 'Health-Care Fund'...

FIDELITY exec slams 'New Deal II'; Blames feds for crisis...

Obama plan brings cries of class warfare...

Outlook grim for costly initiatives...

Bernanke again spurns talk of nationalization... Chinese Scoop Up SoCal Foreclosures...

RECESSION-PROOF: OSCAR PARTY SHOWS HOLLYWOOD STILL HANGING ON...

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Re: Perspectives on the global economic meltdown

Postby ss_roy » 27 Feb 2009 04:16

People.. calm down..

All of this rating agency, slumdog stuff is meaningless. The west (as we know it) is dead.. it just does not know that yet. There is nothing they can do to go back to the "good" old days.

Their only choices are

1. New consumers (from non-white countries)
2. Depression and socio-economic disintegration.

So, it is either a much lower status or destruction. Any guesses about their eventual choice?

On an unrelated note- why are so many indians eager to suck up to these people. The operative word is "suck up" not "be friendly on equal terms"? Any ideas?

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Re: Perspectives on the global economic meltdown

Postby ss_roy » 27 Feb 2009 04:19

Mercantilism, saving and frugality cannot create wealth. Consumption by the masses under capitalism can create wealth. PRC and other east-asians have not learned that lesson yet.

What ever happened to all the Finance gurus and experts on economy, shouting every day that the PRC middle class is growing by leaps and bounds and US has unlimited potential for exports to PRC and trade with PRC is vital blah blah.
They just vanished into thin air especially Jack Welsh of GE (Ex CEO) who was their cheer leader about PRC.

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Re: Perspectives on the global economic meltdown

Postby SwamyG » 27 Feb 2009 04:30

When Wealth is lost nothing is lost,
When Health is lost something is lost,
When Character is lost everything is lost.

I would not want India to ape the West in mindless consumption. I asked the definition of 'wealth' earlier, all this creation and depletion of wealth actually closely follows the laws of physics. Wealth can be neither created nor destroyed, merely transferred.

We need to spend & save (they are not mutually exclusive all the time) to pursue our goals; having a well functioning engine+train is far more important than a run away train or a broken train at the station.

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Re: Perspectives on the global economic meltdown

Postby ss_roy » 27 Feb 2009 04:31

I do not think that it me who is being rigid here. Look.. I do not think that one group are inherently bigger a**holes than another group. I have read too much history to believe that some cultures are more moral than others. They are not.. It is conditions that shape morality.

Indian merchants exploited the conditions that came with british rule. In an earlier era the local rulers would have checked the merchants greed. The british did not, as it was very profitable for them.

ss_roy, there were several pointers given in earlier posts which could be used as a baseline for your research. However, you seem to have some calcified thoughts and with a false assumption as a arguing point, you expect others to prove you wrong! Frankly these assumptions are quite foolish and annoying!


I do not think you were alive then either! While princely states, local chieftans etc had a role in the day to day affairs of India- the sad reality is that many collaborated in these crimes.

That shows you clearly have absolutely no clue as to how things were in British India.
I am pretty sure you are super imposing a map of Present day India in your brain and imagining that the British were ruling all over it.


Who collected the taxes? Who made people grow cash crops? Who enforced these laws and regulations?

> 5xland tax
> 30% of produce
> Switch to cash crops to meet tax demands!


If you choose to believe that all indians were innocent victims, that is your choice. I see something else, namely, willing participation in those genocides. Unless we try to correct the reasons that made that unholy collaboration possible, it will come back to haunt us..

Like I said earlier, nobody is going to strive hard to prove you wrong! The onus is on you
!
Last edited by ss_roy on 27 Feb 2009 04:41, edited 1 time in total.

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Re: Perspectives on the global economic meltdown

Postby ss_roy » 27 Feb 2009 04:39

How are you going to create jobs and motivate people to discover new things? What is mindless consumption anyway.. as long as it keeps people employed, fed, housed and with some disposable income- it is OK.

I would not want India to ape the West in mindless consumption.


Ok.. so the computer you are typing this on was always there.. right? Or the medications you use, or the water/ sewage/ electricity infrastructure you use was always there? Wake up.. wealth is not a zero sum game.

The belief that wealth is a zero sum game is what caused asian cultures to stagnate for over 2,000 years. Do you want more of the same?

I asked the definition of 'wealth' earlier, all this creation and depletion of wealth actually closely follows the laws of physics. Wealth can be neither created nor destroyed, merely transferred.


Yes, but saving more than 10% of your income drains money out of the productive economy. It might sound nice, smart and religious but it does not create new wealth. Only well paid jobs create new wealth.

We need to spend & save (they are not mutually exclusive all the time) to pursue our goals; having a well functioning engine+train is far more important than a run away train or a broken train at the station.

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Re: Perspectives on the global economic meltdown

Postby Abhijeet » 27 Feb 2009 05:15

SwamyG wrote:I asked the definition of 'wealth' earlier, all this creation and depletion of wealth actually closely follows the laws of physics. Wealth can be neither created nor destroyed, merely transferred.


This is not true. Most of the world's population today lives unimaginably better lives than our ancestors, directly because of the wealth created in the last few centuries. Wealth is certainly not just transferred - innovation, efficiency and productivity create wealth, and will continue to do so whether there is an economic crisis or not.

As I've said before, I really hope the economic crisis doesn't result in the wrong lessons being learnt in India. Yes, there were excesses that led to the meltdown. That does not mean that the underlying ideas of capitalism and free markets were wrong. A free(r) economy is still India's best bet for rapid development.

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Re: Perspectives on the global economic meltdown

Postby SriKumar » 27 Feb 2009 05:58

SwamyG wrote:When Wealth is lost nothing is lost,
When Health is lost something is lost,
When Character is lost everything is lost.

I would not want India to ape the West in mindless consumption. I asked the definition of 'wealth' earlier, all this creation and depletion of wealth actually closely follows the laws of physics. Wealth can be neither created nor destroyed, merely transferred.
This might make sense from a philosophical point of view, but I would rather use the yardstick of day-to-day living in assessing the meaning of wealth. I think that is the most practical (and IMHO, useful) way. How does a specific item of wealth benefit a person? I would start with the most basic needs: food, good health, education, good housing. The 'luxurious' needs form the next level in the heirarchy: expensive fast cars, big houses, a private jet, island etc. The richest of kings, a 1000 years ago, would have died from tetanus. All their vaults of gold would not have helped them. Today, kings and commoners alike are all wealthier for having access to tetanus antigens and anitbiotics. The very knowledge that mosquitoes carry malaria is wealth, and the knowledge that quinine (from chincona bark) cures malaria is wealth too. You would realize its value when it saves your own life. And these days, with Intellectual property and all that, you actually make money out of it. Clearly there is more wealth today that it used to be. (Wealth has to be defined in terms of how a person values an object/service and how it betters his life- whether in a reasonable or an unreasonable way).

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Re: Perspectives on the global economic meltdown

Postby Bade » 27 Feb 2009 06:13

When Wealth is lost nothing is lost,
When Health is lost something is lost,
When Character is lost everything is lost.


The correct way to understand this is perhaps, good character is essential for better health, which in turn is required to create wealth. In the end what matters is creating wealth of new ideas and keeping the brain active. That is the essence of wealth creation. Deep meditative state for its own end does not do it.

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Re: Perspectives on the global economic meltdown

Postby Bade » 27 Feb 2009 06:15

One option left for the USA to help accelerate consumption is to open the doors to more immigration. But, will they do it ? This is one way out for sure.

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Re: Perspectives on the global economic meltdown

Postby Neela » 27 Feb 2009 12:26

ss_roy wrote:Famines in India were mainly caused by indian merchants exporting grain to make a bigger profit during droughts. The brits gave them the tools (rails, ships, sepoys), but it is was indian merchants who ultimately let millions starve to make a few pieces of gold.



ss_roy wrote:If you choose to believe that all indians were innocent victims, that is your choice. I see something else, namely, willing participation in those genocides. Unless we try to correct the reasons that made that unholy collaboration possible, it will come back to haunt us..

Now that is a change!

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Re: Perspectives on the global economic meltdown

Postby Neela » 27 Feb 2009 12:50

ss_roy wrote:How are you going to create jobs and motivate people to discover new things? What is mindless consumption anyway.. as long as it keeps people employed, fed, housed and with some disposable income- it is OK.


Ah excellent. Why are you posting on this thread now! :lol: .

The USA , the driver of world economy, the epitome of capitalism, believed in that and believed in the infallibility of consumption ! Universities to Pension funds invested in the belief that the consumption would exist forever! And now, it cannot guarantee health,food or shelter to the millions .


The belief that wealth is a zero sum game is what caused asian cultures to stagnate for over 2,000 years. Do you want more of the same?


And the Western cultures were like they are today for 2000 years eh?
And the reason they set sail in the thousands , most of them perishing on the way, was motivation and not desperation!! :lol:

A culture that stagnates for 2000 years would not exist today!

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Re: Perspectives on the global economic meltdown

Postby Neela » 27 Feb 2009 13:01

ss_roy wrote:
I would not want India to ape the West in mindless consumption.


Ok.. so the computer you are typing this on was always there.. right? Or the medications you use, or the water/ sewage/ electricity infrastructure you use was always there? Wake up.. wealth is not a zero sum game.

The belief that wealth is a zero sum game is what caused asian cultures to stagnate for over 2,000 years. Do you want more of the same?


The Asians didn't know how to walk , talk and eat until the West came?

Why didnt the West build the komputar in the 1400s? How come plague was a such a deadly disease in the middle ages?

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Re: Perspectives on the global economic meltdown

Postby Neela » 27 Feb 2009 13:24

ss_roy wrote:I do not think that it me who is being rigid here. Look.. I do not think that one group are inherently bigger a**holes than another group. I have read too much history to believe that some cultures are more moral than others. They are not.. It is conditions that shape morality.

Interesting! But history is seen to be replete with examples to the contrary! South America and Spain, the Africas and the French! The British and Asia. All in the name of RCC.
Will be interesting to see if you can come up with the names of Indian kings who participated in mass slaughter in the name of Dharma!
Dont rub your mutated version of morality in my face!

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Re: Perspectives on the global economic meltdown

Postby Singha » 27 Feb 2009 15:10

what is this 100 day vacation thing? do H1s contractors come under this?

Microsoft slashes contract worker rates by 10 pct
By JESSICA MINTZ - AP Technology Writer

SEATTLE -- Microsoft Corp. is slashing overtime, hours and pay for U.S. temporary workers as part of an overall push to curb expenses during the recession.

Microsoft will cut what it pays the staffing agencies by 10 percent for current projects and won't raise the rate it pays for temporary workers who return after a mandatory annual 100-day break. The company also plans to reduce overtime and the total number of hours clocked by temporary workers.

In a statement Thursday, the company said it talked with some employment agencies before making the decision.

The move, first reported Wednesday by the Seattle Post-Intelligencer, comes a month after the software maker resorted to its first mass layoffs and said it would trim travel costs, freeze wages and scale back expansion plans for its Redmond, Wash., headquarters.

As the recession has deepened, consumers and businesses have reined in spending on new computers and software. Because Microsoft sells the operating system that runs on the vast majority of computers around the world, it is feeling the pinch, particularly in its lucrative Windows and Office desktop software businesses.

Online advertising spending is also on the wane. Microsoft's online search and ad business was already losing money despite heavy spending to beef up the underlying technology. Chief Executive Officer Steve Ballmer said this week that the company would continue to pour money into competing with Google Inc. on this front.

Microsoft does not disclose how many contract workers it uses, and analyst estimates vary. Sid Parakh, an analyst for McAdams Wright Ragen, said he believes the number is somewhere between 40,000 and 60,000 worldwide. The company employs an additional 95,000 permanent workers globally.

The company relies on skilled contract workers for all sorts of jobs, from developing and testing software to designing Web sites to writing technical documentation. And it's not alone. Tech companies including IBM Corp. and Advanced Micro Devices Inc. routinely hire temporary workers; Google had 10,000 contractors as recently as October.

In the United States, a 2006 General Accountability Office report indicated that about 21.5 million U.S. workers find jobs through temp agencies, work as independent contractors or are self-employed.

Inside Microsoft, the fine distinction between permanent and temporary workers was contentious enough to prompt a class-action lawsuit in 1992, in which contract workers argued they were treated exactly like permanent workers but offered fewer benefits. Microsoft settled in 2001 and began paying $72 million to nearly 8,600 former contract workers in 2005.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 27 Feb 2009 16:20

Yeah, while I agree that it is imperative we study history to learn from it the many systemic weaknesses and flaws our own civilization has had, moral relativism is a rather dangerous game that I would not wanna play.

Am admittedly biased but I doubt any culture but our own could have produced a work of as much singular beauty as the Vedanta.

Anyway, how does one claim the 'west is dead anyway'? A tad early to make that prognosis, perhaps? There may yet be a WW III engineered and population culling on an unprecedented scale visited to ensure the west doesn't fall behind the rest. Of course all sorta of spin will be aired to make it look like some universally noble cause is being served but that wouldn't change anything for the rest of the world.

And if the west is to fall, might as well drag the rest of the world down as well. I know that thinking reeks of Pakiness but hey, the west didn't get to where they are by being queasy about defending turf, power and pelf, IMHO.

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Re: Perspectives on the global economic meltdown

Postby amol.p » 27 Feb 2009 17:16

ss_roy wrote:Mercantilism, saving and frugality cannot create wealth. Consumption by the masses under capitalism can create wealth. PRC and other east-asians have not learned that lesson yet.

What ever happened to all the Finance gurus and experts on economy, shouting every day that the PRC middle class is growing by leaps and bounds and US has unlimited potential for exports to PRC and trade with PRC is vital blah blah.
They just vanished into thin air especially Jack Welsh of GE (Ex CEO) who was their cheer leader about PRC.



I have a different view....saving & frugality creates more wealth ..leave the urban india and go in heartland...no one is affected by recession. Only those who have taken loans to live US style life in metros are those suffering. my own friends who do farming & business in small towns say we have so much in saving that no recession can harm us if it is there for another 10 yrs.....thats the imporatnce of indian mentality of saving & frugality......

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Re: Perspectives on the global economic meltdown

Postby vina » 27 Feb 2009 17:31

Amol , don't kid yourself. The "romantic pastoralism" and everything is nice to get misty eyed and dewy about , but fact is it is an extremely difficult life , stagnant, barely subsisting and very vulnerable to any shock. Why even something as a failed monsoon and a drought devastates millions of lives and leads to large scale migration to cities in search of food, shelter,water and work in the hope of keeping body and soul together.

There are umpteen number of movies made on that sort of thing and real documented experience of such suffering is a recurrent theme in Indian history.

Yes, values of thrift, frugality etc is good. Those are universal good to have values. But what you are missing here is the woods for the trees. The village is a den of inquity and a hell hole of ignorance, really a dark area of Indian life. I know Gandhi and Ambedkar bad radically different views on this. I subscribe to Ambedkar's views. I think he was right. The Gandhian "romantic pastoralism" / "village utopia" is unreal, a chimera and basically an escapism.

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Re: Perspectives on the global economic meltdown

Postby Neela » 27 Feb 2009 17:39

vsudhir wrote:
Anyway, how does one claim the 'west is dead anyway'? A tad early to make that prognosis, perhaps? There may yet be a WW III engineered and population culling on an unprecedented scale visited to ensure the west doesn't fall behind the rest. Of course all sorta of spin will be aired to make it look like some universally noble cause is being served but that wouldn't change anything for the rest of the world.

.


Far from it. And neither is India's path to the top all rosy. But we have atleast ensured we have tools to dissuade people making mischief, if it gets to WW III.

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Re: Perspectives on the global economic meltdown

Postby Gus » 27 Feb 2009 18:46

Singha wrote:what is this 100 day vacation thing? do H1s contractors come under this?


Contractors cannot work continuously and have to take a 100 day break. This is to avoid claims for full benefits that full timers are entitled to. Or something like that :lol: don't remember what I was told many years ago on this. I believe it is for all..not discriminating between citizens, GC or H1Bs etc.

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Re: Perspectives on the global economic meltdown

Postby Singha » 27 Feb 2009 21:16

well nobody ever told me this when I was a h1 contractor for around 500 days.

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Re: Perspectives on the global economic meltdown

Postby SwamyG » 27 Feb 2009 21:30

Roy:
Ok.. so the computer you are typing this on was always there.. right? Or the medications you use, or the water/ sewage/ electricity infrastructure you use was always there? Wake up.. wealth is not a zero sum game.

I said aping the West, right? It does not mean we should not take the best from the West. It does not mean we should not utilize the innovations coming from the West. Aping means blindly copying. That is what I am not particularly fond of.

The belief that wealth is a zero sum game is what caused asian cultures to stagnate for over 2,000 years. Do you want more of the same?

Stagnate for 2,000 years? Wow, I would like elaboration on that claim. Did not Angus claim that India and China's contributed a gigantic share in the World GDP?

Yes, but saving more than 10% of your income drains money out of the productive economy. It might sound nice, smart and religious but it does not create new wealth. Only well paid jobs create new wealth.

I have said nothing about religion. A family saves what the family thinks it needs to save. Looking at the current economic scenario it is evident that a healthy savings is necessary during the tough times. How did you arrive at the 10% number? I am curious to know. In USA, the general rule of thumb is that a family needs to have 4-6 months of liquidty as an emergency fund. Looking at the savings rate and credit card loans, I am not sure if everybody follows that sane advice.

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Re: Perspectives on the global economic meltdown

Postby ramana » 27 Feb 2009 21:33

One finance guru was on local radio and suggested people read his book "Financial Atlas" to get an idea of past busts and benefit from that. he says just as people study people history they need to study financial history.

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Re: Perspectives on the global economic meltdown

Postby SwamyG » 27 Feb 2009 21:36

Abhijeet:
Your post almost imply that I am against free market or capitalism. My stance is we should not get too much attached with any one point of view. A country (for that matter a family and individual) needs a balance. The discussions about which is great - regulations or deregulations etc etc might be nice for the radio talk show hosts and TV hosts.

Wealth has to be created from something, right? For everything there is a price to pay for. And that is what I mean by transfer. Yes we live a lot better than our ancestors in several aspects. We have access to better nourishment, health care, recreation & security. No doubt.

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Re: Perspectives on the global economic meltdown

Postby SwamyG » 27 Feb 2009 21:45

Bade wrote:
The correct way to understand this is perhaps, good character is essential for better health, which in turn is required to create wealth. In the end what matters is creating wealth of new ideas and keeping the brain active. That is the essence of wealth creation. Deep meditative state for its own end does not do it.

Well said. Taking it further, eventually Wealth is a means to something - Happiness.

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Re: Perspectives on the global economic meltdown

Postby vera_k » 27 Feb 2009 22:54

Singha wrote:what is this 100 day vacation thing? do H1s contractors come under this?


The local union went to court against Microsoft in the 1990s claiming that long-term contractors were really full time employees and should get ALL benefits. The 100 day forced vacation was one of several changes instituted at that time to show that contractors are not full time employees. This would be specific to Microsoft and not a general rule across the US.

The policy ultimately benefits contractors who hold themselves out as vendors as they don't face the same restrictions.

http://www.washtech.org/news/courts/dis ... ontent=381

The policy, instituted largely in response to the Vizcaino case, now mandates that agency contractors leave Microsoft for 100 days after working for one consecutive year at the company.


And a comment

I just want to comment as to the troubles that Vizcaino has brought upon all IT contractors, who are now limited to only being able to serve 2 yrs at at time at any one place. Out of this lawsuit, came huge heartache for hard working people trying to make an honest living. I feel like all of the 10s of thousands who have been hit by the 4160 Rule, should file lawsuit against the contractors involved on the plaintive side of this lawsuit. I will spread the word.

Atish
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Re: Perspectives on the global economic meltdown

Postby Atish » 27 Feb 2009 23:20

Blaming the current crisis on capitalism is not right. Capitalism does not claim perfection of markets. And there was a TREMENDOUS amount of regulation and meddling in US housing and bond markets by Congress and regulators over many years. It was IDIOTIC REGULATIONS. The whole idea that home ownership is somehow better than renting, idiotic fiscal and land use policies, neglect of the well known agency problem, and giving quasi govt powers to rating agencies and large investment banks with incompetent regulatory oversight over them. And bubbles and busts will happen no matter what the government does. Its ingrained in human nature to be economically manic depressive.

Atish.

Atish
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Re: Perspectives on the global economic meltdown

Postby Atish » 27 Feb 2009 23:22

They pulled another fast one on the public with the "DEREGULATION" of the electricity market. Though what it did was replace idiotic regulations with even more idiotic ones. Its a great scam, call socialism capitalism, watch it fail as it inevitably will, and then blame capitalism.

Atish.

vsudhir
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Re: Perspectives on the global economic meltdown

Postby vsudhir » 28 Feb 2009 01:28

'There will be blood'

Harvard economic historian Niall Ferguson predicts prolonged financial hardship, even civil war, before the ‘Great Recession' ends.


Publicity hound Niall Fergasson back to his old tricks at understated sensationalizing. Wasn't this the same man who went about advising unkil on the subtleties of managing empire after the Iraq invasion fiasco?

Still, worth a read for the laughs and the inadvertent insights.

Harvard author and financial crisis guru Niall Ferguson has landed with a thud in Ottawa, spreading messages that could make even the most confident policy makers squirm.

The global crisis is far from over, has only just begun, and Canada is no exception, Mr. Ferguson said in an interview before delivering a presentation to public-policy think tank, Canada 2020.

Policy makers and forecasters who see a recovery next year are probably lying to boost public confidence, he said. And the crisis will eventually provoke political conflict, albeit not on the scale of a world war, but violent all the same.

“There will be blood.”
Last edited by vsudhir on 28 Feb 2009 01:37, edited 1 time in total.

SwamyG
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Re: Perspectives on the global economic meltdown

Postby SwamyG » 28 Feb 2009 01:34

I am not blaming Capitalism. I am saying India should not place all its eggs in any one basket. So there were idiotic regulations in some place, but there were no sane regulations checking the banks elsewhere. See there is a lesson here - regulate at the right place, and these are some of the things that India should do/continue to do.

svinayak
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Re: Perspectives on the global economic meltdown

Postby svinayak » 28 Feb 2009 02:48


Yale’s Tobin Guides Obama From Grave as Friedman Is Eclipsed

http://www.bloomberg.com/apps/news?pid= ... er=economy

By Oliver Staley and Michael McKee

Feb. 27 (Bloomberg) -- So long, Milton Friedman. Hello, James Tobin.

After a three-decade run, the free-market philosophies of Friedman that shaped U.S. policy are being eclipsed by the pro- government ideas of Tobin, the late Yale economist and Nobel laureate who brought John Maynard Keynes into the modern era.

Tobin’s stamp is on the $787 billion stimulus signed by President Barack Obama, former students and colleagues say. His philosophies are influencing Austan Goolsbee, a former Tobin student advising Obama, and Ben S. Bernanke, head of the Federal Reserve. Unlike Friedman, Tobin provides guidance for today’s problems, said Paul Krugman, a Princeton University economist.

“Hard-line doctrines don’t seem very appropriate at this troubled moment,” said Krugman, a New York Times columnist who also worked with Tobin at Yale from 1977 to 1979. “Tobin was never a guru in the way Milton Friedman was; he never had legions of Samurai ready to spring to the defense of his theories, but that’s part of why he is so relevant right now.”

The decision by Bernanke last year to invoke the Fed’s emergency powers and put mortgages and other assets on the central bank’s balance sheet “is pure Tobin,” Krugman said. Bernanke cited Tobin’s 1969 essay on monetary theory in a 2004 paper discussing options available to the Federal Reserve for stimulating the economy when interest rates approach zero.

Tobin’s experience of the depression as a teenager in the 1930s gave him a lifelong loathing of unemployment.

‘Livid’ Response

“As a young professor I did a paper where I analyzed the optimal unemployment rate,” said Joseph Stiglitz, a professor at Columbia University in New York, who knew Tobin at Yale. “Tobin went livid over the idea. To him the optimal unemployment rate was zero.”

Like Keynes, Tobin was an advocate for the role of government in maintaining full employment, said James Galbraith, an economist at the University of Texas in Austin. The current economic and financial crisis has validated that philosophy, said Galbraith, a former Tobin student and the son of the late John Kenneth Galbraith, who was a friend of Tobin.

“It’s clear that the position that the federal government has a responsibility for the level of employment, for the economy, has prevailed,” Galbraith said. “The position that the Fed can walk away from the level of employment has completely collapsed. That was the absolutely dominant position coming out of the University of Chicago.”

In contrast to the Friedman-influenced proponents of tax cuts, deregulation and tight control of the money supply, followers of Tobin are more receptive to government intervention in the economy, including stimulus spending.

Herbert Hoover

“I do not believe that over the next two years, we can make major deficit reduction or balancing the budget a goal,” Goolsbee, nominated by Obama to the Council of Economic Advisers, said at a Senate hearing on Jan. 15. “I think that would run the risk of repeating one of the mistakes of Herbert Hoover that led us into Depression.”

Goolsbee was Tobin’s research assistant at Yale.

Tobin was born in 1918 in Champaign, Illinois, the son of a former reporter who was a publicist for the University of Illinois football team. His high school years during the depression motivated him to study economics at Harvard University in Cambridge, Massachusetts, Tobin said in an essay written for the Nobel committee.

“The miserable failures of capitalist economies in the Great Depression were root causes of worldwide social and political disasters,” he wrote. Economics “offered the hope, as it still does, that improved understanding could better the lot of mankind.”

Nobel Winners

Tobin, who died in 2002, won the 1981 Nobel Memorial Prize in Economic Sciences for his analysis of the effect of financial markets on inflation and employment. His followers have been honored as well. Krugman won the 2008 prize, for work on international trade and economic geography. Stiglitz shared the 2001 award, which cited analyses of markets in which some participants have much better information than others.

Tobin helped pioneer the study of financial markets and their importance to economic performance, said William Brainard, a Yale colleague and friend.

“He believed financial markets could serve a valuable service in diversifying risk and moving capital in efficient ways,” Brainard said. “But he was not someone who believed the market always got it right and that private incentives were always aligned with the public good.”


Abhijeet
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Re: Perspectives on the global economic meltdown

Postby Abhijeet » 28 Feb 2009 03:49

SwamyG wrote:Wealth has to be created from something, right? For everything there is a price to pay for. And that is what I mean by transfer.

But this is not just a transfer, that's the point. Wealth is created, not just transferred, in the process of taking a raw material and converting it into a finished product of higher value. The wealth was not simply transferred, there was a value addition during the transformation.

In the case of software/tech companies, they can create wealth out of almost nothing - just human creativity, and arranging a series of bits in the right sequence (almost zero marginal cost). This gives us the power to create wealth on a scale probably unprecedented in human history.

ramana
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Re: Perspectives on the global economic meltdown

Postby ramana » 28 Feb 2009 03:51

Investment Atlas (Hardcover)
by Ken Winans (Author), Renee Robinson (Book Angel) (Editor), Rik Rice (Designer) (Illustrator)


Book Review


Editorial Reviews
Review
Ken Winans has written a book that will fascinate anyone interested in the financial markets and their history, and will hopefully convince everyone else of the importance of studying our financial past.
If you re not a financial history expert, with 200 years of financial market history in the United States, where do you start? How do you get a handle on what was important in the past and what wasn t? Many investors have some understanding of the past, but the problem is how to put it all together.

Investment Atlas provides the perfect starting point. It is a comprehensive map to past financial markets, looking at many of the issues that have affected investors over the past 200 years. The book organizes the various factors that affect financial markets succinctly for quick reference. So next time someone comes out and proclaims, This time, it s different, you can go to the investment atlas to find out that it probably isn t.

The atlas is a time capsule. Each chart is accompanied by pictures, cartoons, historical documents, old stock certificates, and other artifacts to give you the feel of what was going on in the past. It helps you see how people who lived through the events of the past viewed what was happening to them. Even those who aren t financial history buffs and technical analysts should enjoy the book for all the historical documents that are included.

One of the things I like about the book is that it goes beyond the traditional portfolio of stocks, bonds and bills, and includes real estate, commodities, collectibles, and other investments to show how they have performed over time. For most people, their home is the largest investment asset they own, and millions of people collect coins, stamps, art, or other non-financial items. Assessing the performance of real estate, collectibles, and other investments is difficult, and now you can get an idea of how these compare with traditional investments.

Like any atlas, the goal is to help the investor find out where they are going. The charts make me want to study the data in more detail and look at the real numbers, play around with them, test out my own hypotheses, and see what works and doesn t work in the market. Looking at the chart for Enron makes me wonder how similar the chart is to Bear Stearns.

In short, Investment Atlas is a fascinating book that helps you dive into the history of financial markets, and let s you live it as well. --Dr. Bryan Taylor, President, Global Financial Data<br /><br />Ken s new book is the reference I have needed for years! It will stay close to my desk. Sometimes a good reference book is far more efficient and useful than wasting time on the web. --John Knudsen, Dean - Texas A&M Foundation<br /><br />The book is beautiful! --Matt Krantz, Senior Writer - USA Today

Ken's new book is the reference I have needed for years! It will stay close to my desk. Sometimes a good reference book is far more efficient and useful than wasting time on the web. --John Knudsen, Dean - Texas A&M Foundation

The book is beautiful! --Matt Krantz, Senior Writer - USA Today

Product Description
We have all heard the phrase History repeats itself! Yet very few people seriously apply long-term history to the art and science of investing.

There is no better example of this than how the majority of modern investors, the most knowledgeable and technologically advanced in history, mishandled the dot.com bubble and the panic selling in response to the corporate scandals of 2002.

Clearly, the constant barrage of news, earnings projections, economic reports, and advice from respected professionals flowing from the Internet 24 hours a day hasn t helped investors separate the forest from the trees and tackle the age-old problems of successful investing.

Simply put, something is missing!

This artistic, colorful reference book has been written with one objective to make sure investors are armed with useful information about the performance and characteristics of stocks, bonds, commodities, real estate, and collectibles since 1800.

Investments have different personalities and act differently during good times and downtrends. Past bull and bear markets are examined within the various investment groups to show how they differ, and the tools investors can use to navigate the changes in long-term trends.

Finally, the book reviews the surprising reactions of investors to triumphant and catastrophic events that have confronted mankind throughout the ages such as wars, monumental peacetime achievements, natural and man-made disasters, and government actions (i.e., interest rates, taxes, and regulations) in reaction to these situations.

Similar to how a traveler uses a road atlas to learn about his destination and avoid getting lost, Investment Atlas will help the investor be a profitable user of investment history, not a victim of it.



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