shyamd wrote:Since the output gap is now strongly negative there is no immediate risk of inflation from this source, that imply there is actually a chance of deflation in 2010/11. With all of this in mind the direct inflationary effects of quantitative easing are some way off or of little significance and as soon as signs of increasing inflation appear the Bank of England is obliged to go quickly into reverse.
There is a further indirect effect if the UK increases its money supply more than others especially the US and the rest of the EU. You imply this. The lower relative interest rates will cause the £ to fall further and this will increase the rate of inflation. My feeling is that this reduces the risk of deflation and explains the slow fall in CPI inflation at the moment. It could lead to inflation becoming a problem again perhaps reinforced by higher food prices. If the ECB and the FED follow the Bank of England with large scale 'quantitative easing' long run interestrates will fall across the world so the impact on exchange rates and hence inflation will be zero or nearly so. The risk of higher inflation from this source will reduce a lot.
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I meant Long term inflation. There would be a lag due to current supply-demand gap. But don't expect current low demand to turn into massive deflation. You would see some till businesses are clearing inventories or having closing-down sales. But their basic costs (of manufacturing, labour, energy etc) have not gone down. Unless they allow sweat-shops their labour is going to remain expensive. Commodity prices may be low but below a certain point people would just hold on to the assets than give away cheap.
In fact as the demand slumps, the advantages of economies of scale will be lost. The businesses would have to spread their fixed costs over smaller demand base to leading to higher prices in many goods and services. Mobile phone, cable and internet services should be the first to show effects of these.
In the long term even the certain technical manpower will be in short supply due to low and rare demand by industry and become expensive. So even if they become protectionist and want to do make things themselves, the indigenous goods will be more expensive due to higher paid local technical manpower.
Burdened with increasing fiscal liabilities government is likely to raise taxes which won't help prices either.
Khan and Your opinion union have relatively bigger population base to draw either scale benefits or specialized manpower benefits.
Thank you saars, for your good wishes. PhD==permanent head damage is an old one. Latest amongst desi grad students is PhD==Phati Hui Dhoti. Dass what we've been reduced to after yrs of surviving on student stipends onlee....
Re. Inflation vs deflation debate....
Deflation shall happen in (typically immovable and usually semi-illiquid) asset prices as that is what spiked artificially with manufactured credit.
But inflation dangers loom ever more urgently on food, consumables, other essentials and everyday items. Their demand hasn't shrunk, their production costs haven't fallen and yet credit squeeze stunts capacity ramp up.
Its a double whammy onlee. Home values shrink limiting collateral for fresh credit whereas cabbage prices don't shrinking purchasing power of current income. And wage deflation is underway for those fortunate enough to be employed (BLS reports wage increase of -0.6% for Q4'08).
Britain's trade deficit with the rest of the world widened by more than expected in January as exports to countries outside the European Union plummeted by 16%.
The Office for National Statistics (ONS) said that the UK's goods trade gap widened to £7.7bn in January, from £7.2bn in December.
The goods trade gap with non-EU countries also rose by more than expected to a record £5.7bn, from £4.3bn in December.
Goods exported to EU countries increased by 5.9% in the month to January, but this was outweighed by a 15.9% plunge in exports to non-EU countries. Exports to the US were down 8.5% in January alone.
Hmmm, and all this even as the pounded-sterling recorded record falls against the USD (lowest since '91) and the euro? So, even with falling currency their trade deficit is widening? @ 7.7bn lbs a month?? UKoA indeed.
btw TOI Ascent yesterday was the first I have seen with not one itvity ad.
BW
India Tops List of Countries Where Companies Are Still Hiring
A 33-country study puts India at the top of nations likely to keep hiring in the April-June quarter of 2009. South Africa came in second
India tops a list of nations likely to keep a steady pace of hiring in the April-June quarter of 2009 with one in every four Indian companies surveyed saying it plans to recruit.
South Africa came second in the 33-country study that featured 3,600 Indian companies and 72,000 employers worldwide, according to HR consulting firm Manpower.
The survey's benchmark net employment outlook (NEO) for India improved from 19% in the previous quarter to 25% in April-June, said the firm's India MD Naresh Malhan. NEO is arrived at subtracting the percentage of employers expecting to see a decrease in employment at their location in the next quarter from those anticipating total employment to increase.
India had registered a NEO of 42% for Q2 2008, which has now dipped to 25%, indicating the impact of the global slowdown. The relatively slow pace of hiring in the second quarter can be attributed to the employers' focus on maintaining their workforce at current levels. Also, hiring intentions across all industry sectors have softened, as organisations review their requirements at the beginning of the fiscal year," Mr Malhan said.
Employers in all the seven industry sectors surveyed said they expected the headcount to grow in the next quarter. The services sector was the most optimistic with a strong net outlook of 29%.
Sectors such as transportation & utilities, (23%) manufacturing (22%), public administration & education (22%), insurance, finance and real estate (21%) are all likely to see robust hiring in the next quarter.
Also, employers in all four regions across the country predict a strong labour market for April-June, 2009. "The most optimistic forecast is from the eastern region, where the net employment outlook stands at 27%, followed by south, west and north at 24%, 23% and 22%, respectively," the survey said.
South Africa had a NEO of 14% while China registered 4%, and the US just 1%.
US household wealth falls $11.2 trillion in 2008
Reuters - 1 hour ago
By Emily Kaiser WASHINGTON (Reuters) - US households suffered a record 9 percent drop in wealth and pared debt in the fourth quarter as a deepening recession battered confidence and finances, Federal Reserve data showed on Thursday. ...
Household net worth down 18 percent The Business Journal of Milwaukee
Bizjournals.com - 1 hour ago
The financial meltdown has sapped more than 18 percent of US households’ wealth, according to a Wall Street Journal report. Citing Federal Reserve figures, the newspaper said the net worth of American households was $51.5 trillion in 2008, ...
US Household Net Worth Had Record Drop Last Quarter
Bloomberg - 4 hours ago
By Timothy R. Homan March 12 (Bloomberg) -- US household wealth fell by a record $5.1 trillion from October to December, almost twice the decrease in the previous quarter, as home values and stock prices plunged, Federal Reserve figures showed. ...
Lotsa angst here too. It does take some doing to manage to squander as powerful and prosperous a position as 'em boomers have done. Not to be outdone, PRC seems determined to take a stab at the same shining legacy.
Millions of baby boomers born into the dawn of the most spectacular economic expansion in history are being forced to re-imagine their retirement futures. Few news outlets have failed to seize upon the low-hanging pun: the boomers have gone bust.
Not meaning to quibble with what is essentially journalistic license but IMO among the most spectacular economic expansions in history should be counted India between the 2nd century BC and the 2nd century AD, as well as the industrial revolution.
People in their 50s and 60s are losing their nest eggs and increasingly willing to give up their privacy in exchange for rents of $500, $600 a month.”
Boomers are maximizing room occupancy for the same reason that their kids in their 20s and 30s are still competing for the best group rentals on Craigslist: they're broke.
The net worth of median households in the 45 to 54 age bracket has dropped by more than 45 percent since 2004, to just over $80,000. Households headed by those aged 55 to 64, meanwhile, have lost 38 percent of net wealth.
The result is that many baby boomers will only have entitlements to rely on in their retirement.”
IMO, watch out for the canary in the coal mines - the most vulnerable generations in society - the elderly. Empires start crumbling at the edges first even though the center may look strong and glittering. There's already reports of how BoE interest rate policies have pushed some 5 lakh Brit pensioners into penury in 2009 alone (detailed in the previous page, IIRC).
1) The median household with a person between the ages of 45 to 54 saw its net worth fall by more than 45 percent between 2004 and 2009, from $172,400 in 2004 to just $94,200 in 2009 (all amounts are in 2009 dollars). If the median late baby boomer household took all of the wealth they had accumulated during their lifetime, they would still owe approximately 45 percent of the price of a typical house and have no other assets whatsoever.
These calculations imply that, as a result of the collapse of the housing bubble, millions of middle class homeowners still have little or no equity even after they have been homeowners for several decades. These households will be in the same situation as first-time homebuyers, forced to struggle to find the money needed to put up a down payment for a new home. This will make it especially difficult for many baby boomers to leave their current homes and buy housing that might be more suitable for their retirement.
Finally, the projections show that for both age groups, the renters within each wealth quintile in 2004 will have more wealth in 2009 than homeowners in all three scenarios. In the second and third scenarios, renters will have dramatically more wealth in 2009 than homeowners who started in the same wealth quintile.
vsudhir wrote: There's already reports of how BoE interest rate policies have pushed some 5 lakh Brit pensioners into penury in 2009 alone (detailed in the previous page, IIRC).
That's all? So, all the loot and plunder of India over the generations has been spent and some people are into "penury". Is that penury aka english style.."well we have to cut down on some pakis.." I want to see them just like those in Zimbabwe and hope it becomes a reality.
Let there be some justice for all they have done with famines, loot and plunder in our nation. yes, yes, I note our SS_Roy saab's perspective that is all our fault onree.
I have never said that the brits were faultless.. It was just that many indians preferred to make a lot of money, inspite of starving people dying by the thousands near their havelis.
Let there be some justice for all they have done with famines, loot and plunder in our nation. yes, yes, I note our SS_Roy saab's perspective that is all our fault onree.
ramana wrote:It just means people have to work longer if they have jobs.
It also means people will have to work harder on the jobs...meaning real value added work. No more manager type jobs in the long run. It is not the end of the world as you point out, just that the easy jobs (managing a hundred underlings) with lots of money is gone for good. In fact, also for the good of future of the human race. All those who paid big money for MBA type education are going to find the going hard in near future and for a long time. The west had reached saturation levels of consumption with existing ideas which had created needs (markets). So new needs to be created which implies hard work like the 1900-1960s.
Remember all the great ideas in physics in the last century as an example happened during difficult economic times. Those ideas formed the basis for the consumption driven economy of the later half of 20th century.
ss_roy wrote:I have never said that the brits were faultless.. It was just that many indians preferred to make a lot of money, inspite of starving people dying by the thousands near their havelis.
What the Great $hitain (thank you, Rudradev) did in India a some hundred times intense in attrocity than Nazi Germany did to the Jews. Yet there is not a pipsqueak of "other side" that is ever said about Nazi Germany and Jews have been the gravest "victims" all the way. That is how a narrative needs to be told if we want to stop that from happening ever.
But we being what we are...we provide a "balance" by always hitting ourselves at least 3 times for every 5 times we are hitting the enemy.
“We have lent a huge amount of money to the United States,” Wen said at a press briefing in Beijing today after the annual meeting of the legislature. “Of course we are concerned about the safety of our assets. To be honest, I am a little bit worried. I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”
Stable Yuan
“China is worried that the U.S. may solve its problems with the fiscal deficit and banks by printing money, which will stoke inflation,” said Zhao Qingming, a Beijing-based analyst at China Construction Bank Corp., the country’s second-biggest lender. “If the U.S. can make sure this won’t happen, then China will continue to invest.”
“Our goal is to maintain a basically stable yuan at a balanced and reasonable level,” Wen said on the final day of the meeting of the National People’s Congress. “At the end of the day, it is our own decision and any other countries can’t press us to depreciate or appreciate our currency.”
“We have reserved adequate ammunition,” Wen said, adding that the fiscal deficit is under control and the debt level still safe. “At any time, we can introduce new stimulus.”
Yu Yongding, a former adviser to the central bank, said in an interview on Feb. 10 that China should seek guarantees that its U.S. debt holdings won’t be eroded by “reckless policies.” While Wen used the Chinese word for “guarantee” in his answer, it was translated into English as “ensure.”
“We have adopted a principle of diversification with our foreign-exchange investments,” said Wen. “So far, our holdings are generally safe. China will mainly use the reserves for outbound investments and trade.”
China ‘Worried’ Over Safety of U.S. Debt, Wen Says
The chinis are playing hardball in a way the yindians likely wouldn't have (owing to our nature itself, I dare say).
Unkil shall soon learn the heard way they backed the wrong horse (PRC) in Asia. PRC will cannibalize their influence rather than complement it as perhaps yindia might have done. But hey, only soup-err-powers and wannabe soup-err-powers have the luxury to make such mistakes and then learn from them, I guess. MaoA indeed.
Ramana saar,
Its not just a question of some folks having to work harder et al. The generation that is now forced to return to the workforce will compete for the same jobs with another generation that has always taken those jobs for granted.
And since the neo-non-retirees have medicare, they would paradoxically make for cheaper employees than their younger counterparts. Wage competition in a race to the bottom is maybe a tad exagerrated but you can see where this is going. The era of 'good jobs' in the 2006 sense of the word might finally be coming to an end. The implications are profound, IMHO.
But we being what we are...we provide a "balance" by always hitting ourselves at least 3 times for every 5 times we are hitting the enemy.
Its one thing to build our narrative. Quite another that we willfully refuse to learn of the bad apples in our midst.
If anything, for an Indian to collaborate with phoreners against India must become a crime so extreme that the criminals' family for generations to come ought to live with the shame. IMHO, a punishment that extreme would be well deserved.
And such collaboration happened when our traitors collaborated with the invading islamist raiders, and then with the firangs and now as we speak with the chinis (our CPIM heroes) etc.
Last edited by vsudhir on 13 Mar 2009 19:25, edited 1 time in total.
Harvard's fair name gor besmirched when its vaunted miracle-workers failed to further raise its endowment value which crashed down by a third in Q4'08.
But never fear, Harvard's galaxy of illustrious alumni have come riding to the rescue to save the burnished image.
Harvard Business School alumni include Stan O’Neal and John Thain, the last two heads of Merrill Lynch, plus Andy Hornby, former chief executive of HBOS, who graduated top of his class. And then of course, there’s George W Bush, Hank Paul-son, the former US Treasury secretary, and Christopher Cox, the former chairman of the Securities and Exchange Commission (SEC), a remarkable trinity who more than fulfilled the mission of their alma mater: “To educate leaders who make a difference in the world.”
It just wasn’t the difference the school had hoped for.
Switzerland has caved into the growing pressure on tax havens by pledging to co-operate with international standards on tax evasion.
In a landmark decision, the Swiss government said this morning it will adopt Organisation for Economic Co-operation and Development standards, which state that countries should work together on cases of suspected tax evasion.
Switzerland had resisted the rules on international tax and data sharing, but the threat of being blacklisted by the OECD has prompted it to relax its stance.
"Banking secrecy does not protect tax crimes. International co-operation on taxes has become more important given the globalisation of financial markets and in particular against the background of the financial crisis," Swiss president and finance minister Hans-Rudolf Merz told a news conference today.
Merz added, though, that Swiss banks would not now automatically surrender details of their clients, and suggested an amnesty for existing customers might be needed. Switzerland has traditionally not seen tax evasion by foreigners as a crime.
The move comes a day after Liechtenstein said it would start sharing information about suspected tax evaders. Earlier this week, Jersey signed up to a tax information agreement with the UK. With Austria and Andorra also pledging to co-operate, campaigners believe the days of the tax haven may be numbered.
Tax havens are set to be a key issue at the gathering of G20 finance ministers this weekend in London. Barack Obama has led the charge against international tax havens, which he believes cost America billions of dollars a year in lost revenue.
Swiss bank UBS is caught in a battle with US authorities over allegations that tens of thousands of American citizens banked with the company to evade US taxes. It has agreed to pay a $780m (£564m) fine, but is resisting demands to surrender 50,000 names.
Jean Schaffner, a tax partner at Allen & Overy based in Luxembourg, said today's move from Switzerland was "a good compromise between the need to co-operate with foreign tax administrations and the desire to preserve privacy".
The move has divided the country's coalition government. The right-wing Swiss People's Party claimed that the government had "betrayed citizens and bank customers".
"With its fearful attitude to do everything possible not to be blacklisted, the government has once again allowed itself to be blackmailed ... With today's decision the government is sacrificing a centuries-old principle of protecting citizens," it claimed.
But the Swiss Social Democratic Party, the second largest behind the People's Party, said it was an important step.
"This is a foreign policy signal to all those countries which rightly criticise Switzerland for protecting tax flight," it said.
Hundreds of billions at stake
The extent to which companies and individuals are using overseas tax havens to dodge tax has been exposed in an ongoing investigation by the Guardian. The Tax Gap investigation found Royal Bank of Scotland used a series of tax avoidance schemes to avoid paying £500m to British and US revenues. Many other FTSE-listed companies have also used complex financial structures to cut their tax liabilities.
Oxfam added its voice to the anger over tax havens today: the charity said they cost governments around the world up to $124bn a year in lost taxes – more than their yearly $103bn in foreign aid.
"The financial crisis shows our leaders can no longer afford to stand idly by whilst tax havens take billions of pounds from the pockets of taxpayers in rich and poor countries alike," said Kirsty Hughes, Oxfam head of policy and advocacy. "Reform of tax havens would be an easy win for our leaders that would benefit ordinary people at home and abroad alike. There is no longer any excuse for delay."
vsudhir, In strategic industries the old folks are not retiring. And its good thing for the new ones dont know anything being the power point generation. Its going to distort the labor market very badly. Expecty age discrimiantion suits in a few years.
If anything, for an Indian to collaborate with phoreners against India must become a crime so extreme that the criminals' family for generations to come ought to live with the shame. IMHO, a punishment that extreme would be well deserved.
And such collaboration happened when our traitors collaborated with the invading islamist raiders, and then with the firangs and now as we speak with the chinis (our CPIM heroes) etc.
Intelligent debate on the default risk in US gubmint bonds over at naked capitalism, sparked by comlade Wen's demanding guarantees that the US won't default on its debts (heh, heh).
Moody's warned of the risk of a US downgrade in the next 10 years BEFORE all the emergency expenditures and financial firm emergency operations started
Standard and Poor's said consolidation of Freddie and Fannie might impair the US's rating (um, we aren't going to let them go, so the distinction between consolidation and what we have now looks largely cosmetic).
Credit default swaps on US 5 year debt, last I saw, was 100 basis points. Not all that long ago, it was 2, assuming you could even get a quote, the idea of a CDS on govvies seemed ludicrous. The US now seen as far from a risk free credit
And in case you think the credit risk is exaggerated, consider. The US already partially defaulted on its debt.
Recall how Bretton Woods operated. Rather than go back to a gold standard at the end of World War II (its defect is a deflationary bias, which made the Great Depression worse), the US instead pegged its currency at $35 an ounce and other countries set rates of conversion in dollar or pound sterling terms. By 1965, the value of dollar claims by foreigners on America's gold reserves at the $35/oz. rate were greater than the actual supply. The US defaulted on its $35 par value when Nixon cancelled Bretton Woods by suspending the convertibility of dollars into gold. As Michael Hudson noted (hat tip reader Rajiv):
The $75 billion that the U.S. Treasury [would owe] to the world’s central banks at 1968‐1972 prices and exchange‐rates would be repaid with the equivalent of perhaps less than $40 billion in purchasing power as measured by the original debt. To the extent that gold was revalued and part of this $75 billion repaid in bullion, the gold tonnage price of this dollar borrowing would be written down to less than one‐fifth of its original value as measured by the year‐end 1974 price of almost $200 an ounce
And if you don't buy the gold valuation (remember, it had been the value peg until broken), consider that the resulting floating rate regime saw a big depreciation of the greenback against most major currencies.
In other words, the idea of a US partial default is far from a loony line of conversation; we did it less than 40 years ago.
And in light of that history, why is Wen asking for assurances? None can be made. So what concession might he be looking to extract instead? Now that China's trade surpluses have fallen sharply, it has no particular reason to buy Treasuries at anything like its recent volumes.
As we said, this message is most likely to be posturing for domestic consumption, but China could also be putting stakes in the ground. Watch for the next move in this gambit.
Time to take the long view of the past and of the future.
The average base salary for M.B.A. graduates in recent years was £60,000, or about $82,000, in the first year with a potential bonus of £100,000, according to London-based banks.
At the end of the third year, the potential total compensation could rise to roughly £500,000 depending on the performance of the firm, the group the employee works in and the employee.
Wow. So a dude with 5 yrs in a London bank could afford to simply retire to New Zealand after that. No? The greedy ba$turds however hung on and screwed the rest of the economy out of credit, into debt and away from peace of mind. Jai-Ho.
How informal economies are becoming the last buffer in crisis time.
Ms. Patni and millions like her are part of the "informal," or underground, economy, an enormous, vital and poorly understood segment of world commerce.
By using the term Underground consistently through the article I somehow feel they are giving the "illegal" angle to what is rightful hard work and earnings. The term "Unorganized" would do better justice.
vsudhir wrote:
Wow. So a dude with 5 yrs in a London bank could afford to simply retire to New Zealand after that. No? The greedy ba$turds .. Jai-Ho.
Depends on what one's idea of "comfort" is. Unfortunately, this rises proportionately with one's income and is perpetually out of reach, so no retirement in New Zealund.
Over the course of the past week or so, while I was interviewing child psychiatrists about the exciting new field of developmental neuroscience, the phrase “the best and the brightest” came up twice.
As in “I hope the brightest and the best kids will be doing this” — instead of going to work on Wall Street.
The first time I heard it, I didn’t say anything. I was laboring too intensely to keep up with phrases like “single nucleotide polymorphism.” But the second time, I was able to pause in note taking long enough to grouse, “I never had the impression that the best and brightest people went to Wall Street.”
“Maybe not in your day,” came the reply. “But in recent years they have.”
Let’s leave aside for a moment the concept that I could be old enough to have a “day” dating back to sometime in prehistory. And return to that phrase “the best and the brightest,” which got a great deal of airing last month when the Obama administration made the shocking decision to place limits on the compensation packages of executives whose banks received federal bailout funds.
A nice triple usage by Forbes.com columnist Susan Lee, in a piece on the proposed $500,000 compensation cap for top management, was typical: “This produced outraged shrieks from Wall Street that any pay cut would cause the best and brightest to head for the exits,” she wrote. “… But the big flaw here is that the best and brightest have nowhere to go … unless the best and the brightest want jobs as home-care attendants or third-grade teachers, there’s no place to jump.”
When was it, exactly, that the titans of Wall Street, among their many other perks and privileges, got to be crowned with the title of “best and brightest”?
Certainly not in the early 19th century, when Percy Bysshe Shelley, in his love poem “The Invitation,” called, “Best and brightest, come away!” Nor in the early 20th century, when “The Education of Henry Adams” featured a sad, exalted tribute to the geologist Clarence King as the “best and brightest man of his generation.”
The ability to make big bucks wasn’t the chief characteristic of the “best and brightest,” “each new man more brilliant than the last,” whom David Halberstam described in the 1972 book that brought the phrase into our common parlance. His “best and brightest” were ultimately no better than ours; their “arrogance and hubris” led us into the debacle of Vietnam. But they did at least embody a different order of aspiration. They “wrote books and won prizes (even the president had won a Pulitzer prize), climbed mountains to clear their minds. Many of them read poetry and some were said to be able to quote it.”
And this image of best and brightness — however ironic, however laced with foreshadowing of deserved downfall — was, says Susan Jacoby, the author, most recently, of “The Age of American Unreason,” a best-selling account of contemporary anti-intellectualism, the sense that endured behind the phrase for decades. Until this last boom cycle — that irrational bubble-world of the late 1990s and beyond — stamped its values upon every aspect of our world, right down to the language we use to talk about it.
“The best and the brightest meant the people who were supposed to be the smartest, not who made the most money,” she told me this week. “This application in the last few years of the phrase to anyone who’s made a pile of money on Wall Street shows a real degradation of the culture. It’s part of the dumbing down of language as well as culture. It shows a real real dumbing down of everything.”
Even back in the 1980s (“my” day), when greed ostensibly was good, there was still a sense that the best and the brightest didn’t go to Wall Street. Lots of people did want to go, of course — there was a palpable thrill in the air when the investment banks came to recruit on campus — but I never had the impression that anyone was under the illusion that what was on offer was anything other than filthy lucre. You took it or you left it. But you didn’t go to Wall Street under cover of greatness. The whole culture hadn’t yet normalized the value system of men like the reptilian antihero Gordon Gekko. Tom Wolfe’s Masters of the Universe were hardly meant to be admired.
Now that we’ve reached what is almost universally being hailed as a necessary moment of reckoning, I wonder if it’s conceivable that -– along with the revolution in not-shopping that’s sweeping our nation -– we might see a much-needed rehabilitation of the very notion of the “best and the brightest.” Perhaps now, as the great questions begin on Where We Go Next — will our children save their tea bags? Will socialites re-wear their party dresses? — there will be room for a re-evaluation of what really goes into being “bright” and being “the best.”
Maybe it will be discovered that some of the best and the brightest are already teaching third grade and providing low-paying, low-glory health care services. Maybe the definition of the term will come to depend less on money and power, and more on service, ideals, even character. Perhaps there will be an honest accounting of what drives a life devoted to wealth-making.
And maybe — if things work out for this book-writing president and his coterie of brilliant advisers — people might even start to see intellectuals as good, and bright, without irony.
I was able to pause in note taking long enough to grouse, “I never had the impression that the best and brightest people went to Wall Street.”
To which any wall streeter, nay any college grad in 2006 would have retorted:
If you're so smart, how come you ain't rich?
Nay friend, the entire premise of resource allocation and price theory was that the best and the brightest would be pricest highest where they were most wanted and Wall St then priced them the highest no doubt. Hence they would 400% flock there.
The next phase of the world’s economic downturn is taking shape: a global jobs crisis. Its contours are only just becoming clear, but the severity, breadth and likely length of the recession, together with changes in the structure of labour markets in both rich and emerging economies, suggest the world is about to undergo its biggest increase in unemployment for decades.
For now the damage is most obvious in America, where the recession began earlier than elsewhere (in December 2007, according to the National Bureau of Economic Research) and where the ease of hiring and firing means changes in the demand for workers show up quickly in employment rolls.
...
So far, the pattern of job losses in this recession resembles that of the early post-war downturns (starting in 1948, 1953 and 1957). Those recessions brought huge, but temporary, swings in employment, in an economy far more reliant on manufacturing than today’s.
...
Moreover, the official jobless rate understates the amount of slack by more than in previous downturns. Many companies are cutting hours to reduce costs. At 33.3 hours, the average working week is the shortest since at least 1964. Unpaid leave is becoming more common, and not only at the cyclical manufacturing firms where it is established practice.
Onwards to Eurostan.
Europe’s jobs markets look less dire, for now. That is partly because the recession began later there, partly because joblessness had been unusually low by European standards and partly because Europe’s less flexible labour markets react more slowly than America’s. {Not quite, the real reason you will see down below}
...
Structural changes in Europe’s labour markets suggest that jobs will go faster than in previous downturns. Temporary contracts have proliferated in many countries, as a way around the expense and difficulty of firing permanent workers. Much of the reduction in European unemployment earlier this decade was due to the rapid growth of these contracts. Now the process is going into reverse. {Aha, see what I mean}
...
In Spain, Europe’s most extreme example of a “dual” labour market, all the job loss of the past year has been borne by temps. In France employment on temporary contracts has fallen by a fifth. Permanent jobs have so far been barely touched. Despite having few immigrants, Japan is also showing the strains of a dual labour market. Indeed, its workforce is more starkly divided than that of any other industrial country. “Regular” workers enjoy strong protection; the floating army of temporary, contract and part-time staff have almost none. Since the 1990s, the “lost decade”, firms have relied increasingly on these irregulars, who now account for one-third of all workers, up from 20% in 1990.
...
Although the profusion of temporary contracts has brought greater flexibility, it has laid the burden of adjustment disproportionately on the low-skilled, the young and immigrants. The rising share of immigrants in Europe’s workforce also makes the likely path of unemployment less certain.
Of course, the regression to Eurostan's sterling past record can't be far away and must be reverentially broached....
History implies that high unemployment is not just an economic problem but also a political tinderbox. Weak labour markets risk fanning xenophobia, particularly in Europe, where this is the first downturn since immigration soared. China’s leadership is terrified by the prospect of social unrest from rising joblessness, particularly among the urban elite
The move, described as historic by anti-poverty campaigners, came as international pressure, including action from Brown and Barack Obama {Yeah , heard that bull crap before.. suddenly Da Messiah and Poodle are plugged into every thing .. }, forced the world's tax havens to hand over previously undisclosed data on account holders.
In a remarkable week, Europe's secrecy jurisdictions – Liechtenstein, Andorra, Austria, Luxembourg, Jersey and Switzerland – all entered into international information sharing agreements.
Swiss ministers said the government caved in after learning the country was going to be included this month on a blacklist of uncooperative tax havens drawn up by the Organisation for Economic Co-operation and Development (OECD). Having agreed to sign up to the OECD protocol on tax, Switzerland will hand over information on account holders suspected of tax evasion by another country.
Until now tax evasion was not illegal in Switzerland and secrecy has been the bedrock of its economy.
Hans-Rudolf Merz, Swiss president and finance minister, said yesterday: "Co-operation on taxes has become more important given the globalisation of financial markets and in particular against thebackground of the financial crisis."
Switzerland is the world's biggest tax haven. The world's rich hide at least $1.89 tn (£1.35tn) of the estimated $7trn of private wealth there according to the Swiss Bankers Association, though others put the figure much higher.
Netas and all the fraudsters in India must be sh***ing bricks..
It's the other way around. Britain gives refuge to thugs and criminals and these people then invest in Russia via Britain.
Also 59 B from Cyprus and 46 B from Netherlands and 8 B from Virgin Islands. Clearly the real source of these investments lie elsewhere.
a country has to ask the swiss for details, it will not
be given for free. indian netas are safe because all parties have unaccounted money, its a standoff between all parties.
the OECD govts will mop of up stolen money to plug
the gaps in tax collections.
TOi/ET will write a couple articles and forget about it.
Needless to say, people are very wild. This time, both republicans and democrat voting types are talking of revolution etc. This doesnt come at a good time when people are holding small scale tax protests and some are even talking of tea party type of protests on July 4 or Apr-15 (US Tax deadline) to protest the bailouts and tax hikes/obama budget policies.
Some excerpts:
Word of the bonuses last week stirred such deep consternation inside the Obama administration that Treasury Secretary Timothy F. Geithner told the firm they were unacceptable and demanded they be renegotiated, a senior administration official said. But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them.
A.I.G., nearly 80 percent of which is now owned by the government, defended its bonuses, arguing that they were promised last year before the crisis and cannot be legally canceled. In a letter to Mr. Geithner, Edward M. Liddy, the government-appointed chairman of A.I.G., said at least some bonuses were needed to keep the most skilled executives.
“We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury,” he wrote Mr. Geithner on Saturday.
The bonuses will be paid to executives at A.I.G.’s financial products division, the unit that wrote trillions of dollars’ worth of credit-default swaps that protected investors from defaults on bonds backed in many cases by subprime mortgages
There was a similar brief spell of navel gazing and self-recrimination in the wake of the LBO implosions and S&L crisis in the early 1990s. Harvard Business School did a study and concluded you couldn't teach ethics, by the time students arrive at HBS, their moral code is baked in. The conclusion was that they needed to select students differently. Events reveal how much they embraced that idea.
Jai-Ho.
