Perspectives on the global economic meltdown

ramana
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Re: Perspectives on the global economic meltdown

Postby ramana » 21 Mar 2009 01:37

vsudhir wrote:Is this the end of America as we know it?

A tad over the top but nevertheless, another perspective on the downturn.


Lot of anxiety that Shyam Saran was referring to in his speech. Expect more of the same whines. Yes Rome was overrun but Romans are still ruling.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 21 Mar 2009 04:19

Consumers are Just a Paycheck or Two Away From Ruin

A large number of households say that even one missed paycheck would spell financial ruin. And even in households that remain well off, the surveys show a festering fear that financial problems are lurking.
"This is flashing so bright red," said Paul Ballew, senior vice president of Nationwide Insurance Co. "Roughly 60% of the population was ill-prepared (financially) before the meltdown."

A MetLife study released last week found that 50% of Americans said they have only a one-month cushion -- roughly two paychecks -- or less before they would be unable to fully meet their financial obligations if they were to lose their jobs. More disturbing is that 28% said they could not make ends meet for longer than two weeks without their jobs.

And it's not just low-income earners who would find themselves financially challenged. Twenty-nine percent of those making $100,000 or more a year said they would have trouble paying the bills after more than a month of unemployment.

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Re: Perspectives on the global economic meltdown

Postby Singha » 21 Mar 2009 07:38

a nation of closet bhikharis and overspenders masquerading as the "richest nation on earth" it seems.
the emperor is naked.

meantime even trusty old govt jobs are not safe anymore (my US citizen r2i'ed friend had this fantasy of
going back to a govt job if he ran into trouble here, I advised him to buy farmland in bengal - soil is alluvial,
anything you throw at it grows well and produced 'real' food not dollah notes)

USPS to lay 3000 off and offer VRS to 25% of workers
http://www.cnn.com/2009/US/03/20/post.office.cuts/

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Re: Perspectives on the global economic meltdown

Postby ldev » 21 Mar 2009 08:02

I would beg to differ with Shyam Saran's analysis that the global savings imbalance is the cause of the current crisis. All other things being equal, would there be no crisis if the US savings rate had been 5% of GDP over the last 20 years? I think not. Rather, among the primary reasons is unbridled credit growth caused by lax bank supervision and in practice no limits on financial institutions leverage. In the meantime the US Federal Reserve was like a race horse charging ahead with blinkers on its eyes which were focussed unerringly on its two primary objectives:

1. Price stability. ( Ultimately the CPI)

2. Full employment

And in the meantime there was rampant inflation in various asset classes (commodities, real estate, equities funded by a gigantic credit bubble) all of which was not normal. Now, via all the support measure they are undertaking, they want to bring back what was abnormal. Sustainable wealth is created by value addition in the conversion process and not by asset inflation.

However, the fact is that in spite of all the gaalis being heaped on the US, they still remain the single most capable entity on this planet inspite of their all to obvious recent falling because there is no other country which can currently fill the void.

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Re: Perspectives on the global economic meltdown

Postby Arya Sumantra » 21 Mar 2009 17:21


Adrija
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Re: Perspectives on the global economic meltdown

Postby Adrija » 21 Mar 2009 18:08

The "global savings imbalance" spout is pretty much BS....... reality is that the world- led by the US consumer- pretty much overconsumed above sustainable levels. This excess demand was fueled/ supported by cheap credit, and the economic gurus, thought that level of demand was sustainable. That, combined with the excess liquidity, led to the asset prices becoming inflated above sustainable trend line.

Now that someone finally woke up and popped the cork, led to asset prices falling. The US is trying to arrest that fall in prices through quantitative easing (IOW, cheap credit all over again) but I am not personally not sure if it's going to work the second time around. But personally moi thinks the process is more aimed at managing the decline, coz of social pressures, than any fundamental challenge to US economic supremacy

Anyways, in the entire process, Unkil will come out fine and dandy, thank you- Chipanda and al others who built their entire economic model around supplying to US and accepting paper in return, are screwed anyways, as I think we on BRF already know

JMT/ IMVVVHO, of course

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Re: Perspectives on the global economic meltdown

Postby Singha » 21 Mar 2009 18:31

does anyone see a 'solution' where the bottom 80% of americans do not see a significant hit on their
consumerist lifestyle and retirement plans?

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Re: Perspectives on the global economic meltdown

Postby SriKumar » 21 Mar 2009 19:46

vina wrote: Abdul Lungi goes to a showroom and buys....................................... So who is the Finance company which gave Abdul the 5 Lakhs here ? .. Hint --> Our Tarrel than Mountain and deepel than ocean friend to the east!
All of this is zimble and fine onlee, but my original question was about your comment in the earlier post:
Why is there an economic crisis ?. Is that asset prices have crashed . That is the fundamental core fact. Get asset prices back up....... and everything will be normal.
'asset prices' = housing market in the US or something else?

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Re: Perspectives on the global economic meltdown

Postby Bade » 21 Mar 2009 21:39

Singha wrote:does anyone see a 'solution' where the bottom 80% of americans do not see a significant hit on their
consumerist lifestyle and retirement plans?

Did the bottom 80% of Americans ever have a retirement plan. I have seen people in the 80's working even 20 years ago. Only the big MNC retirees and medical doctors had good retirement cushions. Rest just work. I have known a few govt scientist types even retire with much fanfare, take a few vacations over the world or drive around the country and within a year or two get back to work again. :mrgreen: That is the American way for most of the lower strata and it has been. One of my advisors even started a bed and breakfast place within a year of retirement, but he did not live long enough to see it through. In Amrika one works till you drop dead. But Yindoos like me are cunning as always and plan to retire in low cost countries like India onlee.

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Re: Perspectives on the global economic meltdown

Postby Tilak » 21 Mar 2009 22:07

China backs talks on dollar as reserve

MOSCOW, March 19 (Reuters) - China and other emerging nations back Russia's call for a discussion on how to replace the dollar as the world's primary reserve currency, a senior Russian government source said on Thursday. Russia has proposed the creation of a new reserve currency, to be issued by international financial institutions, among other measures in the text of its proposals to the April G20 summit published last Monday.

Calls for a rethink of the dollar's status as world's sole benchmark currency come amid concerns about its long-term value as the U.S. Federal Reserve moved to pump more than a trillion dollars of new cash into the ailing economy late Wednesday.

Russia met representatives of China, India and Brazil ahead of the G20 finance ministers meeting last week, as the big emerging powers seek to up their influence on decisionmaking globally. Their first ever joint communique did not mention a new currency but the source said the issue was discussed.

"They (China) did not formally put forward their position for the G20 summit but unofficially they had distributed their paper regarding the same ideas (the need for the new currency)," the source told Reuters, speaking on condition of anonymity.

The source said the Chinese paper envisaged the International Monetary Fund's Special Drawing Rights (SDRs) being first assigned a role of a clearing currency on some transactions and then gradually becoming the main global reserve currency. "They said that the role of reserve currency should be given to SDR," the source said.

A U.N. panel of experts is also looking at using expanded SDRs, originally created by the International Monetary Fund in 1969, but now used mainly as an accounting unit within similar organisations as a new reserve currency instead of the dollar.

Currency specialist Avinash Persaud, a member of the U.N. panel, told a Reuters Funds Summit on Wednesday that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket.

The SDR and the old Ecu are essentially combinations of currencies, weighted to a constituent's economic clout, which can be valued against other currencies and against those inside the basket.


The Russian source said Moscow was aware that the emergence of the new global currency would not happen overnight and said its goal was to initiate a discussion about it at the G20 summit in London on April 2.

The source said that India did not object to the discussion but was not prepared to take the lead. The source said South Korea and South Africa backed the idea, while developed nations were not "allergic" to it.

"We are not waiting for everyone to say: 'How beautifully it has all been formulated, let's subscribe to it'," the source said. "The main idea is to start a discussion about it."

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 21 Mar 2009 23:21

The mother of all scams

But the Mother of all scams happened way before AIG, GM, Citigroup and others received bailout funds. That's right, now that the alternative investment bubble has popped, the end of the great pension con job has exposed the pension Ponzi scheme that dwarfs the Madoff scam.

For years, Goldman Sachs and other investment banks, hedge funds, private equity funds and real estate funds received billions in fees from pension funds chasing "alpha". The marketing ploys were sophisticated as they kept touting "absolute returns that are not correlated to stocks and bonds".

The investment banks and private funds made a killing in fees but the for the most part, pensions got suckered into believing the garbage pension consultants were feeding them, exposing them to some serious downside risk. And don't kid yourself, the collective actions of pensions funds shoving billions of dollars into alternative investments contributed to this systemic crisis we are now living.

So why did senior pension fund managers allocate so aggressively into alternative investments? One big reason, which I have repeatedly stated in this blog is that they could muck around with the benchmarks in these investments, allowing them to reap huge bonuses based on bogus benchmarks.

As if this wasn't bad enough, late this week we learned that big-name private equity and hedge funds are at the center of criminal charges filed against associates of former New York Comptroller Alan Hevesi, although none of those firms is charged with wrongdoing in the current indictment.


Read it all.

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Re: Perspectives on the global economic meltdown

Postby James B » 21 Mar 2009 23:45

A very nice article on the lines of Vina's explanation

China's U.S. Debt Quandary

U.S. investors may have cheered the Federal Reserve's decision this week to pump more than 1 trillion new dollars into the economy, but at least one faction in China was on the verge of tears.

"I want to cry, really want to cry," wrote one Beijinger on Thursday, posting on one of China's most popular portals, Sina.com. The problem was that by issuing more currency, the Fed was potentially weakening the U.S. dollar, making China's dollar-based investments worth less. "Those elites insist on buying American bonds."

They know that their government is now America's largest creditor, with more than half of its $2 trillion in foreign exchange reserves invested in Treasury securities and other U.S. government bonds. Some of these critics suspect that the Federal Reserve essentially prints more money not just to stimulate the economy, but also to devalue China's U.S. dollar portfolio, undermining a rival power.

The believers are not just fire-breathing ideologues. "Many technocrats believe in this argument that the U.S. is trying to screw over China by cheapening the dollar," says Victor Shih, a political economist and China specialist at Northwestern University. Shih learned of the influential reach of "Currency Wars" when he visited last summer with bureaucrats from the People's Bank of China.


It's the old debtor's aphorism, writ on a sovereign scale: If you owe China $1 billion, it's your problem. If you owe China $1 trillion, it's China's problem.

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Re: Perspectives on the global economic meltdown

Postby Muppalla » 22 Mar 2009 00:30

With an "Economics illiterate" hat I believe the economic crisis will be over once US prints currency to repay its public and private debt. From a historical perspective as a superpower since the second world war , US was able to make believe the world that Dollar is gold and made sure that every one in the world uses dollar as exchange currency for all the goods and services. Export dependent economies also got into the trap to improve and increase the life style of Americans and they were alway in pursuit of dollars. Using sheer power, it coerced fence sitters to fall in line. I don't think that the midle eastern Oil sellers will change the currency or China could change the currency.

Who can stop the dollar. US can use human rights, democracy and other weapons and also with its overwhelming militiary power to not allow any other currency other than dollar. Even it prints 10 trillion dollars what's the big deal and that new dollars will be same as old dollars. It's attitude will be "if you do not think so I will kill ya" using all sorts of weapons. Who has the real ability to fight with US?

With in few months all economic woes are over if there is no challenger to US militiary and there will be some lip service in the form of so called adjustments to currencies here and there and some heart burn etc. But that's it. For survival purposes, China and other similar types will artificially devalue the currency and life goes on. Entire US debt is kaput and there is more wealth for US. Deficit is gone as promised by Obama's election campaign.

I believe the 1st and 2nd world wars occured after deep depressions and after the war the new powers emerged out of economic downturn. In those situations there are challengers and now I find none. If there are challengers then that have to be France, UK, Germany and China. Together they will not stand more than 10 days in a war with US.

End of economic problems and start investing in Stocks now. :)

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Re: Perspectives on the global economic meltdown

Postby Tamang » 22 Mar 2009 00:50


Arya Sumantra
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Re: Perspectives on the global economic meltdown

Postby Arya Sumantra » 22 Mar 2009 02:01

Suraj wrote:
Singha wrote:so that way chipanda can still get relatively current values for its dollah notes when buying from other nations in other currencies.

only if the dollah alone devalues steeply and permanently vs euro/yen etc will chipanda get screwed.

The very act of a large selloff of dollars by chipanda will devalue it. The yuan on the other hand is pegged to a basket of currencies and will strengthen . Point is unkil doesn't need to do something like mms announcing devaluation in the old days - what chipanda does with it's hoard - short of buying *more* dollars - will devalue it ...


But can the chipanda get around it by lending dollahs to countries instead of selling it? The failing economies(Iceland etc) or those with dangerously low forex reserves need huge sums and only they can absorb chipanda's dollahs in big numbers. Ofcourse there is risk but they can take favourable collateral like borrower's commodity mines OR tarriff/barrier-free entry to chicom products. So instead of IMF they could be money lenders of last resort. If countries pay back they still get better returns than T-bills.

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Re: Perspectives on the global economic meltdown

Postby abhischekcc » 22 Mar 2009 02:21

This scandal has progressed exactly as planned - and now it looks more and more like a giant rip-off practiced upon the creditors of US financial institutions, which include Asian and Arab governments as well as the American public (for pensions).

Since 1990s, the US-centered international financial community has been worried about two looming holes in their finances. One is the large debt US owes to other countries, and the second is the large pension obligations to their own retiring baby boomers.

Apart from these two, another threat is the loss of workers as people retire in the US.

This triple threat has now been effectively dealt with or is in the process of doing so.

The money being pumped into to the financial system now will take care of the external debt by effectively defaulting on it.

The pension 'problem' will be taken care of by pension fund bankruptcies (which people will be too scared to resist) and emptying of 401k plans (as people make distress sales). One thing to watch for is the reduction in stock ownership by retirement accounts. A large reduction will probably signal the end of the 'slump'.

But the genius is in the way the problem of lack of workers was handled. Most people have lost a huge amount of pension nest egg, if not all of it. Now, the old guys who expected to retire are being forced to come back to the workforce. So, no pension obligations and no worker shortage problem. Boy, am I glad I am not an American :mrgreen:

Note that the US system protected its Caucasian friends in this scam - the beneficiaries of AIG bailout include European FIs. Only non whites and poor whites were shafted.

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Re: Perspectives on the global economic meltdown

Postby svinayak » 22 Mar 2009 02:51

ldev wrote:I would beg to differ with Shyam Saran's analysis that the global savings imbalance is the cause of the current crisis. All other things being equal, would there be no crisis if the US savings rate had been 5% of GDP over the last 20 years? I think not. Rather, among the primary reasons is unbridled credit growth caused by lax bank supervision and in practice no limits on financial institutions leverage. In the meantime the US Federal Reserve was like a race horse charging ahead with blinkers on its eyes which were focussed unerringly on its two primary objectives:

1. Price stability. ( Ultimately the CPI)

2. Full employment

And in the meantime there was rampant inflation in various asset classes (commodities, real estate, equities funded by a gigantic credit bubble) all of which was not normal. Now, via all the support measure they are undertaking, they want to bring back what was abnormal. Sustainable wealth is created by value addition in the conversion process and not by asset inflation.

However, the fact is that in spite of all the gaalis being heaped on the US, they still remain the single most capable entity on this planet inspite of their all to obvious recent falling because there is no other country which can currently fill the void.


http://www.youtube.com/watch?v=0jHrm1oKVsI

Due to trade with CHina the finance risk was lowered increasing the credit bubble.
This is due to global finance system how it was designed.

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Re: Perspectives on the global economic meltdown

Postby bhavani » 22 Mar 2009 03:17

Another major effect of Recession. Many people in rural america have gone into a panic mode and are loading up on guns, Ammo and cash.

http://www.seacoastonline.com/articles/ ... -903150345

http://www.stuff.co.nz/nelson-mail/busi ... sion-proof


Yesterday as usual i was purchasing my lunch at the office cafeteria, the fat, black lady at the counter was very angry and was saying - you guys come here and take away my jobs and screw up everything blah, blah etc, I could have complained but she along with 5 others were fired, So i dont think she would care any more about anybody complaining. People are changing pretty fast, i have seen people give me looks when i bought a BMW 3 series. Lot of colleagues were highly suprised. I got it on 0.9% Apr.

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Re: Perspectives on the global economic meltdown

Postby Muppalla » 22 Mar 2009 03:44

bhavani wrote:Another major effect of Recession. Many people in rural america have gone into a panic mode and are loading up on guns, Ammo and cash.

http://www.seacoastonline.com/articles/ ... -903150345

http://www.stuff.co.nz/nelson-mail/busi ... sion-proof


Yesterday as usual i was purchasing my lunch at the office cafeteria, the fat, black lady at the counter was very angry and was saying - you guys come here and take away my jobs and screw up everything blah, blah etc, I could have complained but she along with 5 others were fired, So i dont think she would care any more about anybody complaining. People are changing pretty fast, i have seen people give me looks when i bought a BMW 3 series. Lot of colleagues were highly suprised. I got it on 0.9% Apr.


You got be very careful in these aspects. Haven't you read the articles about Indian students getting killed regularly in US. Even in very uppish localities, theft and break-ins have increased. There will be just one yahoo hidden somewhere (either at work or at residential areas or even at schools)taking a machine gun and then spraying bullets everywhere and that's it our Ids will be removed by BRadmin becasue we did not post a single post for more than an XX days.

This is serious issue and many Indian companies has told to their employees not to venture out to ATMs etc after a certain time.

Watch out. Did you read the comments by many Joes posted for any outsourcing articles. These Joes could be one sitting next to us at work and they could be one who speaks passionately about how much they like your work.

Desis need to come to real world !!! Most of the SHQs have no clue about these issues and even when discussed they write off folks as paranoid.

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Re: Perspectives on the global economic meltdown

Postby Muppalla » 22 Mar 2009 03:51

Arya Sumantra wrote:But can the chipanda get around it by lending dollahs to countries instead of selling it? The failing economies(Iceland etc) or those with dangerously low forex reserves need huge sums and only they can absorb chipanda's dollahs in big numbers. Ofcourse there is risk but they can take favourable collateral like borrower's commodity mines OR tarriff/barrier-free entry to chicom products. So instead of IMF they could be money lenders of last resort. If countries pay back they still get better returns than T-bills.


Chipanda cannot afford to devalue Dollah as it does not have a quick capability to replace it export oriented economy to domestic demand based economy. It will just devalue its own currency further.

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Re: Perspectives on the global economic meltdown

Postby svinayak » 22 Mar 2009 04:03

Muppalla wrote:
Desis need to come to real world !!!

I agree with this

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Re: Perspectives on the global economic meltdown

Postby Arya Sumantra » 22 Mar 2009 05:49

bhavani wrote:People are changing pretty fast, i have seen people give me looks when i bought a BMW 3 series. Lot of colleagues were highly suprised.


In such times a Ford would be guaranteed to remain scratch free. You know what sour grapes/buy amerikhan types do with a non-amerikhan brand parked anywhere. Walk next to the car with their key touching your car leaving a straight line.

My chicom classmate who did UG in canuckistan loved wearing big brands to class. Her clothing in Zara and premium footwear did unsettle a lot of gora classmates. Coming from a "poor" country she had outgrown her racial aukaat by not remaining a hardworking simpleton stereotype.

These are once-in-a-lifetime times. Play safe.

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Re: Perspectives on the global economic meltdown

Postby Raja Bose » 22 Mar 2009 06:02

Arya Sumantra wrote:You know what sour grapes/buy amerikhan types do with a non-amerikhan brand parked anywhere. Walk next to the car with their key touching your car leaving a straight line.


Thats why I have no worries about my '96 Civic. They can scratch it all they want with their keys...I wont even notice it! Only damage will be to their keys :mrgreen:

America is learning how rest of the world lives....and is now taking the rest of the world down with it via its tantrums.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 22 Mar 2009 07:10

Oregon, Nevada Join California Among States With Jobless Rates Above 10%

IMHO, 20% unemp would be some sorta social-unrest-trigger perhaps. GDI rates touched 25% at their peak.

Meanwhile,

Dollar posts biggest drop since 1985

Massa's plan is working 400% onlee. Its debt will vaporize and nothing much needs change inside national boundaries (i.e. within the dollar zone). High gas prices the country has already seen and survived.

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Re: Perspectives on the global economic meltdown

Postby John Snow » 22 Mar 2009 07:27

I used to drive used drive 1984 Honda Civic in 1991 working in GM Flint plant and park the car way back and walk to the plant. ( 1987 thru 1993 was recession period)

Also Raja bose , like me then, you need to make a bumper sticker

"STEAL MY CAR YOU WON'T GO FAR" :mrgreen:

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Re: Perspectives on the global economic meltdown

Postby Raghav K » 22 Mar 2009 08:41

vsudhir wrote:Dollar posts biggest drop since 1985

Massa's plan is working 400% onlee. Its debt will vaporize and nothing much needs change inside national boundaries (i.e. within the dollar zone). High gas prices the country has already seen and survived.


But that time the economy was in a better shape and the jobless rate low.

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Re: Perspectives on the global economic meltdown

Postby Raja Bose » 22 Mar 2009 08:59

John Snow wrote:I used to drive used drive 1984 Honda Civic in 1991 working in GM Flint plant and park the car way back and walk to the plant. ( 1987 thru 1993 was recession period)

Also Raja bose , like me then, you need to make a bumper sticker

"STEAL MY CAR YOU WON'T GO FAR" :mrgreen:


Spinster saar :rotfl: that must have been a sight to see at the Flint plant!!

That kind of sticker would be deceive the wannabe thief coz my car looks like a Paki on the outside but runs like a Gurkha. It is in far better mechanical condition than a lot of newer cars I have seen which is why I am loathe to buy a new one. I recently got its smog test done, its emissions are waaay below the average. Also, given the current economy I have decided to extend the use of this car from another 3 years to another 5 years. Why take a debt of $15-30K when there is no need except for one's vanity :mrgreen:

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Re: Perspectives on the global economic meltdown

Postby sudarshan » 22 Mar 2009 09:09

bhavani wrote:People are changing pretty fast, i have seen people give me looks when i bought a BMW 3 series. Lot of colleagues were highly suprised. I got it on 0.9% Apr.


Are you surprised by this? Careful buddy/madam, and take care of your BMW. When Circuit City went out of business, I happened to need something from there, so off I went. Was trying to find it in the aisles, then thought I'd ask for help. I had an idea of how the employees were going to behave towards a brown guy (who in some fashion or the other- don't ask me how- was responsible for CC going down), but it still surprised me. A couple of them walked off as if they didn't see me, then two more pretended to be talking, and moved off likewise. Managed to collar one employee and get what I needed.

Most Indians in the US live in this dream world, where they really believe that Americans are these tolerant, fair-minded people who welcome outsiders with open arms. That may be true so long as there's plenty for all, but when things start going downhill, watch out. Plus most Indians have no clue what Americans privately think of Hindus/Indians, especially the vegetarian/teetotaller ones.

A relative of mine is the other extreme- totally contemptuous of Americans, to the point where (I think) he even brings it into the open in company board meetings. Mocking their English and their accents, etc., and telling them "this is real English; what you guys speak is American English." Got to warn him to be very very careful- with the number of guns floating loose in this country, anything can happen any time.

Apparently new cars in the US are now almost as cheap as used cars. Think I'm going to fall for that and buy a new car anytime soon? No thank you.

Sudarshan

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Re: Perspectives on the global economic meltdown

Postby Arya Sumantra » 22 Mar 2009 09:17

vsudhir wrote:Dollar posts biggest drop since 1985

Massa's plan is working 400% onlee. Its debt will vaporize and nothing much needs change inside national boundaries (i.e. within the dollar zone). High gas prices the country has already seen and survived.


But won't it backfire on many of their own smaller MNCs. There are many smaller sized MNCs present in massa and across atlantic in multiple oiropean kingdoms. These groups have debt and lines of credit in one country, expenses in another and major market in some other countries giving them exposure to multiple currencies. Wild fluctuations will increase their exposure risks sending their balance sheets and forecasts haywire. Many of them which hedged the opposite way would be in a tight spot now.

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Re: Perspectives on the global economic meltdown

Postby Singha » 22 Mar 2009 09:42

while all this is happening, the DDM is fixating on the tougher conditions for the "H1 dream" put forth.

atleast I got out of the jumanji before the nightmare part started whew.

here atleast nobody gives me 'looks' or scratches my car because I am kala bandar.

did notice yesterday enormous sales in liquor shop. people are ordering take out a lot more & perhaps holding
liquor sessions at home vs restaurants/pubs. conspicuous consumption is definitely out.

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Re: Perspectives on the global economic meltdown

Postby Satya_anveshi » 22 Mar 2009 10:17

Better Hide Your Badge, AIG Tells Employees :eek:

American International Group's corporate security advised employees of the insurance giant, which has received more than $170 billion in taxpayer money, to take measures "to increase their overall safety and security" due to "a growing sense of public attention fueled by increased media scrutiny."
In a memo, employees are advised to "avoid wearing any AIG (NYSE:AIG - News) apparel (bags, shirts, umbrellas, etc.) with the company insignia" and to make sure badges with the AIG name are not visible when they are outside the office.
Employees should also report to building security any individuals "who appear to be out of place or spending an inordinate amount of time near an AIG facility," according to the memo.
"Avoid public conversations involving AIG and do not engage any media personnel regarding the company," the memo also warned.
Visitors should be escorted by an AIG employee at all times when inside an AIG building, and employees are advised to "question individuals that you do not recognize and appear to be out of place."
Employees are also advised to avoid propping doors and be aware of those trying to "piggy back" into the building.

Singha
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Re: Perspectives on the global economic meltdown

Postby Singha » 22 Mar 2009 11:37

escalating war between blacks and police in Oakland CA (4 officers KIA)
http://www.nytimes.com/2009/03/22/us/22 ... tml?ref=us

better avoid this patch if I were you. when elephants fight, the deer get trampled.

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Re: Perspectives on the global economic meltdown

Postby Raja Bose » 22 Mar 2009 11:41

2 KIA were SWAT officers. I have heard the name Dan Sakai before...cant place it.

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Re: Perspectives on the global economic meltdown

Postby Singha » 22 Mar 2009 12:13

was it saburo sakai the WW2 Zero fighter ace ?

WSJ

Did Your College Savings Plan Blow Up on You?
By JASON ZWEIG

It hurts to lose your own money in the market, but losing the money you have set aside for your children is agonizing. Just look at what has happened to "529" plans.

At their best, 529s are a safe and sensible way to save, tax free, for your children's college expenses. At their worst, they offer irresponsibly risky exposure to stocks and appallingly bad investments that can blow parents' money and students' dreams to smithereens.

All too many families have gotten the worst. Of the 3,506 options (including funds with different sales charges) in college plans tracked by Morningstar, 93% fell in value over the past year, and 1,098 lost at least 40%.

Of course, the stock market was down 43% over the same period. But the popular "age-based option" for 529s is supposed to protect investors. It should work like this: A young child's account starts out primarily in stocks; with each passing year, more money moves into bonds and cash. By the time the student hits college, less than 20% of the money should be at risk in stocks -- limiting the potential damage from even an epic bear market to 10% or so.

That is vital. Students typically have a finite period, often only four years, during which they spend their 529 savings. They don't have the luxury of waiting for stocks to recover.

Nevertheless, some states pushed students into stocks or out of cash. Last April, Oregon doubled the stock exposure in its "1-3 Years to College" portfolio to 40%. In 2004, an in-college student in Rhode Island's aggressive age-based portfolio would have had 40% stocks, 31% bonds and 29% cash. By 2008, the equivalent was 40% stocks (including real estate), 55% bonds and a measly 5% cash.

Other plans took too much risk all along. In Utah, college enrollees could have 65% in stocks. Several states, including Maine and New Mexico, offered 529 portfolios with no allocation to cash for students over the age of 18. Even after North Carolina finally scaled back its risk earlier this month, a college sophomore can still have 43% in stocks, real estate and junk bonds.

Says Mercer Bullard, a securities-law professor at the University of Mississippi: "In some states, the asset allocation for the 16- to 18-year-olds looks as if it was designed by the 5-year-olds."

Unfortunately, the states compounded their bad strategic decisions with even worse tactical choices. One of Maine's portfolios for students 18 or older consisted of the following Oppenheimer funds: 60% Limited-Term Government, 20% Core Bond, 10% Champion Income and 10% International Bond. Gorging on mortgage-backed securities, the first three funds lost 6.3%, 36% and 78%, respectively, in 2008. That portfolio fell 22% over the past 12 months (not including sales charges).

The "Ultra Conservative" portfolio in New Mexico had 0% cash, 20% stocks and 80% in two Oppenheimer bond funds; it fell 23% last year. Some of the same funds blew up 529s in Illinois, Oregon and Texas. "The performance of the OppenheimerFunds 529-plan portfolios," says a spokeswoman for the fund company, "is not much different than what others have experienced as a result of [the] unprecedented market events [of 2008]."

Assets in 529s, which peaked at $112 billion at year-end 2007, totaled $88.5 billion as of this December. Sadly, the public's faith in 529s appears to be based partly on a false premise: that state bureaucrats are good at managing other people's money.

Officials in several states, including Maine, New Mexico and North Carolina, declined or didn't respond to requests for comment; nor did J.&W. Seligman & Co., which ran the riskiest portion of the North Carolina plan.

Contributing to a 529 is still worth it for the tax benefits alone. Visit savingforcollege.com and the plan's own Web site to make sure your teenager is not up to her armpits in the stock market. If she is, transfer to a less-risky option within the same plan. If you can't tell, call the fund company that runs the 529 and demand details on how the money is allocated.

For young children, consider the remarkable deal offered by Ohio's 529: federally insured certificates of deposit from Fifth Third Bancorp with maturities of up to 12 years at yields as high as 5%. But it is tough to beat a risk-free 5% return exempt from federal income tax. What a tragedy that more states didn't offer similar options before it was too late.

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Re: Perspectives on the global economic meltdown

Postby Raja Bose » 22 Mar 2009 12:32

No, no I am talking about Dan Sakai, one of the SWAT guys who died in Oakland shootout. If I am not mistaken he was involved in police martial arts or something...maybe thats why his name rings a bell.

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Re: Perspectives on the global economic meltdown

Postby Singha » 22 Mar 2009 12:46

saburo sakai and some other aces of the original IJN air arm refused to fly with parachutes...they felt they fought better knowing their lives were on the line.

in true distilled fanaticism and hidebound ritual, few can match imperial japan.

a japanese-american person told me his dad had deserted by some means in
WW2 and moved to america (relatives). even today his mainland relatives
look down upon his side of the family. "family shame" and what not...

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Re: Perspectives on the global economic meltdown

Postby Ardeshir » 22 Mar 2009 20:06

I wonder if the RBI has an understanding with another (or a group of) Asian central bank to buy dollar-denominated bonds issued by them.

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Re: Perspectives on the global economic meltdown

Postby vina » 22 Mar 2009 21:40

Prasant, as a trader, you of all the people should know better than to fall for this 'south/south ' ,"alternate" rubbish of the leftist/socialists/commie /JNU/DSE ding dongs. Chan Akya kid of dude will fall in one or more of those categories.

Buying bonds from fellow asians indeed and that too in which currency, dollars! :rotfl: . Why dollars may I ask ?. Why not buy the Korean Won bonds itself ? . Why not chinese RMB bonds itself ? That article by that dude in Atimes was so half assed . Yawn. also forget about basic risks a bond holder takes like Credit Risk, Interest Rate risk, Event Risk, Options Risk and all those things and even for a market as deep as the US treasury, these risks are calculated, accounted for to the minute. Point is , every country will want the safest party to give their hard earned money to and that , is the US Treasury today. Will you trust your dollars for the paper written by the Korean/Chinese/Indonesian central bank and what is the compensation you will want for that extra risk ?.

Fundamentally, if those guys are distressed, it makes their credit capacity that much less. For eg, when india was on the verge of defaulting in 1990/91, the Koreans refused to honor the letters of credits of most Indian importers, even from banks with near sovereign rating like SBI!. So much for that South-South rubbish. Trusting USD or any bonds written by an Argentina/Brazil/Ecuador/Venezuela or similar guy in S.E Asia/Korea/Phillipines etc doesnt make too much sense.

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Re: Perspectives on the global economic meltdown

Postby Raja Bose » 22 Mar 2009 22:25

vina, how come you have not come up with Wampum-bonds yet? :mrgreen:

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Re: Perspectives on the global economic meltdown

Postby Raja Bose » 22 Mar 2009 22:28

Singha wrote:saburo sakai and some other aces of the original IJN air arm refused to fly with parachutes...they felt they fought better knowing their lives were on the line.

in true distilled fanaticism and hidebound ritual, few can match imperial japan.

a japanese-american person told me his dad had deserted by some means in
WW2 and moved to america (relatives). even today his mainland relatives
look down upon his side of the family. "family shame" and what not...


Moving this topic to Nukkad otherwise Predator ma-bombers might launch some Ohkas at us!


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