Perspectives on the global economic meltdown

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vsudhir
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Re: Perspectives on the global economic meltdown

Post by vsudhir »

OK, dunno where to put this but since this thread deals with perspectives and possibly, fallouts of the econ meltdown, here goes:

Obama Selling Military Secrets To China For Debt Forgiveness?

Ok, thats alarmist and unsubstantiated but still, read on.
According to the Administration, this proposal will help the United States resolve its debt issues. They point out their belief that the B-2 bomber is "strategically obsolete", according to a source in the White House Press Office. In addition, the source claims that the Chinese would be unable to create their own functioning stealth bomber fleet for "at least eight years."

American allies Taiwan, Japan, and South Korea are very wary of the proposal. Koo Syi, a geopolitical analyst from South Korea, points out that this technology could be passed to China's allies. This was the case when Chinese nuclear technology was transferred to Pakistan and North Korea. According to Koo, Obama has rendered US allies' opinions as "irrelevant."

While this proposal is controversial, it is not being presented to Congress, where it could meet with stern opposition. Instead, the State Department has been informed to assisted the Defense Department with the transfer of materials
India should be worried too. Tomorrow, TSP may miraculuosly announce its indigenously developed stealth bomber onlee....
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Re: Perspectives on the global economic meltdown

Post by SwamyG »

Using Psychology To Save You From Yourself
The global economic meltdown + plus Obama's victory in 2008 is moving economists who were earlier consigned to the back burners. I have argued with my friend doing MBA that one needs to be aware that economics has cultural & political influences; the theories and models rest on cultural nuances and political opportunities.

The book "Nudge" seems to be interesting, it is already on my library queue.
ramana
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Re: Perspectives on the global economic meltdown

Post by ramana »

John Snow wrote:ramana garu , is it ok if all the BRFites read the ebook about post capitalistic, plasctic, paper and other (Mr.) Money's era?
They can if they want to. But very few have shown the interest. 8)
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Re: Perspectives on the global economic meltdown

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I have argued with my friend doing MBA that one needs to be aware that economics has cultural & political influences; the theories and models rest on cultural nuances and political opportunities.
Its called "Political Economy" for a reason.

Ramana garu,

Downloaded paths of history from the E-books link. Shall read over the next few days/weeks. Tks for the hint.
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Re: Perspectives on the global economic meltdown

Post by Kakkaji »

The next great crisis: America's debt
At this rate, your share of the load will be $155,000 in a decade. How chronic deficits are putting the country on a path to fiscal collapse

The bill is far too big for only the rich to pick up. There aren't enough of them. America will have to lean on citizens far below the $250,000 income threshold: nurses, electricians, secretaries, and factory workers. Within a decade the average household that pays income tax will owe the equivalent of $155,000 in federal debt, about $90,000 more than last year. What the Obama administration isn't telling Americans is that the only practical solution is a giant tax increase aimed squarely at the middle class. The alternative, big cuts in spending, aren't part of the President's agenda. To keep the debt from wrecking the economy, the U.S. would need to raise annual federal income taxes an average of $11,000 in 2019 for all families that pay them, an increase of about 55%. "The revenues needed are far too big to raise from high earners," says Alan Auerbach, an economist at the University of California at Berkeley. "The government will have to go where the money is, to the middle class." The most likely levy: a European-style value-added tax (VAT) that would substantially raise the price of everything from autos to restaurant meals.
ramana
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Re: Perspectives on the global economic meltdown

Post by ramana »

Relative National Debt graphic:

National Debt_2009
John Snow
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Re: Perspectives on the global economic meltdown

Post by John Snow »

If the Big O plan is any where near truth, then its called "Econobamics" ( a la Reganomics), the prinicple in such thoughts is simple,
"The easiest way to ruin a (suspect) friend is to gift a expensive non funtional second hand car" Spinster

he will for spend fixing it. If Obama and his team have any thing upstairs then
they should read B1 clearly as you only B1 to own it.
ramana
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Re: Perspectives on the global economic meltdown

Post by ramana »

arun wrote:Jim O'Neill, Goldman Chief Economist and the person who coined the term BRIC in 2001:
INTERVIEW - Crisis speeds BRIC rise to power - Goldman's O'Neill

Tue Jun 9, 2009 5:39pm IST …………............

India is predicted to grow at an average rate of 6.3 percent from 2011 to 2050, China 5.2 percent, Brazil 4.3 percent and Russia -- constrained by forecasts of a declining population -- just 2.8 percent. …………………...........

Reuters

However didn't Brazil offically announce it was in recession as it contracted 1% this year?
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Re: Perspectives on the global economic meltdown

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Oakland Mulls Bankruptcy

If this pans out then Oakland, CA will become the first local govt to file for bankruptcy (under ch 9, IIRC) in this great Recession.
"We have asked the (bankruptcy) question because we wanted to know the impact," said District 5 council member Ignacio De La Fuente. "In closed session, the question has been asked, and an answer was given." He would not elaborate. "It's a possibility," he acknowledged. "Things are that bad."

Council President Jane Brunner was equally aloof. She ably acknowledged the city's dire financial problem while managing to avoid the b-word altogether.

"We're going to try to avoid it, but am I going to say it would never happen? I can't say that," Brunner said.

Consider the city's cash position: Out of next year's general fund of approximately $415 million, police costs are estimated at $212 million, fire protection service $103 million and $41 million in debt service payments. That leaves about $60 million to pay for everything else, from library services to recreation centers to public works.

And that calculation doesn't include $50 million more in deferred debt service in a budget proposal presented to the council last month by Mayor Ron Dellums.

Alameda County Assessor Ron Thomsen said tax assessments fell $13.6 billion in the fiscal year that will end June 30. "Our assessment roll will go down 2 percent, and we've never had a year-to-year drop ever in stats going back to 1958," he said.

[The city council] is faced with three choices: drastic pay reductions across the board, including police and fire services; massive layoffs; or bankruptcy.

It has been a great run for municipal employees in Oakland and across the state, who have been the beneficiaries of one of the most generous civil service systems in the nation.

Since the late 1940s, California municipal governments traditionally have employed fewer employees, who have been paid substantially more than other civil servants, Ellwood said.
Blogger Mish Shedlock opines:
By the way, expect to see a surge of cities considering bankruptcy. In addition expect to see municipalities in Florida and Alabama to do the same. The interesting thing to watch will be how far and how fast this spreads.
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Re: Perspectives on the global economic meltdown

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House Oversight Committee subpoenas the Federal Reserve
June 9 (Bloomberg) -- The Federal Reserve was subpoenaed by the House Oversight Committee for e-mails and documents related to Bank of America Corp.’s purchase of Merrill Lynch & Co. after the panel was unable to obtain them through a request last week.

The committee served the subpoena today, Jenny Rosenberg, a spokeswoman for the panel, said in a telephone interview. The panel is seeking the internal Fed documents for a hearing scheduled for June 11, and Bank of America Chief Executive Officer Kenneth Lewis has agreed to testify, she said.
From Denninger:
Those arrogant pricks over at The Fed thought they could ignore a Congressional request for information on the BAC/Merrill merger.

Note that they didn't say "nuts", they apparently ignored the request.

Well, there is now a subpoena floating over toward Bernanke's office.

CNBS :lol: is reporting that The Fed has said they will "respond", which may or may not mean "comply".
Link
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Re: Perspectives on the global economic meltdown

Post by vsudhir »

OMG, haven't seen a more unapologetic eulogy for former usury secretary janaab Hank Paulson ji. Has truly burnished Sri Paulson's credentials and cast in gold his shining legacy for posteriority, onlee.
Exactly what part of Paulson’s record is heroic, Evan? The part where he called up SEC director William Donaldson in 2004 and quietly arranged to get the state to drop capital requirements for the country’s top five investment banks? You remember that business, right, Evan? Your hero Paulson met with Donaldson and got the rules changed so that Goldman and four other banks no longer had to abide by the old restrictions that forced banks to actually have a dollar or two on hand for every ten or so they lent out. After that, it was party time! Bear Stearns in just a few years had a debt-to-equity ration of 33-1! Lehman’s went to 32-1. By an amazing coincidence, both of these companies exploded just a few years after that meeting, and all of the rest of us, Evan, ended up footing the bill, thanks to a state-sponsored rescue of Bear and a much larger massive bailout of Wall Street in general, necessitated in large part by the damage caused by the chaos surrounding Lehman’s collapse.

Meanwhile your own Goldman, Sachs ended up with a 22:1 debt-to-equity ratio a few years following that meeting, a number that would have been much higher if one didn’t count the hedges Goldman bought through a company called AIG. Thanks in large part to Paulson’s leadership in his last years as head of Goldman, the company was so massively over-leveraged that it would have gone under if AIG — which owed Goldman billions when it went into its death spiral last September — had been allowed to collapse. But thanks to Hank Paulson, who heroically stepped in and gave AIG $80 billion the same weekend he allowed one of Goldman’s last key competitors, Lehman, to collapse, Goldman didn’t have to go without that money; $13 billion of the AIG bailout went straight to Goldman. So I guess we have Paulson to thank for the fact that he used about $13 billion of our taxpayer money to essentially bail out his own ******. I mean, that’s heroism if I’ve ever seen it. Audie Murphy has nothing on that. Sit your asses back down, Harriet Tubman, Thomas More, Gandhi and Jesus Christ. Hank Paulson is in the house!

Or maybe it was Paulson’s foresight in heading off the crisis before it happened that inspired you? Maybe it was the way Paulson pronounced the subprime fallout “contained” in 2007 and called the economy the “strongest in decades?” Or maybe it was the way he remained calm last July, saying that it was a “very manageable situation” and “our regulators are on top of it?” Remember how he said all that shit, Evan, just about six weeks before the world exploded? Remember that Henry Paulson was actually in charge of regulating the financial environment during the last years of the crisis and did nothing as his buddies on Wall Street built one gigantic mountain of leverage after another, gashing underwriting standards across the board, saddling the country with a generation of toxic assets that all of the rest of us will be paying for in taxes (instead of, for instance, a health care program, which we can now no longer afford) for the next fifty ****** years? Do you remember that part?

Or was it his non-intervention last summer when gas prices hit $4.50 a gallon thanks again to his old buddies at Goldman and Morgan Stanley, who juiced the commodities market with so much speculative cash that oil prices soared despite the fact that supply was up and demand was down all year? Do you remember that part? How about the way food prices soared thanks to the same commodities speculators? According to the World Food Program at the UN, about 100 million people joined the ranks of the hungry last year during the commodities spike.
Even if it weren’t about five years too early to make any kind of judgment at all about whether or not TARP helped, the notion that Henry Paulson is a hero is complete and utter madness because TARP would never have been necessary if someone, anyone who wasn’t a greed-addled incompetent like Paulson had actually been regulating the economy in the last years of the Bush adminstration. If anyone besides Paulson had been running Goldman Sachs earlier in this decade — if a person with a serious brain injury had been in his place, for instance, or a horse, or a head of lettuce — we’d all be better off today, because there wouldn’t be so many toxic Goldman-underwritten mortgage-backed CDOs on the market. We, all of us, are paying the freight for assholes like Paulson, and like you, for that matter. And while we’re getting over it, slowly, you’re really not helping when you open your mouth and pat yourself on the back for all the good deeds you’ve done. Spare, us, okay? Just give it up.
Link


A hoot, really. Read it all, needless to say.
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Re: Perspectives on the global economic meltdown

Post by svinayak »

Check the comment section
http://happydays.blogs.nytimes.com/2009 ... y-of-less/
June 7, 2009, 10:35 pm
The Joy of Less

By Pico Iyer

“The beat of my heart has grown deeper, more active, and yet more peaceful, and it is as if I were all the time storing up inner riches…My [life] is one long sequence of inner miracles.” The young Dutchwoman Etty Hillesum wrote that in a Nazi transit camp in 1943, on her way to her death at Auschwitz two months later. Towards the end of his life, Ralph Waldo Emerson wrote, “All I have seen teaches me to trust the creator for all I have not seen,” though by then he had already lost his father when he was 7, his first wife when she was 20 and his first son, aged 5. In Japan, the late 18th-century poet Issa is celebrated for his delighted, almost child-like celebrations of the natural world. Issa saw four children die in infancy, his wife die in childbirth, and his own body partially paralyzed.

I’m not sure I knew the details of all these lives when I was 29, but I did begin to guess that happiness lies less in our circumstances than in what we make of them, in every sense. “There is nothing either good or bad,” I had heard in high school, from Hamlet, “but thinking makes it so.” I had been lucky enough at that point to stumble into the life I might have dreamed of as a boy: a great job writing on world affairs for Time magazine, an apartment (officially at least) on Park

In the corporate world, I always knew there was some higher position I could attain, which meant that, like Zeno’s arrow, I was guaranteed never to arrive and always to remain dissatisfied.

Avenue, enough time and money to take vacations in Burma, Morocco, El Salvador. But every time I went to one of those places, I noticed that the people I met there, mired in difficulty and often warfare, seemed to have more energy and even optimism than the friends I’d grown up with in privileged, peaceful Santa Barbara, Calif., many of whom were on their fourth marriages and seeing a therapist every day. Though I knew that poverty certainly didn’t buy happiness, I wasn’t convinced that money did either.

So — as post-1960s cliché decreed — I left my comfortable job and life to live for a year in a temple on the backstreets of Kyoto. My high-minded year lasted all of a week, by which time I’d noticed that the depthless contemplation of the moon and composition of haiku I’d imagined from afar was really more a matter of cleaning, sweeping and then cleaning some more. But today, more than 21 years later, I still live in the vicinity of Kyoto, in a two-room apartment that makes my old monastic cell look almost luxurious by comparison. I have no bicycle, no car, no television I can understand, no media — and the days seem to stretch into eternities, and I can’t think of a single thing I lack.

I’m no Buddhist monk, and I can’t say I’m in love with renunciation in itself, or traveling an hour or more to print out an article I’ve written, or missing out on the N.B.A. Finals. But at some point, I decided that, for me at least, happiness arose out of all I didn’t want or need, not all I did. And it seemed quite useful to take a clear, hard look at what really led to peace of mind or absorption (the closest I’ve come to understanding happiness). Not having a car gives me volumes not to think or worry about, and makes walks around the neighborhood a daily adventure. Lacking a cell phone and high-speed Internet, I have time to play ping-pong every evening, to write long letters to old friends and to go shopping for my sweetheart (or to track down old baubles for two kids who are now out in the world).

When the phone does ring — once a week — I’m thrilled, as I never was when the phone rang in my overcrowded office in Rockefeller Center. And when I return to the United States every three months or so and pick up a newspaper, I find I haven’t missed much at all. While I’ve been rereading P.G. Wodehouse, or “Walden,” the crazily accelerating roller-coaster of the 24/7 news cycle has propelled people up and down and down and up and then left them pretty much where they started. “I call that man rich,” Henry James’s Ralph Touchett observes in “Portrait of a Lady,” “who can satisfy the requirements of his imagination.” Living in the future tense never did that for me.

I certainly wouldn’t recommend my life to most people — and my heart goes out to those who

Perhaps happiness, like peace or passion, comes most when it isn’t pursued.

have recently been condemned to a simplicity they never needed or wanted. But I’m not sure how much outward details or accomplishments ever really make us happy deep down. The millionaires I know seem desperate to become multimillionaires, and spend more time with their lawyers and their bankers than with their friends (whose motivations they are no longer sure of). And I remember how, in the corporate world, I always knew there was some higher position I could attain, which meant that, like Zeno’s arrow, I was guaranteed never to arrive and always to remain dissatisfied.

Being self-employed will always make for a precarious life; these days, it is more uncertain than ever, especially since my tools of choice, written words, are coming to seem like accessories to images. Like almost everyone I know, I’ve lost much of my savings in the past few months. I even went through a dress-rehearsal for our enforced austerity when my family home in Santa Barbara burned to the ground some years ago, leaving me with nothing but the toothbrush I bought from an all-night supermarket that night. And yet my two-room apartment in nowhere Japan seems more abundant than the big house that burned down. I have time to read the new John le Carre, while nibbling at sweet tangerines in the sun. When a Sigur Ros album comes out, it fills my days and nights, resplendent. And then it seems that happiness, like peace or passion, comes most freely when it isn’t pursued.

If you’re the kind of person who prefers freedom to security, who feels more comfortable in a small room than a large one and who finds that happiness comes from matching your wants to your needs, then running to stand still isn’t where your joy lies. In New York, a part of me was always somewhere else, thinking of what a simple life in Japan might be like. Now I’m there, I find that I almost never think of Rockefeller Center or Park Avenue at all.


Pico Iyer’s most recent book, “The Open Road: The Global Journey of the Fourteenth Dalai Lama,” is just out in paperback.
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Re: Perspectives on the global economic meltdown

Post by Singha »

what exactly do money market funds invest in ? municipal bonds or ultrashort corporate and govt bonds ?

I wonder how much $$$ is into muni bonds issued by towns and states ? :twisted:
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Re: Perspectives on the global economic meltdown

Post by John Snow »

utilities, muni, T bills etc

the discount of Campbell soups and Intel corporate bonds are less than that of so called Risk free T bills as of today.
Ardhath Intel and Campbell are less likely to default than US treasury. source Market Place.
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Re: Perspectives on the global economic meltdown

Post by vsudhir »

Russia diversifies out of Treasuries and into IMF bonds
June 10 (Bloomberg) -- Russia may switch some of its reserves from U.S. Treasuries to International Monetary Fund bonds, the central bank said today. The comment drove Treasuries and the dollar lower.
Denninger on the significance:
Russia, if my figures are to be believed, holds roughly $160 billion of Treasuries. In the grand scheme of things its not a lot, and won't (by itself) create a big "move of destruction" in either the dollar or the bond market.

However, all dam breaks begin with one crack, and this is a damn big crack.

The problem here is simply confidence. I have repeatedly said that we don't have "toxic assets", we have a pricing disagreement. Even a defaulted bond has a price - you just may not like it. Homes have a price; it is what someone else will pay.
There is this belief both in Washington and among certain "pundits" that Washington's money supply is infinite - that they can literally wave their arms and conjure as much as they'd like.

The Fed is a so-called "independent" central bank but in reality it is nothing of the sort. Any bank examiner who went into The Fed and had a look at the balance sheet would turn as white as a ghost. Over $2 trillion in "assets" backed by some $40 billion in capital?

The fallacy of those who would "kill The Fed" is that The Fed is in fact beholden to Congress and The Executive (especially Treasury.) Proof? Simple: What sort of "independent bank" would monetize more roughly $2 trillion of trash paper and guarantee $10 trillion more?
Whether Russia is a warning shot or the first crack in the dam that leads to a clean break and crash in the Treasury market is an unknown, but this much is certain - in terms of mortgage rates, which were sold to everyone as the linchpin of any economic recovery, Bernanke and his merry men have once again had their projections and intentions turned into a bad joke - a joke that, unfortunately, is on you.
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Re: Perspectives on the global economic meltdown

Post by vsudhir »

interesting fable circulating on email.
Last fall, some Sioux Indian braves asked their chief, “Will the coming winter be warm, or cold?”
The wise chief hesitated, and responded cautiously, “It might be cold, so you better start cutting fire wood.”

The next day, the chief decided to call the National Weather Bureau to get their opinion. The bureau said “Right now, “we are forecasting a slightly colder than normal winter.”

Satisfied that his prudence was justified, the Chief advised the braves to cut a little more firewood.
The Chief checked in with the Weather Bureau a few days later, and asked for an updated forecast.

“We definitely expect a colder than normal winter” was the reply.
So the Chief again asked the braves to stock up on more firewood.

After a week, the Chief called the Weather Bureau again, with the same question. The Bureau said “We now expect a much colder than normal winter”. The Chief was curious, and asked upon what was this forecast based.
The Bureau replied ….”The Indians are cutting firewood like crazy!”
(and that's how the expert economists prepare their forecasts.)
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Re: Perspectives on the global economic meltdown

Post by SK Mody »

vsudhir wrote:India should be worried too. Tomorrow, TSP may miraculuosly announce its indigenously developed stealth bomber onlee....
No problem. Obama can then sell another 50 B worth of "advanced technology" to India, which will be hailed as a further step towards Indo-US cooperation and we can rest peacefully knowing that we have the high tech edge over China.

In any case, 50 B is a drop in the ocean compared even to the yearly trade deficit of the US.
Last edited by SK Mody on 10 Jun 2009 23:32, edited 1 time in total.
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Re: Perspectives on the global economic meltdown

Post by vsudhir »

(jaw-)breaking noose...

10Yr T bill just breached 4%.......panic at the Fed no doubt. Phones are ringing nonstop. Expect supermassive intervention to cajole yields downwards.

Getting increasingly harder to twist mkts though, IMHO.

watch this space!
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Re: Perspectives on the global economic meltdown

Post by svinayak »

http://www.nytimes.com/2009/06/10/busin ... dt.html?em

The story of today’s deficits starts in January 2001, as President Bill Clinton was leaving office. The Congressional Budget Office estimated then that the government would run an average annual surplus of more than $800 billion a year from 2009 to 2012. Today, the government is expected to run a $1.2 trillion annual deficit in those years.


You can think of that roughly $2 trillion swing as coming from four broad categories: the business cycle, President George W. Bush’s policies, policies from the Bush years that are scheduled to expire but that Mr. Obama has chosen to extend, and new policies proposed by Mr. Obama.

The first category — the business cycle — accounts for 37 percent of the $2 trillion swing. It’s a reflection of the fact that both the 2001 recession and the current one reduced tax revenue, required more spending on safety-net programs and changed economists’ assumptions about how much in taxes the government would collect in future years.

About 33 percent of the swing stems from new legislation signed by Mr. Bush. That legislation, like his tax cuts and the Medicare prescription drug benefit, not only continue to cost the government but have also increased interest payments on the national debt.

Mr. Obama’s main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies — together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama — account for 20 percent of the swing.

About 7 percent comes from the stimulus bill that Mr. Obama signed in February. And only 3 percent comes from Mr. Obama’s agenda on health care, education, energy and other areas.

If the analysis is extended further into the future, well beyond 2012, the Obama agenda accounts for only a slightly higher share of the projected deficits.

How can that be? Some of his proposals, like a plan to put a price on carbon emissions, don’t cost the government any money. Others would be partly offset by proposed tax increases on the affluent and spending cuts. Congressional and White House aides agree that no large new programs, like an expansion of health insurance, are likely to pass unless they are paid for.

Alan Auerbach, an economist at the University of California, Berkeley, and an author of a widely cited study on the dangers of the current deficits, describes the situation like so: “Bush behaved incredibly irresponsibly for eight years. On the one hand, it might seem unfair for people to blame Obama for not fixing it. On the other hand, he’s not fixing it.”

“And,” he added, “not fixing it is, in a sense, making it worse.”
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Re: Perspectives on the global economic meltdown

Post by munna »

We Had Our Perestroika. It's High Time for Yours-M. Gorbachev Very interesting read about today's socio-eco-politico complex in USA. Please give it a read.
In recent years, however, during speaking tours in the United States before university audiences and business groups, I have often told listeners that I feel Americans need their own change -- a perestroika, not like the one in my country, but an American perestroika -- and the reaction has been markedly different. Halls filled with thousands of people have responded with applause.
The model that emerged during the final decades of the 20th century has turned out to be unsustainable. It was based on a drive for super-profits and hyper-consumption for a few, on unrestrained exploitation of resources and on social and environmental irresponsibility
Elements of such a model already exist in some countries. Having rejected the tutorials of the International Monetary Fund, countries such as Malaysia and Brazil have achieved impressive rates of economic growth. China and India have pulled hundreds of millions of people out of poverty
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Re: Perspectives on the global economic meltdown

Post by vsudhir »

You've already heard the speculation here on BRF.

Will Latvia spark an East European contagion?
The collapse of the Thai baht in July 1997 helped spark the Asian financial crisis. Could events in Latvia spawn a similar contagion? Eyes are focused on this small Baltic economy, amid growing talk of a devaluation, due to the potential for spillover effects into its fellow Baltics, Sweden and the broader Eastern European region.

Strong trade and financial linkages, not to mention similar macroeconomic vulnerabilities, mean a Latvian crisis would almost surely have knock-on effects on neighboring Estonia and Lithuania, as detailed in this RGE EconoMonitor post in early May. A Latvian crisis would also have negative spillover effects into Sweden via Swedish banks’ heavy exposure to the Baltic trio. The wildcard is how a Latvian crisis would affect the greater Central and Eastern European (CEE) region. Direct trade and financial linkages between Latvia and CEE economies, outside of the Baltics, are limited. Nevertheless, many of these countries – particularly Bulgaria and Romania – share similar macroeconomic vulnerabilities with Latvia, meaning a crisis there could ‘wake up’ investors to the potential for crises in the rest of the region.
EU's banks are at least as underwater as unkil's. They've managed to keep a lid on it so far, much as the anglo-saxon world kept up appearances despite underlying insolvency for many months starting late 2007.

Should EU falter etc, shouldn't come as a great surprise, IMVHO.

Aagey aagey dekko, hota hai kya.
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Re: Perspectives on the global economic meltdown

Post by John Snow »

Just finished listening to this program on WHYY (NPR Philly station)
The financial mess that we are asked to clean up by making sacrifices has so many crooks as fathers ranging from Congressmen, Presidential cohorts, industry tycoon crooks, wall street serial killers etc.

Verry sophisticated ponzi scheme all the way.
382: The Watchmen

Since Congress hasn't held 1930's-style hearings into the causes of the financial crisis, we stage one of our own. The subject? The regulators and watchdogs who were supposed to be overseeing the banks and the finance industry—to make sure things wouldn't blow up like they have. Clearly something went wrong. Today we pound a gavel and ask: where were the watchmen?

You can check out our other shows on the economy here. Today's show is a co-production with NPR News, part of our Planet Money project. The Planet Money blog and thrice-weekly podcast is at www.npr.org/money.

Prologue.
Host Ira Glass talks with Michael Perrino, a law professor at St Johns University School of Law in New York, who's writing a book about Ferdinand Pecora called The Hellhound of Wall Street. Pecora was the lead attorney in the Senate Banking Committee hearings in the 1930s looking into wrongdoing in the banking industry. When he got the job, he turned the hearings from an unimportant and not terrible useful exercise into a real investigation into Wall Street and the causes of the 1929 stock market collapse. It spurred Congress to pass landmark reforms regulating Wall Street. Ira and Perrino talk about whether these kinds of hearings could or should happen today. (9 minutes)

Act One. Investigation Report #1.

Planet Money reporter Chana Joffe-Walt asks a simple question: who was the federal regulator who was supposed to be regulating AIG? The answer turns out to be far from simple. (21 minutes)

Act Two. Investigation Report #2.

Alex Blumberg and NPR correspondent (and "Planet Money" reporter) Dave Kestenbaum examine what went wrong with the credit ratings agencies. When all these financial instruments that brought down our economy—the mortgage backed securities, the derivatives—were originally issued, the rating agencies (Standard and Poors, Moody's and Fitch) gave many of these things their top rating of triple-A. Because of the great ratings, trillions were invested. And then the ratings turned out to be wrong. What happened? (24 minutes)
http://www.thislife.org/Radio_Episode.aspx?episode=382

you can download and listen to the investigative report , a must for all of us.
Sudhir garu , Vina garu et al please try to listen to it
vsudhir
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Re: Perspectives on the global economic meltdown

Post by vsudhir »

Thx JS garu!

Meanwhile, in the far east, aisa bhi hota hai...

Anxious Japanese Are Working Themselves to Death
As the recession bites, cases of job-related mental illness and karoshi, or death through overwork, are rising
:(

It can happen only in asia. Can never imagine anyone in UKstan doing this, for example....
Satya_anveshi
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Re: Perspectives on the global economic meltdown

Post by Satya_anveshi »

I find the debates on current state of US economy in US a little funny. There is so much mess up there and a lot of chit-chat that goes for a debate but no one proposes to re-look at US's defense spending.

The so called healthcare reform, social security reform etc (yes, they are the bulk of US spending) are talked but none whatsoever is even putting cuts on defence spending on the table. It appears that US's makeup hasn't changed that much - it can screw its own people if need be, may cut health care and SS benefits to its own people but does not want to leave out the chance and capability to screw and loot other people with its Armed forces, even when the proverbial sh!t has hit the fan already.

No one is saying Iraq costs us so much, our continued Iraq, Afghanistan and other mischeafs are costing us so much. It is simply out of taste but I also suspect that the person saying anything along the lines will be branded traitor.

For any other country in similar situation, IMF/WB walas would have disbanded that country's army/armed forces and would have cut short the police force too if needed.
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Re: Perspectives on the global economic meltdown

Post by John Snow »

You are right on the money.

Absolute idiots and con men are at the helm of affairs and in power circles.

Big O cant touch defence spending because Republicans will brand him weak on defence in addition to be weak on war on terror and safe gaurding US main land.

Tim G is another buffon who made his audience laugh him off to the next boat to USA.

These guys are not yet comprehending the disaster or they are simply scared to death to tell as it is.

very sad stae of affairs

meanwhile I have been talking to desi strangers who have been in massa land for 25 to 30yrs, everybody is sulking and the ire is against FOB with Indian degrees finding jobs while people who sent their kids to Local universities at enormous expenses are srtuggling to find jobs. Lots of latent discontent accross the sections of scociety
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Re: Perspectives on the global economic meltdown

Post by kmkraoind »

vsudhir wrote:Thx JS garu!

Meanwhile, in the far east, aisa bhi hota hai...

Anxious Japanese Are Working Themselves to Death
As the recession bites, cases of job-related mental illness and karoshi, or death through overwork, are rising
:(

It can happen only in asia. Can never imagine anyone in UKstan doing this, for example....
Because, Western countries have well-organized psychiatric care system and rehabs, which will take care of extreme psychological conditions. More over Eastern countries value system is entirely different of western.
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Re: Perspectives on the global economic meltdown

Post by Neela »

John Snow wrote:You are right on the money.

Absolute idiots and con men are at the helm of affairs and in power circles.

Big O cant touch defence spending because Republicans will brand him weak on defence in addition to be weak on war on terror and safe gaurding US main land.

Tim G is another buffon who made his audience laugh him off to the next boat to USA.

These guys are not yet comprehending the disaster or they are simply scared to death to tell as it is.

very sad stae of affairs

meanwhile I have been talking to desi strangers who have been in massa land for 25 to 30yrs, everybody is sulking and the ire is against FOB with Indian degrees finding jobs while people who sent their kids to Local universities at enormous expenses are srtuggling to find jobs. Lots of latent discontent accross the sections of scociety

One word John Snow Saar - VANITY! The economy may implode, housing may collapse, feeding yourself made difficult but hey ..you still call the shots!

I wonder how these free,brave men are prevented from expressing their disgust over their rulers..or wait...do they even feel disgust for them or are their emotions held by a tight leash by their media?
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Re: Perspectives on the global economic meltdown

Post by vsudhir »

Satya saar,
I find the debates on current state of US economy in US a little funny. There is so much mess up there and a lot of chit-chat that goes for a debate but no one proposes to re-look at US's defense spending.
The above no doubt was rhetorical flourish coz the oh-so-obvious 'benefits' of running the history's greatest military machine seldom require repetition.

It is ultimately US military domination that guarantees the USD's safe-haven status, that twists arms (sometimes not so subtly) around the world to fill UST coffers, that will ultimately prevail against any combination of challengers should the next global depression lead to its logical corollary - global conflict for resources.

Besides, yes, whilst the mainstream press has been thunderously silent on many defining issues (such as prosecuting outright fraud by corporate honchos, criminal negligence by regulatory authorities, organized deception by rating agencies, intentional misdirection by lenders of all hues etc that collectively brought about the great meltdown; the pharma and medical lobbies that have capped supply and thereby jacked up prices; burgeoning US military spending etc), there is intense and lively debate raging at the aware-citizen level (yup, bloggers primarily) who are calling out the elephants in the room. They are valiantly laying out the intellectual, constitutional and socio-economic case for radical reform as and when the current ponzi scheme sustaining the current set crumbles. Just my 2 cents, of course.
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Re: Perspectives on the global economic meltdown

Post by vsudhir »

Boy Denninger is on a roll. Scary sometimes.
I know, Obama wants his "big health plan"

You do realize that the recent "PayGo" flim-flam ignores (intentionally) up to $2.6 trillion in debt (new deficits) taken on to promote that plan, right?

Do you think we can afford it?

We ran a $189.7 billion deficit this last month folks. Annualized this is a staggering $2.276 trillion dollars - for one year.

That's the difference between tax receipts and spending.

$2.276 trillion dollars.

We cannot keep doing this. Our lenders (the Chinese, Saudis and others) will not permit us to keep doing this.

If we don't stop this stupidity, here and now, interest rates will start to move dramatically higher.

You have already seen mortgage rates rise by some 20% in less than two months.

They could easily double from here.

A $200,000 house that was bought with a 5% mortgage is worth $104,984 if rates rise to 12%.

Let me put this in simple English so you understand what is being done to you with our incompetent, unsustainable and delinquent government policies:

Your home will have its current, depreciated due to the housing bust value, cut in half again if we don't cut this crap out right here and now.

That's right.

But it gets worse.

See, businesses have to borrow too. And their interest costs will double as well, which means lots of job losses, as interest expense is money that can't go to payroll. In fact, it means many millions of additional job losses, and an unemployment rate that will rise to 20% or more.

I realize that nobody is happy about the cost of health care, including me.

But there are some very inconvenient facts related to health care in America that nobody wants to discuss, yet we must discuss them and come to some understanding in this country among all citizens.
link
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Re: Perspectives on the global economic meltdown

Post by Satya_anveshi »

vsudhir wrote:The above no doubt was rhetorical flourish coz the oh-so-obvious 'benefits' of running the history's greatest military machine seldom require repetition.
That matters a lot, more so than ever. We need an analysis on

US military budeget is X times that of Ru and Y times that of CHN
1 US soldier makes X times that of 1 Ru Soldier, 1 CHN soldier
so many people (directly and indirectly) killed in Iraq due to US war.
US has this hardware; Ru had that and CHN has that;
US spends this on software (intel, and other agencies etc), and Ru spends that and CHN that
US spends X on some useless NASA missions while Ru spends this and CHN spends that

Blend that with health care and SS that is being now proposed to cut off.

When India is subjected to umpteen psyops of "when 2 out of 3 in India reeling under poverty, why does it need to test missles and nuclear devices," this will counter such non-sense.

Public in US is directly being affected by the bumbling idots in power and such rhetorical articals will have desired affect and have some value.

How to make trump cards out of dead cards is something we need to learn from US and it is amusing that no one is taking a stab at this at an opportune time.
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Re: Perspectives on the global economic meltdown

Post by RamaY »

ramana wrote:Relative National Debt graphic:

National Debt_2009
It is worrying to see Indian national debt at 78% of GDP.
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Re: Perspectives on the global economic meltdown

Post by Suraj »

Most of our debt is internal, and therefore Rupee denominated, which means it is unconstrained by exchange rate risk. External debt has a significant book-keeping component, e.g. every NRE account adds an external debt, though most of these funds are 'sticky' and stay in India, unlike short term hot money. Same for FDI inflows - instead of being repatriated, they are usually reinvested.

Further, India has long run a chronic fiscal deficit, and yet manages a very high savings/GDP and investment/GDP. It is a paradox, in that we maintain LatAm-like deficits, but East Asian levels of investment/GDP . I'm less concerned about the deficit itself and more concerned about the avenues through which it is served. For example, constant market borrowings on preferential terms to GoI, crowds out access to credit for the private sector.

A bigger and more effective domestic debt market would help a lot, so that equity and bank credit are not the only sources of financing. However, debt is tied to credit rating systems, and an autonomous domestic ratings agency would be an imperative.
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Re: Perspectives on the global economic meltdown

Post by vsudhir »

Interesting take on the 30yr auction today:

http://market-ticker.denninger.net/arch ... eware.html

As well as some good questions on the $134 BILLION in US bonds siezed:

http://market-ticker.denninger.net/arch ... nting.html
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Re: Perspectives on the global economic meltdown

Post by vsudhir »

Baby Boomers: It's All Your Fault
The big question, of course, is what happens when boomers start to retire. The oldest of them became eligible for Social Security in 2008, and as we move forward in time, more and more of the bulge will switch from middle age -- when they're busy earning and spending -- to retirement, when they start to draw down on their savings. According to the "age wave theory," popularized by money manager Harry Dent in the late 1990s, when the boomers hit this transition point, the U.S. will enter a long bear market, as new retirees start tapping into their pension funds and 401(k)'s, selling their stocks and bonds to pay for their golden years.
This is basically what happened to Japan, which experienced an enormous asset boom in the 1980s -- at one point the land around Tokyo's Imperial Palace was worth more than the entire state of California -- and then a crash in 1990. In the subsequent two decades, the country has grown very little or not at all.
Today the Nikkei is about 75 percent below its 1989 high. Sitka thinks that the U.S. is "now starting a similar demographic shift into retirement, and that has coincided with what appears to be a peak in spending and debt." If they're right, the current bear market isn't a mere hiccup or even an indicator of a particularly nasty recession -- it's the start of a decades-long slide. (See Sitka advisor Mike Shedlock's blog for more background.)

Is the U.S. really at the same point? One piece of evidence suggests that it is: in 1990, near the start of Japan's woes, the median age was 37.4 years, meaning half the population was older than that. The U.S. today has a median age of 38 years. We're at roughly the same demographic place that Japan was at 20 years ago. Will we face the same future?
Read it all.
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Re: Perspectives on the global economic meltdown

Post by Prem »

Immigration policy will be key to revival . US wont repeat the UQ mistake and will always get fresh blood infusion from other countries .
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Re: Perspectives on the global economic meltdown

Post by paramu »

They need access to Indian market and Indian labor. Without that they can't make their savings and investments grow.
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Re: Perspectives on the global economic meltdown

Post by AkshayM »

Absolutely, I was going to say US will open up immigration. This will have classic trickle down effect whenever new immigrants come in buying basic necessities to renting to car etc. etc.
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Re: Perspectives on the global economic meltdown

Post by shyam »

What grows in a bear market?

Well... I mean what kind of funds should we look for, to park our 401(k) in a bear market?
Last edited by shyam on 12 Jun 2009 09:19, edited 1 time in total.
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Re: Perspectives on the global economic meltdown

Post by John Snow »

vsudhir wrote:Interesting take on the 30yr auction today:

http://market-ticker.denninger.net/arch ... eware.html
SUdhir garu, thats what I was attempting to show in my cycle of probable events

there will be deflation initially for assets in US atleast ( the world follows is another matter), which makes the dollar go up, then the swing will be to stagflation and then to hyper inflation...

I just came back from one round of mall sniffing... stores like Target, Macy's Sears JC penny are not refurbishing the sold items, even Border book stores, best buy are to the Bone, I see hectic returns on big ticket items like LCD (40'' plus) TVs, home depot garden area should be brimming with young and old senoritas in hot pants and shorts are missing the bloom.

Listen to Market Place, the PRC shipped containers with furniture, white goods are going begging as orders have been cancelled after the containers left the ports...

****
bear market has positive effect on commodities like Food, Grain, to some extent Health care and Pharmaceutical. But this time around things are little more whacky than usual. Walmart is the only one store that is still doing brisk business, ofcourse grocer(ies) will do better as people tend to eat at home rather than go to restuarants.

***
Added even later
Stagflation was a term coined by Paul Samuelson to describe the combination of high inflation and high unemployment.
In current situation the pumping of money into the financial system I(by fiat money) and as it winds down the bad asset write offs (like intial water of flood in a perched land) the cash will vapourize, the govt crowding the market with taking loans out of reach of private sector (innovation, peole are already talking of micro loans of max $7000 to any Entrepreneur in the USA! :eek: ) keeps the unemployment high and cost of goods high (because of cost of capital) which is inflation.

Let us wait for guru Bernakee ki bath kya hoga.. Blood, Bath and Beyond :mrgreen:
Last edited by John Snow on 12 Jun 2009 10:02, edited 1 time in total.
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