Perspectives on the global economic meltdown

Umrao Das
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Re: Perspectives on the global economic meltdown

Postby Umrao Das » 13 Oct 2009 07:53

There is a vested interest in propping Dollar and there is invested interest in dropping INR.

As long as Pakistan is benevolent and attacks India once in every three months Indian sovereignty is not threatened or the INR. Counterfeiting can be easily solved as RBI just converts them into regular INR as per forum member some time back. In way we must thank for Pakistan and Nonstate actors for being regular periodically onlee.

bart
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Re: Perspectives on the global economic meltdown

Postby bart » 13 Oct 2009 11:58

RBI is considering plastic currency notes as per recent reports, those are a lot harder to counterfeit by your average ISI operation.

Singha
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Re: Perspectives on the global economic meltdown

Postby Singha » 13 Oct 2009 13:46

singapore has moved to such a note I think. has a transparent patch too.

our passports are another thing crying out for reforms. we extended our mothers passport in
delhi - so he wrote in green ink on page3 "validity is hereby extended until a/b/20xx" :rotfl:
the local rubber stamp guy could make a better stamp and provide the green fountain pen ink.

khan passport has far superior security features.

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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 13 Oct 2009 14:33

How Much Gold Does the US Have In Its Reserves?

Not getting into issues of where the gold is, what claims there may be on it, and what fineness it may actually be, according to the US Treasury:

The US currently holds 261,499,000 fine troy ounces in its reserves. US International Reserve Position, US Treasury

The gold is valued on the books at $42.2222 per fine troy ounce.

This represents a total value of $11,041,063,078.

This value appears on the Treasury's International Reserve Position US Treasury on Line 4.

Since there are 32150.7466 troy ounces in a tonne, the US Treasury is holding 8,133.528072 tonnes of fine gold.


By the way, and just as a point of curiosity, I calculated that if the Fed wished to back its balance sheet with all the gold in the US Treasury, the amount today would be approximately $8,000 per troy ounce. Don't hold your breath. LOL

Some of this may become an issue IF the SDR does become the international reserve currency, and IF gold is added to the mix of its basket of currencies as some countries like China and Russia have requested.


Wow, eh? Gold is what, at some $1000 odd per ounce? Long way to go it does, if you buy the above analysis.

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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 13 Oct 2009 15:39

Well, looks like it ain't just the UKstani public sector that's selling away phamily silver to pay the bills.... its even the bluebloods among pvt enterprise in oirope....

Investors may force the world’s second- largest retailer to retreat to Europe

The group’s businesses in Brazil and China are substantial, fast-growing and produce generous returns on investment. Now, however, to the dismay of executives at the firm, two big shareholders are reportedly pushing for a sale of the Asian and Latin American businesses.
...
Like many activist investors, they were caught out by the crisis: Carrefour’s share price has fallen from around €50 ($67) when they made their purchases to €30 today.
...
Selling Carrefour’s Asian and Latin American businesses could bring in as much as €13 billion, and would result in a special dividend for shareholders of around €10 per share after tax and some reduction in debt, estimates Philippe Suchet of Exane BNP Paribas, a brokerage firm.
...
Such a sale, however, would limit Carrefour to low-growth European markets, in several of which it is struggling.


Yup. The days of 'em emerged TFTAs running amok with surplus capital to flash around are prolly over onlee.

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Re: Perspectives on the global economic meltdown

Postby kmkraoind » 13 Oct 2009 19:02

http://www.bloomberg.com/apps/news?pid=20601087&sid=aHviAW2XeFuc

Oct. 13 (Bloomberg) -- Goldman Sachs Group Inc., the biggest U.S. securities firm before converting to a bank last year, was cut to “neutral” by Meredith Whitney, as the analyst dropped her only “buy” recommendation.


This is the lady with 'buy' rating to Goldman Sachs three months ago, lifted US and world wide stock markets, when they are about for a big correction. Probably I am expecting a 20-30% correction in the 1 month in stock markets.

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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 13 Oct 2009 19:44

Bank run in Holland

The Netherlands' central bank took control of DSB Bank after talks with a consortium of Dutch banks failed to agree to a support plan following recent heavy deposit withdrawals


Keep watching for more dots coming out of oirope. Connecting them should give some clue to which way they're heading. This is the lulloo before the storm.

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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 13 Oct 2009 20:25

Bill Buiter tohp hai, mama...... been a while since moi visited his perch at the FT. very informative, insightful, nononsense and entertaining commentary, IMO. Hajaar recommended.

Here, he warns us that our sdre emerging economies are at risk of bubbles n busts thanks to the tfta emerged khanomies stuck in growth limbo for the foreseeable future.

The massive injection of official liquidity by the Fed, the ECB, the Bank of England, the Bank of Japan and other central banks in the north-Atlantic region is much more likely to show up as credit and asset market booms, bubbles and - eventually - busts in those emerging markets that are growing rapidly again, that is, most emerging markets other than those in Central and Eastern Europe. China, Brazil, India, Indonesia, Singapore, Turkey and Peru are but some of the countries at risk.


The reason driving this risk?
The reason for this liquidity spill-over is the desire of many of the rapidly expanding emerging markets to prevent a large real appreciation of their currencies vis-à-vis those of the cyclically lagging advanced industrial countries.


Huh, but Dilli doesn't run a peg against the tfta currencies, does it? A floating rate and all, after all. SUre there are interventions but nothing on the prc or BoJ scale.

An appreciation of the real exchange rate can be achieved either by having higher domestic inflation than global inflation and\or through nominal exchange rate appreciation. With sticky domestic inflation, rapid real appreciation requires rapid nominal exchange rate appreciation. This is resisted by the authorities of these countries through foreign exchange market intervention. The accumulation of foreign exchange reserves that results is only partly sterilised.

The result is externally financed expansion of the domestic money supply and more rapid domestic credit growth. This will leak at least partly into domestic asset markets, creating the conditions for boom, bubble and bust.


Surely desi realty marts have seen excessive bubbliness in prices and valuations driven largely by income from abroad earned in tfta money or smuggled back black money. One nonsurprising thing though is:

China is especially at risk of booms and bubbles in its stock market, its residential housing market and its commercial and industrial property markets. That is because the externally funded liquidity injection resulting from Chinese attempts to keep down the external value of the yuan are reinforced by further domestic credit expansion associated with the Chinese fiscal stimulus.
...
Much of the fiscal expansion has been targeted at China’s past areas of comparative advantage: heavy export-oriented industry and infrastructure aimed at supporting those industries.

Much of this expenditure will turn out to have been misdirected from a structural or sectoral perspective, even if it met the short-run cyclical objective of boosting domestic demand. China is creating massive excess capacity in export-oriented industries (and indeed in some of the low-tech consumer goods where it no longer is the global low-cost producer). The bank loans that financed these misdirected expenditures will go belly-up before long with a high probability.

The (majority) state-owned banks that provided these loans knew that they were lending for likely dud projects, but went ahead anyway. First, you don’t argue when the Party tells you to lend, and second, you know that you will be bailed out when the loans go bad. In two or three years, when these loans will be going into default on a large scale, the central bank or the ministry of finance will recapitalise the banks, using a mixture of government debt, central bank domestic credit and foreign exchange reserves. This central bank financing-with-a-lag of a Keynesian spending stimulus makes sense, up to a point. It ceases to make sense if the bank credit ends up going into domestic speculation involving existing financial and real assets. Unfortunately, that is clearly happening.

The medium-term prospects for China are worrying, even if the short-term and long-term prospects are bright.
{well, saar, name any kafir sdre country whose longterm prospects aren't bright, eh? sabka future bright hai, mama.}

The country has thrown everything it has as regards fiscal policy, monetary policy and credit policy at domestic demand to maintain growth at eight percent per annum or more despite the collapse of export demand for its products. The boost to domestic demand is overwhelmingly in the form of fixed investment, much of in the the wrong, old industries. Without a miraculous recovery of export demand growth, excess capacity will re-emerge with a vengeance in the export industries. Since the Chinese authorities fear the social unrest likely to be associated with a steep increase in unemployment, they will thrown the kitchen sink squared at domestic demand again.


It is not clear that the instruments the authorities have at their disposal are well-designed to achieve this sectoral shift of consumption and demand. An authoritarian one-party state can single-mindedly and with amazing speed achieve simple objectives. That is a great advantage if the objective makes sense (the Great March, agricultural reform, the 2008-2009 demand stimulus). It is a great disadvantage if the objective is destructive (the Great Leap Forward, the Cultural Revolution). Changing the composition of production and demand away from what is tried, known and familiar towards unfamiliar goods and services may not be an easy task for the residual central planning apparatus of the People’s Republic of China. They will eventually get it right, but we are likely to see some credit and asset market dysfunctionality along the way.


The assertion, occasionally heard in the halls of the cynics, that the US and other chronic external deficit countries will not be able to redress their imbalances because they have nothing to export, is incorrect. They can export credit and asset booms and bubbles with the best of them.


Read it all.

RBI need be extra vigilant. Sri YV Reddy's RBI did great partly because it kep an eye not just on CPI but also on asset inflation. Need for vigil will only rise here on.

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Re: Perspectives on the global economic meltdown

Postby Purush » 14 Oct 2009 07:27

Posting in full since link is not static.

http://www.straitstimes.com/Breaking%2B ... 41733.html

Fewer S'pore millionaires

MEMBERSHIP of Singapore's millionaires' club has taken a hit in the face of the global economic downturn. The number of high net worth individuals (HNWIs) here - those who hold at least US$1 million in investible assets - shrank by 21.6 per cent to 61,000 last year, up from 78,000 in 2007, according to the Asia-Pacific Wealth Report released by Merrill Lynch and Capgemini on Tuesday.

Japan comes out top of the survey with 1.36 million HNWIs, well ahead of Singapore at sixth place and Hong Kong and Indonesia at ninth and tenth place respectively.

The combined wealth of Singapore's millionaires shrank 29.4 per cent to US$272 billion during the year - the third-largest erosion of wealth in the region after Hong Kong and Australia.

The reasons cited for the decline are the slowing of Singapore's GDP growth and the plunge of the stock market, which fell 50.8 per cent last year.

Asia-Pacific's total population of high net worth individuals, three-quarters of whom are based in Japan, China and Australia, fell 14.2 per cent.

The publication reports that wealthy Asians have staged a flight to safety in the face of economic uncertainty, allocating their wealth to 'safer' cash-based investments and demonstrating a lower appetite for riskier asset classes. They have also favoured more familiar territories, choosing to invest in home regional markets instead of markets in Europe or North America.

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Re: Perspectives on the global economic meltdown

Postby Singha » 14 Oct 2009 11:19

my friend was saying some people who lost work in financial sector had to move into driving taxis and such. the profit margin in driving taxis is not much there apparently since scope for bargaining and cheating clients is almost none, so they are generally a disgruntled lot my friend claimed. there is some 1800 type number where customers can instantly call and register their complaint. no taxi older than 7 yrs is allowed. bill must be printed and produced on demand.

enroute from changi to CBD in a big old london taxi, had a case where the van infront did not
have brake lights working, leading to our driver having to brake sharply. he flips out his phone
and calls up this 1800 asap.

control/discipline/velvet-cum-steel fist very strong there :roll: lacked the 'freewheeling' character of bangkok for sure. another taxi guy claimed the "CID" were everywhere, hiding in
plain sight as lover couples, messenger guys in shorts, gamer dudes, tourists and were extra quick to pounce on taxi guys and criminals of all hues.

love it or hate it, sure works very efficiently.

I started reading a book on chinese history yesterday. has a superb and hilarious commie
poster from the 1960s urging people to be vigilant even in unlikely places. there were two
PLA guys upto their chest inside a lotus pond, with pants rolled up and one was whispering
to the other (ratting on some counter revolutionary activities), while a third trooper even
deeper in the woodwork looks on. will try to photo and link it here.

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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 14 Oct 2009 11:32

This is the lady with 'buy' rating to Goldman Sachs three months ago, lifted US and world wide stock markets, when they are about for a big correction. Probably I am expecting a 20-30% correction in the 1 month in stock markets.


Stock Analysts in general are a discredited lot. Meredith Whitney prolly is among a select few with some street cred left. But taking on GS has never (so far) been a profitable enterprise. And its not because they have deep connections with the establishment and are able to secure taxpayer funded bailouts and lifelines at whim. It is because they are the establishment, some would argue....

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Re: Perspectives on the global economic meltdown

Postby amol.p » 14 Oct 2009 13:50

UK - Some pension schemes close to insolvency

A small number of UK pension schemes are so underfunded, and their sponsors so close to bankruptcy, that either trustees must adopt a go-for-broke high-risk investment strategy or the employer will need to seek protection through insolvency, a new study shows.

The study, conducted by Hewitt Associates, concluded that the percentage of such schemes is probably small, no more than 1 per cent of total defined benefit company pension plans.

EDITOR’S CHOICE
Warning over pension deficits , the high-risk strategies adopted by trustees in recent years in order to reduce the requirement that companies make significant contributions to schemes have backfired.

“Many UK defined benefit schemes in this situation are running significant risks resulting from their traditional equity-heavy narrow strategies, with little governance resource and attention allocated,” said John Belgrove, principal consultant in Hewitt’s global investment practice. “Sponsors rightly cannot stomach the financial roller-coaster ride that is the consequence of static long-term investment thinking.”

The study comes as the Pension Protection Fund, the government-sponsored private fund that insures the underfunded retirement promises of insolvent employers, said that the aggregate shortfall in UK schemes fell in September.

Schemes in deficit had a shortfall of £174.9bn, down from £194.6bn at the end of August. That is still higher than the £98.4bn shortfall that PPF-insured schemes had in September 2008.

Helping to narrow the deficit in September from August was a rise in stock markets, which raised asset values by 2.6 per cent, and higher gilts yields, which reduced liabilities by 0.5 per cent. But the monthly publication of the PPF’s 7800 index serves as a reminder that investment in assets that do not move with liabilities exposes schemes to potentially large losses at a time when an em­ployer is unlikely to be able to make good on losses.

Russell Agius, principal in Hewitt’s retirement practice, who conducted the study, said its conclusion – that about 15,000 people in the UK will lose about 20 per cent of pension benefits – is based on conservative assumptions and is limited to underfunded plans of companies experiencing severe funding problems. “We are talking about cases where the employer cannot fund this scheme any more,” he said.

He noted that some schemes were positioned to take advantage of surging stock markets and seem to have taken little account of the need to crystallise gains and move to less risky strategies over time.

But the recession and collapse of stock markets are now prompting some employers to prod trustees to put in place plans to reduce investment risk as each scheme’s finances improve



http://www.ft.com/cms/s/0/1f699e7e-b82b ... ck_check=1

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Re: Perspectives on the global economic meltdown

Postby Chinmayanand » 14 Oct 2009 17:29

Time to Hire Bernard Madoff to Run U.S. Treasury: William Pesek

Commentary by William Pesek

Oct. 14 (Bloomberg) -- The dollar is at a breaking point.

No, this isn’t hyperbole. It’s what many economists are saying as they look at U.S. finances and how central banks are increasingly snubbing the world’s reserve currency. It barely needs to be said that this could all end very badly.

It’s not that foreign-currency holdings are falling. It’s that nations reporting currency breakdowns put 63 percent of the new cash into euros and yen in April, May and June, according to Barclays Capital. That’s the highest percentage in any quarter, with more than an $80 billion increase.

We could just be on the cusp of the meltdown that has kept investors awake at night for years. A dollar fire sale by jittery central banks, especially those in Asia, could make the credit crisis seem trivial by comparison. It may be time to turn to heavy guns and secret weapons. Maybe even Bernard Madoff.

Mr. $65 Billion Ponzi Scheme has lots of time on his hands -- a 150-year prison sentence. The 71-year-old won’t live that long. It doesn’t mean Madoff’s unique set of skills can’t be tapped by U.S. Treasury Secretary Timothy Geithner.

Their first meeting may go something like this:

Geithner: May I call you Bernie? I would thank you for coming here to the Treasury building, but then you weren’t given a choice. Sorry about putting a hood over your head and sneaking you in through the back door. Necessary steps, I’m afraid. Imagine the scandal if the press got wind of you being here.

Madoff: Well, I’m glad it’s not Guantanamo Bay. Why exactly am I here? Say, can I get an espresso? That jailhouse coffee is nasty.

Geithner: As you may know, the world’s central banks are on to us -- they know the dollar is living on a prayer. The data don’t lie. I really need to know how you did it.

Madoff: How I did what?

Geithner: Oh, come on. How you fooled all of us for so long. How you managed double-digit returns year after year, no matter what markets did. How you convinced everyone all was well. I’d like to apply the same strategies to the U.S. financial system.

Madoff: Are things really that bad? Our currency really has no clothes?

Geithner: It’s getting more and more naked. We’ve been fine with a weaker dollar, so long as we didn’t appear to be devaluing to help exporters. Well, the word is out and we’re spooking our creditors. When China and Japan panic and start dumping dollars, all hell will break loose. The same with the Gulf states.

Madoff: Well, that woke me up! Say, hold that second espresso. I no longer need the caffeine.

Geithner: Of course, countries like China would cannibalize their own growth by pulling the plug on Treasuries. Still, you remember Long-Term Capital Management and Lehman Brothers? Mere pimples on the back of capitalism compared with a dollar crash.

Madoff: Haven’t you guys been running your own fiction? New Asian money flowing in allows you to pay your debts on older investments. That’s your basic Ponzi scheme. I’m wondering if it’s really me who should be learning from you. An alien arriving from Mars would look at your balance sheet, conclude the U.S. is an emerging nation and stay away.

Geithner: Bernie, you could probably make our debt disappear.

Madoff: You really should be calling David Copperfield.

Geithner: The key is keeping folks in Beijing or Tokyo from realizing that. The diversification we’re seeing out of the dollar is a red flag. We must get a handle on this, or our economy cracks. We need to get central banks to keep buying our debt to avoid a run on the dollar.

Madoff: Markets aren’t easy to fool. They know it won’t be easy paying for that Iraq invasion and all those Wall Street bailouts and stimulus packages. Even that Sarah Palin is out there making headlines by dissing your dollar.

Geithner: Look, how do you think I feel? I figured that following Henry Paulson would make me look good no matter what I did. Presiding over a dollar crisis was never on my wish list. I am nostalgic for the days of the Asian crisis. Back then, all we had to do was keep South Korea and Indonesia from imploding. Dealing with “too big to fail” is easier than “too sick to save.” And now it’s Asia holding the cards. We must show that the dollar is fine -- even if it’s an illusion.

Madoff: It’s not as easy as it looks -- or to understand. You will notice that all these new books about how I did it aren’t selling. It’s because no one really gets it. OK, so you’re asking me to do your job for you -- to run the Treasury behind the scenes? This is a much bigger scam than I’m used to.

Geithner: Your country needs you, Bernie. What do you say?

Madoff: Bring that espresso after all, sonny. And get out your notepad. This will take a while to explain.

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Re: Perspectives on the global economic meltdown

Postby SwamyG » 14 Oct 2009 18:32

Just thinking aloud. The dollar kept falling in 2007. Then the economic meltdown started, and the dollar started to get strong as the melting went abated. Did the turmoil give a life line to the dollar? As there are signs of recovery, the dollar has started going south again.

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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 14 Oct 2009 21:45

^^Yup, that was classic 'flight to safety' by global capital into US treasuries - widely perceived to be the safest investment around.

Now it seems there's an even more widely (and deeply) perceived storehouse of value.

Gold.

Trying to trigger another FUD led flight to the safety to the USD might just be a bridge too far the second time round perhaps, IMO. Classic case of crying wolf too often. Besides, GOTUS is hell bent on devalueing the USD, why would they try to raise it up now?

Also, when the stock mkt crashes, the excess liquidity that the banks have deployed there will naturally flow into UST. Jai Ho and all that.

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Re: Perspectives on the global economic meltdown

Postby SwamyG » 14 Oct 2009 22:09

>>>that was classic 'flight to safety' by global capital into US treasuries - widely perceived to be the safest investment around.

And that perception comes just from 'faith'. The faith that US companies or the country will not go kaput. USA stopped redeeming the dollars with gold. I think USA started the new age Bhakti movment - blind devotion. I can still see that bhakti several of my friends. Who can not see the global order changing. When pointed out that in 20-30 years things could be drastically different, they dismiss it as being too far away to worry.

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Re: Perspectives on the global economic meltdown

Postby Purush » 14 Oct 2009 23:09

Singha wrote:my friend was saying some people who lost work in financial sector had to move into driving taxis and such.


Quite true. But it's not only because of the recession; it's been happening even before that since the 'unofficial' age limit for retirement is quite low here (mid 50s IIRC); many private companies don't hire/keep people older than that. There's a (not entirely untrue) joke that SG has the world's most highly educated taxi drivers. :shock:

another taxi guy claimed the "CID" were everywhere,

:rotfl:
Generally, the taxi guys here are a borderline paranoid lot with overactive imaginations and loud mouths. There is some truth to the claims though..plainclothes cops are common in crowded areas such as LI/Orch/chinatown..probably because they don't want tourists to see uniformed cops. But when there are events that draw large crowds esp in the CBD, they are openly out in full force with battle-gear...mobile command centers, TFTA handheld radios/GPS, MP5 etc etc. Can be quite intimidating- though they never stop/harass common abduls, they have no pretentions of 'service with a smile' either... only interested in scanning the crowds for troublemakers, with a 'don't eff with me look'. Deterrence doctrine I suppose.. :oops:

All said and done, SG taxi drivers are a docile lot compared to their counterparts in most cities..for eg KL taxi drivers are consistently reported to be very very nasty..bordering on criminal wrt passenger service, scamming, etc. Even Benguluru/Chennai taxi/auto drivers are not better...have had very bad experiences in both places.

love it or hate it, sure works very efficiently.

Yeah...they like order here...any potential deviation from 'stability' = red flag for the SGsarkaar. They claim without order/stability, there will be no investments/jobs/$$ to waste on malls or holidays in HK etc etc...so ostensibly their rationale for control is economic growth.

The deeper reason is that the establishment here is uber-paranoid about race relations....malay + chinese + desi mix is not a inherently stable system with culturally almost nothing in common between the 3. They haven't forgotten the race riots of the 60s...and they will do literally anything to prevent that kind of 'disorder' again. Even at every little function, they never miss an opportunity to 'promote' stable race relations....'cross-cultural' exchanges etc. IIRC there is even an unofficial (official??) composition guideline for HDB flats ...each apartment block must have a minimimum ratio of C:M:D etc.. to prevent ghettoization.

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Re: Perspectives on the global economic meltdown

Postby paramu » 15 Oct 2009 05:11

Does anybody believe that Obama will take efforts to reduce health care costs?

I think it won't happen. Health care is almost 15% of US GDP. If Obama reduces health care expenses by 20%, it will knock off 3% of US GDP!!! Is that something a US President can afford to do? All he will play with is the insurance part of it, and not the cost healthcare providers charge.

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Re: Perspectives on the global economic meltdown

Postby Umrao Das » 15 Oct 2009 05:20

Imagine you are in control of street level drug pushers and you own the distribution and manufacturing channels for Coke, Crack, Grass etc.

Suddenly your drug addicts start moving away from drugs and are in rehab what would you do? Find new markets, if not encourage local consumption etc.

The savings rate of US is going up, the banks are fixing their books with TARP money, industries are not spending much to improve inventory because they dont see the bad habits of (drug) consumers to spend or they dont have jobs or they already have over leveraged their assets.

Now the drug Lords PRC oil Producers are seeing the shrinking consumption in the massa land, so why should they hold massaland currency? Which in any case has no interensic value, but massa has infinite potentila to print money n questions asked. Ok even earlier Massa was printing money, but then atleast he was consuming in avericious and cupious quantities, so there was motivation for drug lonrds to push peddle more drugs ( PRC products and Arab oil) but not any more, so they are moving away from dollar because the dollar they earned is now equally diluted by new printed (minted) dollars. When drug lords move away from dollar the demand for dollar falls and the corresponding equilibrium will shift towards the substitute for dollar that is Euro or Yuan or Rubble.

So this time dollar falling is beacuse of the realization that Massa land may not be consuming the way it did in earlier recoveries, and there is no quick way to get back to old habits. SO only in the very loooooooong run dollar might gain back its intrensic value.... but I will be dead by then for sure...

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Re: Perspectives on the global economic meltdown

Postby Umrao Das » 15 Oct 2009 05:23

Health care expense will go up for sure. The answer will take me two pages but I refrain. Its enrollment time and people should notice that premiums, deductable and co pays have already been adjusted for Obama factor.

"Expenditure raises to meet the anticpated income (or tax)"

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Re: Perspectives on the global economic meltdown

Postby SwamyG » 15 Oct 2009 05:26

>>Does anybody believe that Obama will take efforts to reduce health care costs?

He might,but interested parties might not like him to do that.

Reduction in health costs, does not evaporate the money from the economy. The money goes from one pocket to another,no?

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Re: Perspectives on the global economic meltdown

Postby Nandu » 15 Oct 2009 05:56

SwamyG wrote:
Reduction in health costs, does not evaporate the money from the economy. The money goes from one pocket to another,no?


Depends on whether consumers take the healthcare savings and immediately spend it somewhere else, or not.

Anyways, while Obama might succeed in getting health coverage for more people, I seriously doubt he will be able to control costs. As far as I know, government takeover or control of a service resulting in cost reductions is ... unprecedented.

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Re: Perspectives on the global economic meltdown

Postby darshan » 15 Oct 2009 09:48

Umrao Das wrote:Health care expense will go up for sure. The answer will take me two pages but I refrain. Its enrollment time and people should notice that premiums, deductable and co pays have already been adjusted for Obama factor.

"Expenditure raises to meet the anticpated income (or tax)"

Already noticed that. For me, premiuim 5% up while benefits coverage went down by 10%.

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Re: Perspectives on the global economic meltdown

Postby Singha » 15 Oct 2009 09:55

how is the copay for a doctor visit these days?

in khan, docs are under pressure to minimize care and reduce tests

in desh, docs are always willing to order more tests to maximize kickbacks

in ukstan, its hard to get medical care in time

only the dead alone know some peace?

Hari Seldon
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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 15 Oct 2009 10:50

Its a bipartisan failure on both the ekhanomy and the healthcare sectors in the khanate, IMO.

Neither party or admin has deigned to take on the *real* culprits in either case.

In the financial ekhanomy, the big banks and the bigger bankers, right upto the biggest bank of them all - the Fed reserve - should have been audited and the comm ones forced to eat losses on bad loans made. The desperately needed overhaul of the system, complete with sweeping prosecutions for fraud (against banksters, rating agencies, CDO peddlers and mortgage lenders), for negligence (regulatory bodies), for misuse of public funds (bailout daddies) among others, never came and never will come from either party.

In the healthcare sector, the chokehold of the AMA (amrikhan med assoc) on trained med worker supply allows the profession to extract monopoly rents and raises the floor on all manner of subsequent costs in the system. Fighting the AMA isn't even talked about much less planned for.

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Re: Perspectives on the global economic meltdown

Postby SwamyG » 15 Oct 2009 20:16

I don't buy in to the theory that 'Government is bad'. Sure it has inefficiencies compared to the private sector. But the purpose of Government is different from the Private sector. The Private Sector cares for just the bottom line - profits at all cost is the 'tarakka mantram'. I would like the private and government sectors to fight each other and act as the balancing force in life. So having some health care reform is not going to hurt the people.

Trusting the Private Sector, way beyond what was necessary, is one reason why we have the meltdown. Let us keep that in the perspective.

ps: For a moment I thought I walked into a ..... den :-)

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Re: Perspectives on the global economic meltdown

Postby Nandu » 15 Oct 2009 20:29

SwamyG, good/bad is not the point. To repeat what I said, it is just unprecedented that government can come in and reduce costs. If you have counterexamples, let us see them. We all need to be reality-based in the end.

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Re: Perspectives on the global economic meltdown

Postby Hari Seldon » 15 Oct 2009 20:39

Another 'moi told ya so' moment or what..... From the eKKKonomissed magazine:

Selling foreign goods in China: Impenetrable

Despite hope that China will help pull the world out of recession, foreigners are finding it as arduous as ever to do business there.

:rotfl:

And what did the tfta khanomist rag expect anyway? All high n mighty and stiff upper hip when it comes to straight players like yindia but all fawning gaga over PRC....LOL .... does seem like momma UK-stan is having trouble finidng markets for its tripe, eh? Why not send another east yindia company yonder, eh? Worked well last time, no? :x No goodwill for uk-stan, its props, and its prop-a-gandu organs.

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Re: Perspectives on the global economic meltdown

Postby Singha » 15 Oct 2009 21:46

what happens if the dollar crashes?

http://www.businessweek.com/magazine/co ... 801269.htm

Federal regulators are monitoring banks for a wide variety of risks, including the threat of a dollar bust: "We're not looking quarter to quarter, we're looking hour to hour and minute to minute at what those risks are," says one regulator who requested anonymity.

From its spring peak, the dollar is down 11% against the Japanese yen, 16% against the euro, 21% against the Canadian dollar, and about 30% against the Brazilian and Australian currencies, which are benefiting from a commodity price spike. Against a broad market basket of all U.S. trading partners, and adjusted for inflation, the dollar has fallen 15% from its spring high.


SwamyG
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Re: Perspectives on the global economic meltdown

Postby SwamyG » 15 Oct 2009 23:50

Nandu wrote:SwamyG, good/bad is not the point. To repeat what I said, it is just unprecedented that government can come in and reduce costs. If you have counterexamples, let us see them. We all need to be reality-based in the end.

It does not matter if the Government increases the costs. Long term sustainability and stability is important for a country's growth. The problem rises only when the Government or the Private sector gets totally into each others way or face and impede the growth.

The reality is neither the Private Sector nor the Government Sector will solve all problems, we need both. The balance depends on 'Neram, Kalam & Samayam'

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Re: Perspectives on the global economic meltdown

Postby SwamyG » 16 Oct 2009 00:21

Prad:
Government is in the business of running a country. Private sector is in the business of making money. Government needs money to run the country.

There are so many reasons for the meltdown. To me it looks like countries relied on unsustainable models. People spent more than what they earned. The government and private companies, in USA, kept encouraging people to be Consumers than Citizens. And people got caught in the bubbles and hypes of the time.

While you rightly expect that there cronyism and other illness are characteristics of government, you don't share the same cynicism while it comes to private sectors. To remind you, both government and private sectors are run by us humans. Systems might breed more efficiencies than other, no doubt; but ultimately both systems are at the mercy of humans. And humans will ride both these institutions to their advantage.

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Re: Perspectives on the global economic meltdown

Postby paramu » 16 Oct 2009 01:12

An important person who did not receive Nobel prize (actually, its equivalent), apart from Gandhi, is Charles Ponzi.

What is his contribution? Demonstrating to the world how economics works, so that even a common man can understand. Everybody subscribes to the argument that there has to be a moderate level of inflation for economic progress. That is nothing but an alternate form of Ponzi scheme - continuous money supply.

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Re: Perspectives on the global economic meltdown

Postby darshan » 16 Oct 2009 10:25

Singha wrote:how is the copay for a doctor visit these days?

Copay has not increased but coinsurance has. And, it seems to be a norm these days for hospitals and doctors to send a bill for "not reimbursed" cost even though they are in network. I would describe it as looting in broad day light.

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Re: Perspectives on the global economic meltdown

Postby Singha » 16 Oct 2009 13:50

Dollar to Hit 50 Yen, Cease as Reserve, Sumitomo Says (Update1)

By Shigeki Nozawa

Oct. 15 (Bloomberg) -- The dollar may drop to 50 yen next year and eventually lose its role as the global reserve currency, Sumitomo Mitsui Banking Corp.s chief strategist said, citing trading patterns and a likely double dip in the U.S. economy.

The U.S. economy will deteriorate into 2011 as the effects of excess consumption and the financial bubble linger, said Daisuke Uno at Sumitomo Mitsui, a unit of Japans third- biggest bank. The dollar¡s fall won¡t stop until theres a change to the global currency system.

The dollar last week dropped to the lowest in almost a year against the yen as record U.S. government borrowings and interest rates near zero sapped demand for the U.S. currency. The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, has fallen 15 percent from its peak this year to as low as 75.211 today, the lowest since August 2008.

The gauge is about five points away from its record low in March 2008, and the dollar is 2.5 percent away from a 14-year low against the yen.

We can no longer stop the big wave of dollar weakness, said Uno, who correctly predicted the dollar would fall under 100 yen and the Dow Jones Industrial Average would sink below 7,000 after the bankruptcy of Lehman Brothers Holdings Inc. last year. If the U.S. currency breaks through record levels, there will be no downside limit, and even coordinated intervention wont work, he said.

China, India, Brazil and Russia this year called for a replacement to the dollar as the main reserve currency. Hossein Ghazavi, Iran¡s deputy central bank chief, said on Sept. 13 the euro has overtaken the dollar as the main currency of Irans foreign reserves.

Elliott Wave

The greenback is heading for the trough of a super-cycle that started in August 1971, Uno said, referring to the Elliot Wave theory, which holds that market swings follow a predictable five-stage pattern of three steps forward, two steps back.

The dollar is now at wave five of the 40-year cycle, Uno said. It dropped to 92 yen during wave one that ended in March 1973. The dollar will target 50 yen during the current wave, based on multiplying 92 with 0.764, a number in the Fibonacci sequence, and subtracting from the 123.17 yen level seen in the second quarter of 2007, according to Uno.

The Elliot Wave was developed by accountant Ralph Nelson Elliott during the Great Depression. Wave sizes are often related by a series of numbers known as the Fibonacci sequence, pioneered by 13th century mathematician Leonardo Pisano, who discerned them from proportions found in nature.

Uno said after the dollar loses its reserve currency status, the U.S., Europe and Asia will form separate economic blocs. The International Monetary Funds special drawing rights may be used as a temporary measure, and global currency trading will shrink in the long run, he said.

To contact the reporter on this story: Shigeki Nozawa in Tokyo at snozawa1@bloomberg.net.

Last Updated: October 15, 2009 03:34 EDT

kmkraoind
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Re: Perspectives on the global economic meltdown

Postby kmkraoind » 16 Oct 2009 18:54

Hari sir. If yen goes 50, what and how it impacts yuan-dollar and US-China economic bonding. TIA.



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Re: Perspectives on the global economic meltdown

Postby kmkraoind » 16 Oct 2009 23:30

Recession Will Be 'Full-Blown Depression

This global recession will turn into a "full-blown depression," Nicu Harajchi, CEO of N1 Asset Management, said Friday, adding that global stimulus hasn't come down to Main Street.

Wall Street is making money, while consumers aren't, Harajchi told CNBC.

"We have seen the G20 coming out with cross border capital injections of $5 trillion this year… But a lot of this money hasn't really come down to Main Street," he said.

"When it comes down to corporate America, corporate Europe or even in Asia, in Japan, we are not seeing Main Street making any money," he said. "Consumers are losing their jobs. They are struggling with their mortgages, with their credit. And we are just seeing this continuing."

The $5 trillion injection is "monetary expansion," according to Harajchi. "At some point, which we believe to be 2010/11, some of the central banks are going to recall some of that money and that will turn from monetary expansion to monetary contraction."

He also said he doesn't see the corporates or the public "being able to pay back that debt."

"We see 2010 becoming a much more risky year than 2009," he said.

Harajchi said unemployment data are "a leading indicator" instead of a lagging indicator.

"When it comes down to corporate America, corporate Europe or even in Asia, in Japan, we are not seeing Main Street making any money," he said. "Consumers are losing their jobs. They are struggling with their mortgages, with their credit. And we are just seeing this continuing."

The $5 trillion injection is "monetary expansion," according to Harajchi. "At some point, which we believe to be 2010/11, some of the central banks are going to recall some of that money and that will turn from monetary expansion to monetary contraction."

He also said he doesn't see the corporates or the public "being able to pay back that debt."

"We see 2010 becoming a much more risky year than 2009," he said.

Harajchi said unemployment data are "a leading indicator" instead of a lagging indicator.

"The Federal Reserve has made it crystal clear that interest rates are staying where they are for an extended period of time. We're getting to see a more confident tone to global growth, to a recovery, and as a result of that, we're seeing the tolerance towards risk aversion drop and that in turn has washed back onto the dollar as investors go in search of risk assets," he said.

"This is something we're going to see for a while, until there is a change in Fed policy. That doesn't seem imminent and certainly it doesn't seem at all likely until sometime in the latter half of next year."

The dollar's depreciation will help boost the S&P 500 index over the coming quarters, Lenhoff told CNBC.

"A weak dollar is everybody's friend," he said.

"If the dollar serves the role of an additional stimulus in reflating the U.S, then I think that it's very good," he said.

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Re: Perspectives on the global economic meltdown

Postby Neshant » 17 Oct 2009 06:49

Its almost like a sick joke the way the entire government has been brazenly hijacked by Goldman Sachs and assorted crooks from financial institutions. A case of getting the fox to guard the hen house. I can't believe the dumb asses in India were foolish enough to let Goldman Sachs own 10% of India's premier stock exchange. They have opened India to a massive security risk.

This after allegations that Goldman sachs has been front running (price rigging customer orders by placing bets ahead of the queue) in the stock market. It won't be long before the same will be happening in India.

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

SEC Taps Goldman Executive for Enforcement Role

WASHINGTON -- The Securities and Exchange Commission tapped Goldman Sachs Group Inc. executive Adam Storch on Friday to serve as the agency's first-ever chief operating officer of the enforcement division.

http://online.wsj.com/article/SB1255721 ... ts_news_us


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