Perspectives on the global economic meltdown (Jan 26 2010)

[svinayak]

That can be read. I am asking what is the special relations it has with global powers

Purely off the cuff it is controlled by Feinberg who is a member of the Rothschild cabal.They have something dirty going on in BP if memory serves me right.Please correct me if I am wrong.

Thanks

[svinayak]

http://w4.stern.nyu.edu/news/news.cfm?doc_id=7268%20

Blackstone, Cerberus Collide as Buyout Firms Overrun Detroit
Bloomberg
April 27, 2007
By John Lippert


The decision had been made. DaimlerChrysler AG's management in Stuttgart, Germany, weary of the struggle to keep its U.S.-based Chrysler unit in the black, was ready to sell. In March, Chrysler Chief Executive Officer Thomas LaSorda organized separate daylong briefings for prospective buyers. They continued their discussions during steak and seafood dinners at the Walter P. Chrysler Museum in Auburn Hills, Michigan -- in a gallery decorated with World War II jeeps.

LaSorda's guests weren't from Toyota Motor Corp. or General Motors Corp. They were Neil Simpkins of Blackstone Group LP and Lenard Tessler of Cerberus Capital Management LP, New York-based private equity firms that have been involved in some of the biggest leveraged buyouts of the past decade.

LaSorda threw a separate dinner for Donald Walker, co-chief executive officer of Magna International Inc., a Canadian parts supplier that entered talks with Onex Corp., Canada's biggest buyout firm, on a joint bid for Chrysler.

Private equity firms have invaded the Motor City, bringing with them piles of cash and gales of controversy. The buyout firms say they'll rescue companies like Chrysler from years of bloat and mismanagement. Their opponents say that Wall Street financial operators will dice up and sell off automakers and suppliers, after loading them up with debt, destroying jobs and hastening the demise of a once-great American industry.

A Laboratory of Finance

Detroit, the cradle of modern American industry since Henry Ford started his first assembly line 94 years ago, is now a living laboratory for the latest techniques in 21st-century finance -- potentially risky combinations of bonds, loans and derivatives complex enough to baffle the most-seasoned observers.

``Most investors I talk to are very concerned, but they're not strong enough to stop it, so the train keeps rushing down the tracks,'' says Edward Altman, finance professor at New York University's Stern School of Business and a bankruptcy expert whose book, ``Corporate Financial Distress and Bankruptcy'' (John Wiley & Sons, 354 pages, $95) is in its third edition.

Private equity and hedge funds are swarming over bankrupt suppliers such as Delphi Corp. and Tower Automotive Inc., the world's biggest maker of vehicle frames. They're buying every financial obligation these companies have -- from common stock to unsecured bonds, to bank loans, to trade receivables -- and repackaging them for sale on secondary markets.

Buyout firms borrow as much as 90 percent of the purchase price of a target company and repay the loans from the company's cash flow, says Altman, 65. ``I've never seen conditions like this in all my life,'' he says. ``The country and the world are becoming so leveraged at all levels that there's a volcano brewing. I don't know when it will happen, but the rumblings are here.''

Seven Bankruptcies

Almost all of the big leveraged buyout names are in Detroit, where seven major suppliers have declared bankruptcy in the past two years, according to Barry Ridings, co-head for restructuring at New York-based Lazard Ltd. Billionaire Carl Icahn offered $5.3 billion for Lear Corp., a maker of auto seats that has not declared bankruptcy. Wilbur Ross, another billionaire investor, rolled up auto parts companies in the U.S., Japan and Brazil into his own $6 billion industrial giant, including pieces of Collins & Aikman Corp. and Lear. David Rubenstein's Washington-based Carlyle Group joined with others to buy the Hertz Corp. car rental company from Ford Motor Co. and has invested in Tower.

And when DaimlerChrysler CEO Dieter Zetsche confirmed he was negotiating to sell Chrysler, Kirk Kerkorian of Tracinda Corp., with great fanfare, made an offer of $4.5 billion.

[enqyoob]

So Cerebros must be literally in the doghouse, hey, given how well the investment in Chrysler paid off?

[Satya_anveshi]

IMO this should give our Sourayamana panjangadhari interesting info on Cerberus:). For the rest disclaimers apply:

I am sure you will like it:)

[Sanjay M]

Well, the current banking mess which has lenders risk-averse and lending to only the trusted few means that Cerberus, Blackstone and other capital fund companies have their pick of the market.

That seems to be why they're again on the prowl, looking to buy up the biggest, juiciest items they can find. For them, it's a buyer's market.

[Singha]

the corners of temple gopurams in the south also seem to have scary looking female demons.
in thailand buddhist temples there is the Yakhsi demons - half human, half beast.

[abhischekcc]

^ That would be true only if these firms do not need to raise funds in the market, ie, they are sitting on great piles of cash. If they need to issue debt in the open market, then they are as screwed as the rest of the market. If they have access to enough money bags who trust them, then it is a moot point.

In any case, their strength is limited in the given market.

[svinayak]

IMO this should give our Sourayamana panjangadhari interesting info on Cerberus:). For the rest disclaimers apply:

I am sure you will like it:)

All are old news. Have seen it. Why do you propagate CTs here. Admin have already warned against it.

[Neshant]

More money printing coming down the pike on Tuesday?

Keynesian economics is beginning to look like a money printing racket and little else.

Only the arrival of a new, productive industry that generates jobs on a vast scale can save the US economy. Something needs to be researched & developed, manufactured and marketed (and hopefully exported). Printing money, fiddling around with interest rates, bailouts, taxing, stock market rigging, financing & banking crap is not going to do anything. It will destroy the wealth of producers and run up an unpayable debt. They are going to run this thing into the ground.

____________________________________________________________________
"The U.S. economy lost 131,000 jobs in July -- more than twice the decline of 65,000 that economists forecast in a Reuters poll."

Fedwatchers are saying the Fed will take steps towards "Quantitative Easing II" if the July job numbers are bad.

And the July job numbers are bad.

"The U.S. Dollar is under pressure against most majors on speculation the Fed will consider restarting its quantitative easing program following next week’s FOMC meeting on August 10."

http://news.yahoo.com/s/nm/20100806/bs_ ... ets_stocks

http://www.forexhound.com/article/Patte ... ing/225605

[svinayak]

If you want a sample of how rough life could be after the economy completely collapses, take a Bikram yoga class! 105 degrees (Fahrenheit) and 28 yoga poses is a simulation of hard labor without the conveniences of modern life. But after the class I feel like a million bucks of gold backed money.

http://www.youtube.com/watch?v=PTKOhAD6drc
Bikram Yoga, a post-economic collapse experience

[Hari Seldon]

Yup, like someone asked above, moi too often wondered how any darling of the Fed can ever go broke in the real world when the Fed has access to a kamadhenu brand electronic printing press?

Turns out the yooyes constitution sits in the way. ya, ya, that same old foggy document.

Turns out only US congress (and the Yindian congress too, perhaps?) have the constitutional power to 'gift' money. Which is why the original TARP I - lifeline to the big 6 on wall st - had to go thru cotus first. OK< technically and strictly speaking, even cotus doesn't have the power to issue currency that is not backed by metal (but that was so yesteryear, gold-standard variety) but keep that aside for a second.

What the fed can do, and typically does, is swap assets - with the premise of an underlying repo transaction. Meaning the fed can only print and loan money, can't quite print and give away. So all the banking biggies who've gotten trillions from the fed, that isn't a gift, its a loan - made against collateral - their dodo-dead CMBSes and other trash that's worth perhaps pennies to the dollah. BTW, its precisely when the aam aadmi in the khanate gradually lost track of the subtle difference between earned and borrowed money - they looked the same after all, eh? - that the seeds of the present blowup germinated.

Anyway, back to the story. So the Fed, effectively, takes in 2 cents collateral for every dollar it loans out to the biggie bank mafia. But, there's got to be a repo agreement somewhere. The Fed isn't authorized to 'buy' such collateral, see. It can only, again, 'borrow'. Sure, the Fed is trying to give away cash using the interest rate differentials and all but that's another tale.

So, yes, the banks aren't anywhere near outta the woods yet. The more the housing market fails to meet its bottom, the worse things get in real terms for the banking biggies, despite their overflowing reserves that they can now only deploy into treasuries.

OK, gotta run now. more later.

[svinayak]

Gerald Celente: The crash will continue: 03 Aug 2010

http://www.youtube.com/watch?v=Z6JSpyHtEDI

Trends Journal: http://www.trendsresearch.com/journal
Twitter: http://twitter.com/geraldcelente


An article in the Washington Times has claimed "Celente's accurate forecasts include the 1987 stock market crash, the collapse of the Soviet Union in 1991, the 1997 Asian currency crash" and "the 2007 subprime mortgage scandal." His forecasts since 1993 have included predictions about terrorism, economic collapses and war. More recent forecasts involve fascism in the United States, food riots and tax revolts. Celente has long predicted global anti-Americanism, a failing economy and immigration woes in the U.S.[13] In December 2007 Celente wrote, "Failing banks, busted brokerages, toppled corporate giants, bankrupt cities, states in default, foreign creditors cashing out of US securities ... whatever the spark, the stage is set for panic in the streets" and "Just as the Twin Towers collapsed from the top down, so too will the U.S. economy ... when the giant firms fall, theyll crush the man on the street.


http://www.youtube.com/watch?v=zPiwOa1AZ-0

Max Keiser 2 depression hyper inflation
Keiser Report Episode 64 Every week Max Keiser looks at all the scandal behind the financial news headlines. This week Max Keiser and co-host Stacy Herbert look at the latest scandals of the enemies of box-office futures, the octogenarian issuing threats and Goldman: the Movie, starring Divine? Or Tony Blair? In the second half of the show, Max talks to fund manager Michael Krieger about the dangers of a failed presidency.

View ALL Of Max's Video Reports at: www.rt.com

Click "Programs"

The Keiser Report Home Page

http://rt.com/About_Us/Programmes/Kei...

www.youtube.com/RussiaToday

[svinayak]

The wealth of the globe was reduced by 40% 2007-2008. It will get bad

[svinayak]

http://www.youtube.com/watch?v=zF0r513k0tg
Virtual currency and virtual credit to replace the banking system and money supply
See this amazing

[Neshant]

Meaning the fed can only print and loan money, can't quite print and give away.

Clearly a falacy as they are printing up & giving away money.

[Hari Seldon]

I know its bad form to quote oneself, but WTH:

And it was nice to have the rest of the world eager to foot the bill by rushing ever more capital onto US treasury market safe-shores. Let us not underestimate the power of having a cheap source of capital fund ambitions on a grand scale. Ukstan had one such cheap source o capitive capital - all the way till 1947. We know the wonders it worked for them.

That was about unkil khan only. You know what they say about pictures being == 1000 words and all....



You can see how the 2 graphs relate, eh? Of course, hard to say which is cause and which is effect anymore.
We keep hearing abt how states and cities and local gubmints in massa are flat broke and more. But that's expected. Some cities I'm told are actually cutting away current pension levels and not just capping future pensions. Keep watching for when the pension payment difficulties hit the pentagon. Then we'll know the shiite has hit the fans.
Meanwhile....


Sure, when everything goes to the dogs, we here in this sweltering SDRE-bhumi will be worst off and all etc etc. More of the same, let's say. But that still doesn't away from the fact that the great khan is riding the debt tiger all naked only.

Oh, and jai ho.

[Satya_anveshi]

Pardon my OT but Matt Simmons referred in the context of Ron Paul discussion is reported to have died of heart attack.

'Peak Oil' Theory Advocate Matt Simmons Dies

[SwamyG]

Sure, when everything goes to the dogs, we here in this sweltering SDRE-bhumi will be worst off and all etc etc. More of the same, let's say. But that still doesn't away from the fact that the great khan is riding the debt tiger all naked only.

And it still does not take away the opinion that Amirkhans have instituted, over hundred years, a system that provides lots of conveniences but over a long term seeks enormous environmental and human toll.

ps: there are hundreds of companies, in various sectors, that use Roman & Greek mythology to name themselves.

[enqyoob]

In todin's Yindian Express, I saw this news of a Supreme Court decision that blasted High Courts for being too quick (yes, yes, even by desi law standards) to intervene and prevent banks etc. from taking action against delinquent borrowers. Note the speed with which things move - they also said that as of 2001, Indian banks were owed over Rs.1.2 lakh crores in non-performing loans. That's too many zeroes - let's see, is that Rs. 12 billion? I guess that's peanuts now, but may have been large in 2001.

Wonder what that number is in 2010? Question is, are Indian banks much further from default than AmirKhanie banks are?

[Singha]

http://www.nytimes.com/2010/08/10/world ... in.html?hp

UK facing steep cuts in govt social sector spending.

[paramu]

IMO this should give our Sourayamana panjangadhari interesting info on Cerberus:). For the rest disclaimers apply:

I am sure you will like it:)

All are old news. Have seen it. Why do you propagate CTs here. Admin have already warned against it.

Check Google map. Those arrays fo cars do not exist. This video is pure CT.

[ShivaS]

enquoob saar, the Indian Banks NPV are really gems of our private and public sector Industry leaders.

Ex Bjaja group owes CBI 12000 Crores ( not the currupt bu&*&* of Investigation) but Central Bank of India.

Kingfisher owes HPCL yet another 12,000 Crores of Rs for fuel supplied.
Just calculate the interest at 9% (inflation rate) and see how much is looted to use funds are runningg capital.

You and I are stupids to remit FE to help ....

[Ameet]

Dubai Brokerages Shutter as Stock Trading Tumbles to 4-Year Low
http://www.bloomberg.com/news/2010-08-0 ... years.html

“Under current market conditions, the smaller firms probably get an average of 3 million dirhams ($817,000) traded a day,” said Waleed Al Khateeb, senior finance manager at Dubai- based Daman Securities LLC, on June 30. “To break even, these brokerages need no less than 15 million dirhams. Even bigger brokerages make little profit on good trading days.”

[Neshant]

The "tools"... .

Fancy terminology is being rolled out to describe what is basically a money counterfeiting operation.

Some chump in the Brox with a laser printer & scanner has the same tools as well.

----------

The Fed's assessment of the economy, and any plans to resume its stimulus measures, will be issued after its meeting ends Tuesday afternoon.

The Fed will likely leave its federal funds rate near zero, but the central bank could signal plans to restart some programs such as its purchase of mortgage-backed securities or buy Treasury bonds. The central bank's programs ended earlier this year when it appeared the recovery was proceeding well.

"The Fed has a lot of tools in its tool shed," said Larry Rosenthal, president of Financial Planning Services in Manassas, Va. "They have to bring buyers back into the market; they have to bring consumption back into the market." (no they don't, they have to stop rigging the market with printed up money)

http://finance.yahoo.com/news/Stocks-ri ... ?x=0&.v=23

--
Printing Money the Only Tool Left for the Federal Reserve

http://www.youtube.com/watch?v=59zjg6frlkw

[Hari Seldon]

Neshant,

I agree that the Fed with its obsessive secrecy is typically upto no good. Only.

And its indeed an object lesson in the law of unintended consequences that the same surefire weapon of no-defeat : the ability to create money as debt by the Fed ensuring that they'd always get back more - principal+interest from the US has come to bit the Fed's principals - the 14 regional Feds whose boards are staffed by the major banks and therefore the major banking families - in the musharraf now.

As annotated partly in the post above, the banks are in trouble and have borrowed (because the Fed is only allowed to lend, not gift) monies from the Fed. But the Fed found a way to gift its principals money in a roundabout way- interest rate differential between the fed funds rate and that of UST yields. But guess what, when the biggie banks all rushed into the bond mkt to buy USTs using excess reserves borrowed from the Fed, since that was a much better and safer way to make money than lending to mains street businesses and consumers (who were anyway choking on debt and wanted no more), they unwittingly caused demand spikes for US bonds->bond price surges -> bond yields crashed through the floor. This squeezes the interest differential the banks were relying on. Only.

BTW, lest you get carried away and ascribe omniscience and omnipotence and omnicompetence to the gubmint+Fed cabal, kindly spare a minute to read what TAE has to say:

Governments do not have the power that people imagine them to have. They cannot overcome the power of the collective, when that power is focused like a laser beam in one direction. {The direction being savings and paying down the worst of the usurious debt burden they currently labor under}

Governments are going to find that the number of claims on their resources skyrockets, even as their tax receipts fall dramatically and their ability to borrow is curtailed by rising interest rates as a reflection of rising sovereign debt risk.
{I'll believe it when I see it only. I've been hearing about these things for a long time now. Somehow I'm not yet convinced that this ponzi can't go on forever. maybe it can, who knows?}

Debt-junkie governments will be caught in a liquidity trap until the power of the international debt financing model is finally broken, as it will eventually be.

However, this does not happen overnight. Until it does, the power of governments to print will be sharply limited. We would expect this to remain the case through the era of deleveraging, which should last for several years. While inflation may be a long term threat once the power of the bond market is broken, that threat lies much further down the line. It is deflation that is today's threat, and deflation that people must prepare for right now.

link

There you have it only.

Oh, and Jai ho and all that.

[Hari Seldon]

A polemic on Japan's 'lost generation' of sorts.
Japan's Economic Stagnation Is Creating a Nation of Lost Youths

What happens to a generation of young people when:

They are told to work hard and go to college, yet after graduating they find few permanent job opportunities?
Many of the jobs that are available are part-time, temporary or contract labor?
These insecure jobs pay one-third of what their fathers earned?
The low pay makes living at home the only viable option?
Poor economic conditions persist for 10, 15 and 20 years in a row?
For an answer, turn to Japan. The world's second-largest economy has stagnated in just this fashion for almost 20 years, and the consequences for the "lost generations" that have come of age in the "lost decades" have been dire. In many ways, Japan's social conventions are fraying under the relentless pressure of an economy in seemingly permanent decline.

While the world sees Japan as the home of consumer technology juggernauts such as Sony and Toshiba and high-tech "bullet trains" (shinkansen), beneath the bright lights of Tokyo and the evident wealth generated by decades of hard work and Japan Inc.'s massive global export machine lies a different reality: increasing poverty and decreasing opportunity for the nation's youth.

The faultlines of a class war - over pensions, retirements, healthcare, we;fare entitlements - are also building up in other tfta ekhanomies but none are so far down the road to ruin as japan is. Truly, the canary in the coalmine.

Read it all.

[Hari Seldon]

Here's another theme this dhaga's been hammering a while now... that the fin sector grew outsized only. Its ok to be a parasite if the host is like 100x times your size.

Presenting The quiet coup by simon johnson in the Atlantic.

"From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent."

Ok, read that again to see the kinda brazen-ness the industry as a whole merrily indulged in, with taxpayer backstopped monies no less, after oct 2008.

Oh, thats not all...

Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.

The financial industry has not always enjoyed such favored treatment. But for the past 25 years or so, finance has boomed, becoming ever more powerful. The boom began with the Reagan years, and it only gained strength with the deregulatory policies of the Clinton and George W. Bush administrations. Several other factors helped fuel the financial industry’s ascent. Paul Volcker’s monetary policy in the 1980s, and the increased volatility in interest rates that accompanied it, made bond trading much more lucrative. The invention of securitization, interest-rate swaps, and credit-default swaps greatly increased the volume of transactions that bankers could make money on. And an aging and increasingly wealthy population invested more and more money in securities, helped by the invention of the IRA and the 401(k) plan. Together, these developments vastly increased the profit opportunities in financial services.

Not surprisingly, Wall Street ran with these opportunities.

Oh, read it all only. I'll else endup excerpting the whole damn (and it is damning!) piece. Only.

[ramana]

enquoob saar, the Indian Banks NPV are really gems of our private and public sector Industry leaders.

Ex Bajaj group owes CBI 12000 Crores ( not the corrupt bu&*&* of Investigation) but Central Bank of India.

Kingfisher owes HPCL yet another 12,000 Crores of Rs for fuel supplied.
Just calculate the interest at 9% (inflation rate) and see how much is looted to use funds are runningg capital.

You and I are stupids to remit FE to help ....

When the Brits left they took a lot of wealth under the sterling reserve scheme of WWII when Churchill transferred the lot of money without the govt in place. Atlee wouldnt give the money back. And this essentially bankrupted the Indian economy. This is what accounted for the Hindu rate of growth of barely 3% due to lack of fininacal reserves for investment.There was very little money in the kitty.

The PS and the banks were used to mobilise the resources and give away to the industrial groups to jump start the economy. Even Harshad Mehta scam was an approved way to boost the stock markets and show life in BSE after the fifnaincal reforms. And by and large it has succeeded. However what it has doen is given the perception of corruption on massive scale. And yes by the laws that were written for the times it si corruption. In the West it is the "Quiet coup or bailout or economic stimulus". In Japan and Korea it si the managed economy. In India it is loot and corruption.

[SwamyG]

^^^
I have maintained that, what is bribe in India is called fees in the West. In India, the bribe at least lights up the chula in many households, unlike in the West where it goes to help the Corporations and select few. Hopefully some guru writes a thesis or a book titled "Corruption: Redistribution of Wealth".

[Singha]

BW - as expected, the PRC is first to call the emperor nanga

A Chinese Rival to S&P, Fitch, and Moody's?
Dagong Global Credit Rating wants to go global and take on its rivals' bias toward debtor countries in the West

By Henry Sanderson
BW Magazine

Guan Jianzhong, the head of one of China's three big credit rating agencies, sees the criticism of Standard & Poor's (MHP), Fitch Ratings, and Moody's Investors Service (MCO) for their role in the global financial crisis as creating an opportunity. He wants his firm, Dagong Global Credit Rating, to enter the U.S. market. "Without a challenge to the status quo, the big ratings agencies won't improve their methodologies on their own," says Guan, who is Dagong's chairman.

Dagong, which has never rated a company outside China, made a splash with its first analysis of international sovereign debt, which it issued on July 11. The report, covering 50 nations, awarded the Chinese government a higher credit rating, at AA+, than the U.S., the U.K., and Japan. Guan says the results highlight the differences between Dagong's approach and that of its rivals. The established agencies, he says, tilt their ratings to reflect "their beliefs and ideology" and the "interests of the borrowing countries" in the West. They place too much emphasis on the nature of a country's political system, the independence of the central bank, and per capita gross domestic product.

Dagong, in contrast, focuses on a country's fiscal health, foreign currency reserves, and ability to create wealth. The big developed countries like the U.S., Britain, and Japan, says Guan, use "over 90 percent of the world's credit resources, but their GDP growth doesn't contribute a lot to the world economy, especially after the financial crisis."

A graduate of Shanxi University of Finance & Economics, Guan worked in finance in New York for several years before returning to China. He became Dagong's chairman in 1998. Last month he was elected director of the government-backed industry group, the China Securities Credit Rating Committee.

Dagong was founded in 1994, a decade after state-owned firms were allowed to issue bonds in China. In December 2009 it spent 10 million yuan ($1.48 million) to prepare and submit an application with the U.S. Securities & Exchange Commission to become a recognized ratings firm. The SEC will hold a hearing on the application in September. The SEC has granted recognition to 10 ratings firms, with only two based outside of North America, both in Japan.

"They certainly picked a good time—global confidence in the existing ratings agencies is probably at an all-time low," says Tom Orlik, China economist at Stone & McCarthy Research Associates in Beijing. Yet it's not clear that Dagong has developed the credibility to compete globally. "Whether they'll be able to successfully push that outside of China, where's there's deep suspicion about the cozy relationship between government and companies, is difficult to foresee," says Orlik.

Like S&P, Moody's, and Fitch, Dagong is paid by the companies it rates. Guan says issuers, especially politically connected companies, also shop around among mainland agencies for the best rating. Gaun says his firm does not allow government connections to influence its ratings. "We want to be an internationally renowned credit-rating agency," he says. "Because of this, we can't provide ratings that aren't independent."

During a time of market anxiety over big budget deficits in the U.S. and Europe, Dagong could become a powerful player given China's trade surpluses and enormous foreign exchange holdings. "It's to their benefit that they're adding the voice of the world's largest global creditor," says William Hess, managing director at China Analytics, an economic research firm in Beijing. "If and when [Chinese investors'] funds start to follow the ratings coming out of China, then that's something that would really make markets sit up and notice."

It takes time to establish that kind of presence. Dagong should focus on China to "build up their reputation and influence," says Wang Yang, co-head of fixed-income research at UBS Securities (UBS) in Beijing. "At this point, I don't think they are ready to expand globally."

[SwamyG]

Hari garu: You have to read the book "Life, Inc." by Douglas Rushkoff. {I think I have said it more than once now }
If you cannot buy, here is a link to it at google books: linky Read Chapter 2, it traces the history of Corporatism and how it overtook Kingdoms and how Monarchy chose to co-opt or they would have been left to dust.

[Carl_T]

I don't think buying treasury securities is a great idea as I don't see how any one benefits. IMO it is much better to print money like crazy and buy up investment grade corporate debt thus injecting liquidity into the economy, increasing the money supply, causing inflation and providing a stimulus at no cost to the US treasury.

[ShivaS]

err
Print money, then buy good corporate debt? Like what?
And what will this do?
Govt gets IOU paper and releases more Green (back) paper into market which means more money circulating which leads to inflation.

example of bad money chasing away good money.

The need of the hour is to increase the real wages of average American Joe to drive the consumption otherwise Uncle sam gets consumption ( older name for TB)

Of course If mints are working over time you can inject money too.
Robbert Mugabe Dollars as in Zimbabwae

****
Remember when T bills are sold money supply shrinks till govt spends it(or pays it debt obligations that is why uncle sam is worried that his borrowings are going mostly to war & debt service).
When govt buys T bills or Debt paper it injects money directly.

PSssss: Please read Nickeled and Dimed in America, to understand the plight of working class on minimum wage jobs. It is a little dated but it only got worse now.

[Neshant]

Running a money printing racket will only lead to ruin.

The reality is that incessant fiddling around with economy by idiiots up top is what causes these massive distortions and recessions to emerge. All that's needed are for the eggheads to step out of the way and let prices correct to where demand can support it. Cut out the money printing, price fixing, financing & high rolling, scheming and scamming.

I'm afraid the parasitic segment of the economy namely banking does not want this gaming of the system to end. Its an 'industry' which produces nothing (other than scams) and needs this setup of a joker at the top fiddling with interest rates & printing money to profit as a middle man.

IMO cental banking is going to be revealed as a fraud of a profession within this decade once people become educated about it. There needs to be a greater emphasis on R&D and manufacturing of tangible and hopefully exportable products and a whole lot less emphasis on the dodgy business of financial services.

[manju]

deleted later.. galati se mistake ho gaya.. move the post the appropriate dhaaga!!

[Sanjay M]

I was thinking about The Opium Wars, whereby Britain greedily sought to sell great quantities of opium to China at the cost of the latter's ruin.

Today, China is now providing the opiate of cheap capital to the US, which has now become so addicted to this unlimited cheap lending that it cannot bring itself to break its dangerous debt habit.

The Americans just can't seem to get that monkey off their back.

If they aren't successful in doing so, then it will lead to their ruin, just as surely as it did for China.

[Neshant]

Here's another theme this dhaga's been hammering a while now... that the fin sector grew outsized only. Its ok to be a parasite if the host is like 100x times your size.

"From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent."

A good quantity of the productive energies of society has gone into the parasite with even more hemmoraging guaranteed for the future.

I'm increasingly coming round to the notion that the best stimulus that can be given to the productive economy is elimination of the parasite.

[ramana]

Intresting SanjayM. Good use of the noggin. A drug can be anything one gets addicted to. opium or cheap capital or wampum.

[Hari Seldon]

Intresting SanjayM. Good use of the noggin. A drug can be anything one gets addicted to. opium or cheap capital or wampum.

Agreed. And we all know what TSP's opium is....

[Singha]

inch by inch, yard by yard, the cushy 'social infra' that west is famous for is becoming costly...

BBC
Hundreds of playground schemes mothballed
By Hannah Richardson BBC News education and family reporter


Hundreds of community playground schemes in England are being scrapped or scaled back because of government cuts.

Education Secretary Michael Gove has frozen grants to 122 councils for building and running up to 1,300 playground schemes, many designed by youngsters.

Only schemes where construction has already started are to be allowed.

The government said it had inherited unrealistic spending commitments.

The £235m Playbuilder scheme was started more than two years ago under Labour to develop 3,500 playgrounds designed by and for the communities they were to serve.

Each local council was given cash to build 22 play areas. Some of these have now been built.

End Quote Emma Kane Parent campaigner

This year, grants for over 1,300 playgrounds in 93 local authorities had been approved.

The Department for Education could not say exactly how many playgrounds would be scrapped as it is only now collecting information about which schemes are in construction.

It has warned local councils not to incur any more costs on schemes and said it will review closely any commitments already made.

In his letter to the heads of children's services, Mr Gove named play as a key area affected by his department's contribution to reducing the public deficit.

He said he was reducing funding for play projects to protect frontline education services.

He also scrapped targets for the number of play facilities councils have to provide, and removed the protection from playground building budgets, saying any unspent money could be retained by his department.
Community disappointment

Campaigners say that in the current financial climate this means play facilities are likely to bear the brunt of budget cuts.

Steve Chown, programme development manager at the charity commissioned to aid councils with their schemes, Play England, said many schemes would not now go ahead.

He said: "Communities are going to be disappointed that these play areas that they have worked so hard to set up are not now going forward.

"There would have been nine months to go on the programme, so there would have been quite a lot of organisations who were just ready to start building."

This was the case at a small £47,000 scheme in Oxfordshire.

Parent Emma Kane has worked with children in Hook Norton to set up a playground scheme which is now unlikely to go ahead. She said: "It's insane to cut what is such a small amount of money."
Ed Balls and Andy Burnham Ed Balls and Andy Burnham launched the scheme in 2008

She said playgrounds were a "soft target" for the government's "drastic cuts."

She added: "Playbuilder is unique in that communities had to come together and work together to get the funding, in a perfect example of 'Big Society'.

"There's lots of disappointed children out there, they keep asking me what's happening and I just don't know what to say to them.

"Furthermore, as everyone knows, playgrounds fight childhood obesity. What does it say about the government's strategy to cut projects that promote both health and communities working together?"

In Richmond, south-west London, 10 schemes are set to be scrapped.

The council's children's services cabinet member Christine Percival said: "While we are disappointed, as it looks unlikely that we will be able to build 11 new play areas this year, we have to be realistic - the economic climate means there just isn't the money for these types of projects at the moment."

A Department for Education spokesman said play was important for children and families, but investment had to be realistic and affordable.

"We are currently talking to local authorities across the country to determine the level of play capital funding for this year that has either not already been spent, or is not yet contractually committed, and which can be saved.

"We've asked local authorities to put on hold projects where contracts have been entered into, but where works have not yet begun.

"We hope to be able to progress these sites subject to future affordability. Those play sites that already under construction can continue and will be paid for."