Perspectives on the global economic meltdown (Jan 26 2010)

SwamyG · Post by **SwamyG** » 11 May 2010 23:17

Satya gaaru: Thanks for the correction. So instead of 9 zeroes it is 12 zeroes

, so the final amount is $12 trillion dollahs. Look at the TARP tracker: http://money.cnn.com/news/storysuppleme ... uttracker/. Quite close no?

shyamd · Post by **shyamd** » 12 May 2010 04:01

Look, Basic problem is this imo. The world does not have enough revenue to service the debt - hence all the cuts in budget and increase in taxes. Its not just big companies in trouble now but entire countries. This $1trillion won't help imo.

Senate Pushes Fed to Give Up Names

The Senate voted Tuesday to force the Federal Reserve to disclose, for the first time, key details of its loans to financial firms during the financial crisis. But elsewhere in Congress and the courts, the Fed is continuing its fight to shield the names of the cash-strapped banks that borrow from it.

"We are beginning to lift the veil of secrecy on what is perhaps the most important agency in the United States government," said the amendment's author, Sen. Bernie Sanders (I., Vt.).

Fannie Mae seeks new US bailout to stay afloat

US mortgage finance giant Fannie Mae said Monday it needs an additional government bailout of 8.4 billion dollars after reporting a 2010 first-quarter net loss of 11.5 billion dollars.

"Our first-quarter results were driven primarily by credit-related expenses, which remain at elevated levels due to weaknesses in the economy and the housing market," the company said in a written statement.

Fannie Mae said its net loss attributable to common stockholders, which included 1.5 billion dollars in dividends on Treasury-held preferred stock, was 13.1 billion dollars, or 2.29 dollars per diluted share.

The results, reported in newly adopted accounting standards, showed improvement from the 2009 fourth quarter, when the net loss stood at 15.2 billion dollars, and the adjusted loss was 16.3 billion dollars.

The publicly traded Fannie Mae and sibling mortgage finance giant Freddie Mac were seized in a government rescue in September 2008 amid an escalating financial crisis after the collapse of a housing bubble.

Fannie Mae also said it ended the first quarter with a net worth deficit of 8.4 billion dollars.

To cover the gap, it said the Federal Housing Finance Agency had asked the Treasury to provide 8.4 billion taxpayer dollars by June 30.

.................................k

Williams said that the company, working with lender partners, completed 94,000 loan modifications in the quarter.

More than half of them were conversions of mortgage modifications under a crisis program set up by President Barack Obama's administration to underpin the crumbling housing market.

"Although we have expanded our loan workout initiatives to keep borrowers in their homes, we expect our foreclosures to increase during 2010 as a result of the adverse impact that the weak economy and high unemployment have had and are expected to have on the financial condition of borrowers," Fannie Mae said.

..........

Credit losses rose to 5.1 billion dollars in the quarter from 4.1 billion dollars in the prior quarter, "reflecting the increase in the number of defaults, which was partially offset by a slight reduction in loss severity."

................

Last December the government pledged Fannie Mae and Freddie Mac virtually unlimited aid through 2012 to allow them to weather the housing downturn.

The additional 8.4-billion-dollar bailout requested for Fannie Mae would add to 15.3 billion dollars in aid already provided by the Treasury on March 31.

Freddie Mac last week reported a first-quarter net loss of 7.98 billion dollars and asked for 10.6 billion dollars in additional Treasury aid.

The Obama administration has resisted pressure for swift reform of the troubled government-backed mortgage giants, citing a still-struggling US real estate market.

...........................

Oh Dear... more defaults in the US. Markets are goin dowwwn imo....

Neshant · Post by **Neshant** » 12 May 2010 06:35

shyamd wrote:Senate Pushes Fed to Give Up Names

The senate passed a watered down version of Ron Paul's "Audit the Fed" bill. Many senators getting lobby money from financial companies were instrumental in blocking the original bill.

Now begins the pretence that something is being audited.

The reality is that nothing will be audited. Just like nothing will happen to the rating agencies which committed mass fraud. IMO Goldman Sachs type companies have stuffed the political arena with so many stooges, there's no easy way to eliminate the parasite from the host.

Sanjay M · Post by **Sanjay M** » 12 May 2010 07:03

Neshant wrote:
shyamd wrote:Senate Pushes Fed to Give Up Names
The senate passed a watered down version of Ron Paul's "Audit the Fed" bill. Many senators getting lobby money from financial companies were instrumental in blocking the original bill.

Now begins the pretence that something is being audited.

The reality is that nothing will be audited. Just like nothing will happen to the rating agencies which committed mass fraud. IMO Goldman Sachs type companies have stuffed the political arena with so many stooges, there's no easy way to eliminate the parasite from the host.

So what's necessary is for civic groups to out these obstructionist stooges by highlighting their roles. You can't get to the dictator without first going after his henchmen.

Hari Seldon · Post by **Hari Seldon** » 12 May 2010 07:09

China analyst sees beginnings of unfolding credit bust

China's economy is teetering on the edge of a major slowdown, though it's not a shakeout in the property market that's about to spark the distress, according to a noted China strategist.

David Roche, an economic and political analyst who manages the Hong Kong-based hedge fund Independent Strategy, says the world's third-largest economy is now on the brink, faced with the inevitable reckoning that follows an extended bank-lending binge.

"We've got the beginnings of a credit-bubble collapse in China," said Roche, predicting the economy will likely cool from its stellar double-digit growth rate to a 6% annual expansion as a result.{But PRC will still grow, not contract and that's what's important. Sure, khan is also growing only.}

The emerging picture is one of a substantial contraction in credit growth and infrastructure expenditure, he says.

The shrinkage is grim news for an economy heavily dependent on such outlays. China managed to escape recession during the global crisis mainly because of bridges, railways and other infrastructure-project spending, estimated to have accounted for about 90% of economic growth last year, according to Roche. {Source? shanghai stats? Would love to know where this 90% flat fig comes from}

About 85% of the funding for these projects was arranged by local government financing vehicles "borrowing money they can never repay" from state-owned banks, says Roche. Nearly 3 trillion yuan ($440 billion) of the 11 trillion yuan extended to these entities has been wasted or stolen, he estimated.

"What do you think a bunch of ex-Communist Party officials in Chinese banks ... know about growing credit at 30% a year?" he said.

Mish goes hajaar bearish on the dlagon, seems like:

Pray tell how is China supposed to "focus on preventing excessive gains in asset prices"?

The idea is ludicrous. In general, Central banks can provide liquidity, they cannot dictate where that money goes, or if indeed it goes anywhere at all.

It is slightly different in China in that when the Central Banks says "Lend", that is a command, not a suggestion and thus banks lend. However, the only realistic place that money can be lent is more housing, more infrastructure, or more manufacturing, none of which China remotely needs at the moment.
...
The "China Story" that most of the world is in love with is nothing more than excess credit finding a home in malinvestments just as happened in the US.

Well, we'll see who was right I guess. Jai Hu.

Sanjay M · Post by **Sanjay M** » 12 May 2010 07:25

Here is a link to the vote on the Vitter amendment, which got voted down. This was the amendment which contained the tough language to intrusively audit the Fed:

http://senate.gov/legislative/LIS/roll_ ... vote=00138

You can see who the hell is in the pocket of the banking cartel known as the "US Federal Reserve" - all these guys who voted No:

Akaka (D-HI)
Alexander (R-TN)
Baucus (D-MT)
Bayh (D-IN)
Begich (D-AK)
Bennet (D-CO)
Bennett (R-UT)
Bingaman (D-NM)
Bond (R-MO)
Boxer (D-CA)
Brown (D-OH)
Brown (R-MA)
Burris (D-IL)
Cardin (D-MD)
Carper (D-DE)
Casey (D-PA)
Conrad (D-ND)
Corker (R-TN)
Dodd (D-CT)
Durbin (D-IL)
Feinstein (D-CA)
Franken (D-MN)
Gillibrand (D-NY)
Gregg (R-NH)
Hagan (D-NC)
Harkin (D-IA)
Inouye (D-HI)
Johanns (R-NE)
Johnson (D-SD)
Kaufman (D-DE)
Kerry (D-MA)
Klobuchar (D-MN)
Kohl (D-WI)
Kyl (R-AZ)
Landrieu (D-LA)
Lautenberg (D-NJ)
Leahy (D-VT)
Levin (D-MI)
Lieberman (ID-CT)
Lugar (R-IN)
McCaskill (D-MO)
McConnell (R-KY)
Menendez (D-NJ)
Merkley (D-OR)
Mikulski (D-MD)
Murray (D-WA)
Nelson (D-FL)
Nelson (D-NE)
Pryor (D-AR)
Reed (D-RI)
Reid (D-NV)
Rockefeller (D-WV)
Schumer (D-NY)
Shaheen (D-NH)
Specter (D-PA)
Stabenow (D-MI)
Tester (D-MT)
Udall (D-CO)
Udall (D-NM)
Voinovich (R-OH)
Warner (D-VA)
Whitehouse (D-RI)

Sanjay M · Post by **Sanjay M** » 12 May 2010 08:45

No good can come from having an unaccountable institution that is run like a private cartel. Private monopolies are the worst of both worlds, and deprive the market of choice. This is what gets everyone running in lockstep like lemmings off a cliff, or like moths to a flame. Then when everyone is lying around with broken bones and singed wings, they wail about how we all got to this place. The reason we all got to this place was a lack of market alternatives - specifically, due to the uber-powerful monopoly cartel that falls under the Fed, and its potent ability to induce groupthink.

Hari Seldon · Post by **Hari Seldon** » 12 May 2010 08:49

Am heading to the hills for a coupla days. No net connexn will happen there, most likely. And anyway, I'd rather be tuned out of the rest of the world for a while.

Here're some more TAE tweets to close with:

Meet the Economist Who Says the Government's Economic Numbers Are Lies http://bit.ly/atb5yY (Great article on John Williams, #shadowstats)

Germany, France May Hurt AAA Ratings in ‘Ponzi Game’ http://bit.ly/bIqroR (ECB loses credibility, more debt instead of cutting debt)

More debt won't solve crisis, warn analysts http://bit.ly/beXPvH (Giving 1 more drink to a drunkard doesn't help, hear that Cramer? Booyah!)

Nations Must Cut Debt to End Crisis, ‘Black Swan’ Author Says http://bit.ly/doMVWL (Blood, sweat and tears. No one can trust Bernanke)

Fannie, Freddie aid cost unclear: regulator http://bit.ly/dCRfcd ("The actual cost I do not know", Edward DeMarco) Thank you taxpayers.

Bank Swaps, Libor Show Doubts on Europe Bailout: Credit Markets http://bit.ly/938lhE (LOL, most useless bailout in history??)

"Banging" the U.S. Stock Market http://huff.to/acO7gD (Janet Tavakoli's take on how to manipulate markets, deregulate, 'dark' and fast)

CFTC Says No Evidence Of 'Fat Finger' on May 6 crash http://bit.ly/b3IZia (Just computers gone wild??)

What are the odds? JP Morgan has perfect quarter in Q1 as well. 64/64. http://bit.ly/b4Nscx (Averaging $118Mn per day)

G'bye all.

abhischekcc · Post by **abhischekcc** » 12 May 2010 09:21

This list posted by Sanjay M is very important. It shows that the party wise distribution of people who support the international banking cartel is:

Democrats = 50
Republicans = 11
Independant = 1

It clearly shows that the democratic party is the true vehicle of these international interests.

Remember what I had said about Democrats being internationalists anglophiles, and the Republicans being a more home grown nationalist elite.

derkonig · Post by **derkonig** » 12 May 2010 09:30

^^^^
Dhimimcrats are amriki version of the INC.
The republicans, alteast the sane ones, are like our nationalist BJP.

abhischekcc · Post by **abhischekcc** » 12 May 2010 09:41

derkonig wrote:^^^^
Dhimimcrats are amriki version of the INC.
The republicans, alteast the sane ones, are like our nationalist BJP.

True, and like the BJP, RP has no idea of defending its agenda in an intelligible way. All they do is react to the agenda being set by the reactionary progressives of their respective countries.

Both BJP and RP have a very legitimate reason for doing what they do, but are unable to justify it intellectually - it is almost as if they do not believe in themselves.

Singha · Post by **Singha** » 12 May 2010 11:37

using their control of the media and academia, the DP is successfully able to paint the RP any way they want.

Sanjay M · Post by **Sanjay M** » 12 May 2010 18:03

abhischekcc wrote:This list posted by Sanjay M is very important. It shows that the party wise distribution of people who support the international banking cartel is:

Democrats = 50
Republicans = 11
Independant = 1

It clearly shows that the democratic party is the true vehicle of these international interests.

Remember what I had said about Democrats being internationalists anglophiles, and the Republicans being a more home grown nationalist elite.

I very strongly agree. But what originally started as anglophile internationalism has eventually morphed into a broader Atlanticism whose scope has been stretched farther eastward. This Atlanticism is supported by interlocking interests, and its power may now be peaking under the tenuously overreached EU.

Neshant · Post by **Neshant** » 12 May 2010 22:04

IMO republican and democrat are of the same coin. Its not as if bush or other repubs had Ron Paul's ideals. All are running around looking for lobbying fees.

RP is the only genuine guy in the whole arena. Him and maybe Alan Grayson plus a couple of others. I have a strange feeling RP is going to run for the 2012 elections, pull off a miracle and win.

I would not trust large media like CNN to give him much publicity as its not in their interest. Banks would not want to help his campaign with contributions. So he needs his supporters to spread the word while large media, banks & the federal reserve work hard to keep the masses confused and voting for the next showman.

abhischekcc · Post by **abhischekcc** » 12 May 2010 22:08

The EU experiment is now over - taking with it Germany third attempt to conquer Europe.

And like the WW2 the biggest winner of the economic crisis iiisssss - Russia.

Not only are its enemies' economies in tatters, the eastward thrust of its primary military threat - NATO, has been effectively arrested.

Combine this with the fact that Russia is surplus in energy and food - two things that will increasingly become leverage in the global economy, and you have a perfect storm for the west.

svinayak · Post by **svinayak** » 12 May 2010 22:29

Sanjay M wrote:
It clearly shows that the democratic party is the true vehicle of these international interests.

Remember what I had said about Democrats being internationalists anglophiles, and the Republicans being a more home grown nationalist elite.

I very strongly agree. But what originally started as anglophile internationalism has eventually morphed into a broader Atlanticism whose scope has been stretched farther eastward. This Atlanticism is supported by interlocking interests, and its power may now be peaking under the tenuously overreached EU.

British Empire created the global financial empire worldwide with London as the financial center.
Global trade, colonialism and movement created its own internationalism. With WWI and WWII new global relations was developed with the old relationship still existing. The financial relationship among US,UK, and other leading countries has come from those era 100 years ago.

Sanjay M · Post by **Sanjay M** » 13 May 2010 03:03

An elastic currency will result in ever widening economic oscillations. Populists have figured out quite some time ago how to misuse the system for their ends, which has fed these widening gyrations. This system is soaking up so much wasteful populist energy, that it will eventually fail catastrophically. The impact radius will span the globe, and everyone worldwide will be affected, but most of all the poor fools in the US who are at ground zero.

I dunno how this banking cartel is able to so effectively hoodwink the masses and keep everyone away from its fiefdom.

These stupid lefties can shriek themselves hoarse about exposing the internal workings of Abu Ghraib or Guantanamo, but they immediately zip their lips when it comes to scrutiny of the Fed.

ramana · Post by **ramana** » 13 May 2010 08:49

About 18 months after the banking industry collapse doe we know what and how it happened?Who were the players and what were the impacts?8

I would like to know when Credit Default swaps took off and who created them and who bought them? I see that after 1 months European second tier economies are on verge of collapse and needed bailout.

I think in addition to economic impacts there are geopolitical impacts.

Neshant · Post by **Neshant** » 13 May 2010 10:34

I dunno how this banking cartel is able to so effectively hoodwink the masses

A lot of these keynesian economists that have infested the system fit the same definition of a lawyer :

"A lawyer is a person who profits by creating confusion. Or when that is impossible, he profits by the confusion created by others. In either case, confusion is his stock in trade. The greater the division between form and substance, between legal technicality and the attainment of justice, between gobbledygook and common intelligibility, the more the lawyer profits. The wider the gap a lawyer can create between the person who ostensibly owns property and he who claims its economic worth, the more money winds up in his pocket."

Basically anytime you have a middleman (central banker, financial companies..etc) inserting itself between you and the fruits of your labor, it sets up conditions for being ripped off. Its opened my eyes as to why physical gold can be the only honest money that cannot be easily stolen through financial con artistry.

In spite of the gold prices having gone up, I don't intend to sell my gold. It will remain as insurance until such a time when there is a return to the gold standard and fiat currencies & central banks are seen as a counterfeiting racket that benefit those who do no real work.

svinayak · Post by **svinayak** » 13 May 2010 11:47

The Dent Method: Economic forecasting based on changes in demographic trends
What is it? Why use it?
http://www.hsdent.com/the-dent-method/#Predictable Spending Patterns

The Dent Method - a long term economic forecasting tool based on demographic trends – is used by Financial Advisors and individual investors to help predict with uncanny accuracy the health of the economy as well as the stock markets years and decades in advance by identifying long-term trends that help build an overall financial picture.

As the only documented record of success at forecasting long term economic trends, The Dent Method has consistently proven that the age structure of the population has the power to influence consumption demand in a predictable, substantial and consistent manner.

Developed by economic expert Harry S. Dent, Jr. in the late 1980’s, The Dent Method offers a unique view of economic forecasting because it suggests that demographics and spending trends affect our economy, stock prices, inflation, interest rates, innovation cycles, new technologies, product and industry trends, real estate, immigration and domestic migration, and new business models for management and organization. This method also shows how to recognize and potentially profit from economic cycles, as well as helps pinpoint the best careers in growth industries, the best places to live, the hottest potential investment sectors, and the key technologies that will change everyday lives.
The Dent Method can be explained by studying:

SwamyG · Post by **SwamyG** » 13 May 2010 21:10

What is being left unsaid and probably unnoticed is the slow consolidation of Asia as days go by. Jim Jubak Eurotrasher here. He lists the following banks to be at great risk:
* Fortis
* Dexia
* Société Générale
* BNP Paribas
* ING
* Barclays
* Deutsche Bank
He feels the $1trillion Euro-bail does not change the risks for these banks.

Fortis holds $5 billion in Greek bonds. Dexia holds $4 billion. Société Générale $5.2 billion. BNP Paribas $8 billion. ING $4.6 billion. Barclays $6 billion. And Deutsche Bank $2.6 billion. Altogether, that's a hefty $35.4 billion in Greek bonds.

Now, I know that seems like a lot of money, but in the scale of the recent financial crisis, it's not all that much. If you compare these amounts with what it took to bail out these banks in the aftermath of the Lehman bankruptcy, $35.4 billion is pocket change.

The governments of Belgium, the Netherlands and Luxembourg bailed out Fortis to the tune of $16 billion or so. The Dutch government injected $13.4 billion into ING. France, Belgium and Luxembourg put $9 billion into Dexia. France bought $13.9 billion in debt securities from six banks, including Société Générale and BNP Paribas, and then later lent an additional $7.4 billion to BNP Paribas

Something similar is happening in the European banking sector right now. Banks are increasingly unwilling to lend to each other for any period longer than overnight.

And here is the news on Spain

In comparison, Spain needs to roll over almost $300 billion in debt just in 2010. And because Spain has a relatively low savings rate and relatively large government and trade deficits, about 45% of Spanish debt is held by foreigners. (For more on the relative size of the Spanish and Greek crises, see this post on my site.)

If that exposure were spread evenly across the globe or even just across Europe, that amount of debt wouldn't be nearly so worrisome. But as the Greek numbers show, a few banks can wind up holding a large portion of the debt. The seven banks on my shortlist hold total Greek debt equal to about 34% of the total debt held by German and French banks.

A parting shot from him:

At least until the United Kingdom and the United States face their days of reckoning for their debt.

SwamyG · Post by **SwamyG** » 13 May 2010 21:32

Insto investors shift money to Asia The largest share, no prizes for guessing, will go to China. Some of the other countries that find themselves in the list are South Korea, Taiwan & India.

[rant on]
India is always mentioned as an after thought by the networks, cable news, financial blogs ityadi. Come on for crying out lout, South Korea and Taiwan's GDP is lower than India. In fact two of the PIGS country - Italy and Spain - are ahead of India for all their problems. Not to count Germany, France and UK whose banks will suffer seizures if bad things happen to PIGS. And not to forget Hong Kong and Singapore the city-states cornering all 2 seconds of fame.
[rant off]

Suraj · Post by **Suraj** » 13 May 2010 22:58

It is partly a case of institutionalized memory and partly a case of how open and large the capital markets are. For example, the capitalization of the Hang Seng, or even Toronto/TSX and Frankfurt/DAX, are significantly larger than that of BSE/NSE . Here's a list of bourses sorted by capitalization.

Satya_anveshi · Post by **Satya_anveshi** » 13 May 2010 23:44

Remove Card and Take Bullion; Gold ATM Debuts

Amid fears over the strength of nearly every major currency, Abu Dhabi’s top hotel has come up with a new type of ATM for their most risk-averse guests. The Emirates Palace is giving those staying there the chance to withdraw gold from the world first ever gold dispenser.

svinayak · Post by **svinayak** » 14 May 2010 03:57

We have first Greece issue which Gold to a record. Apparently 99% buying from Europeans! If the PIIGS really accept and institute austerity measures starting with Greece, there will be severe recession atl east to begin with in Europe. If they perceived as 'cheating' Euro and Euro Zone survival will be at stake. Just keep watching Gold! today yield for 30 yr treasury went up from 2.6 to 3.0% first since March of 2009. Plus the Volume on the SELL side has increased for the last several days - sign of BEAR growling!

The second 'volcano' close to home is HOUSING Market (post, HAMP,HAMP2, stimulus+Credit etc). And the news is NOT good. see the link below and decide your self! This is back to 2007 and probably worse!?

Remember: Housing>Banks>Stock Market & Economy will go SOUTH! Have NOT you seen this picture show already?

Excerpts:

I wanted to go into the details on the current U.S. housing market and the data is not pleasant. In fact, it is downright disturbing. For background information, the U.S. has roughly 51 million active mortgages. As we go through the next 10 charts, it is important to keep this in mind. Whitney Tilson’s T2 Partners came out with some riveting charts regarding the current state of the housing market. Let us go through 10 of the most crucial charts....

51 million x .14 = 7,140,000 mortgages in default or 30+ days late

I always get this question about how folks arrive at the figure of 7 million. The above equation should give you an idea. This by the way is not a good situation. And with many toxic loans including option ARMs and Alt-As still lingering in the market, we have a few more years of problems baked in unfortunately....

Just look at the number of foreclosure filings back in 2005. Roughly 60,000 to 70,000 per month. Last month we hit 367,000+ which was an all time record. When foreclosure filings get back down to more normal levels, then we can say the housing market is improving....

CHARTS - MUST SEE!

http://www.doctorhousingbubble.com/hous ... -problems/

svinayak · Post by **svinayak** » 14 May 2010 21:24

http://dollarcollapse.com/getting-started/

The Collapse of the Dollar and How To Profit From It

CHAPTER 1: ILLUSIONS OF PROSPERITY

During the final two decades of the twentieth century, the U.S. economy was the envy of the world. It created 30 million new jobs while Europe and Japan were creating virtually none. It imposed its technological and ideological will on huge sections of the global marketplace, and produced new millionaires the way a Ford plant turns out pickup trucks. U.S. stock prices rose twentyfold during this period, in the process convincing most investors that it would always be so. Toward the end, even the federal government seemed well run, accumulating surpluses big enough to shift the debate from how to allocate scarce resources to how long it would take to eliminate the federal debt.

As the coin of this brave new realm, the dollar became the world’s dominant currency. Foreign central banks accumulated dollars as their main reserve asset. Commodities like oil were denominated in dollars, and emerging countries like Argentina and China linked their currencies to the dollar in the hope of achieving U.S.-like stability. By 2000, there were said to be more $100 bills circulating in Russia than in the U.S.

But as the century ended, so did this extraordinary run. Tech stocks crashed, the Twin Towers fell, and Americans’ sense of omnipotence went the way of their nest eggs. As this is written in early 2008, three million fewer Americans are drawing paychecks. The federal government is borrowing $500 billion each year to finance the war on terror as well as an array of new or expanded social programs, and many parts of the financial system, including sub-prime mortgages, credit insurance, and municipal bonds, seem to be imploding.

The dollar, meanwhile, has become the world’s problem currency, falling in value versus other major currencies and plunging versus gold. The whole world is watching, scratching its collective head, and wondering what has changed. The answer, as will become clear in the next few chapters, is that everything has changed, and nothing has. The spectacular growth of the past two decades, it now turns out, was a mirage generated by the smoke and mirrors of rising debt and the willingness of the rest of the world to accept a flood of new dollars. Just how much the U.S. owes will shock you. But even more shocking is the fact that we’re still at it. Like a family that has maintained its lifestyle by maxing out a series of credit cards, America is at the point where new debt goes to pay off the old rather than to create new wealth. Hence the past few years’ slow growth and steady loss of jobs.

Gold hits record high as investors flock to safety
Reuters - Jan Harvey, Sue Thomas - ‎4 hours ago‎
Gold bars are displayed at Habib Jewels' boutique in Kuala Lumpur in this September 17, 2009 file photo. LONDON (Reuters) - Gold hit record highs near $1250 an ounce in Europe on Friday as investors bought the metal to protect against sovereign risk in ...

shyam · Post by **shyam** » 14 May 2010 23:35

Some rumour:

Europe: Germany dropping the Euro for new Deutschmark? This week-end?

abhischekcc · Post by **abhischekcc** » 14 May 2010 23:41

SwamyG wrote:Insto investors shift money to Asia The largest share, no prizes for guessing, will go to China. Some of the other countries that find themselves in the list are South Korea, Taiwan & India.

[rant on]
India is always mentioned as an after thought by the networks, cable news, financial blogs ityadi. Come on for crying out lout, South Korea and Taiwan's GDP is lower than India. In fact two of the PIGS country - Italy and Spain - are ahead of India for all their problems. Not to count Germany, France and UK whose banks will suffer seizures if bad things happen to PIGS. And not to forget Hong Kong and Singapore the city-states cornering all 2 seconds of fame.
[rant off]

SwamyG, China is well on its way to history books (at least the Commie party is). Want to bet whether the shit will hit the ceiling in this month or not?

It is ironic if the western investors lose their money in a pseudo capitalist country.

SwamyG · Post by **SwamyG** » 15 May 2010 03:25

So why is West messed up? Read here. Not that East is any better; just that in East people are already used to the hard ships and corrupt politicians & businessmen. Civilization is nothing but a garb on our animal nature. When things are nice, we are civil and courteous, when it because really important things can get nasty.

Select nuggets from the blog.

The US passively allows banks and corporations to evade taxes via various royal islands and havens run by the Queen of England, the Sheikhs of the oil pumping nations or old royalists in small mountain kingdoms in Europe. Wild spending on wars and social services (guns and butter) still continues virtually unabated even as tax dodging continues to rise. On top of this, the fiat funny money Japanese carry trade business that dumped immense debts on the public continues to be a major problem and the fixes being contemplated are insane as we shall see with the Fannie Mae mess, for example. Someone has to pay for all of this and that is where the real explosive mess lies in the future. {more mess in the future}

I deleted all of the personal information. {she refers to an email that she copy+pasted in her blog} Yes, England will blow up. There is no doubts about this. {note: hari garu} Throughout history, whenever corruption allows wholesale looting of the public treasury via tax evasions coupled with wild spending that doesn’t benefit public services and national infrastructures, we get not just economic collapses but eruptions of greatest violence. This is why passively allowing corruption and loophole building to grow is extremely and totally dangerous. The ruling elites refuse to learn lessons for obvious reasons: the wealth they get via corruption is so tempting, they tend to rationalize history and negate the probabilities of revolutions, riots, social collapse, the total death of a culture (a la Japan today or ancient Rome!) or other hazards.

The moral need to have a well-regulated, well-organized, fair and clean system with a minimum of graft and where virtues such as saving money, caring for neighbors, cleaning the environment {dharmic onlee} and using diplomacy rather than war to protect a nation, are all virtues which are pursued rather than mocked.

Sanjay M · Post by **Sanjay M** » 15 May 2010 05:44

WSJ's Dan Henninger again:

The We're-Not-Europe Party

Prem · Post by **Prem** » 15 May 2010 06:59

US firms dodge $60 bn in taxes
http://www.business-standard.com/india/ ... 53/395010/

Tyler Hurst swiped his debit card at a Walgreens pharmacy in central Phoenix and kicked off an international odyssey of corporate tax avoidance.Hurst went home with an amber bottle of Lexapro, the world’s third-best selling antidepressant. The profits from his $99 purchase began a 9,400-mile journey that would lead across the Atlantic Ocean and more than halfway back again, to a grassy industrial park in Dublin, a glass skyscraper in Amsterdam and a law office in Bermuda surrounded by palm trees.
While Forest Laboratories Inc, the medicine’s maker, sells Lexapro only in the US, the voyage ensures most of its profits aren’t taxed there — and they face little tax anywhere else. Forest cut its US tax bill by more than a third last year with a technique known as transfer pricing, a method that carves an estimated $60 billion a year from the US Treasury as it combines tax planning and alchemy.Transfer pricing lets companies such as Forest, Oracle Corp, Eli Lilly & Co and Pfizer Inc, legally avoid some income taxes by converting sales in one country to profits in another — on paper only, and often in places where they have few employees or actual sales.

ShyamSP · Post by **ShyamSP** » 15 May 2010 07:04

shyam wrote:Some rumour:

Europe: Germany dropping the Euro for new Deutschmark? This week-end?

This is less likely but pegging to US dollar is most likely. In a CT way, the Euro happenings are by design.

All the countries (oil countries, Russia, China) that snubbed dollar to go Euro are getting less dollars now for their previous dollar.

Sanjay M · Post by **Sanjay M** » 15 May 2010 10:41

Third World Now A Safer Bet Than First World

Sanjay M · Post by **Sanjay M** » 15 May 2010 20:22

European Contagion May Spread to Eastern Europe

Neshant · Post by **Neshant** » 16 May 2010 01:42

Third World Now A Safer Bet Than First World

you would not know it from the bogus ratings S&P, Fitch and Moody's put out however.

svinayak · Post by **svinayak** » 16 May 2010 01:49

Neshant wrote:
Third World Now A Safer Bet Than First World
you would not know it from the bogus ratings S&P, Fitch and Moody's put out however.

The article is from TIME mag which is a psy ops outlet.

SwamyG · Post by **SwamyG** » 16 May 2010 08:44

Sanjay M wrote:Third World Now A Safer Bet Than First World

So he has written a book "Sustainable Excellence". Now what Indic word does "sustainable" remind us all?

Singha · Post by **Singha** » 16 May 2010 11:58

http://online.wsj.com/article/SB1000142 ... itorsPicks

what go gurus think of this article?

--
That Bright, Dying Star, the American WASP
Kagan Nomination Marks Another Faded Day in the Establishment's Illustrious but Insular History; a New Path to Power

By ROBERT FRANK

On a recent morning at the Links Club, New York's wood-paneled preserve of the old banking elite, a small crowd of white-haired members gathered for breakfast.

The talk around the tables, over poached eggs and toast, was of Europe and sovereign-debt markets. Some were quietly negotiating deals. The crowd was mostly older, though it included a smattering of 40-something and 50-something members.

While undeniably upper-crust, the scene, which included a Latin American and an Asian, was a far cry from the Links Club of 20 years ago, when doing business was forbidden and the strictly homogenous crowd of Protestant blue-bloods spent their mornings comparing golf scores and vacation homes.

"It's changed with the times," said one former member. "That's both our gain and our loss."

In the long downward spiral of what used to be known as America's Protestant Establishment, there have been several momentous milestones: Harvard's opening up its admissions policies after World War II. Corporate America's rush in the 1980s to bring more diversity to the corner office. Barack Obama's inauguration as the first African-American president.

History may reveal another milestone—Elena Kagan's nomination to the Supreme Court. If she is confirmed, the nation's nine most powerful judges will all be Catholic or Jewish, leaving the court without a Protestant member for the first time.

Of the 111 Supreme Court Justices who have served, 35 have been Episcopalians, making them the largest religious group on the court, according to court historians. The court's first non-Protestant was Catholic Justice Roger Taney, appointed by President Andrew Jackson in 1836.

Whether the court's religious makeup even matters in today's legal world has become a subject of hot debate. Yet by ushering in a Protestant-free court, Ms. Kagan is helping to sweep away some of the last vestiges of a group that ruled American politics, wealth and culture for much of the nation's history.
Law Blog

"The fact that we're going to zero Protestants in the court may not be as significant as the fact that her appointment perfectly reflects the decline of the Establishment, or the WASP Establishment, in America," said David Campbell, associate professor of political science at the University of Notre Dame.

Seen from the distance of time, the changes are stunning. In the 1960s, the vast majority of corporate managers were Protestant, according to E. Digby Baltzell's famous 1964 tome, "The Protestant Establishment."

The percentage of Protestants in Congress has dropped to 55% from 74% in 1961, according to Pew Forum. The corner offices of the top banks, once ruled by Rockefellers and Bakers, now include an Indian-American and the grandson of a Greek immigrant.

In old-money enclaves like Palm Beach, Fla., Nantucket, Mass., and Greenwich, Conn., WASPs are being priced out of their waterfront estates and displaced on their nonprofit boards by Jewish, Catholic and other non-Protestant entrepreneurs.

A survey by Pew Research found only 21% of mainline U.S. Protestants had income of $100,000 or more, compared with 46% of Jews and 42% of Hindus.

Until the early 1980s, when a flood of new wealth began to democratize the American elite, the path to power and status in America was straight and narrow. It usually began with old-line families in the lush estates of Greenwich, Boston, New York or Philadelphia and wound its way through New England boarding schools, on to Harvard or Yale and finally to the white-shoe law firms or banks of the Northeast or the corridors of power in Washington.

John J. McCloy—the Philadelphia-born, Harvard-educated lawyer and banker who served as assistant secretary of War during World War II and on several corporate boards, including Chase Manhattan Bank's—became known as "the Chairman of the Establishment."

His son, John J. McCloy II, a Connecticut-based venture capitalist, says Ms. Kagan's nomination is a sign of the nation's commendable meritocracy, but also a "dangerous departure" from Establishment mores, since Ms. Kagan, while a brilliant scholar, has no experience as a judge.

"I think we're losing something fundamental with the Establishment," he said. "The Establishment was really about people who became leaders because they were confident and highly competent in their areas."

The Protestant downfall can be attributed many things: the deregulation of markets, globalization, the rise of technology, the primacy of education and skills over family connections.

Yet many also point to the shifting dynamics of the faith itself, with mainline Protestantism giving way to the more fire-and-brimstone brands of Evangelicals in recent decades. The Episcopal Church, usually seen as the church of the Establishment, has seen some of the most pronounced declines in recent years.

Rev. Mark S. Sisk, bishop of the Episcopal Diocese of New York, said the polarized landscape of religion today hasn't favored more moderate faiths like Episcopals.

"When it comes to elective office, I can't think of anyplace in the country where being a middle-of-the-road Episcopalian would be a great plus," he said.

He added, however, that tracking the ups and downs of socioreligious groups like WASPs was no longer relevant.

"That kind of calibration of 'what members of my team are on the front lines' seems to me to be an antique kind of thing to do," he said.

Meantime, WASP culture has been left to live out its days as a fashion statement, on the shelves of Ralph Lauren stores, or as a social badge at defiantly old-world clubs like the Knickerbocker Club in New York or the Bath and Tennis Club in Palm Beach.

In "The Protestant Establishment," Mr. Baltzell pointed to the prejudice and insularity of the elite as the eventual causes of its decline. "A crisis has developed in modern America largely because of the White-Anglo-Saxon Protestant establishment's unwillingness, or inability, to share and improve its upper-class traditions by continuously absorbing talented and distinguished members of minority groups into its privileged ranks."

Jamie Johnson, the documentary filmmaker and heir to the Johnson & Johnson fortune, said he believed the destructive effects of wealth over multiple generations were also a factor.

"The generations of affluence bred a certain kind of casual, passive approach to life and wealth building," he said. "Lots of people just got lazy."

Write to Robert Frank at [email protected]

Singha · Post by **Singha** » 16 May 2010 12:08

a latino reader sticks a fork in:

* Julia Gomez replied:

It is telling that many commenters have approved a comment that is so glaringly inaccurate. WASPs achieved their success by shutting out the majority of people in this country, not through being particularly smart or working particularly hard. If you cripple the would-be competitors first, of course you can 'beat' them.

Let's examine one of the ways great wealth was obtained - slavery and the slave trade. Fortunes at the base of some of today's most successful colleges, banks and insurance companies can be traced to the New England slave trade. At the time of the Civil War, a large majority of the wealthiest men in the U.S. was owners of multiple plantations in the South and thousands of slaves. Obviously, these WASPs' wealth was gained by dehumanizing and exploiting other people.

Sanjay M · Post by **Sanjay M** » 16 May 2010 12:38

Bah, sounds like sour grapes. I think there is something to the idea of the Protestant Work Ethic (just as there is something to the idea of the Immigrant Work Ethic), and the fact is that the Brits created one of the most successful empires which spanned the globe. We Indians like to pretend that we didn't conquer the globe because we're "Gandhian" or whatever pretentious excuse comes to mind. The fact is that Indians don't even have the competence to run their own country, leave alone conquer everybody else. Ours has been a history of being invaded again and again. We're stalemated by a country one-fifth our size next door. Not a record that inspires confidence.