Continued world financial crisis fallout

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NorthReport

Coming to a town near you?

 

Maybe renting is the way to go for the next few years.

 

San Francisco’s Tallest Condo Cuts Prices 15% as Glut Increases

http://www.bloomberg.com/apps/news?pid=20601213&refer=home&sid=a.l_gBfpOQrs

 

“I wonder if a condo is even a good thing to buy,”

NorthReport

S&P 500 to Fall as Bank Bailout Stalls, Barclays Says

http://www.bloomberg.com/apps/news?pid=20601213&refer=home&sid=aq9GGgCeXDsw

 

The Standard & Poor’s 500 Index will fall, wiping out its 9.8 percent gain since November, as President Barack Obama’s so-called bad bank plan takes months to carry out and the recession worsens, Barclays Plc said.

“We suggest putting down the champagne glass and drinking a cup of coffee,” Barry Knapp, chief U.S. equity strategist at Barclays said in a report dated Jan. 30. “The policy euphoria associated with the ‘bad bank’ plan will prove to be short lived.”

The S&P 500 jumped 3.4 percent on Jan. 28, last week’s biggest daily gain, when government officials said the White House is moving closer to a plan to buy toxic assets from banks. The complexities of the program mean it will take months to implement, said Knapp, who reiterated his forecast that the U.S. stock benchmark will drop to 750 in the first quarter, the lowest level in 11 years.

Economic data that is still “unequivocally negative” will also prevent a rally in the stock market anytime soon, the strategist wrote. The S&P 500 dropped less than 0.1 percent to 825.44 today after the Commerce Department reported U.S. consumer spending fell in December for a record sixth consecutive month.

Barclays joins Goldman Sachs Group Inc. in predicting the S&P 500 will retreat back to the Nov. 20 low of 752.44 as approval of legislation to support the economy and financial system takes longer than investors anticipate.

‘Critical Milestones’

“Passage of a stimulus plan and resolution regarding the remaining TARP capital are critical milestones that must be passed for the S&P 500 to trade higher,” Goldman’s David Kostin wrote in a note last week.

David Bianco at UBS AG disagrees. Investors will gain confidence after the government releases more details on its program to buy bank assets and push the S&P 500 to 1,000, a level last reached on Nov. 4, the equity strategist said in a research report.

Bianco’s end-of-year estimate for the S&P 500 to reach 1,300 is the most bullish of the 10 Wall Street strategists surveyed by Bloomberg. The UBS forecast implies a 57 percent surge from the S&P 500’s Jan. 30 close.

Barclays is the most pessimistic with a projection of 874, a 5.8 percent advance. Goldman Sachs’s estimate for the U.S. stock benchmark is 1,100, a 33 percent gain. All three strategists are based in New York.

 

Fidel

Sweden’s Fix for Banks: Nationalize Them

The Swedes have a simple message to the Americans: Bite the bullet and nationalize.

Quote:

Sweden placed its banks with troubled assets into a so-called bad bank, where they could be held and then sold over time when market and economic conditions improved. In the meantime, it used taxpayer money to provide enough capital to allow banks to resume normal lending.

In the process, Sweden wiped out existing shareholders.

By contrast, the United States government, so far, has bailed out banks without receiving large equity stakes in return, said Bo Lundgren, Sweden’s minister of fiscal and financial affairs during the Swedish bank takeover.

“For me, that is a problem,” said Mr. Lundgren, who called himself more of a free marketer than some Republicans. “If you go in with capital, you should have full voting rights.”

To be sure, the United States has a much larger economy than Sweden’s, with a vast and international banking system. The toxic assets Sweden took from its banks improved when the economy improved, but Sweden was not confronted with a global recession.

Still, many analysts believe that Stockholm has lessons for Washington. . .

Fears of bank nationalization are diverse — skeptics worry that nationalization would cost too much, the government would not run banks effectively or nationalization would be too complicated. Mr. Lundgren, the former minister of financial affairs, said the costs of nationalization have to be measured against the perils a hobbled banking system creates for an economy.

Moreover, he said the mere threat of nationalization nudged some Swedish bankers to find creative solutions to their problems in the 1990s

Oh those Swedes. Still playing hardball with capitalists after all these years.

George Victor

Yep, that's how they should be dealt with.

Had a look at your new, lower line of credit interest rate lately (not)?

 Our banks won't ease up on credit, despite the wonderful new, lower bank rate, because they have to still compete for investor dollars on THE MARKET. And your own pension fund is sure to still have some finance sector equity kicking around in it somewhere.

Johathan Swift would have known how to deal with this. But our media would never employ such a writer, causing disquiet among the advertising community, their lifeblood. Just look at Walrus's advertising and stop wondering at its inane picture of our universe, the last few years.

Lard Tunderin Jeezus Lard Tunderin Jeezus's picture

A very appropriate Word of the Day:

Quote:

Word of the Day

Tuesday February 3, 2009

defalcate \di-FAL-keyt\, verb:
to steal or misuse money or property entrusted to one's care

The stockbroker defalcated millions from investment clients.

c 1540, from Latin defalcere, from de- + falx/falcem "sickle, scythe"

 

George Victor

The BMO's explanation for raising interest rates:

"While the BMO Prime Rate has been decreasing in recent months and the savings passed on to you, the cost of borrowing has risen dramatically for all banks around the world and BMO is no exception. To reflect the changing market realities and the increases in the cost of raising funds in the market, we're increasing our Base Rate from 2% above the BMO Prime Rate to 3% above the BMO Prime Rate."

No mention that it will happen to all - just like gas prices at the pump, and for the same reasons.

More mendacity...{Latin mendax  -dacis perhaps from mendum  fault}

Doug

The Obama administration is expected to impose a cap of $500,000 for top executives at companies that receive large amounts of bailout money, according to people familiar with the plan.....“That is pretty draconian — $500,000 is not a lot of money, particularly if there is no bonus,” said James F. Reda, founder and managing director of James F. Reda & Associates, a compensation consulting firm.

http://www.nytimes.com/2009/02/04/business/04pay.html?hp


wwSwimming

M. Spector wrote:
Jerry West wrote:

...the replacement of mechanical use of energy by human energy on the other.

What, human-powered rickshaws instead of automobiles? Humans shovelling snow off the roads instead of snow ploughs? Humans running on treadmills to recharge batteries to power their toasters? 

or horses tethered to generators, while the bread bakes in solar-powered ovens.

what's the difference between farmers growing biofuels for consumption by wealthy users - to power their vehicles - and human-powered rickshaws ?

crude oil is a huge windfall, in terms of energy density.  as it becomes more expensive & unavailable - and considering the environmental costs of replacements like tar sands - human powered rickshaws don't sound so bad.

 although my limited experience with wealthy people is that some of them prefer the energy for their transportation come from a long ways away, so they don't have to deal with the riff-raff.  or the Rabble.  Embarassed

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - http://LASIK-Flap.com ~ Health Warning about LASIK Eye Surgery

NorthReport

Doug wrote:

The Obama administration is expected to impose a cap of $500,000 for top executives at companies that receive large amounts of bailout money, according to people familiar with the plan.....“That is pretty draconian — $500,000 is not a lot of money, particularly if there is no bonus,” said James F. Reda, founder and managing director of James F. Reda & Associates, a compensation consulting firm.

http://www.nytimes.com/2009/02/04/business/04pay.html?hp


 

And what are the caps in Canada?

 

These executives just sicken me with their greed and lack of a moral compass. How would any of them like to trade places with any one of the hundreds of thousands of the unemployed who lost their job this past month.

ADP Says U.S. Companies Reduced Payrolls by 522,000

http://www.bloomberg.com/apps/news?pid=20601087&sid=alV5yqCR0DTY&refer=home

 Companies in the U.S. cut an estimated 522,000 jobs in January as the economy weakened at the start of the year, a private report based on payroll data showed today.

The drop in the ADP Employer Services gauge was less than economists forecast and followed a revised cut of 659,000 for the prior month.

Employers are slashing workers as clogged credit markets and slumps from housing to manufacturing threaten to extend the longest recession in a quarter of a century. Persistent job losses will probably further curb consumer spending, which represents about 70 percent of the economy.

“We’re in for several more months of bleeding on the jobs front,” Joel Prakken, chairman of Macroeconomic Advisers LLC in St. Louis, said on a conference call with reporters.

ADP revised its methodology late last year to help limit differences between its calculations and the government’s payroll numbers. Last month, the new methodology overestimated the drop in December private payrolls by 162,000 after underestimating the count by about an average 116,000 a month in the first 10 months of 2008 before the revision.

The Labor Department may report in two days that the economy lost 535,000 jobs in January and the unemployment rate jumped to a 16-year high of 7.5 percent, according to median forecasts in a Bloomberg News survey. The U.S. lost almost 2.6 million jobs in 2008, the most since 1945.

Less Than Forecast

The ADP report was also forecast to show a decline of 535,000 jobs, according to the median estimate of 23 economists in a Bloomberg News survey. Projections ranged from decreases of 487,000 to 720,000.

Stock index futures rose following the report and Treasury securities were little changed. The Standard & Poor’s 500 futures contract was up 0.6 percent at 8:57 a.m. in New York. The yield on the benchmark 10-year note was 2.88 percent, the same as yesterday’s close.

ADP includes only private employment and does not take into account hiring by government agencies. Macroeconomic Advisers produces the report jointly with ADP.

Job cuts announced by U.S. employers more than tripled in January from a year earlier, led by planned cutbacks at retailers following the worst holiday-shopping season in four decades, the Chicago-based placement firm Challenger, Gray & Christmas Inc. said today. Firing announcements rose 222 percent last month from January 2008, to 241,749. It was the largest total since January 2002, when job cuts reached a record of 248,475, Challenger said.

Breakdown

Today’s report showed a reduction of 243,000 workers in goods-producing industries including manufacturers and construction companies. Service providers cut 279,000 workers. Employment in construction dropped by 83,000.

Companies employing more than 499 workers shrank their workforces by 92,000 jobs. Medium-sized businesses, with 50 to 499 employees, cut 255,000 jobs and small companies decreased payrolls by 175,000.

Businesses continue to announce firings. Rockwell Collins Inc., an aircraft-parts producer, yesterday said it will eliminate 600 positions in coming weeks, and PNC Financial Services Group Inc. said it plans to cut 5,800 jobs by 2011.

The economy will probably “remain in a severe recession with unemployment well in excess of 8 percent” through 2009, PNC Chief Financial Officer Richard Johnson said on a conference call.

The ADP report is based on data from 400,000 businesses with about 24 million workers on payrolls.

ADP began keeping records in January 2001 and started publishing its numbers in 2006.

 

Doug

As the economy takes a spanking, many women are turning to freelance fetish work to supplement their incomes.

"I've seen it before," says Linda, “during the tech bust in 2002. Women who thought they would always make a decent living in the tech sector lost their jobs.” They came looking to Linda’s industry for freelance work, and now it’s happening again: professional women whose cubicle-bound careers have been downsized are entering Linda’s corner of the “gig economy”—a corner that involves whips, ropes, and occasionally, nipple clamps.

http://www.thedailybeast.com/blogs-and-stories/2009-02-03/kinkonomics/ 

It makes sense. Good jobs are hard to find and there are an awful lot of businessmen who badly deserve a spanking now.

 

George Victor

It makes bad sense Doug. They are bad jobs, and there is no humour in it.  Exploitive and dehumanizing. The product of desperation. A parent's nightmare.

Doug

I don't really want to derail this thread by spending a long time on this, but that's not the impression of it I get at all from the professional dominatrices I've known. (Yes, that's kind of weird. I spent a good bit of time as a younger lad in gothic culture and it goes with that territory.) It's not so wonderful a job as being a bank CEO, but it pays the bills quite nicely.

$200 an hour is bad? I wish my job were that kind of awful. They could strip (or telemarket, for that matter) instead and earn a lot less and have a lot less control. Doing any job in a capitalist society with inadequate social welfare is a product of desperation.

 

Doug

Bernard Madoff has a Japanese counterpart, it seems:

It is a bizarre tale of a bedding company, a megalomaniac businessman and a make-believe currency. And today it culminated in a series of arrests in what could be the biggest investment scam in Japanese history.

Kazutsugi Nami, the chairman of L&G, which stands for Ladies & Gentlemen, a bankrupt bedding supplier, and 21 other executives are suspected of defrauding hundreds of thousands of investors of at least $1.4bn (£1bn) over the past eight years.

http://www.guardian.co.uk/business/2009/feb/05/japan-kazutsugi-nami-ladi...

josh

Unemployment up in the U.S. to 7.6%, 7.2% in Canada.  Worst job loss, nearly 600,000, in the U.S. since 1974.

http://www.nytimes.com/2009/02/07/business/economy/07jobs.html?_r=1&hp

 

Doug

UK banks are rushing to get the bonuses out to their greedy managers now before their government acts too to limit compensation in state-supported banks:

Banks dependent on taxpayer support are planning to rush out hundreds of millions of pounds in bonuses to senior bankers and traders before a threatened crackdown.

As ministers prepared to curb excessive remuneration, it emerged that Barclays and Lloyds Banking Group were poised to follow Royal Bank of Scotland (RBS) by paying bonuses within weeks.

Lloyds, which has taken £17 billion in rescue money from the Government, appears ready to give hundreds of millions of pounds to top executives and more junior staff.

Barclays, which has tapped the Bank of England for billions of pounds in loans and guarantees, is believed to be planning even larger payouts. According to the terms of its purchase of the North American division of the collapsed Lehman Brothers, Barclays is due to pay $2.5 billion (£1.7 billion) in bonuses to traders and dealmakers on Wall Street in the next few days.

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_...

Fidel

Obama Bank Bailout: There is an Alternative Open Letter to Dr. Joseph Stiglitz and Challenge to Debate

by Richard C. Cook

Quote:

Dear Dr. Stiglitz:

 

            I have just finished reading your article published on Alternet.org entitled, “Is the Entire Bailout Strategy Flawed? Let’s Rethink This Before It’s Too Late.” http://www.alternet.org/story/124166/

            With all due respect, I believe you have missed the point of what is going on within the U.S. economy, which causes your proposed solutions to be similarly flawed.

            The purposes of this letter are to delineate my objections to what you have written, to bring our differences before the public, and to challenge you to a debate when I visit New York City on February 27-March 1, 2009.

            You state that, “ America 's recession is moving into its second year, with the situation only worsening.” But you then say, “The hope that President Obama will be able to get us out of the mess is tempered by the reality that throwing hundreds of billions of dollars at the banks has failed to restore them to health, or even to resuscitate the flow of lending.”

            You thereby imply that the economic crisis is due to problems within the financial sector and that it would be a good thing to “resuscitate the flow of lending” without challenging why that lending became such a huge factor in our economy.

            I say: The problem does not lie with the financial sector except that the debt-based monetary system acts as a parasite on the producing economy, resulting in the vast overhang of debt that can never be repaid. “Resuscitating the flow of lending” will do no good, because the collapse of consumer purchasing power due to job outsourcing and income stagnation has made it impossible for people to pay their debts. Most of this debt now needs to be written off and our producing economy restored as our chief source of wealth.  

            You say of the government’s bailout actions late last year: “Then there was the hope that if the government stood ready to help the banks with enough money -- and enough was a lot -- confidence would be restored, and with the restoration of confidence, asset prices would increase and lending would be restored.”

        I say:  . . .

Stiglitz says things that needed to be said. But Cook's is a very good letter, imo. 

Doug

Here is one outcome of the financial crisis that isn't bad whatsoever:

The think-tanks with large endowments like Brookings, the Rand corporation and the Council on Foreign Relations have seen a lot of their cash-pile go up in smoke in the stock-market slump. Things are even more precarious for a lot of the smaller think-tanks - many of them in Europe - that do not have big endowments, but rely heavily on corporate donations and sponsorship. As company bosses and investment banks look for easy items of expenditure to take the axe to, donations to think-tanks for research are an obvious target.

http://blogs.ft.com/rachmanblog/2009/02/incredible-shrinking-think-tanks/

Doug

If you still have money by this point, you may want to consider heading to NYC for some deep-discount designer fashion shopping.

When Saks Fifth Avenue slashed prices by 70% on designer clothes before the holiday season even began, shoppers stampeded. "It was like the running of the bulls," says Kathryn Finney, who says she was knocked to the floor in New York's flagship store by someone lunging for a pair of $535 Manolo Blahnik shoes going for $160.

Saks's deep, mid-November markdowns were the first tug on a thread that's now unraveling long-established rules of the luxury-goods industry. The changes are bankrupting some firms, toppling longstanding agreements on pricing and distribution, and destroying the very air of exclusivity that designers are trying to sell.

http://online.wsj.com/article/SB123413532486761389.html?mod=testMod

Doug

There were 11 fewer debutantes at the International Debutante Ball this year. Oh the tragedy!

But the experienced hands, including mothers like the duchesse who made their own debuts in society in this very ballroom, could see the subtle difference in the layout of the hall. And there were fewer debutantes, 47 this year rather than the 58 at the last biennial ball in 2006, and far fewer guests — 662 instead of 976.

http://www.nytimes.com/2008/12/31/nyregion/31debs.html

George Victor

Paul Krugman in today's NYTimes: "What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?

 A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished. Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years. Yet the centrists did their best to make the plan weaker and worse. "

NorthReport

This is a hoot!

I never know with Americans when they use the term socialist whether they mean commie. Laughing 

We Are All Socialists Now

In many ways our economy already resembles a European one. As boomers age and spending grows, we will become even more French.

http://www.newsweek.com/id/183663

NorthReport

Americans must think Harper is gonna lead them to the promised land.

 http://www.newsweek.com/id/183670

 

Worthwhile Canadian Initiative

Canadian banks are typically leveraged at 18 to 1--compared with U.S. banks

Fidel

NorthReport wrote:

This is a hoot!

I never know with Americans when they use the term socialist whether they mean commie. Laughing 

We Are All Socialists Now

In many ways our economy already resembles a European one. As boomers age and spending grows, we will become even more French.

http://www.newsweek.com/id/183663[/quote

Quote:
And it is unlikely that even the reddest of states will decline federal money for infrastructural improvements

In the States, all political commentary is Orwellian doublespeak as a rule

I'm not sure why red Republican states would have declined money even in good times, because they've been have-nots for a long, long time. The USSR wasnt this broke in 1991.

Jacob Richter

Fidel wrote:
As an unrepentant Marxist, I would prefer 100% control of money by democratically elected government. But I think even if we return to what existed in Canada from 1938 to 1974 with the feds creating about a quarter of the money supply as interest-free, debt-free money(government-created money as opposed to bank-created money) for special purposes, we could afford green infrastructure and vital program spending. Canadian William Krehm says there are municipalities across Canada that can not afford to repair aging infrastructure let alone build anew. And the experiment in privatization of vital infrastructure ie. water and sewers for example, has been a bust around the world where tried. 

But I also agree that if the feds simply taxed corporations and the wealthy at more progressive rates(OECD average to EU-15 average as a percentage of GDP) and actually enforced collection, then Ottawa and our various layers of sub government would have anywhere from $35B to $75 billion dollars(Mel Hurtig, The Vanishing Country: Is it too late to save Canada) more every year to finance public needs.

That reeks more of Lassalle than Marx to me.

RevolutionPlease RevolutionPlease's picture

Arnold having a hard time with Rae days.  Perhaps he was visionary...for Rethuglicans...:

Quote:

The Republican governor already ordered more than 200,000 state government workers to take two days off each month without pay and projected it would save $1.3 billion through June 2010. The first furlough day was last Friday.

But the court ruling that upheld Schwarzenegger's authority to order the furloughs did not address employees of state constitutional officers or members of a tax panel, the Board of Equalization.

The lawsuit filed Monday seeks an injunction that would force Controller John Chiang to reduce the hours of those employees. Chiang's office cuts the cheques to state workers.

Furloughing the 15,000 employees in the constitutional offices and the tax board will save $93.2 million, the governor's finance department said.

"This is absolutely worth it," Schwarzenegger spokesman Aaron McLear said about the lawsuit.

"Every amount that state government can save is less of a burden on the taxpayers of California."

Read it all.

 

http://cnews.canoe.ca/CNEWS/World/2009/02/09/8330031-ap.html

NorthReport

How many Hummers does the governor own now?

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

So we know now these apoligies aren't worth shit as they were drafted by pr firms!

RBS and HBOS executives to apologise for collapse of banks

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5697883.ece

 

The bankers who led Royal Bank of Scotland and HBOS to the brink of collapse will offer a public apology today.

But amid the furore over bankers’ bonuses, they will also seek to point out that they have personally been “punished for failure”, losing millions of pounds because of the meltdown in their banks’ share prices.

Sir Fred Goodwin and Sir Tom McKillop, respectively the former chief executive and chairman of RBS, will express their regrets at a meeting of the Treasury Select Committee. Their expressions of remorse will be echoed by Andy Hornby, the former chief executive of HBOS. and Lord Stevenson of Coddenham, its former chairman.

RBS is 68 per cent owned by the Government while the new Lloyds Banking Group, formed after the rescue of HBOS by Lloyds TSB, is now 43 per cent owned by taxpayers. All four of the bankers have received extensive coaching from public relations and communications experts before today’s meeting — in which MPs, led by John McFall, the committee chairman, are expected to question them aggressively about their role in the banking crisis.

Doug

Last September 18, the global economy was just hours from total collapse.

On Thursday, at about 11 o'clock in the morning, the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States to a tune of $550 billion being drawn out in a matter of an hour or two.

The Treasury opened up its window to help. They pumped $105 billion into the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks.

They decided to close the operation, close down the money accounts, and announce a guarantee of $250,000 per account so there wouldn't be further panic and there. And that's what actually happened.

If they had not done that their estimation was that by two o'clock that afternoon, $5.5 trillion would have been drawn out of the money market system of the United States, would have collapsed the entire economy of the United States, and within 24 hours the world economy would have collapsed.

http://www.dailykos.com/storyonly/2009/2/9/234340/6189/142/695504

Yay free market! Tongue out

 

It seems something similar happened in the UK on October 10:

City Minister Paul Myners disclosed that on Friday, October 10, the country was 'very close' to a complete banking collapse after 'major depositors' attempted to withdraw their money en masse.

The Mail on Sunday has been told that the Treasury was preparing for the banks to shut their doors to all customers, terminate electronic transfers and even block hole-in-the-wall cash withdrawals.

Only frantic behind-the-scenes efforts averted financial meltdown.

 http://www.dailymail.co.uk/news/article-1127278/Revealed-Day-banks-just-...

 

 

NorthReport

Geithner Says U.S. Financial System Badly Damaged, Needs Aid

http://www.bloomberg.com/apps/news?pid=20601087&sid=ar9DJY_76OuA&refer=home

Feb. 10 (Bloomberg) -- Treasury Secretary Timothy Geithner said the U.S. financial system is badly damaged and needs more government help to avoid a collapse that could devastate an already battered economy.

“The financial system is working against recovery, and that’s the dangerous dynamic we need to change,” Geithner said in remarks prepared for delivery today at a speech in Washington. “Without credit, economies cannot grow, and right now, critical parts of our financial system are damaged.”

In the speech, Geithner lays out the administration’s overhaul of the $700 billion bank rescue plan it inherited. He acknowledged that “the American people have lost faith in the leaders of our financial institutions” and are skeptical of the rescue spending so far.

The Obama administration’s strategy has three main components: more capital for banks, financing for as much as $1 trillion of consumer and business loans, and public financing for private investors willing to buy distressed assets, people familiar with the plan said.

NorthReport

I'm so glad we are tied into the US economy, after all the Dow Jones is only down over 300 basis points this morning in early trading - another buying opportunity! Laughing 

People have attacked Trudeau for his economic policies to try and diversify Canada's international trading partners. He knew what he was talking about.

Now thanks to Harper and Mulroney, etc. we can't even control our own destiny in Canada.

 

Canada's recovery hinges on U.S. stimulus, Carney says

http://business.theglobeandmail.com/servlet/story/RTGAM.20090210.wboc0210/BNStory/Business/home

Fidel

Jacob Richter wrote:
Fidel wrote:
As an unrepentant Marxist, I would prefer 100% control of money by democratically elected government. But I think even if we return to what existed in Canada from 1938 to 1974 with the feds creating about a quarter of the money supply as interest-free, debt-free money(government-created money as opposed to bank-created money) for special purposes, we could afford green infrastructure and vital program spending. Canadian William Krehm says there are municipalities across Canada that can not afford to repair aging infrastructure let alone build anew. And the experiment in privatization of vital infrastructure ie. water and sewers for example, has been a bust around the world where tried. 

But I also agree that if the feds simply taxed corporations and the wealthy at more progressive rates(OECD average to EU-15 average as a percentage of GDP) and actually enforced collection, then Ottawa and our various layers of sub government would have anywhere from $35B to $75 billion dollars(Mel Hurtig, The Vanishing Country: Is it too late to save Canada) more every year to finance public needs.

That reeks more of Lassalle than Marx to me.

Perhaps. What's clear about marauding capital today is that it's managed to divorce itself from productive labour economies and achieve unprecedented concentration of wealth in offshore accounts and privatized assets. Capitalists have enslaved whole nations of people with compounding interest on debt that we will never pay down with credit-based consumption economies fueled by more borrowing of money and credit as interest-owing debt. We're being prodded down the path of obligatory growth and indebtedness. 

Bank of Canada says to Canadians: ~Our planned and enforced impotence is still the way, so carry on with your pathetic struggle for democracy

Doug

Ha!

 

Fidel

Ya, back then they needed clean money to make a mandatory offering in the temple. And so poor people couldnt afford to worship.

It Shall Be a Jubilee Unto You

Quote:

Every complex society has a dilemma to solve—wealth and power tend to concentrate until the divide between haves and have-nots threaten the social fabric. Some Native American cultures have massive give-aways (potlatches) in which the giver is honored and all benefit from the largesse. The prophets of the Old Testament also cried out for redistribution ...

The revolutionary Israelite contribution to the tradition was its removal from the hands of rulers to become a sacred popular compact, to be preserved by the Israelites in memory of the fact that they had once been enslaved and must never again permit economic oppression to develop. The Israelites are portrayed as having made a covenant to protect the economically weak by holding the land as the Lord’s gift to support a free rural population: “Land must not be sold in perpetuity, for the land belongs to me, and you are only strangers and guests. You will allow a right of redemption on all your landed property,” and restore it to its customary cultivators every 50 years (Lev. 25:23-28). Israelite debt-slaves likewise were to go free periodically in the Jubilee Year, for they belonged ultimately to the Lord, not to any person (Lev. 25:54).

We need a new covenant. And we can be sure the Gracci bros would be pushed over a cliff by our senators today sooner than grant relief to debt slaves.

NorthReport

The markets have spoken - DJ down close to 400 points, TSX down over 200 points  Another buying opportunity - well eventually one of this situations will actually provide a buying opportunity, but just not sure what century that will be Laughing

 Markets plunge on Geithner plan

http://www.theglobeandmail.com/servlet/story/RTGAM.20090210.wUSbailout0210/BNStory/crashandrecovery/home

WASHINGTON — U.S. Treasury Secretary Timothy Geithner said Tuesday the new administration will wage an aggressive battle against the worst financial crisis in seven decades through programs designed to increase consumer lending and remove toxic assets from banks' balance sheets.

But analysts said they were disappointed by the lack of details in the plans, and investors appeared wary. The Dow Jones industrial average plunged about 330 points in afternoon trading as financial stocks led the market lower, reflecting Wall Street's concerns that the government's latest plans aren't enough to revive the banking industry.

The new efforts are part of the government's major overhaul of the widely criticized $700-billion (U.S.) financial rescue program.

The Federal Reserve said it would expand the size of a key lending program to as much as $1-trillion from $200-billion. The program, which has yet to begin operations, is designed to boost resources for consumer credit and small business loans.

Fidel

[url=http://www.twnside.org.sg/title/mic-cn.htm]The Global Financial Crisis[/url]

Chossudovsky (1997)

Quote:
Financial disarmament

Market forces left to their own devices lead to financial upheaval. Close scrutiny of the role of major speculative instruments (including option trading, short sales, non-trading derivatives, hedge funds, non-deliverable currency transactions, programme trading, index futures, etc.) should be undertaken.

A report published by the Bundesbank had already warned in 1993 that trade in derivatives could potentially 'trigger chain reactions and endanger the financial system as a whole' (Martin Khor, 'Baring and the Search for a Rogue Culprit', Third World Economics, no. 108, 1-15 March 1995, p. 10).

Regulation cannot be limited to the disclosure and reporting of trade in derivatives as recommended by the Bank for International Settlements (BIS); concrete measures applied globally and agreed by governments of both developed and developing countries are required to prohibit the use of specific speculative instruments. The risks associated with the electronic order-routing systems should also be the subject of careful examination. Alan Greenspan, Chairman of the Federal Reserve Board, admits that 'the efficiency of global financial markets, has the capability of transmitting mistakes at a far faster pace throughout the financial system in ways which were unknown a generation ago...'(BIS Review, no. 46, 1997). It is essential that the world community acknowledge an increasingly dangerous situation and adopt without delay a coherent structure of financial regulation (and inter-governmental cooperation). This is a broad and complex political issue requiring substantial changes in the balance of political power within national societies. Those in the seat of political authority often have a vested interest in upholding dominant financial interests. . .

A form of 'financial disarmament' is required directed towards curbing the tide of speculative activity. (The term 'financial disarmament' was coined by the Ecumenical Coalition for Social Justice; see 'The Power of Global Finance', Third World Resurgence, No. 56, March 1995, p.21.) In turn, 'financial disarmament' would require dismantling the entire structure of offshore banking including the movement of dirty and black money. The global economic system is affected not only by the forces of recession and financial restructuring but also by complex social, political and strategic factors. The evolution of international institutions (including the World Trade Organisation and the Bretton Woods twins) is also crucial inasmuch as these international bodies play an important role in overseeing and regulating macro-economic and trade policies invariably to the detriment of national societies.

The world community should recognise the failure of the dominant neoliberal system inherited from the Reagan-Thatcher era. Slashing budgets combined with lay-offs, corporate downsizing and deregulation cannot constitute 'the key to economic success'. These measures demobilise human resources and physical capital; they trigger bankruptcies and create mass unemployment. Ultimately, they stifle the growth of consumer spending: 'recession cannot be a solution to recession'.

Regulating the stock market per se is a necessary but not a sufficient condition. Financial markets will not survive under conditions of global economic depression. An expanding real economy will not occur unless there is a major revamping of economic institutions and a rethinking of macro-economic reform...

There are, however, no 'technical solutions' to this crisis. Meaningful reforms are not likely to be implemented without an enduring social struggle. What is at stake is the massive concentration of financial wealth and the command over real resources by a social minority. The latter also controls the 'creation of money' within the international banking system

NorthReport

When the right takes power they go for the jugular, but when others takes power they want bipartisanship. WTF!!! Doesn't seem like very good negortating strategy to me.

 

Slam the Door on Compromise

http://www.truthdig.com/report/item/20090209_eugene_robinson_bipartisanship_stimulus/

But in the Senate, the ad hoc “gang” of moderate Republicans (all three of them) and conservative Democrats cut those state funds to $39 billion. It’s wrong to see this as the normal give-and-take of legislative sausage-making, the usual trek down a well-worn path toward the golden compromise that everyone can live with. This is not, repeat not, a time for compromise. Meeting in the middle, which the Senate sees as its role in our democracy, renders the whole exercise potentially useless. If we don’t get enough money into the economy, and if we don’t do it soon, we risk wasting a king’s ransom on a stimulus that’s too puny to stimulate.

    This is not an issue where the answer is to be found in the “middle.” This isn’t a matter of left, right and center; it’s a matter of yes or no: Does the federal government try to get the economy moving again, or not? This will sound ridiculous, but the fact is that the details of Obama’s plan don’t matter that much. If anything, many economists believe, the government needs to spend even more than Obama proposes.

    Republicans are using this debate as a branding opportunity, positioning themselves as careful stewards of the public purse. This is absurd, given their record when they were in charge. It’s also cynical. They know that some kind of stimulus will get passed anyway. If it works, they’ll claim their principled intransigence made the plan better; if it doesn’t, they’ll say “I told you so.”

    Obama and the Democrats have public opinion on their side

 

Fidel

Wait a minute-wait a minute! We were better off with Soviet Communism!

Quote:

Thousands of demonstrators in Lithuania, Latvia and Bulgaria have attacked government buildings and called on their governments to resign as unemployment soars in Eastern Europe.

Living standards in these countries were always below those for many countries in the imperialist West. But during the existence of the USSR and the socialist bloc, workers in these countries enjoyed secure jobs and guaranteed access to education, health care and retirement benefits.

Police attack demonstrators in front of Latvia’s Parliament building in Riga Jan. 13. Experts predict a regional increase of 15 million to 18 million unemployed in the coming months, with no relief as jobs for immigrants disappear in Western Europe and the United States.

Neil Shearing at Capital Economics in London says that “Unemployment in the Baltic countries could spike to more than 15 percent. Industry has absolutely collapsed because of shrinking demand” in Western Europe and the U.S. He continues, “The recession will essentially engulf the entire economy of the region.” (Radio Free Europe/Radio Liberty, Jan. 29)

The world capitalist economy is collapsing. The rightist pro-capitalist regimes that have been ruling these countries since the early 1990s are imposing severe cuts on the remaining social safety-net programs. As a result, workers are rising up in protest.

In front of Lithuania’s Parliament in Vilnius Jan. 16. On Jan. 16, more than 10,000 people converged on Riga’s 13th-century cathedral and then marched on parliament to protest the Latvian government’s economic program. The Latvian central bank governor has pronounced the economy “clinically dead.” (The Age, Australia, Feb. 1)

NorthReport

This is the type of scenario which stupidly spending on military expenditures as a prime example is costing us:

 Pimco Says World Economic Crisis Faces ‘Second Wave’ (Update2)

http://www.bloomberg.com/apps/news?pid=20601087&sid=anA4PQ48RFhI&refer=home

M. Spector M. Spector's picture

Asia: The Coming Fury 

Quote:
As goods pile up in wharves from Bangkok to Shanghai, and workers are laid off in record numbers, people in East Asia are beginning to realize they aren't only experiencing an economic downturn but living through the end of an era....

The sudden end of the export era is going to have some ugly consequences. In the last three decades, rapid growth reduced the number living below the poverty line in many countries. In practically all countries, however, income and wealth inequality increased. But the expansion of consumer purchasing power took much of the edge off social conflicts. Now, with the era of growth coming to an end, increasing poverty amid great inequalities will be a combustible combination.

In China, about 20 million workers have lost their jobs in the last few months, many of them heading back to the countryside, where they will find little work. The authorities are rightly worried that what they label "mass group incidents," which have been increasing in the last decade, might spin out of control. With the safety valve of foreign demand for Indonesian and Filipino workers shut off, hundreds of thousands of workers are returning home to few jobs and dying farms. Suffering is likely to be accompanied by rising protest, as it already has in Vietnam, where strikes are spreading like wildfire. Korea, with its tradition of militant labor and peasant protest, is a ticking time bomb. Indeed, East Asia may be entering a period of radical protest and social revolution that went out of style when export-oriented industrialization became the fashion three decades ago.

[url=Walden">http://www.fpif.org/fpiftxt/5855][u]Walden Bello[/url]

NorthReport

 Is this what people think of Obama's stimulus package?

Gold hits seven-month high on safe-haven buying

http://www.marketwatch.com/news/story/gold-rises-near-930-safety/story.aspx?guid={604BA4C2-6E2A-4D9B-B021-8E9E996F7255}&dist=msr_2

Ward

there's an easy way to solve all this mess. The u.s. president simply has to announce a 100 percent tax on all profits and any personal income over 1000000 dollars . Then unveil a plan to lead the global community in establishing a lunar space station.

Fidel

I like that idea posted above where they taser all the banksters and send them to Gitmo where they cant do more harm. Or was it just to bullwhip them senseless? I forget which now. 

Doug

China’s exports fell by the most in almost 13 years as demand dried up in the U.S. and Europe and imports plunged by a record, signaling a deepening slump in the world’s third-biggest economy.

Outbound shipments declined 17.5 percent in January from a year earlier and imports fell 43.1 percent, the customs bureau said on its Web site today. Both numbers were worse than economists’ forecasts.

http://www.bloomberg.com/apps/news?pid=20601087&sid=axZwl6OyPaZY&refer=home

 

Ouch.

NorthReport

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NorthReport

Well if the market is going to jump up today should probably be the day, but it seems they are postponing the enevitable.

I wonder when the run on these banks is going to start, or maybe it already has.

Despite new bailout, banks likely need more money

http://www.google.com/hostednews/ap/article/ALeqM5hRdNEUn0EJdRzHIWuwdox6VWT7JAD96903800

In a report Monday, RBC Capital Markets predicted that up to 1,000 U.S. banks — or roughly one in eight — could fail over the next several years. That's more than three times RBC's earlier estimate.

NorthReport

Well China is now selling more new cars than the USA.

I wonder what the stats are on total used car sales compared to new car sales.

Car sales are expected to drop by $5 billion in Canada this year by some analysts, so manufacturers need to start reeling in some of those excessive prices on their vehicles.  Hyundai came up with a good marketing strategy to offer to take back new cars purchases from people who lose their jobs. Combined this perk with zero interest rates (not really true, just a little con job here by accountants), and slashed prices should start pushing Hyundai up percentage wise in total sales in Canada.

NorthReport

Dow Jones down again close to 250 point drop so far today on Obama's stimuluas package. Certainly not a sign of confidence so far. 

 

http://business.theglobeandmail.com/

NorthReport

China may be recovering, which is one of the four countries apparently planet earth's econony depends on now. The other three being Russia, Brazil, and India.

Doug

In 2008's fourth quarter, consumer spending on food fell at an inflation-adjusted 3.7% from the third quarter, according to data from the Commerce Department's Bureau of Economic Analysis. That is the steepest decline in the 62 years the government has compiled the figure. The report is based on receipts from a sampling of food-oriented businesses across the country.

The big drop likely comes from two things, said Joseph Carson, an economist at AllianceBernstein who worked at the Commerce Department in the 1970s. First, consumers have been trading down to lower-priced items. Second, he thinks many households dug into their pantries for staples rather than going to the store, a trend that can't continue indefinitely. "You can't contract at this rate for long," he said. "It's just shocking."

http://online.wsj.com/article/SB123448606475780133.html

NorthReport

So this is how it works.

Paulson May Have Made $67 Million in Lloyds Plunge  

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDcOB7zgzB58&refer=home

 

Paulson & Co., the hedge fund run by billionaire John Paulson, may have made as much as $67 million in 25 minutes today as Lloyds Banking Group Plc lost about 5.9 billion pounds ($8.5 billion) in market value.

Lloyds fell the most in 20 years after saying HBOS Plc, the U.K. lender it took over last month, would report a 10 billion- pound pretax loss. The shares plunged as much as 43 percent in less than 25 minutes of London trading.

Paulson, who made billions from betting against the subprime mortgage market, held a Lloyds short position representing 0.79 percent of the bank, or 129.3 million shares, as of Jan. 20, according to a regulatory filing. DataExplorers.com, which tracks share borrowing from London, said 1.1 percent of the stock was on loan as of Feb. 11, the most recent data available. That’s down from as much as 8 percent six months ago and suggests Paulson held the bulk of the remaining short position.

“It wasn’t really shorted at all before this share drop,” Julian Pittam, a managing director at DataExplorers.com, said in an telephone interview from London. “There’s little upside and lots of downside in banks when there’s this much political rhetoric and volatility going on.”

Armel Leslie, a spokesman for the $30 billion New York-based hedge fund, declined to comment. There’s no indication that Paulson closed his short position, and there won’t be until a subsequent filing.

Paulson’s Credit Opportunities Fund soared almost sixfold in 2007 on bets that subprime mortgages would plummet. Last year, his flagship fund returned 37 percent, compared with a loss of 19 percent for hedge funds on average.

Shares Tumble

Lloyds closed down 32 percent at 61.4 pence. Paulson’s short position would have netted a gain of $54 million, based on the closing prices of the past two days.

The Financial Services Authority, the U.K. market regulator, lifted a short-selling ban on financial companies on Jan. 16. The restrictions were imposed in September as politicians and investors blamed hedge funds for destabilizing markets.

 

NorthReport

So this is how it works.

Paulson May Have Made $67 Million in Lloyds Plunge  

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDcOB7zgzB58&refer=home

 

Paulson & Co., the hedge fund run by billionaire John Paulson, may have made as much as $67 million in 25 minutes today as Lloyds Banking Group Plc lost about 5.9 billion pounds ($8.5 billion) in market value.

Lloyds fell the most in 20 years after saying HBOS Plc, the U.K. lender it took over last month, would report a 10 billion- pound pretax loss. The shares plunged as much as 43 percent in less than 25 minutes of London trading.

Paulson, who made billions from betting against the subprime mortgage market, held a Lloyds short position representing 0.79 percent of the bank, or 129.3 million shares, as of Jan. 20, according to a regulatory filing. DataExplorers.com, which tracks share borrowing from London, said 1.1 percent of the stock was on loan as of Feb. 11, the most recent data available. That’s down from as much as 8 percent six months ago and suggests Paulson held the bulk of the remaining short position.

“It wasn’t really shorted at all before this share drop,” Julian Pittam, a managing director at DataExplorers.com, said in an telephone interview from London. “There’s little upside and lots of downside in banks when there’s this much political rhetoric and volatility going on.”

Armel Leslie, a spokesman for the $30 billion New York-based hedge fund, declined to comment. There’s no indication that Paulson closed his short position, and there won’t be until a subsequent filing.

Paulson’s Credit Opportunities Fund soared almost sixfold in 2007 on bets that subprime mortgages would plummet. Last year, his flagship fund returned 37 percent, compared with a loss of 19 percent for hedge funds on average.

Shares Tumble

Lloyds closed down 32 percent at 61.4 pence. Paulson’s short position would have netted a gain of $54 million, based on the closing prices of the past two days.

The Financial Services Authority, the U.K. market regulator, lifted a short-selling ban on financial companies on Jan. 16. The restrictions were imposed in September as politicians and investors blamed hedge funds for destabilizing markets.

 

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