It is impossible to quantify how many affluent parents have trimmed allowances in recent months — or how many of their offspring, in turn, have sought either formal employment or odd jobs. But interviews with dozens of teenagers, parents, educators and employers suggest that many youngsters from well-to-do families seem to have found a new work ethic as the economic crisis that has jeopardized their parents’ jobs and investments has also led to less spending money for Saturday night movies or binges at Abercrombie & Fitch.
Teenage participation in the national labor force has fallen steadily since 1979, when 49 percent of all 16- and 17-year-olds had some kind of work; last year, the figure was 30 percent. A recent study by the Center for Labor Market Studies at Northeastern University showed that teenage employment from 2005 to 2007 rose with household incomes that go up to $150,000 a year: 14 percent of teenagers from families earning less than $20,000 a year work, as do 26 percent of those whose families make $60,000, 32 percent of those earning $80,000 and 33 percent of those between $120,000 and $150,000.
Saturday, December 13, 2008
In Poland, Style Comes Used and by the Pound
this is not a tale of people buying used clothes in the midst of recessionary gloom. The global economic crisis has yet to hit a majority of Poles. Thrift stores here have become impromptu laboratories of the changing mores and attitudes in a country adjusting to newfound wealth. Young Poles here in the capital are now confident enough in their ability to buy new clothes that they at last have taken to wearing old ones. Those eking out a living on fixed incomes, especially retirees, still lack the means to do otherwise.And so the hip and the strapped meet at secondhand stores like Tomitex, on Nowowiejska Street in downtown Warsaw.
The pronounced stigma of buying used clothes in a poor country was once a powerful deterrent for shopping — or at least admitting to shopping — at secondhand stores, known here by the derogative colloquialism lumpex, which translates as something like bum export. That stigma has been replaced among the young by a playful attitude toward vintage clothing and bargain-hunting that would not be out of place among their contemporaries in London or New York. It is all part of the ferment of a capital rife with traffic jams as the new and used imported cars have outstripped the capacity of the roads to carry them all. One boutique for the latest new styles, aptly named Luxury & Liberty, has opened in the former headquarters of the governing Polish United Workers’ Party, which also previously housed the Warsaw Stock Exchange since the end of Communism. Poles, who under Communism had few choices for clothes, now have the entire spectrum, but the full breadth is only available to a few. The gulf between the haves and have-nots is wide, and the two sides are increasingly bumping against each other quite literally.
The pronounced stigma of buying used clothes in a poor country was once a powerful deterrent for shopping — or at least admitting to shopping — at secondhand stores, known here by the derogative colloquialism lumpex, which translates as something like bum export. That stigma has been replaced among the young by a playful attitude toward vintage clothing and bargain-hunting that would not be out of place among their contemporaries in London or New York. It is all part of the ferment of a capital rife with traffic jams as the new and used imported cars have outstripped the capacity of the roads to carry them all. One boutique for the latest new styles, aptly named Luxury & Liberty, has opened in the former headquarters of the governing Polish United Workers’ Party, which also previously housed the Warsaw Stock Exchange since the end of Communism. Poles, who under Communism had few choices for clothes, now have the entire spectrum, but the full breadth is only available to a few. The gulf between the haves and have-nots is wide, and the two sides are increasingly bumping against each other quite literally.
Foes warned off 'testing' Obama
The US Defense Secretary has warned opponents of the US against trying to "test" Barack Obama with a crisis in the early days of his presidency stating that "Anyone who thought that the upcoming months might present opportunities to test the new administration would be sorely mistaken." And "President Obama and his national security team, myself included, will be ready to defend the interests of the United States and our friends and allies from the moment he takes office on January 20th."
More dead in Sudan
Over 50 people were killed in tribal clashes in South Darfur on Friday. Combatants from the African Fallata trib attacked their rival Arab Habaniya tribe. Armed cattle rustlers, from the two tribes, wage regular against each other. Six policemen, including an officer, were among the killed people. They were attempting to stop the tribal conflict. Three of the attackers’ vehicles were destroyed.
Fears of New Ethnic Conflict in Bosnia
SARAJEVO, Bosnia and Herzegovina — Thirteen years after the United States brokered the Dayton peace agreement to end the ferocious ethnic war in the former Yugoslavia, fears are mounting that Bosnia, poor and divided, is again teetering toward crisis. On the surface, this haunted capital, its ancient mosques and Orthodox churches still pocked by mortar fire, appears to be enjoying a renaissance. Young professionals throng to stylish cafes and gleaming new shopping malls while the muezzin heralds the morning prayer. The ghosts of Srebrenica linger — recalling the worst massacre in Europe since World War II — but Sarajevans prefer to talk about President-elect Barack Obama or the global financial crisis.Yet for the first time in years, talk of the prospect of another war is creeping into conversations across the ethnic divide in Bosnia, a former Yugoslav republic that the Dayton agreement divided into two entities, a Muslim-Croat Federation and a Serbian Republic. The power-sharing agreement between former foes has always been tense. Now, however, the uneasy peace has been complicated by Kosovo’s declaration of independence from Serbia in February, which many here worry could prompt the Serbian Republic to follow suit, tipping the region into a conflict that could fast turn deadly.
“It’s time to pay attention to Bosnia again, if we don’t want things to get nasty very quickly,” Richard C. Holbrooke, the Clinton administration official who brokered the Dayton accord, and Paddy Ashdown, formerly the West’s top diplomat in Bosnia, warned recently in an open letter published in several newspapers. “By now, the entire world knows the price of that.”
Sketching a worst-case example, Srecko Latal, a Bosnia specialist at the Balkan Investigative Reporting Network in Sarajevo, warned that if the Serbian Republic declared independence, Croatia would respond by sending in troops, while the Bosnian Muslims would take up arms. If Banja Luka, the capital of the Serbian Republic, were to fall, he continued, Serbia would be provoked into entering the fray, leading to the prospect of a regional war.
For the country to progress, leaders on all sides say, the structure established by the Dayton accord must be overhauled. The country’s two entities have their own Parliaments, and there are 10 regional authorities, each with its own police force and education, health and judicial authorities. The result is a byzantine system of government directed by 160 ministers, a structure that absorbs 50 percent of Bosnia’s gross domestic product of $15 billion, according to the World Bank. While untangling that bureaucracy would be difficult, persuading the country’s leaders to put aside their fundamental differences might be harder.
“It’s time to pay attention to Bosnia again, if we don’t want things to get nasty very quickly,” Richard C. Holbrooke, the Clinton administration official who brokered the Dayton accord, and Paddy Ashdown, formerly the West’s top diplomat in Bosnia, warned recently in an open letter published in several newspapers. “By now, the entire world knows the price of that.”
Sketching a worst-case example, Srecko Latal, a Bosnia specialist at the Balkan Investigative Reporting Network in Sarajevo, warned that if the Serbian Republic declared independence, Croatia would respond by sending in troops, while the Bosnian Muslims would take up arms. If Banja Luka, the capital of the Serbian Republic, were to fall, he continued, Serbia would be provoked into entering the fray, leading to the prospect of a regional war.
For the country to progress, leaders on all sides say, the structure established by the Dayton accord must be overhauled. The country’s two entities have their own Parliaments, and there are 10 regional authorities, each with its own police force and education, health and judicial authorities. The result is a byzantine system of government directed by 160 ministers, a structure that absorbs 50 percent of Bosnia’s gross domestic product of $15 billion, according to the World Bank. While untangling that bureaucracy would be difficult, persuading the country’s leaders to put aside their fundamental differences might be harder.
Failed States, Cholera, and ‘Preventive Action’
One discussion centered on creating an international mechanism for humanitarian intervention when a malfunctioning nation’s leadership fails to address a building crisis like the cholera outbreak in Zimbabwe, or when it consciously abuses its people by conducting or abetting mass killings. There was no clear path to establishing such a protocol, although those at the meeting appeared to agree that the United Nations Security Council, in its current form at least, would never be the vehicle given the veto power of states dead-set against anything resembling outside interference in internal affairs.
But when the world watches avoidable disasters unfolding in plain sight, what should be done? With global media and Web connectedness, everyone — to some extent — bears witness to starvation or genocide or the like. Awareness comes with responsibility.
Still, in the long history of nation states, and given human beings’ persistent tribal tendencies, when does an outside institution, however well intentioned, have the right to intervene in another country? Who decides which interventions are moral and “right,” and which are not justified? There is a fundamental tension with us, still, between the rights of individuals (or individual states) and of the larger community (or community of nations). This was at the heart of my recent post on the enduring dream of global-scale thinking and action, with extends from Darwin through Havel and on through Bill and Melinda Gates’ view that all lives have equal value.
How this plays out will certainly help determine how many bumps there are in the road toward 9 billion people seeking a decent life. At the meeting, former Secretary of State Madeleine K. Albright proposed an intermediate step through which rich countries could help speed the progress of poorer ones, creating new ways citizens can serve overseas to help foster freedom, economic development, and improve lives.
But when the world watches avoidable disasters unfolding in plain sight, what should be done? With global media and Web connectedness, everyone — to some extent — bears witness to starvation or genocide or the like. Awareness comes with responsibility.
Still, in the long history of nation states, and given human beings’ persistent tribal tendencies, when does an outside institution, however well intentioned, have the right to intervene in another country? Who decides which interventions are moral and “right,” and which are not justified? There is a fundamental tension with us, still, between the rights of individuals (or individual states) and of the larger community (or community of nations). This was at the heart of my recent post on the enduring dream of global-scale thinking and action, with extends from Darwin through Havel and on through Bill and Melinda Gates’ view that all lives have equal value.
How this plays out will certainly help determine how many bumps there are in the road toward 9 billion people seeking a decent life. At the meeting, former Secretary of State Madeleine K. Albright proposed an intermediate step through which rich countries could help speed the progress of poorer ones, creating new ways citizens can serve overseas to help foster freedom, economic development, and improve lives.
Indian navy 'captures 23 pirates'
A navy spokesman said the Indian navy had responded to a mayday call from MV Gibe, flying under the Ethiopian flag. and has arrested 23 Somali and Yemeni pirates who tried to storm a ship in the Gulf of Aden. As a precaution several countries have warships patrolling the gulf amid growing international concern about piracy. A cache of arms and equipment is reported to have been confiscated, including seven AK-47 assault rifles, three machine guns, and a rocket-propelled grenade launcher.
Last month, India's navy thought it had sunk a pirate "mother vessel" off Somalia but it later emerged that the vessel was actually a Thai fishing trawler that had been seized by pirates off Yemen.
US Defence Secretary Robert Gates said better intelligence was needed for a land attack on pirate bases to be considered, and also called for shipping companies to do more to protect their vessels travelling through the Arabian Sean and Indian Ocean, speaking at a security conference in Bahrain.
UK caused cholera, says Zimbabwe
An ally of Zimbabwean President Robert Mugabe has said the cholera outbreak in Zimbabwe which has left hundreds dead was caused by the UK. Even though on Thursday, Mr Mugabe said the spread of cholera had been halted, aid workers warned that the situation was worsening and the outbreak could last for months.
Report Spotlights Iraq Rebuilding Blunders
BAGHDAD — An unpublished 513-page federal history of the American-led reconstruction of Iraq depicts an effort crippled before the invasion by Pentagon planners who were hostile to the idea of rebuilding a foreign country, and then molded into a $100 billion failure by bureaucratic turf wars, spiraling violence and ignorance of the basic elements of Iraqi society and infrastructure.The history, the first official account of its kind, is circulating in draft form here and in Washington among a tight circle of technical reviewers, policy experts and senior officials. It also concludes that when the reconstruction began to lag — particularly in the critical area of rebuilding the Iraqi police and army — the Pentagon simply put out inflated measures of progress to cover up the failures. In one passage, for example, former Secretary of State Colin L. Powell is quoted as saying that in the months after the 2003 invasion, the Defense Department “kept inventing numbers of Iraqi security forces — the number would jump 20,000 a week! ‘We now have 80,000, we now have 100,000, we now have 120,000.’ ”
Among the overarching conclusions of the history is that five years after embarking on its largest foreign reconstruction project since the Marshall Plan in Europe after World War II, the United States government has in place neither the policies and technical capacity nor the organizational structure that would be needed to undertake such a program on anything approaching this scale.The bitterest message of all for the reconstruction program may be the way the history ends. The hard figures on basic services and industrial production compiled for the report reveal that for all the money spent and promises made, the rebuilding effort never did much more than restore what was destroyed during the invasion and the convulsive looting that followed.
By mid-2008, the history says, $117 billion had been spent on the reconstruction of Iraq, including some $50 billion in United States taxpayer money.When the Office of Management and Budget balked at the American occupation authority’s abrupt request for about $20 billion in new reconstruction money in August 2003, a veteran Republican lobbyist working for the authority made a bluntly partisan appeal to Joshua B. Bolten, then the O.M.B. director and now the White House chief of staff. “To delay getting our funds would be a political disaster for the President,” wrote the lobbyist, Tom C. Korologos. “His election will hang for a large part on show of progress in Iraq and without the funding this year, progress will grind to a halt.” With administration backing, Congress allocated the money later that year. In an illustration of the hasty and haphazard planning, a civilian official at the United States Agency for International Development was at one point given four hours to determine how many miles of Iraqi roads would need to be reopened and repaired. The official searched through the agency’s reference library, and his estimate went directly into a master plan. Whatever the quality of the agency’s plan, it eventually began running what amounted to a parallel reconstruction effort in the provinces that had little relation with the rest of the American effort.
The United States could soon have reason to consult this cautionary tale of deception, waste and poor planning, as troop levels and reconstruction efforts in Afghanistan are likely to be stepped up under the new administration. The incoming Obama administration’s rebuilding experts are expected to focus on smaller-scale projects and emphasize political and economic reform. Still, such programs do not address one of the history’s main contentions: that the reconstruction effort has failed because no single agency in the United States government has responsibility for the job.
Among the overarching conclusions of the history is that five years after embarking on its largest foreign reconstruction project since the Marshall Plan in Europe after World War II, the United States government has in place neither the policies and technical capacity nor the organizational structure that would be needed to undertake such a program on anything approaching this scale.The bitterest message of all for the reconstruction program may be the way the history ends. The hard figures on basic services and industrial production compiled for the report reveal that for all the money spent and promises made, the rebuilding effort never did much more than restore what was destroyed during the invasion and the convulsive looting that followed.
By mid-2008, the history says, $117 billion had been spent on the reconstruction of Iraq, including some $50 billion in United States taxpayer money.When the Office of Management and Budget balked at the American occupation authority’s abrupt request for about $20 billion in new reconstruction money in August 2003, a veteran Republican lobbyist working for the authority made a bluntly partisan appeal to Joshua B. Bolten, then the O.M.B. director and now the White House chief of staff. “To delay getting our funds would be a political disaster for the President,” wrote the lobbyist, Tom C. Korologos. “His election will hang for a large part on show of progress in Iraq and without the funding this year, progress will grind to a halt.” With administration backing, Congress allocated the money later that year. In an illustration of the hasty and haphazard planning, a civilian official at the United States Agency for International Development was at one point given four hours to determine how many miles of Iraqi roads would need to be reopened and repaired. The official searched through the agency’s reference library, and his estimate went directly into a master plan. Whatever the quality of the agency’s plan, it eventually began running what amounted to a parallel reconstruction effort in the provinces that had little relation with the rest of the American effort.
The United States could soon have reason to consult this cautionary tale of deception, waste and poor planning, as troop levels and reconstruction efforts in Afghanistan are likely to be stepped up under the new administration. The incoming Obama administration’s rebuilding experts are expected to focus on smaller-scale projects and emphasize political and economic reform. Still, such programs do not address one of the history’s main contentions: that the reconstruction effort has failed because no single agency in the United States government has responsibility for the job.
Survey Asks: Internet Access or Sex?
Intel came up with a novel way to show how important the Internet and computing have become in the lives of Americans. In conjunction with Harris Interactive, the company conducted a survey of adults in the United States under the prosaic-enough banner “Internet Reliance in Today’s Economy.”
But the first “key finding” from the study is a little more attention-grabbing. According to the study, 46 percent of women and 30 percent of men would opt to forgo sex for two weeks instead of giving up access to their precious Internet for the same period.
More broadly, those surveyed said access to the Internet ranked highest among the discretionary spending items they could not live without. Cable television, dining out, shopping for clothes and gym memberships followed in declining importance.
But the first “key finding” from the study is a little more attention-grabbing. According to the study, 46 percent of women and 30 percent of men would opt to forgo sex for two weeks instead of giving up access to their precious Internet for the same period.
More broadly, those surveyed said access to the Internet ranked highest among the discretionary spending items they could not live without. Cable television, dining out, shopping for clothes and gym memberships followed in declining importance.
White House removes protections for endangered species
With just over a month remaining in office, the Bush administration loosened federal protection of plant and animal species threatened with extinction.On Thursday, the Interior Department announced a change to Section 7 of the Endangered Species Act, which required federal agencies to consult with scientists at the Fish and Wildlife Service or the National Marine Fisheries Service to determine whether a project is likely to affect any listed species.Under the new rule, federal agencies such as the Federal Highway Administration can in many cases simply check with their own personnel to determine if their activities will harm any of the 1,247 animal and 747plant species listed as endangered or threatened.So under the new rules, federal agencies that are undertaking a project need not check with Fish and Wildlife or National Marine Fisheries under these circumstances:
Where the action has no effect on a listed species or critical habitat, or
Where the action is wholly beneficial, or
Where the effects of the action can not be measured or detected in a manner that permits meaningful evaluation using the best available science, or
Where the effects of the action are the result of global processes and can not be reliably predicted or measured on the scale of species current range, or would result in an insignificant impact to a listed species, or are such that the potential risk of harm to a species is remote.
“The rule strengthens the regulations so the government can focus on protecting endangered species as it strives to rebuild the American economy,” said Secretary of the Interior Dirk Kempthorne.
Where the action has no effect on a listed species or critical habitat, or
Where the action is wholly beneficial, or
Where the effects of the action can not be measured or detected in a manner that permits meaningful evaluation using the best available science, or
Where the effects of the action are the result of global processes and can not be reliably predicted or measured on the scale of species current range, or would result in an insignificant impact to a listed species, or are such that the potential risk of harm to a species is remote.
“The rule strengthens the regulations so the government can focus on protecting endangered species as it strives to rebuild the American economy,” said Secretary of the Interior Dirk Kempthorne.
White House assessing options to aid carmakers
The White House and congressional Democrats had agreed on a $14 billion measure that would have extended short-term financing to the industry and set up a "car czar" to make sure the money was used to turn the Big Three into competitive companies. The legislation, however, died when Senate Republicans demanded upfront pay and benefit concessions from the United Auto Workers that union officials rejected.
The failure on Capitol Hill prompted urgent requests for White House intervention. Administration officials were dispatched to weigh the pros and cons of a range of other bailout actions. White House and Treasury Department officials are keeping details of their discussions closely held for fear of affecting markets, but financial experts have zeroed in on a few likely avenues for helping the auto industry and its 3 million workers.
One way is to tap directly into the $700 billion financial rescue bailout fund to provide loans to the carmakers. Another is to use part of the bailout fund as a kind of collateral for emergency loans the automakers could get from the Federal Reserve. The administration also could do nothing, leaving open the possibility that one or more of the automakers could go bankrupt. It also could wait for the new Congress, flush with more Democratic votes when it returns in early January, to try again to get bailout legislation passed.
A second possibility offers Bush some political cover. Treasury Secretary Henry Paulson could use part, but not all, of the $15 billion left of the first $350 billion allocated to the TARP to back up loans the automakers could get from the Fed's emergency lending program. That would leave some money to help troubled financial institutions, which Bush has long argued should be the first in line for TARP money.
Federal Reserve Chairman Ben Bernanke has said he's reluctant to use the Fed's emergency lending program for the automakers. Decisions about giving financial aid to Detroit are best left to Congress, he says.
The failure on Capitol Hill prompted urgent requests for White House intervention. Administration officials were dispatched to weigh the pros and cons of a range of other bailout actions. White House and Treasury Department officials are keeping details of their discussions closely held for fear of affecting markets, but financial experts have zeroed in on a few likely avenues for helping the auto industry and its 3 million workers.
One way is to tap directly into the $700 billion financial rescue bailout fund to provide loans to the carmakers. Another is to use part of the bailout fund as a kind of collateral for emergency loans the automakers could get from the Federal Reserve. The administration also could do nothing, leaving open the possibility that one or more of the automakers could go bankrupt. It also could wait for the new Congress, flush with more Democratic votes when it returns in early January, to try again to get bailout legislation passed.
A second possibility offers Bush some political cover. Treasury Secretary Henry Paulson could use part, but not all, of the $15 billion left of the first $350 billion allocated to the TARP to back up loans the automakers could get from the Fed's emergency lending program. That would leave some money to help troubled financial institutions, which Bush has long argued should be the first in line for TARP money.
Federal Reserve Chairman Ben Bernanke has said he's reluctant to use the Fed's emergency lending program for the automakers. Decisions about giving financial aid to Detroit are best left to Congress, he says.
Sarkozy scorned for Dalai meeting
Chinese state media (which really means the Chinese government) has launched a co-ordinated attack on French President Nicolas Sarkozy for meeting Tibet's spiritual leader, the Dalai Lama.
One newspaper said he had shown the "wild ambition of a king of the world". Another accused him of his duplicity.
Meanwhile in France, websites have been hacked and material hostile to the country and its president has appeared a lot on Chinese internet forums.
Mr Sarkozy countered that he would not compromise his "European values".
He met the 73-year-old Tibetan leader at a gathering of Nobel Peace Prize winners in Poland last Saturday, despite Chinese protests.
Beijing accuses the Dalai Lama of leading a movement for Tibet's full independence from China.
The spiritual leader said last week he was seeking autonomy within China, rather than independence from it, but he also urged the European Union - China's biggest trading partner - to stand up to Beijing on human rights.
Man Sarkozy has been pissing everyone off recently. This time though I find it weird Beijing is so pissed Sarkozy saw the Dalai Lama. I don't remember them being so mad when he has seen almost every dignitary in the past half century. If China got as mad every time as they did (or pretended to) with Sarkozy they wouldn't have anyone left in the world to get mad at.
Gates in Iraq to discuss troops' status
US Defense Secretary Robert Gates is on an unannounced visit to Iraq, where he is expected to meet with senior military commanders. Gates, who was recently reinstated as the secretary of defense by US President-elect Barack Obama, arrived at the Balad airbase in northern Baghdad on Saturday to discuss the drawdown of US troops. The visit comes as the US prepares to cut its troops levels and begin to pull forces out of Iraqi cities, stationing its forces in military bases and camps, In accordance with a security pact signed between Washington and Baghdad. The pact mandates that US combat forces withdraw from Iraqi cities by next June and from the whole country by the end of 2011.
Earlier in the day Iraq's Prime Minister Nouri al-Maliki dismissed a suggestion by government spokesman Ali al-Dabbagh that US troops may need to stay in the country for 10 years despite the two sides' agreement. "What was announced about the Iraqi forces needing 10 years in order to be ready is only his [Dabbagh's] personal point of view and it doesn't represent the opinion of the Iraqi government," Maliki said, AP reported. Before flying to Baghdad from the Bahraini capital of Manama, Gates had urged Arab nations to help fight the spread of violent extremism by funding and training Afghan security forces and reaching out more aggressively to the fledgling Afghan government.
He also urged Persian Gulf Arab leaders to set aside old hostilities inflamed in the Saddam era and forge diplomatic ties with Iraq.
how do you get over Recent Historical tensions like this one and help a Iraq and Afghanistan, esp. when your country is financially unstable? More financially solvent and wealthier countries are pulling out and then telling the Gulf to 'help their Arab brothers". This doesnt seem completely right to me....
Earlier in the day Iraq's Prime Minister Nouri al-Maliki dismissed a suggestion by government spokesman Ali al-Dabbagh that US troops may need to stay in the country for 10 years despite the two sides' agreement. "What was announced about the Iraqi forces needing 10 years in order to be ready is only his [Dabbagh's] personal point of view and it doesn't represent the opinion of the Iraqi government," Maliki said, AP reported. Before flying to Baghdad from the Bahraini capital of Manama, Gates had urged Arab nations to help fight the spread of violent extremism by funding and training Afghan security forces and reaching out more aggressively to the fledgling Afghan government.
He also urged Persian Gulf Arab leaders to set aside old hostilities inflamed in the Saddam era and forge diplomatic ties with Iraq.
how do you get over Recent Historical tensions like this one and help a Iraq and Afghanistan, esp. when your country is financially unstable? More financially solvent and wealthier countries are pulling out and then telling the Gulf to 'help their Arab brothers". This doesnt seem completely right to me....
Actor Hugh Jackman to host Oscars
A little mind numbing news to clear everybody's heads of all the intellectual stimulation.
Organizers have announced Australian actor Hugh Jackman will be the host of the 2009 Academy Awards.
Although the 40-year-old star has not hosted the event before, he has presented the award for best original score in 2007.
Best known for playing Wolverine in the X-Men films, the actor can currently be seen in Baz Luhrmann's epic Australia.
His involvement marks a change of pace for the ceremony, which in recent years has employed a comedian or comic actor as master of ceremonies including last years host John Stewart who is the star of the satirical who The Daily Show.
There ya go. Does your brain feel better now?
Mumbai suspect requests legal aid from Pakistan
The only surviving suspect in last month's attacks in Mumbai has written a letter to the Pakistan High Commission, or embassy, seeking legal aid, CNN's sister network in India reported Saturday, quoting a Mumbai police official.
Investigators said that Mohammad Ajmal Kasab is from Faridkot village in the Okara district of Pakistan's Punjab province and that the other nine attackers also are from Pakistan. Pakistani officials have denied that assertion, blaming instead "stateless actors."
Rakesh Maria, Mumbai's joint police commissioner of crime, said Saturday that Kasab's three-page letter was written in Urdu. In the letter, Kasab confesses his role in the attacks, CNN-IBN said.
The letter is to be delivered to the commission's New Delhi, India, office, possibly Monday, the network reported.
Investigators said that Mohammad Ajmal Kasab is from Faridkot village in the Okara district of Pakistan's Punjab province and that the other nine attackers also are from Pakistan. Pakistani officials have denied that assertion, blaming instead "stateless actors."
Rakesh Maria, Mumbai's joint police commissioner of crime, said Saturday that Kasab's three-page letter was written in Urdu. In the letter, Kasab confesses his role in the attacks, CNN-IBN said.
The letter is to be delivered to the commission's New Delhi, India, office, possibly Monday, the network reported.
Iceland: Cracks in the crust
the collapse of the krona and nationalisation of the country’s three largest banks in early October, which forced the country to secure help from the IMF, have left Iceland’s economic miracle and Mr Oddsson’s reputation in tatters. For weeks, protesters have gathered in Reykjavik’s main square each Saturday calling for his removal from office. On the chilly afternoon of December 1st a few hundred of them, shouting “David out, David out”, gathered at the Arnarson statue and marched down the hill to the central bank. In the lobby, they were met by riot police, who eventually defused the situation.
Almost no other private creditor is lending them anything; Iceland has turned instead to the IMF. In November the fund agreed to a $2.1 billion two-year standby programme, which was supplemented by promises from Nordic countries and Poland, as well as Britain, the Netherlands and Germany. The package will be worth $10.2 billion in total—more than half of Iceland’s GDP.
The IMF calls the collapse of the banks the biggest banking failure in history relative to the size of an economy. In 2007 Iceland’s three main banks made loans equivalent to about nine times the size of the booming economy, up from about 200% of GDP after privatisation in 2003 (see chart 1). Only about one-fifth of those loans were in kronur; interest rates on these were punitively high. Ordinary citizens instead borrowed from their banks in cheaper currencies such as yen and Swiss francs to buy even the most modest homes and cars.
But after the banks collapsed in early October, the currency slumped and domestic interest rates rose sharply (see chart 2). Exchange controls imposed in the heat of the crisis have severely restricted access to hard currency. Initially, there were fears for the payments system. But after an initial panic, credit and debit cards appear to work normally again; Reykjavik’s stores are filled with Christmas shoppers, and restaurants still serve up expensive delicacies such as grilled whale.
But people are mostly living on borrowed time as well as borrowed money. The IMF programme forecasts that the economy will contract by 9.6% next year. Many workers have been laid off but, thanks to Iceland’s labour laws, they have three months’ notice, so the impact is not yet being fully felt. Many young Icelanders, who have never known unemployment, are expected to lose their jobs as businesses shut down. Vilhjalmur Egilsson, head of the Confederation of Icelandic Employers, the main business organisation, says that “corporate Iceland is technically bankrupt” because of its foreign debts. It is unable to refinance loans because the new capital controls mean all credit to the country has dried up.
The scale of what confronts Ms Hjaltested and other Icelanders is only just becoming clear. According to the IMF, the failure of the banks may cost taxpayers more than 80% of GDP. Relative to the economy’s size, that would be about 20 times what the Swedish government paid to rescue its banks in the early 1990s. It would be several times the cost of Japan’s banking crisis a decade ago.
Almost no other private creditor is lending them anything; Iceland has turned instead to the IMF. In November the fund agreed to a $2.1 billion two-year standby programme, which was supplemented by promises from Nordic countries and Poland, as well as Britain, the Netherlands and Germany. The package will be worth $10.2 billion in total—more than half of Iceland’s GDP.
The IMF calls the collapse of the banks the biggest banking failure in history relative to the size of an economy. In 2007 Iceland’s three main banks made loans equivalent to about nine times the size of the booming economy, up from about 200% of GDP after privatisation in 2003 (see chart 1). Only about one-fifth of those loans were in kronur; interest rates on these were punitively high. Ordinary citizens instead borrowed from their banks in cheaper currencies such as yen and Swiss francs to buy even the most modest homes and cars.
But after the banks collapsed in early October, the currency slumped and domestic interest rates rose sharply (see chart 2). Exchange controls imposed in the heat of the crisis have severely restricted access to hard currency. Initially, there were fears for the payments system. But after an initial panic, credit and debit cards appear to work normally again; Reykjavik’s stores are filled with Christmas shoppers, and restaurants still serve up expensive delicacies such as grilled whale.
But people are mostly living on borrowed time as well as borrowed money. The IMF programme forecasts that the economy will contract by 9.6% next year. Many workers have been laid off but, thanks to Iceland’s labour laws, they have three months’ notice, so the impact is not yet being fully felt. Many young Icelanders, who have never known unemployment, are expected to lose their jobs as businesses shut down. Vilhjalmur Egilsson, head of the Confederation of Icelandic Employers, the main business organisation, says that “corporate Iceland is technically bankrupt” because of its foreign debts. It is unable to refinance loans because the new capital controls mean all credit to the country has dried up.
The scale of what confronts Ms Hjaltested and other Icelanders is only just becoming clear. According to the IMF, the failure of the banks may cost taxpayers more than 80% of GDP. Relative to the economy’s size, that would be about 20 times what the Swedish government paid to rescue its banks in the early 1990s. It would be several times the cost of Japan’s banking crisis a decade ago.
China and India, suddenly vulnerable
Asia’s two big beasts are shivering. India’s economy is weaker, but China’s leaders have more to fear.
THE speed with which clouds of economic gloom and even despair have gathered over the global economy has been startling everywhere. But the change has been especially sudden in the world’s two most populous countries: China and India. Until quite recently, the world’s fastest-growing big economies both felt themselves largely immune from the contagion afflicting the rich world. Optimists even hoped that these huge emerging markets might provide the engines that could pull the world out of recession. Now some fear the reverse: that the global downturn is going to drag China and India down with it, bringing massive unemployment to two countries that are, for all their success, still poor—India is home to some two-fifths of the world’s malnourished children.
The pessimism may be overdone. These are still the most dynamic parts of the world economy. But both countries face daunting economic and political difficulties. In India’s case, its newly positive self-image has suffered a double blow: from the economic buffeting, and from the bullets of the terrorists who attacked Mumbai last month. As our special report makes clear, India’s recent self-confidence had two roots. One was a sustained spurt in economic growth to a five-year annual average of 8.8%. The other was the concomitant rise in India’s global stature and influence. No longer, its politicians gloated, was India “hyphenated” with Pakistan as one half of a potential nuclear maelstrom. Rather it had become part of “Chindia”—a fast-growing success story. If China’s growth rate were to fall to that level, it would be regarded as a disaster at home and abroad. The country is this month celebrating the 30th anniversary of the event seen as marking the launch of its policies of “reform and opening”, since when its economy has grown at an annual average of 9.8%. The event was a meeting of the Communist Party’s Central Committee at which Deng Xiaoping gained control. Tentatively at first but with greater radicalism in the 1990s, the party dismantled most of the monolithic Maoist edifice—parcelling out collective farmland, sucking in vast amounts of foreign investment and allowing private enterprise to thrive. The anniversary may be a bogus milestone, but it is easy to understand why the party should want to trumpet the achievements of the past 30 years (see article). They have witnessed the most astonishing economic transformation in human history. In a country that is home to one-fifth of humanity some 200m people have been lifted out of poverty.
...
The gap between mouth and trouser
One worry is that China’s rulers will try to push the yuan down to help exporters. That would be a terrible idea, not least because the government has the resources to ease the pain in less dangerous ways: it is running a budget surplus and has little debt. Last month it announced a huge 4 trillion yuan (nearly $600 billion) fiscal-stimulus package. Some who have crunched the numbers argue that this was all mouth and no trousers—much of it made up by old budget commitments, double-counting and empty promises. It was thus mainly propaganda, to convince China’s own people and the outside world that the government was serious about stimulating demand at home. That may yet prove to be unfair: what matters is when infrastructure money is spent, not when it is announced. Yet there is little sign that the regime is ready to take radical steps in the two areas that would do most to persuade the rural majority to spend its money rather than hoard it: giving farmers better rights over their land; and providing a decent social safety-net, especially in health care.
Still, China does at least have trousers, with deep pockets. India, in contrast, is not seen as a big potential part of the answer to the world’s economic problems. Not only is its economy far smaller; its government’s finances are also a mess. Its budget deficit—some 8% of GDP—inhibits it from offering a bigger stimulus that might mitigate the downturn (see article). This is alarming. If China reckons it needs 8% annual growth to provide jobs for the 7m or so new members of its workforce each year, how is India to cope? A younger country, its workforce is increasing by about 14m a year—ie, about one-quarter of the world’s new workers. And, perversely, its great successes of recent years have been in industries that rely not on vast supplies of cheap labour but on smaller numbers of highly educated engineers—such as its computer-services businesses and capital-intensive manufacturing.
In two respects, however, India has a big advantage over China in coping with an economic slowdown. It has all-too extensive experience in it; and it has a political system that can cope with disgruntlement without suffering existential doubts. India pays an economic price for its democracy. Decision-making is cumbersome. And as in China, unrest and even insurgency are widespread. But the political system has a resilience and flexibility that China’s own leaders, it seems, believe they lack. They are worrying about how to cope with protests. India’s have their eyes on a looming election.
THE speed with which clouds of economic gloom and even despair have gathered over the global economy has been startling everywhere. But the change has been especially sudden in the world’s two most populous countries: China and India. Until quite recently, the world’s fastest-growing big economies both felt themselves largely immune from the contagion afflicting the rich world. Optimists even hoped that these huge emerging markets might provide the engines that could pull the world out of recession. Now some fear the reverse: that the global downturn is going to drag China and India down with it, bringing massive unemployment to two countries that are, for all their success, still poor—India is home to some two-fifths of the world’s malnourished children.
The pessimism may be overdone. These are still the most dynamic parts of the world economy. But both countries face daunting economic and political difficulties. In India’s case, its newly positive self-image has suffered a double blow: from the economic buffeting, and from the bullets of the terrorists who attacked Mumbai last month. As our special report makes clear, India’s recent self-confidence had two roots. One was a sustained spurt in economic growth to a five-year annual average of 8.8%. The other was the concomitant rise in India’s global stature and influence. No longer, its politicians gloated, was India “hyphenated” with Pakistan as one half of a potential nuclear maelstrom. Rather it had become part of “Chindia”—a fast-growing success story. If China’s growth rate were to fall to that level, it would be regarded as a disaster at home and abroad. The country is this month celebrating the 30th anniversary of the event seen as marking the launch of its policies of “reform and opening”, since when its economy has grown at an annual average of 9.8%. The event was a meeting of the Communist Party’s Central Committee at which Deng Xiaoping gained control. Tentatively at first but with greater radicalism in the 1990s, the party dismantled most of the monolithic Maoist edifice—parcelling out collective farmland, sucking in vast amounts of foreign investment and allowing private enterprise to thrive. The anniversary may be a bogus milestone, but it is easy to understand why the party should want to trumpet the achievements of the past 30 years (see article). They have witnessed the most astonishing economic transformation in human history. In a country that is home to one-fifth of humanity some 200m people have been lifted out of poverty.
...
The gap between mouth and trouser
One worry is that China’s rulers will try to push the yuan down to help exporters. That would be a terrible idea, not least because the government has the resources to ease the pain in less dangerous ways: it is running a budget surplus and has little debt. Last month it announced a huge 4 trillion yuan (nearly $600 billion) fiscal-stimulus package. Some who have crunched the numbers argue that this was all mouth and no trousers—much of it made up by old budget commitments, double-counting and empty promises. It was thus mainly propaganda, to convince China’s own people and the outside world that the government was serious about stimulating demand at home. That may yet prove to be unfair: what matters is when infrastructure money is spent, not when it is announced. Yet there is little sign that the regime is ready to take radical steps in the two areas that would do most to persuade the rural majority to spend its money rather than hoard it: giving farmers better rights over their land; and providing a decent social safety-net, especially in health care.
Still, China does at least have trousers, with deep pockets. India, in contrast, is not seen as a big potential part of the answer to the world’s economic problems. Not only is its economy far smaller; its government’s finances are also a mess. Its budget deficit—some 8% of GDP—inhibits it from offering a bigger stimulus that might mitigate the downturn (see article). This is alarming. If China reckons it needs 8% annual growth to provide jobs for the 7m or so new members of its workforce each year, how is India to cope? A younger country, its workforce is increasing by about 14m a year—ie, about one-quarter of the world’s new workers. And, perversely, its great successes of recent years have been in industries that rely not on vast supplies of cheap labour but on smaller numbers of highly educated engineers—such as its computer-services businesses and capital-intensive manufacturing.
In two respects, however, India has a big advantage over China in coping with an economic slowdown. It has all-too extensive experience in it; and it has a political system that can cope with disgruntlement without suffering existential doubts. India pays an economic price for its democracy. Decision-making is cumbersome. And as in China, unrest and even insurgency are widespread. But the political system has a resilience and flexibility that China’s own leaders, it seems, believe they lack. They are worrying about how to cope with protests. India’s have their eyes on a looming election.
Bank of America may shed 35,000 jobs
Along with the merger between Bank of America and Merrill Lynch comes a three year plan that will cut up to 35,000 jobs. The job cuts will come from both companies, and are designed to get rid of redundancies in order to streamline the nation's soon to be largest financial services firm. Bank of America, the larger of the companies in terms of employees, will keep most of Merrill's financial advisers on board. In fact, that is the main reason why Bank of America wanted the merger. Since the merger was announced both companies have received funds from the $700 billion bailout plan, with Bank of America promising to use its $15 billion in the lending market. These ads are in response to criticism that they are not using the money to give out mortgages on homes. They are even running an ad campaign with the tag line "...we're putting our capital where our mouth is."
Taiwan Government Subsidize Employee Training
In hard times business has been looking to down size, to lay off or give forced unpaid leave to employer. In Taiwan the government's Council of Labor Affiar(CLA) looks to fund on the job-trainning for many firms. Firms won't have to lay off their workers and can give them more training and be ready when times are better. Chen I-min director-general of the Bureau of Employment and Vocational Training said:“This is a good time for [companies to provide] on-the-job training, Instead of layoffs or unpaid leave, companies can consider training their workers now when business is slow to prepare them for when the economy improves"
“10 companies have already been counseled, and six of them have agreed to scale down their layoffs or use unpaid leave instead,” CLA Minister Jennifer Wang said.
“10 companies have already been counseled, and six of them have agreed to scale down their layoffs or use unpaid leave instead,” CLA Minister Jennifer Wang said.
Wall Street Wizard Bernard L. Wadoff Accused of Fraud
Bernard L. Wadoff was arrested yesterday on charges of running a giant Ponzi scheme. It is a type of fraud in which earlier investors are paid off with money raised from later victims — until no money can be raised and the scheme collapses.
Mr. Madoff's investment success has been regularly questioned in the past due to his "unnaturally steady returns, his vague investment strategy and the obscure accounting firm that audited his books." He was not running an actual hedge fund, but managing accounts for investors inside his own securities firm. Hedge funds hold their portfolios at banks and brokerage firms like JPMorgan Chase and Goldman Sachs. Outside auditors can check with those banks and brokerage firms to make sure the funds exist.
Yet, many hedge fund companies kept promoting Mr. Madoff’s funds to other funds and individuals. The Securities and Exchange Commission investigated Mr. Madoff in 1992 but cleared him of wrongdoing.
"The collapse of Mr. Madoff’s firm is another blow in a devastating year for Wall Street and investors. While Mr. Madoff’s firm was not a hedge fund, the scope of the fraud is likely to increase pressure on hedge funds to accept greater regulation and transparency and protect their investors."
Mr. Madoff's investment success has been regularly questioned in the past due to his "unnaturally steady returns, his vague investment strategy and the obscure accounting firm that audited his books." He was not running an actual hedge fund, but managing accounts for investors inside his own securities firm. Hedge funds hold their portfolios at banks and brokerage firms like JPMorgan Chase and Goldman Sachs. Outside auditors can check with those banks and brokerage firms to make sure the funds exist.
Yet, many hedge fund companies kept promoting Mr. Madoff’s funds to other funds and individuals. The Securities and Exchange Commission investigated Mr. Madoff in 1992 but cleared him of wrongdoing.
"The collapse of Mr. Madoff’s firm is another blow in a devastating year for Wall Street and investors. While Mr. Madoff’s firm was not a hedge fund, the scope of the fraud is likely to increase pressure on hedge funds to accept greater regulation and transparency and protect their investors."
Obama Pledges Public Works on a Vast Scale
President Elect Barack Obama has pledged to create the largest public works program since the interstate highway half a century ago. Obama has put together a plan that ranges from traditional work programs for the middle class, like infrastructure projects to repair roads and bridges, to include new-era jobs in technology and so-called green jobs that reduce energy use and global warming emissions, in Obama's effort to offset the close to 2 million job loss in this country over the past year. The article states that :"Mr. Obama’s plan, if enacted, would be in part a government-directed industrial policy, with lawmakers and administration officials picking winners and losers among private projects and raining large amounts of taxpayer money on them." President Bush and many conservative economists have opposed such large-scale government intervention in the economy, because some of the firms that will be supported under this program can not survive the market economy. Paul Bledsoe, a former Clinton White House energy adviser said:"It’s now clear that Obama intends to stimulate the economy through large direct government spending on infrastructure projects as well as through business and individual tax cuts"
It seems like Obama is really ambitious and he might be shaking up the system a bit when he takes office. What he has proposed seems like a radical change from how the U.S free market been operating in the last 20-30 years. If his program is successful I think it can do alot of good for the U.S with newer infrastructures.
It seems like Obama is really ambitious and he might be shaking up the system a bit when he takes office. What he has proposed seems like a radical change from how the U.S free market been operating in the last 20-30 years. If his program is successful I think it can do alot of good for the U.S with newer infrastructures.
Friday, December 12, 2008
Should the Detroit 3 Become the Detroit 1?
An auto industry bail-out will only offer a temporary solution to the problem, and there is no guarantee that the three car companies would not eventually go bankrupt. Infact, the government had bailed out Chrysler in 1979, and its back to square one. So there is no guarantee that this will not happen again in 30 years.
In a global economy, the competition for Ford, Chrysler and GM comes not from within the U.S. but from outside. So if the three car-makers merge, it may be better positioned to compete against foreign car companies like Toyota and Hyundai. This model worked favorably for Boeing, and it may work for the Detroit 3.
In a global economy, the competition for Ford, Chrysler and GM comes not from within the U.S. but from outside. So if the three car-makers merge, it may be better positioned to compete against foreign car companies like Toyota and Hyundai. This model worked favorably for Boeing, and it may work for the Detroit 3.
GM to cut production by 250,000 vehicles
General Motors Corp. reported today that it will temporarily close 20 factories across North America and make cuts to vehicle production to try to adjust to the much weaker automobile demand.GM said it will decrease 250,000 vehicles from its production schedule for the first quarter of 2009. This includes a cut of 60,000 vehicles announced last week; whereas, normal production would be around 750,000 cars and trucks for the quarter.Many plants will be shut down for all of January,and most likely, the factories will be closed for 30% of the quarter.The change mostly affects GM's plants in the U.S., Canada and Mexico. During this period, employees will be temporarily laid off and can apply to receive a part of their normal pay from the company. They can also apply for state unemployment benefits. GM and most other automakers in the U.S. are suffering from the worst sales slump since 26 years ago.
GM is asking for government loans to stay in operation beyond the end of the year. The White House said Friday it may tap into its $700 billion Wall Street bailout fund to help GM and Chrysler stay in business after the Senate blocked a measure to provide $14 billion in immediate loans. However, the request failed dramatically late Thursday after Senate Republicans balked at passing the bill without more wage and benefit concessions from auto workers.
GM is asking for government loans to stay in operation beyond the end of the year. The White House said Friday it may tap into its $700 billion Wall Street bailout fund to help GM and Chrysler stay in business after the Senate blocked a measure to provide $14 billion in immediate loans. However, the request failed dramatically late Thursday after Senate Republicans balked at passing the bill without more wage and benefit concessions from auto workers.
U.S. Driving on the Decline
On Friday, the Department of Transportation reported that driving in America underwent its largest, continuous decline in ever. In the U.S. people drove 100 billion less miles between November 2007 and October 2008 compared with the year before. Driving declines even when gas prices came down from the summer. This trend is evidence that our travel habits are changing. Today, the average price for unleaded gas was $1.656 per gallon compared to the peak of $4.114 per gallon on July 17. In October, the amount of driving dropped the most is has dropped since 1971. We have driven 3.5% less (8.9 billion less miles) compared to a week ago. There are concerns that the decrease will negatively affect the nation's highway system funds.
"The way we finance America's transportation network must also change to address this new reality, because banking on the gas tax is no longer a sustainable option."
More than 2.8 billion trips were taken on public transportation nationwide from July to September, an increase of 6.5%.
"The way we finance America's transportation network must also change to address this new reality, because banking on the gas tax is no longer a sustainable option."
More than 2.8 billion trips were taken on public transportation nationwide from July to September, an increase of 6.5%.
Stocks rally on bailout hopes
Stocks rose today, which ended the session higher than expected. Investors were happy about the indication that the Treasury Department made about stepping in and bailing out the automakers after a $14 billion bill collapsed in the Senate.For the week, the Dow and S&P 500 ended with small losses and the Nasdaq had a slight gain.
The question of whether the $14 billion auto rescue bill would lose in the Senate caused stocks to slump on Thursday and the worries were valid. Negotiations fell through on Thursday night. Democrats, Republicans, the individual companies and the United Auto Workers union couldn't come to a compromise. However, on Friday, the White House said it would consider using some of the money set aside to help banks and Wall Street for bailing out the auto industry. The Bush administration said it could access the $700 billion bailout (Troubled Asset Recovery Program) already approved by Congress. The Treasury Department regulates TARP and it said in a statement that it was willing to use the money as a short-term solution "until Congress reconvenes and acts to address the long-term viability of the industry."
The question of whether the $14 billion auto rescue bill would lose in the Senate caused stocks to slump on Thursday and the worries were valid. Negotiations fell through on Thursday night. Democrats, Republicans, the individual companies and the United Auto Workers union couldn't come to a compromise. However, on Friday, the White House said it would consider using some of the money set aside to help banks and Wall Street for bailing out the auto industry. The Bush administration said it could access the $700 billion bailout (Troubled Asset Recovery Program) already approved by Congress. The Treasury Department regulates TARP and it said in a statement that it was willing to use the money as a short-term solution "until Congress reconvenes and acts to address the long-term viability of the industry."
U.S. Recession
The National Bureau of Economic Research declared that the United States has been in a redession since December 2007. The NBER is in charge of dating the beginning and end of economic downturns. It is normal that it would take this long to declare an actual downturn because they need to look at the final reading of many economic measures. Companies have decreased payrolls by cutting 1.2 million jobs in the first 10 months of '08. Economists are estimating our country has lost another 325,000 jobs in November.
Bernanke Doctrine
This article is very cleverly written. The author first lists measures proposed by Bernanke six years ago to combat deflation. He refers to this as the Bernanke Doctrine and he then puts a check mark against steps already taken by the Fed.
1. The Fed can print money which will produce more dollars in the economy and lead to inflation.
Status: Done
2. These dollars are then implanted into the banks. Bernanke said that according to John Maynard Keynes's proposal, in combating deflation, the government fills bottles with currency and buries them in mine shafts for the public to dig up.
Status: Done
3. Interest rates are cut, even if it means taking it down to 0 percent. The Federal Reserve has, so far, lowered interest rates nine time in a row, from 5.25 percent to 1 percent. The central bank should place caps on yields paid by long-term Treasury bills. Therefore, the Fed will engage in bond price pegging, like it did after WWII.
Status: Pending
4. The Fed lends zero interest dollars to banks for a fixed term, taking back corporate bonds as collateral. This way, the Fed can determine yields without necessarily buying securities. This would make banks lend out these dollars so there is more money floating in the economy, causing inflation.
Status: Pending
5. U.S. dollar is depreciated, just like during the Great Depression. This, along with printing of money, would help end deflation.
Status: Use when everything else fails
6. By foreign currencies on a massive scale and cause de facto depreciation. The quantity of foreign assets available for purchase by the Fed is several times the stock of U.S. government debt, so there is a huge scope for the Fed to reverse this deflation process.
Status: Use when everything else fails
7. The money created by printing is used to buy industries throughout the country. This way the Fed would acquire private asset option.
Status: Technique tested, full deployment pending.
The Federal Reserve has mostly done the easy part already. It still has many more options and measures to reverse the deflation process.
1. The Fed can print money which will produce more dollars in the economy and lead to inflation.
Status: Done
2. These dollars are then implanted into the banks. Bernanke said that according to John Maynard Keynes's proposal, in combating deflation, the government fills bottles with currency and buries them in mine shafts for the public to dig up.
Status: Done
3. Interest rates are cut, even if it means taking it down to 0 percent. The Federal Reserve has, so far, lowered interest rates nine time in a row, from 5.25 percent to 1 percent. The central bank should place caps on yields paid by long-term Treasury bills. Therefore, the Fed will engage in bond price pegging, like it did after WWII.
Status: Pending
4. The Fed lends zero interest dollars to banks for a fixed term, taking back corporate bonds as collateral. This way, the Fed can determine yields without necessarily buying securities. This would make banks lend out these dollars so there is more money floating in the economy, causing inflation.
Status: Pending
5. U.S. dollar is depreciated, just like during the Great Depression. This, along with printing of money, would help end deflation.
Status: Use when everything else fails
6. By foreign currencies on a massive scale and cause de facto depreciation. The quantity of foreign assets available for purchase by the Fed is several times the stock of U.S. government debt, so there is a huge scope for the Fed to reverse this deflation process.
Status: Use when everything else fails
7. The money created by printing is used to buy industries throughout the country. This way the Fed would acquire private asset option.
Status: Technique tested, full deployment pending.
The Federal Reserve has mostly done the easy part already. It still has many more options and measures to reverse the deflation process.
Former Taiwan president indicted
Taiwan Former President Chen Shui-bian and his wife has been indicted on corruption charges. The Charges includes forgery embezzlement, document forger and money laundering. Chan's been held in jail since Nov 12, and he now face indictment with corruption charges and is currently out on bail. Chan denies any wrong doing and claims to be a political prisoner of current President Ma Ying-jeou to please China, Chan still remains the leading figure for critics of the current administration. This is the first indictment charges faced by an ex-president in Taiwan. If Chan is convicted he could face life in jail.
US Senate rejects plans for bailout of automakers
The U.S Senate have block the $14 Billion Detroit bail out. The Senate negotiated late into the night on a possible compromise that participants said fell apart over proposed wage concessions by the powerful United Auto Workers union. For GM and Chrysler the last life line from the government rests on the white house in allocating parts of the $700 Billion from the Financial bail out to give loans to the help auto industry to survive.
Japan Econmies Contract at a Faster Pace
Japan is a country that puts a large emphasis on exports which is being hurt by the financial situation around the world. They are expected to contract at a faster pace and experience economic downturn well into 2009. Exports have decreased along with production hurting their GDP. They are expected to shrink 0.7% from October to December, which is worse than the predicted 0.3%."What was most shocking in recent weeks was the industrial production data which indicated that output would mark its sharpest-ever quarterly fall in October-December," said Masamichi Adachi, senior economist at JPMorgan Securities Japan.
Fidelity Ex-Workers End SEC Gift Case
8 Former Fidelity Investment employees will pay more than $1 million to settle a SEC charge that they improperly accepted gifts. As we have seen in this crisis, Wall Street if full of corruption. The employees were found guilty after the SEC declared that these 8 employees "violated securities laws by accepting the gifts". SEC's deputy director of enforcement said that "by accepting the improper gifts, the brokers squandered investor trust."
China to Define Oil Prices in 2009
China is expected to remain on the growth path throughout the global slowdown being experienced in Western countries. China is being effected but not as drastically as Europe and the United States. Since China is still on the growth path it will increase its demand for commodities like oil. China will help to increase oil demand in 2009 despite the downfall we are currently experiencing.
Currently China's demand for oil has decreased 14.6% from October, and it is being predicted that things will get worse for china before they get better. In spite of all of this economists feel that China will increase its demand in 2009, which is when things are expected to start looking up for economies globally. China's demand may not make up for the global slump, but it will certainly help.
Currently China's demand for oil has decreased 14.6% from October, and it is being predicted that things will get worse for china before they get better. In spite of all of this economists feel that China will increase its demand in 2009, which is when things are expected to start looking up for economies globally. China's demand may not make up for the global slump, but it will certainly help.
Blackstone Joins Ranks of Those Cutting Jobs
Private Equity firm Blackstone is following the trend- they are cutting jobs. Blackstone has joined several other large buyout firms that have announced layoffs this month. For example, the well respected Carlyle Group is cutting 10% of its worldwide staff, and the 3i Group is cutting 15% of its staff.
Argetina tries to Boost Tourism
In order to boost tourism in Argentina the President is offering no interest loans in order to boost domestic tourism. This is to help Argentina fight the economic downturn. Just last week the government launched an 3.87$ billion dollar program that offers low cost loans to consumers and farmers. For the next 3-6 months Argentina will be offering low cost loans to tourists businesses and travelers. Argentina has been rapidly growing over the last few years but are expected to see a decline in growth this last year. They are trying to increase tourism to help them boost growth during the economic downturn.
Outlook Darkens as Recession Deepens
Speculators are saying that this may turn out to be the worst recession since the Great Depression. This is not going to help boost consumer confidence in the U.S which is extremely low. The household sector is being hit the hardest. Economists predict a 0.5% decrease in GDP this quarter. Many economists believe that this recession will last throughout 2009. The downturn is estimated to have been 18 months long so far, as the National Bureau of Economic research set the date for the start of the recession at December 2007.
Many however are hopeful that the government fiscal stimulus package along with President elect Barack Obama will be key in pulling the U.S economy of out depression. Many feel that these things will help increase consumer confidence, many predict the new team is much better equipped to handle the situation that Bush's administration.
Hopefully Obama's promise for change will become a reality.
Many however are hopeful that the government fiscal stimulus package along with President elect Barack Obama will be key in pulling the U.S economy of out depression. Many feel that these things will help increase consumer confidence, many predict the new team is much better equipped to handle the situation that Bush's administration.
Hopefully Obama's promise for change will become a reality.
Deutsche Bank Lost $1 Billion on Bond Bet
A proprietary trading group at Deutsche Bank lost more than a billion dollars betting the wrong way on corporate bonds. Although the bank has recorded gains on other trading areas, recent troubles in the corporate bond mkt has made it more difficult to turn around their losses.
The bank reduced its leverage, and borrowed money which also increased their losses because investors are being forced to sell while the corporate-bond market is falling.
State Attorney General Seeks to Strip Governor of Powers
Illinois attorney General filed papers with the state Supreme Court to take away Governer Rod Blagojevich of his position after he was arrested for allegedly trying to sell Obama's Senate seat. Blagojevich said that the seat is worth a lot of money and that he is not willing to let it go for free.
Detroit Dailies to Curtail Home Delivery
The Publisher of the Detroit Free Press, the country's 20th largest paper according to weekday circulation, is expected to announce next week that it will cease home delivery of the print edition of the newspaper on most days of the week.
More newspapers are considering cutting back home delivery as well due to declined costs and decreasing revenues.
U.S Trade Defecit Grew in October as Exports Slow
The Commerce department reported that exports to 2.2% in october. This is from a large decrease in sales from automobile industries and consumer goods. This is not a good time for exports to decrease as many american manufacturers are relying on sales from foreign countires to make up for decreased sales domestically.
The Dollar has currently stregthened agasint other countires, which one may think would be positive, but it has made U.S goods less attractive to forein consumers becasue prices are relatively higher. "There is clear evidence that the falloff in global demand is having a direct impact on top-line revenue growth at multinational corporations," said Steven Ricchiuto.
This may create even larger problems as domestic firms have to decrease production and lower revenues projections. Ultimately this may lead to more layoffs which would be a negative impact on the U.S economy right now.
Domestic demand has decreased as well as U.S consumers have decreased their consumption. This problem with the trade defecit is not going to help get the U.S out of a recession. "The disappointing trade figures may lead to a more significant contraction in economic growth for the final three months of 2008. "Trade is now starting to subtract from GDP, and subtract in a big way," Ricchiuto said
The question is now what do we do to try and resolve this problem?
The Dollar has currently stregthened agasint other countires, which one may think would be positive, but it has made U.S goods less attractive to forein consumers becasue prices are relatively higher. "There is clear evidence that the falloff in global demand is having a direct impact on top-line revenue growth at multinational corporations," said Steven Ricchiuto.
This may create even larger problems as domestic firms have to decrease production and lower revenues projections. Ultimately this may lead to more layoffs which would be a negative impact on the U.S economy right now.
Domestic demand has decreased as well as U.S consumers have decreased their consumption. This problem with the trade defecit is not going to help get the U.S out of a recession. "The disappointing trade figures may lead to a more significant contraction in economic growth for the final three months of 2008. "Trade is now starting to subtract from GDP, and subtract in a big way," Ricchiuto said
The question is now what do we do to try and resolve this problem?
Credit Freeze Thawing???
Credit rates are still extremely volatile at this point, but have seemed to relax enough to help give a clearer forecast for the coming months. Because of the current situation credit rates are low and still dropping. Inflation is the past months has dropped from 5% to 2% and still real credit rates are increasing. In the construction industry and increased number of borrowers are being asked to pay rates higher than the premiums for prime borrowers.
Credit rates have put a huge constraint on construction since they demand a large amount of credit to finance projects. Although credit rates will eventually decrease, it is going to be a long time before this happens. Credit restraints will most likely continue to stay high throughout the recession and cause the recovery to slow down.
I found it very interesting that this article talked about how the Treasury recently borrowed at a rate of 0.0% interest. They took this money to pour into the financial systems and get them infused with fresh capital. The problem is that now banks have the money but need to rebuild their capital assets and decrease their lending. So basically banks have money, but are unwilling to lend any of it. How is this going to help the economy recover?
Credit rates have put a huge constraint on construction since they demand a large amount of credit to finance projects. Although credit rates will eventually decrease, it is going to be a long time before this happens. Credit restraints will most likely continue to stay high throughout the recession and cause the recovery to slow down.
I found it very interesting that this article talked about how the Treasury recently borrowed at a rate of 0.0% interest. They took this money to pour into the financial systems and get them infused with fresh capital. The problem is that now banks have the money but need to rebuild their capital assets and decrease their lending. So basically banks have money, but are unwilling to lend any of it. How is this going to help the economy recover?
Multiple Red Flags in Madoff Case
Many people have been talking about Mandoff's fraudulent tactics. He is alleged to have pulled off one of the biggest frauds in Wall Street History. But, many people believe that there were many red flags including a series of accusations leveled against Madoff's operation. "There's no smoking gun, but if you added it all up you wonder why people either did not get it or chose to ignore the red flags" says Jim Vos, who runs Aksia LLC. How can so many people on wall street get away with these schemes when analysts and other people are evaluating their companies daily.
Retail Sales, Wholesale Prices Fall
Falling Gas prices and a decreased demand for cars has led to a decrease in Retail Sales this past november. However, the decline was lower than expected due to consumer spending on clothes, electronics, etc. The expected drop was 2.2%, but in reality the drop was only 1.8%.
Spanish fake kidnap mother jailed
A Spanish woman has been found guilty of staging the fake kidnapping of her two children seven times in order to obtain ransom money from her husband.
Over five years, Josefa Sanchez Vargas conned her estranged husband out of more than 600,000 euros (£535,000), saying she had to pay the kidnappers.
But he eventually became suspicious, and hired a detective to investigate.
Sanchez Vargas has been jailed for three-and-a-half years. Two accomplices have also been given jail terms.
The provincial court in Madrid heard how she invented increasingly bizarre stories behind the kidnappings.
The first time, in 2001, she told her husband, identified only as Pedro GM, that strangers had broken into the family home to take her daughter and had demanded a ransom of 30,000 euros.
He then handed over another 48,000 euros the following year, believing the girl had been kidnapped again.
In 2003, Sanchez Vargas said her son had been kidnapped by clothing dealers to whom she owed money. Mr GM agreed to pay the "debt" of 36,000 euros.
Then in 2004, Mr GM paid out 54,000 euros, believing his son was being held by drug dealers.
$50 billion fraud charge at hedge fund
Bernard Madoff, former chairman of Nasdaq, is accused of using money from new investors to pay of old ones. The 70 year-old is out on a ten million dollar bail.
"Under a Ponzi scheme, also known as a pyramid scheme, investors are promised very high returns on their investment, while in reality early investors are paid with money collected from later investors." So basically Madoff ran out of money to pay people the money he owed.
Madoff faces 20 years in prison.
"Under a Ponzi scheme, also known as a pyramid scheme, investors are promised very high returns on their investment, while in reality early investors are paid with money collected from later investors." So basically Madoff ran out of money to pay people the money he owed.
Madoff faces 20 years in prison.
Obama Team Interest Encourages Treasury Mortgage
By Robert Schmidt and Craig Torres
Dec. 12 (Bloomberg) -- President-elect Barack Obama’s economic team is expressing interest in a U.S. Treasury plan to spur homebuying through new securities aimed at driving down mortgage rates.
U.S. Consumer Sentiment Index Unexpectedly Improves
By Courtney Schlisserman
Dec. 12 (Bloomberg) -- Confidence among U.S. consumers unexpectedly improved this month from the lowest level in 28 years, reflecting a record drop in gasoline prices that gave temporary relief to household budgets.
U.S. Stocks, Dollar, Oil Tumble After Auto-Rescue Bill Fails
By Whitney Kisling
Dec. 12 (Bloomberg) -- U.S. stocks, the dollar and oil fell after the Senate’s rejection of a bailout for American automakers threatened to deepen the worldwide recession.
General Motors Corp., the biggest U.S. carmaker, lost 3.6 percent and Ford Motor Co. slid 4.5 percent, while Exxon Mobil Corp. and Chevron Corp. dropped as oil declined the most in almost two weeks. Honda Motor Co. and Daimler AG sank more than 4 percent as the failure of the rescue plan sent stocks falling from Tokyo to Frankfurt. Auto shares pared some of their losses after the Treasury said it may bolster carmakers with money from a fund intended to shore up U.S. banks.
General Motors Corp., the biggest U.S. carmaker, lost 3.6 percent and Ford Motor Co. slid 4.5 percent, while Exxon Mobil Corp. and Chevron Corp. dropped as oil declined the most in almost two weeks. Honda Motor Co. and Daimler AG sank more than 4 percent as the failure of the rescue plan sent stocks falling from Tokyo to Frankfurt. Auto shares pared some of their losses after the Treasury said it may bolster carmakers with money from a fund intended to shore up U.S. banks.
U.S. Treasury Ready to Prevent Failure of Automakers
By John Brinsley and Jeff Green
Dec. 12 (Bloomberg) -- The Bush administration dropped its opposition to using the $700 billion bank bailout to provide financing for U.S. automakers, after the Senate yesterday failed to approve emergency loans.
“Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms,” Perino said. “However, given the current weakened state of the U.S. economy, we will consider other options if necessary -- including use of the TARP program -- to prevent a collapse of troubled automakers.”The Good and The Bad
Sandy Jadeja, chief market strategist at ODL Securities, is predicting a bear market until 2012-2013. He believes there will be a rally in the Asian and American markets in early 2009 until July, but then a sharp decrease in October last for two or three years.
So maybe by the time the seniors graduate there will be a better market and more jobs.
So maybe by the time the seniors graduate there will be a better market and more jobs.
Auto Workers by State
It's no surprise that Michigan leads the pack with highest number of auto related jobs with 241,883 jobs. California comes in at number two on the list with 189,749. However, the weird thing about the two is the huge difference in average salary per worker. In Michigan the average is $65,119, but in California it is $17,590. I can't quite figure out why there would be such a difference.
Retail Sales Continue to Fall
Retail stores reported 1.8% drop for the month of November. According to the article, "November is a crucial sales month for retailers since it marks the start of the important holiday shopping season. Combined sales for November and December can account for as much as 50% of merchants' annual profits and sales."
The 1.8% drop is misleading. The drop is probably higher, but because of how poorly stores have done the past two months November looks a little better comparatively.
The 1.8% drop is misleading. The drop is probably higher, but because of how poorly stores have done the past two months November looks a little better comparatively.
Demand for Oil....DOWN
For the first time since 1983, demand for oil is projected to be down for 2008 by approximately 200,000 barrels a day. The International Energy Agency, which calculated this projection, also says 2009 calculations show even lower amounts of consumption. If this happens, it will be the first time in 30 years there is a two year decline in consumption.
As gas prices have been falling further and further to a national average of $1.66 last week, there are some signs of higher consumption; For the first time in 33 weeks, gasoline demand finally saw an increase.
These prediction are interesting, but with the amount of change we have seen in gas prices over the last four or so years, who really knows whats going to happen.
As gas prices have been falling further and further to a national average of $1.66 last week, there are some signs of higher consumption; For the first time in 33 weeks, gasoline demand finally saw an increase.
These prediction are interesting, but with the amount of change we have seen in gas prices over the last four or so years, who really knows whats going to happen.
No Change!!
This funny but still serious article looks "Inside the Worlds Most Annoying Economic Crisis". Argentina, with Buenos Aires especially, is struggling with keeping coins in circulation. The writer talks about his experiences and tells examples of not being sold items because of not having right change or being given back MORE so the seller did not have to give him change. As of now, the one peso coin is worth more to people than a two peso paper note because they can make change easier with the coins, and possible not be shut out of a sale.
The artilce says its not for sure why the problem is happening. The government is accusing Argentines of hording their coins, which many are at this point. In turn, citizens are accusing the governemnt of not minting enough, even though they have produced a record amount of coins this year and the problem has only gotten worse. Everyone is blamming the bus companies who only accept coins, and are then running a legal side business of exchanging paper notes to coins for a fee.
This economic crisis may seem like something minor, but what a pain to deal with. I was in Buenos Aires for a week early this summer and saw what a pain it was for that short time. It seems the problem has only amplified since then as well.
The artilce says its not for sure why the problem is happening. The government is accusing Argentines of hording their coins, which many are at this point. In turn, citizens are accusing the governemnt of not minting enough, even though they have produced a record amount of coins this year and the problem has only gotten worse. Everyone is blamming the bus companies who only accept coins, and are then running a legal side business of exchanging paper notes to coins for a fee.
This economic crisis may seem like something minor, but what a pain to deal with. I was in Buenos Aires for a week early this summer and saw what a pain it was for that short time. It seems the problem has only amplified since then as well.
$14 billion auto bailout dies in Senate
$14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts. The collapse came after bipartisan talks on the auto rescue broke down over GOP demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with Japanese carmakers.
Majority Leader Harry Reid said he hoped President George W. Bush would tap the $700 billion Wall Street bailout fund for emergency aid to the automakers. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.
The White House said it was evaluating its options in light of the breakdown.
"It's disappointing that Congress failed to act tonight," a White House statement said. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable."
The Senate rejected the bailout 52-35 on a procedural vote -- well short of the 60 required -- after the talks fell apart. Now that the three giant automakers are not far from bankruptcy, millions of employees are also panicked about losing their jobs. This will exacerbate the already critical situation of unemployment in the US right now. Just last week, the government reported that the economy had lost more than a half-million jobs in November, the most in any month for more than 30 years.
Majority Leader Harry Reid said he hoped President George W. Bush would tap the $700 billion Wall Street bailout fund for emergency aid to the automakers. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.
The White House said it was evaluating its options in light of the breakdown.
"It's disappointing that Congress failed to act tonight," a White House statement said. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable."
The Senate rejected the bailout 52-35 on a procedural vote -- well short of the 60 required -- after the talks fell apart. Now that the three giant automakers are not far from bankruptcy, millions of employees are also panicked about losing their jobs. This will exacerbate the already critical situation of unemployment in the US right now. Just last week, the government reported that the economy had lost more than a half-million jobs in November, the most in any month for more than 30 years.
Thursday, December 11, 2008
France and China
Apparently they are having a diplomatic chilling period right now because of Sarkozy's overtures that he is going to see the Dalai Lama, as well as criticism of China over Tibet and his threatened boycott of the Olympics. The rather outspoken French President was recently snubbed, as was all of the EU, by China when they canceled last minute on a summit between the EU and China meant to discuss such things as the cooperation needed to solve the global financial crisis, ironically enough.
The layman's finance crisis glossary
Let's play Buzz ï¼·ord!!! recently with this credit crunch news papers has been throwing vasts amounts financial buzz words and confusing jargon, but fear not !!!! I have found on the BBC website an a to z glossary of such buzz words, with an short explanation of them. I feel with this tool we are able to read financial new paper better with a more thorough understating.
Singapore seen emerging Asia's weakest economy
Singapore is poised to be emerging Asia's worst-performing economy next year, when it is likely to remain entrenched in recession as the global downturn erodes demand for its exports, a Reuters poll shows.
The government pledged $1.5 billion last month to help firms secure credit and said it was prepared to run a bigger budget deficit to boost the economy.
Rising unemployment will dent consumer spending, which is not being helped by a decline in tourism since August.
Singapore slipped into recession - defined as two quarters of negative quarterly growth - in the third quarter.
The government pledged $1.5 billion last month to help firms secure credit and said it was prepared to run a bigger budget deficit to boost the economy.
Rising unemployment will dent consumer spending, which is not being helped by a decline in tourism since August.
Singapore slipped into recession - defined as two quarters of negative quarterly growth - in the third quarter.
Kissing to cause deafness?
This has got to be the weirdest story every! Actually second, I just remembered a really weird I read about a week ago.
A young Chinese woman was left partially deaf following a passionate kiss from her boyfriend. The 20-something from Zhuhai in Guangdong province arrived at hospital having completely lost the hearing in her left ear, said local reports. The kiss reduced the pressure in the mouth, pulled the eardrum out and caused the breakdown of the ear!!!!
Luck for her she is expected to regain her full hearing within about two months.
A young Chinese woman was left partially deaf following a passionate kiss from her boyfriend. The 20-something from Zhuhai in Guangdong province arrived at hospital having completely lost the hearing in her left ear, said local reports. The kiss reduced the pressure in the mouth, pulled the eardrum out and caused the breakdown of the ear!!!!
Luck for her she is expected to regain her full hearing within about two months.
S.Korea to announce Japan, China currency swaps
South Korea's central bank said on Friday that it expects to announce deals to expand its bilateral currency swap facilities with Japan and China later in the day.
Under current arrangements, South Korea can tap up to $13 billion credit line from the Bank of Japan and $4 billion from the People's Bank of China.
Under current arrangements, South Korea can tap up to $13 billion credit line from the Bank of Japan and $4 billion from the People's Bank of China.
Wanted: A New Miracle
China has gone through a large and painful change since the 1970's with Deng's Economic policy that introduced Capitalism to China, now that China has become a "Big Economy" it'll have to find a way to conjure a new economic miracle which is to turn itself into a "Strong Economy" with domestic technological formidable manufacturers, rather than just producing inexpensive goods for the rest of the world. And begin developing its service sector and knowledge-based companies. China needs to find a way to turn savers into spenders, leveraging China's enormous domestic markets. Michael Tseng, an executive at Taiwan's BenQ Corp., which runs a hospital in Nanjing: "China was the world's factory, but manufacturing is yesterday's story now.". The Chinese saves much of what they earn because the government fails to provide a comprehensive social safety net, thus the government needs to fix the social infrastructure to get the people to start spending.
Japan’s Nikkei Rises in Longest Streak Since May on Car Bailout
Japan stocks rose, sending the Nikkei 225 Stock Average to its longest advance since May, on expectations a bailout of U.S. carmakers passed by the House of Representatives will alleviate a global economic recession.
The House approved a $14 billion loan package intended to prevent a collapse of American automakers that would threaten millions of U.S. jobs. The vote sends the measure to the Senate, where Republican party opposition could delay or kill the legislation.
Crude oil, which has fallen more than $100 from its record in July, gained 3.4 percent to $43.52 a barrel in New York yesterday, and the contract rose as much as 2.2 percent today.
The House approved a $14 billion loan package intended to prevent a collapse of American automakers that would threaten millions of U.S. jobs. The vote sends the measure to the Senate, where Republican party opposition could delay or kill the legislation.
Crude oil, which has fallen more than $100 from its record in July, gained 3.4 percent to $43.52 a barrel in New York yesterday, and the contract rose as much as 2.2 percent today.
Efficient Fridges
This article from the New Yorker talks about the new possible Secretary of Energy, Steven Chu, a Nobel Winning Physicist that is widely respected. He talks about efficient fridges as a template for change within America in the effort to stem Global changes. He is talking about how in California strict fridge efficiency laws were imposed despite the hard lobbying and whining of appliance makers, and of course fridges are still around and have adapted to these new standards which were applied nationwide. This is the same sort of hard line that must begin to be taken in Washington, with standards being imposed regardless of the protests of industry because desperate times call for desperate measures and because becoming environmentally friendly and efficient is the smart and productive thing for the American economy.
While Detroit Slept
Thomas Friedman, the author of "The World is Flat" offers his opinions on what he thinks is a wasteful bailout of the American auto industry.
The reason is that there is a lot of innovation going on in the car industry in other parts of the world, starting with Denmark. Basically it relies on electric cars and a national electric car charging network, generated from clean energy such as wind and solar. Consumers can then buy their milage on their car batteries from the firm Better Place like you would buy minutes for your cell phone.
This model has the effect of being cheaper (6 cents a mile for electric cars, compared to 12 cents a mile for gasoline transportation), and cleaner for the environment. The set up also makes it more convenient for consumers.
Thomas Friedman argued that the US is missing its chance to join in the new trend by its bailout of the old technology. "If we miss the chance to win the race for Car 2.0 because we keep mindlessly bailing out Car 1.0, there will be no one to blame more than Detroit’s new shareholders: we the taxpayers. "
However, I don't think the picture is all that rosy. To popularize this model on a larger scale takes innovation in the harnessing of clean energy as well. The disadvantage of clean energy is that it is difficult to generate a lot of electricity compared to using fossil fuels. In addition, wind and solar energy are subject to weather changes, therefore their supplies are sometimes unpredictable and inconsistent. That leads me to question the costs of building the national charging network for electric cars. It's likely to be more costly.
What do you think?
The reason is that there is a lot of innovation going on in the car industry in other parts of the world, starting with Denmark. Basically it relies on electric cars and a national electric car charging network, generated from clean energy such as wind and solar. Consumers can then buy their milage on their car batteries from the firm Better Place like you would buy minutes for your cell phone.
This model has the effect of being cheaper (6 cents a mile for electric cars, compared to 12 cents a mile for gasoline transportation), and cleaner for the environment. The set up also makes it more convenient for consumers.
Thomas Friedman argued that the US is missing its chance to join in the new trend by its bailout of the old technology. "If we miss the chance to win the race for Car 2.0 because we keep mindlessly bailing out Car 1.0, there will be no one to blame more than Detroit’s new shareholders: we the taxpayers. "
However, I don't think the picture is all that rosy. To popularize this model on a larger scale takes innovation in the harnessing of clean energy as well. The disadvantage of clean energy is that it is difficult to generate a lot of electricity compared to using fossil fuels. In addition, wind and solar energy are subject to weather changes, therefore their supplies are sometimes unpredictable and inconsistent. That leads me to question the costs of building the national charging network for electric cars. It's likely to be more costly.
What do you think?
Study Finds White-Collar Unemployment Spreading
This article reports that unemployment has spread to white collar professions such as lawyers, architects. Construction, retail and service jobs are also going to be affected.
What profession is going to be most hardly hit? I think the financial sector's jobs are among the first that experience the recession, followed up with construction, automobile industry jobs, and other professional jobs.
What profession is going to be most hardly hit? I think the financial sector's jobs are among the first that experience the recession, followed up with construction, automobile industry jobs, and other professional jobs.
World Bank predicts global gloom
The World Bank predicted that the world's annual economic growth will slow to 0.9%, from 2.5% this year.
Even for strong developing economics such as China and India, it is predicted that their economic growth rate would slow down. The World Bank projects China's growth to slow from 11.9% in 2007 to 7.5% in 2009, while India's growth prospects will be cut from 9% to 5.8%.
However, predictions remain positive for long-term growth. The Bank says that the long-term growth prospects for developing countries remain strong, and this will lead to substantial reduction in world poverty rates by 2015, with just 15% of people living on less than $1.25 per day, compared to 25% in 2005.
Even for strong developing economics such as China and India, it is predicted that their economic growth rate would slow down. The World Bank projects China's growth to slow from 11.9% in 2007 to 7.5% in 2009, while India's growth prospects will be cut from 9% to 5.8%.
However, predictions remain positive for long-term growth. The Bank says that the long-term growth prospects for developing countries remain strong, and this will lead to substantial reduction in world poverty rates by 2015, with just 15% of people living on less than $1.25 per day, compared to 25% in 2005.
Bank of America to cut 30,000 jobs
Bank of America has is planing to cut between 30,000 and 35,000 jobs over three years following the completion of its takeover of Merrill Lynch.
Bank of America said the move would reflect both post-merger efficiency savings, and "the weak economic environment" which had hit business and could affect about 11% of the combined firms' 308,000 workforce.
The $50bn (£33bn) takeover of Merrill was announced in September. It came after Merrill had seen $40bn losses.
Bank of America said the job cuts would come across both businesses, and that it could not give exact numbers until early 2009.
US 'willing to lead climate push'
According to former US presidential candidate John Kerry the US is ready to lead the world towards a new climate deal qualifying "but only if other countries pledge emission curbs too."
Senator Kerry made clear that the UN climate conference that the aim of agreeing a new global deal next year must remain on track and that a deal could not work unless it involved all countries.
A number of dignitaries said they were looking forward to working with Barack Obama's incoming administration.
The Massachusetts senator, is currently set to preside over the Senate committee on foreign relations as chairman of the influential committee.It's so nice having people like you again isn't it?
Belgium detains al-Qaeda suspects
Belgian police have detained 14 people suspected of being members of the al-Qaeda network including a man believed to have been about to launch a suicide attack, officials said.
Federal prosecutor Johan Delmulle said police did not know where the suspected suicide attack was to have targeted and it is thought he is likely in to be from Afghanistan or Pakistan.
Thus far, a total of 242 police officers carried out 16 raids in Brussels and one in the eastern city of Liege, officials said. When they seize, they usually,seize computers, data storage equipment and a pistol during the raids, reports say, and the men and women arrested are due to appear before anti-terrorism judges later.
Pakistan moves on Mumbai accused
Pakistan has put Cleric Hafiz Mohammad Saeed founder of Lashkar-e-Taiba an Islamic militant group accused of having links to last month's Mumbai attacks under house arrest.
Pakistan, denied any involvement in the multiple attacks, is also closing offices of Mr Saeed's Jamaat-ud-Dawa charity, after it was put on a UN blacklist.
Meanwhile, India is doing much more as well. They recently announced a major overhaul of their security and intelligence services.
Newly-appointed Interior Minister Palaniappan Chidambaram said the measures would include:
- Reinforcing coastal security
- Creating a new national investigative agency
- Improving police training and strengthening anti-terror laws
Sarkozy comments spark Iran row
Iran has summoned the French ambassador in Tehran over comments made by the French president about his Iranian counterpart, Mahmoud Ahmadinejad.
Nicolas Sarkozy said earlier this week that he would not be able to shake hands with someone who said Israel had to be wiped off the map. Ambassador Bernard Poletti was told there would be repercussions for relations if such remarks were repeated.
In the speech, given on 8 December on the 60th anniversary of the Universal Declaration of Human Rights, Mr Sarkozy said: "How is it that a people such as the Iranian people - one of the world's greatest peoples, one of the world's oldest civilisations, sophisticated, cultured, open - have the misfortune of being represented as they are today by some of their leaders?
"I have said this to my friend Kofi [Annan]: I find it impossible to shake hands with somebody who has dared to say that Israel must be wiped off the map.
Rebels kill '90 Sri Lanka troops'
About 90 Sri Lankan soldiers have been killed in the latest fighting in northern Sri Lanka, says the pro-rebel TamilNet website says.
The army, thus far, denies the figures, but officials have conceded they have met "stiff resistance" from the rebels.
Both sides are accused of routinely understating their own casualties while overstating those of the enemy and independent reporters are banned from going to the war zone, so confirmation of conflicting figures is impossible.
Military spokesman, Brig Udaya Nanayakkara, claims the TamilNet pictures were "staged" and it's impossible to tell when they were taken, though confirming the clashes had occurred.
US to 'rethink' N Korea strategy
Washington said it wants to "rethink" the handling of North Korea, following the failure of the latest talks aimed at ending the country's nuclear program.
White House spokeswoman Dana Perino said Pyongyang had missed an "open door" and the US could now reconsider its "action-for-action" strategy.
North Korea had agreed, in principle, that it would receive fuel and other aid in exchange for dismantling its nuclear program but talks have stalled over verification procedures for nuclear material.
No date has been set for future talks and analysts say it is unlikely that anything will be concluded before President George Bush leaves office in January.
AU troops leaving Somalia
The Prime Minister of Ethiopian, Meles Zenawi, has told parliament African Union peacekeepers in Somalia want to leave.
Ethiopian troops, who are due to pull out of Somalia at the end of the month, are to cover their withdrawal.
Ethiopia originally went into Somalia two years ago to help government forces drive Islamist forces from the capital, but different Islamist forces have been gaining ground in recent months and now control much of southern Somalia once more.
AU troops from Uganda and Burundi are expected to stay and possibly increase their numbers to make up for the planned Ethiopian pull-out.Auto bailout might fail to pass?
Everything seemed to be going well for the auto industry since the bailout they had requested started to take form and passed in the House. However, within the Senate there is strong opposition from the Republicans and some of the Democrats on this issue. The Republican leader of the Senate strongly opposed the legislation, and not even the White House's urge to save the auto industry changed his mind. The big three in Detroit could be in a bunch of trouble if this auto bailout doesn't pass, seeing as how the executives of GM and Chrysler have said that they could run out of cash within weeks.
Illinois not the most corrupt state
Even with Illinois being in the news for having their governor arrested for trying to sell the former senate seat of president-elect Barack Obama, they still fall lower than many states based on the total number of convictions. North Dakota comes in at the highest percentage of convictions for every 100,000 people at 8.3%. Even Ohio(4.8%) has a higher percentage than Illinois(3.9%). So even though Illinois has been in the news for having their governor being arrested, and prior ones before this one too, based on total population and the number of convictions, Illinois is not that bad of a state.
Massive job losses in Congo mines
Due to the collapse of mineral prices from the global economic downturn, more than 200,000 jobs have been lost in the Democratic Republic of Congo. Some fear that the jobs loss could reach 300,000 by the end of this month. More than 40 firms in the mineral industry have shut down in the past month in the southern Katanga province(the richest province in Congo). Expert says that the costs to process minerals like cobalt and copper are currently higher than the price of the minerals in the world markets. About half of the world's cobalt and 4% of the copper are produced in Katanga alone and generates early half of the country's revenue. Provincial Minister of Mines Barthelemy Mumba Gama said that the situation can be save if the government gives tax relieves to the mining sectors.
Wednesday, December 10, 2008
Weight loss easier when you get paid for it: study
This article is about a study that used monetary incentives for people to lose weight. It turns out that when people are being paid to lose weight, they lose a lot more. There were three groups. One group had a lottery that they could win only if they met their weight loss targets. The second group deposited their own money and only got it back at the end of the month if weight loss goals were met. The third group was a control. The first group made about $380 and lost 13 pounds, the second group made about $275 and lost 14 pounds. The control group only lost 4 pounds.
As Dr. Gitter always says, people respond to incentives.
As Dr. Gitter always says, people respond to incentives.
Obama's infrastructure plan
This is an interesting article about Obama's proposed plan of invigorating the US infrastructure program through a protracted investment plan. The article plays the "what if" game a little bit more than I would like, looking back nostalgically about what might have happened if Gore were elected. But it does make good points about the Neo-Keynsian aspects of some of Obama's proposed plan, in terms of investing in America's ability to be productive again, a completly logical step in my opinion. In order to reform from this crisis we need to invest in the capabilities of America and get us back to point where we are competitive with the rest of the world in something other than bubbles.
China export declining
This article from the Economist talks about the declining trade figures for China especially in exports that the deterimental effect this may have on the global economy. The unfortunate prognosis is that the dismal performance of China the last few weeks is a bad sign for the economy as a whole since China was meant to be a staple consumer and producer while richer countries went into a recession, a hope that these trade numbers severely diminish.
India Moves to Cut Prices on Fuel
Canada’s Rate at Half-Century Low
The Central Bank of
Oil Prices Up on Talk of OPEC Cut
Oil prices have increased since its four-year low of $40.35 a barrel. Oil prices increased $2.90 to $43.71 barrel. The president of OPEC, Chakib Khelil, said on Saturday that they could “surprise” markets with a production cut at their meeting in
Russian Firms ‘Lead Bribe List’
Companies from the emerging economies of
Trichet Hints No Cut in January
The president of the European Central Bank or ECB Jean-Claude Trichet “hinted” that there would not be an additional interest rate cut at their January meeting. He says that the current cuts need to be “transmitted into the real economy.” The current rate is 2.5 percent, down from 3.25 percent.
German Investor Confidence Rises
The sentiment with German investors is a little less negative in December, the index rising from -53.5 points to -45.2 points. The historical average is +27.1 points. The recent cut in interest rates has contributed for the slight increase, but investors realize of the tough times ahead and know the economy is slipping deeper into a recession. Overall things will get worse before they get better.
EU Wants End to Old-Style Bulbs
The banning of conventional incandescent bulbs by 2012 has been suggested by a European Union report, citing reason of energy savings and cutting down on greenhouse gas emissions. The report said that Europeans could save $12 billion a year, $64 a household, with the switch. The report needs approval by all 27 EU member states and backing by the European Parliament.
Monaco Drops Bid to Expand Land
Daewoo Leases African Plantation
Daewoo, a South Korean firm, has released plans to lease one million acres of land in
China’s exports fall for first time in seven years
China’s exports fell in November for the first time in seven years as global demand weakened, data showed on Wednesday, adding to pressure on Beijing to reverse a worsening economic slump and avert heavy job losses.
The November trade surplus widened to a new monthly record of $40.1 billion as exports fell 2.2 per cent from the year-earlier period and imports fell even faster, dropping 17.9 per cent, the customs agency reported.
The sharper-than-expected decline adds to pressure on Beijing, which has launched a massive stimulus package to boost consumer spending in hopes of insulating China from the global slowdown.
‘The data breakdown shows a disturbing picture, indicating that in fact there is much to worry about,’ said Sherman Chan, a Moody’s Economy.com economist, in a report.
‘Exports will continue to contract in the next few months – at least until the U.S. and European economies show any solid signs of a bottom.’
Auto Bailout Hopes Lift Stocks
Wall Street is maintaining its optimism about a potential government lifeline for the U.S. automakers and largely looking past a sharp drop in wholesale inventories.
The Commerce Department said Wednesday wholesale inventories plunged by 1.1 percent in October. It is the largest drop in seven years.
Investors' relief over prospects for the automakers is dominating trading. Lawmakers are believed to be close to approving a $15 billion bailout for Detroit.
The Dow Jones industrials are up 67 at the 8,758 level.
Tuesday, December 9, 2008
Interest on T-Bills hits zero
The Treasury Department said Tuesday it had sold $30 billion in four-week bills at an interest rate of zero percent, the first time that's happened since the government began issuing the notes in 2001.
There's good news in all this for taxpayers: Low interest rates on government debt mean the United States is financing its $700 billion bailout of the financial system very cheaply. The Treasury has sold mountains of debt to pay for it. But the trend also underlines stubborn anxiety in the financial market that could keep the economy sluggish for years to come, and it translates into stagnant returns for people who have their money in places like money market funds.
Earning zero percent on an investment for a short while may not seem that dire for the average person. But a zero percent rate will have serious consequences for the complex credit markets. Those markets have been dysfunctional since Lehman Brothers Holdings Inc. went bankrupt in September, scaring away investors who normally buy bonds from seemingly creditworthy borrowers. Lending, the lifeblood of the economy, has frozen up. And high demand for government debt rather than corporate debt could stifle economic growth.
Corporate bond rates have been surging to record levels compared with Treasury's, which makes it more expensive for companies to raise money. And when companies can't raise money, they often have to cut costs, sometimes through layoffs. Many worry that the government will become the most attractive lender and borrower in the market -- crowding out others in the private sector.
Illinois Governor in Corruption Scandal
Illinois governor Rod R. Blagojevich was arrested today and charged with corruption. He reportedly was going to try and "sell" President-Elect Obama's vacant senate seat to the highest bidder. This was just one of the many things he was recorded saying he wanted to do to make money. He also mentioned not giving a children's hospital $8 million becasue a board member didn't give him a $50,000 donation to his campaign. He also said that if he couldn't get what he wanted he would simply appoint himself.
The Illinois Congress said that they will hold an emergency meeting to draft a law that they will allow them to appoint a new senator.
The Illinois Congress said that they will hold an emergency meeting to draft a law that they will allow them to appoint a new senator.
Merrill's Thain seeking 2008 bonus of $10 million: report
Merrill Lynch & Co Chief Executive John Thain has asked for a $10 million dollars annual bonus, Merrill Lynch's compesnation commitee has not responded to Thain's request but likely to reject it. Merrill Lynch almost went under until it merged with the bank of America Corp. an hour before Lehman Brothers Holdings Inc filed for bankruptcy. Thain's calm to the $10 million is that he allowed the merger and saved the company from a much larger loss.
Financial Crisis Tames Demand for World’s Oldest Service
This article is about the decrease in demand for prostitution in Prague. It is a huge industry, generating about $500 million each year. This has caused the Czech government to consider regulating the industry, just like all other companies. Either way, demand is way down, so people are demanding fewer services, while at the same time, more people are turning to prostitution for work. It is actually causing the entire country to hurt a little because of the decrease in "sex tourists", or people who come from other countries to go to brothels. Fewer hotels are being rented, fewer European flights are being bought and its all around a tough time.
So I guess this makes prostitution a normal good...
So I guess this makes prostitution a normal good...
Economic slump causes NFL to cut staff
It appears that even the National Football League is not immune to the current economic crisis. Today they announced that they will be cutting about 10% of their staff that works in New York, at the headquarters. This announcement comes after the NBA and NASCAR also announced layoffs. Roger Goodell, Commissioner of the NFL, noted that most games have been sold out this season. He notes though that this was probably because season tickets were purchased over the summer and last season. The 2009 season will be a move accurate measure of how bad the NFL has bee hit.
Zimbabwe MDC adviser 'kidnapped'
Witnesses say Zimbabwe's opposition MDC adviser Gandhi Mudzingwa was forced by nine gunmen into a car which then drove to the city centre on Monday afternoon.
It would bring to 18 the number of MDC activists and rights campaigners who have vanished in the past six weeks.
President Robert Mugabe's ruling Zanu-PF party and Movement for Democratic Change (MDC), who has been deadlocked in power-sharing negotiations since September, can do nothing about the current outbreak of cholera.
The UN says nearly 600 Zimbabweans are known to have died in the outbreak, but there are fears that the number may be much higher.
Slump hits India's car industry
With all the focus on the US's car industry, I thought we would shift the attention a little to Inda's. Japan's third-larges carmaker, Nissan, and Renault have scaled back plans for joint projects after a sharp fall in car sales in the region.
Nissan's representive's said it still wanted to start car production together with Renault in the first half of 2010, as scheduled, at a plant in the southern city of Chennai.
But the factory, thus far, will start with just one daily shift, instead of two.
Other projects in India, including a joint venture between Nissan, Renault and India's Bajaj Auto to sell a $2,500 (£1,700) car from 2011, would go ahead as planned, Nissan said.
Demand for trucks in India has also dropped by more than 60% over the past year because of the credit crunch and a sharp drop in construction activity.
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