Dr. Warren who is a Harvard Law professor and chairwoman of the Congressional Oversight Panel said on the Daily Show (which is the Comedy Central Network) last Tuesday: “It is simple. This is America’s middle class. We’ve hacked at it and chipped at it and pulled on it for 30 years now. And now there’s no more to do. Either we fix this problem going forward or the game really is over.” She also added: “The chips are all on the table. We are going to write what the American economy looks like for 50 years going forward. And right now the CEOs have any real change bottled up in the Senate.”
Again, we may be witnessing an epic moment in the world history. An American claimed that “American hubris has brought it ruin.” I sincerely hope that he’ll be proven wrong.
http://www.huffingtonpost.com/2010/01/27/elizabeth-warren-the-chip_n_438379.html
Thursday, January 28, 2010
The Myth of Recovery
Jesse contends that bailing out banks and pumping them full of cheap capital in order to make houses, commodities and stocks all more expensive is going to actually make consumers less likely to spend. Mr. Hudson makes the point that more Obama props up the fire economy and helps banks hide their bad assets, the longer we will have to wait for a recovery in consumer spending and decreases in unemployment.
http://jessescrossroadscafe.blogspot.com/2010/01/tale-of-two-economies-and-myth-of.html
http://jessescrossroadscafe.blogspot.com/2010/01/tale-of-two-economies-and-myth-of.html
Tuesday, January 26, 2010
The Korean Stock Market Tumbles
Uncertain about the likely impact of the U.S. government’s bank revamp plans and Beijing’s decision to curb credit, the Korea Composite Stock Price Index shed 85 points over just three days to fall to the 1,630 range as the local currency finished at 1,163 won to the USD.
The question is: more downside to come?
The world economy is intertwined. The Asian stock market does not seem to have been decoupled from the U.S.' China may be one of those catalysts that could trigger downside scenarios.
Some contends that the U.S. stock market may muddle through this year, but after the election in November, the U.S. economy and stock market will fall. We shall see.
The question is: more downside to come?
The world economy is intertwined. The Asian stock market does not seem to have been decoupled from the U.S.' China may be one of those catalysts that could trigger downside scenarios.
Some contends that the U.S. stock market may muddle through this year, but after the election in November, the U.S. economy and stock market will fall. We shall see.
Jobs, Jobs, Jobs
According to a survey held nationwide by the Seoul headquarters of the civic group Citizen Manifesto, the majority among 20 thousand respondents chose “boosting the economy by creating jobs” as the top priority for the June provincial elections.
In the meantime, at the government’s weekly emergency economic meeting last Thursday the Korean president said job creation will be his administration’s top priority this year. He added that while his administration and the National Assembly will do their part to help create jobs, it shouldn’t be the government that provides the bulk of the jobs that Korea needs.
Of course, the devil lies in the details.
According to government statistics, the unemployment in Korea was 3.6 percent last year. However, many point out there are many more job seekers out there who haven’t been able to find jobs although they are not technically categorized as unemployed.
Many countries around the globe including the U.S. are facing high structural employment and some are experiencing jobless recovery.
In the meantime, at the government’s weekly emergency economic meeting last Thursday the Korean president said job creation will be his administration’s top priority this year. He added that while his administration and the National Assembly will do their part to help create jobs, it shouldn’t be the government that provides the bulk of the jobs that Korea needs.
Of course, the devil lies in the details.
According to government statistics, the unemployment in Korea was 3.6 percent last year. However, many point out there are many more job seekers out there who haven’t been able to find jobs although they are not technically categorized as unemployed.
Many countries around the globe including the U.S. are facing high structural employment and some are experiencing jobless recovery.
Thursday, January 14, 2010
A Simple Explanation of What Happened and Why Financial Reform Won’t Be Easy
An excerpt from the transcript of Bill Moyer's Journal of January 8, 2010:
Thanks to taxpayers like you who generously bailed banking from the financial shipwreck it created for itself and for us, by the end of 2009 the industry's compensation pool reached nearly $200 billion. And despite windfall profits, the banks will claim almost $80 billion in tax deductions. And nearly $20 billion of those deductions will go to just three institutions — Morgan Stanley, JP Morgan Chase, and Goldman Sachs.
Ah, yes — Goldman Sachs, that paragon of profit and probity — which bet big on the housing bubble and when it popped — presto! — converted itself from an investment firm into a bank so it could get your bailout money. Now consider this: in 2008, Goldman Sachs paid an effective tax rate of just one percent. I'm not making that up — one percent! — while their CEO Lloyd Blankfein pulled down over $40 million. That's God's work, if you can get it. And, believe me, Wall Street bankers know how to get it.
http://www.pbs.org/moyers/journal/01082010/watch.html
Thanks to taxpayers like you who generously bailed banking from the financial shipwreck it created for itself and for us, by the end of 2009 the industry's compensation pool reached nearly $200 billion. And despite windfall profits, the banks will claim almost $80 billion in tax deductions. And nearly $20 billion of those deductions will go to just three institutions — Morgan Stanley, JP Morgan Chase, and Goldman Sachs.
Ah, yes — Goldman Sachs, that paragon of profit and probity — which bet big on the housing bubble and when it popped — presto! — converted itself from an investment firm into a bank so it could get your bailout money. Now consider this: in 2008, Goldman Sachs paid an effective tax rate of just one percent. I'm not making that up — one percent! — while their CEO Lloyd Blankfein pulled down over $40 million. That's God's work, if you can get it. And, believe me, Wall Street bankers know how to get it.
http://www.pbs.org/moyers/journal/01082010/watch.html
Who Is Mainly Buying U.S. Treasuries?
From Jesse’s Café:
Personally I think the Fed is buying across the yield curve to affect interest rates, and Treasury takes care of stocks and commodities through the Exchange Stabilization Fund, but who can say without the power of wiretap, audit, and subpoena?
If this is price manipulation, no matter the intentions or beneficiaries, it is likely that it is mispricing risk in a big way, and will eventually will fail, and that its failure will cause a great deal of pain in the real economy for innocent bystanders, and will end in tears. And when that time comes, expect those who created the crisis to make you another offer that they think you cannot refuse.
You decide what is most likely, and what needs to be done about it, if anything. More than a few people are wondering at the lack of response from the people in various nations, particularly in the UK and the US.
And in this slow descent into madness, the worst is yet to come.
http://jessescrossroadscafe.blogspot.com/2010/01/who-is-one-big-bidder-for-us-treasuries.html
Personally I think the Fed is buying across the yield curve to affect interest rates, and Treasury takes care of stocks and commodities through the Exchange Stabilization Fund, but who can say without the power of wiretap, audit, and subpoena?
If this is price manipulation, no matter the intentions or beneficiaries, it is likely that it is mispricing risk in a big way, and will eventually will fail, and that its failure will cause a great deal of pain in the real economy for innocent bystanders, and will end in tears. And when that time comes, expect those who created the crisis to make you another offer that they think you cannot refuse.
You decide what is most likely, and what needs to be done about it, if anything. More than a few people are wondering at the lack of response from the people in various nations, particularly in the UK and the US.
And in this slow descent into madness, the worst is yet to come.
http://jessescrossroadscafe.blogspot.com/2010/01/who-is-one-big-bidder-for-us-treasuries.html
Doing Business in China: Google Threatens to Pull Out of China
From Bloomberg:
Google Inc.’s threat to pull out of China is the most visible reflection of U.S. companies’ growing disillusionment with the country nine years after it joined the World Trade Organization, business groups said.
Trade groups representing companies like Microsoft Corp., Boeing Co., Intel Corp. and Cigna Corp., which backed China’s entry into the WTO and fought off legislation to punish Chinese imports, say China increasingly discriminates against them on government contracts and through unfair subsidies.
Google, owner of the most-used search engine, said Jan. 12 that it would end self-censorship of its product in China after attacks on e-mail accounts of human-rights activists. The Mountain View, California-based company said the move may cause it to close offices in the country.
U.S. industry groups have raised complaints in recent months about policies such as China’s proposal to limit government contracts to companies that develop their technology in China.
“There is a growing frustration among companies about doing business in China,” John Neuffer, vice president of the Information Technology Industry Council, a Washington-based group that represents companies such as Microsoft and Intel, said in an interview. “It’s still a profitable market, but it’s become more difficult to do business there.”
Such comments from long-time backers of U.S.-China relations represent growing dissatisfaction among U.S. companies, said Susan Aaronson, a professor at George Washington University in Washington who writes about U.S.-China trade relations.
“I see much greater disillusionment as China is promoting its national champion companies,” Aaronson said in an interview. “More and more firms are going to say: I can do without this market.”
http://bloomberg.com/apps/news?pid=20601087&sid=avHfo24ba994&pos=7
From the NY Daily News:
Security experts say Google, along with dozens of other major companies, was the victim of a concerted espionage effort that they say came from within China and exploited flaws in e-mail attachments to get into networks of major financial and technology firms.
http://www.nydailynews.com/news/world/2010/01/14/2010-01-14_security_experts_china_hacked_google_to_steal_us_defense_secrets.html
Google Inc.’s threat to pull out of China is the most visible reflection of U.S. companies’ growing disillusionment with the country nine years after it joined the World Trade Organization, business groups said.
Trade groups representing companies like Microsoft Corp., Boeing Co., Intel Corp. and Cigna Corp., which backed China’s entry into the WTO and fought off legislation to punish Chinese imports, say China increasingly discriminates against them on government contracts and through unfair subsidies.
Google, owner of the most-used search engine, said Jan. 12 that it would end self-censorship of its product in China after attacks on e-mail accounts of human-rights activists. The Mountain View, California-based company said the move may cause it to close offices in the country.
U.S. industry groups have raised complaints in recent months about policies such as China’s proposal to limit government contracts to companies that develop their technology in China.
“There is a growing frustration among companies about doing business in China,” John Neuffer, vice president of the Information Technology Industry Council, a Washington-based group that represents companies such as Microsoft and Intel, said in an interview. “It’s still a profitable market, but it’s become more difficult to do business there.”
Such comments from long-time backers of U.S.-China relations represent growing dissatisfaction among U.S. companies, said Susan Aaronson, a professor at George Washington University in Washington who writes about U.S.-China trade relations.
“I see much greater disillusionment as China is promoting its national champion companies,” Aaronson said in an interview. “More and more firms are going to say: I can do without this market.”
http://bloomberg.com/apps/news?pid=20601087&sid=avHfo24ba994&pos=7
From the NY Daily News:
Security experts say Google, along with dozens of other major companies, was the victim of a concerted espionage effort that they say came from within China and exploited flaws in e-mail attachments to get into networks of major financial and technology firms.
http://www.nydailynews.com/news/world/2010/01/14/2010-01-14_security_experts_china_hacked_google_to_steal_us_defense_secrets.html
Friday, January 8, 2010
Goods Producing Workers Vs. Government Payroll
This chart shows how the manufacturing job trend lines panned out according to administration from the peak of manufacturing jobs in the U.S.
http://js-kit.com/blob/lybbHE8XmXbuANHDiQtIz3.jpg
From Jesse’s Café:
For the first time there are decidedly more government employees than goods-producing (manufacturing) employees in the US according to the Department of Labor.
It is interesting to think about this in terms of health care, pension plans, job security, employee loyalty, and so forth.
US corporations have been offshoring jobs for many years, in part due to the structural problems of benefits and environmental costs in a developed nation and Asian mercantilism. Some of this transfer of employee is due to natural market forces, but a great deal of it is a result of purposeful national policy and trade practices such as currency pegs, for example.
http://jessescrossroadscafe.blogspot.com/2010/01/more-government-employees-than-goods.html
http://js-kit.com/blob/lybbHE8XmXbuANHDiQtIz3.jpg
From Jesse’s Café:
For the first time there are decidedly more government employees than goods-producing (manufacturing) employees in the US according to the Department of Labor.
It is interesting to think about this in terms of health care, pension plans, job security, employee loyalty, and so forth.
US corporations have been offshoring jobs for many years, in part due to the structural problems of benefits and environmental costs in a developed nation and Asian mercantilism. Some of this transfer of employee is due to natural market forces, but a great deal of it is a result of purposeful national policy and trade practices such as currency pegs, for example.
http://jessescrossroadscafe.blogspot.com/2010/01/more-government-employees-than-goods.html
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