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'US Economy' Page (us-economy.html)
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| Horatio: O day and night, but this is wondrous strange! Hamlet: And therefore as a stranger give it welcome.
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| How often have I said to you that when you have eliminated the impossible,
whatever remains, however improbable, must be the truth.
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First question, was the US financial crisis (aka 'financial meltdown') and economic crash (aka 'recession'; 'great recession?', soon to become 'great depression'?) predictable or anticipated? The answer is a qualified, if speculative, yes!
Actually, several people have accurately predicted the financial crisis and consequent recession, among whom is Nouriel Roubini (aka 'Dr. Doom' ), a professor at New York University's Stern School of Business. According to an August 15, 2008 article by Stephen Mihm in The New York Times :
Dr. Doom
On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac.
The audience seemed skeptical, even dismissive. As Roubini stepped down from the lectern after his talk, the moderator of the event quipped, "I think perhaps we will need a stiff drink after that." People laughed — and not without reason. At the time, unemployment and inflation remained low, and the economy, while weak, was still growing, despite rising oil prices and a softening housing market. And then there was the espouser of doom himself: Roubini was known to be a perpetual pessimist, what economists call a "permabear". When the economist Anirvan Banerji delivered his response to Roubini's talk, he noted that Roubini's predictions did not make use of mathematical models and dismissed his hunches as those of a career naysayer.
But Roubini was soon vindicated. In the year that followed, subprime lenders began entering bankruptcy, hedge funds began going under and the stock market plunged. There was declining employment, a deteriorating dollar, ever-increasing evidence of a huge housing bust and a growing air of panic in financial markets as the credit crisis deepened. By late summer, the Federal Reserve was rushing to the rescue, making the first of many unorthodox interventions in the economy, including cutting the lending rate by 50 basis points and buying up tens of billions of dollars in mortgage-backed securities. When Roubini returned to the I.M.F. last September, he delivered a second talk, predicting a growing crisis of solvency that would infect every sector of the financial system. This time, no one laughed. "He sounded like a madman in 2006", recalls the I.M.F. economist Prakash Loungani, who invited Roubini on both occasions. "He was a prophet when he returned in 2007."
Over the past year [2007], whenever optimists have declared the worst of the economic crisis behind us, Roubini has countered with steadfast pessimism. In February [2008], when the conventional wisdom held that the venerable investment firms of Wall Street would weather the crisis, Roubini warned that one or more of them would go "belly up" — and six weeks later, Bear Stearns collapsed. Following the Fed's further extraordinary actions in the spring — including making lines of credit available to selected investment banks and brokerage houses — many economists made note of the ensuing economic rally and proclaimed the credit crisis over and a recession averted. Roubini, who dismissed the rally as nothing more than a "delusional complacency" encouraged by a "bunch of self-serving spinmasters", stuck to his script of "nightmare" events: waves of corporate bankrupticies, collapses in markets like commercial real estate and municipal bonds and, most alarming, the possible bankruptcy of a large regional or national bank that would trigger a panic by depositors. Not all of these developments have come to pass (and perhaps never will) [this August 15, 2008 article was written-published before the collapse of investment bank Lehman Brothers in September 2008, that triggered the 'financial meltdown' aka 'financial crisis' or 'crash' of 2008 ... and the financial meltdown is still ongoing in 2009, and has affected the real economy, both in the US and the rest of the planet!] , but the demise last month of the California bank IndyMac — one of the largest such failures in U.S. history — drew only more attention to Roubini's seeming prescience.
As a result, Roubini, a respected but formerly obscure academic, has become a major figure in the public debate about the economy: the seer who saw it coming. He has been summoned to speak before Congress, the Council on Foreign Relations and the World Economic Forum at Davos. He is now a sought-after adviser, spending much of his time shuttling between meetings with central bank governors and finance ministers in Europe and Asia. Though he continues to issue colorful doomsday prophecies of a decidedly nonmainstream sort — especially on his popular and polemical blog, where he offers visions of "equity market slaughter" [note the current (January-March) 2009 bearish stock market] and the "Coming Systemic Bust of the U.S. Banking System" [which started with Lehman Brothers' crash in September 2008 — and is still on-going in 2009!] — the mainstream economic establishment appears to be moving closer, however fitfully, to his way of seeing things. "I have in the last few months become more pessimistic than the consensus", the former Treasury secretary Lawrence Summers told me [Stephen Mihm, NYT] earlier this year [2008?]. "Certainly, Nouriel's writings have been a contributor to that."
[...]
—
www.nytimes.com/2008/08/17/magazine/17pessimist-t.html?_r=1
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Video Clip Title:
"Fall 2008 - Collapse of the U.S. Economy" - Part 1 & Part 2
YouTube Info/Description: "The United States House of Representatives met in a secret conference March 13, 2008. There was much debate over the necessity and grounds for this secret meeting. On July 7, 2008, on the Michael Herzog show, called the "American Awakening" on RBN, they revealed the content discussed in that meeting. In which they, bluntly, told their viewers some of the most shocking and inevitable truth that our Government have planned for us." Uploaded to YouTube by: amplifythenoise Date of Upload: August 15, 2008 Tags: Fall 2008 september collapse of US economy iran israel war martial law inflation dollar world nwo ww3 jesus christ lord savior
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YouTube Video Clip Title: dollar fuckD by bailout Uploaded by: bluedonkeyman Date added: September 20, 2008 Description/Info: max kaiser dollar screwed |
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Okay ... let's have a serious look-see at the whole Mystery of the US Economy ...
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Title:
'Worst economic collapse ever'
From:
RussiaToday
Added:
February 10, 2009
Info-Description:
Digg it so that more people can watch it!
digg.com/world_news/Worst_economic_collapse_ever_Gerald_Celente
In 2009 were going to see the worst economic collapse ever, the Greatest Depression, says Gerald Celente, U.S. trend forecaster. He believes its going to be very violent in the U.S., including there being a tax revolt.
Title:
2009 will be the year of Total decline for US Jim Rogers
From:
EconomyMeltdown
Added:
December 18, 2008
Info-Description:
recession depression decline US economy economic collapse crisis meltdown
dollar gold silver Ron Paul Alex Jones Peter Schiff jim Rogers Max Keiser
Title:
3/1 CNN Your Money: Talks of Great Depression Coming
From:
Redpill4u
Added:
March 01, 2008
Info-Description:
Get ready for the price of gold to soar after this type of story in
mainstream! John Williams discusses a coming financial depression. Many
financial experts outside of mainstream has spoken about an economic collapse
for years; such as Bob Chapman from http://theinternationalforecaster.com/
DISCLAIMER: RedPill4u does not own this video footage, it belongs to their respective owners under the Fair Use policy and terms.
The percentage of elected officials saying their community has experienced the following over the past year:
Increase in foreclosures: 62%
Increase in need for temporary assistance: 53%
Decrease in city revenue: 33%
Increase in abandoned/vacant properties: 33%
Increase in homelessness: 22%
Source: National League of Cities' Insta-Poll of 1,240 local officials, based on 211 responses
It will only get worse, but they've already have a plan for you. You'll be
introduced to a regional currency 'Amero' then eventually a global currency.
Hey, I'm not a prophet, I just read what they speak of. Sadly, many of you will
fall to the deception because of your coming economic demise. Unfortunately, It
shouldn't have come to this, but many of you are slaves to group blaming.
(Republican vs. democrat, conservative vs. liberal, etc)
The End of National Currency
www.foreignaffairs.org/20070501faessay86308-p0/benn-steil/
the-end-of-national-currency.html
Washington Post: time to ditch the dollar for new currency
www.washingtonpost.com/wp-dyn...d=opinionsbox1
The CFR, Robert Pastor and the NAU
www.informationliberation.com/?id=22156
Problem, reaction then solution.
"Being ahead of the masses in your observations of economic trends is no way to win a popularity contest. If you're 30 days ahead of the masses, you're considered a genius; but if you're two years ahead, you're considered insane. It makes me wonder about the experiences of historical geniuses like Nikola Tesla, since they were at least a hundred years ahead in their understanding of science." -Mike Adams
Please explore these articles:
FDIC Girds For Bank Failures & The FDIC Will Seek to Rehire 25 of It's Own
Retired Members, Many of Whom Specialized in Bank Closings.
www.thestreet.com/print/story/10405078.html
www.investmentnews.com/apps/pbcs.dll/article?AID=
/20080226/REG/802566081
Wall Street Bank Run
www.washingtonpost.com/wp-dyn/content/article
/2008/02/20/AR2008022002270.html
US Properties Plunge Into Negative Equity Than At Any Time Since The Great
Depression Of The 30's
www.guardian.co.uk/business/2008/feb/24/useconomy.property
U.S. Credit Markets Collapsing!
hosted.ap.org/dynamic/stories/E/
ECONOMY?SITE=RIPAW&SECTION=HOME
&TEMPLATE=DEFAULT
America's Economy Risks the Mother of All Meltdowns
news.yahoo.com/s/ft/20080219/
bs_ft/fto021920081334359078;
_ylt=AozoX8V3CwKFRV6c_RfR1f0E1vAI
U.S. Mortgage Crisis Spreads Past Subprime Loans!
www.iht.com/articles/2008/02/12/business/12credit.php
Dozens of U.S. Banks Will Fail by 2010
www.canada.com/ottawacitizen/news/
business/story.html?
id=db0041ae-fa25-43a2-b472-f8fbb851a367&k=53982
Wealthy Investor Jim Rogers Warns About Economy, 'It's Going To Be Much Worse'
money.cnn.com/2008/01/30/news/international/
okeefe_rogers.fortune/index.htm?
postversion=2008013103
Crisis may make 1929 look a 'walk in the park'
www.telegraph.co.uk/money/main.jhtml?
xml=/money/2007/12/23/cccrisis123.xml
World Economic Situation Serious - IMF
news.smh.com.au/
world-economic-situation-serious--imf/
20080122-1nb5.html
Full global impact phase of the Very Great US Depression
www.leap2020.eu/
GEAB-N-21-is-available!-2008-
Full-global-impact-phase-of-the-Very-Great-US-
Depression_a1195.html?PHPSESSID=
19b48b7e8afe63571c0428c0d77c311e
"If a nation values anything more than freedom, it will lose its freedom; and the irony of it is that if it is comfort or money that it values more, it will lose that too." -Somerset Maugham
Derivatives the new 'ticking bomb'
www.marketwatch.com/news/story/
derivatives-new-ticking-time-bomb/story.aspx?
guid=%7bB9E54A5D-4796-4D0D-AC9E-
D9124B59D436%7d&print=true
&dist=printTop
Title:
THE TOTAL COLLAPSE OF THE GLOBAL ECONOMY
From:
THEYLIVE2012
Added:
March 16, 2008
Info-Description:
www.myspace.com/totalreality2012
There's good news and bad news...
Good news is thanks to the massive wealth of information
the internet provides, we can now have a glimpse into the near future, so those
of us with
perception, can adequately prepare for the bad news
and the bad news is...there is absolutely no avoiding this
unprecedented economic downturn
I hope people will heed these warnings
History shows it's those who giggled and snickered that ended
up a statistic
Title:
The Truth About The Economy: Total Collapse
From:
DavidThePatriot
Added:
September 14, 2007
Info-Description:
Compilation from the Korelin Economics Report in April. More and more
proof that we are losing a financial war with ourselves...
I was up late making this, and there are two unintentional
typos... Laptop keys are small too =)
RonPaul2008.com
Title:
Major U.S. Economic Collapse Coming
From:
myspacesecrets
Added:
February 26, 2008
Info-Description:
http://www.moneytreeprofits...
Major U.S. Economic Collapse Coming People. You Are Being Warned. Is This The Big One Predicted Many Years Ago...YES!
email : financial911@gmail.com
Title:
Ron Paul on the Economic Collapse!
From:
GoldSilverAndGold
Added:
February 04, 2008
Info-Description:
http://goldsilver.com Who is Ron Paul? What does he stand for? If you
want to know, then the full-length interview at http://goldsilver.com is the
one to watch. Ron Paul is a nine term Congressman and Presidential Candidate
whose passion is monetary policy, Dr. Paul has served on The House Banking
Committee and The Financial Services Committee. If anyone is in a position to
know what our country has in store financially, it is this man. In this amazing
interview with Michael Maloney of Goldsilver.com Presidential Candidate Ron
Paul warns what lies dead ahead for our country if we continue on our present
path.
Title:
IT'S LIKE A FIX FOR A JUNKIE! Ron Paul on Economy Meltdown
From:
VOTERSTHINKdotORG
Added:
September 19, 2008
Info-Description:
http://cspanjunkie.org/
September 19, 2008 CNN
Title:
*Advice From Warren Buffett Start A Biz* {Warren Buffet Speaks}
From:
berryguru2
Added:
October 22, 2008
Info-Description:
http://www.Joinfreenow.info
Robert Nichols
(310) 601-8430
Warren Edward Buffett (born August 30, 1930) is an American investor, businessman, and philanthropist. He is one of the world's most successful investors and the largest shareholder and CEO of Berkshire Hathaway. He was ranked by Forbes as the richest man in the world during the first half of 2008, with an estimated net worth of $62.3 billion.
Often called the "Oracle of Omaha", Buffett is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth. His 2006 annual salary was about $100,000, which is small compared to senior executive remuneration in comparable companies. When Buffett spent $16.7 million of Berkshire's funds on a business jet in 1989, he jokingly named it "The Indefensible" because of his past criticisms of such purchases by other CEOs. He lives in the same house in the central Dundee neighborhood of Omaha that he bought in 1958 for $31,500 and today, it is valued at around $700,000.
Buffett also is a notable philanthropist. In 2006, he announced a plan to give away his fortune to charity, with 83% of it going to the Bill & Melinda Gates Foundation. In 2007, he was listed among Time's 100 Most Influential People in The World. He also serves as a member of the board of trustees at Grinnell College.
Mr. Buffett married Susan Thompson in 1952. They had three children, Susie, Howard, and Peter. The couple began living separately in 1977, although they remained married until her death in July 2004. Their daughter Susie lives in Omaha and does charitable work through the Susan A. Buffett Foundation and is a national board member of Girls, Inc.In 2006, on his seventy-sixth birthday, he married his never-before-married longtime-companion, Astrid Menks, who was then sixty years old. She had lived with him since his wife's departure in 1977 to San Francisco. Interestingly, it was Susan Buffett who ar
Title:
Advice From Warren Buffett
From:
CBS
Added:
October 17, 2008
Info-Description:
Katie Couric reports on new signs of an economic downturn and the expert
advice of billionaire investor Warren Buffett.
Title:
Economy Total Collapse !! America Bankrupt ! trillion fraud
From:
johnrigs123
Added:
October 27, 2008
Info-Description:
????????????!!!!!!!!!!!
Title:
Economic Collapse of 2009 - Greater than Great Depression
From:
WhereIsTruth
Added:
December 20, 2008
Info-Description:
Gerald Celente, and analyst renowned for accuracy on forecasting trends,
explains why the impending economic collapse, next escalating to a serious
retail and commercial real estate collapse, will be greater than the Great
Depression of 1929; speaking on the Lew Rockwell Show. ...
According to Wikipedia :
The subprime mortgage crisis is an ongoing financial crisis triggered by a dramatic rise in mortgage delinquencies and foreclosures in the United States, with major adverse consequences for banks and financial markets around the globe. The crisis, which has its roots in the closing years of the 20th century, became apparent in 2007 and has exposed pervasive weaknesses in financial industry regulation and the global financial system.
Continues Wikipedia:
Financial products called mortgage-backed securities (MBS), which derive their value from mortgage payments and housing prices, had enabled financial institutions and investors around the world to invest in the U.S. housing market. Major banks and financial institutions had borrowed and invested heavily in MBS and reported losses of approximately US$435 billion as of 17 July 2008. The liquidity and solvency concerns regarding key financial institutions drove central banks to take action to provide funds to banks to encourage lending to worthy borrowers and to restore faith in the commercial paper markets, which are integral to funding business operations. Governments also bailed out key financial institutions, assuming significant additional financial commitments.
The risks to the broader economy created by the housing market downturn and subsequent financial market crisis were primary factors in several decisions by central banks around the world to cut interest rates and governments to implement economic stimulus packages. These actions were designed to stimulate economic growth and inspire confidence in the financial markets. Effects on global stock markets due to the crisis have been dramatic. Between 1 January and 11 October 2008, owners of stocks in U.S. corporations had suffered about $8 trillion in losses, as their holdings declined in value from $20 trillion to $12 trillion. Losses in other countries have averaged about 40%. Losses in the stock markets and housing value declines place further downward pressure on consumer spending, a key economic engine. Leaders of the larger developed and emerging nations met in November 2008 to formulate strategies for addressing the crisis.
Title:
SubPrime Mortgage Blues
From:
MoneyTalksNews
Added:
April 27, 2007
Info-Description:
If your credit isn't the best, you might be familiar with sub-prime
loans: they're the kind with a high rate for people with low credit...
Title:
Inside the US subprime crisis 01 April 2008
From:
AlJazeeraEnglish
Added:
April 27, 2007
Info-Description:
The subprime mortgage crisis in the US is being felt deeply by those in
the business of selling homes.
With property sales dipping across the country, property agents are feeling the
pinch.
Adam B. Salem is a property agent in the state of Virginia who has a lot of
clients, many of them immigrants, who took out subprime loans they can't re-pay.
He tells his story in his own words.
Before we view a couple of these YouTube video clips, let's check out what we can about LCTM ...
According to Wikipedia , "Long-Term Capital Management (LTCM) was a U.S. hedge fund which used trading strategies such as fixed income arbitrage, statistical arbitrage, and pairs trading, combined with high leverage. It failed spectacularly in the late 1990s, leading to a massive bailout by other major banks and investment houses, which was supervised by the Federal Reserve."
Continues Wikipedia: "LTCM was founded in 1994 by John Meriwether, the former vice-chairman and head of bond trading at Salomon Brothers. Board of directors members included Myron Scholes and Robert C. Merton, who shared the 1997 Nobel Memorial Prize in Economic Sciences. Initially enormously successful with annualized returns of over 40% (after fees) in its first years, in 1998 it lost $4.6 billion in less than four months following the Russian financial crisis and became a prominent example of the risk potential in the hedge fund industry. The fund folded in early 2000."
Wikipedia concluded as follows:
After helping unwind LTCM, Meriwether launched a new fund JWM Partners. The principals of the firm were a familiar bunch: Haghani, Hilibrand, Leahy, Rosenfeld, all signed up. By December 1999 they had raised $250 million for a fund that would continue many of LTCM's strategies—this time, there would be less leverage.
The website www.cato.org of The Cato Institute carries a "Briefing paper No. 52" apparently entitled "Too Big to Fail?: Long-Term Capital Management and the Federal Reserve", by Kevin Dowd, professor of economics at the University of Sheffield and an adjunct scholar at the Cato Institute. Here's what the "Executive Summary" says:
The Fed's intervention was misguided and unnecessary because LTCM would not have failed anyway, and the Fed's concerns about the effects of LTCM's failure on financial markets were exaggerated. In the short run the intervention helped the shareholders and managers of LTCM to get a better deal for themselves than they would otherwise have obtained.
The intervention also is having more serious long-term consequences: it encourages more calls for the regulation of hedge-fund activity, which may drive such activity further offshore; it implies a major open-ended extension of Federal Reserve responsibilities, without any congressional authorization; it implies a return to the discredited doctrine that the Fed should prevent the failure of large financial firms, which encourages irresponsible risk taking; and it undermines the moral authority of Fed policymakers in their efforts to encourage their counterparts in other countries to persevere with the difficult process of economic liberalization.
The following text is from the About.com web page entitled "What Was the LTCM Hedge Fund Crisis?" by Kimberley Amadeo.
Answer: Long-Term Capital Management (LTCM) was a very large hedge fund ($126 billion in assets) that nearly collapsed in late 1998. Like many hedge funds, its investment strategies were based on a fairly regular range of volatility in foreign currencies and bonds. When Russia declared it was devaluing its currency and basically defaulting on its bonds, it moved beyond the regular range that LTCM had counted on. In response, the U.S. stock market dropped 20%, while European markets fell 35%. Investors sought refuge in Treasury bonds, causing interest rates to drop by over a full point.
As a result, LTCM' s higly leveraged investments started to crumble. By the end of August 1998, it lost 50% of the value of its capital investments. Since so many banks and pension funds were invested in LTCM, its problems threatened to push most of them to near bankruptcy.
To save the U.S. banking system, then-Federal Reserve Chairman Alan Greenspan personally convinced 14 banks to remain invested in the hedge fund, averting disaster. In addition, the Fed started lowering the Fed Funds rate as a reassurance to investors that the Fed would do whatever it took to support the U.S. economy. Without such direct intervention, the entire financial system was threatened with a collapse.
There is growing concern that the large role of hedge funds in today' s markets could cause a repeat of that panic. However, the September 2006 financial distress of Amaranth Advisors, a fund nearly twice the size of LTCM, had little effect on global stock markets. (Source: IMF, World Economic Outlook, Interim Assessment, "Chapter III: Turbulence in Mature Financial Markets" December 1998; IMF Report: "International Contagion Effects from the Russian Crisis and the LTCM Near-Collapse", April 2002; European Central Bank, "Financial Stability Report" December, 2006.)
Title:
Warren Buffett on Long Term Capital Management
From:
xZExROx
Added:
May 26, 2008
Info-Description:
Warren Buffett on Long Term Capital Management. making money when you are
already rich - James Cox finance blog
US unemployment will surge to 10 per cent this year [2009] and the budget deficit will widen to US$1.5 trillion next year, reflecting a "deeper recession" than previously expected, White House budget chief Peter Orszag said.
The Office of Management and Budget (OMB) also forecasts that the US economy will shrink 2.8 per cent this year [2009], worse than the 1.2 per cent contraction that the OMB projected in May [2009].
[...]
Even with economic conditions worse than originally forecast, [White House chief economist Ms Christina] Romer said, "we do expect positive GDP growth by the end of this year [2009]" for the fourth quarter, as the economy reaches "a turning point". This is in line with 94 per cent of Blue Chip economists, according to Mr Orszag.
"A return to employment growth will take longer," Ms Romer said.
—
Column:
"Top Stories"
Title:
"White House paints darker economic picture'"
Sub-title / Tagline:
"GDP to shrink 2.8%, joblessness to hit 10% this year [2009]"
Motherlode / Original Source:
Bloomberg, AP
Newspaper:
The Business Times
[BT]
, August 26, 2009
|
[KALGOORIE - WESTERN AUSTRALIA]
Many economies may be showing signs of bottoming [out] in response to massive government stimulus [inlcuding bailouts] but the world will stay in recession until the end of the year, prominent economist Nouriel Roubini said yesterday [Monday, August 3, 2009], warning that deflation would be a key risk. "There is potentially light at the end of the tunnel, and advanced as well as emerging economies are showing signs of bottoming out of [the] recession, but there is the risk of a double-dip recession in the second half of next year [2010] and into 2011," he told delegates at a mining conference in Western Australia. Mr Roubini, a New York University economist who rose to rock star status after he predicted the global financial crisis, said the world economy would contract by 2 per cent this year [2009], staying in a recession until the end of the year, before growing by 2 to 3 per cent next year. [...] With the United States being the world's largest economy, consumption trends there will be the key for the global recovery, and signs from the labour market and the outlook for consumer demand remain worrying, Mr Roubini said. Given the severe weakness in the job market, the American consumer would remain "shopped out" and keen to increase the rate of hosehold savings, he added. [...]
|
|
[WASHINGTON]
[...] One intriguing sub-plot of the economic crisis is the failure of most economists to predict it. Here we have the most spectacular economic and financial crisis in decades — possibly since the Great Depression [of the 1930's] — and the one group that spends most of its waking hours analyzing the economy basically missed it. Oh, a few economists [e.g., Nicolas Taleb and Nouriel Roubini] can legitimately claim some foresight. But they are a handful. Most were as surprised as the rest of us. Why? This is a compelling question without, as yet, a compelling answer. Indeed, so far as I [Robert Samuelson] can tell, economists have not engaged in rigorous self-criticism to explain their lapse. We've had some casual theories and some partisan recriminations: "Free-market ideology" is a standard scapegoat on the assumption that most economists are "free-market ideologues". But that's not true. In any case, the crisis surprised liberal and conservative economists, Republicans and Democrats alike. [...]
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[WASHINGTON]
Niall Ferguson is one of those rare characters: a respected scholar who's also a successful populariser. Ferguson, a Brit, has taught at Oxford, New York University and now at Harvard. He has written about World War I, the British Empire and the Rothschilds (Europe's most powerful banking family). He has turned four of his projects into TV documentaries, the latest of which — The Ascent of Money , which is also a book — began airing on PBS on July 8 [2009]. It is a programme that could be usefully viewed by most of America's roughly 13,000 economists. [...] Ferguson is an able guide. ... [...] [In his broadcasted documentary and book, The Ascent of Money , Ferguson] suggests two reasons why the present crisis embarassed most economists.
— Column: "Editorial & Opinion" Title: "Why economists did not see collapse coming" (Adapted) By: Robert Samuelson Newspaper: The Business Times (BT) , July 10, 2009 |
|
The United States may emerge from recession as early as this summer [Summer
2009], though further job losses mean a "depressed economy" could last as long
as five years [2009 - 2014], Nobel Prize-winning economist Paul Krugman said
yesterday [Tuesday, May 19, 2009].
[...] Mr Krugman said he would not be surprised if the US recession, which began in December 2007, ends in August or September [2009]. But he said job losses are likely to continue into 2011, meaning "the period of a depressed economy" could last until 2013 or 2014. The academic at Princeton University won the Nobel Memorial Prize in Economic Sciences last year [2008] for his analysis of how economies of scale can affect international trade patterns. He also writes columns for The New York Times . Mr Krugman said while economic indicators worldwide are improving, they suggest the pace of economic decline has only slowed. "I share the optimism that the worst of this may be over," he said, also noting a stabilisation in financial markets. "What's really hard, however, is to say when does this go beyond stabilisation to an actual recovery." He said it was tricky defining the beginning and end of recessions. A general definition of recession is two straight quarters of economic contraction, although broader measures are also taken into account. Mr Krugman noted that in the US, they are officially dated by the National Bureau of Economic Research, which he said generally declares "that the end of a recession is when some major economic indicators begin improving. When it's no longer a case where everything is falling". The last two recessions in the US, said Mr Krugman, officially ended when industrial production turned up even though unemployment continued to worsen "long after the official end of the recession".
As an example, he cited the one in 2001, which ended after eight months in
November [2001], though the unemployment rate didn't bottom out until June of
2003.
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[NEW YORK]
As job losses rise, gorwing numbers of Americans homeowners with once solid credit [ratings] are falling behind on their mortgages, amplifying a wave of foreclosures. In the latest phase of the nation's real estate disaster, the locus of trouble has shifted from sub-prime loans — those extended to homebuyers with troubled credit — to the far more numerous prime loans issued to those with decent financial histories. With many economists anticipating that the umemployment rate will rise into the double digits from its current 8.9 per cent, foreclosures are expected to accelerate. That could exacerbate bank losses, adding pressure to the financial system and the broader economy. "We're about to have a big problem," said Morris A Davies, a real estate expert at the University of Wisconsin. "Foreclosures were bad last year? It's going to get worse." Economists refer to the current surge of foreclosures as the third wave , distinct from the initial spike when speculators gave up property because of plunging real estate prices, and the secondary shock , when borrowers' introductory interest rates expired and were reset higher. "We're right in the middle of this third wave, and it's intensifying," said Mark Zandi, chief economist at Moody's Economy.com. "That loss of jobs and loss of overtime hours and being forced from a full-time to part-time job is resulting in defaults. They're coast to coast." Those sliding into foreclosure today are more likely to be modest borrowers whose loans fit their income than the consumers of exotically lenient mortgages that formerly typified the crisis. Economy.com expects that 60 per cent of the mortgage defaults this year [2009] will be set off primarily by unemployment, up from 29 per cent last year [2008].
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[...] ... the [US] mortgage market collapsed, new construction stopped ... Borrowers [including "rich US homeowners"] ... are [now] becoming trapped by the same issue facing the poorest sub-prime homeowners: falling home [real-estate] prices erase [home or real-estate] equity and make it impossible to sell or refinance without losing money. The number of US homes valued at more than US$729,750 — [which is] the jumbo-loan limit in the most affluent areas — entering the foreclosure process jumped 127 per cent during the first 10 weeks of this year from the same period of 2008 ... The rate rose 72 per cent for homes valued at less than US$417,000 and 78 per cent for all homes ....
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[NEW YORK] Home values in the United States extended their fall in the first quarter [Q1 2009], with more than one in five homeowners now owing more on their mortgages than their homes are worth, real estate website Zillow.com said yesterday. [...] Declining home values left 21.9 per cent of all American homeowners with negative equity by the end of Q1, Zillow said.
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The IMF announcement of a toxic asset hole of probably US$4 trillion is
shocking but not unexpected. Some of us believe that the statement is a
"warmer" and that there will be more to come. It is said that worse figures
have already been presented in Washington.
There is one group of people coming out of the disaster with a big smile on their faces - the bankers. They make Houdini look like an amateur. Not only have they got away with privatising the profits and socialising the losses, they are right now increasing their charges, reducing their service and continuing to pay themselves outrageous bonus monies. Four of them, under the watchful eye of the political equivalent of a Kalashnikov rifle, apologised - and immediately set about stealing more of their customers' savings. And what did we do? Some hotheads broke a few bank windows and got arrested. Otherwise we sat back and took the fiscal rape with barely a murmur. Apart from locking them all up for a very long time and throwing away the key, there are eight things we must now do to put the situation right and prevent a recurrence of the worst of the causes of global financial bankruptcy.
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Losses at financial institutions could approach US$4.1 trillion (S$6.1 trillion) worldwide, the International Monetary Fund (IMF) said on Tuesday [April 21, 2009] .... [...] The 185-nation IMF, based in Washington, is the world's economic-rescue squad, providing emergency loans to countries facing financial troubles. Said the IMF in its latest conclusions: "The current inability to attract private money suggests that the crisis has deepened to the point where governments need to take bolder steps and not shrink from capital injection in the form of common shares, even if it means majority, or even complete, control of institutions.
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[WASHINGTON]
US President Barack Obama called AIG reckless and greedy during a blistering attack in which he pledged to try to block the insurance giant from handing its executives millions of dollars in bonuses after taking billions in federal aid. [...] "I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?" Mr Obama said on Monday [March 16, 2009] ... Expressions of outrage across the political spectrum reached a new crescendo when Senator Charles Grassley suggested in a Iowa City radio interview on Monday [March 16, 2009] that AIG executives should take a Japanese approach towards accepting responsibility for the collapse of the insurance giant by resigning or killing themselves. "Obviously, maybe they ought to be removed," the Iowa Republican said. "But I would suggest the first thing that would make me feel a little better towards them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide." Mr Grassley's spokesman Casey Mills said the senator wasn't calling for AIG executives to kill themselves, but said those who accept tax dollars and spend them on travel and bonuses do so irresponsibly. [...]
... New York Attorney-General Andrew Cuomo said he issued sub-poenas for the
names of AIG employees given bonuses despite their possible roles in its near
collapse. Mr Cuomo said his office will investigate whether the bonuses are
fraudulent under state law because they were promised when the company knew it
wouldn't have the money to cover them.
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Washington
The US unemployment rate bolted to 8.1 per cent in February [2009], the
highest since late 1983, as cost-cutting employers slashed
651,000
jobs amid a
deepening recession.
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... The US consumer has always been the one that keeps on spending, thus keeping Asia's export levels up. Now even the mighty US consumer has fallen, and Asia is hurting. The financial crisis which has frozen much of the lending end keep the US consumer cautious for a long time. The US consumer has overspent and is sitting on far too much debt. As at September 2008, the US household debt-to-disposable income ratio stood at 1.3 times (source: US Bureau of Economic Analysis and Federal Reserve ). This means that for every dollar of disposable income, an average US citizen has to pay on US$1.30 worth of debt! Given the current credit squeeze ['CREDIT CRUNCH'] experienced globally, it will be a long time before the US consumer pays down enough of his debt to start spending aggressively again. — Title: "Asian power to the fore" Subtitle / Tagline: "With more spending power than the US consumer, larger and stricter banks and stronger businesses, power is bound to shift gradually towards Asia" Newspaper: BT Weekend , Sat/Sun, Feb 14-15, 2009 |
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Money for nothing.
Almost every country and industry has been affected by the aftermath of the
credit and banking crisis emanating from the US. The unnecessary bankruptcy of
Lehman Brothers was the tipping point. Unbelievably, a relatively small US$700
billion sub-prime problem was incompetently allowed to morph into a global
economic disaster wiping out several trillions of wealth globaly and causing
unnecessary hardship.
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Jeffrey Immelt, General Electric (GE) chief executive officer, says capping
management pay is ''not conducive" to the best leadership while acknowledging
"people are angry" at business leaders in general
.
[...] — Title: "Pay cap not conducive to leadership: GE chief" (Adapted slightly) Newspaper: BT Weekend , Sat/Sun, Feb 7-8, 2009 |
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Washington
US employers slashed
598,000
jobs in January [2009], the deepest cut in
payrolls in 34 years and the jobless rate shot up to 7.6 per cent, according to
a Labor Department report yesterday that underlined a deepening recession.
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New York
... Bank of America [BA], the largest financial institution in the US ... had
to go begging for help from the [US] government just two weeks after closing
its purchase of Merrill Lynch.
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[STOCKHOLM]
Mobile phone maker Nokia plans to cut 1,700 jobs in sales, marketing and some management functions to adapt to falling consumer demand. [...] Competitor Sony Ericsson Mobile Communications said in January [2009] it probably won't return to profit before the second half [of 2009], as fewer people buy new mobile phones in the global economic recession. "It's a sign the mobile phone market is still deteriorating," said Maurice Redin, Stockholm-based head of equities at Alfred Berg, which manages US$27 billion in assets. ... Nokia has lost more than half its market value in a year, declining 55 per cent. That's less than US competitor Motorola, which has lost 61 per cent in 12 months. [...]
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Cheers!
Paul Quek
Webmeister
Woodlands, Singapore
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| Incept Date: | 09 February 2009 | |
| Rev'd Date: | 25 August 2010 |
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It is my sincere hope that you are not, or have not become, so gullible as to fall for anything bogus or nonsensical or farcical, such as falling for stuff like "Astrology" or "I-ching" or some such similar garbage ... including falling for anything that is featured, as a warning , in our public service webpages — our entire Mysteries of the World / MOTW Website is geared to warn readers and viewers of these scams, hoaxes, frauds and tricks, in other words, we are asking you to beware and be aware!
It is intellectually dishonest to believe in something that is not true, even if it is profitable (that is, even if it makes you a lot of mullah, money, cash, whatever); surely, you are not chained to the "bean-counter" mentality, are you? Because if you are, that is really, really sad!
If you want to be liberated or if you want to awaken , then walk away from that which is not the truth! ("The truth shall make you free", says the Bible, right? Yes!) Especially, don't be so chained to the money, that you become "richly asleep", unable to awaken from the nightmare of your own making that has ensnared you!
[ Buddhism Without Beliefs: A Contemporary Guide to Awakening ;puts it:
see also Living with the Devilaka ego or Mara ]
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