Archive for the ‘Financial crisis’ Category
Posted by seumasach on September 27, 2010
Jim Willie
Market Oracle
23rd September, 2010
Japan has proved without confusion that 0% is a permanent stuck position. The United States will repeat the path, but with a vast mudslide. Japan has had the advantage of a strong industrial base, a sizeable trade surplus, and no war budget. Thus it has been capable of funding much of its own deficits. It does possess a big debt burden. But the US has $1 of new debt for every $1 in government revenue. The US war budget is almost as large as its total revenue. The US depends upon foreign creditors, many of whom have been thoroughly alienated.
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Posted by smeddum on September 25, 2010
Top officials from six U.K. universities joined Martin Rees, president of the Royal Society, in London today in a last-ditch attempt to avert the government’s expected cuts in science funding, which will be detailed in its forthcoming comprehensive spending review, scheduled for release on 20 October . The defiant gathering follows U. K. business secretary Vince Cable’s controversial speech earlier this month at The Queen Mary Bioenterprises Innovation Centre in London, in which he remarked that only research that has a commercial use or is “theoretically outstanding” should be funded by taxpayers. Cable’s remarks come a few months after the U.K. research councils were told to submit budgets for scenarios involving a funding freeze and cuts of 10% and 20%. Read the rest of this entry »
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Posted by smeddum on September 25, 2010
Sinn Féin warns against further cuts
Monday, 20 September 2010
RTE
Sinn Féin’s Caoimhghín Ó Caoláin has warned that cutting billions of euro out of the economy will not pull Ireland out of recession. Read the rest of this entry »
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Posted by seumasach on September 21, 2010
GEAB
Global Research
18th September, 2010
As anticipated by LEAP/E2020 last February in the GEAB No. 42, the second half of 2010 is really characterized by a sudden worsening of the crisis marked by the end of the illusion of recovery maintained by Western leaders (1) and the thousands of billions swallowed up by the banks and the economic « stimulation » plans of no lasting effect. The coming months will reveal a simple, yet especially painful reality: the Western economy, and in particular that of the United States (2), never really came out of recession (3). The startling statistics recorded since summer 2009 have only been the short-lived consequences of a massive injection of liquidity into a system which had essentially become insolvent just like the US consumer (4). At the heart of the global systemic crisis since its inception, the United States is, in the coming months, going to demonstrate that it is, once again, in the process of leading the economy and global finances into the « heart of darkness » (5) because it can’t get out of this « Very Great US Depression (6) ». Thus, coming out of the political upheavals of the US elections next November, with growth once again negative, the world will have to face the « Very Serious Breakdown » of the global economic and financial system founded over 60 years ago on the absolute necessity of the US economy never being in a lasting recession. Now the first half of 2011 will dictate that the US economy take an unprecedented dose of austerity plunging the planet into new financial, monetary, economic and social chaos (7).
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Posted by seumasach on September 14, 2010
Prof Rodrigue Tremblay
Global Research
14th September, 2010
It has become a truism to say that the Democrats and the Obama administration now “own” the crucial issue of the economy. Justly or unjustly, voters are bound to hold them accountable for the poor state of the U.S. economy. This is not an enviable political position to be in just before an election, at a time when disgusted voters are most angry and very anxious about the economy and their economic future. Recent polls indicate that nearly two-thirds of Americans think their nation is in a state of decline and that the economy will remain in the same recessionary state or get worse next year.
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Posted by seumasach on September 14, 2010
Michael Hudson
Global Research
14th September, 2010
I can smell the newest giveaway looming a mile off. The Wall Street bailout, health-insurance giveaway and support of real estate prices rather than mortgage-debt write-downs were bad enough, not to mention the Oil War¹s Afghan extension. But now comes a topper: the $50 billion transportation infrastructure plan that Obama proposed in Milwaukee cynically enough, on Labor Day. It looks like the Thatcherite Public-Private Partnership, Britain¹s notorious giveaway to the City of London underwriters. The financial giveaway had the effect of increasing prices for basic infrastructure services by building in heavy financial fees guaranteed for the banks, who lent the money that banks and property owners used to pay in taxes in more progressive times.
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Posted by seumasach on September 11, 2010
David Goldmen
Asia Times
8th September, 2010
Full disclosure: I just unloaded a large part of my municipal portfolio. I am restricting my holdings to bulletproof bonds with ring-fenced revenue streams. New York City, my home town, went bankrupt once in my lifetime, and with financial industry employment vaporizing and real estate values falling, the Apple is lookng pretty wormy. Meredith Whitney yesterday forecast what everyone in financial industry management has been saying private for weeks: mass layoffs are coming in the banking sector. The banks simply can’t make money with a still-shrinking loan book, a flattening yield curve, and stupid-tight mortgage spreads (thanks to the Fed’s purchasing program).
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Posted by seumasach on September 6, 2010
Note that 5% of Chinas currency reserves are held in pounds sterling, presumably received in payment for imports to Britain and reinvested in UK government bonds. The pound, like the dollar, acts as a reserve currency, a privilege as crucial to British prosperity as it is incompatible with quantitative easing i.e. money printing to fund UK debt. On the other hand, the programme of cuts which will hasten the collapse of Britian’s consumer economy, and hence of imports from China, will undermine the source of debt funding which that 5% represents. What a wonderful free ride we’ve had purchasing imports with pounds and seeing them reinvested on our government bonds and what a lamentable state we’ll be in as it comes to an end!
Telegraph
5th September, 2010
Roughly 65pc of China’s foreign currency reserves are held in dollars, according to a report. Photo: AFP The Chinese Government holds the largest stockpile of currency reserves at $2.45 trillion (£1.59 trillion), with 65pc held in dollars, 26pc in euros, 5pc in pounds, and 3pc in yen.
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Posted by seumasach on September 6, 2010
Mr Ferguson said the “Chimerica” marriage of recent years is on the rocks. China is no longer willing to fund the US Treasury bond market, cutting its share of holdings from 13pc to 10pc of the total debt stock.
While China must find ways to recycle its trade surplus and hold down the yuan, it is doing this by stockpiling commodities, buying hard assets around the world, or rotating into Asian bonds.
Ambrose Evans-Pritchard
Telegraph
5th September, 2010
“The US has run out of bullets,” said Nouriel Roubini, professor at New York University, and one of a caste of luminaries with grim forecasts at the annual Ambrosetti conference on Lake Como.
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Posted by seumasach on September 1, 2010
Paul Craig Roberts
Global Research
31st August, 2010
Have economists made themselves irrelevant? If you have any doubts, have a look at the current issue of the magazine, International Economy, a slick endorsed by former Federal Reserve chairmen Paul Volcker and Alan Greenspan, by Jean-Claude Trichet, president of the European Central Bank, by former Secretary of State George Shultz, and by the New York Times and Washington Post, both of which declare the magazine to be “ahead of the curve.”
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Posted by seumasach on August 31, 2010
Hossein Askari and Noureddien Krichene
Asia Times
1st September, 2010
In his weekend speech at Jackson Hole, Wyoming, home to an annual Federal Reserve retreat, Fed chairman Ben Bernanke acknowledged that the United States economy had indeed slowed down. He noted that monetary policy will remain extraordinary aggressive until recovery becomes strong.
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Posted in Financial crisis | Tagged: dollar collapse | Leave a Comment »
In These New Times 