Posts Tagged
‘stimulus package’
by ilene - May 11th, 2010 5:16 pm
Courtesy of Mish
Is China a canary in the coalmine of an impending global slowdown, or is China simply overloved as a beacon of growth as it was in 2008? I think it’s both.
China’s property and infrastructure bubbles are massive; that is for certain. Moreover, China’s biggest export trading partner is Europe, just as Europe is headed for numerous austerity programs.
While it’s doubtful the European austerity programs bring deficits down to where they are supposed to be, those programs will for a while cause a decline in European spending along with much social unrest.
Can China take a double whammy like this without overheating? I think not. And China will have to show things down, whether it wants to or not.
China Overheating, Tightening Coming
Please consider Hong Kong Stocks Fall as China Prices Prompt Tightening Concern
Hong Kong stocks fell as rising consumer inflation and housing prices in China stoked concern the country will act further to rein in its economy. The city’s developers pared losses after a government land sale.
“Domestic concerns are more important in terms of the policy measures coming out in China to cool things down,” said Binay Chandgothia, who oversees about $2.2 billion as chief investment officer at Principal Global Investors (Hong Kong). For Europe, “the question is the credibility of the billions of dollars of government debt that resides with European banks.”
“Domestic concerns are more important in terms of the policy measures coming out in China to cool things down,” said Binay Chandgothia, who oversees about $2.2 billion as chief investment officer at Principal Global Investors (Hong Kong). For Europe, “the question is the credibility of the billions of dollars of government debt that resides with European banks.”
“Price pressures have been building throughout the economy, strengthening the case for higher interest rates and a stronger yuan,” said Brian Jackson, a Hong Kong-based strategist at Royal Bank of Canada. “China is at risk of overheating, with spot fires breaking out in various parts of the economy.”
Chinese policy makers should focus on preventing excessive gains in asset prices and liquidity as Europe’s rescue package makes another global slump less likely, central bank adviser Li Daokui said in an interview yesterday. The increase in property prices across
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Tags: bubble, CHINA, consumer, credit bubble, Economy, global economy, malinvestments, Recovery, Sovereign Debt, SSEC, Stimulus, stimulus package, Stock Market
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by ilene - January 7th, 2010 6:37 pm
The disappointment with Obama is reaching new heights. He ran for office making certain representations to the American people; and he proceeds to ignore his own pre-election promises, as if they were meaningless. Here’s a video showing the eight times Obama said health care negotiations would be televised on C-SPAN. Below is an assessment by Timothy D. Naegele (the interview here) of Obama’s performance thus far. - Ilene
Via Breitbart
By Timothy D. Naegele[1]
Just days after announcing the surge of 30,000 more U.S. troops in his Afghan war, Barack Obama was in Oslo to accept the Nobel Peace Prize that was announced shortly after he became president—before he had done anything. Next, he was in Copenhagen accepting a deal without any teeth to address “global warming,” in the midst of a blizzard that dumped snow on the Danish capital, suggesting to most people that the issue is a “hoax.”
Straddling his back-to-back trips to Europe, he was in Washington, D.C.—where he was met by a blizzard on his return from Denmark—pushing for the enactment of ObamaCare that Americans oppose[2]. The legislation is so reckless that it had to be rammed through the U.S. Senate on a partisan vote. Also, the Democrats’ leadership hid the exact nature of the health care bill from senators, who surely had a right to know what they were voting for.
Then the president jetted off to spend the holidays in Hawaii[3], having irresponsibly saddled the people with ObamaCare—after the legislation clears a joint Senate-House conference committee and he signs some version of it into law—which is reprehensible, certainly with respect to its impact on Medicare patients[4]. His recent travels alone create a carbon footprint globally that boggles the mind, especially when so many Americans are suffering from an economic meltdown that shows few real signs of abating. Indeed, 49 States have lost jobs since his so-called “Stimulus Package” was enacted.[5]
His popularity poll numbers have been plummeting[6], but he is seemingly oblivious to the will of the people and determined to remake the United States and the world in his own image. Never mind that his life was shaped by years growing up in Hawaii and Indonesia, he
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Tags: Afghan war, Global warming, Guantanamo Bay, lies, Obama, ObamaCare, poll numbers, pre-election, Promise for televised healthcare negotiations, stimulus package
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by ilene - October 7th, 2009 9:15 pm
Courtesy of Ellen Brown, http://www.webofdebt.com/articles/imf.php
“A year ago,” said law professor Ross Buckley on Australia’s ABC News last week, “nobody wanted to know the International Monetary Fund. Now it’s the organiser for the international stimulus package which has been sold as a stimulus package for poor countries.”
The IMF may have catapulted to a more exalted status than that. According to Jim Rickards, director of market intelligence for scientific consulting firm Omnis, the unannounced purpose of last week’s G20 Summit in Pittsburgh was that “the IMF is being anointed as the global central bank.” In a CNBC interview on September 25, Rickards said, “They’ve issued debt for the first time in history. They’re issuing SDRs. The last SDRs came out around 1980 or ’81, $30 billion. Now they’re issuing $300 billion. When I say issuing, it’s printing money; there’s nothing behind these SDRs.”
SDRs, or Special Drawing Rights, are a synthetic currency originally created by the IMF to replace gold and silver in large international transactions. But they have been little used until now. Why does the world suddenly need a new global fiat currency and global central bank? Rickards says it because of “Triffin’s Dilemma,” a problem first noted by economist Robert Triffin in the 1960s. When the world went off the gold standard, a reserve currency had to be provided by some large-currency country to service global trade. But leaving its currency out there for international purposes meant that the country would have to continually run large deficits, and that meant it would eventually go broke. The U.S. has fueled the world economy for the last 50 years, but now it is going broke. The U.S. can settle its debts and get its own house in order, but that would cause world trade to contract. A substitute global reserve currency is needed to fuel the global economy while the U.S. solves its debt problems, and that new currency is to be the IMF’s SDRs.
That’s the solution to Triffin’s dilemma, says Rickards, but it leaves the U.S. in a vulnerable position. If we face a war or other global catastrophe, we no longer have the privilege of printing money. The dollar becomes just another currency. To avoid…
Tags: central bankers, currency, Ellen Brown, G20, Gold, IMF, inflation, International Monetary Fund, poor countries, printing money, stimulus package, the Federal Reserve
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by ilene - August 4th, 2009 11:47 pm
Courtesy of Edward Harrison at Credit Writedowns
The US is not the only place where a double dip downturn is to be feared. China has its own economic imbalances to deal with. Too much money is being thrown at the problem creating malinvestment and a bubble economy, shares having doubled this year alone.
Stephen Roach thinks much of the stimulus money in China has been wasted, potentially requiring a second stimulus package.
‘The impact of the investment-led stimulus will fade and the Chinese growth rate will start to slip again some time towards the middle of 2010,’ Roach said, suggesting that slowing growth could lead to increased layoffs and thus social instability.
‘That means, the Chinese authorities will be forced to contemplate another proactive fiscal stimulus.’
In May, Roach had said China may face a ‘W’-shaped economic recovery and had previously said that China’s current stimulus is directed too much at the pace of growth rather than the quality of the growth.
The former global chief economist for the U.S. investment bank also reiterated his concerns about excessive investments in infrastructure, rather than on stimulating private consumption or bolstering health care or social safety nets for Chinese.
‘Bottom line is they are creating a very unbalanced macroeconomic structure,’ Roach said in the interview, estimating that investment spending in the first half of the year as a share of gross domestic product had exceeded 45 percent of the economy.
‘This is a ratio unheard of in the annals of a modern, large developing economy,’ he said.
These are much the same complaints that can be levelled against US policy makers. However, the scale of the endeavour in China is truly breathtaking. And while the growth potential in China is still very strong, the economy has a number of significant problems with which to deal, unemployment being one. Another mentioned by Roach is the need for the Chinese to save huge sums in order to meet health care costs and to insure against economic misfortune because of the porous social safety net.
Were the government to put more emphasis on increasing economic security, many Chinese would feel more comfortable spending and the economy would be able to wean itself from its reliance on exports. However, to date, infrastructure has been the name of the game…
Tags: CHINA, double dip downturn, Economy, Stephen Roach, stimulus package, unemployment
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by ilene - June 13th, 2009 8:54 pm
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Courtesy of Michael Panzner at Financial Armageddon
Newfound transparency in the wake of the unfolding financial crisis will expose a scale of prior fraud, corruption, and self-dealing that many will find almost impossible to comprehend. Day in and day out, reports will surface about hidden losses, false accounting, inflated appraisals, sizable off-balance-sheet obligations, valuation discrepancies, unregulated offshore entities, phantom profits, insider trading, and businesses bled dry to enrich a few individuals at the expense of employees, investors, bankers, and bondholders. Other revelations will reinforce the idea that companies, governments, and individuals are in far worse shape than people had assumed only a few years earlier.
-- Financial Armageddon
When I wrote those words three years ago, I didn’t have any specific knowledge about Bernie Madoff’s massive fraud or the alleged house of cards put together by Allen Standford. But it didn’t matter. History and the extraordinary excesses of the go-go years meant such scams were bound to be out there, just waiting to be uncovered. In "Economic Downturn Accelerates Collapse of Ponzi Schemes," the Washington Post reveals the breathtaking extent to which one type of crime managed to worm its way into the economic landscape.
The great recession has decimated many industries; home builders, automakers and bankers are obvious casualties.
Now, add Ponzi schemers to the list.
Ravaged by the same fiscal turbulence pounding the nation’s legitimate businesses, Ponzi operations have been collapsing at a record clip, exposing prolific, rampant and colossal frauds that have bilked investors of billions of dollars.
The FBI, which is handling about 20 such cases in the Washington region, has almost 500 open Ponzi investigations nationwide — up from about 300 in 2006, bureau officials said. Law enforcement officials with other agencies have noticed similar trends, and authorities said they expect to turn up many more cases in coming months.
"We have more open Ponzi scheme cases than at any time in FBI history," said Special Agent David G. Nanz, chief of the FBI’s economic crimes unit. "We anticipated a spike, but the numbers we are seeing are even greater than expected. . . . There is an old saying, though: ‘When the tide goes out, you can see
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Tags: Bernard L. Madoff, Fraud, Ponzi scheme, stimulus package, Thomas Petters
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.