10.03.2010 - 11:55
BHARAT BECOMES YET ANOTHER MAJOR VICTIM OF RADICAL SUNNI ISLAM
(Adds more comments)
By Hideyuki Sano TOKYO,
March 10 (Reuters) -
Japanese Finance Minister Naoto Kan shot down the idea of a formal
policy pact with the Bank of
Japan as the government aims to strike a delicate balance
between pushing the central bank to ease policy further and
respecting its independence. The idea of a formal policy accord has
been floated in the
past by critics of the central bank who feel it could be doing
more to combat grinding deflation that has plagued the world's
second-largest economy for most of the past 15 years. But Kan, who has
also been calling on the BOJ to take
bolder action, said he saw no immediate need for such a pact,
echoing the view held by a majority of policy makers and
politicians wary of threatening the central bank's
independence. "I gather advocates of such a policy want an arrangement
where the government increases the deficits and the BOJ
cooperates by buying more government debt," said Izuru Kato,
chief economist at Totan Research. "They must be thinking central bank
independence allows the
BOJ to be too hesitant about buying government bonds and
therefore they should strip the BOJ of its independence," Kato
said. Kan steered clear of saying exactly what he wants the
central bank to do at its policy meeting next week, where
further easing is likely to be discussed. [ID:nTOE6230A7] BOJ board
member Miyako Suda, seen as hawkish on monetary
policy, said on Wednesday that the central bank will maintain a
very accommodative stance, but she added that the BOJ had
implemented an appropriate policy on prices. "Suda did not sound so
positive about taking more steps
blindly. It's not clear how strong the measures the BOJ takes
next week will be," said Naomi Hasegawa, senior strategist at
Mitsubishi UFJ Securities. With the government's room for further
fiscal stimulus
limited by a public debt that is already close to 200 percent
of GDP, the six-month old administration has put pressure on
the central bank to stem deflation. But the BOJ's options are limited
as long as the economic
outlook remains weak. Expectations of further price declines in future
could
persuade consumers and companies to delay spending and
investment even longer, adding more pressure on the economy.
Until demand picks up and more money flows into the system,
prices will struggle to recover. The BOJ has said prices will rise
eventually as the economy
mends. TOO MUCH INDEPENDENCE? Japan's central bank law guarantees the
BOJ independence in
its policy decisions, but it also requires the bank to
communicate with the government to ensure its policy is in line
with the government's economic policy. Few in the top circle of
Japanese policymakers see the need
for a change in those stipulations. "I am cautious about the framework
of an accord," Kan, also
deputy prime minister, told a parliamentary committee on
Wednesday in response to an opposition lawmaker's question. But some
politicians, mostly from the opposition, have said
the BOJ needs to be more accountable for its decisions, blaming
it for putting Japan in deflation for much of the past 15
years. The BOJ is likely to debate easing again at its March 16-17
board meeting, after introducing a new funding operation in
December amid a wave of government pressure as the yen climbed
versus the dollar. [ID:nTOE6230A7] "If they increase the cheap funding
operation to replace
the corporate support scheme that expires in March, that's
probably already priced in," said Hasegawa of Mitsubishi UFJ
Securities. The Bank of Japan's Suda dropped few hints, repeating the
BOJ's view that easy policy alone is no panacea for deflation.
"Although maintaining easy monetary policy is the top
priority, it is important for the Japanese economy to undergo
bold structural reform as much as it needs a recovery," she
said, referring to the need to fix Japan's pension system and
get public finances in order to reduce concerns about the
future. "If structural reform is delayed, it would undermine the
stimulative effect of monetary policy," she said. Japan's core
machinery orders fell slightly less than
expected in January from the previous month, data showed on
Wednesday, offering more evidence that capital expenditure will
keep growing slowly this year as manufacturers raise spending. Core
private-sector machinery orders, a highly volatile
series regarded as an indicator of capital spending, fell 3.7
percent in January, less than a median market forecast for a
4.1 percent decline, after a 20.1 percent jump in December.
[JPMORDDECI] ECONJP But the data also showed non-manufacturers remain
wary on
capital spending, highlighting the weakness in domestic demand. Annual
wholesale price deflation eased to 1.5 percent in
February on a recent rise in commodity prices. But economists say
deflationary pressure is likely to
continue due to the big gap between supply and demand. Japan pulled
out of recession in April-June last year,
helped by a rebound in exports and industrial output as well as
a rise in consumption due to government subsidies. But
economists expect growth to slow early this year as the
government cuts public works and the impact of subsidies
fades.
(Additional reporting by Rie Ishiguro, Stanley White, Leika
Kihara and Tetsushi Kajimoto; Editing by Kim Coghill)
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Euro gives up gains, yen steadies after fall
Mar 8, 2010
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http://www.reuters.com/article/idUSTOE62901R20100310
March 10, 2010, 12:52 a.m.
WORLD FOREX: Euro Ticks Up Vs Yen On Japan Importer Buying
By Miho Nakauchi
TOKYO (MarketWatch) -- The euro ticked up against the yen in Asia
Wednesday, as Japanese importers buying the single currency on a
regular settlement day set the tone of the market amid a lack of other
trading cues.
But further gains are far from certain, dealers said, with the euro's
near-term direction resting on developments in the euro-zone's fiscal
problem and upcoming economic data.
As of 0450 GMT, the euro stood at Y122.44, slightly up from Y122.36 in
New York late Tuesday. Against the dollar, the unit traded at $1.3602
from $1.3601.
"Overall currency moves were very limited" with share markets almost
unchanged and a lack of major economic data, meaning that Japanese
importers' buying flows became more dominant and set the trend, said
Yuzo Sakai, a foreign-exchange manager at Tokyo Forex & Ueda Harlow.
Japanese importers tend to buy the currency on regular settlement
days, which fall on the 5th, 10th, 15th, 20th and 25th of each month.
At 0450 GMT, the Nikkei 225 Stock Average index was down 0.08%.
Dealers said the European single currency could fall toward $1.3300
and Y119.00 over the next few weeks if any negative news emerges on
Europe's fiscal issues, adding to concerns over its economic outlook,
dealers said.
The focus is on European countries' huge levels of debt, said Hideaki
Inoue, a chief foreign-exchange manager at Mitsubishi UFJ Trust and
Banking Corp. "Growing expectations for sovereign debt default could
prompt mid- and long-term players to sell" the euro, he said.
Although most players are bearish toward the euro, better-than-
expected economic data could help restore investor confidence,
possibly buoying the risk-sensitive euro toward $1.3700 and Y123.50,
some dealers said. Investors will monitor U.S. retail sales for
February and Reuters/University Of Michigan Consumer Sentiment Survey
for March, both due Friday, for any hints on the health of the global
economy.
Elsewhere, the dollar stood at Y90.00 as of 0450 GMT, almost unchanged
from its New York level of Y89.97 Tuesday. The ICE U.S. Dollar Index,
which tracks the greenback against a trade-weighted basket of
currencies, was at 80.576 from 80.580.
The U.S. unit may fall toward Y89.50 in coming weeks, traders said.
Japanese exporters may repatriate overseas assets as we move toward
Japan's fiscal year-end on Mar. 31, which could weigh on the U.S.
unit, dealers said.
1.China's trade surplus shrinks further in February
http://www.marketwatch.com/story/chinas-trade-surplus-shrinks-further-in-fe=
bruary-2010-03-09
2.The rise and certain fall of the American Empire
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empire-2010-03-09
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importer-buying-2010-03-10
Currencies
March 10, 2010, 3:46 a.m. EST 7 Recommend 7 Post:
Dollar rises vs. euro as German trade data disappointView all
Currencies B
By MarketWatch
TOKYO (MarketWatch) -- The dollar got a lift against the euro
Wednesday when trade data from Germany, a key euro-zone economy, came
in worse than expected.
News Hub: Economist Warns of More Volatility AheadAnirvan Banerji,
director of research at Economic Cycle Research, joins the News Hub to
discuss why he believes the U.S. economy will experience more frequent
recessions ahead.
Germany's exports increased by 0.2% and imports dropped by 1.4% in
January 2010 compared to the same month a year ago, the Federal
Statistical Office reported on Wednesday. Compared to December 2009,
exports fell by 6.3% in January and imports rose by 6.0%. Germany's
seasonally-adjusted foreign trade balance recorded a surplus of 8.7
billion euros in January, official data showed.
"This was the weakest reading since the March of 2009 when the global
economy was in the throes of its worst contraction in [the] post-war
period. The news was especially surprising given the decline in the
euro/U.S. dollar over the past several months," said Boris
Schlossberg, director of currency research at GFT.
He added that the trade balance data were "not helpful to the single
currency which has been battered by concerns over sovereign debt
problems of Greece, Portugal and Spain."
The euro slipped to $1.3551, from $1.3598 in late North American
trading Tuesday, and the British pound skidded to $1.4898, from
$1.4991.
The dollar index /quotes/comstock/11j!i:dxy0 (DXY 80.67, +0.08,
+0.10%) , which measures the U.S. unit against a trade-weighted basket
of six major currencies, rose to 80.851, from 80.580 late Tuesday.
The greenback bought 89.96 yen, compared with 89.98 yen late Tuesday.
But the Australian dollar was up 0.1% against its U.S. counterpart, to
91.43 U.S. cents.
The Aussie "outperformed, with better than expected Chinese trade data
underpinning global recovery hopes in the region," said analysts at
Action Economics.
China's trade surplus narrowed further in February to $7.6 billion
from $14.2 billion in January. When compared with the same month last
year, both exports and imports grew at a higher-than-expected rate,
with the value of imports climbing 44.7%, reflecting growing domestic
consumption in mainland China. The value of outbound goods and
services surged 45.7% from February 2009 on a recovery in demand for
Chinese goods. Read more on China trade data.
On Tuesday, the U.S. dollar advanced versus the euro and British
pound, finding support amid ongoing worries about debt problems in the
euro zone after warnings of downgrades from Fitch Ratings and Moody's
Investors Service. See Tuesday's Currencies report.
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Raymond Richman - Jesse Richman - Howard
Richman
Richmans' Trade and Taxes Blog
The Obama Administration's Agenda to Balance Trade
Raymond Richman, 3/9/2010
On March 1, 2010, Ambassador Ron Kirk, United States Trade
Representative, disclosed 3The President's 2010 Trade Policy Agenda4,
a suicide pill for the U.S. economy. For three decades, every
administration had more or less the same agenda. Ignore the trade
deficits or just accept them as the inevitable result of competitive
forces, which they are not. If China, Japan, Germany, and others want
to exchange their valuable goods for our money, why should we
complain? We can print more. It is hard to believe that that was and
continues to be the attitude of the vast majority of economists.
They2ve been brain-washed into believing that market forces must
inevitably restore a balance of trade. We pointed out in our book,
Trading Away Our Future (Ideal Taxes Assn, Jan., 2008) that free trade
was not justified by economic theory, that China, like Japan before
it, was deliberately pursuing the mercantilist policy of promoting a
surplus of exports over imports by erecting all sorts of barriers to
imports while subsidizing exports, keeping its currency artificially
undervalued to make its imports expensive and its exports cheap, by
buying U.S. financial assets to keep U.S.interest rates low to
American consumers, to discourage savings and encourage consumption.
Not until recently did an eminent economist like Prof. Paul Krugman
condemn China2s mercantilist practices and suggest U.S. counteraction.
Until then, he believed no country would find it in its interest to
accumulate financial assets rather than goods.
The slow-acting suicide pill suddenly accelerated in the mid-1990s.
The result was the loss of millions of U.S. industrial jobs. How many?
To balance trade at the level of imports in 2008, we would have to
create eight million industrial jobs. The defenders of U.S. trade
policy point to our achievement of full employment in 2007, neglecting
to mention that the competition of factory workers who lost their well-
paying jobs lowered workers2 earnings of all workers. As a result,
wages have stagnated over the past three decades, fewer workers enjoy
middle class incomes, income distribution has worsened, and the U.S.
is on the verge of becoming a second-rate industrial power if it has
not already achieved that distinction. ...
In an incredible display of sycophancy, the document asserts that the
administration2s goal is 3Making Trade Work for America2s Working
Families.4 America2s Working Families? They have been the big losers
as a result of our tolerance of our huge chronic trade deficits. The
document asserts that 3President Obama2s economic strategy halted the
slide into a deep economic crisis and laid the foundation for renewed
American prosperity that is more sustainable, fairer for more of our
citizens, and more competitive globally.4 That remains to be seen.
Since the President took office, the unemployment rate, including
those who lost their factory jobs as a result of the trade deficits,
has continued to grow and grow.
The Trade Representative gives lip service to the lip-service of the
G-20 nations who pledged in 2009 to work toward balancing trade. It
displays the same Pollyanna-ish reliance on market forces. All we have
to do is increase our exports by $800 billion. His report states that
the U.S. has reacted to unfair trade practices by imposing
countervailing duties on countries committing infractions of trade
rules like dumping (Chinese tires) and even getting China to further
open its market to 3American wind energy products.4 Just the other
day, there were protests in the Congress against imported wind
turbines, which, to add injury to injury, are heavily subsidized by
the U.S. government. The President has set a goal 3of doubling U.S.
exports in the next five years4 to create 2 million jobs. He created a
new bureaucracy called the Export Promotion Cabinet which will fund
export promotion programs, tools for small- and medium-sized
businesses, reduction in barriers to trade, and open new markets. It
joins hundred of federal agencies designed to do-good but end up doing-
nothing.
The report recites: 3Effective trade policy helps increase exports
that yield well-paying jobs for Americans 5 studies show that firms
engaged in trade usually grow faster, hire more, and on average pay
better wages than those that do not. In recent years, exports of
manufactured goods have become an important source of employment,
supporting almost one in five of all manufacturing jobs.4 No mention,
not a single mention of the jobs lost to imports, the amount of the
trade deficite, and the declining number of employees in industry,
month after month after month! There is this acknowledgment, 3We have
to be frank in recognizing that some Americans lose jobs as markets
shift in response to trade.4 So we have enacted a Trade Adjustment
Assistance Act to assist those who lose their jobs to adjust to their
new status. No new export jobs are created by the Act.
That is about all the response the loss of millions of American jobs
has occasioned. Nothing to balance trade except statements that we
need to be more competitive and the international community (the
G-20?) should increase their domestic consumption and imports as part
of a more balanced growth strategy! Don2t hold your breath.
It announces to the world that the United States is committed to the
multilateral trade rules of the WTO system, to trade liberalization
3through negotiation and a defense against protectionism4, the
strongest country in the world announcing that we will not take
unilateral action against the mercantilist practices of such 3weak4
countries like China, Japan, Germany, and OPEC. They can continue
their practices, impose barriers to our exports, grant subsidies to
their exports until we petition the WTO for a remedy. The WTO rules
already authorize countries experiencing chronic trade deficits to
take unilateral action including the imposition of tariffs and other
barriers to imports. Why haven2t we done anything to protect our
industry and industrial workers from such destructive trade practices?
La-de-da, it would be so unbecoming a great nation. Our elitists want
to be loved by the world2s elite, who are by-and-large antii-American.
Attempting to counter the impression that it is doing nothing, the
report points to its action responding to 3a harmful surge of Chinese
tire imports4, challenging restrictions on U.S. exports of
agricultural products, and filing suit over Chinese export quotas and
duties on raw materials needed by core U.S. industrial sectors from
steel and aluminum to chemicals. Good, those are useful actions but
the number of jobs created relative to the number of jobs lost to the
trade deficits is infinitesimal.
What the U.S. has been engaged in is talk, talk, talk. It needs to
concentrate on jobs, jobs, jobs. The government has engaged in
discussions, just talk, with China, India, Brazil, Russia. It
sponsored and entered into negotiations for a regional, Asia-Pacific
trade agreement, known as the Trans-Pacific Partnership (TPP)
Agreement, with Australia, Brunei, Chile, NewZealand, Peru, Singapore,
and Vietnam. Not one industrial job has been created or ever will be.
Another initiative is the Asia Pacific Economic Cooperation (APEC)
forum. The U.S. will host APEC in 2011. The report writes, 3To this
end, we are coordinating with the 2010 host nation, Japan, on an
ambitious agenda that engages APEC2s broad membership on crucial trade
and investment topics for the region2s future. Initiatives in APEC are
a successfully demonstrated way of building a stronger and
constructive American role in the Asia-Pacific market.4 Aside from
costing a lot of money and providing a free vacation to a lot of anti-
Americans, how many jobs producing goods for export will it create?
Not a single job.
The report recites that 3Bilateral relationships are crucial. But as
we know, multi-faceted regional economic relationships are of major,
and even growing, importance for United States and for the world.4
Where is the evidence that it is important, let alone of increasing
importance, to the U.S. The administration is doing and plans to do a
lot of talking. In place of jobs, jobs, jobs, it is placing emphasis
on talk, talk, talk.
http://www.idealtaxes.com/post3074.shtml
UPDATE 1-Japan finmin wary of policy accord with BOJ
TOKYO, March 10 (Reuters) - Japanese Finance Minister Naoto Kan said
he saw no immediate need to have a more formal policy pact with the
Bank of Japan as the government and the central bank already share a
common goal of beating deflation.
Kan, who took over at the Finance Ministry in January, has been
calling on the central bank to do more to end deflation, but has
steered clear of saying exactly what he wants the central bank to do.
Asked by an opposition lawmaker if he thought a formal agreement with
the central bank would help, Kan said: "It's questionable whether it's
good to have an explicit policy accord. The BOJ governor has already
said in public that the bank wants inflation from plus zero to plus 2
percent ...
"I am cautious about the framework of an accord," Kan, also deputy
prime minister, told a parliamentary committee.
With the government's room for further fiscal stimulus limited by a
public debt that is already close to 200 percent of GDP, the six-month
old administration has put pressure on the central bank to stem
deflation.
Japan's central bank law guarantees the BOJ independence in its policy
decisions, but it also requires the bank to communicate with the
government to ensure its policy is in line with the government's
economic policy.
The central bank is likely to debate easing its ultra-loose monetary
policy again at its board meeting on March 16-17, after introducing a
new funding operation in December under a previous wave of government
pressure as the yen climbed versus the dollar. [ID:nTOE6230A7]
One member of the bank's policy board, Miyako Suda, said on Wednesday
that the central bank will maintain a very accommodative monetary
policy stance to help the country escape deflation.
"The BOJ intends to continue making its contribution to help the
Japanese economy escape deflation and return to a sustained growth
path with price stability," Suda said at a roundtable conference
hosted by the Economist Group.
But Suda also repeated the BOJ's view that easy policy alone will not
be a panacea for deflation.
"Although maintaining easy monetary policy is the top priority, it is
important for the Japanese economy to undergo bold structural reform
as much as it needs recovery... If structural reform is delayed, it
would undermine the stimulative effect of monetary policy," she said.
BOJ officials have said further monetary policy easing will have
little impact on boosting prices, with interest rates already near
zero.
Suda added that the BOJ had taken appropriate steps on monetary policy
and that she didn't think aiming for a high inflation rate would
resolve the shock of the financial crisis. (Reporting by Hideyuki
Sano, Stanley White and Rie Ishiguro; Editing by Hugh Lawson)
http://www.reuters.com/article/idUSTOE62900K20100310?typeDmarketsNews
FOREX-Yen rises on Japan exporters; sterling falters
By Masayuki Kitano TOKYO, March 9 (Reuters) - The yen rose broadly on
Tuesday on
dollar and euro selling by Japanese exporters, while sterling
faltered on weak data and after Moody's said Britain faces a
dilemma over its support for the banking sector. The yen also climbed
with short-term traders taking cues from
a dip in Nikkei share average .N225 and U.S. stock index
futures SPc1, as demand for riskier assets ebbed. "Japanese exporters
are in the market and selling pretty
actively, including the euro against the yen," said Yuji
Matsuura, joint general manager at Aozora Bank's forex and
derivatives trading group. There could be more yen-buying by Japanese
exporters during
the week, and there might also be some flows in the last week of
March, just before they close their books at the end of Japan's
fiscal year, Matsuura said. Market players said, however, that gains
in the yen have been
limited by speculation that the Bank of Japan may take further
steps to ease monetary policy. The euro fell 0.4 percent to 122.59 yen
EURJPYDR, off a
two-week high of 123.90 yen struck on EBS on Monday. The euro also
dropped against the dollar, dipping 0.1 percent
to $1.3615 EURD but was still well off last week's $1.3433, its
lowest in more than nine months. The euro struggled after Greek Prime
Minister George
Papandreou warned on Monday that if the Greek crisis worsened it
could lead to a new global financial meltdown. [ID:nLDE6271WD].
Sterling fell 0.3 percent to $1.5014 GBPDD4 and shed 0.7
percent to 135.08 yen GBPJPYDR. Data showing that British house prices
grew last month at
their slowest pace since August weighed on sterling.
[ID:nLAG006161] Another negative factor for sterling was a Moody's
Investors
Service report saying Britain faces a difficult balancing act in
deciding how and when to reduce support for the banking sector,
given growth in the UK's public debt burden. [ID:nLDE6271OB]
EYES ON BOJ MEETING The dollar fell 0.3 percent to 90.01 yen JPYD. The
greenback had rallied on the yen to a two-week high of
90.69 yen on EBS on Monday, after a better-than-expected U.S.
jobs report backed views that the U.S. Federal Reserve will lift
rates faster than the Bank of Japan. The report had also bolstered
demand for higher-yielding
currencies and riskier assets like stocks and commodities, on
improved economic prospects. The Australian dollar fell 0.3 percent
against the yen
AUDJPYDR and the New Zealand dollar shed 0.6 percent
NZDJPYDR. The dollar is likely to be supported at levels around 89.50
yen on speculation about more monetary easing steps from the BOJ,
possibly at its policy meeting next week, said a trader for a
Japanese trust bank. The BOJ meeting is in the spotlight after the
Nikkei
newspaper reported on Friday that the BOJ was examining easing
again and may decide on such a move when it meets on March 16-17.
Sources familiar with the matter said the BOJ is likely to
debate this month easing its ultra-loose monetary policy again.
[ID:nTOE6230A7] The most likely next step for the BOJ is to expand the
fund-supply operation it put in place in December, under which it
lends to banks at 0.1 percent, either by increasing the size from
10 trillion yen ($110.7 billion) or extending the duration of
loans from the current three months. Even if such steps are taken, the
market impact could be
limited given how low yen money market rates are already, said a
trader for a European bank. "Basically, the aim may be to achieve an
announcement effect
and the market has factored in a lot of that," the trader said,
adding that the dollar could fall against the yen if the BOJ
stands pat and unveils no new measures.
(Additional reporting by Anirban Nag in Sydney, Satomi Noguchi
and Kaori Kaneko in Tokyo; Editing by Edwina Gibbs)
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FOREX-Yen, dollar dip; euro up as Greece concerns ease
Mar 7, 2010
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Analysis: Greece's crisis could presage America's
By TOM RAUM (AP) 6 10 hours ago
WASHINGTON 7 Greece is a financial basket case, begging for
international help. Is America heading down that same road?
Many of the same risky financial practices that now imperil the Greeks
were at the center of the all-too-recent U.S. meltdown.
As with Greece, America's national debt has been growing by leaps and
bounds over the past decade, to the point where it threatens to swamp
overall economic output. And in the U.S., as in Greece, a large
portion of that debt is owed to foreign investors.
Not good, if these debt holders begin to wonder if they'll be paid
back. A foreign flight from U.S. Treasury securities could sow
financial chaos in the United States, as happened when many investors
lost faith in Greek bonds.
It's something that could affect all Americans. The U.S. has never
defaulted on a debt, and even the hint of such a possibility could
send interest rates soaring and choke off a fragile recovery.
How long can the United States remain the world's largest economy as
well as the world's largest debtor?
"Not indefinitely," suggests former Federal Reserve Chairman Alan
Greenspan. "History tells us that great powers when they've gotten
into very significant fiscal problems have ceased to be great powers."
After all, Spain dominated the 16th century world, France the 17th
century and Great Britain much of the 18th and 19th before the United
States rose to supremacy in the 20th century.
"Unless we do things dramatically different, including strengthening
our investments in research and education, the 21st century will
belong to China and India," suggests Norman Augustine, the former CEO
of Lockheed Martin who chaired a 2009 bipartisan commission studying
the nation's top challenges.
The Greek government has taken stiff austerity steps in an effort to
get a lifeline from the European Union, sparking strikes and violent
demonstrations.
Some of the same risky strategies used by U.S. hedge funds and other
professional investors in a failed effort to profit from subprime
mortgages in this country 7 and which led to the 2008 financial near-
collapse 7 are now being employed by those betting that Greece will
default on its debt.
Greek Prime Minister George Papandreou, who met with President Barack
Obama at the White House on Tuesday, is calling for "decisive and
collective action" here and in Europe to crack down on such rampant
speculation and unregulated bets. He is also seeking more favorable
European interest rates for loans.
Speaking outside the White House, Papandreou welcomed support from
Obama and some European leaders for such efforts and for the austerity
measures taken by his own government. He said it shows the "labor and
sacrifices are not wasted. Of course, our struggle is not ended, it
continues."
Many economists say it's a stretch to compare the U.S. economy, by far
the world's largest, to Greece and other distressed small economies of
southern Europe. They say many of Greece's problems are unique to that
nation and aggravated by a monetary system that rigidly binds 16
nations to the same currency, the euro.
But others argue it may only be a matter of time before the U.S. faces
a similar, and potentially graver, crisis.
"Someday it will happen if we don't get our act together on spending,
our debt under control and our economy to grow faster," said Allen
Sinai, chief global economist for New York-based Decision Economics
Inc., which provides financial advice to corporations and governments.
With signs pointing to a weaker recovery than after other post-World
War II recessions, U.S. consumer spending is likely to remain
unimpressive and the jobless rate high for some time. Sinai said that
suggests there won't be enough growth to push down federal deficits by
much. "It's a political keg of dynamite," he said.
Greece's national debt now equals more than 100 percent of its gross
domestic product, the broadest measure of economic activity. U.S. debt
7 now $12.5 trillion 7 is fast closing in on the same dubious
milestone.
Nearly all of Greek's debt is held by foreign governments and
investors. In the United States, roughly half is owned by global
investors, with China holding the largest stake.
By contrast, Japan's debt is proportionately even bigger 7 about twice
its GDP 7 but the impact is cushioned by the fact that most is held by
Japanese households.
"The more open you are to the rest of the world, the more likely
you're going to have a problem if you start running large deficits and
large debt loads," said Mark Zandi, founder of Moody's Economy.com,
and a frequent adviser to lawmakers of both parties.
Zandi does not see any major fallout from the Greek fiscal crisis in
the United States for now, other than a possible temporary hit on
potential European export markets.
However, he said, "global investors at some point are going to start
demanding a higher interest rate. And that's our moment of truth. If
we don't address it by cutting spending and raising taxes, some
combination of the two, then we're going to have a problem."
Polls show growing public anger over deficits and government spending.
The issue is a potent one for the upcoming midterm elections, and a
particular liability for majority-party Democrats.
Calls have sounded from both sides of the political aisle for deficit
reduction. And Obama last month set up a bipartisan deficit commission
to find ways to get the country's budget deficit, now adding more than
$1 trillion a year to the national debt, under control.
But the panel is a weak substitute for what Obama really wanted 7 a
commission created by Congress that could force lawmakers to vote on
remedies to reduce the debt.
EDITOR'S NOTE _ Tom Raum covers economics and politics for The
Associated Press.
Copyright 9 2010 The Associated Press. All rights reserved.
Greek Prime Minister George Papandreou walks away after talking to the
media in front of the West Wing of the White House in Washington,
Tuesday, March 9, 2010, following a meeting with President Barack
Obama. (AP Photo/Alex Brandon)
http://www.google.com/hostednews/ap/article/ALeqM5i8fvUrHUOkJVfaq5UBxHCYV85=
s3wD9EBDPRO2
Fears of a Greek bank run
By Dody Tsiantar, contributorMarch 9, 2010: 3:33 PM ET
(Fortune) -- In the middle of the 2001 debt crisis, Argentines stormed
their nation's banks to get their money out. To stop the stampede, the
government imposed controls that allowed them to take out only $250 at
a time and limited withdrawals for overseas trips to $1,000.
Greece, in the middle of its own financial crisis, is teetering on the
brink of a default. Many of its wealthier citizens are also uneasy
about what lies ahead for their cash. According to estimates from
private bankers in Greece and Cyprus, as much as 10 billion euros have
left the country for Greek-owned bank subsidiaries in Switzerland and
Cyprus in the last couple of months.
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"Customers are coming...from Greece on a daily basis," says one
private banker who works for a Greek bank in Cyprus. "They fly here in
the morning, bring us a check and fly back to Athens in the
afternoon."
One banker in Athens reports that many of his clients have sent funds
out of the country in recent weeks, fearing that the government will
take a bigger bite of their money. "They're afraid they'll have to pay
tax on their cash," he says.
Countries in economic turmoil historically look for unpopular ways to
raise revenue, according to economists. So when things start to go
sour, "everyone becomes convinced that the stage is being set for
higher taxes," says former IMF economist Dev Kar, the lead economist
for Global Financial Integrity, an international policy research
center. "People with wealth then ship their money out, so government
does not come and get it when it all comes crashing down."
But growing concerns that Greece's financial crisis will spill over to
its banking system appear to be driving most of the outflow. The fear
isn't totally unfounded: Late last month, Fitch Ratings downgraded the
country's four major private-sector banks to two notches above junk
status on fears that demand for loans may plunge, denting their
potential profitability .
"I'm scared," says one 40-year-old Athenian woman, who's considering
taking her nest egg to Cyprus. "I want to take my money out of the
country before the banks run out of cash."
Not as bad as it seems
A run on the bank, a la Argentina, is not imminent, say banking and
government officials. They acknowledge that money is leaving the
country, but say that reports of massive capital outflows are "grossly
overstated."
"There is a trickle, but nothing like a real flight that would put the
system under pressure," says Anthimos Thomopoulos, chief financial
officer of the National Bank of Greece, which holds a third of
Greece's 250 billion euro total deposit pool.
The situation isn't overly worrisome right now, bank and government
officials say, because most of the money has flowed to those Greek-
owned banks abroad and should, in theory, be easier to repatriate.
What's happening, says Nikolaos Karamouzis, deputy CEO of Eurobank
EFG, a private bank in Greece with 84 billion euro in assets, is "not
materially significant, despite the fact that there is widespread
concern among our clients."
Exactly how much cash has left the country since the crisis exploded
in mid-December is hard to determine, however. According to the most
recent quarterly statistics available, the national deposit pool at
the end of December dropped by less than a half a percent. But
analysts point out those numbers do not reflect the full impact of the
crisis, which picked up momentum in January and February after the
government announced its belt-tightening measures.
A pesos to drachmas comparison
Unlike Greece today, Argentina's government had an arsenal of
financial tools in 2001 to deal with its crisis. It devalued the peso
and imposed capital controls. But as a member of the European Union,
Greece does not have those options; it can't devalue, and because the
Union has rules that call for a free movement of capital within its
boundaries, it can't stop citizens or businesses from moving cash from
one partner country to another.
"The only way Greece could impose capital controls would be to leave
the EU," says Michael Melvin, head of currency and fixed income
research at global asset management firm BlackRock. "And there's close
to zero probability of that."
A return to the drachma isn't likely any time soon either, but Greek
citizens do have good reason to believe that taxes are going to go up.
The socialist government of Prime Minister George Papandreou has
already announced a slew of tax hikes, including increases in the
value-added tax, new excise taxes on luxury goods, such as yachts and
cars, and up to a 20% tax on cigarettes, alcohol and fuel.
0:00 /1:24Greece: Another crisis looms
In addition, a key tenet of the socialist government's plan is to go
after tax cheats aggressively -- economists figure that nearly 30% of
the country's gross domestic product goes unreported to authorities.
For decades, Greece's shadow economy has thrived because many Greeks
-- doctors, plumbers, electricians and lawyers among them -- conduct
business entirely in cash. Much of that money has ended up in bank
accounts in other countries, say economists -- and a lot of it is not
reflected in national statistics.
"The outflow of cash from Greece is not a new phenomenon. If you could
calculate the outflow of the last 50 years, you'd get an astronomical
figure," says University of Maryland economics professor Theodore
Kariotis. "Greeks are a very sneaky people."
The government's new rules intend to change that. Last week it
announced new measures to encourage those who have transferred money
out of Greece to bring it back within six months, no questions asked.
They'll be taxed 5% on the total, however. Another option offered:
declare the money, leave it in foreign accounts -- and be subject to
an 8% tax. After that, foreign governments will cooperate with Greek
tax authorities to pursue lawbreakers, says a source in the finance
ministry.
Greek Finance Minister George Papaconstantinou hopes the government's
new measures will produce results. "As the reform program unfolds, a
lot of this lost, or quasi-lost, liquidity will come back to the
system," he said in a mid-January interview. "It is an immediate
concern, of course, but it is reversible."
Maybe it is, but according to economists, money that leaves a country
rarely returns. "I'm not holding my breath," says Global Financial
Integrity's Kar. "Once [cash] leaves, it's hard to get it back."
The snag in Greece's salary solution
http://money.cnn.com/2010/03/04/news/international/greece_pay.fortune/index=
.htm?postversionD2010030403
Is your country the next Greece?
http://money.cnn.com/2010/03/08/news/international/next_greece.fortune/inde=
x.htm?postversionD2010030815
Greeks try to remember how to cut back
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ne/index.htm?postversionD2010030109
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ctionDmagazines_fortune
Tax hikes may still fail to fix Athen's debts crisis
Wednesday March 10 2010
GREEK tax increases, which have sparked widespread protests, may fail
to generate as much additional revenue as the government in Athens
estimates, a draft EU report says.
While the 04.8bn of additional austerity measures enacted by the Greek
parliament last week "appear sufficient to safeguard the 2010
budgetary targets", risks remain that increases in value-added tax and
fuel taxes may generate less than is projected, the report says.
The Greek government plans to cut the deficit to 8.7pc of gross
domestic product (GDP) this year from 12.7pc in 2009. The draft report
will be discussed by EU finance ministers in Brussels next week.
Demand
An increase in the main VAT rate by 2pc from 19pc will bring in 01.3bn
in added revenue this year, while higher excise duties on petrol and
diesel are expected to generate 0450m more, according to the finance
ministry in Athens.
But "the implications on tax revenue of a contraction in demand should
not be underestimated", according to the European Commission.
On VAT, it said "changes in the tax base -- in relation to the
contraction of internal demand -- and tax evasion may result to lower-
than-expected gains".
Greece's overall government debt "remains on a steep upward path",
according to the commission. Greek debt is projected to swell to 125pc
of GDP this year, the highest in the 27-nation EU, it forecasts.
EU Economic and Monetary Affairs Commissioner Olli Rehn said yesterday
that the latest measures put Greece on "the path of fiscal adjustment
for 2012" -- the deadline to meet the EU's 3pc deficit limit.
(Bloomberg)
Irish Independent
http://www.independent.ie/business/european/tax-hikes-may-still-fail-to-fix=
-athens-debts-crisis-2093413.html
S&P expert: Integrated eurozone fiscal policy key to sovereign debt
crisis
English.news.cn 2010-03-09 18:32:11
by Xinhua writer Wang Zongkai
BEIJING, March 9 (Xinhua) -- Integrated fiscal policy was essential
for the euro zone to get out of the consequences of Greek sovereign
debt crisis, according to an expert from Standard and Poor's (S&P).
"The Greek debt crisis can be the strongest challenge that the euro
zone has faced in the past 11 years, and the key to solve the problem
is whether eurozone-16 can sacrifice some of their fiscal
sovereignty," said David Beers, managing director of S&P sovereign and
international public finance ratings group, on Monday.
On Dec. 8, 2009, Fitch Ratings downgraded its rating on Greece
sovereign credit from A- to BBB+, and revised its outlook to negative,
which signaled the commence of Greece sovereign credit crisis.
Moreover, other eurozone members, including Portugal, Ireland, Italy
and Spain, also reported deficit problem recently. In a context of
weak recovery in European economies, some analysts said that the Greek
debt crisis might contaminate the whole Europe.
However, Beers believes that the Greek debt crisis will not cause a
new round of global crisis.
On the one hand, other eurozone members welcomed Greece's 4.8-billion-
euro (6.53-billion-U.S. dollar) austerity package, which has shown the
Greek government's willingness to submit some fiscal sovereignty to
the union for underpinning euros, he said.
On the other hand, the creditworthiness of all eurozone sovereign
states was currently at least adequate to meet their financial
commitments, and S&P did not assume any sovereign state leaving the
euro zone in the medium term, Beers added.
So far, the Greek debt crisis had been contained within the euro zone.
Meanwhile, the Greek government had actively taken measures, while the
euro zone was considering institutional reform such as the
establishment of a European Monetary Fund, which will function like
the International Monetary Fund.
Regarding Britain's estimates of its deficit in 2010 fiscal year to
amount 1.78 trillion pounds (2.67 trillion dollars), nearly 13 percent
of its gross domestic product, Beers said Britain's current fiscal
policy is sustainable.
"If party in office changed, S&P would keep a close look at deficit-
cutting measures of the new administration," he added.
Meanwhile, the other two largest economies in the world are also
facing the deficit problem. U.S. federal deficit in 2009 had amounted
to 1.41 trillion dollars, almost 10 percent of the GDP while Japan's
outstanding public debt reached a record high of 817.5 trillion yen (9
trillion dollars), and 6.83 million yen (7,560 dollars) per capita.
Nevertheless, Beers was more optimistic on U.S. and Japan thanks to
more flexibility and time in dealing with debt problem given that the
dollar and the yen are the two strongest reserve currencies right now.
Beers estimated that it would take one or two years to solve the Greek
debt crisis.
People in Greece and other eurozone countries need to have confidence
while their governments need action.
Editor: Xiong Tong
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5 Germany will not give Greece a cent: economy minister
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Chrysanthemum or Samurai?
Posted By Dan Twining Tuesday, March 9, 2010 - 12:20 PM
In a thoughtful essay in today's Financial Times, Gideon Rachman asks
whether Japan may now be tilting towards China after 60 years of
aligning itself with the United States. This question is interesting
on multiple dimensions -- including with regard to the future of U.S.
primacy in Asia, the impact of China's rise on its neighbors, the
nature of Japanese politics and identity, and our understanding of the
deep structure of international relations at a time of systemic power
shifts. Indeed, Japan is a critical case study for assessing how the
developed world will respond to the rise of dynamic new power centers
in Asia -- and what the implications will be for American leadership
in the international system.
The ascent of the Democratic Party of Japan (DPJ) after nearly six
decades of unbroken rule by the conservative, U.S.-oriented Liberal
Democratic Party (LDP) has convulsed not only Japanese politics but
also its foreign policy. Prime Minister Yukio Hatoyama has mused
about constructing a pan-Asian fraternal community based on
"solidarity" -- not with Tokyo's closest alliance partner across the
Pacific but with its near neighbors, led by China. What should have
been little more than a tactical skirmish about the terms of the
realignment of U.S. forces in Okinawa has become, through
mismanagement on both sides, a strategic headache for both Washington
and the inexperienced government in Tokyo, raising unnecessary
tensions within the alliance. DPJ leader Ichiro Ozawa, the power
behind the throne of the Hatoyama administration, recently led a
delegation of 143 parliamentarians and hundreds of businessmen to
Beijing, reviving in form if not substance the tributary delegations
from China's neighbors that, in pre-modern times, ritually visited the
Chinese court to acknowledge its suzerainty as Asia's "Middle
Kingdom."
These and other moves, unthinkable during the Cold War heyday of the
U.S.-Japan alliance, suggest a striking shift in Japan's geopolitical
alignment as the Pacific century dawns. Despite the fact that Japan
was never part of "the Chinese world order" in traditional Asia, some
analysts believe a Japanese tilt toward a resurgent China would be in
keeping with the country's foreign policy traditions. As Gideon
writes:
Some western observers in Tokyo muse that perhaps Japan is once again
following its historic policy of adapting to shifts in global politics
by aligning itself with great powers. Before the first world war the
country had a special relationship with Britain. In the inter-war
period Japan allied itself with Germany. Since 1945, it has stuck
closely to America. Perhaps the ground is being prepared for a new
"special relationship" with China?
In this reading of Japanese history since the Meiji restoration, the
country has repeatedly aligned itself with the international system's
preeminent power -- Britain in the early 20th century, Nazi Germany
until 1945, and the United States since then. If Japan really is
edging away from the United States to align itself with China today,
that is a compelling indicator that the future belongs to Beijing, and
that America's best days as the world's indispensable nation are
behind it.
Yet this judgment is, if anything, premature -- and may simply be
wrong. Imperial Britain, Nazi Germany, and America during the Cold War
were actual or aspiring hegemons from outside Asia; Japan's alliance
with each of them cemented its own role as Asia's dominant power.
Japan was not aligning with each of these powers to bandwagon with
them, subordinating its power and interests to theirs. It allied with
these Western states to facilitate its own pursuit of national power
and leadership in Asia.
This is true even of Japan's Cold War alliance with the United States,
when post-war leaders in Tokyo pursued a conscious strategy of
developing Japan's economic and technological dynamism within the
cocoon of American military protection. In a systematic and self-
interested manner, these leaders took advantage of the security
umbrella provided by the United States to modernize Japan's economy
and build strength with an eye on a long-term objective of moving
beyond the constraints imposed by the U.S. alliance as Japan grew into
a leading economic and technological power. The DPJ's new independence
vis-0-vis Washington reflects this evolution, and the only surprise is
that more Japan hands in the West didn't see it coming.
Historically, Japan has shown a striking ability to rapidly transform
itself in response to international conditions, as seen in the Meiji
break from isolation, the rise to great power in the twentieth
century, the descent into militarism, and renewal as a dynamic trading
state. Only a few years ago, excellent books and articles with titles
like Japan Rising: The Resurgence of Japanese Power and Purpose,
Securing Japan: Tokyo's Grand Strategy and the Future of East Asia,
and "Japan is Back: Why Tokyo's New Assertiveness is Good for
Washington" framed the country as a resurgent Asian great power. Since
2001, successive Japanese prime ministers have articulated
unprecedented ambitions for Japanese grand strategy. These have
included casting Japan as the "thought leader of Asia," forging new
bilateral alliances with India and Australia, cooperating with these
and other democratic powers in an "Arc of Freedom and Prosperity,"
formalizing security cooperation with NATO, constructing a Pacific
community around an "inland sea" centered on Japan as the hub of the
international economic and political order, and building a new East
Asian community with Japan at its center. These developments reflect
the churning domestic debate in Japan about its future as a world
power and model for its region, trends catalyzed by China's explosive
rise.
Japan's strategic future remains uncertain in light of the country's
churning domestic politics and troubling economic and demographic
trends. Yet there is no question that military modernization in China
and North Korea has spurred a new Japanese search for security and
identity that has moved Tokyo decisively beyond the constraints that
structured its foreign policy for fifty years following defeat in the
Pacific war. The ascent of the DPJ, with its calls for a more equal
U.S.-Japan alliance and greater Japanese autonomy in security and
diplomacy, is another step forward in Japan's transformation into what
DPJ leader Ichiro Ozawa famously called a "normal country." Enjoying a
normal relationship with China, as the DPJ intends to do, is part of
that process. But so will be a continuing partnership with the United
States.
Jason Lee-Pool/Getty Images
http://shadow.foreignpolicy.com/posts/2010/03/09/chrysanthemum_or_samurai
JGB futures edge down from 2-mth high as Nikkei jumps
By Rika Otsuka
TOKYO, March 8 (Reuters) - Japanese government bond futures slipped
further on Monday from a two-month peak hit last week, as growing
optimism about a global economic recovery prompted investors to move
money to stocks from government debt.
The five-year/20-year JGB yield spread matched its highest since
November 1999 as prospects of further central bank easing pinned down
yields on midterm maturities, which are more sensitive to shifts in
monetary policy outlook.
U.S. monthly employment data showed late last week that the world's
biggest economy lost 36,000 jobs in February, less than the 50,000 job
cuts expected by economists. [ID:nN04252324]
But bond losses were limited as the JGB market received support from
speculation that the Bank of Japan would further ease its monetary
policy in the coming months to help Japan's economy move out of
deflation.
"The rise in bond yields has been small as investors are willing to
pick up JGBs, with some speculating the BOJ could further relax its
policy at next week's board meeting," said Hidenori Suezawa, chief
strategist at Nikko Cordial Securities.
JGBs rose on Friday after the Nikkei newspaper said the central bank
will debate whether to ease monetary policy further by expanding the
fund-supply operation it introduced in December, under which it
extends loans to commercial banks at a policy rate of 0.1 percent.
[ID:nTOE6230A7]
"Demand is also strong as a large amount of government debt is
maturing this month," said Suezawa at Nikko Cordial Securities.
Analysts said some 10 trillion yen ($110.8 billion) of JGBs are being
redeemed in March. Government bonds with maturities of five years or
longer will mature in March, June, September and December.
Large amount of bonds maturing means that durations of popularly
followed bond indexes are usually extended to accommodate the
redemptions, generating demand for longer-dated paper from investors
following monthly changes to these indexes.
A 30-year JGB auction scheduled for Tuesday is expected to draw decent
demand as dealers will be looking to replenish their inventories, said
Makoto Noji, a senior market analyst at Mizuho Securities.
"Demand for superlong paper was unusually strong toward the end of
last month as investors bought to match bond indexes, depleting
dealers' inventories."
March 10-year JGB futures edged down 0.07 point to 140.12 2JGBv1,
slipping from 140.27, their highest since late December.
Outstanding loans held by Japanese banks fell 1.5 percent in February
from a year earlier, matching a decline in January that was the
biggest annual drop in four years, the BOJ said on Monday. [JPBNKDECI]
[ID:nTFD006326]
The market showed a muted reaction to the data, although it somewhat
strengthened expectations that sluggish lending would prompt banks to
add more JGBs to their portfolios with the new financial year starting
on April 1.
The combination of sluggish lending and expectations towards further
BOJ easing has helped JGBs, especially the shorter-dated maturities,
which are supported by purchases from banks.
The five-year/20-year yield spread stood at 167 basis points on
Monday, matching its steepest in a decade, according to historical
data on Reuters EcoWin.
The five-year yield stood unchanged at 0.470 percent on Monday after
banks, the main players in the mid-term sector, aggressively bought
five-year notes late last week to push down the yield to a two-month
low of 0.460 percent JP5YTNDJBTC.
The benchmark 10-year yield inched up 1 basis point to 1.315 percent
JP10YTNDJBTC, staying near a two-month low of 1.290 percent first
reached in late February.
The 20-year yield was up 1.5 basis points at 2.140 percent
JP20YTNDJBTC and the 30-year yield edged up 0.5 basis point to 2.325
percent JP30YTNDJBTC.
Tokyo's Nikkei share average .N225 jumped 2.1 percent after the U.S.
jobs data, with exporters benefiting from a weaker yen. [.T] [FRX/]
($1D90.28 Yen)
(Additional reporting by Shinichi Saoshiro; Editing by Joseph
Radford)
http://www.reuters.com/article/idUSTOE62703620100308
http://www.reuters.com/article/idUSTOE62103Z20100302?loomia_owDt0:s0:a49:=
g43:r1:c1.000000:b31604150:z0
March 8, 2010, 1:03 a.m. EST 7 Recommend 7 Post:
WORLD FOREX: Dollar At 2-Week High Vs Yen On Asia Stock RisesStory
By Takashi Mochizuki
TOKYO (MarketWatch) -- The dollar rose to a two-week-high against the
yen Monday in Asia, as higher regional shares bolstered investors'
appetite for riskier, higher-yielding assets, and they dumped the safe-
haven Japanese unit for the U.S. currency.
The greenback rose as high as Y90.69, its highest since Feb. 23 as
Asian investors took cues from Japan's benchmark Nikkei 225 Stock
Average and China's Shanghai Composite Index.
As of 0450 GMT, the Nikkei was up 1.9% to 10,563.72 and the Shanghai
Composite was up 0.82% to 3,056.00.
Higher Asian share prices often push the yen lower, as Japanese
investors become more aggressive about investing in overseas assets
with higher yields.
The yen's decline, however, isn't likely to continue for long because
Japanese exporters still have a vigorous appetite for yen, analysts
said. Exporters need a hefty volume of yen ahead of the March 31
fiscal year-end when they close their books.
"We would caution against turning very bearish (about the yen) in the
short term," said Adarsh Sinha, a strategist at Barclays Capital.
There is also a risk that demand for yen will increase again if
upcoming U.S. economic data, such as Friday's retail sales, turn out
weaker than expected, analysts said.
"Markets need to wait for more data to assess the true trend of the
U.S. economy," said Tomoko Fujii, a strategist at Bank of America-
Merrill Lynch.
The U.S. government said Friday that non-farm payrolls decreased by
36,000 in February from the month before. This was much better than
the 75,000 decline economists had expected.
But Fujii said it was "premature to draw a conclusion" about the U.S.
economic outlook, as recent U.S. economic reports have contained some
negative surprises.
As of 0450 GMT, the dollar was at Y90.41 from Y90.33 Friday in New
York. The euro was at $1.3679 from $1.3620 and Y123.70 from Y123.04.
The euro may have entered a long-term upward trend, dealers said, on
the belief debt-laden Greece will be able to secure support from its
European partners.
"I'm now becoming certain that Greece won't fail. The clouds are
clearing for Greece's future," said Jun Kato, a senior dealer at
Shinkin Central Bank.
On Sunday, French President Nicolas Sarkozy said a number of European
Union nations were preparing a support package for Greece. In Berlin,
German Chancellor Angela Merkel said Friday that E.U. members would
intervene to rescue Greece if its debt problems threaten to spiral out
of control.
The euro may rise above $1.38 in the days ahead if more positive news
for Greece comes out, OCBC Bank's currency research team said. The
currency last traded above $1.38 on Feb. 11.
The ICE U.S. Dollar Index, which tracks the greenback against a trade-
weighted basket of currencies, was at 80.168 from 80.451
http://www.marketwatch.com/story/world-forex-dollar-at-2-week-high-vs-yen-o=
n-asia-stock-rises-2010-03-08
...and I am Sid Harth
http://groups.google.com/group/soc.culture.indian.marathi/browse_thread/thr=
ead/3bc67593a8a0ac5b#
10.03.2010 - 15:40
Rasmussen: 57% think ObamaCare will damage economy
posted at 12:52 pm on March 9, 2010 by Ed Morrissey
The White House promised a 3hard pivot4 to jobs and the economy almost
three months ago, attempting to put the ObamaCare debate on the back
burner after the holidays. They had belatedly discovered that the
electorate was much more concerned about the economic plunge than in
retooling a health-care system that works for most Americans now.
Instead of the hard pivot, Democrats have doubled down on ObamaCare 7
and the latest Rasmussen survey shows that a strong majority believe
it to be the wrong direction on both issues:
Fifty-seven percent (57%) of voters say the health care reform plan
now working its way through Congress will hurt the U.S. economy.
A new Rasmussen Reports national telephone survey finds that just 25%
think the plan will help the economy. But only seven percent (7%) say
it will have no impact. Twelve percent (12%) aren2t sure.
Two-out-of-three voters (66%) also believe the health care plan
proposed by President Obama and congressional Democrats is likely to
increase the federal deficit. That2s up six points from late November
and comparable to findings just after the contentious August
congressional recess. Ten percent (10%) say the plan is more likely to
reduce the deficit and 14% say it will have no impact on the deficit.
Underlying this concern is a lack of trust in the government numbers.
Eighty-one percent (81%) believe it is at least somewhat likely that
the health care reform plan will cost more than official estimates.
That number includes 66% who say it is very likely that the official
projections understate the true cost of the plan.
Only a plurality of Democrats believe that the bill will help the
economy (43%), while 89% of Republicans and 61% of independents think
it will damage it.
Politically, the Democrats have the worst of all worlds. Not only do
they look out of touch for spending all of their efforts on a plan
that is deeply unpopular with voters, they now are seen as actively
damaging the economy. The deficit spending alone would be enough to
send voters heading for the exits, but the increased costs are even
worse. Seventy-eight percent of all respondents believe that middle-
class tax increases will come as a result of ObamaCare, with almost
two-thirds (65%) believing that to be 3very likely.4 Fifty-eight
percent of Democrats expect middle-class tax increases, which shows
how effective Obama has been in selling this plan.
What2s the biggest problem with ObamaCare? Majorities of all
political affiliations agree: the cost. Hardly anyone believes the
cost estimates. When asked whether the bill would exceed its cost
estimates, 93% of Republicans, 70% of Democrats, and 80% of
independents thought it at least somewhat likely 7 with 88% of
Republicans and 73% of independents calling it 3very likely.4 Only
20% of Democrats thought it unlikely. Again, this looks like a big
failure of the Obama administration2s efforts to sell the package as a
cost containment program.
Democrats now face the prospect of using arcane parliamentary tricks
to pass a bill that has minimal support, one that most voters believe
will damage the economy, cost more than advertised, and prompt
sweeping tax increases, all while ignoring the issues of a damaged
economy while attempting to make it worse. If they think that2s a
winning strategy for the midterms, they need new leadership 7 and
after the electoral disaster coming, they2ll probably be forced to get
it.
BlowbackNote from Hot Air management: This section is for comments
from Hot Air's community of registered readers. Please don't assume
that Hot Air management agrees with or otherwise endorses any
particular comment just because we let it stand. A reminder: Anyone
who fails to comply with our terms of use may lose their posting
privilege.
Comments
and lo, the Democrat party wandered aimlessly in the desert for 40
election years.
TN Mom on March 9, 2010 at 4:13 PM
Great pic!
mikeyboss on March 9, 2010 at 4:18 PM
From the rich being able to buy our representatives and lead our
culture by the nose, yes.
Dark-Star on March 9, 2010 at 4:00 PM
Boo hoo, the rich can do things that I can2t, therefore we have to
give govt control over everything so that the rich can be punished.
I2m still trying to figure out why you actually believe that everyone
who has more than you are is evil.
Is it because you are such a failure in life, that you can2t bear to
accept responsibility?
Lord knows, your given your demonstrated intellectual powers, it2s
hard to imagine you2ve ever been able to handle a job that doesn2t
involve the phrase 3would you like fries with that4.
MarkTheGreat on March 9, 2010 at 4:25 PM
and lead our culture by the nose, yes.
Ohh, and people pay more attention to the rich than they do you. I bet
that stings.
MarkTheGreat on March 9, 2010 at 4:26 PM
They won2t get new leadership, because Pelosi will be the only one
left in the House after November.
joe_doufu on March 9, 2010 at 5:03 PM
If you believe the 57% figure, then you2ll love the fictitious 9%
unemployment.
This administration is so inaccurate they couldn2t hit the side of a
barn with a tennis racket.
Cybergeezer on March 9, 2010 at 5:23 PM
I2m waiting for Congress to offer shares of stock in the new Health
Care Industry they want to create.
Think China will buy any?
Cybergeezer on March 9, 2010 at 5:25 PM
This HealthScare legislation is another omnibus spending bill that
lets Congress spend like drunken sailors with unlimited credit cards.
Obama has already signed an omnibus spending bill last year, and he
can2t wait to sign another one.
Cybergeezer on March 9, 2010 at 5:30 PM
If we just get enough fed-up conservative-types to move to Costa Rica
we could remake that country into what the U.S. should be. The U.S. is
going to be a once-great nation in record time and I, for one, don2t
feel like being taxed to death as it goes through its all too rapid
fall.
Fatal on March 9, 2010 at 5:31 PM
Adding a new entitlement? revenue neutral? Look at the prescription
drug benefit enacted by President Bush. In less than 10 years the
unfunded liabilities of this new entitlement are nearly 19 trillion
(18.7 and climbing).
Congress:
Look at the debt clock. Health care reform, yes. ObamaCare, NO.
Angry Dumbo on March 9, 2010 at 6:50 PM
Democrats now face the prospect of using arcane parliamentary tricks
to pass a bill that has minimal support, one that most voters believe
will damage the economy, cost more than advertised, and prompt
sweeping tax increases, all while ignoring the issues of a damaged
economy while attempting to make it worse. If they think that2s a
winning strategy for the midterms, they need new leadership 7 and
after the electoral disaster coming, they2ll probably be forced to get
it.
This isn2t about winning in 2010.
It isn2t about the leadership.
This is about having the most left leaning leadership in Washington
since the early 302s taking an opportunity to screw the country that
they thought they would never have!
We have a Marxist president who has already says he2d content with one
term if, BY HIS DEFINITION, he was a good president.
We have a Marxist wax statue House Speaker who comes from a district
where the majority probably feel Congress isn2t taking over enough of
the private sector on the way to their communist utopia.
We have an old, doesn2t-care-if-he2s-reelected Senate Leader who
thinks this is the culmination of his life2s work and that of his dead
friend Teddy!
These three jokers are betting that if they can get this passed,
rammed through, crammed down America2s throat, that in the future the
party can run on 3Save Healthcare! Keep those filthy Republican hands
off of it!4 3Oh, that evil Republican wants to repeal healthcare and
kill millions by taking away their coverage!4
Unfortunately, the chaos that2s going to ensue, sooner if they pass
healthcare, after we reach banana republic status in the next year,
could lead to numerous conclusions. It may be best if it leads to two
or more countries if this is the government we2re stuck with.
PastorJon on March 9, 2010 at 8:02 PM
Fifty-eight percent of Democrats expect middle-class tax increases,
which shows how effective Obama has been in selling this plan.
Whadda ya know! The Dems are as dumb as the Repubs.
Herb on March 9, 2010 at 8:36
http://hotair.com/archives/2010/03/09/rasmussen-57-think-obamacare-will-dam=
age-economy/
NYC2s New Suicide Sculptures (metaphor for economic reality)
Posted by barrypopik (Profile)
Wednesday, March 10th at 5:24AM EST
No Comments
New York is full of brilliant ideas these days. Let2s look first at
the suicide sculpture metaphor, then the economic reality.
From Wednesday2s New York Times:
Statues Seem Ready to Leap, but Police Say They Won2t
By MICHAEL S. SCHMIDT
Published: March 9, 2010
They stand about six feet tall and look like naked human beings. Over
the next few days, 27 of them will be scattered across rooftops and
ledges of buildings in Midtown Manhattan 7 including the Empire State
Building 7 as part of a public art exhibition.
About the same time that the first figure was placed atop a four-story
building at 25th Street and Fifth Avenue on Tuesday, the Police
Department issued a statement reassuring New Yorkers that the figures
are not despondent people on the verge of leaping to their deaths.
Police officials said they were trying to prevent an overwhelming
number of emergency calls from concerned pedestrians or office
workers. Nevertheless, they said that all emergency calls about a
potential suicide would be taken seriously 7 even those from places
where one of the figures is located.
3We are going to respond no matter what because there could be a
jumper at the spot,4 said Paul J. Browne, the department2s chief
spokesman.
The figures, which are anatomically correct, are modeled after the
body of the artist Antony Gormley, who created the exhibition, which
is being presented by the Madison Square Park Conservancy.
Gormley did the same thing in London in 2007.
Is anyone surprised that lots of people would call 911? Does anyone
think that clogging the 911 line is a good idea? In a nanny state
government that forbids toy guns, why is this OK? How much did this
guy earn for this 3art4?
Stupidity all around, but that2s not surprising for New York.
Moving on to suicidal economic news, the New York Times loves the
proposed soda tax:
Editorial
Healthy Solution: Taxing Sodas
Published: March 8, 2010
Seldom does one idea help fix two important problems, but a proposal
to tax sugary soft drinks in New York State is just that sort of 2-
for-1 solution. The penny-per-ounce tax on sodas and other sweetened
drinks is a way to raise desperately needed money for the city and
state in a bad economy. It also could help lower obesity rates, which
have soared in recent years.
The Legislature in Albany should adopt this tax quickly.
Increasing New York taxes to support outrageously generous public
union pensions 7 bless your hearts, New York Times and Mayor
Bloomberg.
What is the other solution to New York2s fiscal crisis? Billions in
increased borrowing, of course:
Paterson2s No. 2 Sets Broad Plan on New York Fiscal Crisis
By DANNY HAKIM
Published: March 9, 2010
ALBANY 7 New York could borrow billions of dollars to address its
urgent budget shortfall and a financial review board would be
established to impose new discipline on future spending under a five-
year financial rescue plan that Lt. Gov. Richard Ravitch will present
Wednesday.
(5)
Mr. Ravitch, who was asked by Gov. David A. Paterson to draw up the
blueprint, is seeking to curb the runaway spending that has helped
plunge New York into fiscal crisis. Despite the recession and talk of
fiscal austerity, state spending this year soared by 10 percent over
the previous year2s budget.
Keep on spending!
The state faces a $9 billion shortfall for the fiscal year that begins
April 1 and a $15 billion gap for the following year.
The plan, which requires legislative approval, seeks to address New
York2s immediate cash needs by permitting the state to sell bonds to
help cover operating expenses.
Keep on borrowing! Does anyone want to buy a bond from a bankrupt
state run by David Paterson?
If the Madison Square Park Conservancy wants to add some art, why not
ditch the suicide sculptures and have a replica of the Diana sculpture
that once graced Madison Square Garden? The Roman goddess Diana was an
emblem of chastity.
Suicide sculpture 7 an urban metaphor for these times? Why not move
them from Madison Square down to Wall Street?
http://www.redstate.com/barrypopik/2010/03/10/nycs-new-suicide-sculptures-m=
etaphor-for-economic-reality/
Economists trim 2011 U.S. growth forecast
Posted 2010/03/10 at 12:40 am EST
WASHINGTON, Mar. 10, 2010 (Reuters) 7 U.S. economists raised their
forecast for economic growth in 2010 in March, the third straight
monthly rise, while trimming their growth forecast for 2011, according
to a survey released on Wednesday.
Economists surveyed earlier this month in the Blue Chip Economic
Indicators newsletter said the economy is expected to grow by 3.0
percent in 2011, which is 0.1 percentage point lower than estimates
made a month ago.
But economists raised their 2010 growth forecast for the third
consecutive month to 3.1 percent, up 0.1 percentage point from
February.
Still, the economists predicted the recovery would be mild given the
depth of the recession.
The consensus also expects inventories to continue adding to GDP over
the next several quarters but see the size of those contributions
become increasingly smaller.
"By Q1 2011, the contribution to GDP from business inventories is
expected to become trivial," the survey said.
The panelists said they also expect "a slower and less powerful than
is typical improvement in labor market conditions that will cap gains
in disposable personal income and personal consumption expenditures."
The panelists expressed concern that severe winter weather crimped
economic activity in February and that upcoming monthly data on
production, retail sales, housing starts and home sales could fall
short of earlier consensus expectations.
However, they also pointed out any weather-induced softness should be
recovered in the March data.
(Reporting by Nancy Waitz, Editing by Chizu Nomiyama)
Copyright Reuters 2008.
http://www.newsdaily.com/stories/tre6290q0-us-usa-economy-bluechip/
US Chamber of Commerce getting into the game.
I almost titled this "US Chamber of Commerce starts recognizing its
class interests," but that kind of language bugs people on the Right,
for some reason.
Posted by Moe Lane (Profile)
Tuesday, March 9th at 11:48AM EST
5 Comments
Say hello to the US Chamber of Commerce. Or don2t; they2re coming to
sit down at the table any which way.
The U.S. Chamber of Commerce is building a large-scale grass-roots
political operation that has begun to rival those of the major
political parties, funded by record-setting amounts of money raised
from corporations and wealthy individuals.
[snip]
The new grass-roots program, the brainchild of chamber political
director Bill Miller, is concentrating on 22 states. Among them are
Colorado, where incumbent Democratic Sen. Michael Bennet is
vulnerable; Arkansas, where Democratic Sen. Blanche Lincoln faces an
uphill reelection battle; and Ohio, where the chamber sees
opportunities in numerous House races and an open Senate seat.
The network, called Friends of the U.S. Chamber, has been used to
generate more than a million letters and e-mails to members of
Congress, 700,000 of them in opposition to the Democratic healthcare
plan. That is an increase from 40,000 congressional contacts generated
in 2008.
The article goes on to note that the CoC2s grassroots planning
recently got a big boost from the recent Citizens2 United case, as
well as that this organization is increasingly publicly acknowledging
that 1pro-business growth2 means 1pro-Republican.2 And why would th=
at
be? Probably because of Democratic assaults like this one:
A Democratic aide says a new provision in the health care bill will
require businesses to count part-time workers when calculating
penalties for failing to provide coverage.
Via Hot Air, and that particular sudden addition to the health care
bill should have the same effect on small business growth as would,
say, a load of buckshot to the face. Remember, folks: the current
ruling party of this country is largely led by people who have never
worked for a living in their lives - and by God, does it show
sometimes! Keep this in mind when opening your checkbooks, because
the business community certainly plans to5
Moe Lane
5 Comments
*HOW* can they do this? How is it Constitutional?
yoyo Tuesday, March 9th at 12:16PM EST
Isn2t the Senate Bill ALREADY voted for? How can they insert an
amendment into a bill that is already passed?
Wouldnt the inclusion of this amendment (or any other) require that
the whole she-bang go back to the Senate for another up/down vote? Or
at the very least, allow the Senate to Amend this to Death - FINALLY?
Without coming back to the Senate, the Bill would be unconstitutional,
yes?
Just Checking. Dan, can you help me out here? Rule check, please!
Si Vis Pacem Para Bellum
1If you seek peace, prepare for war!2
The 1yoyo2 replaced my cigarettes January 22, 20065.
http://www.twitter.com/rs_yoyo
That's what "reconcilliation" is all about.
The_Gadfly Tuesday, March 9th at 12:25PM EST
See, this is a cost cutting measure. Without it, they won2t have
enough money to cover the bills, so the reconcilliation rules apply,
and they only need 51 votes for that.
No, I don2t really believe that either, but you can better a year2s
salary that2s how they2ll sell it. Assuming of course you can find
someone dumb enough to take the wager.
We2ve been called racists enough now that it shouldn2t bother us any
more.
-AChance, http://www.redstate.com/moe_lane/2009/11/03/what-men-may-do-we-ha=
ve-done/#comment-24463
If NY23 was a beat down for Conservatives, what do you call what
happened to Progressives in NJ and VA?
inspired by ColdWarrior,
http://www.redstate.com/hooah_mac/2009/11/04/ny-23-the-agony-of-defeat-not-=
so-much/#comment-156
"Cost Cutting?" Really? Smells of "Policy" to me.
yoyo Tuesday, March 9th at 12:33PM EST
But, I *do* have a head cold, so my sniffer may be broken.
OR, more likely, it just stinks.
I say they should start reconcilling the bill with the Constitution
and go forward from there.
But, I AM a little bit 3old fashioned.4 *Tradition and Patriotism* and
all that.
Si Vis Pacem Para Bellum
1If you seek peace, prepare for war!2
Pukin2 Dogs - The Fighting 143
Sans Reproache
The 1yoyo2 replaced my cigarettes January 22, 20065.
http://www.twitter.com/rs_yoyo
George Washington
hickorystick Tuesday, March 9th at 1:32PM EST
led the Rebellion, because England was infringing upon his interests.
George Washington wasn2t that political a guy. He did maintain his
1interest2 very sharply. He was one of the wealthiest Colonials, and
he was constantly irritated with England imposing laws and
restrictions impinging on his 1interest2. He chose his wife, Mary, not
for her looks, but because she had a lot of land. I get so frustrated
with politics because most of the time, especially media time, is
spent talking about nebulous things which we have no power or control
over. We would do well to frame every bill in terms of how it affects
1interests2. You cannot walk into court and ask for something, unless
you can prove an 1interest2 or 2standing2. We should do the same in
our political fights, sticking to our right to maintain property. That
is what we fought over in the revolution. Remember, we didn2t bother
to write a Constitution till some years after we had won the war. The
form of government that came most naturally after the victory, was a
Continental Congress. This form left most issues to the states, where
property could best be protected. If we want to effectively fight this
Redistibutor-in-Chief, We better start focusing on our own interest
and that of our states.
Wow...
tdpwells Tuesday, March 9th at 3:09PM EST
So let2s see, that2s most employees at fast food restaurants, grocery
stores, convenience stores, corner pharmacy stores like CVS and
Walgreens, etc etc etc5
Unemployment ought to be at a healthy 30% by the time they2re done.
Nice.
I do not believe that the power and duty of the General
Government ought to be extended to the relief of individual
suffering which is in no manner properly related to the
public service or benefit5to the end that the lesson should
be constantly enforced that though the people support the
Government, the Government should not support the people.
Grover Cleveland (16 February 1887)
http://www.redstate.com/moe_lane/2010/03/09/us-chamber-of-commerce-getting-=
into-the-game/
Bloomberg
Siegel Says U.S. Recovery Certain, Euro Region Faces Splinter
March 10, 2010, 5:39 AM EST
By Le-Min Lim
March 10 (Bloomberg) -- Jeremy Siegel, a finance professor at the
University of Pennsylvania2s Wharton School, says the worst is over
for the U.S. economy and the Federal Reserve may raise interest rates
by year2s end to cool growth.
Spending by companies on equipment and plants will outpace private
consumption as the main growth driver this year, he said in an
interview in Hong Kong. The jobless rate, at 9.7 percent last month,
will fall below 9 percent by the end of 2010, he said. That may force
the Fed to tighten policy and full-year economic growth may reach 4
percent, he said.
The Fed 3will feel comfortable raising the rates as long as the
situation continues to improve, as I believe it will,4 said Siegel, in
an interview in Hong Kong. Siegel, 64, is an adviser to U.S.-based
WisdomTree Investments Inc., which had $6.7 billion of assets under
management as of the end of last year.
The Fed and the Treasury are trying to withdraw the emergency measures
introduced during the financial crisis without triggering a relapse in
the economy. Fed Chairman Ben S. Bernanke said Feb. 24 the U.S. is in
a 3nascent4 recovery that still requires keeping interest rates near
zero 3for an extended period4 to spur demand once stimulus wanes.
In Europe, the European Central Bank will have little alternative
other than to keep interest rates low as euro region members such as
Greece struggle to convince investors they will cut soaring budget
deficits, he said. Its benchmark rate is currently at a record low of
1 percent.
Exports
The euro is making the exports of nations such as Spain and Greece so
uncompetitive that they may start talks as early as next year to leave
the 16-nation bloc, he said. That departure would be 3painful and
difficult and drag down the region for a few years,4 he said. One
weakness of the currency union is that it lacks a proper and orderly
exit strategy for members that can2t keep up, Siegel said.
3They should have signed prenups before they got married to the euro,4
said Siegel, referring to agreements that outline the terms of a
divorce.
A U.S. recovery and uncertainty in the eurozone mean the dollar will
remain a 3viable4 asset, said Siegel.
Later this year, China may start a managed appreciation of the yuan,
Siegel said. China wants to revert to export-driven economic growth,
so is more likely to try a staggered revaluation than a major, one-
time adjustment, he said.
--Editors: Dirk Beveridge, John Fraher
To contact the reporter on this story: Le-Min Lim in Hong Kong at
lmlim@bloomberg.net.
To contact the editor responsible for this story: Mark Beech at
mbeech@bloomberg.net.
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Most Asian Stocks Fall as Oil, Shippers Drop; Telstra Advances
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Greek Crisis Is Over, Rest of Region Safe, Prodi Says (Update2)
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http://www.businessweek.com/news/2010-03-10/rand-may-breach-10-per-euro-for=
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High Conviction: Short the Yen
by: Alexander Tepper March 10, 2010
Alexander Tepper is Chief Economist at TKNG Capital, a global macro
hedge fund based in New York. Previously, Mr. Tepper was a senior
economic policy aide to U.S. Senator Frank Lautenberg. He also has
experience at Oliver, Wyman & Company advising Fortune 500 financial
institutions on risk management and as an investment banking Associate
at Credit Suisse. He has a masters degree in Economics from Oxford
University, and a BA in Physics from Princeton University.
We recently had the opportunity to ask Alexander about the single
highest conviction position he currently holds in his fund.
What is your highest conviction position in your fund right now - long
or short?
We are short Japanese yen against the US Dollar. We have implemented
the trade by selling out-of-the-money calls to buy out-of-the-money
puts and taking in premium.
Why did you use options to structure the trade?
Call options on the yen are significantly more expensive than put
options. This 3skew,4 as it2s known, exists because the Japanese
investment community tends to be short yen, making it susceptible to
sharp rises during bouts of risk aversion.
Investors hedge this exposure by buying out-of-the-money yen calls.
But given the sharp adjustment that has already occurred in the crisis
and a government whose proclivities are far from fiscally
conservative, we view the risks as less asymmetric than implied by the
skew.
Structuring this trade with options is akin to playing with dice
loaded in our favor.
Tell us a bit about Japan right now, and why you're short its
currency.
Japan has traditionally been an export-oriented economy, but that2s
going to change as the population continues to age and retire. These
older citizens, who have saved their whole lives and are no longer
producing anything, will be a natural source of demand, first for
domestic Japanese goods and then for imports. A shrinking labor force
will mean other nations will need to pick up the slack in production.
Already, the savings rate in Japan has fallen into the low single-
digits and it should fall further.
Japan is also in serious fiscal trouble. Its net debt is more than
100% of GDP, and gross debt is nearing 200% of GDP. The Japanese
government and central bank do not seem particularly concerned. It is
only Japan2s strong balance of payments position, and a willful
suspension of disbelief by the markets, that differentiates it from
countries like Greece. But those, too, should ebb over time.
So why will the yen fall?
First, as the Japanese retire, the supply shock to the economy will
result in continuing declines in competitiveness. The yen will need to
fall to restore balance.
Second, less income and more retirees will mean that Japan will need
to fund more of its government2s borrowing from abroad. Making this
attractive will mean a lower exchange rate, higher interest rate, or
(most likely) both.
Third, the government2s fiscal position is the worst in the developed
world. The scale of the adjustments that are necessary to stabilize
the budget deficit would be unprecedented in a large developed nation,
requiring deep cuts to pensions, double-digit tax increases, and
severe spending restraint elsewhere. If sovereign worries persist,
Japan and its currency are obvious targets for speculators.
Finally, we think consumers in the US and UK are undergoing a lasting
shift in psychology that will cause them to save a larger share of
their incomes going forward. Over the long-term, the savings rate
needs to average around 10% in order for Americans to secure a
reasonable retirement. When Americans save more, they buy less,
especially imports. This lack of demand for imports means a stronger
dollar against US trading partners like Japan.
All this is on the assumption that the global economy will limp along
for a while. But if instead we have a return to robust growth that
looks broadly like the pre-crisis economy, the yen should weaken
towards 2007 levels as markets become more and more comfortable with
risk and interest rates rise in the rest of the developed world.
There are a lot of ways to win with this trade.
What would you say the current broad sentiment is on the yen?
The market has tended to view the yen as part of the 3risk-on/risk-
off4 trade, where the yen rises with worries about the global economy.
Japan2s fiscal issues are well-known, but the market has generally not
priced them, with yields on 10-year Japanese bonds below 1.5%.
Japanese CDS spreads, however, have doubled since late summer.
More broadly, the markets have believed that correction of global
imbalances requires a weaker dollar to encourage Americans and Asians
to change their consumption behavior. We think the financial crisis
and experience of house price declines will be the driving force that
restrains Americans2 profligacy, while Asians will consume more. The
result will be a stronger dollar.
Does Japanese economic policy play a role in your position?
The Japanese government has made fairly clear that it does not intend
to tolerate a markedly stronger yen because it hurts their exporters.
It also seems neither inclined nor able to do anything about the
fiscal situation in the near future.
What catalysts do you see that could move the currency, and the trade
in your favor?
The eurozone2s sovereign risk worries will soon resolve themselves one
way or another. When they do, Japan could easily become a target.
As economic data continue to strengthen over the next few months, a
return to normalcy will mean a weaker yen.
We are also prepared for a more gradual adjustment as markets adopt
our demographic view.
What could go wrong with this trade?
In the near term, Japanese companies repatriating income around the
fiscal year-end in March could potentially lead to a rise in the
currency. A sharp rise in risk aversion could have a similar effect.
We have been careful to choose the strike prices on our options to
minimize the damage if such a spike does occur.
Beyond that, deflation in Japan means that in a perfect economic
world, the yen would appreciate over time. There is also the risk that
the pundits over the past several years prove right and we see
fundamental weakening of the dollar with respect to all Asian
currencies.
Finally, if China were to revalue its currency, as many believe it
will, that could create space for the Japanese authorities also to
allow some appreciation. Again, however, we believe our options are
sufficiently out of the money to limit our downside in such a
scenario.
Thanks, Alexander.
Disclosure: TKNG Capital is short the Yen against the Dollar.
If you are a fund manager and interested in doing an interview with us
on your highest conviction stock holding, please email Rebecca
Barnett.
About the author: Alexander Tepper Alexander Tepper is Chief
Economist at TKNG Capital, a global macro hedge fund based in New
York. Previously, Mr. Tepper was a senior economic policy aide to U.S.
Senator Frank Lautenberg. He also has experience at Oliver, Wyman &
Company advising Fortune 500 financial institutions on risk... More
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The Coolpix L11 is clearly designed more for the frugal than the
fancy. The 6-megapixel camera sports a 37.5mm-to-112.5mm-equi... 3x
zoom lens and a relatively small 2.4-inch LCD screen. While its
hardware hardly impresses, however, the camera offers some
surprisingly useful features. The L11 includes Nikon's In-Camera Red-
Eye Fix and Face-Priority AF. In-Camera Red-Eye Fix supplements the
camera's red-eye reduction flash mode with a processing system that
removes red-eye after the photo is taken. Face-Priority AF detects and
tracks faces in photos, and adjusts focus to stay on those faces,
instead of just the closest subject. Both features come standard on
most Nikon Coolpix cameras, but are still handy for casual shooting.
www-nikon.com Mar 10 0
Carlos Lam is a deputy prosecuting attorney in a mid-sized county in a
midwestern state. An adherent in the Austrian School of economics, he
believes that to truly prosper as the republic envisioned by the
Founding Fathers, we must return to principles of sound money and
limited government. He... More Latest StockTalkWent long Canadian Oil
Sands Trust (COSWF.PK) as a way to hedge oil/gasoline price increases
& to diversify away from the USDSep 11, 2009Latest articles &
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More Debt2."Cash for Clunkers" Passes House: The Debt Merchants
Continue Their Efforts3.Will the Chrysler Deal Be Delayed?
Shorting the Yen could be an interesting play. Already the Japanese
savings rate has crashed from its lofty position to under 4%, so the
Japanese government will not be able to count on domestic savings to
finance its debt indefinitely.
Mar 10 06:25 AM
John Thomas graduated with a bachelor2s degree in biochemistry with
honors and a minor in mathematics from the University of California at
Los Angeles (U.C.L.A.) in 1974. He moved to Tokyo, Japan where he was
employed by a medium-sized Japanese securities house. Thomas became
fluent in... More Company: The Mad Hedge Fund Trader bvgf I2m hearing
from my buddies in Japan that while things are already quite bad in
that enchanting country, they are about to get a whole lot worse, and
that it is time to start scaling into a major short in the yen.
Australia and China have already raised interest rates, to be followed
by the US, and eventually Europe. With its economy enfeebled, the
prospects of Japan raising rates substantially is close to nil,
meaning the yield spread between the yen and other currencies is about
to widen big time. That will generate hundreds of billions of dollars
worth of yen selling as hedge funds rush to pile on a giant carry
trade. Until now, the government has been able to finance ballooning
budget deficits caused by two lost decades, but those days are coming
to an end. Japan is quite literally running out of savers. The savings
rate has dropped from 20% during my time there, to a spendthrift 3%,
because real falling standards of living leave a lot less money for
the piggy bank. The national debt has rocketed to 190% of GDP, and
100% when you net out government agencies buying each other2s
securities. Japan has the world2s worst demographic outlook. Unfunded
pension liabilities are exploding. Other than once great cars and
video games, what does Japan really have to offer the world these
days, but a carry currency? Until now, the government has been able to
cover up these problems with tatami mats, because almost all of the
debt it issued has been sold to domestic institutions. Now that this
pool is drying up, there is nowhere else to go but foreign investors.
With Greece and the rest of the PIIGS at the forefront, and awareness
of sovereign risks heightening, this is going to be a much more
discerning lot to deal with. You could dip your toe in the water here
around 588.40. In a perfect world you could sell it as it double tops
at the 85 level. My initial downside target is 5105, and after that
5120. If you2re not set up to trade in the futures or the interbank
market like the big hedge funds, then take a look at the leveraged
short yen ETF, the (YCS). This is a home run if you can get in at the
right price.
Mar 10
http://seekingalpha.com/article/192864-high-conviction-short-the-yen
Fresh Trade Winds?
Wednesday, 10 March 2010 02:19
0 Comments and 4 Reactions
Investor's Business Daily
Editorial
Investor's Business Daily
Editorial
http://epaper.investors.com
Economy: U.S. Trade Representative Ron Kirk came out swinging
Wednesday, warning Congress that it2s time to pass free trade. Is
something happening here? Is the Obama administration finally getting
serious about jobs?
After a year of inaction, Kirk told Democrats in remarks to the Senate
Finance Committee that passage of free-trade pacts must be 3a
priority.4
Free trade 3will stimulate export-driven growth and help the United
States meet the president2s goal to double U.S. exports in five
years,4 he said, adding that 2 million jobs would be created.
That kind of talk from a leading Democrat directed at the
protectionists in his own party is a new 7 and welcome 7 development.
Over the last year, Obama administration officials have occasionally
talked up the benefits of free trade, but only with conservatives and
business groups, who already know about it.
Now some are spending political capital to push it.
Confronting a Congress that is holding up the creation of jobs doesn2t
come a moment too soon. U.S. joblessness stands at 9.7% and Europe is
grabbing U.S. markets abroad.
Congressional protectionists talk of free trade passage in terms of
years; their campaign financiers in Big Labor, such as the AFL-CIO,
say 3never.4
Kirk rebuked that stance in his speech, telling labor it had a voice
but 3not a veto4 on trade and hinted that President Obama would put
the pacts through without them. He also gave labor leaders a deadline
to make demands on free-trade deals like the one with Colombia instead
of constantly moving the goal posts.
One shot.
It doesn2t come a moment too soon. Congress2 failure to enact the free-
trade pacts in front of them is costing the U.S. nearly 600,000 jobs,
according to a 2009 study by the U.S. Chamber of Commerce. Contrary to
protectionist myth, free trade costs no net jobs in the U.S. economy
at all, as Fed chief Ben Bernanke noted in a 2007 speech citing years
of data. 3Trade allows us to enjoy both a more productive economy and
higher living standards,4 he said. Unemployment is killing the U.S.
economy and sinking the Obama presidency. Time is running out to open
markets that could help repair it. Just this week, Europe signed a
free-trade deal with Colombia and Peru and breezily announced it would
have a pact with fast-growing India ready by October.
U.S. international credibility right now is zero, given that
alreadynegotiated trade pacts with Colombia, Panama and South Korea
have languished in Congress for more than three years.
Who2d want to negotiate something new and have it put in congressional
limbo? That2s why the Obama administration2s proposed U.S. Trans-
Pacific Partnership to open new markets in Brunei, Australia, New
Zealand and Vietnam is going nowhere.
3This delay in implementing hurts U.S. credibility around the world 7
not just economically, but geopolitically as well,4 said Sen. Charles
Grassley, R-Iowa, at the Kirk hearing. Hello? Anyone out there? The
U.S. is losing ground in world markets and doing it at the cost of our
own citizens2 jobs. It2s exactly what U.S. labor unions such as the
Teamsters, United Steelworkers, United Autoworkers and various public
employee unions want.
And right now, like it or not, they rule Congress. It2s ironic,
because many lobbyists believe free trade can pass both congressional
Houses if the bills are put to a vote. Past presidents, including
Democrat Bill Clinton and Republican George W. Bush, knew that2s what
it took to get pacts through Congress. Both threw their all into
getting big treaties 7 like 19932s North American Free Trade Agreement
and 20052s Central American Free Trade Agreement 7 passed in Congress,
acts that took on people who would stop them to charge up the U.S.
economy. There2s still no sign of Obama out there working the Hill.
But Kirk2s statements, no doubt authorized by the president, may be
the beginning of a turnaround on trade.
http://epaper.investors.com/Olive/ODE/IBD/LandingPage/LandingPage.aspx?href=
DSUJELzIwMTAvMDMvMDU.&pagenoDMTA.&entityDQXIwMTAwNA..&viewDZW50aXR5
http://www.truthabouttrade.org/news/latest-news/15680-fresh-trade-winds
A new finger on the pulse of economy
A new index co-developed by Ceridian uses diesel fuel sales to track
U.S. economic growth.
By NEAL ST. ANTHONY, Star Tribune
Last update: March 9, 2010 - 9:03 PM
Want to know which way the economy is headed? Find out how much diesel
fuel is being burned by the nation's over-the-road truckers.
That's the theory behind a new economic index developed by Bloomington-
based Ceridian Corp., a provider of electronic payments services, and
UCLA's Anderson School of Management.
Called the Pulse of Commerce Index, the survey, to be released
Wednesday, shows the U.S. economy was essentially flat over the first
two months of the year, with a snowbound February decline of 0.7
percent in output offsetting the modest January gain of 0.6 percent.
"February was disappointing, but the geographic pattern underlying the
index suggests this was due in large part to extreme snowfalls during
the month," said Edward Leamer, director of UCLA's Anderson Forecast
and chief economist for the Ceridian-UCLA Pulse of Commerce Index
(PCI). "We still need much stronger growth in the PCI to get Americans
back to work. To sustain at least a 4 percent GDP number for the first
quarter [on an annualized basis], the March PCI has to be ... over 1
percent growth. That number will be very important."
The new index is designed to get the jump on the Federal Reserve's
report on industrial production report for February, which comes out
next week.
The PCI uses real-time diesel fuel consumption data from over-the-road
truckers, which is tracked by Ceridian, a longtime payment services
provider to the trucking industry. The index is built by analyzing
Ceridian's electronic card payment data, which captures the location
and volume of diesel fuel being purchased. This provides a detailed
picture of the movement of products across the United States.
In an interview Tuesday, Leamer said that once the bad weather is
taken into account, February's numbers suggest that there is an
underlying power to industrial demand and he expects that a catch-up
surge in goods moved in March will indicate that the economy is
growing at about a 3 percent annualized rate during the first quarter.
"To be optimistic about jobs, we'll need at least that," Leamer said.
"In the fourth quarter, we had 5.9 percent growth, but 3.9 percent was
just inventory replacement. That leaves 2 percent. We need more than
that. And March will tell the quarter."
Leamer said the Ceridian diesel-consumption data, collected from about
7,000 service stations around the country, constitutes a
representative sample and provides a "real data, not surveys" about
the movement of goods, which is a manifestation of industrial
production and shipments.
The flow of commerce
"We're monitoring the flow of commerce at truck stops, and the
arteries for the commercial system are the interstate highways
carrying the products," he said. "It amplifies the swings in GDP and
also tells us early where the economy is going."
Industrial production only accounts for about one-third of the U.S.
economy. It is more volatile than the service sector, which fluctuates
less during economic cycles.
All economic eyes are on month-to-month changes in industrial output,
which is a guide to business spending, credit expansion and demand for
goods in the aftermath of the 2008-09 recession that has given way to
a fairly tepid economic recovery. Most labor economists believe that
the economy won't start adding jobs significantly unless industrial
output starts growing at a 3 to 5 percent annualized clip.
Back testing of the Ceridian-UCLA Pulse of Commerce Index indicates
that it is a reliable indicator of industrial output. For example, the
index rose in areas unaffected by February's snows, including 2.7
percent in the Upper Midwest and 2.1 percent in the Pacific region.
"Goods have to be transported for the economy to grow, so when
snowstorms bog down that flow, it is reflected in our index and in the
overall U.S. economy," said Craig Manson, senior vice president and
index analyst for Ceridian.
A new finger on the pulse of economy...
Wait! The economy has a pulse?
posted by DrZoidberg on Mar 9, 10 at 11:55 pm |
http://www.startribune.com/business/87180717.html?elrDKArks:DCiU1OiP:DiiU=
iD3aPc:_Yyc:aUU
Posted: Wed, Mar 10 2010. 9:00 AM IST
International News
US, Europe eye free-trade pacts with rising Asia
The talks will follow the launch of negotiations on a free-trade
agreement between Singapore and the European Union, which is also keen
on expanding trade ties with Southeast Asia
AFP
Singapore: The United States, fearful of being sidelined as China and
other fast-growing Asian economies speed up their integration, is
banking on a new trade pact to shore up its Pacific influence.
Talks opening Monday in Melbourne will focus on a proposed Trans-
Pacific Partnership agreement linking the US market with Australia,
Brunei, Chile, New Zealand, Peru, Singapore and Vietnam.
Officials hope the TPP will form the nucleus of a wider Asia-Pacific
trade zone that would eventually rope in China, Japan and South Korea
as well as key Southeast Asian nations.
The talks will follow the launch of negotiations on a free-trade
agreement between Singapore and the European Union, which is also keen
on expanding trade ties with Southeast Asia.
The United States and Europe have been shut out of a growing web of
Asia-centric trade pacts spurred by the region2s 1997 financial crisis
and by a lack of progress in the Doha round of global trade talks,
analysts said.
While the United States is 3unquestionably4 a Pacific power, it 3lack=
s
a comprehensive Asia strategy4, said Ernest Bower, a Southeast Asia
expert at the Center for Strategic and International Studies (CSIS) in
Washington.
3The lack of consistent US focus in the region has enabled the
ascendance of Chinese power,4 Bower said, adding that it could slowly
undermine US business interests and eventually degrade US security
capabilities.
The new trade attention from the West comes as Asian countries lead
the rest of the world in recovering from the global economic downturn.
3That the US and the EU are knocking on Asia2s doors is a recognition
that the centre of economic power is shifting, or has shifted, to our
region,4 an Asian diplomat closely involved in trade issues told AFP.
3They know very well that ignoring Asia will be at their own peril.
China is already a major trade partner for many Asian countries and is
leading efforts toward regional economic integration,4 he said on
condition of anonymity.
Deputy US trade representative Demetrios Marantis warned that
Washington 3faces the daunting prospect of getting locked out4 by Asia-
specific trade pacts.
A study by the US-based Peterson Institute for International Economics
showed that discriminatory policies under an East Asia free trade zone
could cost the US economy at least 25 billion dollars of annual
exports and lead to the loss of 3about 200,000 high-paying jobs4.
The United States has free-trade accords with Australia and Singapore
and has also negotiated a trade pact with South Korea, but this has
yet to be implemented due to fierce disputes over cars and beef.
China has been more aggressive in wooing regional partners.
An agreement between China and the Association of Southeast Asian
Nations (ASEAN) covering nearly two billion consumers went into effect
this year, creating the world2s biggest free-trade area in terms of
population.
There are also efforts to form a larger, all-Asian free-trade zone
spanning China, Japan, South Korea and the 10 ASEAN states.
C. Fred Bergsten and Jeffrey Schott of the Peterson Institute hailed
Washington2s decision to join the trans-Pacific talks in Australia.
3Deepening US engagement with countries in the Asia-Pacific region is
crucial for the advancement of both US economic and foreign policy
interests,4 Bergsten and Schott said in a recent paper.
3Within the next few years, it is likely that the East Asian countries
will deepen their economic ties and conclude both a regional trade
agreement and a monetary agreement,4 the authors said.
Such a bloc would 3draw a line4 in the middle of the Pacific Ocean by
discriminating against US exporters and investors, and excluding the
United States from major regional economic and security forums, they
said.
Marantis acknowledged that overcoming crisis-hit Americans2 opposition
to free-trade agreements is a key challenge.
Surveys suggest that only about one in 10 Americans think that trade
pacts create jobs, while more than half believe the accords lead to
job losses at home, he said.
http://www.livemint.com/2010/03/10090029/US-Europe-eye-freetrade-pact.html
...and I am Sid Harth
http://groups.google.com/group/soc.culture.indian.marathi/browse_thread/thr=
ead/fbe56c67d373c696/31b16b774a16ac15
posted at 12:52 pm on March 9, 2010 by Ed Morrissey
The White House promised a 3hard pivot4 to jobs and the economy almost
three months ago, attempting to put the ObamaCare debate on the back
burner after the holidays. They had belatedly discovered that the
electorate was much more concerned about the economic plunge than in
retooling a health-care system that works for most Americans now.
Instead of the hard pivot, Democrats have doubled down on ObamaCare 7
and the latest Rasmussen survey shows that a strong majority believe
it to be the wrong direction on both issues:
Fifty-seven percent (57%) of voters say the health care reform plan
now working its way through Congress will hurt the U.S. economy.
A new Rasmussen Reports national telephone survey finds that just 25%
think the plan will help the economy. But only seven percent (7%) say
it will have no impact. Twelve percent (12%) aren2t sure.
Two-out-of-three voters (66%) also believe the health care plan
proposed by President Obama and congressional Democrats is likely to
increase the federal deficit. That2s up six points from late November
and comparable to findings just after the contentious August
congressional recess. Ten percent (10%) say the plan is more likely to
reduce the deficit and 14% say it will have no impact on the deficit.
Underlying this concern is a lack of trust in the government numbers.
Eighty-one percent (81%) believe it is at least somewhat likely that
the health care reform plan will cost more than official estimates.
That number includes 66% who say it is very likely that the official
projections understate the true cost of the plan.
Only a plurality of Democrats believe that the bill will help the
economy (43%), while 89% of Republicans and 61% of independents think
it will damage it.
Politically, the Democrats have the worst of all worlds. Not only do
they look out of touch for spending all of their efforts on a plan
that is deeply unpopular with voters, they now are seen as actively
damaging the economy. The deficit spending alone would be enough to
send voters heading for the exits, but the increased costs are even
worse. Seventy-eight percent of all respondents believe that middle-
class tax increases will come as a result of ObamaCare, with almost
two-thirds (65%) believing that to be 3very likely.4 Fifty-eight
percent of Democrats expect middle-class tax increases, which shows
how effective Obama has been in selling this plan.
What2s the biggest problem with ObamaCare? Majorities of all
political affiliations agree: the cost. Hardly anyone believes the
cost estimates. When asked whether the bill would exceed its cost
estimates, 93% of Republicans, 70% of Democrats, and 80% of
independents thought it at least somewhat likely 7 with 88% of
Republicans and 73% of independents calling it 3very likely.4 Only
20% of Democrats thought it unlikely. Again, this looks like a big
failure of the Obama administration2s efforts to sell the package as a
cost containment program.
Democrats now face the prospect of using arcane parliamentary tricks
to pass a bill that has minimal support, one that most voters believe
will damage the economy, cost more than advertised, and prompt
sweeping tax increases, all while ignoring the issues of a damaged
economy while attempting to make it worse. If they think that2s a
winning strategy for the midterms, they need new leadership 7 and
after the electoral disaster coming, they2ll probably be forced to get
it.
BlowbackNote from Hot Air management: This section is for comments
from Hot Air's community of registered readers. Please don't assume
that Hot Air management agrees with or otherwise endorses any
particular comment just because we let it stand. A reminder: Anyone
who fails to comply with our terms of use may lose their posting
privilege.
Comments
and lo, the Democrat party wandered aimlessly in the desert for 40
election years.
TN Mom on March 9, 2010 at 4:13 PM
Great pic!
mikeyboss on March 9, 2010 at 4:18 PM
From the rich being able to buy our representatives and lead our
culture by the nose, yes.
Dark-Star on March 9, 2010 at 4:00 PM
Boo hoo, the rich can do things that I can2t, therefore we have to
give govt control over everything so that the rich can be punished.
I2m still trying to figure out why you actually believe that everyone
who has more than you are is evil.
Is it because you are such a failure in life, that you can2t bear to
accept responsibility?
Lord knows, your given your demonstrated intellectual powers, it2s
hard to imagine you2ve ever been able to handle a job that doesn2t
involve the phrase 3would you like fries with that4.
MarkTheGreat on March 9, 2010 at 4:25 PM
and lead our culture by the nose, yes.
Ohh, and people pay more attention to the rich than they do you. I bet
that stings.
MarkTheGreat on March 9, 2010 at 4:26 PM
They won2t get new leadership, because Pelosi will be the only one
left in the House after November.
joe_doufu on March 9, 2010 at 5:03 PM
If you believe the 57% figure, then you2ll love the fictitious 9%
unemployment.
This administration is so inaccurate they couldn2t hit the side of a
barn with a tennis racket.
Cybergeezer on March 9, 2010 at 5:23 PM
I2m waiting for Congress to offer shares of stock in the new Health
Care Industry they want to create.
Think China will buy any?
Cybergeezer on March 9, 2010 at 5:25 PM
This HealthScare legislation is another omnibus spending bill that
lets Congress spend like drunken sailors with unlimited credit cards.
Obama has already signed an omnibus spending bill last year, and he
can2t wait to sign another one.
Cybergeezer on March 9, 2010 at 5:30 PM
If we just get enough fed-up conservative-types to move to Costa Rica
we could remake that country into what the U.S. should be. The U.S. is
going to be a once-great nation in record time and I, for one, don2t
feel like being taxed to death as it goes through its all too rapid
fall.
Fatal on March 9, 2010 at 5:31 PM
Adding a new entitlement? revenue neutral? Look at the prescription
drug benefit enacted by President Bush. In less than 10 years the
unfunded liabilities of this new entitlement are nearly 19 trillion
(18.7 and climbing).
Congress:
Look at the debt clock. Health care reform, yes. ObamaCare, NO.
Angry Dumbo on March 9, 2010 at 6:50 PM
Democrats now face the prospect of using arcane parliamentary tricks
to pass a bill that has minimal support, one that most voters believe
will damage the economy, cost more than advertised, and prompt
sweeping tax increases, all while ignoring the issues of a damaged
economy while attempting to make it worse. If they think that2s a
winning strategy for the midterms, they need new leadership 7 and
after the electoral disaster coming, they2ll probably be forced to get
it.
This isn2t about winning in 2010.
It isn2t about the leadership.
This is about having the most left leaning leadership in Washington
since the early 302s taking an opportunity to screw the country that
they thought they would never have!
We have a Marxist president who has already says he2d content with one
term if, BY HIS DEFINITION, he was a good president.
We have a Marxist wax statue House Speaker who comes from a district
where the majority probably feel Congress isn2t taking over enough of
the private sector on the way to their communist utopia.
We have an old, doesn2t-care-if-he2s-reelected Senate Leader who
thinks this is the culmination of his life2s work and that of his dead
friend Teddy!
These three jokers are betting that if they can get this passed,
rammed through, crammed down America2s throat, that in the future the
party can run on 3Save Healthcare! Keep those filthy Republican hands
off of it!4 3Oh, that evil Republican wants to repeal healthcare and
kill millions by taking away their coverage!4
Unfortunately, the chaos that2s going to ensue, sooner if they pass
healthcare, after we reach banana republic status in the next year,
could lead to numerous conclusions. It may be best if it leads to two
or more countries if this is the government we2re stuck with.
PastorJon on March 9, 2010 at 8:02 PM
Fifty-eight percent of Democrats expect middle-class tax increases,
which shows how effective Obama has been in selling this plan.
Whadda ya know! The Dems are as dumb as the Repubs.
Herb on March 9, 2010 at 8:36
http://hotair.com/archives/2010/03/09/rasmussen-57-think-obamacare-will-dam=
age-economy/
NYC2s New Suicide Sculptures (metaphor for economic reality)
Posted by barrypopik (Profile)
Wednesday, March 10th at 5:24AM EST
No Comments
New York is full of brilliant ideas these days. Let2s look first at
the suicide sculpture metaphor, then the economic reality.
From Wednesday2s New York Times:
Statues Seem Ready to Leap, but Police Say They Won2t
By MICHAEL S. SCHMIDT
Published: March 9, 2010
They stand about six feet tall and look like naked human beings. Over
the next few days, 27 of them will be scattered across rooftops and
ledges of buildings in Midtown Manhattan 7 including the Empire State
Building 7 as part of a public art exhibition.
About the same time that the first figure was placed atop a four-story
building at 25th Street and Fifth Avenue on Tuesday, the Police
Department issued a statement reassuring New Yorkers that the figures
are not despondent people on the verge of leaping to their deaths.
Police officials said they were trying to prevent an overwhelming
number of emergency calls from concerned pedestrians or office
workers. Nevertheless, they said that all emergency calls about a
potential suicide would be taken seriously 7 even those from places
where one of the figures is located.
3We are going to respond no matter what because there could be a
jumper at the spot,4 said Paul J. Browne, the department2s chief
spokesman.
The figures, which are anatomically correct, are modeled after the
body of the artist Antony Gormley, who created the exhibition, which
is being presented by the Madison Square Park Conservancy.
Gormley did the same thing in London in 2007.
Is anyone surprised that lots of people would call 911? Does anyone
think that clogging the 911 line is a good idea? In a nanny state
government that forbids toy guns, why is this OK? How much did this
guy earn for this 3art4?
Stupidity all around, but that2s not surprising for New York.
Moving on to suicidal economic news, the New York Times loves the
proposed soda tax:
Editorial
Healthy Solution: Taxing Sodas
Published: March 8, 2010
Seldom does one idea help fix two important problems, but a proposal
to tax sugary soft drinks in New York State is just that sort of 2-
for-1 solution. The penny-per-ounce tax on sodas and other sweetened
drinks is a way to raise desperately needed money for the city and
state in a bad economy. It also could help lower obesity rates, which
have soared in recent years.
The Legislature in Albany should adopt this tax quickly.
Increasing New York taxes to support outrageously generous public
union pensions 7 bless your hearts, New York Times and Mayor
Bloomberg.
What is the other solution to New York2s fiscal crisis? Billions in
increased borrowing, of course:
Paterson2s No. 2 Sets Broad Plan on New York Fiscal Crisis
By DANNY HAKIM
Published: March 9, 2010
ALBANY 7 New York could borrow billions of dollars to address its
urgent budget shortfall and a financial review board would be
established to impose new discipline on future spending under a five-
year financial rescue plan that Lt. Gov. Richard Ravitch will present
Wednesday.
(5)
Mr. Ravitch, who was asked by Gov. David A. Paterson to draw up the
blueprint, is seeking to curb the runaway spending that has helped
plunge New York into fiscal crisis. Despite the recession and talk of
fiscal austerity, state spending this year soared by 10 percent over
the previous year2s budget.
Keep on spending!
The state faces a $9 billion shortfall for the fiscal year that begins
April 1 and a $15 billion gap for the following year.
The plan, which requires legislative approval, seeks to address New
York2s immediate cash needs by permitting the state to sell bonds to
help cover operating expenses.
Keep on borrowing! Does anyone want to buy a bond from a bankrupt
state run by David Paterson?
If the Madison Square Park Conservancy wants to add some art, why not
ditch the suicide sculptures and have a replica of the Diana sculpture
that once graced Madison Square Garden? The Roman goddess Diana was an
emblem of chastity.
Suicide sculpture 7 an urban metaphor for these times? Why not move
them from Madison Square down to Wall Street?
http://www.redstate.com/barrypopik/2010/03/10/nycs-new-suicide-sculptures-m=
etaphor-for-economic-reality/
Economists trim 2011 U.S. growth forecast
Posted 2010/03/10 at 12:40 am EST
WASHINGTON, Mar. 10, 2010 (Reuters) 7 U.S. economists raised their
forecast for economic growth in 2010 in March, the third straight
monthly rise, while trimming their growth forecast for 2011, according
to a survey released on Wednesday.
Economists surveyed earlier this month in the Blue Chip Economic
Indicators newsletter said the economy is expected to grow by 3.0
percent in 2011, which is 0.1 percentage point lower than estimates
made a month ago.
But economists raised their 2010 growth forecast for the third
consecutive month to 3.1 percent, up 0.1 percentage point from
February.
Still, the economists predicted the recovery would be mild given the
depth of the recession.
The consensus also expects inventories to continue adding to GDP over
the next several quarters but see the size of those contributions
become increasingly smaller.
"By Q1 2011, the contribution to GDP from business inventories is
expected to become trivial," the survey said.
The panelists said they also expect "a slower and less powerful than
is typical improvement in labor market conditions that will cap gains
in disposable personal income and personal consumption expenditures."
The panelists expressed concern that severe winter weather crimped
economic activity in February and that upcoming monthly data on
production, retail sales, housing starts and home sales could fall
short of earlier consensus expectations.
However, they also pointed out any weather-induced softness should be
recovered in the March data.
(Reporting by Nancy Waitz, Editing by Chizu Nomiyama)
Copyright Reuters 2008.
http://www.newsdaily.com/stories/tre6290q0-us-usa-economy-bluechip/
US Chamber of Commerce getting into the game.
I almost titled this "US Chamber of Commerce starts recognizing its
class interests," but that kind of language bugs people on the Right,
for some reason.
Posted by Moe Lane (Profile)
Tuesday, March 9th at 11:48AM EST
5 Comments
Say hello to the US Chamber of Commerce. Or don2t; they2re coming to
sit down at the table any which way.
The U.S. Chamber of Commerce is building a large-scale grass-roots
political operation that has begun to rival those of the major
political parties, funded by record-setting amounts of money raised
from corporations and wealthy individuals.
[snip]
The new grass-roots program, the brainchild of chamber political
director Bill Miller, is concentrating on 22 states. Among them are
Colorado, where incumbent Democratic Sen. Michael Bennet is
vulnerable; Arkansas, where Democratic Sen. Blanche Lincoln faces an
uphill reelection battle; and Ohio, where the chamber sees
opportunities in numerous House races and an open Senate seat.
The network, called Friends of the U.S. Chamber, has been used to
generate more than a million letters and e-mails to members of
Congress, 700,000 of them in opposition to the Democratic healthcare
plan. That is an increase from 40,000 congressional contacts generated
in 2008.
The article goes on to note that the CoC2s grassroots planning
recently got a big boost from the recent Citizens2 United case, as
well as that this organization is increasingly publicly acknowledging
that 1pro-business growth2 means 1pro-Republican.2 And why would th=
at
be? Probably because of Democratic assaults like this one:
A Democratic aide says a new provision in the health care bill will
require businesses to count part-time workers when calculating
penalties for failing to provide coverage.
Via Hot Air, and that particular sudden addition to the health care
bill should have the same effect on small business growth as would,
say, a load of buckshot to the face. Remember, folks: the current
ruling party of this country is largely led by people who have never
worked for a living in their lives - and by God, does it show
sometimes! Keep this in mind when opening your checkbooks, because
the business community certainly plans to5
Moe Lane
5 Comments
*HOW* can they do this? How is it Constitutional?
yoyo Tuesday, March 9th at 12:16PM EST
Isn2t the Senate Bill ALREADY voted for? How can they insert an
amendment into a bill that is already passed?
Wouldnt the inclusion of this amendment (or any other) require that
the whole she-bang go back to the Senate for another up/down vote? Or
at the very least, allow the Senate to Amend this to Death - FINALLY?
Without coming back to the Senate, the Bill would be unconstitutional,
yes?
Just Checking. Dan, can you help me out here? Rule check, please!
Si Vis Pacem Para Bellum
1If you seek peace, prepare for war!2
The 1yoyo2 replaced my cigarettes January 22, 20065.
http://www.twitter.com/rs_yoyo
That's what "reconcilliation" is all about.
The_Gadfly Tuesday, March 9th at 12:25PM EST
See, this is a cost cutting measure. Without it, they won2t have
enough money to cover the bills, so the reconcilliation rules apply,
and they only need 51 votes for that.
No, I don2t really believe that either, but you can better a year2s
salary that2s how they2ll sell it. Assuming of course you can find
someone dumb enough to take the wager.
We2ve been called racists enough now that it shouldn2t bother us any
more.
-AChance, http://www.redstate.com/moe_lane/2009/11/03/what-men-may-do-we-ha=
ve-done/#comment-24463
If NY23 was a beat down for Conservatives, what do you call what
happened to Progressives in NJ and VA?
inspired by ColdWarrior,
http://www.redstate.com/hooah_mac/2009/11/04/ny-23-the-agony-of-defeat-not-=
so-much/#comment-156
"Cost Cutting?" Really? Smells of "Policy" to me.
yoyo Tuesday, March 9th at 12:33PM EST
But, I *do* have a head cold, so my sniffer may be broken.
OR, more likely, it just stinks.
I say they should start reconcilling the bill with the Constitution
and go forward from there.
But, I AM a little bit 3old fashioned.4 *Tradition and Patriotism* and
all that.
Si Vis Pacem Para Bellum
1If you seek peace, prepare for war!2
Pukin2 Dogs - The Fighting 143
Sans Reproache
The 1yoyo2 replaced my cigarettes January 22, 20065.
http://www.twitter.com/rs_yoyo
George Washington
hickorystick Tuesday, March 9th at 1:32PM EST
led the Rebellion, because England was infringing upon his interests.
George Washington wasn2t that political a guy. He did maintain his
1interest2 very sharply. He was one of the wealthiest Colonials, and
he was constantly irritated with England imposing laws and
restrictions impinging on his 1interest2. He chose his wife, Mary, not
for her looks, but because she had a lot of land. I get so frustrated
with politics because most of the time, especially media time, is
spent talking about nebulous things which we have no power or control
over. We would do well to frame every bill in terms of how it affects
1interests2. You cannot walk into court and ask for something, unless
you can prove an 1interest2 or 2standing2. We should do the same in
our political fights, sticking to our right to maintain property. That
is what we fought over in the revolution. Remember, we didn2t bother
to write a Constitution till some years after we had won the war. The
form of government that came most naturally after the victory, was a
Continental Congress. This form left most issues to the states, where
property could best be protected. If we want to effectively fight this
Redistibutor-in-Chief, We better start focusing on our own interest
and that of our states.
Wow...
tdpwells Tuesday, March 9th at 3:09PM EST
So let2s see, that2s most employees at fast food restaurants, grocery
stores, convenience stores, corner pharmacy stores like CVS and
Walgreens, etc etc etc5
Unemployment ought to be at a healthy 30% by the time they2re done.
Nice.
I do not believe that the power and duty of the General
Government ought to be extended to the relief of individual
suffering which is in no manner properly related to the
public service or benefit5to the end that the lesson should
be constantly enforced that though the people support the
Government, the Government should not support the people.
Grover Cleveland (16 February 1887)
http://www.redstate.com/moe_lane/2010/03/09/us-chamber-of-commerce-getting-=
into-the-game/
Bloomberg
Siegel Says U.S. Recovery Certain, Euro Region Faces Splinter
March 10, 2010, 5:39 AM EST
By Le-Min Lim
March 10 (Bloomberg) -- Jeremy Siegel, a finance professor at the
University of Pennsylvania2s Wharton School, says the worst is over
for the U.S. economy and the Federal Reserve may raise interest rates
by year2s end to cool growth.
Spending by companies on equipment and plants will outpace private
consumption as the main growth driver this year, he said in an
interview in Hong Kong. The jobless rate, at 9.7 percent last month,
will fall below 9 percent by the end of 2010, he said. That may force
the Fed to tighten policy and full-year economic growth may reach 4
percent, he said.
The Fed 3will feel comfortable raising the rates as long as the
situation continues to improve, as I believe it will,4 said Siegel, in
an interview in Hong Kong. Siegel, 64, is an adviser to U.S.-based
WisdomTree Investments Inc., which had $6.7 billion of assets under
management as of the end of last year.
The Fed and the Treasury are trying to withdraw the emergency measures
introduced during the financial crisis without triggering a relapse in
the economy. Fed Chairman Ben S. Bernanke said Feb. 24 the U.S. is in
a 3nascent4 recovery that still requires keeping interest rates near
zero 3for an extended period4 to spur demand once stimulus wanes.
In Europe, the European Central Bank will have little alternative
other than to keep interest rates low as euro region members such as
Greece struggle to convince investors they will cut soaring budget
deficits, he said. Its benchmark rate is currently at a record low of
1 percent.
Exports
The euro is making the exports of nations such as Spain and Greece so
uncompetitive that they may start talks as early as next year to leave
the 16-nation bloc, he said. That departure would be 3painful and
difficult and drag down the region for a few years,4 he said. One
weakness of the currency union is that it lacks a proper and orderly
exit strategy for members that can2t keep up, Siegel said.
3They should have signed prenups before they got married to the euro,4
said Siegel, referring to agreements that outline the terms of a
divorce.
A U.S. recovery and uncertainty in the eurozone mean the dollar will
remain a 3viable4 asset, said Siegel.
Later this year, China may start a managed appreciation of the yuan,
Siegel said. China wants to revert to export-driven economic growth,
so is more likely to try a staggered revaluation than a major, one-
time adjustment, he said.
--Editors: Dirk Beveridge, John Fraher
To contact the reporter on this story: Le-Min Lim in Hong Kong at
lmlim@bloomberg.net.
To contact the editor responsible for this story: Mark Beech at
mbeech@bloomberg.net.
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High Conviction: Short the Yen
by: Alexander Tepper March 10, 2010
Alexander Tepper is Chief Economist at TKNG Capital, a global macro
hedge fund based in New York. Previously, Mr. Tepper was a senior
economic policy aide to U.S. Senator Frank Lautenberg. He also has
experience at Oliver, Wyman & Company advising Fortune 500 financial
institutions on risk management and as an investment banking Associate
at Credit Suisse. He has a masters degree in Economics from Oxford
University, and a BA in Physics from Princeton University.
We recently had the opportunity to ask Alexander about the single
highest conviction position he currently holds in his fund.
What is your highest conviction position in your fund right now - long
or short?
We are short Japanese yen against the US Dollar. We have implemented
the trade by selling out-of-the-money calls to buy out-of-the-money
puts and taking in premium.
Why did you use options to structure the trade?
Call options on the yen are significantly more expensive than put
options. This 3skew,4 as it2s known, exists because the Japanese
investment community tends to be short yen, making it susceptible to
sharp rises during bouts of risk aversion.
Investors hedge this exposure by buying out-of-the-money yen calls.
But given the sharp adjustment that has already occurred in the crisis
and a government whose proclivities are far from fiscally
conservative, we view the risks as less asymmetric than implied by the
skew.
Structuring this trade with options is akin to playing with dice
loaded in our favor.
Tell us a bit about Japan right now, and why you're short its
currency.
Japan has traditionally been an export-oriented economy, but that2s
going to change as the population continues to age and retire. These
older citizens, who have saved their whole lives and are no longer
producing anything, will be a natural source of demand, first for
domestic Japanese goods and then for imports. A shrinking labor force
will mean other nations will need to pick up the slack in production.
Already, the savings rate in Japan has fallen into the low single-
digits and it should fall further.
Japan is also in serious fiscal trouble. Its net debt is more than
100% of GDP, and gross debt is nearing 200% of GDP. The Japanese
government and central bank do not seem particularly concerned. It is
only Japan2s strong balance of payments position, and a willful
suspension of disbelief by the markets, that differentiates it from
countries like Greece. But those, too, should ebb over time.
So why will the yen fall?
First, as the Japanese retire, the supply shock to the economy will
result in continuing declines in competitiveness. The yen will need to
fall to restore balance.
Second, less income and more retirees will mean that Japan will need
to fund more of its government2s borrowing from abroad. Making this
attractive will mean a lower exchange rate, higher interest rate, or
(most likely) both.
Third, the government2s fiscal position is the worst in the developed
world. The scale of the adjustments that are necessary to stabilize
the budget deficit would be unprecedented in a large developed nation,
requiring deep cuts to pensions, double-digit tax increases, and
severe spending restraint elsewhere. If sovereign worries persist,
Japan and its currency are obvious targets for speculators.
Finally, we think consumers in the US and UK are undergoing a lasting
shift in psychology that will cause them to save a larger share of
their incomes going forward. Over the long-term, the savings rate
needs to average around 10% in order for Americans to secure a
reasonable retirement. When Americans save more, they buy less,
especially imports. This lack of demand for imports means a stronger
dollar against US trading partners like Japan.
All this is on the assumption that the global economy will limp along
for a while. But if instead we have a return to robust growth that
looks broadly like the pre-crisis economy, the yen should weaken
towards 2007 levels as markets become more and more comfortable with
risk and interest rates rise in the rest of the developed world.
There are a lot of ways to win with this trade.
What would you say the current broad sentiment is on the yen?
The market has tended to view the yen as part of the 3risk-on/risk-
off4 trade, where the yen rises with worries about the global economy.
Japan2s fiscal issues are well-known, but the market has generally not
priced them, with yields on 10-year Japanese bonds below 1.5%.
Japanese CDS spreads, however, have doubled since late summer.
More broadly, the markets have believed that correction of global
imbalances requires a weaker dollar to encourage Americans and Asians
to change their consumption behavior. We think the financial crisis
and experience of house price declines will be the driving force that
restrains Americans2 profligacy, while Asians will consume more. The
result will be a stronger dollar.
Does Japanese economic policy play a role in your position?
The Japanese government has made fairly clear that it does not intend
to tolerate a markedly stronger yen because it hurts their exporters.
It also seems neither inclined nor able to do anything about the
fiscal situation in the near future.
What catalysts do you see that could move the currency, and the trade
in your favor?
The eurozone2s sovereign risk worries will soon resolve themselves one
way or another. When they do, Japan could easily become a target.
As economic data continue to strengthen over the next few months, a
return to normalcy will mean a weaker yen.
We are also prepared for a more gradual adjustment as markets adopt
our demographic view.
What could go wrong with this trade?
In the near term, Japanese companies repatriating income around the
fiscal year-end in March could potentially lead to a rise in the
currency. A sharp rise in risk aversion could have a similar effect.
We have been careful to choose the strike prices on our options to
minimize the damage if such a spike does occur.
Beyond that, deflation in Japan means that in a perfect economic
world, the yen would appreciate over time. There is also the risk that
the pundits over the past several years prove right and we see
fundamental weakening of the dollar with respect to all Asian
currencies.
Finally, if China were to revalue its currency, as many believe it
will, that could create space for the Japanese authorities also to
allow some appreciation. Again, however, we believe our options are
sufficiently out of the money to limit our downside in such a
scenario.
Thanks, Alexander.
Disclosure: TKNG Capital is short the Yen against the Dollar.
If you are a fund manager and interested in doing an interview with us
on your highest conviction stock holding, please email Rebecca
Barnett.
About the author: Alexander Tepper Alexander Tepper is Chief
Economist at TKNG Capital, a global macro hedge fund based in New
York. Previously, Mr. Tepper was a senior economic policy aide to U.S.
Senator Frank Lautenberg. He also has experience at Oliver, Wyman &
Company advising Fortune 500 financial institutions on risk... More
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hardware hardly impresses, however, the camera offers some
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camera's red-eye reduction flash mode with a processing system that
removes red-eye after the photo is taken. Face-Priority AF detects and
tracks faces in photos, and adjusts focus to stay on those faces,
instead of just the closest subject. Both features come standard on
most Nikon Coolpix cameras, but are still handy for casual shooting.
www-nikon.com Mar 10 0
Carlos Lam is a deputy prosecuting attorney in a mid-sized county in a
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Shorting the Yen could be an interesting play. Already the Japanese
savings rate has crashed from its lofty position to under 4%, so the
Japanese government will not be able to count on domestic savings to
finance its debt indefinitely.
Mar 10 06:25 AM
John Thomas graduated with a bachelor2s degree in biochemistry with
honors and a minor in mathematics from the University of California at
Los Angeles (U.C.L.A.) in 1974. He moved to Tokyo, Japan where he was
employed by a medium-sized Japanese securities house. Thomas became
fluent in... More Company: The Mad Hedge Fund Trader bvgf I2m hearing
from my buddies in Japan that while things are already quite bad in
that enchanting country, they are about to get a whole lot worse, and
that it is time to start scaling into a major short in the yen.
Australia and China have already raised interest rates, to be followed
by the US, and eventually Europe. With its economy enfeebled, the
prospects of Japan raising rates substantially is close to nil,
meaning the yield spread between the yen and other currencies is about
to widen big time. That will generate hundreds of billions of dollars
worth of yen selling as hedge funds rush to pile on a giant carry
trade. Until now, the government has been able to finance ballooning
budget deficits caused by two lost decades, but those days are coming
to an end. Japan is quite literally running out of savers. The savings
rate has dropped from 20% during my time there, to a spendthrift 3%,
because real falling standards of living leave a lot less money for
the piggy bank. The national debt has rocketed to 190% of GDP, and
100% when you net out government agencies buying each other2s
securities. Japan has the world2s worst demographic outlook. Unfunded
pension liabilities are exploding. Other than once great cars and
video games, what does Japan really have to offer the world these
days, but a carry currency? Until now, the government has been able to
cover up these problems with tatami mats, because almost all of the
debt it issued has been sold to domestic institutions. Now that this
pool is drying up, there is nowhere else to go but foreign investors.
With Greece and the rest of the PIIGS at the forefront, and awareness
of sovereign risks heightening, this is going to be a much more
discerning lot to deal with. You could dip your toe in the water here
around 588.40. In a perfect world you could sell it as it double tops
at the 85 level. My initial downside target is 5105, and after that
5120. If you2re not set up to trade in the futures or the interbank
market like the big hedge funds, then take a look at the leveraged
short yen ETF, the (YCS). This is a home run if you can get in at the
right price.
Mar 10
http://seekingalpha.com/article/192864-high-conviction-short-the-yen
Fresh Trade Winds?
Wednesday, 10 March 2010 02:19
0 Comments and 4 Reactions
Investor's Business Daily
Editorial
Investor's Business Daily
Editorial
http://epaper.investors.com
Economy: U.S. Trade Representative Ron Kirk came out swinging
Wednesday, warning Congress that it2s time to pass free trade. Is
something happening here? Is the Obama administration finally getting
serious about jobs?
After a year of inaction, Kirk told Democrats in remarks to the Senate
Finance Committee that passage of free-trade pacts must be 3a
priority.4
Free trade 3will stimulate export-driven growth and help the United
States meet the president2s goal to double U.S. exports in five
years,4 he said, adding that 2 million jobs would be created.
That kind of talk from a leading Democrat directed at the
protectionists in his own party is a new 7 and welcome 7 development.
Over the last year, Obama administration officials have occasionally
talked up the benefits of free trade, but only with conservatives and
business groups, who already know about it.
Now some are spending political capital to push it.
Confronting a Congress that is holding up the creation of jobs doesn2t
come a moment too soon. U.S. joblessness stands at 9.7% and Europe is
grabbing U.S. markets abroad.
Congressional protectionists talk of free trade passage in terms of
years; their campaign financiers in Big Labor, such as the AFL-CIO,
say 3never.4
Kirk rebuked that stance in his speech, telling labor it had a voice
but 3not a veto4 on trade and hinted that President Obama would put
the pacts through without them. He also gave labor leaders a deadline
to make demands on free-trade deals like the one with Colombia instead
of constantly moving the goal posts.
One shot.
It doesn2t come a moment too soon. Congress2 failure to enact the free-
trade pacts in front of them is costing the U.S. nearly 600,000 jobs,
according to a 2009 study by the U.S. Chamber of Commerce. Contrary to
protectionist myth, free trade costs no net jobs in the U.S. economy
at all, as Fed chief Ben Bernanke noted in a 2007 speech citing years
of data. 3Trade allows us to enjoy both a more productive economy and
higher living standards,4 he said. Unemployment is killing the U.S.
economy and sinking the Obama presidency. Time is running out to open
markets that could help repair it. Just this week, Europe signed a
free-trade deal with Colombia and Peru and breezily announced it would
have a pact with fast-growing India ready by October.
U.S. international credibility right now is zero, given that
alreadynegotiated trade pacts with Colombia, Panama and South Korea
have languished in Congress for more than three years.
Who2d want to negotiate something new and have it put in congressional
limbo? That2s why the Obama administration2s proposed U.S. Trans-
Pacific Partnership to open new markets in Brunei, Australia, New
Zealand and Vietnam is going nowhere.
3This delay in implementing hurts U.S. credibility around the world 7
not just economically, but geopolitically as well,4 said Sen. Charles
Grassley, R-Iowa, at the Kirk hearing. Hello? Anyone out there? The
U.S. is losing ground in world markets and doing it at the cost of our
own citizens2 jobs. It2s exactly what U.S. labor unions such as the
Teamsters, United Steelworkers, United Autoworkers and various public
employee unions want.
And right now, like it or not, they rule Congress. It2s ironic,
because many lobbyists believe free trade can pass both congressional
Houses if the bills are put to a vote. Past presidents, including
Democrat Bill Clinton and Republican George W. Bush, knew that2s what
it took to get pacts through Congress. Both threw their all into
getting big treaties 7 like 19932s North American Free Trade Agreement
and 20052s Central American Free Trade Agreement 7 passed in Congress,
acts that took on people who would stop them to charge up the U.S.
economy. There2s still no sign of Obama out there working the Hill.
But Kirk2s statements, no doubt authorized by the president, may be
the beginning of a turnaround on trade.
http://epaper.investors.com/Olive/ODE/IBD/LandingPage/LandingPage.aspx?href=
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http://www.truthabouttrade.org/news/latest-news/15680-fresh-trade-winds
A new finger on the pulse of economy
A new index co-developed by Ceridian uses diesel fuel sales to track
U.S. economic growth.
By NEAL ST. ANTHONY, Star Tribune
Last update: March 9, 2010 - 9:03 PM
Want to know which way the economy is headed? Find out how much diesel
fuel is being burned by the nation's over-the-road truckers.
That's the theory behind a new economic index developed by Bloomington-
based Ceridian Corp., a provider of electronic payments services, and
UCLA's Anderson School of Management.
Called the Pulse of Commerce Index, the survey, to be released
Wednesday, shows the U.S. economy was essentially flat over the first
two months of the year, with a snowbound February decline of 0.7
percent in output offsetting the modest January gain of 0.6 percent.
"February was disappointing, but the geographic pattern underlying the
index suggests this was due in large part to extreme snowfalls during
the month," said Edward Leamer, director of UCLA's Anderson Forecast
and chief economist for the Ceridian-UCLA Pulse of Commerce Index
(PCI). "We still need much stronger growth in the PCI to get Americans
back to work. To sustain at least a 4 percent GDP number for the first
quarter [on an annualized basis], the March PCI has to be ... over 1
percent growth. That number will be very important."
The new index is designed to get the jump on the Federal Reserve's
report on industrial production report for February, which comes out
next week.
The PCI uses real-time diesel fuel consumption data from over-the-road
truckers, which is tracked by Ceridian, a longtime payment services
provider to the trucking industry. The index is built by analyzing
Ceridian's electronic card payment data, which captures the location
and volume of diesel fuel being purchased. This provides a detailed
picture of the movement of products across the United States.
In an interview Tuesday, Leamer said that once the bad weather is
taken into account, February's numbers suggest that there is an
underlying power to industrial demand and he expects that a catch-up
surge in goods moved in March will indicate that the economy is
growing at about a 3 percent annualized rate during the first quarter.
"To be optimistic about jobs, we'll need at least that," Leamer said.
"In the fourth quarter, we had 5.9 percent growth, but 3.9 percent was
just inventory replacement. That leaves 2 percent. We need more than
that. And March will tell the quarter."
Leamer said the Ceridian diesel-consumption data, collected from about
7,000 service stations around the country, constitutes a
representative sample and provides a "real data, not surveys" about
the movement of goods, which is a manifestation of industrial
production and shipments.
The flow of commerce
"We're monitoring the flow of commerce at truck stops, and the
arteries for the commercial system are the interstate highways
carrying the products," he said. "It amplifies the swings in GDP and
also tells us early where the economy is going."
Industrial production only accounts for about one-third of the U.S.
economy. It is more volatile than the service sector, which fluctuates
less during economic cycles.
All economic eyes are on month-to-month changes in industrial output,
which is a guide to business spending, credit expansion and demand for
goods in the aftermath of the 2008-09 recession that has given way to
a fairly tepid economic recovery. Most labor economists believe that
the economy won't start adding jobs significantly unless industrial
output starts growing at a 3 to 5 percent annualized clip.
Back testing of the Ceridian-UCLA Pulse of Commerce Index indicates
that it is a reliable indicator of industrial output. For example, the
index rose in areas unaffected by February's snows, including 2.7
percent in the Upper Midwest and 2.1 percent in the Pacific region.
"Goods have to be transported for the economy to grow, so when
snowstorms bog down that flow, it is reflected in our index and in the
overall U.S. economy," said Craig Manson, senior vice president and
index analyst for Ceridian.
A new finger on the pulse of economy...
Wait! The economy has a pulse?
posted by DrZoidberg on Mar 9, 10 at 11:55 pm |
http://www.startribune.com/business/87180717.html?elrDKArks:DCiU1OiP:DiiU=
iD3aPc:_Yyc:aUU
Posted: Wed, Mar 10 2010. 9:00 AM IST
International News
US, Europe eye free-trade pacts with rising Asia
The talks will follow the launch of negotiations on a free-trade
agreement between Singapore and the European Union, which is also keen
on expanding trade ties with Southeast Asia
AFP
Singapore: The United States, fearful of being sidelined as China and
other fast-growing Asian economies speed up their integration, is
banking on a new trade pact to shore up its Pacific influence.
Talks opening Monday in Melbourne will focus on a proposed Trans-
Pacific Partnership agreement linking the US market with Australia,
Brunei, Chile, New Zealand, Peru, Singapore and Vietnam.
Officials hope the TPP will form the nucleus of a wider Asia-Pacific
trade zone that would eventually rope in China, Japan and South Korea
as well as key Southeast Asian nations.
The talks will follow the launch of negotiations on a free-trade
agreement between Singapore and the European Union, which is also keen
on expanding trade ties with Southeast Asia.
The United States and Europe have been shut out of a growing web of
Asia-centric trade pacts spurred by the region2s 1997 financial crisis
and by a lack of progress in the Doha round of global trade talks,
analysts said.
While the United States is 3unquestionably4 a Pacific power, it 3lack=
s
a comprehensive Asia strategy4, said Ernest Bower, a Southeast Asia
expert at the Center for Strategic and International Studies (CSIS) in
Washington.
3The lack of consistent US focus in the region has enabled the
ascendance of Chinese power,4 Bower said, adding that it could slowly
undermine US business interests and eventually degrade US security
capabilities.
The new trade attention from the West comes as Asian countries lead
the rest of the world in recovering from the global economic downturn.
3That the US and the EU are knocking on Asia2s doors is a recognition
that the centre of economic power is shifting, or has shifted, to our
region,4 an Asian diplomat closely involved in trade issues told AFP.
3They know very well that ignoring Asia will be at their own peril.
China is already a major trade partner for many Asian countries and is
leading efforts toward regional economic integration,4 he said on
condition of anonymity.
Deputy US trade representative Demetrios Marantis warned that
Washington 3faces the daunting prospect of getting locked out4 by Asia-
specific trade pacts.
A study by the US-based Peterson Institute for International Economics
showed that discriminatory policies under an East Asia free trade zone
could cost the US economy at least 25 billion dollars of annual
exports and lead to the loss of 3about 200,000 high-paying jobs4.
The United States has free-trade accords with Australia and Singapore
and has also negotiated a trade pact with South Korea, but this has
yet to be implemented due to fierce disputes over cars and beef.
China has been more aggressive in wooing regional partners.
An agreement between China and the Association of Southeast Asian
Nations (ASEAN) covering nearly two billion consumers went into effect
this year, creating the world2s biggest free-trade area in terms of
population.
There are also efforts to form a larger, all-Asian free-trade zone
spanning China, Japan, South Korea and the 10 ASEAN states.
C. Fred Bergsten and Jeffrey Schott of the Peterson Institute hailed
Washington2s decision to join the trans-Pacific talks in Australia.
3Deepening US engagement with countries in the Asia-Pacific region is
crucial for the advancement of both US economic and foreign policy
interests,4 Bergsten and Schott said in a recent paper.
3Within the next few years, it is likely that the East Asian countries
will deepen their economic ties and conclude both a regional trade
agreement and a monetary agreement,4 the authors said.
Such a bloc would 3draw a line4 in the middle of the Pacific Ocean by
discriminating against US exporters and investors, and excluding the
United States from major regional economic and security forums, they
said.
Marantis acknowledged that overcoming crisis-hit Americans2 opposition
to free-trade agreements is a key challenge.
Surveys suggest that only about one in 10 Americans think that trade
pacts create jobs, while more than half believe the accords lead to
job losses at home, he said.
http://www.livemint.com/2010/03/10090029/US-Europe-eye-freetrade-pact.html
...and I am Sid Harth
http://groups.google.com/group/soc.culture.indian.marathi/browse_thread/thr=
ead/fbe56c67d373c696/31b16b774a16ac15
10.03.2010 - 19:24
National Magazine | Aug 20, 2007
Irfan Hussain
Scandals
Sixty Years On, More Sinned Against...
The great political scams of the last 60 years reflect their times,
but also fit a timeless definition of corruption: abuse of public
power for private gain. A trip down murky memory lane.
Smita Gupta
Special Issue: India At 60
The great political scams of the last 60 years reflect their times,
but also fit a timeless definition of corruption: abuse of public
power for private gain. They rolled out decade after decade7the
Mundhra scandal, the Kairon embarrassment, the mysterious Nagarwala
case; in the 1980s, big defence scams kept pace with India's growing
defence needs. In the 1990s, as the economy liberalised, stockmarket
and hawala scams erupted. Ironically, while political reputations were
ruined and a government was brought down7in 1989, on the Bofors issue7
very few allegations have ever been proved. The recent scandals, like
the Taj Corridor case involving Mayawati, and the Telgi fake stamp
paper scam, are still fresh in the public mind. Here, we take you on a
trip down murky memory lane.
***
The Mundhra Scandal
The timing was disastrous. Less than a year after the government
nationalised life insurance in 19567on the grounds that it was not
being managed well7the Life Insurance Corporation (LIC) produced
independent India's first scam. Pressured by the Union finance
ministry, LIC bypassed its investment committee and purchased shares
worth Rs 124 lakh in six7mainly dud7companies belonging to Calcutta
industrialist Haridas Mundhra. Feroze Gandhi, Prime Minister
Jawaharlal Nehru's son-in-law, dramatically disclosed the deal in
1958, leading to a nationwide furore, and an investigation. The guilty
were punished, and Union finance minister T.T. Krishnamachari had to
resign.
Kairon and Sons
For independent India, this was a first-of-a-kind scandal. Later, of
course, it was to become almost a cliche in political life: a chief
minister accused of aggrandising himself and his family at public
expense. The S.R. Das Commission, tasked to investigate these charges
against Punjab chief minister Pratap Singh Kairon, exonerated him in
1964, saying a father could not be held legally responsible for the
actions of his grown-up children. But a caveat7that a chief minister
could not escape moral responsibility for his children's' actions7was
indictment enough. Kairon quit.
"Man from Bangladesh"
The case, straight out of a political thriller, captured public
imagination and continues to raise unanswered questions. On May 24,
1971, former intelligence agent R.S. Nagarwala, posing as a "man from
Bangladesh", withdrew Rs 60 lakh from the Parliament Street branch of
New Delhi's State Bank of India, following a purported call from then
prime minister of India, Indira Gandhi, to the chief cashier.
Nagarwala had apparently "mimicked" Indira Gandhi's voice. In the
course of the probe that followed, investigating officer D.K. Kashyap
was killed in a mysterious car accident and Nagarwala died in prison.
The Janata Party, alleging that the money belonged to Indira Gandhi,
set up the Jaganmohan Reddy commission in 1977, but found insufficient
evidence to indict her.
"Rajiv Gandhi chor hai"
"Gali gali mein shor hai, Rajiv Gandhi chor hai!" As the scandal over
the Bofors gun deal became a symbol of corruption in high office, this
slogan was heard across the country. The alleged kickback involved was
Rs 60 crore, small change as such scandals go, but it helped V.P.
Singh's National Front trounce Rajiv's Congress in 1989. Since then,
the Delhi High Court has acquitted Rajiv Gandhi and the Hinduja
brothers. 'Middleman' Ottavio Quattrocchi's name has not yet been
cleared, but investigators have not come up with anything conclusive
either. Yet, 18 years later, the ghost of Bofors continues to haunt a
forever tainted Congress7and Rajiv Gandhi's widow, Sonia.
St Kitts Forgery Scandal
Chandraswami, a godman with greasy locks and mighty political
connections, was the central figure in the 1989 tit-for-tat "scam"
intended to tarnish V. P. Singh. He, along with then external affairs
minister, P.V. Narasimha Rao, and another minister, K.K. Tewary,
reportedly organised forged documents to show that VP's son Ajeya
Singh had deposited $21 million in the First Trust Corporation Bank in
the Caribbean island of St Kitts, with his father as beneficiary.
After Rao's term as PM ended in 1996, the CBI formally charged him for
the crime. But later, the court acquitted Rao for lack of evidence.
All the other accused were also eventually let off. However, the scam
punctured Chandraswami's colourful career. Politicians kept clear of
him from then on.
Sukh Ram Telecom Scam
He came to be known by the epithet, minister of tele-'phony'. In 2002,
a CBI special court sentenced former Union communications minister
Sukh Ram to three years RI, and fined him Rs 1 lakh for purchasing
poor quality radio system equipment from a company in 1991, causing
the public exchequer to suffer losses totalling Rs 1.68 crore. The
buzz was that Sukh Ram, under whose bed dhobi bundles of cash were
found, was involved in several other deals, but nothing was proved. A
senior telecom official, Runu Ghosh, and Hyderabad-based businessman
Pataru Rama Rao, were also sentenced to two and three years
imprisonment respectively. A tortuous legal battle continues.
Stockmarket Scam, 1992
He was toasted and celebrated by investors and the media alike. But
like the stockmarket, he too crashed, leading to one of the biggest
financial scandals in independent India. 'Big Bull' Harshad Mehta,
held to be largely responsible for the stockmarket crash of '92, was
arrested by the CBI in November that year for "misappropriating" more
than 27 lakh shares7worth Rs 250 crore7of about 90 companies,
including Sensex heavyweights like ACC and Hindalco, through forged
share transfer forms. Blacklisted in the stockmarket, he reportedly
caused a loss of more than Rs 4,000 crore to various entities and
eventually died in custody in December 2001, before all the legal
issues were sorted out. The stock scam reverberated through the
country, with several people committing suicide after losing their
life savings and going bankrupt overnight.
PV in a Pickle
Close on the heels of the stock scam came Harshad Mehta's sensational
allegation that he had paid Rs 1 crore in cash to the personal
secretary of then prime minister Narasimha Rao. He even displayed a
suitcase, offering a symbol for venality, but the allegation was never
proved. Rao was also embarrassed by the Lakhubhai Pathak cheating
scandal. Pickle king Pathak, a UK-based Indian businessman, alleged
that he had paid Chandraswami and his associate K.N. Aggarwal alias
Mamaji (who were close to Rao) $100,000 in return for a paper pulp
supply contract in India, a "promise" that was not kept. Rao and
Chandraswami were acquitted of the charges in 2003 due to lack of
evidence. Despite this, the case remained a blot on Rao.
Jain Hawala Scam
Some of the country's leading politicians were implicated in the Rs 64-
crore hawala scandal, involving payments allegedly received by
politicians through the Jain brothers, who were hawala brokers. The
media went into overdrive over a diary, which apparently contained the
names of top politicians. These included the BJP's L.K. Advani and
Congressmen Balram Jakhar, Madhavrao Scindia and Arjun Singh. However,
they were all cleared. Advani was let off in 1997, while Jakhar and
the Jain brothers were also let off in 1999 for want of credible
evidence. The CBI was severely criticised for its inefficient
investigation of the scandal.
Fodder Scam
In 1996, Bihar CM Laloo Prasad Yadav became the focus of the Rs 950-
crore fodder scam in the state's animal husbandry department,
notorious for financial irregularities involving powerful politicians
(across parties) and officials. In April 2000, Laloo was chargesheeted
in the case, with wife Rabri Devi as co-accused. In December '06, they
were acquitted, but the CBI and the Bihar government, now under the
JD(U)'s Nitish Kumar, opposed the decision in the Patna high court.
Till date, 250 persons have been convicted. But the scandal's severest
toll has been on Laloo's reputation.
Petrol Pump Scam
Shortly after the NDA came to power in '98, the BJP was quick to prove
it was not "a party with a difference". By '02, it was evident that
most petrol pump, LPG and kerosene allotments during the NDA regime
had favoured BJP functionaries, Sangh activists and selected governors
and bureaucrats. Then prime minister A.B. Vajpayee was forced to
cancel all 3,158 allotments, with effect from January 2000. However,
the SC quashed the order. In 2005, an apex court-appointed panel
recommended that 296 of the 409 allotments be cancelled.
Operation West End
Tehelka.com sent shockwaves throughout the country when it released
secret video footage of senior politicians, including then BJP
president Bangaru Laxman and Samata Party national president Jaya
Jaitly, bureaucrats and army officers accepting bribes for defence
deals. This was the first major sting operation in Indian journalism.
From then on, getting 'Bangarued' came to mean being caught with your
hand in the till. The scandal forced Bangaru and then defence minister
George Fernandes to resign. The CBI filed charges against Bangaru and
two of his aides in July '06 and against Jaitly in December '06.
Chargesheets were also filed in 2006 against some of the other accused
in the Union ministry of defence and the army. R.K. Jain, former
treasurer of the Samata Party, was finally arrested in 2006 on charges
of receiving huge payoffs in defence deals.
Bu Smita Gupta with Debarshi Dasgupta
Aug 17, 2007 12:00 AM
22 Gulam:>>" Who are "we" here?
All those involved in fighting the terrorists."
All those now involved in 'protecting/training' the terrorists should
also sincerely join the fight against terrorists and their
elimination. Otherwise, these may well be the first, though
unintended, casualties in the terrorist explosions. Perhaps, you may
be able make them realize this, before it is too late.
v.seshadri
chennai, india
Aug 17, 2007 12:00 AM
21 Seshadri,
Irfan Hussain
Scandals
Sixty Years On, More Sinned Against...
The great political scams of the last 60 years reflect their times,
but also fit a timeless definition of corruption: abuse of public
power for private gain. A trip down murky memory lane.
Smita Gupta
Special Issue: India At 60
The great political scams of the last 60 years reflect their times,
but also fit a timeless definition of corruption: abuse of public
power for private gain. They rolled out decade after decade7the
Mundhra scandal, the Kairon embarrassment, the mysterious Nagarwala
case; in the 1980s, big defence scams kept pace with India's growing
defence needs. In the 1990s, as the economy liberalised, stockmarket
and hawala scams erupted. Ironically, while political reputations were
ruined and a government was brought down7in 1989, on the Bofors issue7
very few allegations have ever been proved. The recent scandals, like
the Taj Corridor case involving Mayawati, and the Telgi fake stamp
paper scam, are still fresh in the public mind. Here, we take you on a
trip down murky memory lane.
***
The Mundhra Scandal
The timing was disastrous. Less than a year after the government
nationalised life insurance in 19567on the grounds that it was not
being managed well7the Life Insurance Corporation (LIC) produced
independent India's first scam. Pressured by the Union finance
ministry, LIC bypassed its investment committee and purchased shares
worth Rs 124 lakh in six7mainly dud7companies belonging to Calcutta
industrialist Haridas Mundhra. Feroze Gandhi, Prime Minister
Jawaharlal Nehru's son-in-law, dramatically disclosed the deal in
1958, leading to a nationwide furore, and an investigation. The guilty
were punished, and Union finance minister T.T. Krishnamachari had to
resign.
Kairon and Sons
For independent India, this was a first-of-a-kind scandal. Later, of
course, it was to become almost a cliche in political life: a chief
minister accused of aggrandising himself and his family at public
expense. The S.R. Das Commission, tasked to investigate these charges
against Punjab chief minister Pratap Singh Kairon, exonerated him in
1964, saying a father could not be held legally responsible for the
actions of his grown-up children. But a caveat7that a chief minister
could not escape moral responsibility for his children's' actions7was
indictment enough. Kairon quit.
"Man from Bangladesh"
The case, straight out of a political thriller, captured public
imagination and continues to raise unanswered questions. On May 24,
1971, former intelligence agent R.S. Nagarwala, posing as a "man from
Bangladesh", withdrew Rs 60 lakh from the Parliament Street branch of
New Delhi's State Bank of India, following a purported call from then
prime minister of India, Indira Gandhi, to the chief cashier.
Nagarwala had apparently "mimicked" Indira Gandhi's voice. In the
course of the probe that followed, investigating officer D.K. Kashyap
was killed in a mysterious car accident and Nagarwala died in prison.
The Janata Party, alleging that the money belonged to Indira Gandhi,
set up the Jaganmohan Reddy commission in 1977, but found insufficient
evidence to indict her.
"Rajiv Gandhi chor hai"
"Gali gali mein shor hai, Rajiv Gandhi chor hai!" As the scandal over
the Bofors gun deal became a symbol of corruption in high office, this
slogan was heard across the country. The alleged kickback involved was
Rs 60 crore, small change as such scandals go, but it helped V.P.
Singh's National Front trounce Rajiv's Congress in 1989. Since then,
the Delhi High Court has acquitted Rajiv Gandhi and the Hinduja
brothers. 'Middleman' Ottavio Quattrocchi's name has not yet been
cleared, but investigators have not come up with anything conclusive
either. Yet, 18 years later, the ghost of Bofors continues to haunt a
forever tainted Congress7and Rajiv Gandhi's widow, Sonia.
St Kitts Forgery Scandal
Chandraswami, a godman with greasy locks and mighty political
connections, was the central figure in the 1989 tit-for-tat "scam"
intended to tarnish V. P. Singh. He, along with then external affairs
minister, P.V. Narasimha Rao, and another minister, K.K. Tewary,
reportedly organised forged documents to show that VP's son Ajeya
Singh had deposited $21 million in the First Trust Corporation Bank in
the Caribbean island of St Kitts, with his father as beneficiary.
After Rao's term as PM ended in 1996, the CBI formally charged him for
the crime. But later, the court acquitted Rao for lack of evidence.
All the other accused were also eventually let off. However, the scam
punctured Chandraswami's colourful career. Politicians kept clear of
him from then on.
Sukh Ram Telecom Scam
He came to be known by the epithet, minister of tele-'phony'. In 2002,
a CBI special court sentenced former Union communications minister
Sukh Ram to three years RI, and fined him Rs 1 lakh for purchasing
poor quality radio system equipment from a company in 1991, causing
the public exchequer to suffer losses totalling Rs 1.68 crore. The
buzz was that Sukh Ram, under whose bed dhobi bundles of cash were
found, was involved in several other deals, but nothing was proved. A
senior telecom official, Runu Ghosh, and Hyderabad-based businessman
Pataru Rama Rao, were also sentenced to two and three years
imprisonment respectively. A tortuous legal battle continues.
Stockmarket Scam, 1992
He was toasted and celebrated by investors and the media alike. But
like the stockmarket, he too crashed, leading to one of the biggest
financial scandals in independent India. 'Big Bull' Harshad Mehta,
held to be largely responsible for the stockmarket crash of '92, was
arrested by the CBI in November that year for "misappropriating" more
than 27 lakh shares7worth Rs 250 crore7of about 90 companies,
including Sensex heavyweights like ACC and Hindalco, through forged
share transfer forms. Blacklisted in the stockmarket, he reportedly
caused a loss of more than Rs 4,000 crore to various entities and
eventually died in custody in December 2001, before all the legal
issues were sorted out. The stock scam reverberated through the
country, with several people committing suicide after losing their
life savings and going bankrupt overnight.
PV in a Pickle
Close on the heels of the stock scam came Harshad Mehta's sensational
allegation that he had paid Rs 1 crore in cash to the personal
secretary of then prime minister Narasimha Rao. He even displayed a
suitcase, offering a symbol for venality, but the allegation was never
proved. Rao was also embarrassed by the Lakhubhai Pathak cheating
scandal. Pickle king Pathak, a UK-based Indian businessman, alleged
that he had paid Chandraswami and his associate K.N. Aggarwal alias
Mamaji (who were close to Rao) $100,000 in return for a paper pulp
supply contract in India, a "promise" that was not kept. Rao and
Chandraswami were acquitted of the charges in 2003 due to lack of
evidence. Despite this, the case remained a blot on Rao.
Jain Hawala Scam
Some of the country's leading politicians were implicated in the Rs 64-
crore hawala scandal, involving payments allegedly received by
politicians through the Jain brothers, who were hawala brokers. The
media went into overdrive over a diary, which apparently contained the
names of top politicians. These included the BJP's L.K. Advani and
Congressmen Balram Jakhar, Madhavrao Scindia and Arjun Singh. However,
they were all cleared. Advani was let off in 1997, while Jakhar and
the Jain brothers were also let off in 1999 for want of credible
evidence. The CBI was severely criticised for its inefficient
investigation of the scandal.
Fodder Scam
In 1996, Bihar CM Laloo Prasad Yadav became the focus of the Rs 950-
crore fodder scam in the state's animal husbandry department,
notorious for financial irregularities involving powerful politicians
(across parties) and officials. In April 2000, Laloo was chargesheeted
in the case, with wife Rabri Devi as co-accused. In December '06, they
were acquitted, but the CBI and the Bihar government, now under the
JD(U)'s Nitish Kumar, opposed the decision in the Patna high court.
Till date, 250 persons have been convicted. But the scandal's severest
toll has been on Laloo's reputation.
Petrol Pump Scam
Shortly after the NDA came to power in '98, the BJP was quick to prove
it was not "a party with a difference". By '02, it was evident that
most petrol pump, LPG and kerosene allotments during the NDA regime
had favoured BJP functionaries, Sangh activists and selected governors
and bureaucrats. Then prime minister A.B. Vajpayee was forced to
cancel all 3,158 allotments, with effect from January 2000. However,
the SC quashed the order. In 2005, an apex court-appointed panel
recommended that 296 of the 409 allotments be cancelled.
Operation West End
Tehelka.com sent shockwaves throughout the country when it released
secret video footage of senior politicians, including then BJP
president Bangaru Laxman and Samata Party national president Jaya
Jaitly, bureaucrats and army officers accepting bribes for defence
deals. This was the first major sting operation in Indian journalism.
From then on, getting 'Bangarued' came to mean being caught with your
hand in the till. The scandal forced Bangaru and then defence minister
George Fernandes to resign. The CBI filed charges against Bangaru and
two of his aides in July '06 and against Jaitly in December '06.
Chargesheets were also filed in 2006 against some of the other accused
in the Union ministry of defence and the army. R.K. Jain, former
treasurer of the Samata Party, was finally arrested in 2006 on charges
of receiving huge payoffs in defence deals.
Bu Smita Gupta with Debarshi Dasgupta
Aug 17, 2007 12:00 AM
22 Gulam:>>" Who are "we" here?
All those involved in fighting the terrorists."
All those now involved in 'protecting/training' the terrorists should
also sincerely join the fight against terrorists and their
elimination. Otherwise, these may well be the first, though
unintended, casualties in the terrorist explosions. Perhaps, you may
be able make them realize this, before it is too late.
v.seshadri
chennai, india
Aug 17, 2007 12:00 AM
21 Seshadri,
