US President-elect Barack Obama has chosen New York Federal Reserve president Timothy Geithner to be treasury secretary. Mr Obama has also named Lawrence Summers, a former treasury secretary under president Bill Clinton and one-time president of Harvard University, to lead the National Economic Council. Both men will appear with Mr Obama at a press conference in Chicago on Monday. WikiPedia: Timothy F. Geithner. AllVoices: Obama to name Geithner, Summers to economic posts.
• Market jumps on hopes of new treasury secretary
• Boost fails to help US banking giantJames Doran in New York
Wall Street ended a volatile week with renewed confidence last night, after reports that Barack Obama has chosen Timothy Geithner, the head of the New York Federal Reserve, as his treasury secretary.
• States and companies target developing nations
• Small farmers at risk from industrial-scale deals
Julian Borger, diplomatic editor guardian.co.uk, Saturday November 22 2008 00.01 GMT The Guardian, Saturday November 22 2008 Article historyRich governments and corporations are triggering alarm for the poor as they buy up the rights to millions of hectares of agricultural land in developing countries in an effort to secure their own long-term food supplies.
Subprime mortgages were the beginning, not the end, of a global financial crisis, and in recognition of this fact equity markets have crashed. The proximate cause of this week's retreat in equity markets to the lowest levels since the 1990s was the collapse of loans to American commercial real estate, which in turn implies the collapse of insurance companies and pension funds. Americans who relied on private pension funds, whether through their employer or insurance companies, will lose part or all of their pensions. That is why it is so difficult to rescue General Motors...
US economic data intensifies concerns of a long and deep global recession as blue-chip Dow Jones industrial average plunges 444.99 points. The Dow Jones industrial average plunged 5.56 percent, to 7,552.29 on Thursday as US stocks sank again. New Zealand Herald: Dollar falls to six-year low as bad news bites. Reuters: No relief seen in global economic crisis.
Some 691,000 children went hungry in America in 2007, a rise of 50 percent over the previous year, while one in eight Americans overall struggled to feed themselves. The figures are reported in a study on food security conducted annually by the US Department of Agriculture (USDA). Of the 36.2 million people who struggled with hunger during the year, almost a third of these adults and children faced a substantial disruption to their food supply, meaning they went hungry at some point. The number of these most hungry Americans has grown by more than 40 percent since 2000, rising to 11.9 million individuals in 2007.
Over the past few months, Americans have been hearing the word "depression" with unfamiliar and alarming regularity. The financial crisis tearing through Wall Street is routinely described as the worst since the Great Depression, and the recession into which we are sinking looks deep enough, financial commentators warn, that a few poor policy decisions could put us in a depression of our own. It's a frightening possibility, but also in many ways an abstraction. The country has gone so long without a depression that it's hard to know what it would be like to live through one.
The three biggest US car makers have pleaded with congress for $25 billion in aid to save their businesses, warning that their collapse would further damage the ailing US economy. The chief executives of General Motors, Ford and Chrysler appeared before the US senate banking committee on Tuesday to request a portion of the $700 billion financial bailout agreed by US politicians last month. "It's about saving the US economy from a catastrophic collapse," Rick Wagoner, General Motors chief executive, said.
US Treasury Secretary has said the USD 700 billion bailout plan should not be considered 'a panacea' for the country's economic problems. Henry Paulson and Federal Reserve Chairman Ben Bernanke were scheduled Tuesday to give testimony before the US House Financial Services Committee about the Troubled Asset Relief Program (TARP).
The company said total headcount is being reduced by 20 percent from its peak of 375,000 at the end of 2007; the company had already announced in October that it was eliminating about 22,000 jobs from those levels. The total workforce reductions include thousands of jobs that will be lost when Citigroup completes the sale of Citi Global Services and its German retail banking business.
The fox and the hounds, of course, have a clear idea of what they want to do and how they want to do it, which is more than you can say of Paulson. Sums of incalculable size are being spent or pledged by Paulson and his playmate, Ben Bernanke, chairman of the Federal Reserve Board, and nobody outside their organizations, or maybe inside them either, knows who got what, how much they got, and under what conditions they got it. In the past couple of months Bernanke has loaned out $2 trillion to unnamed companies under eleven different programs and all but three of them were slapped together in the past fifteen months of financial crisis. To repeat, we do not know who got this money or what collateral was put up in return for the loans or what conditions were attached to them.
The G20 is meeting today in Washington , D.C. , to discuss the world financial crisis, its causes, and what can be done about it. But this won’t help the people of the U.S. who have been victimized by their own financial system. The stated objectives are to find ways to stabilize and reduce speculation in the financial markets and make financial transactions more transparent, more efficient, and more international in scope. But this is also a revolt by the nations of the world against over-reliance on the U.S. dollar as the world’s reserve currency. What we are likely to see over time is a multi-currency regime that includes the Euro and one or more Asian currencies as well. But the conference will not address the real causes of why the world is heading into a global recession or why the U.S. economy in particular is in such dire straits. Nor will the meeting lresult in redress of the staggering level of bankers’ criminality abetted by the U.S. government in the creation of the financial bubbles whose collapse is underway. The Nation: The more details emerge, the clearer it becomes that Washington's handling of the Wall Street bailout is not merely incompetent. It is criminal.
No sense letting thousands of hard-earned dollars slither away at the time when they are becoming more scarce. The cost of food has risen 6% and energy 29% in the past year. Here is a list of suggestions I have developed on how to save money, mainly by buying products of better value and durability.
Three million jobs could be lost in a year if America's so called 'Big Three' carmakers - General Motors, Ford and Chrysler - are allowed to collapse, an expert predicts.
The Prime Minister was last night struggling to win over world leaders with his ambitious and much-trumpeted global anti-recession package involving tax and interest rate cuts. Many countries indicated they were not ready to sign up to Gordon Brown's 'fiscal stimulus' solution
In September, Treasury Secretary Hank Paulson sold his $700 billion bailout to Congress on the premise that banks were hoarding money to prop up their balance sheets and that this was bringing the economy to a screeching halt.
Retail sales in the US fell 2.8 percent in October, the fourth straight monthly decline, the Commerce Department reported Friday. The decline was much worse than the 2.1 percent drop forecast by economists in a Bloomberg News survey.
US President George W. Bush came to Wall Street Thursday to deliver a speech extolling the virtues of the "free enterprise" system even as multiple economic indicators made it clear that the so-called "magic of the market" is spelling misery for millions more working people in the US and around the globe.
Iran has converted financial reserves into gold to avoid future problems, an adviser to President Mahmoud Ahmadinejad said in comments published on Saturday, after the price of oil fell more than 60 percent from a peak in July. Iran, the world's fourth-largest oil producer, is under U.N. and U.S. sanctions over its disputed nuclear programme and is now also facing declining revenue from its oil exports after crude prices tumbled. "With the plans of the presidency...the country's money reserves were changed into gold so that we wouldn't be faced with many problems in the future," presidential adviser Mojtaba Samareh-Hashemi was quoted as saying
Bush, has told G20 leaders that the free market system was not behind the economic crisis. "Bush said to world leaders, 'Look, don't abandon capitalism, its the best way for growth and human justice, and so on.'
The Hollywood Reporter reveals that Michael Moore’s new documentary will focus on the global financial crisis and the U.S. economy. Moore is “feverishly shooting,” and it is expected to come out as early as this spring. “The untitled movie will contain an end-of-the-empire tone, say those familiar with the project.” Craig Minassian, an entertainment consultant, said, “If Moore offers a prescription for how to improve things, he may indeed find an audience that at this moment is eager for change,” but cautioned “it’s going to be hard for him. What this election shows is what’s right with America, and sometimes what Michael Moore does is highlight what’s wrong with America.”
French President Nicolas Sarkozy said on Thursday ahead of the G20 meeting of world leaders: “I am leaving tomorrow for Washington to explain that the dollar cannot claim to be the only currency in the world…, that what was true in 1945 can no longer be true today”. There have been many previous indications that the dollar would not remain the world’s reserve currency for long. But this is a dramatic statement by a close American ally. Axis of Logic: Mr Sarkozy and the CIA. Based on Thierry Meyssan's "Operation Sarkozy".
This estimate of total U.S. direct aid to Israel updates the estimate given in the July 2006 issue of the Washington Report on Middle East Affairs. It is an estimate because arriving at an exact figure is not possible, since parts of U.S. aid to Israel are a) buried in the budgets of various U.S. agencies, mostly that of the Defense Department (DOD), or b) in a form not easily quantifiable, such as the early disbursement of aid, giving Israel a direct benefit in interest income and the U.S. Treasury a corresponding loss. Given these caveats, our current estimate of cumulative total direct aid to Israel is $113.8554 billion. WRMEA: PRO-ISRAEL PAC CONTRIBUTIONS TO 2008 CONGRESSIONAL CANDIDATES.
Fast foward to minute 7:40, Alan Greenspan admits "The Fed is an independent agency... There is no other agency in government that can overrule actions that we take." -Watch the video.
One of Barack Obama's leading advisors has done more damage to Africa, its economies and its people than anyone I can think of in world history, including even Cecil John Rhodes. That charge may surprise readers, but hear me out.
Gordon Brown unjustifiably used the Anti-terrorism, Crime and Security Act of 2001 against the people of Iceland for his own short-term political gain. This has turned a grave situation into a national disaster, affecting families in both Iceland and the United Kingdom. Help us avert greater damage by signing this petition now.
Bank of England governor Mervyn King today warned that the recession in Britain will be deeper and longer than expected, and signalled interest rates will have to fall further to stop inflation dropping far below its 2% target. King also admitted there was a risk of the economy suffering deflation during the next two years. In a dramatic change of its forecasts three months ago, the Bank predicted that the UK economy would shrink by 2% in the first half of next year and would not return to growth until towards the end of 2009. With the UK economy already contracting, this suggests that the recession will last for more than a year.
"In a subtle, bloodless coup, the Reaganomics ideology magically pulled victory out of the jaws of defeat in the meltdown. The magic happened fast and quietly, in the shadows, while you were in a trance, distracted by the election drama. American Conservative: Conservatives Follow the Leader: The culminating event was the financial bailout of the Wall Street plutocrats, which contradicts everything that conservatives allegedly stand for. It was socialistic in every way. It rewarded market failures. It ripped off average families for the sake of billionaires. It was the worst form of Keynesian planning. It was an open conflict of interest, as the ex-CEO of Goldman Sachs funneled vast sums to Goldman Sachs. It had exactly zero chance of helping the economy. In fact, by draining productive private resources necessary for economic recovery, it makes a bad situation worse.
The October 2008 financial meltdown is not the result of a cyclical economic phenomenon. It is the deliberate result of US government policy instrumented through the Treasury and the US Federal Reserve Board. This is the most serious economic crisis in World history. Rolling Stone: The New Trough.
"Australian PM Kevin Rudd - “Nuke strike would make 9/11 insignificant” and other weird warnings" "Over the last 72 hours there has been a strange melange of cryptic messages leaked from world political leaders about what could be in store for America over the next few months. These predictions of impending doom come from England, France, Australia and the United States. Biden told the top Democratic donors that a “generated crisis” will develop within six months and Barak Obama will need the help of community leaders to control the population as unpopular decisions are made and Americans resist. WUFYS: Warning of new "bin Laden" attack: "bin Laden" poised to deliver painful blow. Current: Council on Foreign Relations president predicts coups, genocide and terrorism to test Obama. PressTV: Brzezinski: Obama may be tested.
Fourth consecutive month of declines seen. The election heard around the world has ushered in a political sea change throughout the United States. But Barack Obama. the president-elect, can't look forward to smooth sailing. The recession, persistent distress in the housing and financial markets and mounting job losses will demand his attention, even as immediate remedies may prove elusive. Upcoming data on retail sales are likely to show that consumers, strapped by a credit crunch and rising unemployment, are cutting back on spending.
REYKJAVIK, Iceland — The collapse came so fast it seemed unreal, impossible. One woman here compared it to being hit by a train. Another said she felt as if she were watching it through a window. Another said, “It feels like you’ve been put in a prison, and you don’t know what you did wrong.”
In his first public appearance as president-elect, Barack Obama held a press conference in Chicago Friday afternoon after meeting for several hours with a selected group of economic advisers, comprised entirely of bankers, corporate executives and current and former government officials.
McBama more of the same. WUFYS: In case you thought there was going to be CHANGE - A record number of Jews in CONGRESS: For those of you naive enough to think that OBAMA and the Democrats are going to bring about any significant CHANGE in the ZOG (zionist Occupied Government), the Jerusalem Post has another plan: A record number of Jews in Washington? "Forget Mr. Smith - this year, Mr. Stein is going to Washington. With an expected nationwide surge in Democratic turnout for Tuesday's US presidential elections, the number of Jews elected to Congress may reach record-levels. With Jewish candidates positioning to match the 2006 record of 30 House members and 13 senators, Democrats are hoping to capture at least four new House districts - including Alaska's lone House seat, contested by would-be freshman Ethan Berkowitz, and another from the Phoenix area. On the Republican side, Rep. Eric Cantor, a four-term congressman from Virginia who is currently the GOP's chief deputy whip, is rumored to be in the running for minority leader in the expected post-election changeover. The Senate total of Jewish leaders is expected to remain unchanged. ..." PIC: Hamas: There is no difference between Obama and McCain. Black Commentator: Obama is More of the Same — Only Worse (part 1)
Sales of new vehicles in the US plummeted in October as consumers—hit by growing unemployment, falling income and tighter credit—sharply reduced purchases of cars and trucks. Sales fell by a staggering 31.9 percent last month over the previous year in a further sign the US economy has entered a deep and protracted downturn, threatening the jobs of millions of working people.
The word "redeem" means "buy back." It is used in Christian theology to describe what Jesus did for mankind in general (common grace) and individuals (special grace). It was used during the era of the gold standard to describe the right of a holder of paper money to redeem this money for gold coins at a fixed price. The debt of the United States government is now beyond redemption. Lew Rockwell: The Rip-Off Economy: Plutocrats vs. Regular people.
Investors on the outside slammed while insiders getting rich, Market conditions indicate you need to protect yourself with gold and silver, Paulson monetary voodoo reanimates zombie fraudster banks, Market crashes set the stage for bank acquisitions, predicting a financial super entity.
The Wall Street Journal published a front-page article Friday reporting that the nine biggest US banks, which have received a combined $125 billion in taxpayer funds as part of the $700 billion bailout authored by Treasury Secretary Henry Paulson and passed by the Democratic Congress, owed their executives more than $40 billion for recent years’ compensation and pensions as of the end of 2007
Chinese Prime Minister Wen Jiabao says his country sees no obstacle to Iran's membership in the Shanghai Cooperation Organization (SCO).
Gross domestic product (GDP) figures released yesterday by the Commerce Department show that the US economy shrank by 0.3 percent on an annualised basis in the three months from July to September. With economists expecting even poorer GDP figures for the fourth quarter, the latest data confirms that the economy has now entered into severe recession. WSWS: Evidence grows that UK is entering a sharp recession.
The swindle of American taxpayers is proceeding more or less in broad daylight, as the unwitting voters are preoccupied with the national election. Treasury Secretary Hank Paulson agreed to invest $125 billion in the nine largest banks, including $10 billion for Goldman Sachs, his old firm. But, if you look more closely at Paulson's transaction, the taxpayers were taken for a ride--a very expensive ride. They paid $125 billion for bank stock that a private investor could purchase for $62.5 billion. That means half of the public's money was a straight-out gift to Wall Street, for which taxpayers got nothing in return. AlterNet: NAOMI KLEIN: THE BAILOUT HAS BEEN DESIGNED TO KEEP STEALING FROM THE TREASURY FOR YEARS TO COME.
What explains the paradox of the dollar’s sharp rise in value against other currencies (except the Japanese yen) despite disproportionate US exposure to the worst financial crisis since the Great Depression? The answer does not lie in improved fundamentals for the US economy or better prospects for the dollar to retain its reserve currency role.
Automakers are expected to hand in yet another set of sickly U.S. car sales numbers next week in what could mark the last time the industry reports results before Detroit's Big Three becomes the Big Two.
Ask yourself this question: was the housing price bubble, which has burst, caused by (a) a Fed policy of too much liquidity, which caused artificially low interest rates, which in turn caused a great deal of malinvestment, or (b) a Fed policy of too little liquidity which caused high interest rates and a credit-starved economy? If you chose answer b, congratulations, you may have a future as a celebrated author, historian, and Wall Street Journal commentator.
Times are tough, but don't worry about most members of Congress making ends meet. Their collective wealth grew by 13 percent last year, leaving them in better shape than most Americans to make it through an economic downturn, according to a new analysis of personal financial reports.
In our search for new clean technology, it’s important to pay attention to inventions of the past. A tiny hydroelectric plant in the Yorkshire Dales area of England is coming out of a 60 year retirement next summer to create renewable energy. The Linton Falls hydroelectric plant will work with the use of two Archimedean screws. Originally designed to carry water up as they rotate, the screws will generate renewable energy by spinning at high speeds when river water flows through them.
The Federal Reserve yesterday cut its benchmark federal funds interest rate by a half a percentage point to 1 percent. The rate reduction is the Fed's second this month and brings the official interest rate down to a record low first reached in 2003 and 2004. The volatile US share markets recovered some ground in anticipation of the rate cut, with the Dow Jones index closing 10.9 percent higher on Tuesday. But yesterday the Dow declined in late trading, falling 0.82 percent. New economic data released in the last two days provide further evidence that the US economy has entered a severe recession.
Remember the $700B that was *desperately* needed so the banks could loan it? Well, the banks took the cash, but they're holding on to it instead of loaning it - and they're not ashamed to say so.
The UN General Assembly has overwhelmingly adopted a resolution demanding the U.S. lift an economic trade and financial embargo against Cuba. It was supported by a majority of countries with only three against, among them the United States.
Senator Ted Stevens of Alaska, the longest-serving Republican in the history of the US Senate, was convicted Monday on seven felony counts of filing false reports to conceal more than a quarter million dollars worth of gifts from political and business cronies. A Washington DC jury reached its verdict after deliberating only a few hours, evidently rejecting out of hand the defense case.
The Smashing of Dreams Is Not Over. The dreams of easy retirement are disappearing. So are the dreams of automatic wealth. Americans, more than any other people, bought into the dream of automatic wealth. "Just buy a larger home with 5% down and wait. You will get rich." The dream of leveraged money trapped homeowners. It also trapped hedge fund investors.
Before delving into the murk please consider how you would answer the question, "Who runs the world?" The short answer is "Bankers". Key to our entire system of existence is money and the control of money, for through the control of money comes control of the affairs of man. Bankers control money therefore bankers control mankind. It really is that simple when you boil it down.
It is just over a year since the SWP and Galloway, then united in Respect, split acrimoniously. Galloway did so amidst accusations that the SWP was ultra-left and that its undemocratic efforts to dominate Respect were an obstacle to building a broad alliance of generally left and democratic forces. The SWP somewhat belatedly discovered that Galloway was orienting towards Muslim businessmen and that he is moving to the right. The two conferences served to demonstrate how both organizations are continuing their rightward lurch.
The chairman of a key Pentagon advisory panel has echoed recent claims by both Joe Biden and Colin Powell, warning that the next administration will face an international crisis within months of taking office. Michael Bayer, chairman of the Defense Business Board and veteran Pentagon consultant announced during a public meeting late last week that the new President should “prepare for a likely first-270-days crisis.”
Economically, the Bush-Cheney administration is leaving behind a big financial and economic mess. In fact, this is an administration that has brought misery upon America by its misguided economic policies that have built a mountain of shaky debt and rendered dysfunctional large segments of the American banking industry and large sectors of the U.S. economy, through inappropriate deregulation to enrich greedy special interest characters, wheeler-dealers, corporate con men, professional short-sellers and other scam artists and swindlers. In so doing, it has empowered rich parasitic speculators and turned the financial sector into a giant casino, thus risking the health of the entire economy.
The United States has now entered what analysts widely anticipate will be the worst recession in more than a quarter of a century. JPMorgan Chase economists estimated Friday that gross domestic product fell an annual rate of 0.5 percent in the third quarter this year, and forecasted a decline of 4 percent in the three months up to December. This would mark the steepest decline since the 1981-82 recession. The Real News Network: One nation under debt (Video): In part two of our interview with Danny Schechter, Danny provides up-to-date information about the housing crisis in the US. With 21 million families now finding their homes worth less than their remaining mortgage payments, the banks are being forced to readjust the loans in order to keep people in their homes. Danny also outlines some of the grassroots work that is being done in order to stem the tide of evictions.
After failing to obtain financial assistance from allies including the US and China, Pakistan's government has turned to the International Monetary Fund for the emergency loans it needs to stave off state bankruptcy. Pakistan's central bank governor and top finance ministry officials began discussions with IMF officials in Dubai last Tuesday, and which will continue until the middle of this week.
There are signs that the credit crunch is easing. Interbank lending in dollars has fallen for a ninth straight day. The various indicators of stress in the market -- LIBOR, the TED spread, and the LIBOR-OIS spread -- are all gradually returning to normal, but the damage to the broader economy has been substantial.
Living in a car isn't something that anyone would recommend. However, when you get laid off, your emergency fund runs out, your home is foreclosed (or you get an eviction notice) and there's nobody to help, living in your car might be the only choice, especially if you don't feel safe at a local shelter. Unfortunately, in many places, sleeping in your car is not only frowned upon, but also illegal. Here's how to get by until something better comes along. 1. Find a safe and inconspicuous place to park. First, check to see if there are any organizations in your area (or a nearby area) that designates parking lots specifically for people in situations like yours; it's not only legal, but the organization might screen the people who use the lot, or even designate a women-only lot. If there are no such lots available, and you live in a city, look for streets with no sidewalks, no overlooking windows, and adjacent to woods; the area should be sparse enough to avoid nosy onlookers but populated enough that the car does not stand out. Parking lots of big-box retailers (especially those that are open 24 hours and have restrooms, such as Wal-mart) are great to clean up in and have security. As long as you spend a couple of dollars there and don't park in one place too often.
For western countries such as the UK, the first major problems of Peak Oil, assuming there are no oil shocks, will not be the shortage of oil but the economic crises that will occur. Argentina is a recent example of a country that suffered a serious economic crisis, and although Argentina and the UK are not identical, anyone interested in how economic crises can affect individual lives will be very interested in the following vivid description of life for an Argentinian following the economic collapse.
On Thursday, the German stock exchange fell dramatically as auto manufacturers announced substantial job cuts and austerity measures. According to media reports, Volkswagen plans to cut up to 25,000 temporary staff and contract workers. Management at the VW headquarters in Wolfsburg denied that decisions have already been made, but did confirm that a “crisis programme” is being worked on.
Uruknet: In Canto XVII of Dante's Inferno, we learn about the usurers' place in Hell. The canto contains this appropriate description: Behold the monster with the pointed tail / that passes mountains, breaks through wall and gate / and taints the whole world with his stinking trail. [...] He had features of an honest curate / outwardly so meek and mild; the rest / of him was serpentine and intricate. [...] Dangling down into the void, his bottom / quivered upwards with its forked hook / which, as in scorpions, was tipped with venom. The Guide said: "Now perforce must turn aside / Our way a little, even to that beast / Malevolent, that yonder coucheth him." (from: Ciaran Carson translation, Granta Books, 2002)
World share markets plunged again on Friday, as further signs emerged that the global economy is heading for a deep and protracted recession. The largest falls were in Asia, where major exporters are being hit by shrinking markets in the US and Europe.
Stock markets across the world cracked yesterday, forcing Wall Street to suspend trading on a key futures contract to stem panic-selling while Moscow shut for business altogether. Sharp losses in New York, London, Europe and the Far East raised the spectre that governments may be forced to impose emergency holidays to avert a meltdown across world stock markets.
• 50bn wiped off value of Britain's top 100 firms • Wave of panic selling after warnings about far eastAndrew Clark in New York, Phillip Inman, Chris Tryhorn and Kathryn Hopkins The Guardian, Saturday October 25 2008 Article historyFears of an economic slump to rival the recession of the early 1990s have wiped almost £50bn off the value of Britain's top 100 companies and sent stockmarkets around the world into a tailspin. Reuters: U.S. has plundered world wealth with dollar.
What can you buy in America for $1,000? A flat-screen television, perhaps. A weekend break in the sun. Or a three-bedroom suburban home with stripped wood floors and a garage in the country's motor capital. Prophesy News Watch: The Dangers of a Diminished America
Andrew Clark in New York The Guardian, Saturday October 25 2008 Article historyOne of the world's biggest hedge fund managers, Citadel, told clients last night that two of its main funds have lost 35% of their value this year after rumours swept the market about its financial position.
Times have been tough here for some time, and seem only to be getting worse. "The valley is already hurting," Colleen tells us. "It's really scary for the kids that are making minimum wage and driving 25 or 30 miles a day to work — paying for gas, for babysitters, housing. Hard to watch these kids. It's a struggle. It takes all they've got. They don't have luxuries. They live on $1500 a month - $500 for rent. How can you live on that? They have no health insurance. They can't afford it."
Asian and European leaders meeting in Beijing have called for a "comprehensive reform" of the global financial system. At a news conference at the close of the 40-member Asia-Europe Meeting (Asem) on Saturday, Wen Jiabao, the Chinese prime minister, said that greater regulation was needed to avoid another crisis.
The news on markets around the world is particularly dire this morning. Despite a late day rally in the U.S., markets in Asia and Europe are down as much as 9 and 10% and S&P Futures are 60 limit down. This is going to be a very ugly day with market breakers likely to be tested and the Dow breaking through 2002 lows easily at the open. The Independent: Downturn even worse than expected: UK moving 'towards' recession. Yahoo: Stocks dive belief global recession is at hand. Reuters: INSTANT VIEW: Stocks tank at market open. + Markets in tailspin. MarketWatch: Sell-off spans globe.
It's important to remember though that even with these losses, on top of previous losses, Congress still can't find time to make Wall Street bonuses an issue.
Indicators of a worsening social crisis in the US are mounting daily as the economic downturn takes an ever greater toll on jobs. Further layoffs were announced yesterday in the US and around the world. New data was also released showing escalating numbers of American families losing their homes through foreclosure, further driving down house prices.
Let's look at the Panics of 1873 and 2008. Preceding the Panic of 1873 was a boom in railroad building. Preceding the Panic of 2008 was a boom in housing. The Federal government had subsidized construction of such major railroads as the Union Pacific, Central Pacific, and Northern Pacific through land grants and low-interest loans, starting in 1862 and ending in 1869. In the recent housing boom, banks were urged to use their ample reserves to finance home purchases by subpar borrowers. WikiPedia: The Panic of 1873. NationMaster: The Panic of 1873 was a severe nationwide economic depression in the United States that lasted until 1877.
"I made a mistake in presuming that the self interest of organizations, specifically banks and others, was such that they were best capable of protecting their own shareholders and the equity in the firms," Greenspan said. Al Jazeera: Greenspan admits 'flaw' in ideology. The Guardian: Greenspan - I was wrong about the economy. Sort of.
Often referred to as a sub-prime mortgage collapse, this obfuscates the real reason. By associating tangible useless failed mortgages, at least something 'real' can be blamed for the carnage. The problem is, this is myth. The magnitude of this fiscal collapse happened because it was all based on hot air. Financial managers and banking executives were selling the ultimate con to the entire world, akin to the snake-oil salesmen from the 18th century but this time in suits and ties. And by October 2009 it was a quadrillion-dollar (that's $1,000 trillion) industry that few could understand. Propped up by false hope, America is now falling like a house of cards.
Stockmarkets across Asia have suffered fresh falls following yesterday's steep losses in the US and Europe, as the FTSE 100 fell through the 4000-point mark again and Sony issued a shock profit warning. Investors have been spooked by the prospect of a deep, prolonged global recession, with a string of large companies warning that their sales and profits will suffer as the downturn bites.
What we have before us now is a systematic redistribution from the prudent and the responsible to the imprudent and the irresponsible. Did you make your mortgage payments in full when they were due? Were you careful to avoid investing in incomprehensible derivatives whose failure might lead to your bankruptcy? Very good, sir: you are therefore entitled to relinquish substantial amounts of your wealth, either directly through ordinary taxation or indirectly through the “inflation tax” and the diffuse effects of “crowding out” in the loanable-funds market, where the government must soon borrow hundreds of billions of dollars more than expected a few months ago. The People's Voice on 09/28/08: U.S. reaches bailout deal in bid "to stem crisis": The Seektress: Those Who Voted Yes to the Bailout. Existentialist Cowboy: GOP Economics: 'When a Parasite Kills Its Host'. WSWS: Job cuts mount as global recession takes hold. MarketWatch: Weekly jobless claims rise 15,000 to 478,000. Global Research: The Financial Meltdown: This Time Is Different. Lew Rockwell: Warren Buffett, Government Propagandist.
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