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 SPENGLER
PIIGS to the slaughter
The next time European nations in the south-sweeping arc from Ireland to Greece
- aka PIIGS - sink under the weight of their debt, the Germans will not come to
the rescue. The hard-working northerners have other priorities, and other
friends, and aim to survive when a Latin American-style crisis breaks out in
the profligate south. (Jul 20, '10)
THE BEAR'S LAIR
UK joins the dark side
Where the United States led in fiddling inflation figures, the British are now
following. The results might be handy for governments in the short term.
Further out, the results of such self-deception are damaging to the entire
economy. - Martin Hutchinson (Jul 20, '10)
Big Oil makes war on the Earth
United States residents starting to feel the direct impact of the BP Gulf of
Mexico oil spill are so far experiencing only part of the destructive powers of
Big Oil's careless fuel extraction methods, which for decades have brought
suffering and loss to less affluent communities around the world. - Ellen
Cantarow (Jul 19, '10)
THE POST-CRISIS OUTLOOK
The folly of common currencies
Europe should not be surprised at the difficulty it faces in maintaining a
common currency across widely divergent economies. The examples of Argentina
and Hong Kong in their efforts to peg their currencies to those of other
countries should have been lesson enough. - Henry CK Liu
(Jul 15, '10)
This is the 11th article in a series.
Part 10:The
trillion-dollar failure
The runaway train
The European debt crisis and other factors appear to have dissipated investors'
concerns of inflation risk. Yet the gold price continues to gain, and for good
reason. Whether the US economy rebounds strongly or experiences only slow
growth, inflation could just run out of control. - Kieran Osborne
(Jul 14, '10)
The fighting twins
Trade and fiscal deficits both contribute to increases in public debt, but a
constructively used fiscal deficit can be an effective measure to wean
economies - those with trade deficits or those with trade surpluses - from
excess dependence on foreign trade. - Henry CK Liu
(Jul 14, '10)
THE BEAR'S LAIR
The changing face of emergence
Goldman Sachs' chief economist Jim O'Neill tips Colombia, Indonesia, Vietnam,
Egypt, Turkey and South Africa as the next favored emerging markets. But the
rules of the game have changed since O'Neill's near-decade old, and now famous,
forecast of BRIC emergence. - Martin Hutchinson
(Jul 13, '10)
 CHAN
AKYA
The 'why' of Europe's banks
The dismal state of European banks, in stark contrast to the Agriculture Bank
of China's world record US$22 billion share sale, offers Chinese authorities a
window on what should - and should not - be done to prevent Chinese lenders
heading in the same direction that European banks followed over the past 20
years. (Jul 9, '10)
CHAN AKYA
The short list
None of the numerous reasons being given for this week's steep stock market
declines should come as a surprise, and the sensible response is simple - sell
almost everything, and if you want to buy, go low-tech, small (Singapore), or
African. Most obviously, go gold. (Jul 2, '10)
BP versus GS - spot the
difference
As more worrying revelations emerge on the AIG bailout and rescue of Goldman
Sachs, the failure of the White House to take meaningful action against
institutions that may have benefited from America's financial pain stands in
stark contrast to the firm stance - and financial demands made - against BP
over the Gulf of Mexico disaster. - Hossein Askari and Noureddine
Krichene (Jul 1, '10)
Free ride for oil may be over
Governments give away an estimated US$2 billion to the often hugely profitable
fossil fuel industry each and every day. With austerity measures now being
enacted in many countries, that largesse may be about to end, although the
political risks involved mean change could still come slowly.
(Jun 30, '10)
G-20 splits asunder
The Group of 20 is no longer a "group" but a divided gathering in which some at
least recognize the folly of unlimited government spending. European
policymakers have made it clear they can no longer toe a United States line
drawn by politicians eyeing only the shortest of short-term results. - Hossein
Askari and Noureddine Krichene (Jun
29, '10)
THE BEAR'S LAIR
Europe's not the problem
US President Barack Obama is right to be concerned about Europe's turn towards
austerity. If cuts push Europe, America's largest market, back into recession,
the embryonic US recovery will be hit. If austerity works, the US will be
isolated in its fiscal laxity, damaging its credit rating. - Martin Hutchinson
(Jun 29, '10)
Sudanese blood spills into Asia
A formal investigation into events surrounding the operations of Lundin
Petroleum in Sudan threatens the immediate future of Swedish Foreign Minister
Carl Bildt. Allegations of war crimes also bring into the spotlight the role in
the strife-torn African country of Malaysia's Petronas and other Asian oil
companies. - Ritt Goldstein (Jun 24, '10)
BP-style horrors coming your way
The BP Gulf of Mexico oil spill is not an aberration, an avoidable disaster
given proper safeguards. The extraction of energy in geological and politically
unsafe places means more such calamities will occur. The only doubts are the
where and the when. We can start with four possible cases. - Michael T Klare
(Jun 23, '10)
Solidarity sought in auto
industry shake-up
The struggling United States auto industry and its counterpart in China appear
to be heading in opposite trajectories, but as standards become increasingly
common labor activists recognize similarities in the challenges facing workers
and the need to shape global alliances. (Jun 22,
'10)
THE BEAR'S LAIR
Back to the Kaiser's world
Weak US leadership and poor policies have led the world to an economic
environment similar to that of the protectionist decades leading to World War
I. In the remake of Kaiser Wilhelm's world of high tariffs and unfair trade,
the most successful bloc will be led by China and will include much of
Southeast Asia and large parts of Africa. - Martin Hutchinson
(Jun 22, '10)
G-20 split and out of order
The United States does not feel compelled to develop exports to pay for
imports, instead letting the dollar's reserve currency position do the heavy
lifting. These deficits cannot be cured by a re-evaluation of the yuan. Nor is
the Group of 20 the forum to demand that countries abandon their export-led
strategies. - Hossein Askari and Noureddine Krichene
(Jun 21, '10)
Kick ass - or buy gas
Anger in the United States at BP is growing as fast as the oil spill spreading
across the Gulf of Mexico. Yet as the company stumps up compensation for the
Deepwater Horizon disaster, its coffers are being filled by contracts with the
Pentagon - which continue despite US government regulators being fully aware of
BP's dismal safety record. - Nick Turse (Jun
18, '10)
CHAN AKYA
Bhopal, BP and karma
The public mauling of BP chief executive Tony Hayward by US congressmen stands
in stark contrast with the attitudes of the United States government, courts
and industrialists towards industrial catastrophes visited by US businesses on
communities overseas. If Union Carbide's reaction to the disaster in the Indian
city of Bhopal, for example, were the template, Hayward would merely wash his
hands of the whole business. (Jun 18, '10)
The talented tenth
A US$100 million project to create 10,000 female entrepreneurs in the
developing world offers one way to create businesses that employ people and
help to grow needy economies. Or it could merely help to develop a self-serving
elite, mirroring the project sponsor, Goldman Sachs. - John Feffer
(Jun 17, '10)
G-20 does u-turn on profligacy
The Group of 20, which so recently urged profligate spending by crisis-hit
countries, now urges consolidation of deficits - although when other countries
are expanding theirs, such action can reduce competitiveness. With this u-turn,
confused finance ministers display their loss of self-confidence. - Hossein
Askari and Noureddine Krichene (Jun
16, '10)
Cool head needed for cup
winnings
The football World Cup now underway in South Africa offers a great chance to
make a financial killing in as short a time as 90 minutes. The trick, just as
with a striker taking a last-minute penalty kick to win the game, is not to get
too emotional. - Debasish Roy Chowdhury (Jun
14, '10)
THE ROVING EYE
The World Cup war
The first kick in the World Cup in South Africa takes place on Friday, the
start of the world's greatest sporting festival and the showcase for global
entertainment's biggest industry - football, which is run with an iron fist by
the mega-rich FIFA. Host countries - and the fans - might have to sell their
souls to FIFA, but for a month of frenzied action, the only real question is
who will be the next footballing god. - Pepe Escobar
(Jun 11, '10)
OBITUARY
Julian Delasantellis
Julian, whose insightful, colorful and always informative articles on economic
affairs have been a highlight of Asia Times Online over the past four years,
died on June 4, aged 53.
For tributes to Julian, click here.
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No golden time, but a time for
gold
Investors and speculators have good reasons to turn to gold in the midst of
unorthodox monetary policies and high fiscal deficits. As long as low interest
rates and high volatility persist, the markets will expect the curse of
inflation - and the continuing high gold price is the sure result. - Hossein
Askari and Noureddine Krichene (Jun
10, '10)
Gold - the true standard
The world's economic expansion since Franklin D Roosevelt took the United
States off gold in 1933 does not make it impossible for the world - or an
individual country - to return to the gold standard. Just as honesty is
practicable and constitutions should be followed, a return to the gold standard
is both possible and necessary. - Antal E Fekete
(Jun 10, '10)
CHAN AKYA
The cup of joy
Millions in Asia keenly wait for Friday's start to the 2010 World Cup, even
though emerging football nations such as China and India are not participating
and the South African hosts are nervous over  predictions
of low revenues and soaring costs. Gamblers may fancy outsiders like North
Korea - who will hopefully just be launching shots on goal - but the real wild
card entry is the weather. (Jun 9, '10)
THE POST-CRISIS OUTLOOK
The trillion-dollar failure
The Greek debt crisis has ushered in austerity measures across the eurozone and
beyond, forcing the young, the working poor and the elderly to pay for the
careless profligacy and corruption of governments, the propertied rich, and
financiers. In all cases, social democrats support the cuts, telling working
people that there is "no alternative". There is. - Henry CK Liu
(Jun 9, '10)
This is the 10th article in a series.
Part 9: Greek
crisis, German politics
THE BEAR'S LAIR
The perversion of incentives
State control has been proved not to work, not least because of the related
perverse and distorting incentives that produce economically sub-optimal
results. Those still in doubt need only look at the oil industry, the financial
sector and the Japanese government. - Martin Hutchinson
(Jun 8, '10)
CHAN AKYA
G-20 almost makes sense
The latest Group of 20 confab concluded with little new emerging. That is good
news, as it almost explicitly acknowledges the lack of ideas on how to handle
the financial crisis and the doubtful benefits of issuing new government debt.
That supports the argument for a reduced government role in the economy - and
points to increased difficulty in engineering future bank bailouts.
(Jun 7, '10)
Bank reform bill - much ado
about little
The US Senate's bank reform bill includes a level of bank regulation not seen
since the Great Depression, yet it addresses what is politically digestible
rather than look at the root cause of the ongoing financial crisis. After a
little time, it will be business as usual, crises included. - Hossein Askari
and Noureddine Krichene (Jun 2, '10)
THE BEAR'S LAIR
The verdict on Keynes
We should enjoy Keynes' witty aphorisms and respect his intellect, but avoid
following his policy recommendations. The conditions under which Keynesian
stimulus works almost never apply, and the United States economy will be paying
the costs of turning to the misguided policy for a decade to come. - Martin
Hutchinson (Jun 1, '10)
CHAN
AKYA
Top kills and junk shots
The so-far futile efforts to plug the Gulf of Mexico oil spill offer telling
lessons to governments seeking to resolve the financial crisis spreading from
Europe. The oil companies are, at least, addressing the source of the leak. The
equivalent priority for central bankers is to stem excessive leverage.
(May 28, '10)
China pulls the strings
Private capital appeared to be shunning the financial markets this week,
following the lead of governments that no longer seemed willing to support
their economies. Then China spoke up and, as a global stock market rally
immediately followed, demonstrated its role as the world economy's new
paterfamilias. - Julian Delasantellis (May
28, '10)
Central banks - crisis creators
The US Federal Reserve admonishes commercial banks for taking excessive risk,
yet it does so itself with impunity, operating in a manner that would put any
car rental company out of business. The folly of central banks running a loose
monetary policy is well known, and the Fed continues to fuel the present
instability. - Hossein Askari and Noureddine Krichene
(May 26, '10)
THE POST-CRISIS OUTLOOK
Greek crisis, German politics
Efforts to drive through bailout packages for Greece exposed and exacerbated
strains between European Union member states and within those countries,
notably Germany. The political, as well as the economic, costs of this crisis
are rising, and spreading to the United States. - Henry C K Liu
(May 26, '10)
This is the ninth article in a series.
Part 8:
Greek tragedy
US fumbles through Greek crisis
The reaction in the United States to the country's involvement in the Greek
bailout displays an unfortunate failure to grasp what is involved, never mind
that politicians are using it to deprive President Barack Obama of the ability
to prod the International Monetary Fund into lending money to friends and to
possibly block development aid to poor countries. - Julian Delasantellis(May
25, '10)
THE BEAR'S LAIR
The second Bernanke crash
Recent market turbulence, superficially attributed to concerns over the euro
and the finances of European countries, has its roots as far back as the 1950s,
while the insanity of excessive money creation since 2008 has put a sustainable
recovery out of the question. A second crash at the hands of US Federal Reserve
chairman Ben Bernanke now appears unavoidable. - Martin Hutchinson
(May 25, '10)
CHAN
AKYA
The new order is chaos
This week's stock trading should tell academics and economists all they need to
know as they struggle to define the "new normal". It isn't about relative
economic growth or the dynamics of inflation. It is the return of gut-wrenching
volatility that places investing in a permanent state of siege. Chaos is
the new order; a constant state of crisis is the new normal.
(May 21, '10)
THE POST-CRISIS OUTLOOK
Greek tragedy
The roots of the debt crisis in Greece, a country of almost insignificant size,
are buried under decades of financial myth-making condoned by stronger European
powers and nourished by the creative geniuses of American banks. The fruit is a
credit market meltdown greater than that of 2008 and doubt on the future of the
euro. - Henry CK Liu (May 20, '10)
This is the eighth article in a series.
Part 1:
The crisis of wealth destruction
Part 2: Banks
in crisis
Part 3: The
Fed's no-exit strategy
Part 4: Fed's
double-edged rescue
Part 5: Too
big to save
Part 6: Prudence
and folly
Part 7:
Global sovereign debt crisis
Europe's Gordian knot
The Greek debt crisis presents the European Union with a tangle of Gordian Knot
complexity. Either of two solutions can make sense - reconstitution of the
eurozone with Germany quitting the common currency and re-adopting the
deutschmark, or Greece returning to the use of the drachma. The associated
costs in economic, political, legal and institutional terms make either
resolution nearly impossible. (May 20, '10)
Need profit - will drill
The Gulf of Mexico oil disaster, we will be told, was an unfortunate fluke
resulting from improper management and faulty equipment. Don't believe it. The
ultimate source of the disaster is big oil's compulsive drive to compensate for
the decline in its conventional oil reserves by seeking supplies in inherently
hazardous areas - risks be damned. - Michael T Klare
(May 19, '10)
Wall Street's kitchen-sink drama
The involvement of high-powered women, so different from their male
counterparts, in the United States' attempts to clear up the mess of the
financial crisis could point to a new Wall Street marked by fairness and
integrity. Or is this just a reminder that this is the way it has always been?
- Julian Delasantellis (May 18, '10)
THE BEAR'S LAIR
Bailout world
Bailouts can have merit when the rescued institution or country is
fundamentally viable, but they are damaging when the bailout target is
economically unviable, as is the case with Greece or Fannie Mae. Too often,
they are the result of politically driven monetary policy untethered to a sound
economic anchor. - Martin Hutchinson (May 18,
'10)
BOOK REVIEW
Mad about Bernie Madoff
No One Would Listen by Harry Markopolos
The man who blew the whistle no one heard on the biggest scam in Wall Street
history deserves a medal. This book on the Bernard Madoff scandal highlights
why he'll probably never get it. - Muhammad Cohen
(May 14, '10)
CHAN
AKYA
Yes, debtor
For all her posturing, German Chancellor Angela Merkel's retreat
on austerity measures underlined the power of European bureaucrats who
engineered the eurozone bailout package despite the absence of any
democratic mandate to pull it off. The decisions being taken by Brussels appear
to have nothing to do with the popular will of Europeans.
(May 14, '10)
The tarping of Euroland
The US$1 trillion bailout in Euroland has cheered markets, but, as with the
Troubled Asset Relief Program in the United States, the ax of bankruptcy has
been deflected from banks only for the burden to fall on the private sector, on
workers and on foreigners who hold euros as a reserve currency. There is, as
ever, no free lunch. - Hossein Askari and Noureddine Krichene
(May 13, '10)
THE POST-CRISIS OUTLOOK
Global sovereign debt crisis
The European states now deep in financial trouble got there by following the
rules of neo-liberal games promoted by US market fundamentalists and supported
by the easy money stance of the US Federal Reserve. The outcome in Europe is a
move by more conservative states, notably Germany, for nationalistic insulation
from free-spending neighbors. - Henry C K Liu (May
12, '10)
This is the seventh article in a series.
Part 1:
The crisis of wealth destruction
Part 2: Banks
in crisis: 1929 and 2007
Part 3: The
Fed's no-exit strategy
Part 4: Fed's
double-edged rescue
Part 5: Too
big to save
Part 6: Public
debt - prudence and folly
Public debt and the EU patch
The creation of a stabilization fund to bail out Greece and give the appearance
of eurozone financial solidarity is a short-term patch, not a convincing
roadmap for over-indebted European Union countries to get their financial
houses back in order. - Hossein Askari and Noureddine Krichene
(May 12, '10)
Pariahs at your back door
Folk who believe that the collapse last week of the US equity markets
strengthens their right to regulate traders might like to think again. Squeeze
those hard-driven pariahs of society, and their absence of social utility, out
of their jobs and where will they go, if not to chase down work usually done by
gentler souls. - Julian Delasantellis (May
11, '10)
THE BEAR'S LAIR
Adenauer redux
The austere policies of West Germany's first chancellor, Konrad Adenauer, set
the foundation for the modern German state and its relative financial
stability. With Britain's Thatcherite policies and the spendthrift ways of
Greece both now well discredited, the time is ripe for an Adenauer comeback. - Martin
Hutchinson (May 11, '10)
SPENGLER
Ignore that Keynes behind the
arras
Few forecasters expected the Greek debt problem to threaten the world financial
system, yet it has. And yet again, governments will claim to have "fixed" the
problem and halted the rot. Perhaps the fix will hold for a while, or maybe the
panic will spread. Either way, the markets now recognize such Keynesian
short-term fixes are no solution to deep-rooted problems.
(May 10, '10)
CHAN
AKYA
Keynesian Waterloo
The numerous factors that contributed to Thursday's record intra-day decline in
the Dow Jones Industrial Average should not mask that we are witnessing the
consequence of government overindulgence in spending as buyers of debt now fear
an explosion of credit risk. Smart advocates of Keynesian profligacy should
recognize the magnitude of this rout and consider quiet exile.
(May 7, '10)
THE POST-CRISIS OUTLOOK
Public debt - prudence and folly
Too much can be made of the danger of high fiscal deficits and national debts,
a burning issue during the present financial crisis. The purported danger comes
not from their size but on how the proceeds from them are used - unwisely in
the case of the United States in its recent history. - Henry C K Liu
(May 6, '10)
This is the sixth article in a series.
Part 1:
The crisis of wealth destruction
Part 2:
Banks in crisis: 1929 and 2007
Part 3:
The Fed's no-exit strategy
Part 4:
Fed's double-edged rescue
Part 5:
Too big to save
 SINOGRAPH
Give us back the German empire
To stop the rot spreading from the Greek financial crisis, Germany should take
over Europe - and do it fast. At present speed, Europe's decline to global
irrelevance could take only a few years - just as China's rise was accomplished
in two decades. - Francesco Sisci (May 5,
'10)
CHAN
AKYA
South Park - the markets
Somewhere along the line a joke can suddenly seem not so funny, and the fun and
games suddenly stop - sometimes when some loon pulls out a gun, real or
otherwise. The markets are not immune to innocuous squibs masquerading as real
explosives, or vice versa. Recently, they all seem to be hallmarked "G".
(May 5, '10)
Carry on 'banking'
The latest conference held in the name of the late Hyman P Minsky had,
appropriately, plenty to say on the present dismal state of financial
regulation - but not much approbation of the industry taking advantage of this.
But then, investment banks will be investment banks. As usual, they can do no
wrong. - Julian Delasantellis (May 5, '10)
THE BEAR'S LAIR
Courage absent in UK election
Britain's next prime minister faces formidable economic challenges, not least
of which is a budget deficit that is near Greek levels. Yet a careful sifting
of comparable challenges in the country's past shows that a strong recovery is
possible; the only thing lacking will be political courage. - Martin Hutchinson
(May 4, '10)
BOOK REVIEW
Islamic finance - steady amid
chaos
The Stability of Islamic Finance by Hossein Askari et al
As the global financial crisis shredded banks' fortunes around the world,
Islamic institutions maintained high growth rates. This team of authors has the
rare combined expertise to explain why and to present Islamic finance as a
realistic alternative to the current conventional system. - Robert E Looney
(Apr 30, '10)
THE POST-CRISIS OUTLOOK
Too big to save
The role of banks in the United States economy has long been contentious. Yet
the latest financial crisis has so concentrated their power within so few
institutions that the country risks having a financial structure too big to
save without voiding the normal characteristics of a market economy. - Henry CK
Liu (Apr 29, '10)
This is the fifth article in a series.
Part 1:
The crisis of wealth destruction
Part 2:
Banks in crisis: 1929 and 2007
Part 3:
The Fed's no-exit strategy
Part 4:
Fed's double-edged rescue
The flaying of Goldman
Gnashing their teeth, the high priests of government, aka the Senate Permanent
Subcommittee on Investigations, set about the inquisition of their erstwhile
praetorian guard on the sacred duty of protecting clients' interests. And with
what panache, what disdain, did the generals of modern finance - aka Goldman
Sachs chief executive Lloyd Blankfein and his assistants - endure the
obligatory flaying. - Julian Delasantellis (Apr
29, '10)
Will the real Adam Smith stand
up
The International Monetary Fund and Group of 20 meetings last weekend
underlined how little should be expected from such beholden institutions and
politicians. Leaders (and students) in the United States and elsewhere need to
restore a sense of decency to the public and private sectors. Reading Adam
Smith's "other" book would be a start. - Hossein Askari and Noureddine
Krichene (Apr 27, '10)
THE BEAR'S LAIR
Regulatory Stooges
The proposals emerging from the United States and Britain to reform the banking
system are, in the manner of a Three Stooges knockabout, mostly contradictory,
and few address the problems that make the financial system so dangerous. Real
solutions are available - but will not be enacted. - Martin Hutchinson
(Apr 27, '10)
BOOK REVIEW
A lost morality
Keynes: The Return of the Master by Robert Skidelsky
John Maynard Keynes' posthumous reputation has fluctuated as much as his
personal fortunes did in his lifetime, as later economists pressed for
acceptance of their own concoctions. Now, as the squabbling successors to this
towering man of erudition and morality see the waste around them, they can only
hope that a claim to be first-offenders will save them from the most severe
prison sentences. - Julian Delasantellis (Apr
23, '10)
THE POST-CRISIS OUTLOOK
Fed's double-edged rescue
As the financial sector in the United States lurched towards implosion in early
2008, the Federal Reserve eventually tapped a rarely used section of the 1932
Federal Reserve Act to set up rescue programs. These now pose a formidable
challenge to its exit strategy. - Henry CK Liu (Apr
22, '10)
This is the fourth article in a series.
Part 1:
The crisis of wealth destruction
Part 2:
Banks in crisis: 1929 and 2007
Part 3:
The Fed's no-exit strategy
DISPATCHES FROM AMERICA
Democratic kleptocracy
The slanging match between opposing sides of US politics, with rants warning
against a future of "socialism" or "fascism", obscures the reality of today -
the United States has become a kleptocracy, a rigged system of crony capitalism
that elites in the likes of Afghanistan and Iran are happy to emulate as
Washington exports its new form of government. - William J Astore
(Apr 21, '10)
COMMENT
Real reforms required
The effectiveness of the US Senate's present proposals for reform of
regulations for the financial sector will not prevent a future recurrence of
financial crises, warn former regulators, economists, market participants and
influential political personalities in a letter to US Senate leaders that sets
out what is actually required. (Apr 21, '10)
Volcanic fallout spreads far
from Europe
The gigantic plume of ash spewing from Iceland's Eyjafjallajokull volcano may
be lingering over Europe's skies, but its destructive effects stretch like a
venomous cloud over a sizeable chunk of the planet. A timely reminder of the
fragility of an interdependent world, the natural disaster's economic impact
for the airline industry has now surpassed that of the 9/11 attacks. - Kaveh L
Afrasiabi (Apr 20, '10)
THE BEAR'S LAIR
V-shaped explosion
United States gross domestic product figures next week may confirm signs that a
V-shaped recovery is underway. That would please the government and perk up
consumers, but the outcome of such a pick-up in the economy will not be
pleasant. Better for all concerned is something more gamma-shaped. - Martin
Hutchinson (Apr 20, '10)
THE POST-CRISIS OUTLOOK
The Fed's no-exit strategy
US Federal Reserve chairman Ben Bernanke has gone some way to explaining how
the United States central banks will exit the extraordinary lending and
monetary policies that it implemented to combat the financial crisis and
support economic activity. Yet as the economy continues to require support of
accommodative monetary policies, it all sounds a bit like Samuel Beckett's Waiting
for Godot. - Henry CK Liu (Apr 20,
'10)
This is the third article in a series
Part 1:
The crisis of wealth destruction
Part 2:
Banks in crisis: 1929 and 2007
Banking with piranhas
Even knowledgeable commentators who came close to the details of the Goldman
Sachs/John Paulson scam appeared reluctant to believe them. Perhaps no one
could quite believe that big houses like Goldman would actually treat their
smaller customers like so many guppies to be eaten alive by so many piranhas. - Julian
Delasantellis (Apr 19, '10)
CHAN
AKYA
Goldman: The charade of honesty
The view that key middlemen involved with Goldman Sachs and other finance firms
feathered their own nests to the tune of millions of dollars through deals
likely to make others lose billions has now been confirmed. The notion that
Goldman, JPMorgan, or any other bank, had superior insight into the financial
crisis is belied, while the lawsuits to follow from the latest revelations will
highlight the real risks of owning bank shares. (Apr
19, '10)
BOOK REVIEW
Lewis comes up short
The Big Short by Michael Lewis
The celebrated author of Liar's Poker returns to his old hunting ground
of the financial markets to chase down the characters who saw the financial
crisis coming and backed their insights with hard cash. The "who" and the "how"
are vintage Lewis. Missing, unfortunately, is the big question(s) - "why?". - Chan
Akya (Apr 16, '10)
Zoellick sees end of 'Third
World'
World Bank president Robert Zoellick wants recognition of a new world order
that is emerging from the global financial crisis, one in which the old views
of a "Third World" and a "North-South" divide are no longer relevant. Critics
say the World Bank itself should start reflecting such a changed perspective. - Jim
Lobe (Apr 15, '10)
Keynes versus Hayek
The Institute for New Economic Thinking, established with the support of George
Soros, held its inaugural conference this month at the United Kingdom's
University of Cambridge. To mark the event, Asia Times Online publishes an
essay on Friedrich Hayek and John Maynard Keynes, whose differing theories were
a feature of the gathering. - Henry C K Liu (Apr
14, '10)
New treaty is a slow start
The new Strategic Arms Reduction Treaty signed by US President Barack Obama and
Russian President Dmitry Medvedev, together with the 2010 US Nuclear Posture
Review, may set steps to reduce nuclear arsenals, but those who were hoping for
clear and significant drops in the numbers of nuclear weapons will be
disappointed. - Julien Mercille (Apr 14, '10)
THE POST-CRISIS OUTLOOK
Banks in crisis: 1929 and 2007
The 1929 banking crisis, which led to the Great Depression, and the financial
implosion that started to envelop the world in 2007 have the same root cause
(excess debt) and show similar distortions of the function of the stock market.
But telling differences are also instructive. - Henry C K Liu
(Apr 13, '10)
This is the second article in a series.
Part 1:
The crisis of wealth destruction
THE BEAR'S LAIR
When labor becomes a commodity
Commodity price surges are changing the world pecking order - and not
necessarily in favor of China and India, the big recent entrants in the global
market. At the same time, human labor, even skilled human labor, is entering a
position of glut. That points to the likes of Australia and Canada as being
winners in the new world order. - Martin Hutchinson
(Apr 13, '10)
THE POST-CRISIS OUTLOOK, Part 1
Wealth destruction
The financial crisis destroyed more wealth than the 2008 combined GDP of the
United States, the European Union and Japan. Two years on, and after huge
amounts of government aid around the world, global credit markets remain
dangerously anemic and economies are still operating on intensive care. - Henry
CK Liu (Apr 12, '10)
This is the first article in a series.
US lawsuits may flood China
drywalls
A flood of lawsuits from American homeowners with houses built using
Chinese-made drywall could go all the way up to the State Council in Beijing
after a US judge ordered that gypsum material used by a company linked to the
central government had blighted residences and must be removed. Repair bills
for the thousands of buildings could cost billions of dollars. Peter J Brown
(Apr 9, '10)
Bottom of the class
The transition of the United States economy towards socialism continues apace,
with student loan reforms that were slipped into the healthcare bill just the
latest step in crippling the economy. - Peter Schiff
(Apr 8, '10)
Fed policy and the damage done
US Federal Reserve chairman Ben Bernanke and his predecessor, Alan Greenspan,
must be among the very few who cannot see the damage done by overly loose and
discretionary monetary policies that have created huge economic distortions,
fueled inflation and undermined confidence in the US dollar as the world's
reserve currency. - Hossein Askari and Noureddine Krichene
(Apr 7, '10)
Slick oil move by Obama
There is little question that the United States has an energy problem, and the
country knows it. So the welcome granted to President Barack Obama's relaxation
of oil exploration rules is understandable. It is also mistaken. - Julian
Delasantellis (Apr 7, '10)
China tilts resource balance
China's increasing interest in securing access to overseas energy resources,
particularly at a time when US consumption of oil is in recession-hit decline,
points to how the world's balance of power is shifting from West to East. The
geopolitical implications will not be ignored in Washington, London, Paris and
Tokyo. - Michael T Klare (Apr 6, '10)
THE BEAR'S LAIR
Iron ore to fool's gold
The move by iron-ore miners to settle contracts in three-month, rather than
annual, terms will impose immense economic costs on all of us, and the illusory
safeguard of hedging will offer little or no protection to ore producers or
users. - Martin Hutchinson (Apr 6, '10)
Lehman's dance with the Devil
Lehman Brothers boss Dick Fuld was strong on the regular things in life -
long-lasting (and preferably happy) marriages, immaculate suits and ties in the
office. "Sloppy dress, sloppy thinking" was his line. But then came the
temptation of casual dress on Fridays, a frolic with subprime lending, an
overdose of leverage, and total destruction. - Julian Delasantellis
(Mar 30, '10)
THE BEAR'S LAIR
Japan - land of the setting sun
The Japanese government's latest doubts in privatizing Post Bank should kill
any prospect of the country emerging soon from its two decade-long economic
malaise. With luck, Japan may get leaders three years hence prepared to cut
spending and stick to that task for a decade. The alternative will be
depression or hyperinflation. - Martin Hutchinson
(Mar 30, '10)
CHAN AKYA
The perfect crime
Rating agencies, for all their role in fueling the financial crisis, survive
essentially untouched by subsequent regulation - official zeal no doubt
tempered by government needs to raise cash (and get ratings) in the bond
markets. If ever there was an issue for Asian countries to take a lead on, it
is the pursuit of truth in credit ratings. (Mar 26,
'10)
For the IMF, read China
European politicians should swallow their pride over whether the International
Monetary Fund should bail out Greece. After all, that is not much different
from the United States getting its funding, with the risks involved, from
China. - Axel Merk (Mar 25, '10)
Huff, puff, banks fall down
Huffington Post founder Arianna Stassinopoulos scores a debating point in
urging Americans to move their money out of big banks - "reckless behemoths" -
to smaller, community-based lenders. Unfortunately, the net result could be the
very damaging opposite of the stability she foresees. Julian Delasantellis
(Mar 23, '10)
THE BEAR'S LAIR
Bankrupt transactional banking
Recent and pending court cases around the world call into question a modern
bank's relationship to the companies, governments and individuals with which it
does business. It is clearly in the interests of both clients and the global
economy that present-day transactional banking returns to a more traditional
relationship system. It might even be inevitable in the long run. - Martin
Hutchinson (Mar 23, '10)
Bogolyubov dines out on JP Morgan
defeat
Ukrainian mining magnate Gennady Bogolyubov has scored a significant victory
over JP Morgan on its billing - including the price of a Big Mac - for work
during a takeover battle for Australian miner Consolidated Minerals. The US
bank now faces more trials in Europe and the United States, while Bogolyubov is
strengthened in his bid to take on the giants of the manganese mining industry.
- John Helmer (Mar 22, '10)
SPENGLER
Post-Apocalyptic zombie finance
The whole world is bailing out the US government by purchasing US debt - with
money lent by America. While such zombie financing persisted for two decades in
Japan, the US arrangement is weakening the reserve status of the dollar, the
very foundation on which it depends. The situation is so absurd and unstable
that the list of potential points of failure is endless. - Splengler
(Mar 22, '10)
CHAN
AKYA
Liar's punishment
Deceit at the highest levels increasingly appears the norm - from the nonsense
of Greek debt figures to the accounting sleight of hand that US regulators
accepted at Lehman Brothers. Capping them all, perhaps, are impossible claims
that exports will haul the world into full recovery. The lesson? Believe no
one, sell everything (except solid precious metals). And distrust even this
warning ... (Mar 19, '10)
Betting the farm on oil
Persistent increases in oil prices - attributable not to speculators but to the
policies of central banks - can dissuade hiring and undermine economic growth.
The world economy may now be locked in a vicious cycle of loose monetary policy
and spiraling oil and commodity price inflation. - Hossein Askari and Noureddine
Krichene (Mar 17, '10)
Terror state - US style
The only conclusion to be drawn from the US government's policy torpor in the
three years since the financial crisis broke is that the country is now the
greatest failed state in world history, while also becoming a base from which
financial terrorism is exported around the world. - Julian Delasantellis
(Mar 16, '10)
THE BEAR'S LAIR
Capitalism without leeches
Managerial capitalism has become entrenched over half a century, although no
viable theory argues that resources are effectively created or allocated when
owners of capital do not control its use. The adoption of "founder's shares"
for long-term investors would ensure that capital is not leeched away by
professional managers. - Martin Hutchinson (Mar
16, '10)
Job creation squeezed
Private-sector jobs are the lifeblood of a sound economy, yet the Barack Obama
administration is raising taxes on business owners, monopolizing credit and
increasing business regulations. If this continues, the giant sucking sound of
jobs heading overseas will only grow louder. - Peter Schiff
(Mar 11, '10)
No exit
Countries that make up the Group of 20 insist that there can be no exit from
crisis-fighting policies until economic recovery has been fully established.
But as these policies may have helped cause the problem, is escape from crisis
possible with them still in place? - Hossein Askari and Noureddine
Krichene (Mar 10, '10)
The great game - asset-trader
style
The United States financial industry, with a US$10 billion advertising budget,
is turning its friendly-faced focus on women, increasingly the family
decision-makers. Yet the love and desire to help the American public evident in
the commercials is often in short supply within the industry's practitioners.
The game is, after all, about making money. Lots of it. - Julian Delasantellis
(Mar 9, '10)
THE BEAR'S LAIR
Accelerator jammed
The retirement of US Federal Reserve vice chairman Donald Kohn means the Fed
will now be loaded with extreme soft-money advocates, ensuring the money
throttle will be jammed open, with only modest interest-rate increases, until
2013. Chairman Ben Bernanke and his new cohorts are about to give Americans a
painful object lesson in the wilder forms of soft monetary policy. - Martin
Hutchinson (Mar 9, '10)
CHAN AKYA
The blame game
European governments scrabbling for a way to resolve the Greek debt crisis are
focusing on the role played by peddlers of credit default swaps. Money was
certainly there to be made by those who anticipated events, but government
energies would be better spent. As that ancient Greek Sophocles put it, no one
loves the messenger who brings bad news. That's no reason to shoot him.(Mar
5, '10)
A Volcker rule for the Fed
Former US Federal Reserve chairman Paul Volcker's proposals for regulations of
banking institutions are aimed in part at avoiding a repeat of the continuing
financial crisis. Given the role of incumbent Ben Bernanke in setting the stage
for the crisis, the Fed may need a modified Volcker rule even more than the
commercial banks. - Hossein Askari and Noureddine Krichene
(Mar 3, '10)
US Congress picks at China's
holdings
Politicians in the United States are concerned at the amount of US debt held by
China - about US$1 trillion. Yet the amount may say little about Beijing's
motives and everything about Washington's lack of political willpower and, as
congressmen heard last week, the influence on them of companies with
multinational interests. - Benjamin Shobert (Mar
3, '10)
Greece calls in war debts
Germany appears to be moving reluctantly, and with some fancy financial
legerdemain, to bail out Greece from its debt crisis. The fix might work in the
short term, and defuse increasingly vitriolic exchanges over the two countries'
war history. Further ahead, the European Union must sort out how to handle its
fiscal imbalances, or it must necessarily break apart under their weight. - Julian
Delasantellis (Mar 2, '10)
THE BEAR'S LAIR
The diminished incentive to save
The hazards of maintaining low interest rates, as in the United States at
present, include undermining the propensity to save. The devastation this
wrecks on an economy is potentially ruinous. With no little thanks to US
Federal Reserve chairman Ben Bernanke, the US today is in the position of
Weimar Germany in 1921. - Martin Hutchinson (Mar
2, '10)
US budget springs leak after
leak
If the 2011 budget and its projections proceed as planned, a great many
Americans will be hungrier and remain jobless in a harsher, meaner world. As
many of the projections look increasingly questionable, the hunger and
harshness will be even more intense and widespread. - Jo Comerford
(Mar 1, '10)
Climate change's secret weapon
The claim by the Maldives and other low-lying nations to be innocent victims of
climate change, while their direct contribution to that change is negligible,
is betrayed by their role as "tax-havens", where up to US$13 trillion of
illicit funds, often from sources benefiting from environmental and human
degradation, can be laundered in a shroud of secrecy. Moderately taxed, the
cash could be put to better use. - Khadija Sharife
(Feb 25, '10)
Goldman's golden sunset moment
Goldman Sachs appeared to rise with superhuman ease above the 2008 financial
crisis, as Lehman Brothers and other lesser entities imploded and sank into
history. But that was a long time ago. Now golden Goldman may also be heading
gently into a Greek sunset. The question is, which finance house is next to die
of hubris and perfidy? - Julian Delasantellis
(Feb 24, '10)
THE BEAR'S LAIR
US holds key to eurozone success
European proponents of a centralized finance minister for the eurozone should
look instead to the United States for a lesson on how to avoid a repeat of the
Greek market panic. Member countries should commit to a balanced budget or quit
the currency regime. - Martin Hutchinson (Feb
23, '10)
Bernanke discounts recovery risk
There is little sign of a real need for the increase in the US Federal Reserve
discount rate. Yet one consequence could be damage to the manufacturing sector,
a rare bright spot in the present economic climate. Fed chairman Ben Bernanke
may be heading down the road of strangling the infant recovery before it even
takes its first cry. - Julian Delasantellis (Feb
19, '10)
BOOK REVIEW
Overextended banker collapses
The Next Asia by Stephen S Roach
A long-time Wall Street "thought leader" and current Morgan Stanley Asia
chairman gives his views on the economic crisis, globalization, United
States-China relations and more. Like many bankers' books, this one doesn'vt
stand up to close examination. - Muhammad Cohen
(Feb 19, '10)
Greece - the mutating financial
crisis
The consequences of a decade of loose monetary policies in major reserve
currency centers are now being felt in Greece. Other countries will follow in
its path, their pain seen in durable economic stagnation and unemployment. - Hossein
Askari and Noureddine Krichene (Feb
17, '10)
THE BEAR'S LAIR
After Greece, a new world
The Greek default crisis has made it clear that national economies are no more
risk-free than Lehman Brothers or Merrill Lynch. That is good news for Asian
countries such as South Korea, Indonesia and China that have used the past
decade to good effect in working out sound policies. India is another matter. - Martin
Hutchinson (Feb 16, '10)
Deficit flights of fancy
The current account deficits of Greece, other European countries of
international concern, and the United States are, in fact, not particularly bad
and are in a declining trend. Of greater concern are demands by historian Niall
Ferguson and others that the US government restrain from supporting the economy
when the private sector has pulled back. The consequences would not be
pleasant. - Julian Delasantellis (Feb 16,
'10)
CHAN AKYA
Oedipus wrecks
The European Union's public pledge of support for Greece makes clear for the
rest of the world that, off-stage, there is no government in Europe, let alone
one that is effective or coordinated. Currency death and economic pain among
this family of nations has just started as the latest Greek tragedy works
towards its climax. (Feb 12, '10)
Euro trash?
As European leaders seek a way to resolve the Greek debt crisis, it will likely
draw European Union member states into a covert political struggle that may
decide the future of the union itself. As this battle ebbs and flows, both the
euro and the US dollar likely will suffer great volatility. - John Browne
(Feb 11, '10)
When money refuses to flow
uphill
Bond speculators are reaping risk-free profits from the US Federal Reserve's
open market sales of Treasuries, contributing to the destruction of capital
that threatens to push recession into depression. Is this the polar opposite of
what Ben Bernanke expects from creating new money? - Antal E Fekete
(Feb 10, '10)
Blind spots to the right
Yes, the US national debt is rising, at around US$2 million a minute. But
ignored by the polemicists on the right, other data, equally accessible,
demonstrates that government spending did not bring about the financial crisis
and even now is not bleeding the markets dry. - Julian Delasantellis
(Feb 9, '10)
COMMENT
Palin into omnipotence
The genius of former US vice presidential candidate Sarah Palin and the
Republican right is to tie fears of big business and big government into a
package that is presented as creeping socialism. This, along with anti-minority
sentiment, attracts the teabaggers' vociferous support. Palin knows that If she
did articulate her policies in a clear and intellectually compelling manner,
the "plain folks" would turn away. - Ian Williams(Feb
9, '10)
THE BEAR'S LAIR
The unequal credit crunch
The damage being wrought on small businesses by United States government
policies is delaying the very recovery the government seeks. The way out of
this impasse is to raise short-term interest rates. Growth will follow. - Martin
Hutchinson (Feb 9, '10)
Obama prolongs the pain - again
President Barack Obama's record, including his 2010 budget proposal, indicates
that had he, and not George W Bush, been elected eight years earlier, his
legacy would be about the same as the one he inherited. His budget also means a
grim inheritance for the next generation of US citizens. - Hossein Askari
and Noureddine Krichene (Feb 8, '10)
DISPATCHES FROM AMERICA
30-second warnings
Super Bowl Sunday is about as close as America gets, without a presidential
election, to taking the pulse of the nation. From Iraq to Afghanistan,
Mississippi to the West Coast, Americans and others gathered around television
sets will witness snapshots of the national zeitgeist in the game's
multi-million-dollar advertising slots; these will include voyeuristic
horndogs, flatulent slackers and a pro-life message delivered by a quarterback.
- Robert Lipsyte (Feb 5, '10)
CHAN
AKYA
Hair of Damocles' sword
United States Treasury Secretary Timothy Geithner's future in office might be
short, with a warning by Moody's Investors Service that the US is at risk of
losing its triple A credit rating, giving more ammunition to critics of his
handling of the financial crisis. Whenever his successor takes over,
humiliating deals with China are likely to be part of a thankless work load.
(Feb 5, '10)
BOOK REVIEW
Look who's come to dinner
Superfusion by Zachary Karabell This insightful book
examines the alternatives to fearing China's inevitable rise as a super-economy
and global political force and asks whether American hostility to making room
at the table for an upsetter of the old economic order is more a reflection of
its own lost confidence. - Benjamin A Shobert
(Feb 5, '10)
What's next for the dollar?
Tightening credit may push up mortgage costs in the United States, threatening
an already questionable housing market recovery. That may encourage Federal
Reserve chief Ben Bernanke to print more money, gambling that higher inflation
from a weakening dollar may drive home prices back up again. - Axel Merk
(Feb 4, '10)
Bernanke who?
China's efforts to cool its economy are already having an impact elsewhere -
notably on export-related stocks in the United States, such as those involved
in steel, shipping and natural resources. The most important monetary official
in the world may now be based, not in Washington, but in Beijing. - Julian
Delasantellis (Feb 3, '10)
THE BEAR'S LAIR
Let's atomize Wall Street
Paul Volcker's proposal to spin proprietary trading away from deposit-taking
banks is all well and good, but that leaves Wall Street's rent-seeking ways and
its conflicts of interest still to be addressed. - Martin Hutchinson
(Feb 2, '10)
SPENGLER
Profits, not principals, move
the age
What brought United States and other Western banks down was not speculative
bets in volatile markets but the necessary pursuit of profit in what appeared
to be ultra-safe investments. The sources of the crisis remain unchanged: the
industrial world's need to fund the greatest retirement wave in history.
(Feb 1, '10)
Obama's polemics versus economic
facts
President Barack Obama would have voters believe that the United States economy
is recovering, that jobs are being created and that the outlook is positive.
Unfortunately for him, the economy is in shambles and Americans can add. - Peter
Morici (Feb 1, '10)
CHAN
AKYA
Vestigial organs
As governments in the United States and Europe figure out how to bail out their
struggling states - California and Greece the prime candidates for failure -
the rest of the world can consider the body's vestigial organs, such as the
appendix, and wonder if such a fate now awaits the US dollar and the euro.
(Jan 29, '10)
Volcker - time for real change
United States President Barack Obama's decision to lean more on ex-Fed chief
Paul Volcker reflects the US economy's dismal state and his failure to halt the
decline in jobs. Yet full employment is an achievable goal. He could attack
financial sector corruption, starting with a look at his own White House. That
would be change in which to believe. - Henry CK Liu
(Jan 28, '10)
Obama's unending jobs nightmare
The increasing jobless tally in the United States is forcing President Barack
Obama and his team to face up to the harsh reality that a continued focus on
financial stability will not secure votes in this year's mid-term elections. - Hossein
Askari and Noureddine Krichene (Jan
27, '10)
Main Street's Disneyland folly
Main Street America's enthusiasm for blaming its woes on Wall Street blithely
ignores the benefits that accrued to the general population from the bankers'
greed. Did the owners of businesses, large and small, really not know where
their burgeoning custom came from, much as Nazi-era Germans knew "nothing" of
what was happening in their own backyard? - Julian Delasantellis
(Jan 26, '10)
THE BEAR'S LAIR
1995 and all that
Some years look better, in retrospect, than others - 1973, perhaps, or 1995.
Such nostalgia can help us identify tendencies that need to be reversed and to
find a means to regain, if partially, what has been lost in the interim. Even
2010 may be at the cusp of another great leap forward - with Americans leading
the way. - Martin Hutchinson (Jan 26, '10)
Stiglitz pinpoints 'moral' core
of crisis
Nobel Laureate economist Joseph Stiglitz rightly condemns the "ersatz
capitalism" of the United States, yet the government there is fixated on
resurrecting the morally depraved system that led to the present crisis.
Reformists forget that predatory lenders in the US in theory forfeit any right
of collection. Start to fix that, and a new economic order could emerge. - Henry
CK Liu (Jan 25, '10)
CHAN
AKYA
Bonus battles
The popular view that bank bonuses represent greed, gluttony and perhaps lust
ignores the factors allowing banks to make such money - central bankers' sloth
and government pride in their financial systems. When the bonus drama ends, it
will be because people realize the true culprits are, indeed, governments.
(Jan 22, '10)
Zero interest rates, economic
gloom
Recent record low interest rates created a highly speculative environment,
making financial markets akin to a world casino. As was seen in Japan,
near-zero interest rates often create financial disorder rather than demand and
employment. - Hossein Askari and Noureddine Krichene
(Jan 21, '10)
Crisis probe lacks Pecora edge
The parade of Wall Street's Masters of Finance - Lloyd Blankfein, Jamie Dimon
et al - before the Financial Crisis Investigative Committee quite simply lacked
the theatrical drawing power of its Great Depression equivalent, the Pecora
Commission. For a start, this time round, the bad guys kept winning. - Julian
Delasantellis (Jan 20, '10)
THE BEAR'S LAIR
The futility of Wall Street
'reform'
President Barack Obama's latest attempt to rein in Wall Street is doomed
because a tax on liabilities will drive the financial services industry further
into unstable derivatives products. It also fails to deal with the notion that
"too big to fail'' has failed. - Martin Hutchinson
(Jan 20, '10)
SPENGLER
Is America a failed state?
When America came to the end of decades of wealth creation, the electorate
thought a Barack Obama presidency might reverse the coming tide of misery. The
tens of millions facing unemployment and poverty now realize that the cure will
take years, not months, to take effect. Republicans, meanwhile, should be
careful what they wish for - right now, voters will pounce on whichever party
is unlucky enough to be in power. (Jan 19, '10)
Ask not how Obama changed
Washington
As he enters his second year in the White House, Barack Obama seems to have
lost his ability to understand voters and dominate the political stage. Rather
than changing Washington as president, Washington seems to have changed Obama
and his once astute team. - Muhammad Cohen (Jan
19, '10)
Google searches for lock on
China
Google's threat to pull out of China stunned even Microsoft's chief executive
officer, Steve Ballmer - how, after all, can a few hackers and a concern for
human rights be set against the drawing power of the world's biggest Internet
market? Yet with talks between Google and the Chinese government still ahead,
the outlook for Google in China is possibly brighter than ever. - Sherman So
(Jan 19, '10)
CHAN AKYA
Nine pins from '09
The ghosts of the year past are wasting little time in making their chilling
presence felt on the investment outlook for 2010 - from Alcoa's earnings
results to China's monetary tightening to increasing preference for cash, the
harbingers are spooky at best. (Jan 15, '10)
Ben's impotent interest rates
Ben Bernanke, his senate confirmation for a second term as a chairman of the US
Federal Reserve Board delayed, showed in a recent address that he has learned
little from the financial crisis beyond the need to save his own reputation.
Most particularly, he still insists that low interest rates had no part in
fueling the housing bubble. - Hossein Askari and Noureddine Krichene
(Jan 13, '10)
Things fall apart in eurozone
Structural problems recognized at the birth of the European Union yet still
unresolved threaten to undermine the present strength of the euro. As the US
dollar's credibility is also eroded, a quiet rush into gold can be expected -
with silver popular as small change for the rich. - John Browne
(Jan 13, '10)
Iceland points to the future
Iceland's moment of fame as a center for get-rich-quick capitalism is not over
yet; its move towards repudiating nearly US$6 billion in debt takes mortgage
denial to a new level. Yet such morally questionable behavior may come to be
seen as the only real solution to the past three decades of world capitalist
excess. - Julian Delasantellis (Jan 12, '10)
THE BEAR'S LAIR
Back to shareholder capitalism
Warren Buffett's announcement that he would vote against a Kraft rights issue
is a reminder of how shareholder capitalism is supposed to work, reining in the
over-ambitious, self-serving goals of non-invested management. Restoration of
shareholder capitalism will take time, but it is possible. - Martin Hutchinson(Jan
12, '10)
Why free trade is failing the US
Currency manipulation creates a 25% subsidy on China's exports, creating an
effective barrier to the genuine free trade that would benefit the United
States. Until the US has a president prepared to stand up to China on this
issue, it will be impossible for the country to create the 9 million jobs
needed to bring unemployment down. - Peter Morici
(Jan 7, '10)
Washington's killer touch
The first decade of the century can be appropriately considered the "naughties"
- no advance in major United States or British stock indexes, no net new
American jobs, no gains in workers' wages, and to cap them all - no estate tax
this year in the US. That is the real killer touch out of Washington. - Julian
Delasantellis (Jan 6, '10)
CHAN
AKYA
What's in a name?
Renaming the world's tallest building to honor Dubai's financial rescuer may
mark the death of a non-resource-based model of development in the Arab world.
It could also serve to encourage other similar changes - RBS could be renamed
the People's Bank of Britain, or California (given the right terms with China)
could become Xinjiang (West). (Jan 6, '10)
THE BEAR'S LAIR
St Januarius' blood
That a remedy can be both efficacious and a hoax was recognized by 19th-century
British prime minister Benjamin Disraeli and should be recognized more often by
present-day politicians. An upwards nudge to US interest rates would be a
start. The effects could be near miraculous. - Martin Hutchinson(Jan
5, '10)
SPENGLER
A Commedia for our times
The France Telecom suicide wave is one of the iconic events of 2009, the
sociological quirk that sets in relief the mortal flaw in the Western
character. Dante notwithstanding, Lust is the least of the problems in
21st-century Europe. The insatiable predator is Sloth.
(Jan 4, '10)
A hell of a decade - to come
End-of-year claims that the past 10 years have been grim for Americans overlook
that for the United States it was a decade of glorious excess. Government,
public and media ignorance of the period's failings means that it is the time
ahead that will be the decade from hell. - Peter Schiff
(Jan 4, '10)
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 Get
the real thing
Just why the Bank for International Settlements should take possession of 380
tonnes of gold remains a mystery, but the increasing demand for real gold
rather than bits of utterly unreliable paper "representing" the glorious metal
goes a long way to explaining this latest chapter of market manipulation.
(Jul 20, '10)
The complete Mogambo Guru |
Maggots in the Apple
Apple's slow and stumbling response to complaints by users of its new iPhone4
are undermining the company's image as maker of the world's most attractive and
must-have computer-based gadgets. A recall would cost a lot; a loss of public
trust much more. (Jul 16, '10)
Martin J Young surveys the week's developments in computing, gaming and
gizmos. |
CREDIT
BUBBLE BULLETIN
The dollar's predicament
The United States economic "recovery" may look intact to some analysts, but the
US financial system is dependent on confidence continuing from Asian central
banks and the global speculating community. That leaves it - and the US dollar
- extraordinarily vulnerable to any number of potential shocks.
(Jul 19, '10)
Doug Noland looks at the previous week's events each Monday. |
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David P
Goldman
(Jun 4, '10)
The miserable [US] employment report confirms my warning that the next shoe to
drop would be US data.
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Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong
Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
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