Author Archives: Lila

Markets Fell Across the Globe in 2009

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    2008 2009 % Change
Asia            
Australia All Ordinaries 3659.3 3496.7 3353.0 -4.1% -8.4%
Japan Nikkei 225 8859.6 7779.4 7416.4 -4.7% -16.3%
  Topix 859.2 764.6 739.5 -3.3% -13.9%
Hong Kong Hang Seng 14387.5 13554.7 12699.2 -6.3% -11.7%
S. Korea Kospi 1124.5 1192.4 1066.0 -10.6% -5.2%
Singapore STI 1761.6 1705.6 1594.9 -6.5% -9.5%
China Shanghai Composite 1820.8 2320.8 2261.5 -2.6% 24.2%
             
India Sensex 30 9647.3 9634.7 8843.2 -8.2% -8.3%
Indonesia Jakarta Composite 1355.4 1338.7 1296.9 -3.1% -4.3%
Malaysia KLSE Composite 876.8 909.8 889.7 -2.2% 1.5%
Philippines PSEi 1872.9 1919.7 1881.4 -2.0% 0.5%
Taiwan Taiex 4591.2 4592.5 4436.9 -3.4% -3.4%
Thailand SET 450.0 445.8 434.7 -2.5% -3.4%
             
Europe            
UK FTSE 100 4434.2 4189.6 3889.1 -7.2% -12.3%
France CAC 3218.0 2997.9 2750.6 -8.2% -14.5%
Germany XETRA DAX 4810.2 4413.4 4014.7 -9.0% -16.5%
             
North America            
United States Dow 8776.4 7850.4 7365.7 -6.2% -16.1%
  NASDAQ 1577.0 1534.4 1441.2 -6.1% -8.6%
  S&P 500 903.3 826.8 770.1 -6.9% -14.7%
Canada S&P/TSX Comp. 8987.7 8678.1 7950.0 -8.4% -11.5%
Mexico Bolsa 22380.3 19368.1 18324.2 -5.4% -18.1%

Anne Picket at Econoday


 

Krugman Blames Thrifty Asians For Global Crisis

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“Today we know that subprime lending was only a small fraction of the problem. Even bad home loans in general were only part of what went wrong. We’re living in a world of troubled borrowers, ranging from shopping mall developers to European “miracle” economies. And new kinds of debt trouble just keep emerging.

How did this global debt crisis happen? Why is it so widespread? The answer, I’d suggest, can be found in a speech Ben Bernanke, the Federal Reserve chairman, gave four years ago. At the time, Mr. Bernanke was trying to be reassuring. But what he said then nonetheless foreshadowed the bust to come.

The speech, titled “The Global Saving Glut and the U.S. Current Account Deficit,” offered a novel explanation for the rapid rise of the U.S. trade deficit in the early 21st century. The causes, argued Mr. Bernanke, lay not in America but in Asia.

In the mid-1990s, he pointed out, the emerging economies of Asia had been major importers of capital, borrowing abroad to finance their development. But after the Asian financial crisis of 1997-98 (which seemed like a big deal at the time but looks trivial compared with what’s happening now), these countries began protecting themselves by amassing huge war chests of foreign assets, in effect exporting capital to the rest of the world….”

Paul Krugman, “Revenge of the Glut”

Comment:

I don’t know where to begin with this. But I’ll try…

This is Krugman’s political bias coming into play.  Yes. even professors have them. Don’t think so? Notice whom Krugman will blame for the present economic crisis – Phil Gramm (R) and George Bush (R)….and (to a smaller extent) Alan Greenspan (libertarian R)….and Bernie Madoff (D – but obviously a crook).

But he’ll say nothing about Robert Rubin (D), or Franklin Raines (D), or Barney Frank (D), or Sandy Weill (D), or any of the Clintonistas under whom the first big bubble was inflated.

Democrats also tend to be more China- hawkish than Republicans, so that accounts for the anti-Asian (read, Chinese) slant here.

Dow Hit By AIG

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AIG reported losses in the 4th quarter of 2008 of $60.7 $61.7 billion – the largest in corporate history (despite the bail-out). It’s asking for another $30 bn.

In response, the Dow went down to levels not seen since 1997 – below 7000. 

Here’s what AIG and other financial institutions have got from the government so far:

AIG – $180bn

Bank of America – $45bn

Citigroup – $50bn

JP Morgan Chase – $25bn

Wells Fargo – $25bn

Goldman Sachs – $10bn

Morgan Stanley – $10bn

State Street – $3bn

Bank of New York Mellon – $3bn

More at the BBC

Madoff Madness: Some Victims Might Have to Give Up Principal…

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“If an investor put money directly into Madoff but redeemed some or all of his investment before Madoff’s arrest, would Irving Picard, the trustee in charge of gathering assets for pro-rata distribution to bilked investors, come after him for the money he already took out? Short answer: yes, if the investor had gains. And it’s even conceivable that the investor might have to cough up principal….”

More  here on the coming wave of litigation from the Madoff fraud.

Comment:

The Madoff case, as you know, puzzles me. From what I’ve read so far, everyone knew fraud was being perpetrated…and no one did anything. Now everyone, from “little people” who lost their retirement through their pensions funds to fund of funds managers and their clients, is expecting the SIPC to kick in and pay for the losses, or to recover them through litigation.  It seems to me that if a fund manager deliberately looked the other way, they were guilty of fraud; they should be the ones held accountable by their investors. But now that the government is involved, expect this to become a racket.

And on that gloomy note, why did Irving Picard, the court appointed trustee, need $28 million to adminster the estate of Madoff? That’s a lot of money. And he was asking for it within a fortnight of the breaking of the story.

Ron Paul On Our Real Enemies

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“I am convinced that there are more threats to American liberty within the 10-mile radius of my office on Capitol Hill than there are on the rest of the globe. If we get our troops off of foreign soil, those perceived enemies of our liberty abroad are much more likely to stand down and let us be. We have more than enough troops to mind our own business and defend ourselves. It is only for world domination that we have a troop shortage.”

“The Draft: Just Say No,” Ron Paul

Obamanomics: Tax Job Creators, Bankroll Swindlers

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“We have no problem with taxing hedge fund operators and leverageurs till they bleed from the ears, and we’ll even go along with a cap on bankers’ salaries (although we’d have preferred they be publicly flogged). But how could a plan that purports to stimulate the economy have overlooked the entrepreneurs who are the lifeblood of American prosperity? A logical answer is that the stimulus package is deliberately anti-capital, a vengeful and self-destructive act against every GOP president since Reagan. To the extent this is so, it could be a long, long time before the economy shows any signs of returning to health….”

Rick Ackerman  

Medicine: A Leading Cause of Illness

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“As few as 5% and no more than 20% of iatrogenic acts are ever reported.(16,24,25,33,34) This implies that if medical errors were completely and accurately reported, we would have an annual iatrogenic death toll much higher than 783,936. In 1994, Leape said his figure of 180,000 medical mistakes resulting in death annually was equivalent to three jumbo-jet crashes every two days.(16) Our considerably higher figure is equivalent to six jumbo jets are falling out of the sky each day. What we must deduce from this report is that medicine is in need of complete and total reform—from the curriculum in medical schools to protecting patients from excessive medical intervention. It is obvious that we cannot change anything if we are not honest about what needs to be changed. This report simply shows the degree to which change is required…..”

From Death by Medicine, Gary Null et. al.

Raimondo on Rothbard…

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“Reagan started out by denouncing the power elite and specifically the CFR and the Trilateralists, but wound up with that epitome of the Establishment, Skull-&-Bonesman George Bush as his vice president and successor. Bush is a longtime CFR director, and Trilateralist; most of his major cabinet officers, including his chairman of the joint chiefs, Colin Powell, were CFR members. The Clinton administration is similarly afflicted, from the President (CFR/Trilateral) on down through Donna Shalala (CFRJ Trilateral) and George Stephanopoulos (CFR), with the CFR honeycombed (as usual) throughout the State Department. In addition to Secretary of State Warren Christopher, other CFR members in the Clinton cabinet include Laura Tyson, chairman of the Council of Economic advisors, Treasury Secretary Robert Rubin; Interior Secretary Bruce Babbitt, HUD honcho Henry Cisneros; and Alice Rivlin, 0MB director…”.

 Justin Raimondo, author of An Enemy of the State: the Life of Murray N. Rothbard and other books, is editor of Antiwar.co

Thanks to Scott Horton for the link  Raimondo’s latest piece on the stirring up of anti-Russian feeling (preparatory to what? a skirmish with Russia?) should give anyone pause.

Comment:

The crucial reason why bankers have managed to hijack the government is that banking based on a fractional reserve system (i.e. a system where the banks lend out a multiple of the money they hold as deposits) is by its nature inclined to favor debt…and thus to favor statism (that is, favor larger government). Here’s Rothbard on the subject, from the article linked above:

“Businessmen or manufacturers can either be genuine free enterprisers or statists; they can either make their way on the free market or seek special government favors and privileges. They choose according to their individual preferences and values. But bankers are inherently inclined toward statism.

Commercial bankers, engaged as they are in unsound fractional reserve credit, are, in the free market, always teetering on the edge of bankruptcy. Hence they are always reaching for government aid and bailout.

Investment bankers do much of their business underwriting government bonds, in the United States and abroad. Therefore, they have a vested interest in promoting deficits and in forcing taxpayers to redeem government debt. Both sets of bankers, then, tend to be tied in with government policy, and try to influence and control government actions in domestic and foreign affairs.”

[Just to clarify, a government bond is the way the government raises money for its programs – by selling bonds, either through auction or through underwriting bank/banks].

Cutting through all the fancy terminology – bonds are debt. Debt is money borrowed from someone on which interest is paid. People carrying debt (borrowers) have an innate preference for inflationary policies, since this reduces the level of their debt. Those who assume the risks of those loans have the same innate preference.  In addition borrowers and those who buy their debt have a motivation to prefer government policies which will let the public underwrite or pay off the debt or assume the risk of the debt…or all of the above.

Obama: Yes to Banksters, No to Haitian Refugees

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“BBC called the situation “eye-popping,” and the Miami Herald said it was “the worst humanitarian disaster (for) Haiti in 100 years” leaving:

— Gonaives, Haiti’s third largest city, uninhabitable;

— most of the nation’s livestock and food crops destroyed as well as farm tools and seeds for replanting;

— irrigation systems demolished;

— collapsed buildings throughout the country; 23,000 houses destroyed; another 85,000 damaged; 964 schools destroyed or damaged;

— conservatively about $1 billion in storm damage;

— the threat of famine, especially for children and the elderly;

— 2.3 million Haitians facing “food insecurity,” according to USAID, reeling under 40% higher prices than in January;

— inadequate sanitation and clean water;

— the widespread threat of disease; and

— overall millions lacking everything needed to survive who in normal times struggle to get by.

In December, Director Randy McGorty of Catholic Legal Services for the Archdiocese of Miami said:

“After dealing with this administration on Haitian issues for eight years, I’m forced to conclude that its policy toward Haiti is based on racism. It’s shocking. People (lack everything and) are starving. This callous disregard for human life is inexplicable. Many deported Haitians simply have no communities to return to. It is disappointing that the Bush administration would even consider sending people back to this incredibly fragile nation….(Haiti’s) humanitarian crisis….continues and worsens.”

(South) Florida Immigrant Advocacy Center’s (FIAC) executive director, Cheryl Little, said: “We are attempting to do whatever we can to convince government officials to change their minds on this. It’s an outrageously inhumane act.”

On January 26, FIAC urged new DHS Secretary Janet Napolitano to “immediately stay the inhumane deportations and to seriously consider granting Temporary Protected Status (TPS) for Haitians already in the United States.” On December 19, former DHS Secretary Michael Chertoff denied the Preval government’s TPS request. As a result, Haiti won’t cooperate, so ICE is making Haitians get their own travel documents (including passports) and assist in their own deportations.

Throughout 2008, around 1000 occurred in total. After a near-three month suspension (from September 19 – December 9), they resumed slowly, but picked up noticeably after Obama’s inauguration. According to FIAC, men like Louiness Petit-Frere are affected, deported on January 23: “Here ten years with no criminal record, he leaves his US-citizen wife behind along with his mother and four siblings, all (with) legal status….One of his brothers, US Marine Sgt Nikenson Peirreloui, served and was injured in Iraq.”

In 2008, Obama campaigned vigorously for South Florida’s Haitian vote. Now he’s betrayed it the way he’s abandoning millions of distressed households by providing little in real relief compared to trillions in handouts to Wall Street and the rich….”

More at Stephen Lendman

Comment:

Here’s a link to a report on Haiti’s hope for an Obama presidency

and an open letter from Haitians to Obama on the catastrophic conditions in their country.

The Zwangswirtschaft of America……

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The Zwangswirtschaft type of Socialism  

It is, of course, true that this type of socialism preserves some of the labels and the outward appearance of capitalism. It maintains, seemingly and nominally, private ownership of the means of production, prices, wages, interest rates and profits. In fact, however, nothing counts but the government’s unrestricted autocracy. The government tells the entrepreneurs and capitalists what to produce and in what quantity and quality, at what prices to buy and from whom, at what prices to sell and to whom. It decrees at what wages and where the workers must work. Market exchange is but a sham. All the prices, wages, and interest rates are determined by the authority. They are prices, wages, and interest rates in appearance only; in fact they are merely quantity relations in the government’s orders. The government, not the consumers, directs production. The government determines, directs production. The government determines each citizen’s income, it assigns to everybody the position in which he has to work. This is socialism in the outward guise of capitalism. It is the Zwangswirtschaft of Hitler’s German Reich and the planned economy of Great Britain….”

More at the Mises site.

Comment:

Zwang means compulsion and wirtschaft is economy, so  this translates as “command economy.”

Now, consider what Paul Krugman and Alan Greenspan (!) are demanding – nationalization.

Put it together: Nationalism + Socialism = National Socialism a.k.a. Nazism

Don’t be fooled by all the “nice” sounding stuff:

Health care for all…

Money for science research…..

Sounds good..but the price is saying OK to rule by Kleptocrats. and a managed/command economy run for the Kleptocrats.

This is a  bribe to make you go along with fundamentally dishonest policies.

And this, from the Mises site:

“An investigation of the root causes of the ascendancy of Nazism
must show not only how domestic German conditions begot
Nazism but also why all other nations failed to protect themselves
against the havoc. Seen from the viewpoint of the British, the
Poles, or the Austrians, the chief question is not: What is wrong
with the Nazis? but: What was wrong with our own policies with
regard to the Nazi menace? Faced with the problem of tuberculosis,
doctors do not ask: ‘What is wrong with the germs? but: What is
wrong with our methods of preventing the spread of the disease?’

Life consists in adjusting oneself to actual conditions and in
taking account of things as they really are, not as one would wish
them to be. It would be more pleasant if there were neither germs
nor dangerous barbarians. But he who wants to succeed has to fix
his glance upon reality, not to indulge in wishful dreams.