Top finance officials at a Group of 20 meeting in London are
expected to stress their commitment to boosting the global economy for
now -- despite friction over when exactly to scale back stimulus
efforts as signs of recovery increase.
Finance ministers and central bankers will try to coordinate plans
for an eventual
Fund manager, Nathan Lewis, explains how the International Monetary Fund is nothing more the collection arm of the big banks:
The International Monetary Fund operates primarily as a banker bailout machine. They cajole and tempt and confuse and threaten the leaders of governments worldwide to pay off the failed bets of the big bankers using the taxpayer funds of their countries. This has been going on a long time, at least since the early 1980s.
Thus, I am not in the teeniest bit surprised that the same thing is happening today in Iceland and Latvia....
Michael Hudson has some of the details:"...The European Union and International Monetary Fund have told them to replace private debts with public obligations, and to pay by raising taxes, slashing public spending and obliging citizens to deplete their savings..."
This is the trick: replacing private debts with public obligations. Lots of people loaned money to banks and corporations in Iceland. They are now facing h
Hong Kong is pulling all its physical gold holdings
from depositories in London, transferring them to a high-security
depository newly built at the city's airport. The facility would support Hong Kong's
emergence as a Swiss-style trading hub for bullion and would lessen
London's status as a key settlement-and-storage center.
The report, from the European Union Chamber of Commerce in China, covers the whole gamut of the Chinese economy, from industrial chemicals to mobile phones to banking. It paints a troubling picture of the Chinese business landscape, filled with discrimination against foreign companies, arbitrary laws and regulations, and abuses of China's World Trade Organisation obligations.
Although China has repeatedly complained about protectionism in the United States and Europe, the report suggests that China is one of the most protectionist major economies.
Joerg Wuttke, the president of the European Chamber, warned that "China needs Europe more than Europe needs China", and pointed out that the EU is a bigger market than the US for China, and exports to European countries make up 7pc of Chinese GDP.
According to the World Bank, China ranks 83rd out of 181 countries in its annual assessment of how easy it is to do business. The emerging superpower scored lower than Kenya, Vanu
Japan's stocks slipped and the yen hit a seven-week high on Thursday on
unease that Friday's U.S. employment picture may reflect a slower
recovery than investors have priced into markets, raising uncertainty
about riskier assets.
Asian stock markets fell after China said it will curb
overcapacity and excessive investment in industries such as steel and
cement, adding to worries about whether a global economic recovery is
America is just a few days away from a
possible day of reckoning. I again call attention to this day, August
25, when the Federal Deposit Insurance Corporation issues its 2nd Quarter report for 2009 on the state of health of American banks.
A weak set of economic indicators for July laid the foundation for the latest market correction, challenging the Shanghai Composite's nearly doubling in value in the first seven months of the year.
But let's dig a little deeper.
China's current-account surplus is off 32% for the first half of the year.
Financial Times Alphaville writer Izabella Kaminska convincingly argues that China's stimulus money is being recollected back from the people who receive it before it can do any good.
China has lent out a huge amount of money. Marketwatch's David Weider notes that "China loaned $852 billion globally through the first five months of the year".
Vitaliy Katsenelson argues that while China has been blowing a huge bubble in lending, the government may have enough of a surplus to pull it off - at least for a couple of years (especially given that the banks are controlled by the government).
But - at some point in the future
It is the open secret no one wants to talk about, the unwelcome truth
that most prefer to hide. In Afghanistan, one of the richest sources of
Taliban funding is the foreign assistance coming into the country.
Resources used to subsidize industry A (or industries A, B, and C) must
come from somewhere; such subsidies might enable their recipient
industries to expand output farther than otherwise and to sell at lower
prices than otherwise, but these same subsidies will artificially raise the costs born by other industries in the country.
"Cooperation with Mexico" involves changing culturally entrenched social hierarchies and dynamics that date
to pre-Columbian times. Unfortunately, it's easier and less
disruptive to the existing power structure perpetuated by Mexico's
ruling elite to wage a war against the cartels than it is to
revolutionize a society that denies the vast majority of its members
legitimate opportunities for socioeconomic advancement.
Britain's Uber-bear is growling again. After predicting a torrid "relief
rally" over the early summer, Bob Janjuah at Royal Bank of Scotland is
advising clients to take profits in global equity and commodity markets and
prepare for another storm as winter nears.
Standards & Poor's, the credit-rating agency, cut Latvia's rating to "BB" and warned that its economy will contract by a further 16% this year. The public debt will vault from 19% of GDP last year to 80% by 2011.
The economy is quite the complex area of study. Most people find it too boring and tedious to ever fully delve into it’s science. Those that have only a moderate understanding of how economics work, usually only for personal use in business and private finances, still do not find the topic of the economy attractive or exciting in any way.
UK banks with government stakes saw a sharp downgrading of chunks of their debt on Tuesday after S&P concluded the government’s sweeping powers could harm bondholders. The downgrades followed the government’s decision earlier this year to suspend interest payments due on some so-called “tier two” bonds of Bradford & Bingley and Dunfermline, both of which it fully owns. Other countries have not seen their debt downgraded in the same way. On Tuesday S&P downgraded the tier two debt of Northern Rock eight notches to B-minus, while Lloyds Banking Group saw its tier two debt rating cut by three notches. Their share prices stayed steady however as investors knew the changes were coming.
Record bank lending in China drove average prices for new homes 6.3 percent higher in June in 36 large and medium-sized Chinese cities, according to government data. That gain came even as urban unemployment rose and wage growth for workers in Chinese cities slowed.
“The government should do something to effectively control the speed of growth of the real estatemarket,” Han said. “The housing price in Shanghai is already too high. We must prevent excessive inflation of home prices in this market.”
Chinese banks made 7.37 trillion yuan ($1.07 trillion) of new loans in the first six months of 2009 as the government sought to bolster economic growth that slowed to the weakest in almost a decade in the first quarter.
The open question is how fragile are Europe's banks now? They ran on even lower equity levels than US banks, ate a lot of bad US paper, and depend on national regimes for backstops. In the Netherlands, Switzerland, and Germany, the banking sectors are too large for their governments to credibly back them up
“We were struck by the 44 percent increase in problem loans in the quarter,” Morgan Stanley analysts Huw van Steenis and Hubert Lam said in a note today, cutting their rating on Deutsche Bank shares...
Citigroup has just released a forecast which is very troubling in regards to employment and growth in the Spanish economy. With unemployment already having hit 17.9%, Citigroup expects layoffs to increase this to 22% in 2010.
This is the third failure in two weeks. It is becoming more and more difficult to raise massive amounts of debt. It is simple really. Every country in the world is raising record amounts of debt. That just can't work out.
Analysts at the Chancellery, Finance Ministry and Economy Ministry now concur that Germany is at risk of a credit crunch that could worsen the recession, already the deepest since the 1930s, Süddeutsche reported.
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