Forget that TGIF stuff, it’s not happening this week, considering what happened in the markets yesterday this is no laughing time. It’s time to understand…..what’s going on.
Have you witnessed an economic empire loosing friends and control ?
Just how are Americans going to pay for all this?
NEW YORK: ………..Published: October 8, 2008
All told, the U.S. Federal Reserve has pumped $800 billion into the financial system, Ben Bernanke, its chairman, estimated Tuesday. That figure doesn’t include the untold sum that the Fed now plans to spend buying short-term debt so that companies can continue to pay for their daily operations. And it
doesn’t include any of the money the Treasury Department is laying out, like the $700 billion bailout fund or the $200 billion that could be spent propping up Fannie Mae and Freddie Mac.
After 14 months of financial crisis, the U.S. government - which means the U.S. taxpayers - has put serious money on the line. As a point of comparison, the entire annual U.S. budget is about $3 trillion. Just how are Americans going to pay for all this?
http://www.iht.com/articles/2008/10/08/business/leonhardt.php
–Well go no further….country is looking for Global Help….
Bernanke, Paulson Seek Global Help as Crisis Swamps U.S. Steps
By Rich Miller and Simon Kennedy
Oct. 9 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson are discovering both the leeway and limits they have as policy makers as they struggle to combat the 14-month-old credit crisis.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aayXiKk6ympQ&refer=home
– See what others have to say about extending help.
World shouldn’t foot bill for US woes -China paper
Tue Oct 7, 2008 6:07pm EDT
BEIJING (Reuters) - China’s banking regulator denied that Beijing might ride to America’s financial rescue, while a leading state newspaper said on Tuesday that the world should avoid paying for the United States’ own mistakes.
The commentary by Shi Jianxun, a professor at Shanghai’s Tongji University, said Washington’s rescue plan would compel the United States to resort to deficit financing that would cause the dollar to fall, exacerbating global inflationary pressures.
“For countries experiencing high inflation, this undoubtedly is a yet another disaster,” he wrote.
Other countries should “avoid as far as possible footing the bill the for U.S. bailout, while also joining hands to counter the financial crisis and actively promoting reform of the global financial and currency system that now maintains the hegemonic position of the U.S. dollar,” Shi said.
Qin added that China would remain in close contact with Japan, South Korea and other big Asian economies. But he said there were not yet any firm plans for a meeting after South Korea on Monday called for a three-way crisis summit.
http://www.reuters.com/article/bondsNews/idUSPEK1390920081007?pageNumber=3&virtualBrandChannel=0
–OK so that was China…now let us see what are Allies are saying….such as Germany.
‘The World Shouldn’t Have to Bear the Burden for America’s Lapses’
By Corinna Kreiler in Hamburg
The US government is buying bad debt for $700 billion. Now Washington is asking other countries to jump in and help, too, but the Germans are bowing out. Believing that the rescue package sends the wrong signal, experts from the country’s leading economics think tanks argue it’s the right call.
http://www.spiegel.de/international/business/0,1518,579880,00.html
– Looks like Germany is more than upset
Merkel talked about a “distribution of risk at everyone’s expense” and the consequences for the “economic situation in the coming months and possibly even years.” Most of all, she made it clear who she considers the true culprit behind the current plight. “The German government pointed out the problems early on,” said the chancellor, whose proposals to impose tighter international market controls failed repeatedly because of US opposition. “Some things can be done at the national level,” she said, “but most things have to be handled internationally.”
http://www.spiegel.de/international/world/0,1518,581502,00.html
- Well let us see few other friendly countries on the this topic.
The Group of Seven meeting will bring together finance ministers and central bankers from the United States, Germany, Japan, France, Britain, Italy and Canada for some collective-thinking on the credit crunch and crashing stocks.
The United States finds itself in a rare position of weakness, facing many allies that have been highly critical of its economic policy and regulatory system blamed for the problems.
German officials in particular have been openly critical in the past weeks, saying the United States and Britain had delayed for years efforts to regulate financial markets that were out of control.
“The United States lacked laws, a regulatory framework that would have prevented” what Social-Democrat Finance Minister Peer Steinbrueck called “uncontrolled speculation” in an interview on September 28.
“The USA will lose its superpower status in the global financial system. The world financial system is becoming multi-polar,” Steinbrueck said on September 25 in a speech to parliament.
http://timesofindia.indiatimes.com/World_finance_chiefs_to_hold_emergency_talks/rssarticleshow/3576139.cms
-South America is our friend..let us see what is happening in Venezuela, Caribbean, Honduras, Guatemala,Costa Rica
Venezuela rivals U.S. in Central America and Caribbean
Tue Sep 2, 2008 6:39pm BST
CARACAS (Reuters) - Venezuela’s socialist President Hugo Chavez has won over some of the United States’ closest allies in the Caribbean and Central America with oil credits and aid that match similar efforts by Washington.
Hundreds of millions of dollars in food aid and billions in low-interest loans to buy Venezuelan oil put Chavez neck-and-neck with the United States as a major financier in a region that U.S. officials once called their backyard.
In a show of his growing influence, Chavez in August convinced Honduras, for long a U.S. ally, to join a Venezuela-led alliance of leftist countries called the Bolivarian Alternative for the Americas, or ALBA, which was originally set up to counteract a U.S. free trade proposal.
Guatemala, part of a group of Central American countries that has a free trade pact with the United States, now receives oil credits from Venezuela. And Costa Rican President Oscar Arias, another Washington ally, has also asked for the financing, despite his past criticism of Chavez.
Critics say - “Chavez may make a lot of promises that he can’t keep, but the magnitude of the debts that are building up is quite significant,” Pinon said. “This will have serious consequences, both for small countries like Dominica and for Venezuela itself.” ….
http://www.iht.com/articles/reuters/2008/09/02/america/OUKWD-UK-VENEZUELA-USA.php
But until then….he is changing view about America in that region…
Struggling U.S.
“The U.S. is struggling to come up with adequate alternatives to encourage or co-opt supporters within Latin America and rival Chavez’s oil largesse,” says the Eurasia Group’s Esteruelas.
In some cases, Chavez has said he would accept goods and services as payment. In August, he suggested that the Dominican Republic could reduce its debt with tourism packages for Venezuelans.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aUMDzYgZ0h6Y&refer=home
-Iceland another friendly state.
Financial crisis: Iceland nationalises bank and seeks Russian loan
The Icelandic government has seized the country’s second-largest bank and pleaded with Russia to hand it a £3bn life-line loan in order to stave off “national bankruptcy” as it continued to come to grips with its harsh new economic realities.
Mr Haarde confirmed that he was sending a delegation to Iceland’s “new friend” Russia to negotiate a £3bn capital injection into the country’s finances, after the country’s traditional Western allies refused to help the collapsing banking system.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/3154116/Financial-crisis-Iceland-nationalises-bank-and-asks-Russia-for-3bn.html
-Hong Kong Angry.
Hundreds of Lehman investors protest in HK
Wednesday October 8, 7:47 am ET
By Dikky Sinn, Associated Press Writer
Hundreds of Lehman Brothers investors protest in Hong Kong in hopes to recoup money
HONG KONG (AP) — Hundreds of angry Lehman Brothers investors protested in Hong Kong Wednesday to demand a full refund of their investment backed by the failed U.S. bank.
The rally came after the Hong Kong government proposed Monday a buyback scheme under which local banks and distributors of Lehman-backed bonds would buy back the products at a value to be decided on
http://biz.yahoo.com/ap/081008/as_hong_kong_lehman_protests.
-North Korea.
Broken US promises undermine North Korean nuclear agreement
By Peter Symonds
26 September 2008
http://www.wsws.org/articles/2008/sep2008/kore-s26.shtml
–There goes Africa…
On the face of it, China, which is relatively unscathed by the crisis, has a golden opportunity to exploit Western disarray and increase its financial and political penetration of the continent. Already there are signs that Africans are starting to look away from the West and towards other emerging markets,
especially China, as they watch the banking chaos in the traditional capitalist markets.
http://blogs.reuters.com/global/2008/10/08/does-crisis-give-china-new-opportunity-in-africa/
- How Arab world feels about America ?
“The United States now has zero diplomatic credibility, very little military credibility after Iraq and Afghanistan, and now nearly zero economic credibility,” Khouri said. “It’s a ghost of its old self, although this is obviously a temporary situation because it is still very powerful.”
http://www.reuters.com/article/reutersEdge/idUSTRE4978FQ20081008?pageNumber=3&virtualBrandChannel=0
-You already know about Cuba, Iran,Russia and how they feel about America.
-So where will power shift ? who will be next after US ?
U.S. grapples with power dive amid financial crisis
By Sue Pleming
WASHINGTON (Reuters) - It may too soon to write off U.S. economic clout as Germany’s finance minister did last month, but experts say a power realignment is taking place in any event with U.S. credibility and popularity at a low.
The notion of America’s status as a global superpower has been dented by the financial meltdown but foreign and economic policy experts say U.S. omnipotence had been exaggerated.
“The U.S. remains the dominant global power in military terms but the growing economic clout of nations like Russia, China, India and Brazil is changing that dynamic,” said Stephen Flanagan of the Center for Strategic and International Studies, a Washington think-tank.
“The global nature of the economy inevitably means that the United States can’t be as dominant as it once was,” he said.
http://in.reuters.com/article/topNews/idINIndia-35773220081002
- Why will the power shift ?
This is no longer the muscular and arrogant United States the world knows, the superpower that sets the rules for everyone else and that considers its way of thinking and doing business to be the only road to success.
A new America is on display, a country that no longer trusts its old values and its elites even less: the politicians, who failed to see the problems on the horizon, and the economic leaders, who tried to sell a fictitious world of prosperity to Americans.
Also on display is the end of arrogance. The Americans are now paying the price for their pride.
Gone are the days when the US could go into debt with abandon, without considering who would end up footing the bill. And gone are the days when it could impose its economic rules of engagement on the rest of the world, rules that emphasized profit above all else — without ever considering that such returns cannot be achieved by doing business in a respectable way.
With its rule of three of cheap money, free markets and double-digit profit margins, American turbo-capitalism has set economic standards worldwide for the past quarter century. Now it is proving to be nothing but a giant snowball system, upsetting the US’s global political status as it comes crashing down. Every bank that US Treasury Secretary Henry Paulson is currently forced to bail out with American government funds damages America’s reputation around the world.
Of course, it is not solely the result of undesirable economic developments that the United States is in the process of forfeiting its unique position in the world and that the world is moving toward what Fareed Zakaria, editor of Newsweek International, calls a “post-American age.” Washington has also lost much of its political ability to impose its will on other countries.
http://www.spiegel.de/international/world/0,1518,581502,00.html
-One Chinese news paper has gone to the extent of asking to create a new world currency.
China paper urges new currency order after “financial tsunami”
Wed Sep 17, 2008 1:45am EDT
BEIJING (Reuters) - Threatened by a “financial tsunami,” the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said on Wednesday.
“The eruption of the U.S. sub-prime crisis has exposed massive loopholes in the United States’ financial oversight and supervision,” writes the commentator, Shi Jianxun.
“The world urgently needs to create a diversified currency and financial system and fair and just financial order that is not dependent on the United States.”
http://www.reuters.com/article/ousiv/idUSPEK4365020080917?sp=true
- And just when you think you have seen it all…….watch when the un-secured loans go belly up.
Another shoe to drop Bad credit-card debt could be next shot to economy, researcher says
By Jennifer Waters, MarketWatch
Last update: 7:42 p.m. EDT Sept. 30, 2008
Comments: 259
CHICAGO (MarketWatch) — Credit-card debt is on the brink of imploding and will be the next storm to hit the fragile finance industry, an investment research firm predicted this week.
According to Innovest StrategicValue Advisors, banks will charge off $18.6 billion in delinquent credit-card accounts in the first quarter of 2009 and $96 billion in all of 2009, more than double the research firm’s forecast for all of this year.
http://www.marketwatch.com/news/story/bad-credit-card-debt-could-next/story.aspx?guid={DE0C0B15-4760-491C-A0F4-D34CBD96F7B7}
If you were paying attention to the market on Thursday then you know DOW closed down over 600 points, this is despite of cutting interest rate by 0.5% point and then having all other central banks cut the rates at the same time, and having all those banks pump money into the markets……….but markets still went down…they went down big time……….that does look like loosing control……….!!
[views and openions expressed here are mine and you need not agree with them. You should definitely not make any financial decision based upon what you read on this webstie. For that you must contact a financial expert in the relevant area of your need.]
Play this video to learn some interesting information…
or click on this link…as video loading from yahoo is very slow……….
0 responses so far ↓
There are no comments yet...Kick things off by filling out the form below.
Leave a Comment