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sandiegosmith
Foreign Minister
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 Mon Jan 21, 2008 10:31 pm    |
This opinion piece lists recent evidence of the spreading of the US economic troubles to the world markets. Can the global economy weather a decline in one of it's two largest import markets? I think not and apparently neither do the traders of the world's stock markets.
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More Room to Fall
Steven Pearlstein
Tuesday, January 22, 2008; Page A01
With the explosive growth in developing countries such as China and India, and a modest revival of business in Europe, economists have begun to suggest that the global economy is no longer so reliant on the United States.
But judging from yesterday's global stock market meltdown, all this talk of "decoupling" may have been a bit premature. For though it may no longer be true that a healthy U.S. economy can single-handedly keep the global economy humming, it still looks to be a necessary ingredient to global prosperity.
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Other news yesterday shows just how widely the damage has spread. A Chinese newspaper reported that the Bank of China is exposed to subprime U.S. mortgage loans to a degree it had not previously disclosed and may have to write down the value of its $8 billion in such investments. Several large European banks have taken similar hits.
Those losses could have importance beyond the hit they cause to the banks' share prices. Banks and other financial institutions play an important role in an economic downturn: lending to businesses and consumers so they can help the economy get back on track. The multibillion-dollar losses could make them unable to play that role.
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If there are men in this country big enough to own the government of the United States, they are going to own it. - Woodrow Wilson (WW was Pre-Globalization, parochial, and optimistic by today's standards) |
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| posts: 1700 | location: San Diego, Ca. USA | joined: 19 Dec 2001 |
Pigmalia
Dignitary
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Tue Jan 22, 2008 5:04 pm |
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| The reduction in the federal funds rate from 4.25 percent to 3.5 percent marked the biggest reduction in this target rate for overnight loans on records going back to 1990. It marked the first time the Fed has changed rates between meetings since 2001, when the central bank was battling the combined impacts of a recession and the terrorist attacks. |
They are acting in unison also on a 150 billion stimulus package including $500-$800 individual rebates as well as additional welfare type benefits. They are having emergency late night economic meetings.
Considering the 10% loss in the dollar last year, the now 10% loss in the stock market in the first fourteen days of trading this year, and the emergency economic meetings, it leaves one wondering what's going on. I can only hope that it is as simple as the Demicans/Republicrats covering their party machines during the election year, and not something more sinister like Ron Paul being right about our economic policies.
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“I enjoy crushing bastards.” Assange |
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| posts: 4734 | location: Autonomous Inland Empire - Occupied | joined: 02 Feb 2006 |
sandiegosmith
Foreign Minister
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Wed Jan 23, 2008 11:05 pm |
Business leaders in the US and Europe are now concerned about a looming Global Recession. Indian and Chinese CEOs still believe they can whether slowdowns in their top import markets. IMHO it is just wishful thinking. Where are all of the moneyed buyers for their exports? Africa?
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A global recession has now become the biggest threat to companies, according to a global survey of top chief executives.
Business confidence is also falling for the first time in five years, according to PricewaterhouseCoopers' survey.
The corporate gloom, however, is limited to bosses in the United States and Western Europe.
In Asia business confidence is soaring, with 90% of Indian bosses saying they are "very confident".
While confidence numbers are down overall, half of all chief executives still claim to be "very confident" about their company's future. That is twice the level of 2003, the last time confidence levels were falling.
However, the survey of 1,150 top bosses in 50 countries does not yet take account of the most recent stock market turmoil, as it was conducted during the last three month of 2007.
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| posts: 1700 | location: San Diego, Ca. USA | joined: 19 Dec 2001 |
Tezcatlipoca
Civilian
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Thu Jan 24, 2008 9:43 pm |
If China's market has a "slowdown" in the run up to the Olympics, things are going to get real interesting there. Continued economic improvement and the Chinese belief that any of them could strike it big (even if the vast majority never will) is about all that's holding the country together. China will also tolerate absolutely nothing that interferes with the Olympics. It's going to be a bad combination if people start demanding changes due to a bad economy, but the leaders decide there will be no changes.
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sandiegosmith
Foreign Minister
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Fri Apr 18, 2008 10:18 am |
Iceland is noticing a slowdown in it's economy and they are predicting Recession. Gee, how unexpected!
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But little could have prepared Iceland for the reversal of fortune it has suffered in the last few months. The country’s long economic boom has ended in a painful bust, with a collapsing currency, rising inflation, double-digit interest rates and predictions of its first recession since 1992.
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| posts: 1700 | location: San Diego, Ca. USA | joined: 19 Dec 2001 |
sandiegosmith
Foreign Minister
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Fri Apr 18, 2008 10:29 am |
Workers in the USA are getting fewer hours which means less money which means less spending. This will help deepen the recession in the USA which will be importing even less. How many still don't believe the evidence that a Global Recession is under way? Who is going to pick up the slack from the lack of USA consumer spending on trinkets? Columbia? Haiti? Look for the Chinese stockmarket bubble to pop just after the Olympics as construction spending continues to slowdown in China and exports decline.
Underemployment is not reported in the unemployment statistics but have a great impact on consumer spending.
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Everybody’s getting tighter,” he said — himself included. With his income cut in half, Mr. Garcia, a single father, no longer takes his two young daughters out for fast food, he said. For clothing, he now goes to secondhand stores instead of the mall. For amusement, he visits the park instead of the museum.
“We spend more time at home,” Mr. Garcia said. “We don’t drive anywhere we don’t have to.”
In Los Angeles, William Righi, a musician, bemoans the sudden difficulty of getting jazz and blues gigs at restaurants and parties. He gives fewer private singing lessons to high school students.
“Their parents don’t want to pay,” Mr. Righi sighed. “They don’t have the money to burn. In the last month, it’s really dropped off.”
With his income down, Mr. Righi has been putting off buying new musical instruments and sheet music. He has curtailed his traveling.
At a factory in Lancaster, Pa., Armstrong World Industries, which makes flooring products, cut production of vinyl sheets for two weeks in March in reaction to softening demand for its goods, the company said.
Management is now seeking to slow production further, said Joe Rumberger, president of the local branch of the United Steelworkers, which represents workers there.
Some of those sent home received temporary unemployment benefits, he said, securing government checks of about $520 a week in lieu of paychecks that reached $900.
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| posts: 1700 | location: San Diego, Ca. USA | joined: 19 Dec 2001 |
orange
Foreign Minister
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Fri Apr 18, 2008 12:06 pm |
| Quote: |
Everybody’s getting tighter,” he said — himself included. With his income cut in half, Mr. Garcia, a single father, no longer takes his two young daughters out for fast food, he said. For clothing, he now goes to secondhand stores instead of the mall. For amusement, he visits the park instead of the museum.
“We spend more time at home,” Mr. Garcia said. “We don’t drive anywhere we don’t have to.” |
And this is a bad thing???
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OIW
TOC9 Terminal Engagement - France |
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| posts: 3502 | location: Lansdale, Pennsylvania | joined: 09 May 2002 | medals: 7 |
sandiegosmith
Foreign Minister
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Fri Apr 18, 2008 7:50 pm |
The US Recession is expected to cause worse economic problems in Mexico and trigger increased Mexican migration into the USA. Any question that this will further depress wages among the poorest Americans and make it harder for them to even find work?
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TEZIUTLAN, Mexico — As the U.S. economy heads south, Mexicans may have to head north.
That's the fear of many workers here, where the slowdown in the United States already has cut production at manufacturing plants whose output is largely sold in the United States.
"If it's bad there, it will be worse here," said Bartolo Juarez, 35, who makes jeans for Levis and Guess at a Teziutlan factory and already has discussed moving to the United States if his job here vanishes. His 12-year-old daughter, Gabriela, has broken down in tears more than once after hearing her parents talk about her father leaving for the States, her mother said.
"It's a sacrifice. I don't want to go, but I know I can get a good-paying job in San Antonio," even in troubled economic times, Juarez said. It's always easier to find work in the United States than in Mexico, he added, and for five times more money.
Economists say that U.S. recessions historically are tougher on Mexico than they are on the United States, and that while U.S. officials say that border security measures, such as building a wall along the Mexican border, have reduced illegal immigration in recent months, they won't hold back the flood of workers that's likely if Mexican factories close.
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| posts: 1700 | location: San Diego, Ca. USA | joined: 19 Dec 2001 |
Magister Equitum
Ambassador
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Fri Apr 25, 2008 10:12 am |
| SLOTerp wrote: |
You got that last part right, a poor economy never helps the party at the top. |
Perhaps in Canada the situation may be slightly different. While the Bank of Canada has forecasted economic growth of just 0.3% in the second quarter, this may not hurt the minority Conservative Government. The Tories, for the most part, are seen as strong economic managers and concern over a sluggish economy may cause people to drift away from parties that are perceived as ‘bigger spenders.’ On the other hand, given this economic anxiety, segments of the population which feel vulnerable to the changing economic situation may drift away from the Conservatives, feeling that while Harper may be able to manage the economy, he won’t care enough for those hurt by government cuts. But if the incumbent party can avoid a deficit, I think that the Conservatives will be in pretty good shape should an election be called.
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Game History
 Sazerac
 SIIN
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| posts: 1925 | location: Canada | joined: 22 Mar 2007 |
sandiegosmith
Foreign Minister
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Mon Apr 28, 2008 11:58 am |
Warren Buffet sees the Recession as a reality. Bush Jr. continues to dismiss it as merely a slowdown.
The out of control spending of the US Government combined with the evisceration of USA industrial employment has led to this. Lest we forget the answer always seems to be everything will be brighter if we cut the taxes for the wealthy and the corporations. The same usual suspects that have led the charge to lower wages in the USA.
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Warren Buffett, the world's richest person, said on Monday the U.S. economy is in a recession that will be more severe than most people expect.
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"This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think," Buffett said. "This will not be short and shallow.
"I think consumers are feeling gas and food prices," he added, "and not feeling they've got a lot of money for other things."
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"In the retail businesses ... if anything, they've gotten a little worse," Buffett said. "Of course, things connected with housing, whether it's in brick or whether it's in carpet, those businesses have shown no uptick at all. Jewelry had a bad Christmas ... and it stayed that way."
Buffett sees no respite from the housing slump.
"I think this is going to be fairly long and fairly deep, but who knows," he said.
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| posts: 1700 | location: San Diego, Ca. USA | joined: 19 Dec 2001 |
sandiegosmith
Foreign Minister
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Mon Apr 28, 2008 12:21 pm |
European imports are called the main deterrent to Global Recession as US demand slackens. Mercantilism reigns supreme. If the exports from the 3rd world cannot find a buyer in the first world, global recession is a reality. Without credit from their homes, the American people have little money left to buy imports after paying for food, shelter, and energy.
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“There has been a very assertive export orientation among emerging-market countries over the past five years,” he says. “They have got more flexible about switching to different markets, but there is a problem if there is nowhere for exports to go.”
So far, European consumers seem to have kept trade going by taking in more imports. Mark Page, research director at Drewry Shipping, a consultancy in London, says Asia-US container trade saw a big slowdown that began in the middle of 2007, with demand for the whole year perhaps only 2 per cent higher than in 2006. But ships were redeployed to the routes between Asia and Europe, north Africa and the Middle East, where container trade grew by around 20 per cent.
For the moment, Mr Page says, most shippers are confident that such growth will persist in Europe and the Middle East. But if demand from Europe does slow, Japan seems highly unlikely to take up the baton and global trade will suffer.
That would be true even if the big emerging markets do manage to generate enough domestic demand to absorb a lot more of the goods that they produce. Despite all the talk of an emerging Chinese middle class that could buy the goods coming out of its factories, its economic growth in recent years has instead owed much to its high trade surplus.
Some signs of a global slowdown may already be evident. The Baltic Dry index, which records movements in freight prices for basic commodities such as coal and iron ore and is sensitive to short-term movements in demand, has fallen by nearly one third since last November.
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| posts: 1700 | location: San Diego, Ca. USA | joined: 19 Dec 2001 |
Pigmalia
Dignitary
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Tue Apr 29, 2008 4:15 pm |
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| posts: 4734 | location: Autonomous Inland Empire - Occupied | joined: 02 Feb 2006 |
rickyp
Statesman
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Fri May 02, 2008 5:41 pm |
| Quote: |
| belief that any of them could strike it big (even if the vast majority never will) is about all that's holding the country together |
Is China the only country for which this statement might be true ?
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http://img376.imageshack.us/im.....ingrs3.jpg |
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| posts: 4774 | location: Oakville, Ontario, Canada | joined: 14 Aug 2000 |
rickyp
Statesman
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Fri May 02, 2008 5:47 pm |
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| Perhaps in Canada the situation may be slightly different. |
Primarily because of exports of Oil, Potash, agriculture and a still strong market for other raw materials...And Blackberries....) Don't give the government too much credit. The last Tory government was Mulroney and he drove the deficit to record heights, and the economy on the rails. ...Harper has a tenuous minority and is hamstrung. He can't do anything too out rageous or risk an election. And with the current scandals over elections fraud, and the attempt at silencing the Auditor General .... he isn't going to risk an election even against ineffectual Dionne.
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| posts: 4774 | location: Oakville, Ontario, Canada | joined: 14 Aug 2000 |
Magister Equitum
Ambassador
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Fri May 02, 2008 7:43 pm |
| rickyp wrote: |
Harper has a tenuous minority and is hamstrung. He can't do anything too out rageous or risk an election. And with the current scandals over elections fraud, and the attempt at silencing the Auditor General .... he isn't going to risk an election even against ineffectual Dionne. |
Right, recent polls suggest that women are already moving away from the Conservative party due to feeling that Harper will not show adequate compassion for those affected by the sluggish economy.
(Tories might as well use the economic situation to cut back on social spending.)
Dion is running low on funds as well so an election will not likely be in the interest of the Liberals either. Perhaps the party could turn to their past fiscal policies (after all, the Conservatives have been bigger spenders than expected), though turning to the past may also draw to mind scandal and financial mismanagement. It seems that the possibility of election as we go into the summer has been deflated.
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| posts: 1925 | location: Canada | joined: 22 Mar 2007 |
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