kmguru
Staff member
More Great Economic News
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kmguru
Staff member
Unhappy new year
Dec 21st 2007
From Economist.com
More banks reveal damage caused by subprime-infected debt
Reuters
HOW big the final bill will be is not clear. But most estimates put the eventual tally for defaults by America’s subprime borrowers at $200 billion-300 billion. Sensibly with such a big sum, banks are taking the pain in installments. On Thursday December 20th Bear Stearns was the latest Wall Street bank to add to the $40 billion or so in related losses that its peers have admitted to. The bank suffered a write-down of $1.9 billion in the quarter to the end of November on its exposure to subprime-infected debt and a loss of $854m, its first ever in any quarter of its history.
The day before Morgan Stanley had released its own bad news, a whopping $9.4 billion write-down in the latest quarter. This led to Morgan Stanley’s announcement of its first-ever quarterly loss too, in this case of some $4 billion. John Mack, the bank’s chief said the results were “embarrassing” and will forgo his bonus for the year. James Cayne opted for the describing his bank’s performance as “unacceptable”. He and other top executives at Bear Stearns will also go without bonuses. And both bosses look more vulnerable.
Mammoth write-downs at Merrill Lynch led to the departure of its chief executive, Stan O’Neal. HSBC and Citigroup have both taken the step of absorbing off-balance-sheet debts. SIVs and conduits helpfully allowed banks to keep subprime investments off their balance sheets so they had no need to set aside capital in case of problems. Now they have turned sour the banks are having to face up to huge losses. But though the revelations of losses is now underway no banks is quite sure what liabilities other banks are sitting on.
Read Story
Dec 21st 2007
From Economist.com
More banks reveal damage caused by subprime-infected debt
Reuters
HOW big the final bill will be is not clear. But most estimates put the eventual tally for defaults by America’s subprime borrowers at $200 billion-300 billion. Sensibly with such a big sum, banks are taking the pain in installments. On Thursday December 20th Bear Stearns was the latest Wall Street bank to add to the $40 billion or so in related losses that its peers have admitted to. The bank suffered a write-down of $1.9 billion in the quarter to the end of November on its exposure to subprime-infected debt and a loss of $854m, its first ever in any quarter of its history.
The day before Morgan Stanley had released its own bad news, a whopping $9.4 billion write-down in the latest quarter. This led to Morgan Stanley’s announcement of its first-ever quarterly loss too, in this case of some $4 billion. John Mack, the bank’s chief said the results were “embarrassing” and will forgo his bonus for the year. James Cayne opted for the describing his bank’s performance as “unacceptable”. He and other top executives at Bear Stearns will also go without bonuses. And both bosses look more vulnerable.
Mammoth write-downs at Merrill Lynch led to the departure of its chief executive, Stan O’Neal. HSBC and Citigroup have both taken the step of absorbing off-balance-sheet debts. SIVs and conduits helpfully allowed banks to keep subprime investments off their balance sheets so they had no need to set aside capital in case of problems. Now they have turned sour the banks are having to face up to huge losses. But though the revelations of losses is now underway no banks is quite sure what liabilities other banks are sitting on.
Read Story
Did she send you a real photo of herself, or was it a picture of jessica simpson?
kmguru
Staff member
Niether do dead men
Jessica for sure
"Mine is rounder" is vanity?
WTF?I didn't send you squat. Dream on, bucko.
kmguru
Staff member
Sucks...I should have known...it was too good to be true...looks like somebody impersonated Sandy who is impersonating Christie...oh..well
I'm not really impersonating her. I just look like her. Always have. Probably always will.
If you keep telling yourself the same thing over again, you will eventually begin to believe it. :thumbsup: I should know, it worked for me...
I don't have to tell myself anything. I get stopped ALL the time--especially in CA and at airports. If I wear sunglasses I might as well forget it. I'm not getting anywhere fast. I have looked like her my whole life. I did not choose to look like an ageing supermodel. I just do.
You are always talking about your alleged beauty. Who cares? Do I ever mention the fact that I'm drop dead gorgeous? Never.
I don't bring it up unless questioned/challenged/harassed/attacked. There is nothing "alledged". I'm hot. Big deal. You know when you are. Show me a pic of you or who you look like and I'll decide if you're hot. I'm thinking you probably are.
I just realized something, if I grow out my hair, and grow a beard, I will look like a teenage Jesus!
kmguru
Staff member
The US Dollar: The Long Farewell?
By Gwynne Dyer
12/22/07 " Salt Lake Tribune" - -- It's just straws in the wind so far. India's Ministry of Culture announces that foreign tourists can no longer pay in dollars when visiting the Taj Mahal and other heritage sites; they have to pay in good, hard rupees.
Iran and Venezuela call for a joint OPEC statement on the weak U.S. dollar, and Saudi Arabian Foreign Affairs Minister Saud Al-Faisal warns that any public reference to the U.S. dollar's problems could cause the troubled currency to "collapse". Rap star Jay-Z's latest video shows our hero flashing a wad of euros, not dollars.
Only straws in the wind, but all in the past couple of weeks. For the majority of Americans who do not travel abroad, the only visible effect so far of the dollar's steep fall has been higher fuel prices at the pump. The Chinese imports that fill the big-box stores still cost the same, because the Chinese yuan is still pegged to the American dollar. But that may be about to change, along with many other things.
At the beginning of 2003, one euro bought one US dollar. Eighteen months ago, it bought $1.20. Now it is pushing $1.50, and there is no reason to think that it will stop there. Three of the world's biggest oil exporters, Iran, Venezuela and Russia, are demanding payment in euros rather than U.S. dollars. Last week a Chinese central bank vice-director, Xu Jian, gave voice to the suspicion of many others, saying that the U.S. dollar was "losing its status as the world currency."
If that happens, then America loses a great deal. Other countries have to maintain large reserves of foreign currencies - most of which they keep in U.S. dollars - to cover their foreign debts, but the United States can pay its huge foreign debts in its own money. If necessary, it can just print more dollars. Having their own money as the world's reserve currency confers advantages that Americans would miss if they lost them.
The main reason for the collapse of the U.S. dollar is President George W. Bush's attempt to fight expensive foreign wars while cutting taxes at home. This involved deficit financing on a very large scale, and inevitably the value of the dollar began to fall - slowly at first, but with increasing speed as it became clear that the White House did not care.
"Ronald Reagan proved that deficits don't matter," as Vice President Dick Cheney told then-Treasury Secretary Paul O'Neill.
But they do matter to foreigners. As the U.S. dollar fell in value, the price of oil (which is usually calculated in dollars) rose to compensate for it, but there was no comparable adjustment for foreign central banks that had huge amounts of U.S. dollars in their reserves. China, which was sitting on about a trillion U.S. dollars, simply lost several hundred billion as the currency's value fell. So various central banks started wondering if they should diversify their reserves, and some acted on it.
The downward pressure on the dollar will continue, because the United States is currently borrowing 6 percent of its Gross Domestic Product from foreigners each year to cover its trade deficit. Foreign banks were happy to go on lending so long as they had faith in the integrity of U.S. financial institutions, but that has been hit hard by the sub-prime mortgage crisis. Besides, other markets, notably China and India, now offer a better return - and Congress's resistance to foreign takeover bids, combined with tighter visa restrictions, make the U.S. a less welcoming place for foreign investors.
Above all, there are now alternatives to the U.S. dollar. The last time it faced a comparable crisis was in 1971, when a different Republican president was trying to run another unpopular war without raising taxes. Richard Nixon devalued the U.S. dollar and demolished the Bretton Woods system that had fixed all other currencies in relation to the dollar, inaugurating the current era of floating exchange rates.
There was no other candidate then for the role of global reserve currency, so the dollar stayed at the center of the system despite all the turbulence. This time, by contrast, there is the euro, the currency of an economic zone just as big as the United States, with the Chinese currency as a possible long-term rival. But nothing is likely to happen very fast.
The last time the world went through a change like this, it took over 40 years to complete. Before World War I, the British pound reigned supreme, accounting for 64 percent of the world's currency reserves and 60 percent of all international trade. Britain then impoverished itself in two world wars, but the U.S. dollar did not fully replace the pound until the 1950s.
Today the U.S. dollar accounts for 70 percent of both international trade and currency reserves, but it is probably starting down the same road. Many countries are replacing part of their dollar reserves with a basket of other currencies, and those who have pegged their currency to the dollar are starting to cut loose from it: Kuwait has already done so, and the United Arab Emirates is actively considering it. If China unpegs, things will move a lot faster, but in any case the long farewell of the U.S. dollar has begun.
Gwynne Dyer is a London-based independent journalist whose articles are published in 45 countries.
By Gwynne Dyer
12/22/07 " Salt Lake Tribune" - -- It's just straws in the wind so far. India's Ministry of Culture announces that foreign tourists can no longer pay in dollars when visiting the Taj Mahal and other heritage sites; they have to pay in good, hard rupees.
Iran and Venezuela call for a joint OPEC statement on the weak U.S. dollar, and Saudi Arabian Foreign Affairs Minister Saud Al-Faisal warns that any public reference to the U.S. dollar's problems could cause the troubled currency to "collapse". Rap star Jay-Z's latest video shows our hero flashing a wad of euros, not dollars.
Only straws in the wind, but all in the past couple of weeks. For the majority of Americans who do not travel abroad, the only visible effect so far of the dollar's steep fall has been higher fuel prices at the pump. The Chinese imports that fill the big-box stores still cost the same, because the Chinese yuan is still pegged to the American dollar. But that may be about to change, along with many other things.
At the beginning of 2003, one euro bought one US dollar. Eighteen months ago, it bought $1.20. Now it is pushing $1.50, and there is no reason to think that it will stop there. Three of the world's biggest oil exporters, Iran, Venezuela and Russia, are demanding payment in euros rather than U.S. dollars. Last week a Chinese central bank vice-director, Xu Jian, gave voice to the suspicion of many others, saying that the U.S. dollar was "losing its status as the world currency."
If that happens, then America loses a great deal. Other countries have to maintain large reserves of foreign currencies - most of which they keep in U.S. dollars - to cover their foreign debts, but the United States can pay its huge foreign debts in its own money. If necessary, it can just print more dollars. Having their own money as the world's reserve currency confers advantages that Americans would miss if they lost them.
The main reason for the collapse of the U.S. dollar is President George W. Bush's attempt to fight expensive foreign wars while cutting taxes at home. This involved deficit financing on a very large scale, and inevitably the value of the dollar began to fall - slowly at first, but with increasing speed as it became clear that the White House did not care.
"Ronald Reagan proved that deficits don't matter," as Vice President Dick Cheney told then-Treasury Secretary Paul O'Neill.
But they do matter to foreigners. As the U.S. dollar fell in value, the price of oil (which is usually calculated in dollars) rose to compensate for it, but there was no comparable adjustment for foreign central banks that had huge amounts of U.S. dollars in their reserves. China, which was sitting on about a trillion U.S. dollars, simply lost several hundred billion as the currency's value fell. So various central banks started wondering if they should diversify their reserves, and some acted on it.
The downward pressure on the dollar will continue, because the United States is currently borrowing 6 percent of its Gross Domestic Product from foreigners each year to cover its trade deficit. Foreign banks were happy to go on lending so long as they had faith in the integrity of U.S. financial institutions, but that has been hit hard by the sub-prime mortgage crisis. Besides, other markets, notably China and India, now offer a better return - and Congress's resistance to foreign takeover bids, combined with tighter visa restrictions, make the U.S. a less welcoming place for foreign investors.
Above all, there are now alternatives to the U.S. dollar. The last time it faced a comparable crisis was in 1971, when a different Republican president was trying to run another unpopular war without raising taxes. Richard Nixon devalued the U.S. dollar and demolished the Bretton Woods system that had fixed all other currencies in relation to the dollar, inaugurating the current era of floating exchange rates.
There was no other candidate then for the role of global reserve currency, so the dollar stayed at the center of the system despite all the turbulence. This time, by contrast, there is the euro, the currency of an economic zone just as big as the United States, with the Chinese currency as a possible long-term rival. But nothing is likely to happen very fast.
The last time the world went through a change like this, it took over 40 years to complete. Before World War I, the British pound reigned supreme, accounting for 64 percent of the world's currency reserves and 60 percent of all international trade. Britain then impoverished itself in two world wars, but the U.S. dollar did not fully replace the pound until the 1950s.
Today the U.S. dollar accounts for 70 percent of both international trade and currency reserves, but it is probably starting down the same road. Many countries are replacing part of their dollar reserves with a basket of other currencies, and those who have pegged their currency to the dollar are starting to cut loose from it: Kuwait has already done so, and the United Arab Emirates is actively considering it. If China unpegs, things will move a lot faster, but in any case the long farewell of the U.S. dollar has begun.
Gwynne Dyer is a London-based independent journalist whose articles are published in 45 countries.
kmguru
Staff member
kmguru
Staff member
one more...
US workers face mass job losses
John Sterlicchi, US correspondent Guardian Unlimited, Wednesday December 12 2007
Thousands of American workers are receiving an unwanted Christmas present … redundancy notices.
Businesses across the spectrum are this month cutting jobs, from airlines to automotive, from chemicals to pharmaceuticals, from banking to retail.
And of course there are the Wall Street workers waiting for the bad news. Citicorp is expected to sack tens of thousands now that Vikram Pandit has been confirmed as its new chief executive office. Even the Pentagon is warning of job cuts because of a Congressional impasse over the federal budget.
There was a time when American businesses did everything they could to avoid throwing people out of work over the holiday season. "There used to be a taboo against laying people off between Thanksgiving (which is in late November) and New Year," remembers John Challenger, CEO of Chicago-based outplacement firm Challenger Gray & Christmas.
That all changed in the 1990s, said Challenger. Any CEO who showed compassion simply because it's Christmas would swiftly find themselves in trouble with their shareholders and companies that might have let job cuts slide to the New Year in a kinder, gentler era now would themselves be pushed out of the door, he said.
Bristol-Myers Squibb is leading the league table at the moment with its announcement that it is cutting 4,800 jobs - more than 10% of its global workforce. The company notified 1,300 of their affected staff earlier this month and an additional 3,500 will be made redundant in 2008.
The company's CEO, James Cornelius, ensured his Wall Street masters were on side with the job cuts by breaking the news at an investment analysts' conference in New York.
At DIY retailer Home Depot employees were annoyed not only that they were sacked just before Christmas, but that the company did not offer them any severance pay to help them transition to new jobs.
Nearly 1,000 workers were made redundant at call centres in Tampa, Dallas and Chicago.
"Right before Christmas, too, that's terrible," said one of the workers, Dierdre Quinones. "People that wanted to go Christmas shopping; now they're worry about mortgage and car payments."
Earlier this year its former CEO, Bob Nardelli, who was often criticized for his huge compensation packages, left the company under fire with a massive $210m (£97.8m) severance package.
Had Home Depot had paid three months severance to the sacked workers (at their average annual salary of $36,000) the bill to the company would have been a little over $11m.
Stephen Holmes, a spokesman for Home Depot, agreed the company will not give the workers severance but said it will pay them through a 60 days notice period and will give them a four-week bonus for working until the call centres close.
Other companies not making this Christmas a merry one include Abbott Labs, which is eliminating 1,200 jobs; Dow Chemical (1,000), Volvo Trucks (650), Bank of America (170), 3M (100) and Frontier Airlines (100).
Of course the sub-prime crisis is still taking its toll and a few days ago H&R Block announced it was closing down its mortgage lending unit with the loss of 620 jobs.
Even the International Monetary Fund is getting in on end-of-year redundancies.
Its new chief, Dominique Strauss-Kahn, told the Wall Street Journal he intended to cut its staff of 2,634 by 300 to 400 positions. Voluntary redundancy would not be enough, he said.
It is not all bad news for workers though. The number of announced corporate cuts has declined steadily since its peak in 2001 and the figure to the end of November of 723,848 is down nearly 8% from last year, according to Challenger Gray & Christmas.
US workers face mass job losses
John Sterlicchi, US correspondent Guardian Unlimited, Wednesday December 12 2007
Thousands of American workers are receiving an unwanted Christmas present … redundancy notices.
Businesses across the spectrum are this month cutting jobs, from airlines to automotive, from chemicals to pharmaceuticals, from banking to retail.
And of course there are the Wall Street workers waiting for the bad news. Citicorp is expected to sack tens of thousands now that Vikram Pandit has been confirmed as its new chief executive office. Even the Pentagon is warning of job cuts because of a Congressional impasse over the federal budget.
There was a time when American businesses did everything they could to avoid throwing people out of work over the holiday season. "There used to be a taboo against laying people off between Thanksgiving (which is in late November) and New Year," remembers John Challenger, CEO of Chicago-based outplacement firm Challenger Gray & Christmas.
That all changed in the 1990s, said Challenger. Any CEO who showed compassion simply because it's Christmas would swiftly find themselves in trouble with their shareholders and companies that might have let job cuts slide to the New Year in a kinder, gentler era now would themselves be pushed out of the door, he said.
Bristol-Myers Squibb is leading the league table at the moment with its announcement that it is cutting 4,800 jobs - more than 10% of its global workforce. The company notified 1,300 of their affected staff earlier this month and an additional 3,500 will be made redundant in 2008.
The company's CEO, James Cornelius, ensured his Wall Street masters were on side with the job cuts by breaking the news at an investment analysts' conference in New York.
At DIY retailer Home Depot employees were annoyed not only that they were sacked just before Christmas, but that the company did not offer them any severance pay to help them transition to new jobs.
Nearly 1,000 workers were made redundant at call centres in Tampa, Dallas and Chicago.
"Right before Christmas, too, that's terrible," said one of the workers, Dierdre Quinones. "People that wanted to go Christmas shopping; now they're worry about mortgage and car payments."
Earlier this year its former CEO, Bob Nardelli, who was often criticized for his huge compensation packages, left the company under fire with a massive $210m (£97.8m) severance package.
Had Home Depot had paid three months severance to the sacked workers (at their average annual salary of $36,000) the bill to the company would have been a little over $11m.
Stephen Holmes, a spokesman for Home Depot, agreed the company will not give the workers severance but said it will pay them through a 60 days notice period and will give them a four-week bonus for working until the call centres close.
Other companies not making this Christmas a merry one include Abbott Labs, which is eliminating 1,200 jobs; Dow Chemical (1,000), Volvo Trucks (650), Bank of America (170), 3M (100) and Frontier Airlines (100).
Of course the sub-prime crisis is still taking its toll and a few days ago H&R Block announced it was closing down its mortgage lending unit with the loss of 620 jobs.
Even the International Monetary Fund is getting in on end-of-year redundancies.
Its new chief, Dominique Strauss-Kahn, told the Wall Street Journal he intended to cut its staff of 2,634 by 300 to 400 positions. Voluntary redundancy would not be enough, he said.
It is not all bad news for workers though. The number of announced corporate cuts has declined steadily since its peak in 2001 and the figure to the end of November of 723,848 is down nearly 8% from last year, according to Challenger Gray & Christmas.
That's some great economic news!
According to the London Telegraph, this liquity crisis is far more than an American problem:
On the bright side:
http://www.telegraph.co.uk/money/ma...?xml=/money/2007/12/23/cccrisis123.xml&page=3
kmguru
Staff member
Because China and India are doing very well, the hope is that the bad news will not drag our economy to 1929. Hope that is right. It is difficult to exactly find out where the tipping point is. Whether it is just a pot hole (or many pot holes) where you could have a flat in the tire or a crater where you and your car is done bye bye...one can not see. So, keep your finger crossed and pray....
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