#1
Sorry, I'm not smart enough to draw any conclusions from this brief article. Japan's economy and the Yen are in trouble?
Posted by: Bobby ||
03/08/2010 8:44 Comments ||
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#2
Nah, the articles are too brief and not well written so that they explain what's going on.
The article next to the one posted is also equally cryptic and provacative: It is because the fastest growing export of the Western banking industry (and governments) is now fraud.
#4
the articles are too brief and not well written so that they explain what's going on. That is true about a lot of media and internet coverage about the economy.
People who do know what's going on in any specialty seem either unwilling or incapable of conveying the gist of their understanding, no matter how many words they emit.
#5
It's intended for an audience learned in the FOREX market. Basically you hold a currency to make the interest off it while hedging with a currency that typically moves diametrically to it. There are several classic carry trade pairs, nothing of consequence to the general public, just another expample of people playing the market and thinking that "I can't lose on this one!"
#6
It will be 4 years at the current rate before supply of Japan gov debt exceeds Japan savings, and net overseas borrowing begins. An awful lot can happen in 4 years.
In hindsight, all those Japan 'stimulus measures' to stop deflation, particularly the capital works were a colosal mistake. But then I think deflation is a good thing.
#7
Wonderful. I think we should all become traders seeking to arbitrage the state. Send 49% of the population overseas, make another 49% into servants to gazillionaires + foundation/nonprofit workers + public sector employees, and let the rest flip assets and trade carbon credits and currencies and such.
California's union-dominated, Democratic-controlled Legislature is temperamentally incapable of fixing the state's structural budget deficit, given that such a fix would require reduced government spending and the granting of fewer benefits to the state's class of government workers. As Rome burned, legislators last week debated a meaningless "no-cussing" measure, which suggests how out-of-touch these lawmakers remain.
Meanwhile, the bad fiscal news keeps pouring in. From the front page of Wednesday's Sacramento Bee: "Bruised by heavy losses and wary of the economic road ahead, California's two big public pension funds are considering reducing their official forecasts of future investment results." Investment income is supposed to pay for the absurdly generous pensions enjoyed by government retirees, but when there's a downturn the taxpayers pick up the slack. So the $100 billion pension losses will result in reduced forecasts which will "put pressure on taxpayers and workers to support the two retirement systems," the article continued.
We've got us a big mess in California state government, which seems designed to chase away every last working stiff to Nevada or Arizona. I spoke last week to the Chamber of Commerce in the northern city of Redding, and a large crowd showed up to listen to discussions of pension reform. That tells you something. Shasta County has been tweaking its system by requiring additional employee contributions and pushing out the retirement age. Orange County and the city of San Diego, likewise, have passed minor tweaks in their retirement packages, but the entire fiscal problem especially at the state level is getting beyond the need for tweaking.
Orange County Supervisor John Moorlach recently said that the state is "technically bankrupt." On Wednesday, I talked to Assemblywoman Diane Harkey, a Republican representing parts of South Orange County and northern San Diego County, and she did not shy away from the B-word ("bankruptcy"), either. She had just given the Republican caucus a presentation summarizing the sorry state of California's government. Echoing a column she wrote last month for the political Web site Flashreport, Harkey first compared the state's predicament with that of a family that has overspent its two-earner income, lost its bonus (capital gains), lost some of its permanent income (income tax reductions), maxed out home equity (general obligation bonds), maxed out the credit cards (revenue anticipation notes), borrowed from family members (internal accounts) and now is in foreclosure.
I like the analogy. Her conclusion: "Even if we begin to earn more income, and we cut our expenses, we still will not have enough cash. .... We can file for bankruptcy .... [o]r convince a lender that we can repay if they help us through." She says the state is "facing de facto bankruptcy." States can't technically go bankrupt, but they can end up in federal receivership.
As I touched on in a previous column, people are hungry for solutions. Average citizens are showing up to Tea Party protests and listening to journalists rant about pension obligations. Californians know that something is wrong, and they also know that their elected officials at least operating under today's political dynamic can't even get themselves to stop digging a deeper hole. Few economists believe that the economy is poised to come roaring back, which would paper over the problems.
Hope can come in the initiative process, but the public-employee unions, with their deep pockets, dominate that process. I previously discussed the death of a useful pension initiative that would have created a still-generous second-tier level of benefits for state employees. The unions and their wholly owned subsidiaries in the Legislature don't want to touch any level of benefits for public employees or cut any government program. Their solution is always the same make it easier to raise taxes on Californians!
For an idea of what the unions think, consider this statement by Services Employees International Union California President Bill Lloyd in response to a Legislative Analyst's Office report from January: "We need a new approach that lays the groundwork for recovery and that protects Californians, our public investments, our communities, and our future. The only way to do that is to make sure that everyone in the state pays their share, including the corporations who keep getting a free pass from the governor and the Legislature."
That sounds more like the old approach keep sticking it to businesses and keep "investing" in $100,000 public employee pensions and bigger government bureaucracies.
That approach has led to lingering, structural budget deficits, according to Harkey, who points to Treasurer Bill Lockyer's statement from September, pegging that budget gap at an astounding $56 billion over the next three years. She gave me a chart from the state controller, predicting that total state borrowing will hit almost 34 percent of the general fund budget by July 1, the start of the 2010-11 fiscal year. The state's bond rating has gone from AA to A to BBB, she said, and now almost is not investment grade.
Harkey showed me a chart pinning the state's debt-service ratio the share of the budget devoted to repaying debt at 6.7 percent this year, 7.59 percent next year and 9.69 percent by 2014-15. And that assumes that the state doesn't issue any more debt (bonds), which is like assuming that a drunk won't find his way to the liquor store on Saturday night. And if interest rates go up, the state's debt-servicing costs also go up.
Scared yet?
California appears headed toward a massive fiscal collapse. Despite the big problems, Harkey believes the state can get back on track if its adopts some simple measures to reduce future debt, cut spending, reform pensions and prevent recurrent deficits via a rainy-day fund. Well, these measures aren't that simple, given what we're dealing with in the state Capitol, but they are sensible and modest.
Harkey calls herself the "banker of the Assembly," referring not only to her deep interest in boring fiscal matters but in her financial and mortgage background. I asked, if California were a family, would she give it a home loan? "No," she said, but she'd consider it if the family first followed her simple workout plan.
Barry M is right on topic regarding the economy, both personal and public; Barry O is whistling in the dark about the national economy and so is Congress. No progress out of these progressives.
#3
I think it was Hemingway who recounted the story of how a man lost it all in the Crash of 1929. He describe the process thus: "Slowly. And then all at once."
I think many will be surprised at how things unwind. Of course the media will report that clueless blowhards experts never expected what did happen.
#4
Now we find that some state union members rake in pensions equal to 90% of their highest wage over 25 years. Several retirees take over $500,000 per year. That is food for deficits.
It is a universal political truth that administrations do not begin to fragment when things are going well: it only happens when they go badly, and those who think they know better begin to attack those who manifestly do not. The descent of Barack Obama's regime, characterised now by factionalism in the Democratic Party and talk of his being set to emulate Jimmy Carter as a one-term president, has been swift and precipitate. It was just 16 months ago that weeping men and women celebrated his victory over John McCain in the American presidential election. If they weep now, a year and six weeks into his rule, it is for different reasons.
Despite the efforts of some sections of opinion to talk the place up, America is mired in unhappiness, all the worse for the height from which Obamania has fallen. The economy remains troublesome. There is growth a good last quarter suggested an annual rate of as high as six per cent, but that figure is probably not reliable and the latest unemployment figures, last Friday, showed a levelling off. Yet 15 million Americans, or 9.7 per cent of the workforce, have no job. Many millions more are reduced to working part-time. Whole areas of the country, notably in the north and on the eastern seaboard, are industrial wastelands. The once mighty motor city of Detroit appears slowly to be being abandoned, becoming a Jurassic Park of the mid-20th century; unemployment among black people in Mr Obama's own city of Chicago is estimated at between 20 and 25 per cent. One senior black politician a Democrat and a supporter of the President told me of the wrath in his community that a black president appeared to be unable to solve the economic problem among his own people. Cities in the east such as Newark and Baltimore now have drug-dealing as their principal commercial activity: The Wire is only just fictional.
When will Barack Obama stop fudging it?Last Thursday the House of Representatives passed a jobs Bill, costing $15 billion, which would give tax breaks to firms hiring new staff and, through state sponsorship of construction projects, create thousands of jobs too. The Senate is trying to approve a Bill that would provide a further $150 billion of tax incentives to employers. Yet there is a sense of desperation in the Administration, a sense that nothing can be as efficacious at the moment as a sticking plaster. Edward B Montgomery, deputy labour secretary in the Clinton administration, now spends his time on day trips to decaying towns that used to have a car industry, not so much advising them on how to do something else as facilitating those communities' access to federal funds. For a land without a welfare state, America starts to do an effective impersonation of a country with one. This massive state spending gives rise to accusations by Republicans, and people too angry even to be Republicans, that America is now controlled by "Leftists" and being turned into a socialist state.
"Obama's big problem," a senior Democrat told me, "is that four times as many people watch Fox News as watch CNN." The Fox network is a remarkable cultural phenomenon which almost shocks those of us from a country where a technical rule of impartiality is applied in the broadcast media. With little rest, it pours out rage 24 hours a day: its message is of the construction of the socialist state, the hijacking of America by "progressives" who now dominate institutions, the indoctrination of children, the undermining of religion and the expropriation of public money for these nefarious projects. The public loves it, and it is manifestly stirring up political activism against Mr Obama, and also against those in the Republican Party who are not deemed conservatives. However, it is arguable whether the now-reorganising Right is half as effective in its assault on the President as some of Mr Obama's own party are.
Mr Obama benefited in his campaign from an idiotic level of idolatry, in which most of the media participated with an astonishing suspension of cynicism. The sound of the squealing of brakes is now audible all over the American press; but the attack is being directed not at the leader himself, but at those around him. There was much unconditional love a year or so ago of Rahm Emanuel, Mr Obama's Chief of Staff; oleaginous profiles of this Chicago political hack, a veteran of that unlovely team that polluted the Clinton White House, appeared in otherwise respectable journals, praising the combination of his religious devotion, his family-man image, his ruthless operating technique and his command of the vocabulary of profanity. Now, supporters of the President are blaming Mr Emanuel for the failure of the Obama project, not least for his inability to construct a deal on health care.
This went down badly with friends of Mr Emanuel, notably with Mr Emanuel himself. His partisans, apparently taking dictation from him, have filled newspaper columns and blogs with uplifting accounts of the Wonder of Rahm: as one of them put it, "Emanuel is the only person preventing Obama from becoming Jimmy Carter". They attack other Obama "sycophants", such as David Axelrod, his campaign guru, and Valerie Jarret, a long-time friend of Mrs Obama and a fixer from the office of Mayor Daley of Chicago who now manages or tries to manage the President's image. These "sycophants" have, they argue, tried to keep the President above politics, letting Congress run away with the agenda, and gainsaying Mr Emanuel's advice to Mr Obama to get tough with his internal opponents. This naïve act of manipulation has brought its own counter-counterattack, with an anti-Emanuel pundit drawing a comparison with our own Prime Minister and ridiculing the idea that Mr Obama should start bullying people too.
The root of the problem seems to be the management of expectations. The magnificent campaign created the notion that Mr Obama could walk on water. Oddly enough, he can't. That was more Mr Axelrod's fault than Mr Emanuel's. And, to be fair to Mr Emanuel, any advice he has been giving the President to impose his will on Congress is probably well founded. The $783 billion stimulus package of a year ago was used to further the re-election prospects of many congressmen, not to do good for the country. America's politics remain corrupt, populated by nonentities whose main concern once elected is to stay elected; it seems to be the same the whole world over. Even this self-interested use of the stimulus package appears to have failed, however. Every day, it seems, another Democrat congressman announces that he will not be fighting the mid-term elections scheduled for November 2. The health care Bill, apparently so humane in intent, is being "scrubbed" (to use the terminology of one Republican) by its opponents, to the joy of millions of middle Americans who see it as a means to waste more public money and entrench socialism. For the moment, this is a country vibrant with anger.
A thrashing of the Democrats in the mid-terms would not necessarily be the beginning of the end for Mr Obama: Bill Clinton was re-elected two years after the Republicans swept the House and the Senate in November 1994. But Mr Clinton was an operator in a way Mr Obama patently is not. His lack of experience, his dependence on rhetoric rather than action, his disconnection from the lives of many millions of Americans all handicap him heavily. It is not about whose advice he is taking: it is about him grasping what is wrong with America, and finding the will to put it right. That wasted first year, however, is another boulder hanging from his neck: what is wrong needs time to put right. The country's multi-trillion dollar debt is barely being addressed; and a country engaged in costly foreign wars has a President who seems obsessed with anything but foreign policy as a disregarded Britain is beginning to realise.
There are lessons from the stumbling of Mr Obama for our own country as we approach a general election. Vacuous promises of change are hostages to fortune if they cannot be delivered upon to improve the living conditions of a people. The slickness of campaigning that comes from a combination of heavy funding and public relations expertise does not inevitably translate into an ability to govern. There is no point a nation's having the audacity of hope unless it also has the sophistication and the will to turn it into action. As things stand, Barack Obama and America under his leadership do not.
#1
The root of the problem seems to be the management of expectations. NO. The root of the problem is that Obama persists in pursuing policies that are irrelevant, harmful, or both, and neglects to even consider policies that would improve, ameliorate, or at least not worsen, our ongoing national disaster.
#3
The author lost me at "The Fox network is a remarkable cultural phenomenon which almost shocks those of us from a country where a technical rule of impartiality is applied in the broadcast media." This from the land of government owned propaganda. Perhaps if the BBC hadn't bamboozled the Brits and worldwide audience into supporting Obama 4:1 over McCain, American media might have taken a harder look at the anti-British Manchurian Candidate. As they say, karma is a bitch.
Posted by: ed ||
03/08/2010 14:52 Comments ||
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#4
And the Telegraph and the rest of the Brit media were in lockstep with the BBC and deserve just as much ridicule and blame for their closed minded lemming cliff dive.
Posted by: ed ||
03/08/2010 14:55 Comments ||
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#10
And the Telegraph and the rest of the Brit media were in lockstep with the BBC and deserve just as much ridicule and blame for their closed minded lemming cliff dive.
As demonstrated by this article, Brit journos are just as addled by cocktail-party liberalism as any of their American counterparts. But give them some credit - a lot of them still hew to the old-fashioned idea that they have something resembling a public trust, as demonstrated by the fact that the UK papers (even al-Guardian, for chrissakes) are the go-to place for comprehensive coverage on issues such as Climategate still being embargoed by the US media.
Posted by: Ricky bin Ricardo (Abu Babaloo) ||
03/08/2010 22:33 Comments ||
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#11
Used to be the case that presidents were offended to be compared to Jimmy Carter. Young Barry's such a washout that Carter's offended to be compared to him.
A multi-volume chronology and reference guide set detailing three years of the Mexican Drug War between 2010 and 2012.
Rantburg.com and borderlandbeat.com correspondent and author Chris Covert presents his first non-fiction work detailing
the drug and gang related violence in Mexico.
Chris gives us Mexican press dispatches of drug and gang war violence
over three years, presented in a multi volume set intended to chronicle the death, violence and mayhem which has
dominated Mexico for six years.
Rantburg was assembled from recycled algorithms in the United States of America. No
trees were destroyed in the production of this weblog. We did hurt some, though. Sorry.
It is a universal political truth that administrations do not begin to fragment when things are going well: it only happens when they go badly, and those who think they know better begin to attack those who manifestly do not. The descent of Barack Obama's regime, characterised now by factionalism in the Democratic Party and talk of his being set to emulate Jimmy Carter as a one-term president, has been swift and precipitate. It was just 16 months ago that weeping men and women celebrated his victory over John McCain in the American presidential election. If they weep now, a year and six weeks into his rule, it is for different reasons. 
