The United States is in the midst of an energy boom that at the end of the decade will make it the world's top oil producer, temporarily displacing Saudi Arabia, and a net exporter of natural gas, according to a new report.
By 2030, America will be nearly energy self-sufficient on net and North America as a whole will become a net oil exporter, says the report released Monday by the International Energy Agency (IEA), a Paris-based research and advocacy group for oil-importing developed nations.
Governments could step in and encourage that switch toward renewables. Some economists are pushing for a carbon tax in the US that would help make renewables more cost-competitive. The IEA forecasts that a concerted global effort on energy efficiency could cut the growth in global energy demand in half through 2035 and cause oil demand to peak before 2020 and then fall substantially.
Global output would rise a cumulative $18 trillion, with India, China, the US, and Europe reaping the biggest gains.
Read more: Energy boom will push US past Saudi Arabia, benefit economy - CSMonitor.com
Showing posts with label World Economy. Show all posts
Showing posts with label World Economy. Show all posts
11/13/12
9/24/12
Economy: Planning for a world without economic growth
In the wake of the financial crisis, kick-starting growth has been at the forefront of political economics. Governments have leveraged massive amounts of capital to prop up their economies, hoping that expanding markets will help them overcome fiscal and social problems.
But does our faith in a growing economy blind us about its limitations?
The idea of an end to growth is not new. Thomas Malthus predicted it back in the 1790s, as did the Club of Rome during the 1970s. Their basic argument was that growth is inherently coupled to resource consumption, we live on a finite planet, and therefore our economies will have to stop growing at some point.
A few important statistics show our proximity to this limit. According to the UN Food and Agriculture Organization, agriculture accounts for 30 per cent of the Earth’s land surface area, and uses almost all available arable land. Food production uses 70 per cent of all water withdrawn from aquifers, streams, and lakes. Furthermore, global agricultural output will have to increase by 70 per cent over the next 40 years to keep up with our population, all while our heavily cultivated soil suffers up to 75 times the erosion rates of natural areas.
There may be plenty of oil to go around, but our costs for extracting it from unconventional sources is going up, leading to what Jeff Rubin calls peak prices of oil. An often quoted but admittedly shaky statistic is that a $10 increase in the price of a barrel of oil shaves about a half per cent off of Gross Domestic Product over two years. You get the picture.
We probably aren’t on the verge of a doomsday, but it is prudent policy-making to consider how our economies fit within larger natural and physical systems. As the world economy struggles to continue expanding, we should remember that growth is a means to an end, not an end in itself.
Read more: Planning for a world without economic growth | therecord
But does our faith in a growing economy blind us about its limitations?
The idea of an end to growth is not new. Thomas Malthus predicted it back in the 1790s, as did the Club of Rome during the 1970s. Their basic argument was that growth is inherently coupled to resource consumption, we live on a finite planet, and therefore our economies will have to stop growing at some point.
A few important statistics show our proximity to this limit. According to the UN Food and Agriculture Organization, agriculture accounts for 30 per cent of the Earth’s land surface area, and uses almost all available arable land. Food production uses 70 per cent of all water withdrawn from aquifers, streams, and lakes. Furthermore, global agricultural output will have to increase by 70 per cent over the next 40 years to keep up with our population, all while our heavily cultivated soil suffers up to 75 times the erosion rates of natural areas.
There may be plenty of oil to go around, but our costs for extracting it from unconventional sources is going up, leading to what Jeff Rubin calls peak prices of oil. An often quoted but admittedly shaky statistic is that a $10 increase in the price of a barrel of oil shaves about a half per cent off of Gross Domestic Product over two years. You get the picture.
We probably aren’t on the verge of a doomsday, but it is prudent policy-making to consider how our economies fit within larger natural and physical systems. As the world economy struggles to continue expanding, we should remember that growth is a means to an end, not an end in itself.
Read more: Planning for a world without economic growth | therecord
7/17/12
World Economies on Life Support
Since crisis economic conditions erupted in fall 2007, resolution has been sorely lacking.
US corporations and America's super-rich benefitted from over $3 trillion in tax cuts. Anywhere from $9 trillion to double or triple that amount went to bankers that caused the crisis.
Ordinary Citizens have been largely left out. In the US that nation's economic engine stalled. Recovery is more illusion than reality. Increasingly it looks dangerously troubled.
Financial analyst Martin Weiss said he's "never seen anything like the whirlwinds and dark clouds now encircling the so-called advanced economies of the world."
Since crisis conditions erupted, one fourth of developed countries' workers are unemployed or underemployed. Debt levels too onerous to repay were incurred. Solutions proposed involve piling on more. Troubled countries include the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) making headlines. Vulnerable also include America, Britain, France, Belgium, Canada, and Japan.
Even China's vaunted economic growth is weakening. Brazil and India are also affected. It's not an encouraging sign. In a recent Bloomberg interview, economist Nouriel Roubini warned of a 2013 meltdown worse than 2008.
Banks are operating illegally, he said. The only way to stop it is "break up these financial supermarkets" and hold responsible officials accountable. Bankers are greedy, he said. Massive conflicts of interest exist. Firms on both sides of major deals. Without substantive change, crises will continue and worsen. Political will is lacking. Policy measures so far resolved nothing.
A fundamentally corrupt system festers. Nothing changed. Too-big-to-fail banks get bigger. No one high up faced prosecution. Things don't look promising ahead.
Progressive Radio News Hour regular Jack Rasmus says when economists resort to metaphors, they have little idea about root causes or won't say. Blaming poor results on weather or seasonality doesn't wash.
Evolutionary biologist Ernst Mayr (1904 - 2005) expressed concern. He said human intelligence doesn't guarantee survival. He believed beetles and bacteria stand a better chance.
Market analyst Byron Wien calls the smartest man he knows in Europe a "firedancer."
Read more: World Economies on Life Support : Indybay
US corporations and America's super-rich benefitted from over $3 trillion in tax cuts. Anywhere from $9 trillion to double or triple that amount went to bankers that caused the crisis.
Ordinary Citizens have been largely left out. In the US that nation's economic engine stalled. Recovery is more illusion than reality. Increasingly it looks dangerously troubled.
Financial analyst Martin Weiss said he's "never seen anything like the whirlwinds and dark clouds now encircling the so-called advanced economies of the world."
Since crisis conditions erupted, one fourth of developed countries' workers are unemployed or underemployed. Debt levels too onerous to repay were incurred. Solutions proposed involve piling on more. Troubled countries include the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) making headlines. Vulnerable also include America, Britain, France, Belgium, Canada, and Japan.
Even China's vaunted economic growth is weakening. Brazil and India are also affected. It's not an encouraging sign. In a recent Bloomberg interview, economist Nouriel Roubini warned of a 2013 meltdown worse than 2008.
Banks are operating illegally, he said. The only way to stop it is "break up these financial supermarkets" and hold responsible officials accountable. Bankers are greedy, he said. Massive conflicts of interest exist. Firms on both sides of major deals. Without substantive change, crises will continue and worsen. Political will is lacking. Policy measures so far resolved nothing.
A fundamentally corrupt system festers. Nothing changed. Too-big-to-fail banks get bigger. No one high up faced prosecution. Things don't look promising ahead.
Progressive Radio News Hour regular Jack Rasmus says when economists resort to metaphors, they have little idea about root causes or won't say. Blaming poor results on weather or seasonality doesn't wash.
Evolutionary biologist Ernst Mayr (1904 - 2005) expressed concern. He said human intelligence doesn't guarantee survival. He believed beetles and bacteria stand a better chance.
Market analyst Byron Wien calls the smartest man he knows in Europe a "firedancer."
Read more: World Economies on Life Support : Indybay
7/3/12
Global corporate defaults nearly double
Global defaults have risen to 39 so far this year versus 21 in the same period a year ago with plastics maker Kloeckner Holdings and media company Central European Media Enterprises the latest to default, according to Standard & Poor’s.
While those two companies were based in Luxembourg and Bermuda, US-based corporations accounted for most of the defaults so far this year, with 23 in total.
Barneys New York, DirectBuy Holdings and Reichhold Industries were some of the US-based companies that either missed payments, conducted “distressed exchanges” or filed for bankruptcy in the first half of the year. A distressed exchange consists of a company swapping its debt for other securities or cash that equals less than par, or 100 cents on the dollar.
In Europe, where five companies including Ireland’s ERC Ireland Preferred Equity and Swiss Petroplus Holdings defaulted, the top reasons for default were missed coupon payments and debt restructuring.
Read more: Global corporate defaults nearly double | VCCircle
While those two companies were based in Luxembourg and Bermuda, US-based corporations accounted for most of the defaults so far this year, with 23 in total.
Barneys New York, DirectBuy Holdings and Reichhold Industries were some of the US-based companies that either missed payments, conducted “distressed exchanges” or filed for bankruptcy in the first half of the year. A distressed exchange consists of a company swapping its debt for other securities or cash that equals less than par, or 100 cents on the dollar.
In Europe, where five companies including Ireland’s ERC Ireland Preferred Equity and Swiss Petroplus Holdings defaulted, the top reasons for default were missed coupon payments and debt restructuring.
Read more: Global corporate defaults nearly double | VCCircle
Corporations take ethics very lightly and most get away with "murder"
World’s worst corporate abuses includes issues as diverse as assassination, torture, kidnapping, environmental degradation, huge political campaign donations, violently repressing political rights, releasing toxins into pristine environments, destroying homes, discrimination, and causing widespread health problems.
Only very few corporate ethics abuses have resulted in these companies being forced to close down. In most cases they usually pay their way out of their problems and often their top management also usually gets off scot free and many even still stay in charge of their corporations
Global Exchange recently put out a list of "most wanted Corporate Criminals gives you information about the abusive behavior of this year’s worst corporations, and tells you who is responsible, and how to connect with and support people who are doing something about it.
The List
1. Bank of America for funding of environmentally harmful coal industry, excessive campaign contributions
2. Chevron for damaging ecosystem and people of Ecuador, repression of protest to oil extraction, Brazil spill
3. Century International Arms for producing Romanian AKs, which are frequently smuggled into Mexico
4. Halliburton for hydraulic fracturing, involvement in the Gulf spill, bribery in Nigeria
5. The Hershey Company for refusing to use fair trade labor and continuing to support labor that violates human rights standards
6. Monsanto for promotion of monocropping, involvement in government, refusing to label product, bankrupting small farms
7. Pacific Rim for mining in El Salvador
8. TransCanada for plans to construct Keyston XL Pipeline
9. Veolia for operations in Israel, high prices and bad service, privitization of water
10. Wal-Mart for unfair treatment of employees, use of sweatshop labor, bribery in Mexico
In more recent developments
British GlaxoSmithKline pharmaceutical company has agreed to pay $3 billion US in criminal and civil fines and plead guilty to misdemeanour criminal charges related to the sale and marketing of its antidepressants Paxil and Wellbutrin and the diabetes drug Avandia in the largest health care fraud settlement in U.S. history.
US Federal regulators propose a $3.7 million civil penalty against the TransCanada owners of a pipeline that ruptured in 2010, dumping more than three billion litres of oil into a Michigan river.
Barclays Plc was fined 290 million pounds ($451.4 million), the largest penalties ever imposed by regulators in the U.S. and U.K., after admitting it submitted false London and euro interbank offered rates.
EU-Digest
6/24/12
China: Hu Urges Fair, Orderly World Financial System
 |
| Hu Jintao General Secretary of the Chinese Communist Party |
All countries should make concerted efforts to bring about more achievements in international financial system reform and make the system provide better services and boost the real economy's growth, Hu said in a speech at the Group of 20 (G20) summit.
Hu also said that all countries should work together to push reform of international financial governance and increase the representation and powers of emerging economies and developing countries; to improve the international reserve currency system so as to establish a system that embraces stable currencies, orderly supplies and an adjustable aggregate amount.
Read more: Hu Urges Fair, Orderly World Financial System
6/21/12
Bad news spurs global market plunge - by David Berman
The latest economic measures paint a picture of a global recovery that has slowed to an alarming degree, and raise fears that commodity prices have further to fall, setting the stage for more volatility ahead – particularly for Canada’s commodity-sensitive benchmark index.
Investors fled from stocks and commodities Thursday amid disappointing reports from virtually every corner of the globe, testing the confidence of the markets at a time when the health of the world economy is already threatened.
In the troubled euro zone, a manufacturing report fell to its lowest level in three years and included a weak outlook for employment. “With labour components continuing to deteriorate, it becomes even more painful for politicians to put in place these austerity measures,” said Stéfane Marion, chief economist and strategist at National Bank Financial.
Along with the weak economic reports, two analysts from Goldman Sachs Group Inc. recommended that investors sell short the S&P 500 – or bet that the U.S. benchmark index will fall – adding one more reason to shy away from stocks.
Read more: Bad news spurs global market plunge - The Globe and Mail
Investors fled from stocks and commodities Thursday amid disappointing reports from virtually every corner of the globe, testing the confidence of the markets at a time when the health of the world economy is already threatened.
In the troubled euro zone, a manufacturing report fell to its lowest level in three years and included a weak outlook for employment. “With labour components continuing to deteriorate, it becomes even more painful for politicians to put in place these austerity measures,” said Stéfane Marion, chief economist and strategist at National Bank Financial.
Along with the weak economic reports, two analysts from Goldman Sachs Group Inc. recommended that investors sell short the S&P 500 – or bet that the U.S. benchmark index will fall – adding one more reason to shy away from stocks.
Read more: Bad news spurs global market plunge - The Globe and Mail
6/19/12
An Introduction To The Mysterious World Of Sovereign Wealth Funds - by Richard Wilson
Sovereign wealth funds have attracted a lot of attention in recent years as more countries open funds and invest in big-name companies and assets. Some experts estimate that all sovereign wealth funds combined to hold more than $5 trillion in assets in 2012, a number that is expected to grow relatively quickly. This has given way to a wide concern over the influence these funds have on the global economy. As such, it is important to understand exactly what sovereign wealth funds are and how they first came about.
A sovereign wealth fund is a state-owned pool of money that is invested in various financial assets. The money typically comes from a nation's budgetary surplus. When a nation has excess money, it uses a sovereign wealth fund as a way to funnel it into investments rather than simply keeping it in the central bank or channeling it back into the economy.
The motives for establishing a sovereign wealth fund vary by country. For example, the United Arab Emirates generates a large portion of its revenue from exporting oil and needs a way to protect the surplus reserves from oil-based risk, thus it places a portion of that money in a sovereign wealth fund. Many nations use sovereign wealth funds as a way to accrue profit for the benefit of the nation's economy and its citizens.
Sovereign wealth funds represent a large and growing portion of the global economy. The size and potential impact that these funds could have on international trade has led to considerable opposition, and the criticism has mounted after controversial investments in the United States and Europe. Following the mortgage crisis of 2006-2008, sovereign wealth funds helped rescue struggling Western banks CitiGroup, Merrill Lynch, UBS and Morgan Stanley. This led critics to worry that foreign nations were gaining too much control over domestic financial institutions, and that these nations could use that control for political reasons. This fear could also lead to investment protectionism, potentially damaging the global economy by restricting valuable investment dollars.
In the United States and Europe, many financial and political leaders have stressed the importance of monitoring and possibly regulating sovereign wealth funds. Many political leaders assert that sovereign wealth funds pose a threat to national security and their lack of transparency has fueled this controversy. The United States addressed this concern by passing the Foreign Investment and National Security Act of 2007, which established greater scrutiny when a foreign government or government-owned entity attempts to purchase a U.S. asset.
Western powers have been guarded about allowing sovereign wealth funds to invest and have asked for improved transparency.
The top five largest SWF by assets (data as of February 2008)
Read more: An Introduction To Sovereign Wealth Funds | Benzinga
A sovereign wealth fund is a state-owned pool of money that is invested in various financial assets. The money typically comes from a nation's budgetary surplus. When a nation has excess money, it uses a sovereign wealth fund as a way to funnel it into investments rather than simply keeping it in the central bank or channeling it back into the economy.
The motives for establishing a sovereign wealth fund vary by country. For example, the United Arab Emirates generates a large portion of its revenue from exporting oil and needs a way to protect the surplus reserves from oil-based risk, thus it places a portion of that money in a sovereign wealth fund. Many nations use sovereign wealth funds as a way to accrue profit for the benefit of the nation's economy and its citizens.
Sovereign wealth funds represent a large and growing portion of the global economy. The size and potential impact that these funds could have on international trade has led to considerable opposition, and the criticism has mounted after controversial investments in the United States and Europe. Following the mortgage crisis of 2006-2008, sovereign wealth funds helped rescue struggling Western banks CitiGroup, Merrill Lynch, UBS and Morgan Stanley. This led critics to worry that foreign nations were gaining too much control over domestic financial institutions, and that these nations could use that control for political reasons. This fear could also lead to investment protectionism, potentially damaging the global economy by restricting valuable investment dollars.
In the United States and Europe, many financial and political leaders have stressed the importance of monitoring and possibly regulating sovereign wealth funds. Many political leaders assert that sovereign wealth funds pose a threat to national security and their lack of transparency has fueled this controversy. The United States addressed this concern by passing the Foreign Investment and National Security Act of 2007, which established greater scrutiny when a foreign government or government-owned entity attempts to purchase a U.S. asset.
Western powers have been guarded about allowing sovereign wealth funds to invest and have asked for improved transparency.
The top five largest SWF by assets (data as of February 2008)
- Abu Dhabi Investment Authority (UAE) - $875 billion
- Norway Government Pension Fund (Global) - $380 billion
- Government of Singapore Investment Corporation - $330 billion
- Saudi Arabia 1 (no official fund name) - $300 billion
- State Administration of Foreign Exchange (China) - $300 billion
Read more: An Introduction To Sovereign Wealth Funds | Benzinga
6/8/12
‘Budget cuts for Europe like pouring gas on fire’
Russian TV interviewing Mark Weisbrot who is is an American economist, columnist and co-director, with
Dean Baker, of the Center for Economic and Policy Research in
Washington, D.C.: "What about the BRICS powers? Those rising powers versus the voting rights at the IMF and the whole debate that took place at the spring meetings?"
Mark Weisbrot: "These institutions have been controlled by the US since 1946. And it has not changed much at all. Some people think the Europeans control the IMF because they get to appoint a European, but that is not true. The US has the veto over the European head of the IMF, and they still have the dominant voice at the IMF. And Europe is the junior partner. That’s changed a little bit in recent years because now more than 60 per cent of the IMF loans are in Europe and the US Treasury Department would defer to Europe for matters that are focused on Europe. But in the rest of the world, in all the developing world where the IMF still makes loans it is US-decided. So, they control both: the IMF and the World Bank, which is two out of the three international institution that have any power. The third one is the Security Council. And there they have the veto as well. This is the world after World War II. And global governance has not changed. That is one of the reasons why they created the G20. But it is still the G7 making all the decisions – and mainly the G1 here in Washington – because that is who has power in these institutions of international governance that actually have power."
Read more: ‘Budget cuts for Europe like pouring gas on fire’ — RT
Mark Weisbrot: "These institutions have been controlled by the US since 1946. And it has not changed much at all. Some people think the Europeans control the IMF because they get to appoint a European, but that is not true. The US has the veto over the European head of the IMF, and they still have the dominant voice at the IMF. And Europe is the junior partner. That’s changed a little bit in recent years because now more than 60 per cent of the IMF loans are in Europe and the US Treasury Department would defer to Europe for matters that are focused on Europe. But in the rest of the world, in all the developing world where the IMF still makes loans it is US-decided. So, they control both: the IMF and the World Bank, which is two out of the three international institution that have any power. The third one is the Security Council. And there they have the veto as well. This is the world after World War II. And global governance has not changed. That is one of the reasons why they created the G20. But it is still the G7 making all the decisions – and mainly the G1 here in Washington – because that is who has power in these institutions of international governance that actually have power."
Read more: ‘Budget cuts for Europe like pouring gas on fire’ — RT
4/21/12
IMF boosts resources by $430 billion to calm market fears over European debt crisis
Finance ministers and central bank governors hope a more than $430 billion increase in resources of the International Monetary Fund will be enough to handle any fresh crisis in the eurozone.
IMF Managing Director Christine Lagarde announced the new figure at the conclusion of discussions of the G-20 major economic powers Friday. She said that some countries, including Russia, India, China and Brazil, had made private pledges but did not want to issue public commitments until they had conferred with officials in their home capitals.
But she said when the public and private commitments were combined, the total raised would exceed $430 billion, nearly doubling the IMF’s available resources to make loans to nations in trouble.
IMF boosts resources by $430 billion to calm market fears over European debt crisis - The Washington Post
IMF Managing Director Christine Lagarde announced the new figure at the conclusion of discussions of the G-20 major economic powers Friday. She said that some countries, including Russia, India, China and Brazil, had made private pledges but did not want to issue public commitments until they had conferred with officials in their home capitals.
But she said when the public and private commitments were combined, the total raised would exceed $430 billion, nearly doubling the IMF’s available resources to make loans to nations in trouble.
IMF boosts resources by $430 billion to calm market fears over European debt crisis - The Washington Post
3/20/12
Economic confidence makes a comeback - by Tavia Grant and Richard Blackwell
 |
| "Seems the economy is picking up" |
Improving global conditions are the chief reason, as the U.S. economy shows increased signs of vigour and Europe moves to contain its financial turmoil. Closer to home, high commodity prices will support Western Canada while low interest rates will underpin business and consumer spending.
“Some of the worst-case scenarios [on Europe, the U.S. and China] look a little less worrisome now than they did, say, in December,” said RBC chief economist Craig Wright, who is raising his projection for growth to 2.6 per cent this year. “The uncertainty is easing.”
For more: Economic confidence makes a comeback - The Globe and Mail
1/25/12
George Soros predicts riots, police state and class war for America
Billionaire investor George Soros has a new prediction for America. While it might be as dire as it gets for the financial wiz, this bet concerns more than just the value of the buck. According to Soros, there's about to be an all-out class war.
Soros, 81, previously bet against the British pound in the early 90s and made $1 billion off its collapse. In the years since, he’s remained active in investing, but also in advocacy. He’s helped keep Wikipedia afloat thanks to impressive contributions and through donations to the Tides Center, has indirectly funded Adbusters, the Canadian anti-capitalist magazine that put Occupy Wall Street on the map. Speaking to Newsweek recently, Soros neglected to acknowledge his past successes, but instead offered a word of warning: a period of “evil” is coming to the western world.
Soros goes on to compare the current state of the western world with what the Soviet Union was facing as communism crumbled. Although he would think that history would have taught the globe a thing or two about noticing trends, Soros says that, despite past events providing a perfect example of what is to come, the end of an empire seems imminent.
For more: George Soros predicts riots, police state and class war for America — RT
Soros, 81, previously bet against the British pound in the early 90s and made $1 billion off its collapse. In the years since, he’s remained active in investing, but also in advocacy. He’s helped keep Wikipedia afloat thanks to impressive contributions and through donations to the Tides Center, has indirectly funded Adbusters, the Canadian anti-capitalist magazine that put Occupy Wall Street on the map. Speaking to Newsweek recently, Soros neglected to acknowledge his past successes, but instead offered a word of warning: a period of “evil” is coming to the western world.
Soros goes on to compare the current state of the western world with what the Soviet Union was facing as communism crumbled. Although he would think that history would have taught the globe a thing or two about noticing trends, Soros says that, despite past events providing a perfect example of what is to come, the end of an empire seems imminent.
For more: George Soros predicts riots, police state and class war for America — RT
12/19/11
World Economy: A Second Great Recession Is Possible In 2012 - by Peter Morici
Just as the US economy appears to be improving, four sets of forces could thrust America into an abyss rivaling the Great Depression.
First, for decades, the Washington has pursued more open global trade and domestic deregulation. These unleashed great potential for innovation and growth; however, China and other nations have abused freer trade through export subsidies and import barriers to boost their economies at the expense of others. And, in some industries, a few players have amassed great monopoly power-notably, large financial houses on Wall Street and Europe now have an iron grip on lending.
For more: A Second Great Recession Is Possible In 2012 - Seeking Alpha
First, for decades, the Washington has pursued more open global trade and domestic deregulation. These unleashed great potential for innovation and growth; however, China and other nations have abused freer trade through export subsidies and import barriers to boost their economies at the expense of others. And, in some industries, a few players have amassed great monopoly power-notably, large financial houses on Wall Street and Europe now have an iron grip on lending.
For more: A Second Great Recession Is Possible In 2012 - Seeking Alpha
10/3/11
Debt Jubilee could solve the economic crises
The idea of substantial debt restructurings and a haircut for bondholders has been raised by financial pundits, including Barry Ritholtz and Chris Whalen, two popular analysts and bloggers.
Renowned economist Stephen Roach, currently non-executive chairman of Morgan Stanley Asia, has gone a step further, calling for Wall Street to get behind what others have called a “Debt Jubilee” to forgive excess mortgage and credit card debt for some borrowers. The notion of a Debt Jubilee dates back to biblical Israel where debts were forgiven every 50 years or so. In an August appearance on CNBC, Mr. Roach said debt forgiveness would help consumers get through “the pain of de-leveraging sooner rather than later.”
But it’s not just the liberal economists and doom-and-gloom financial analysts calling for a great haircut. Even some institutional investors, who might suffer some of the impact of debt reductions on their portfolios, are seeing a need for a creative solution to the mess.
EU-Digest
Renowned economist Stephen Roach, currently non-executive chairman of Morgan Stanley Asia, has gone a step further, calling for Wall Street to get behind what others have called a “Debt Jubilee” to forgive excess mortgage and credit card debt for some borrowers. The notion of a Debt Jubilee dates back to biblical Israel where debts were forgiven every 50 years or so. In an August appearance on CNBC, Mr. Roach said debt forgiveness would help consumers get through “the pain of de-leveraging sooner rather than later.”
But it’s not just the liberal economists and doom-and-gloom financial analysts calling for a great haircut. Even some institutional investors, who might suffer some of the impact of debt reductions on their portfolios, are seeing a need for a creative solution to the mess.
EU-Digest
9/26/11
A pessimistic viewpoint: "The world’s problems are so big, and our politicians are so small" - by Margaret Wente
For the past 18 years, many of the world’s most powerful men and women have worked strenuously to impose peace on the Israelis and the Palestinians, who together occupy a piece of real estate that’s smaller than Nova Scotia. Yet, peace is as far away as ever. And nothing that happens at the UN is going to change that.
But it’s not just the Middle East they can’t fix. On the biggest issues of the day, our leaders seem more powerless than ever. The European Union is coming unglued. The United States is stuck in the slough of despond. Even if our leaders knew what to do, they seem incapable of doing it.
In the heroic version of history, extraordinary times produce extraordinary men. When the U.S. was on its knees, it produced FDR. When Britain was threatened by Hitler, along came Churchill. Today, great men are absent. Instead, the EU has faceless Eurocrats such as Jean-Claude Trichet, the man who runs the European Central Bank, and divided leaders who continue to insist that Greece will not default, even though everyone knows it’s just a matter of time.
Back in the days of 2008, people could at least count on the central banks to get together and figure out a bailout plan. This time, that’s not going to happen.
Note EU-Digest: Come on now...Any optimist will disagree with the above report by Margaret Wente. If life looked so grim, we could just as well all pack it in. The optimist will say: "When the going gets tough the tough get going"....now that's the right spirit.
For more: The world’s problems are so big, and our politicians are so small - The Globe and Mail
But it’s not just the Middle East they can’t fix. On the biggest issues of the day, our leaders seem more powerless than ever. The European Union is coming unglued. The United States is stuck in the slough of despond. Even if our leaders knew what to do, they seem incapable of doing it.
In the heroic version of history, extraordinary times produce extraordinary men. When the U.S. was on its knees, it produced FDR. When Britain was threatened by Hitler, along came Churchill. Today, great men are absent. Instead, the EU has faceless Eurocrats such as Jean-Claude Trichet, the man who runs the European Central Bank, and divided leaders who continue to insist that Greece will not default, even though everyone knows it’s just a matter of time.
Back in the days of 2008, people could at least count on the central banks to get together and figure out a bailout plan. This time, that’s not going to happen.
Note EU-Digest: Come on now...Any optimist will disagree with the above report by Margaret Wente. If life looked so grim, we could just as well all pack it in. The optimist will say: "When the going gets tough the tough get going"....now that's the right spirit.
For more: The world’s problems are so big, and our politicians are so small - The Globe and Mail
4/6/11
Stock Market: When Worlds Collide Rick Rule says," don't panic"
Returning to cyberspace for one of his popular webcasts last week, Rick Rule, founder of Global Resource Investments, warned of extreme volatility ahead, in the broad economy generally and in the natural resource market in particular. Girding for the violent roller-coaster ride he foresees calls for both emotional fortitude and financial preparation, he says, suggesting that investors make up their minds now to stay on the sidelines if they don't have the stomach and the cash to climb aboard.
"The bottom line is that your own financial and psychological preparedness for dealing with volatility will determine whether you come out of the next year or two substantially better off-or substantially worse," Rick says. "It's your responsibility to determine your response and hence your own financial future."
On the psychological side, as he has pointed out in the past, Rick believes that the nature of profiting from volatility lies in being "on the other side of the trade."
And as he says, count on "incredible turbulence and incredible variability" as the commodities supercycle, fed by the developing nations, comes up against the secular bull market enveloping the Western economies. "Both the risks and the rewards will come much more frequently and with much more urgency," he predicts. "This market will give you extraordinary opportunities to either make or lose money. Your response will determine whether the next two years are extremely pleasant or unpleasant for you." It could turn out otherwise, he says, but he hopes that in 10 to 15 years "we can look back on this as an exhilarating and profitable experience."
"In the context of the Chinese curse," Rick concludes, "these are very interesting times, times that will favor the prepared and the bold, and be catastrophic for those who are neither prepared nor bold."
EU-Digest
"The bottom line is that your own financial and psychological preparedness for dealing with volatility will determine whether you come out of the next year or two substantially better off-or substantially worse," Rick says. "It's your responsibility to determine your response and hence your own financial future."
On the psychological side, as he has pointed out in the past, Rick believes that the nature of profiting from volatility lies in being "on the other side of the trade."
And as he says, count on "incredible turbulence and incredible variability" as the commodities supercycle, fed by the developing nations, comes up against the secular bull market enveloping the Western economies. "Both the risks and the rewards will come much more frequently and with much more urgency," he predicts. "This market will give you extraordinary opportunities to either make or lose money. Your response will determine whether the next two years are extremely pleasant or unpleasant for you." It could turn out otherwise, he says, but he hopes that in 10 to 15 years "we can look back on this as an exhilarating and profitable experience."
"In the context of the Chinese curse," Rick concludes, "these are very interesting times, times that will favor the prepared and the bold, and be catastrophic for those who are neither prepared nor bold."
EU-Digest
2/24/11
Financial Industry Under Pressure: Equity markets stirred-up as 'peak oil' fears grow amid Libya crisis
Oil prices spiked near the US$120 mark this morning amid the escalating crisis across North Africa and the Arabian Peninsula.
While Libya's Muammar Gaddafi 'bunkered down' and the country's civilian uprising stepped up a gear, the oil prices have soared, and should the 'unrest contagion' continue to spread throughout the oil producing region, crude prices are expected to keep pushing higher.
Setting aside the political and humanitarian issues, the escalating crisis poses an intriguing dichotomy for investors. On one hand the uncertainty is something of a dark cloud hanging over what had looked like a bright, albeit early, recovery for equity markets. Also the threat of rising costs - from disrupted supply routes, and higher fuel costs - compound lingering fears over inflation.
For more: Equity markets stirred-up as 'peak oil' fears grow amid Libya crisis - Proactiveinvestors (UK)
While Libya's Muammar Gaddafi 'bunkered down' and the country's civilian uprising stepped up a gear, the oil prices have soared, and should the 'unrest contagion' continue to spread throughout the oil producing region, crude prices are expected to keep pushing higher.
Setting aside the political and humanitarian issues, the escalating crisis poses an intriguing dichotomy for investors. On one hand the uncertainty is something of a dark cloud hanging over what had looked like a bright, albeit early, recovery for equity markets. Also the threat of rising costs - from disrupted supply routes, and higher fuel costs - compound lingering fears over inflation.
For more: Equity markets stirred-up as 'peak oil' fears grow amid Libya crisis - Proactiveinvestors (UK)
2/18/11
From the Middle East to Wisconsin - the party is over...
Following their 18 day struggle which ended with the toppling of President Mubarack, the Egyptian people clearly showed they had enough with high unemployment, the listless growth of the country, the transfer of wealth to the top one percent of the Egyptian population, the excessive power of the corporate world, and the gluttony of the leadership!
If this sounds familiar, it is! The only difference between Egypt and other parts of the world is the number of band-aids available and a media not doing its job in exposing the unsustainable problems that are showing up everywhere. But change is coming. People are getting very agitated for having to pay the bill for the reckless behavior of the financial community and the lack of Government "supervisory" efforts, for which they were elected, to curb these excesses when they became apparent. Consequently recent Government moves to austerity in Europe were seen as unfair, resulting in public demonstrations in Greece, Ireland, and the United Kingdom.
But this is only the beginning. There certainly will be more demonstrations and violence to come all around the globe, for they all indirectly relate to many of the same "deficiencies" that are now violently coming to the surface in the Middle East. This week the unrest even showed up, of all places, at Madison, Wisconsin, in the US, where thousands of state employees marched on the capitol to protest austerity measures imposed by the new Republican Governor, Scott Walker. Among the measures, slashing workers benefits and busting the public employee unions, despite the $100 million in concessions state employees had already given to help the state's budgetary shortcomings. Governor Walker even called in the National Guard, fearing union members' outrage, and threatening to have the National Guardsmen take over their jobs.
As US states like Wisconsin, Illinois and others attempt to balance government shortfalls by raising taxes, reducing pay, and vacating promises of retirement and health-care on the backs of the middle-class, there is no doubt, these demonstrations will increase and accelerate.
Not one country in the world is immune against this Tsunami of People Power that is engulfing the Globe. Even Americans are finally awakening to the realization that their country has become a combination of a plutocracy and oligarchy; run by a corporate-congressional complex. Like Abraham Lincoln said: "You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time". The party is over....
EU-Digest
If this sounds familiar, it is! The only difference between Egypt and other parts of the world is the number of band-aids available and a media not doing its job in exposing the unsustainable problems that are showing up everywhere. But change is coming. People are getting very agitated for having to pay the bill for the reckless behavior of the financial community and the lack of Government "supervisory" efforts, for which they were elected, to curb these excesses when they became apparent. Consequently recent Government moves to austerity in Europe were seen as unfair, resulting in public demonstrations in Greece, Ireland, and the United Kingdom.
But this is only the beginning. There certainly will be more demonstrations and violence to come all around the globe, for they all indirectly relate to many of the same "deficiencies" that are now violently coming to the surface in the Middle East. This week the unrest even showed up, of all places, at Madison, Wisconsin, in the US, where thousands of state employees marched on the capitol to protest austerity measures imposed by the new Republican Governor, Scott Walker. Among the measures, slashing workers benefits and busting the public employee unions, despite the $100 million in concessions state employees had already given to help the state's budgetary shortcomings. Governor Walker even called in the National Guard, fearing union members' outrage, and threatening to have the National Guardsmen take over their jobs.
As US states like Wisconsin, Illinois and others attempt to balance government shortfalls by raising taxes, reducing pay, and vacating promises of retirement and health-care on the backs of the middle-class, there is no doubt, these demonstrations will increase and accelerate.
Not one country in the world is immune against this Tsunami of People Power that is engulfing the Globe. Even Americans are finally awakening to the realization that their country has become a combination of a plutocracy and oligarchy; run by a corporate-congressional complex. Like Abraham Lincoln said: "You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time". The party is over....
EU-Digest
2/10/11
"Oil price will put US back in recession" - by Amiram Barkat
Current oil prices will put the US back into recession by year's end, and a global oil crisis will break out in 4-5 years. This gloomy forecast comes from Yossi Hollander, chairman of the Israeli Institute for Economic Planning. In an interview with "Globes" in advance of a session of the Herzliya Conference on rising oil prices, he explains what he believes will happen in the coming years, and why Israel has an opportunity to make large gains.
The session at the Herzliya Conference is against the backdrop of oil crossing the $100 a barrel threshold, and a forecast by the International Energy Agency published three months ago, that the price per barrel will reach $200 in 2035.
Yossi Hollander noted: "In the longer term of the next 4-5 years, a global oil crisis is expected. It will begin in less stable places. China will know how to take care of itself; it has $2 trillion. But countries without the economic ability to buy oil, or the military capability to take over oil supplies, will simply remain without oil. African countries like Kenya, which a year ago spent 150% of its trade deficit on petroleum procurement, will drop out of the market completely. In this situation, there is no fuel for transportation, no fertilizers, and no pesticides. People will die of hunger, because the land cannot sustain them all."
"They say that the rise in food prices in Egypt was the straw that broke the camel's back. There is an absolute correlation between the price of food and the price of oil. Not long ago, it was reported that countries like Saudi Arabia were stockpiling food so that it would not happen to them. The Saudis are buying sugar to raise the price of ethanol, which is an alternative to oil. China is building strategic oil stock stocks, and according to estimates, one third of the increase in oil demand in China was for this purpose", said Yossi Hollander
For more: "Oil price will put US back in recession" - Globes
The session at the Herzliya Conference is against the backdrop of oil crossing the $100 a barrel threshold, and a forecast by the International Energy Agency published three months ago, that the price per barrel will reach $200 in 2035.
Yossi Hollander noted: "In the longer term of the next 4-5 years, a global oil crisis is expected. It will begin in less stable places. China will know how to take care of itself; it has $2 trillion. But countries without the economic ability to buy oil, or the military capability to take over oil supplies, will simply remain without oil. African countries like Kenya, which a year ago spent 150% of its trade deficit on petroleum procurement, will drop out of the market completely. In this situation, there is no fuel for transportation, no fertilizers, and no pesticides. People will die of hunger, because the land cannot sustain them all."
"They say that the rise in food prices in Egypt was the straw that broke the camel's back. There is an absolute correlation between the price of food and the price of oil. Not long ago, it was reported that countries like Saudi Arabia were stockpiling food so that it would not happen to them. The Saudis are buying sugar to raise the price of ethanol, which is an alternative to oil. China is building strategic oil stock stocks, and according to estimates, one third of the increase in oil demand in China was for this purpose", said Yossi Hollander
For more: "Oil price will put US back in recession" - Globes
1/1/11
Environmental moments in 2010: Spill Without End, Bill Without End ( and more)
Top 10 lists are often relentlessly negative: the 10 most-polluting industrial plants, the 10 most befouled beaches, and so on.
The spirit of this list is slightly different: Good or bad, these are environmental moments in 2010 that are most likely to reverberate in the world of environmental news in 2011 and beyond.
For more: 2010: Spill Without End, Bill Without End - NYTimes.com
The spirit of this list is slightly different: Good or bad, these are environmental moments in 2010 that are most likely to reverberate in the world of environmental news in 2011 and beyond.
For more: 2010: Spill Without End, Bill Without End - NYTimes.com
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