Archive for December, 2009
Economist Says Current Financial Crisis Is First And Foremost A Crisis Of Confidence
by Mr. Wiseman on Dec.19, 2009, under Opinions
ScienceDaily (Sep. 26, 2008) — Mahmoud El-Gamal, chair of Rice University’s economics department and Amy Myers Jaffe of Rice University’s Baker Institute are near completion of a forthcoming book, tentatively titled “Oil, Dollars, Debt and Crises.” The book closely examines the world financial marketplace. “It’s a book about the petrodollar and the worldwide financial system,” said El-Gamal.* (continue reading…)
2010 economy ‘looking good’
by Mr. Wiseman on Dec.18, 2009, under Opinions
The Chinese economy will grow by more than 8 percent in 2010, despite lingering uncertainties in the global market, a leading Chinese economist predicted.
Fan Gang, director of the China National Economic Research Institute and a member of the money policy committee of the People’s Bank of China, is confident that the country can meet its GDP growth target of 8 percent this year and will keep the momentum of the economic recovery next year.
He attributed the strong economic growth to the government stimulus package, rising investment in property and industrial sectors as well as a growing trade surplus.
China’s 4-trillion-yuan ($585 billion) stimulus package, mainly on domestic investment and consumption, is shoring up the economy, with manufacturing showing more signs of recovery, according to the State Council, or Chinese cabinet .
“Investment in real estate so far this year has almost fallen to its lowest level for years,” Fan said, “yet money has started to flow into this sector and will increase quickly next year, making it a significant source of GDP growth.” (continue reading…)
Over-Consumtion is a Straight Way to Crisis
by Mr. Wiseman on Dec.18, 2009, under Editorial
New trendy “Do The Green Thing” published an survey. It show how much people spend on completely unneeded staff.
In 2008, £1.7 billion was spent on unwanted Christmas presents
Each person will spend an average of £435 on Chrismas gifts
Over-consumtion leads to extra garbage and CO2 emissions. (continue reading…)
Fundamental driving forces of the financial crisis
by Mr. Wiseman on Dec.15, 2009, under Opinions
It is superfluous to note on this blog that the world economy is passing through the most severe financial crisis since 1929.[1] Its results are also beginning to be well understood: the era of increasing deregulation has ended and instead increased, in the US very large scale, state intervention in the economy has begun.[2]
But what type of crisis is this – which greatly affects what its eventual outcome will be? (continue reading…)
Why Constitution Matters in Financial Crisis
by Mr. Wiseman on Dec.08, 2009, under Opinions
Regardless, as the imminent unwind occurs (not if – when), it is always the equity tranche that will take the first loss, despite the novel development of the creeping equitization concept for companies such as Citigroup (and soon Bank Of America) where dilution and value destruction of senior capital tranches is only voluntary because the administration deems it so – the loaded gun of total system collapse pointed at one’s temple can be a persuasive mechanism.
BBC: World Financial Crisis ‘not over’
by Mr. Wiseman on Dec.07, 2009, under Opinions
The US economist widely credited with having predicted the financial crisis has warned we are already “planting the seeds of the next crisis”.
Nouriel Roubini told the BBC that he is concerned about the growing gap between the “bubbly and frothy” stock markets and the real economy.
Today’s Question: How will Dubai’s debt default affect the world economy?
by Mr. Wiseman on Dec.03, 2009, under Opinions
Over the past decade Dubai has touted its resorts, skyscrapers and beaches to build a brand of luxury and extravagance. Its momentum fueled by Western investors, last fall’s financial crisis exposed just how much the Arab emirate had borrowed — between $80 and $90 billion. (continue reading…)
Fundamental Reason for Current World Economic Turmoil
by Mr. Wiseman on Dec.03, 2009, under Opinions
What is the fundamental reason for current world economic turmoil? It is a quadrillion dollar question. Contrary to popular perception, the answer is not US housing crisis or exotic derivatives such as CMO’s and CDO’s or high oil prices or cheap dollar. The fundamental reason is lack of trust. People don’t trust the banks with their hard earned money. Banks don’t trust people to lend money. Investors don’t trust the CEO’s and CFO’s of public companies to invest in them . Business leaders don’t trust the political establishment and political leaders don’t trust private enterprises.Finally people don’t trust their elected officials and public institutions. It is a evil cycle: Classic chicken Egg problem. (continue reading…)
