World economy talk

[uls]

Naharang ang bailout for big 3 automakers

CNBC:

Emergency aid for the nation's auto industry was thrown into jeopardy as Republicans revolted against the $14 billion deal between Democrats and the White House.

---

Evereyone's favorite analyst Meredith Whitney was interviewed on CNBC last night...

"The big banks are going to be on life support for at least 18 months, if not 36 months,"

[tidus1203]

Well Meredith Whitney is just stating the common sense analysis of what will happen. Its just common sense to know that terrible things will happen if you spent beyond your means both at a personal level and even the government level.

[tidus1203]

California is losing money fast. The Governator is scrambling for a quick fix to their $14.8B shortfall. At this rate they could only last until February which until then the state will have no money for even paying state employees. They need a loan fast, or since its bailout season maybe the Federal government could bailout the state?

http://www.foxbusiness.com/story/mar...icit-climbs-b/

[uls]

haha

California = Too big to fail

[tidus1203]

Now for the first time I have to agree on the notion of TOO BIG TO FAIL. Literally! So now people from New York, Texas and all the other 49 states will officially become a California taxpayer if a bailout is on the cards

[uls]

Ya, US taxpayers better get used to that...

--

hey, check this out:

Italy bails out cheese makers!

http://online.wsj.com/article/SB1228...s_Most_Popular

SALSOMAGGIORE TERME, Italy -- The world is bailing out banks and car companies. Italy is coming to the rescue of parmigiano cheese.

In an effort to help producers of the cheese commonly grated over spaghetti, fettuccine and other pastas, the Italian government is buying 100,000 wheels of Parmigiano Reggiano and donating them to charity.

haha

amazing

[tidus1203]

Yep the Europeans with the exception of Germany (that is why they are the most prosperous nation in Europe) always love their dole outs. You know why cars in Europe costs almost double of that in the US? Because Europeans need to subsidize inept French automakers so they can make money

[uls]

Global recession indicator:

Asia exports down --

China's exports fall for first time in seven years
http://www.marketwatch.com/news/stor...7FA42B54B3E%7D

HONG KONG (MarketWatch) -- China's exports declined in November, the first such contraction in more than seven years, underscoring the severity of the global slowdown, and painting a bleak outlook for the sustainability of mainland exports in the months ahead.

Japan Machine Orders Fall 4.4% as Recession Deepens
http://www.bloomberg.com/apps/news?p...zlY&refer=home

Dec. 10 (Bloomberg) -- Japanese machinery orders fell in October as the deepening global recession choked off demand for the country’s cars and electronics.

S.Korea's Nov exports fall 18.3 percent
http://www.forbes.com/afxnewslimited...fx5757475.html

South Korean exports in November fell 18.3 percent from a year ago, data showed on Monday, much worse than forecasts for a 9.9 percent drop, adding to concerns a global economic slowdown was denting the country's sales abroad.

November's drop was the biggest since a 20.4 percent fall in December 2001.

and last but not least:

Philippines Exports -14.9% on Year in Oct
http://www.rttnews.com/Content/Asian...e=B2&Id=798100

Exports in the Philippines were down 14.9 percent on year in October, the National Statistics Office said in a preliminary report on Wednesday, coming in at $3.967 billion. Exports stood at $4.659 billion in October 2007.

[tidus1203]

As I have stated in previous posts the PIG (American and Western Europe consumer) is exhausted. So there is no more bacon and fat that can be extracted for us exporters. But regardless, we are still better off than them. At least we save and we have the money to weather this storm and since sanay na tayo with a low standards of living socially and psychologically we are also better of. The Westerners are in debt, has no money, and is so used to the high life that it would be very painful for them to downgrade their lives. But they have to downgrade, they don't have a choice because afterall they just borrowed the high life with credit and its not theirs to own...

[tidus1203]

True to the German form thus why they are the only one of the BIG 3 in Europe (BIG 3 being Germany, UK and France) that is a net exporter and a budget surplus and a trade surplus.

LONDON -- German Finance Minister Peer Steinbrueck has criticised countries for rushing through what he called crass and untested economic rescue packages at a "breathtaking and depressing" pace.
In an interview with Newsweek magazine, Steinbrueck urged governments to pause before pledging to spend billions of dollars on plans to try and help their economies emerge from the global credit crunch.
A recession was unavoidable and governments should stop trying to outdo each other with ever bigger stimulus measures, said Steinbrueck.
"The speed at which proposals are put together under pressure that don't even pass an economic test is breathtaking and depressing," he said in the interview, published on the magazine's website on Wednesday.
Steinbrueck singled out British Prime Minister Gordon Brown for particular criticism, accusing him of switching to economic policies that would saddle a generation with debt.
"The same people who would never touch deficit spending are now tossing around billions," he said.
"The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking."

http://www.chinadaily.com.cn/world/2...nt_7295217.htm

Looks like may kasama na rin pala ako (the German finance minister in that) sa paniniwala in the flaws of Keynesian spending spree in solving this problem.

[uls]

Britain was the world's power, the British pound was the world's reserve currency

But after WW2, Britain could no longer hang on to its status coz it was deep in debt...

Britain overconsumed...

Someone had to take Britain's place...

So the former British colony - the US - became the world's power, and the USD became the world's reserve currency

The US became the world's biggest consumer... the consumer of last resort

But the US now is deep in debt. the US overconsumed...

Someone now has to take the place of the US

The US can no longer continue its role as the biggest consumer

who will take the place of the US?

Asia?

[tidus1203]

And prior to the British it was the Spanish who was deemed superpoer and guess what made them fall?? You guessed it! DEBT! They had so much debt too in trying to increase their territories and colonies that they can no longer make it sustainable.

[uls]

yep

empires rise and fall

the US is just another empire

like Rome

[ab_initio]

yep

empires rise and fall

the US is just another empire

like Rome

let me venture into this seemingly exclusive field...hehehe (malapit na ako mag 300 e...busy na ako next week)

sustainability is a concept too easy to say but hardest to execute...

[tidus1203]

That is true. Well the problem kasi once one becomes a superpower their head becomes to bloat and they leverage their powers (in this case economic powers) too much beyond their control. So sa huli tumba rin...

[tidus1203]

Meet my new idol. Hugh Hendry of Eclectica. A hedge fund manager. Nice Scottish accent

[ame="http://www.youtube.com/watch?v=9G7HQpXby5k"]YouTube - Hugh Hendry insights on the Euro[/ame]

[uls]

"Greenspan and his acolytes abolished the business cycle"

--

the governments that guarantee bank deposits really have no money to pay depositors if the depositors withdraw all their money

it's a bluff

the market knows that

the bank deposits are bigger than the GDP of their countries

the market doesnt bet on bank failures now coz the banks get bailed out

the bets are now on sovereign debt default

--

Investing in UK sovereign debt is now riskier than investing in McDonald's corporate bonds

Check the credit default swaps:

The cost of insuring for a year against default on £10m of five-year UK debt has jumped from less than £30,000 to £120,000, compared with the current price of £77,000 to protect against a similar McDonald's default.

[Monseratto]

The US can no longer continue its role as the biggest consumer

who will take the place of the US?

Asia?

Don't bet on it...

They better find one fast if they want an end to the global recession by the second half of next year. Countries can no longer produce like before if there's no one with the money to consume it. The consumer will be forced to use their cars and gadgets longer than before.

[uls]

^^

yep, Asians will not borrow and spend like Americans

[kinyo]

who will take the place of the US?

China ... at least from the looks of it ... haven't they started invading U.S. by buying houses?

Is world war 3 coming?