Monday, February 23, 2009
Thursday, February 19, 2009
Sunday, February 15, 2009
How then would Adam Smith fix the present mess? Sorry, but it is fixed already. The answer to a decline in the value of speculative assets is to pay less for them. Job done.
We could pump the banks full of our national treasure. But Smith said: “To attempt to increase the wealth of any country, either by introducing or by detaining in it an unnecessary quantity of gold and silver, is as absurd as it would be to attempt to increase the good cheer of private families, by obliging them to keep an unnecessary number of kitchen utensils.” 
We could send in the experts to manage our bail-out. But Smith said: “I have never known much good done by those who affect to trade for the public good.” 
And we could nationalise our economies. But Smith said: “The state cannot be very great of which the sovereign has leisure to carry on the trade of a wine merchant or apothecary”.  Or chairman of General Motors.
Too bad he decided not to run for House Minority Leader, the house could use more of his guidance.
Very good NYT OP-ED here. He makes a good point about our assumption that the world will be able to finance our massive debt increase by buying our US treasury bonds.
"From a global perspective, the picture only looks worse. As we have debated how much money to borrow and spend in hopes of jump-starting our economy, we’ve ignored the worldwide stimulus binge. China, Europe and Japan are all spending hundreds of billions of dollars they don’t have in hopes of speeding up their economies, too. That means the very countries we have relied on to buy our bonds, notably China and Japan, are now putting their own bonds on the global credit markets."
Wednesday, February 11, 2009
"European banks sitting on £16.3 trillion of toxic assets may suffer massive losses, according to a confidential Brussels document. "
"In line with the risk, and the weak performance of some EU economies compared to others, investors are demanding increasingly higher interest to lend to countries such as Italy instead of Germany. Ministers and officials fear that the process could lead to vicious spiral that threatens to tear both the euro and the EU apart."
Tuesday, February 10, 2009
"So President Obama says we face catastrophe absent help from Washington? Far from it. Economies once again never fall into recession; instead they are pushed into slowdowns by governments that create wedges between work and reward. In short, the single best tonic for our economy is not tax cuts or tax increases, not housing or unemployment subsidies, not heavy spending or China jawboning, but a far humbler Washington that simply does nothing. Left alone, there’s nothing individuals working free of government oversight can’t achieve. The answer to our economic ills is for Washington to simply leave us alone."
Friday, February 6, 2009
"After Obama's miraculous 2008 presidential campaign, it was clear that at some point the magical mystery tour would have to end. The nation would rub its eyes and begin to emerge from its reverie. The hallucinatory Obama would give way to the mere mortal. The great ethical transformations promised would be seen as a fairy tale that all presidents tell -- and that this president told better than anyone.
I thought the awakening would take six months. It took two and a half weeks."
Monday, February 2, 2009
* FRANCE -- Hundreds of thousands of strikers marched in French cities on Thursday to demand pay rises and job protection. Some protesters clashed with police, but no major violence was reported. -- The one-day strike failed to paralyse the country and support from private sector workers appeared limited. Labour leaders hailed the action, which marked the first time France's eight union federations had joined forces against the government since President Nicolas Sarkozy took office in 2007.
* RUSSIA -- Thousands of opposition supporters rallied in Moscow and the far east port of Vladivostok on Saturday in a national day of protests over hardships caused by the financial crisis. On Sunday hundreds of demonstrators in Moscow called for Russia's leaders to resign. -- Street rallies were held in almost every major city over the weekend. The pro-Kremlin United Russia party also drew thousands to rallies in support of government anti-crisis measures. -- About 100 protesters were arrested in Vladivostok last month during protests against hikes in second hand car import duties aimed at protecting jobs in the domestic car industry.
* MADAGASCAR -- More than 100 people were killed in civil unrest in Madagascar last week, according to the U.S. ambassador. Police previously confirmed 44 deaths, with most of those in a store burned during looting when an anti-government protest degenerated into violence. -- The mayor of Antananarivo, Andry Rajoelina, galvanised popular frustrations to spearhead demonstrations and strikes against President Marc Ravalomanana's government. The violence came amid an oil and minerals exploration boom in Madagascar.
* ICELAND -- Parties forming a new coalition for the crisis-hit island decided on Sunday its new prime minister will be former Social Affairs Minister Johanna Sigurdardottir. -- Prime Minister Geir Haarde resigned last week after a series of protests, some of which had turned violent. He was the first leader to fall as a direct result of the credit crunch. -- The collapse of the country's fast-expanding banks under a weight of debt forced the country to take a $10 billion IMF-led rescue package and sparked widespread anger.
* DAVOS -- Hundreds of people rallied in Geneva and Davos on Saturday to protest against the World Economic Forum, saying the elite gathered for its annual meeting are not qualified to fix the world's problems. -- In Geneva, where the WEF has its headquarters, police in riot gear fired teargas and water canon to disperse a crowd.
* BRITAIN -- Up to 900 contractors at the Sellafield nuclear plant walked off the job on Monday, joining hundreds of other contract workers who have gone on strike in recent days over the use of foreign labourers as recession bites. -- Thousands of energy workers staged walkouts on Friday, two days after contractors at a refinery owned by France's Total began protests at the award of a construction contract to Italian firm IREM. Unions say it has brought in workers from Italy and Portugal and deprived Britons of work.
* GREECE -- Greek farmers removed roadblocks last week which caused 11 days of travel chaos across the country as they protested against low prices. They kept their blockade on Bulgaria's border and central Greece. -- High youth unemployment was a main driver for rioting in Greece in December, initially sparked by the police shooting of a youth in an Athens neighbourhood. The protests forced a government reshuffle. * GUADELOUPE -- France sent a minister to the Caribbean island on Sunday for talks aimed at ending a 13-day general strike over pay and prices that has paralysed the French territory. -- An alliance of 47 unions and local bodies launched their protest on Jan. 20 over the cost of living. They have drawn up a list of 146 demands including a 200 euro ($257) increase in the minimum salary, a freeze on rents and a cut in taxes and food prices. Island authorities have rejected the demands.
* BULGARIA -- Hundreds of Bulgarians demanded economic and social reforms in the face of a global slowdown in anti-government rallies last month, calling on the Socialist-led government to act or step down. -- Earlier in January, hundreds of protesters clashed with police, smashed windows and damaged cars in Sofia when a rally against corruption and slow reforms in the face of the economic crisis turned into a riot.
* LATVIA -- A 10,000-strong protest in Latvia on Jan. 16 descended into a riot, with protesters trying to storm parliament before going on the rampage. Government steps to cut wages, as part of an austerity plan to win international aid, have angered people.
* LITHUANIA -- Also on Jan. 16, police fired teargas to disperse demonstrators who pelted parliament with stones in protest at government cuts in social spending to offset an economic slowdown. Police said 80 people were detained and 20 injured. -- Prime Minister Andrius Kubilius said the violence would not stop an austerity plan launched after a slide in output and revenues.
Really? That is our big problem. Over the last couple generations we have saved too much and not spend enough? We aren't in this mess because we are waaaaay overextended?
"People are not saving; they are building financial bomb shelters," said Mark Stevens, who runs a management consulting firm.... That sounds about right.
"It's really a liberating feeling," she said. "If you want something, you have to have the money for it."