Of Recessions and Recoveries
V-Shaped. L-Shaped. Shallow but long. Deep but short.
Economists use phrases like these to characterize recessions. Use this graphic to compare the current recession -- and the eventual recovery -- to other downturns and to put the current crisis in perspective. Data will be updated regularly over the next two years. (Interactive Grapic on WSJ online)
http://online.wsj.com/article/SB123574078772194361.html#articleTabs%3Dinteractive
Economy in Worst Fall Since '82
Output Sank 6.2% Last Quarter; Plunging Trade, Investment Signal Trouble Ahead
Babylon Translator Download
Saturday, February 28, 2009
Berkshire net sinks; Buffett says economy in shambles
Berkshire net sinks; Buffett says economy in shambles
NEW YORK (Reuters) - Berkshire Hathaway Inc, Warren Buffett's insurance and investment company, barely broke even in the fourth quarter because of losses on derivatives contracts tied to the stock market, which caused its net worth to tumble $10.9 billion.
Buffett also offered a gloomy outlook for the economy, saying in his annual letter to Berkshire shareholders: "The economy will be in shambles throughout 2009 -- and for that matter, probably well beyond."
Quarterly net income for Omaha, Nebraska-based Berkshire sank 96 percent to $117 million, or $76 per Class A share, from $2.95 billion, or $1,904, a year earlier, based on company filings. Revenue fell 12 percent to $24.59 billion.
Results were battered by $4.61 billion of pretax losses on about 251 derivative contracts largely tied to the longer-term performance of four stock market indexes and the creditworthiness of higher-risk "junk" bonds. The losses were twice what Berkshire suffered in the prior nine months.
A deteriorating economy and tight credit led to steep declines in stock prices and an increase in junk bond defaults, resulting in losses for Berkshire. While the losses exist on paper, accounting rules require Berkshire to report them with earnings.
Berkshire's net worth fell to $109.27 billion at year end from $120.16 billion at the end of September, and $120.73 billion at the end of 2007.
For all of 2008, profit at Berkshire fell 62 percent to $4.99 billion, or $3,224 per share, from $13.21 billion, or $8,548. Earnings were the lowest since 2002. Revenue fell 9 percent to $107.8 billion.
Warren Buffett loses billions
Berkshire Hathaway drops $10.9bn in investor's worst year since 1965.
(Source The Telegraph.co.uk)
Mr Buffett described derivatives as "dangerous", but he remained convinced that they were a good bet. "I believe each contract we own was mispriced at inception, sometimes dramatically so. If we lose money on our derivatives, it will be my fault," he wrote.
Nineteen of top 20 stocks in Berkshire's US portfolio, valued at $51.9bn, fell last year. Coca-Cola, its top holding, dropped 26pc and American Express plunged 64pc.
Mr Buffett, 78, said he would maintain Berkshire's "Gibraltar-like financial position" during 2009 by retaining "huge amounts of excess liquidity, near-term obligations that are modest and dozens of sources of earnings".
But he offered a gloomy outlook, saying: "The [US] economy will be in shambles throughout 2009 – and probably well beyond."
He also upped his attack of the US government's bail-out of his insurance and banking rivals. "Though Berkshire's credit is pristine – we are one of only seven AAA corporations in the country – our cost of borrowing is now far higher than competitors with shaky balance sheets but government backing," he wrote. "At the moment, it is much better to be a financial cripple with a government guarantee than a Gibraltar without one."
Warren Buffett's Letters to Berkshire Shareholders
Updated February 28, 2009
BERKSHIRE HATHAWAY INC. SHAREHOLDER LETTERS (Link Download PDF)
Buffett prefers to release the annual report and shareholder letter on Saturdays, when markets are closed and investors can digest his thoughts slowly and in peace.
A Look at the Autos on the Chopping Block
A Look at the Autos on the Chopping Block
1/16/2009 (Video MarketWatch)
Detroit's Big Three automakers are looking to downsize. WSJ's John Stoll talks about some of the brands that might be sold or scrapped, including the Hummer.
1/16/2009 (Video MarketWatch)
Detroit's Big Three automakers are looking to downsize. WSJ's John Stoll talks about some of the brands that might be sold or scrapped, including the Hummer.
Most expensive real estate markets in 2009
Most expensive real estate markets in 2009
(Source) Global Property Guide
Last Updated: Feb 15, 2009
No surprise - Monte Carlo is No 1 in the Global Property Guide's list of World's Most Expensive Residential Real Estate Markets 2009, more than twice as expensive, at US$45,000 per square metre, as the runner up.
Battling for the number 2 position are prime central Moscow and London. Prime central Moscow's US$20,853 per square metre price tag slightly outpaces core Prime London's US$20,756 per square metre, though it is fairer to say the two cities are neck-and-neck.
London residential property prices have fallen for much of 2008, while Moscow property price declines only started in the last quarter, allowing Moscow to catch up with London. Both countries have experienced strong currency declines.
Tokyo and Hong Kong come in fourth and fifth, respectively.
New York, the only US city included in the survey , is 6th, with an average price of US$15,000 per sq. m.
Completing the top ten most expensive real estate markets are two European cities (Paris at 7th and Rome at 9th) and two other Asian cities (Singapore at 8th and Mumbai at 10th). Average prices range from US$9,000 per sq. m. to US$12,000 per sq. m.
The figures are based on the average price of a 120 sq. m., good-condition high-end used apartment in the city centres of more than 110 cities around the world, typically the economic centres where most foreigners are likely to buy.
http://www.globalpropertyguide.com/investment-analysis/Most-expensive-real-estate-markets-in-2009
(Source) Global Property Guide
Last Updated: Feb 15, 2009
No surprise - Monte Carlo is No 1 in the Global Property Guide's list of World's Most Expensive Residential Real Estate Markets 2009, more than twice as expensive, at US$45,000 per square metre, as the runner up.
Battling for the number 2 position are prime central Moscow and London. Prime central Moscow's US$20,853 per square metre price tag slightly outpaces core Prime London's US$20,756 per square metre, though it is fairer to say the two cities are neck-and-neck.
London residential property prices have fallen for much of 2008, while Moscow property price declines only started in the last quarter, allowing Moscow to catch up with London. Both countries have experienced strong currency declines.
Tokyo and Hong Kong come in fourth and fifth, respectively.
New York, the only US city included in the survey , is 6th, with an average price of US$15,000 per sq. m.
Completing the top ten most expensive real estate markets are two European cities (Paris at 7th and Rome at 9th) and two other Asian cities (Singapore at 8th and Mumbai at 10th). Average prices range from US$9,000 per sq. m. to US$12,000 per sq. m.
The figures are based on the average price of a 120 sq. m., good-condition high-end used apartment in the city centres of more than 110 cities around the world, typically the economic centres where most foreigners are likely to buy.
http://www.globalpropertyguide.com/investment-analysis/Most-expensive-real-estate-markets-in-2009
Economy Opinion: Climate of Change (New York Times)
Op-Ed Columnist
Climate of Change (New York Times Permalink)
By PAUL KRUGMAN Published: February 27, 2009
President Obama’s budget represents a huge break from policy trends. If he can get it through Congress, he will set America on a fundamentally new course.
Climate of Change (New York Times Permalink)
By PAUL KRUGMAN Published: February 27, 2009
President Obama’s budget represents a huge break from policy trends. If he can get it through Congress, he will set America on a fundamentally new course.
The budget proposals seek to reverse the rapid increase in economic inequality over the last 30 years.
Friday, February 27, 2009
Economy shrinks at worst pace in 25 years. GDP down 6.2 percent in 4th quarter 2008
Economy shrinks at worst pace in 25 years
Economy shrinks at faster-than-expected 6.2 percent pace in fourth quarter, worst in 25 years
Friday February 27, 8:35 am ET By Jeannine Aversa, AP Economics Writer
WASHINGTON (AP) -- The government says the economy shrank at a staggering 6.2 percent pace at the end of 2008, the worst showing in a quarter-century. Consumers and businesses ratcheted back spending, plunging the country deeper into recession. The Commerce Department figure shows the economy sinking much faster than the 3.8 percent annualized drop for the October-December quarter first estimated by the government last month.
It also was a considerably weaker performance than the 5.4 percent annualized decline economists expected
The faster downhill slide in the final quarter of last year came as the financial crisis -- the worst since the 1930s -- intensified.
Consumers at the end of the year slashed spending by the most in 28 years. They chopped spending on cars, furniture, appliances, clothes and other things. Businesses retrenched sharply, too, dropping the ax on equipment and software, home building and commercial construction..
Economy shrinks at faster-than-expected 6.2 percent pace in fourth quarter, worst in 25 years
Friday February 27, 8:35 am ET By Jeannine Aversa, AP Economics Writer
WASHINGTON (AP) -- The government says the economy shrank at a staggering 6.2 percent pace at the end of 2008, the worst showing in a quarter-century. Consumers and businesses ratcheted back spending, plunging the country deeper into recession. The Commerce Department figure shows the economy sinking much faster than the 3.8 percent annualized drop for the October-December quarter first estimated by the government last month.
It also was a considerably weaker performance than the 5.4 percent annualized decline economists expected
The faster downhill slide in the final quarter of last year came as the financial crisis -- the worst since the 1930s -- intensified.
Consumers at the end of the year slashed spending by the most in 28 years. They chopped spending on cars, furniture, appliances, clothes and other things. Businesses retrenched sharply, too, dropping the ax on equipment and software, home building and commercial construction..
AEX zakt naar laagste stand sinds 1995
AEX zakt naar laagste stand sinds 1995
(Source DFT De Telegraaf) AMSTERDAM - De AEX-index dook aan het begin van de middaghandel nog dieper in de rode cijfers en bereikte de laagste intradag-stand sinds december 1995.
Rond half twee noteerde de hoofdgraadmeter 2,6% lager op 217,70. Op 12 maart 2003 was er nog een laagste stand van 217,80 punten.
Het waren met name de financiële waarden, die de beurs omlaag trokken. ING en Aegon gingen 8% respectievelijk 11% onderuit. Ook de futures van Wall Street zakten steeds verder weg door tegenvallend nieuws over Citigroup.
Alle beurzen in Europa in het rood! (3 % tot 4% lager, Amsterdam 14.45 CET). Update 19.00 CET, European Stock Markets closed down between 1,5 and 2.5 percent. U.S. Markets moderately lower.
U.S.Futures point to considerably lower opening after the U.S. GDP data release.
(Source DFT De Telegraaf) AMSTERDAM - De AEX-index dook aan het begin van de middaghandel nog dieper in de rode cijfers en bereikte de laagste intradag-stand sinds december 1995.
Rond half twee noteerde de hoofdgraadmeter 2,6% lager op 217,70. Op 12 maart 2003 was er nog een laagste stand van 217,80 punten.
Het waren met name de financiële waarden, die de beurs omlaag trokken. ING en Aegon gingen 8% respectievelijk 11% onderuit. Ook de futures van Wall Street zakten steeds verder weg door tegenvallend nieuws over Citigroup.
Alle beurzen in Europa in het rood! (3 % tot 4% lager, Amsterdam 14.45 CET). Update 19.00 CET, European Stock Markets closed down between 1,5 and 2.5 percent. U.S. Markets moderately lower.
U.S.Futures point to considerably lower opening after the U.S. GDP data release.
What is the lipstick indicator?
What is the lipstick indicator?
After World War I, Victorian-era prudishness began to melt away as adventurous girls dared to display more calf below their skirts. Flappers bedecked in headbands and short, shapeless dresses characterized the decadence of the Roaring '20s. But women's style shifted following the stock market crash in 1929, and during the Great Depression, hemlines dropped back down toward the floor.
In 1926, economist George Taylor noticed that fluctuating fashion. Like the stock market, the length of many women's dresses also fell with a peculiar synchronicity. Perhaps this hemline index, as Taylor coined it, reflected the grim economy's psychological effect on the public. It wasn't a time for rash celebration and risk taking; instead, the Great Depression called for a return to fiscal modesty. Read More...
http://money.howstuffworks.com/lipstick-indicator.htm
After World War I, Victorian-era prudishness began to melt away as adventurous girls dared to display more calf below their skirts. Flappers bedecked in headbands and short, shapeless dresses characterized the decadence of the Roaring '20s. But women's style shifted following the stock market crash in 1929, and during the Great Depression, hemlines dropped back down toward the floor.
In 1926, economist George Taylor noticed that fluctuating fashion. Like the stock market, the length of many women's dresses also fell with a peculiar synchronicity. Perhaps this hemline index, as Taylor coined it, reflected the grim economy's psychological effect on the public. It wasn't a time for rash celebration and risk taking; instead, the Great Depression called for a return to fiscal modesty. Read More...
http://money.howstuffworks.com/lipstick-indicator.htm
Hungary Seeks $230 Billion Package for Eastern Europe
Hungary Seeks $230 Billion Package for Eastern Europe
Feb. 27 (Bloomberg) -- Hungarian Prime Minister Ferenc Gyurcsany wants the European Union to arrange a package of as much as 180 billion euros ($230 billion) to help east European economies, banks and companies weather the financial crisis.
A “European Stabilization and Integration Program” would include short-term financing for governments, coordinated restructuring for private debt, the recapitalization of banks and liquidity for companies in as many as 12 countries, Gyurcsany, 47, said in an interview in Budapest yesterday. He will present the plan at a March 1 EU summit in Brussels.
Some Eastern European economies are in meltdown as the global crisis throttles demand for their exports while investment and credit evaporate. Hungary, Ukraine, Latvia, Serbia and Belarus have sought international bailouts. Regional currencies, stocks and bonds plunged as investors fled riskier assets.
Read more...
http://www.bloomberg.com/apps/news?pid=20601087&sid=aMovouCgIclA
Analysis of East Europe bailout
(01:05) Rough Cut Reuters Video
Feb 27 - Analyst Nigel Rendell of RBC Capital Markets in London says more euros will be needed.
Global development banks have launched a 25 billion euro rescue package to prop up banks and businesses in central and Eastern Europe.
In a communique obtained by Reuters, the coordinated plan calls for the World Bank, the European Bank for Reconstruction and Development and the European Investment Bank to provide quick large scale funding to strengthen banks and give insurance firms access to credit.
Details on the banks and countries involved were not immediately available.
The massive expansion of international banks into the former Communist countries of central and Eastern Europe has made the region vulnerable to the credit strains that arose in the U.S.
NOTE: Natural sound; no reporter narration.
SOUNDBITE:
# Analyst Nigel Rendell of RBC Capital Markets in London
Feb. 27 (Bloomberg) -- Hungarian Prime Minister Ferenc Gyurcsany wants the European Union to arrange a package of as much as 180 billion euros ($230 billion) to help east European economies, banks and companies weather the financial crisis.
A “European Stabilization and Integration Program” would include short-term financing for governments, coordinated restructuring for private debt, the recapitalization of banks and liquidity for companies in as many as 12 countries, Gyurcsany, 47, said in an interview in Budapest yesterday. He will present the plan at a March 1 EU summit in Brussels.
Some Eastern European economies are in meltdown as the global crisis throttles demand for their exports while investment and credit evaporate. Hungary, Ukraine, Latvia, Serbia and Belarus have sought international bailouts. Regional currencies, stocks and bonds plunged as investors fled riskier assets.
Read more...
http://www.bloomberg.com/apps/news?pid=20601087&sid=aMovouCgIclA
Analysis of East Europe bailout
(01:05) Rough Cut Reuters Video
Feb 27 - Analyst Nigel Rendell of RBC Capital Markets in London says more euros will be needed.
Global development banks have launched a 25 billion euro rescue package to prop up banks and businesses in central and Eastern Europe.
In a communique obtained by Reuters, the coordinated plan calls for the World Bank, the European Bank for Reconstruction and Development and the European Investment Bank to provide quick large scale funding to strengthen banks and give insurance firms access to credit.
Details on the banks and countries involved were not immediately available.
The massive expansion of international banks into the former Communist countries of central and Eastern Europe has made the region vulnerable to the credit strains that arose in the U.S.
NOTE: Natural sound; no reporter narration.
SOUNDBITE:
# Analyst Nigel Rendell of RBC Capital Markets in London
Thursday, February 26, 2009
Orders for big-ticket goods signal continuing weakness in U.S. industrial sector
Orders for big-ticket goods weaker than expected
Orders for manufactured goods plunge in Jan.; posts record 6 straight months of declines
WASHINGTON (AP) -- Manufacturers saw orders for big-ticket goods plunge a bigger-than-expected 5.2 percent in January as global economic troubles cut into demand from customers in the United States and abroad.
The latest report on U.S. factory activity, released Thursday by the Commerce Department, showed orders falling for a record sixth straight month. The previous record of four straight monthly declines came in 1992.
The weakness in January was widespread with orders for autos, metal products, machinery, computers and electrical equipment, and household appliances all posting declines.
Not only was last month's drop steeper than the 2.5 percent decline analysts expected, but activity in December turned out to be much weaker. Updated figures showed a 4.6 percent drop in orders, versus a 3 percent decline previously estimated.
Manufacturers have trimmed production and payrolls as they race to cut costs to survive the recession. The collapse of the U.S. housing market has especially crimped demand for all kinds of building materials and equipment, as well as a range of consumer goods, including furniture, carpet and household appliances.
Consumers at home and abroad are cutting back, which is hurting U.S. manufacturers.
The department's report showed that orders for autos dropped 6.4 percent in January, from the previous month. Orders for primary metals -- a category that includes steel -- fell 4.6 percent. Demand for fabricated metal products declined 1.1 percent.
Machinery orders dipped 2 percent. Orders for computers and related products plunged 16 percent. Orders for electrical equipment, household appliances and other components fell 6.1 percent.
Stripping out volatile transportation orders, all other orders sank 2.5 percent in January, also the sixth straight monthly decline. Economists expected a 2.1 percent drop for this category.
http://finance.yahoo.com/news/Orders-for-bigticket-goods-apf-14476718.html
Orders for manufactured goods plunge in Jan.; posts record 6 straight months of declines
WASHINGTON (AP) -- Manufacturers saw orders for big-ticket goods plunge a bigger-than-expected 5.2 percent in January as global economic troubles cut into demand from customers in the United States and abroad.
The latest report on U.S. factory activity, released Thursday by the Commerce Department, showed orders falling for a record sixth straight month. The previous record of four straight monthly declines came in 1992.
The weakness in January was widespread with orders for autos, metal products, machinery, computers and electrical equipment, and household appliances all posting declines.
Not only was last month's drop steeper than the 2.5 percent decline analysts expected, but activity in December turned out to be much weaker. Updated figures showed a 4.6 percent drop in orders, versus a 3 percent decline previously estimated.
Manufacturers have trimmed production and payrolls as they race to cut costs to survive the recession. The collapse of the U.S. housing market has especially crimped demand for all kinds of building materials and equipment, as well as a range of consumer goods, including furniture, carpet and household appliances.
Consumers at home and abroad are cutting back, which is hurting U.S. manufacturers.
The department's report showed that orders for autos dropped 6.4 percent in January, from the previous month. Orders for primary metals -- a category that includes steel -- fell 4.6 percent. Demand for fabricated metal products declined 1.1 percent.
Machinery orders dipped 2 percent. Orders for computers and related products plunged 16 percent. Orders for electrical equipment, household appliances and other components fell 6.1 percent.
Stripping out volatile transportation orders, all other orders sank 2.5 percent in January, also the sixth straight monthly decline. Economists expected a 2.1 percent drop for this category.
http://finance.yahoo.com/news/Orders-for-bigticket-goods-apf-14476718.html
Will The Economic Crisis Split East And West In Europe?
Will The Economic Crisis Split East And West In Europe?
Nouriel Roubini, 02.26.09, 12:01 AM EST
The meltdown puts huge pressure on the E.U.'s free-market rules.
(Nouriel Roubini co-wrote this essay with Mary Stokes, Jelena Vukotic and Elisa Parisi-Capone, analysts at Roubini Global Economics.)
The Central and Eastern Europe region is the sick man of emerging markets. While the global crisis means few--if any--bright spots worldwide, the situation in the CEE area is particularly bleak. After almost a decade of outpacing worldwide growth, the region looks set to contract in 2009, with almost every country either in or on the verge of recession.
The once high-flying Baltics--Estonia, Latvia, Lithuania--look headed for double-digit contractions, while countries relatively less affected by the crisis--the Czech Republic, Slovakia and Slovenia--will have a hard time posting even positive growth. Meanwhile, Hungary and Latvia's economies have already deteriorated to the point where International Monetary Fund (IMF) help was needed late last year.
Central and Eastern Europe's ill health is primarily driven by two factors: collapsing exports and the drying up of capital inflows. Exports were key to the region's economic success, accounting for 80% to 90% of gross domestic product in the Czech Republic, Hungary and Slovakia. By far the biggest market for CEE goods is the Eurozone, now in recession.
Meanwhile, the global credit crunch has sapped capital inflows to the region. An easy flow of credit fueled Eastern Europe's boom in recent years, but the good times are gone. According to the Institute of International Finance, net private capital flows to emerging Europe are projected to fall from an estimated $254 billion in 2008 to $30 billion in 2009. Whether this is formally considered a "sudden stop" of capital or not, it will necessitate a very painful adjustment process. Read more...
http://www.forbes.com/2009/02/25/eastern-europe-eu-banks-euro-opinions-columnists_nouriel_roubini.html
Nouriel Roubini, 02.26.09, 12:01 AM EST
The meltdown puts huge pressure on the E.U.'s free-market rules.
(Nouriel Roubini co-wrote this essay with Mary Stokes, Jelena Vukotic and Elisa Parisi-Capone, analysts at Roubini Global Economics.)
The Central and Eastern Europe region is the sick man of emerging markets. While the global crisis means few--if any--bright spots worldwide, the situation in the CEE area is particularly bleak. After almost a decade of outpacing worldwide growth, the region looks set to contract in 2009, with almost every country either in or on the verge of recession.
The once high-flying Baltics--Estonia, Latvia, Lithuania--look headed for double-digit contractions, while countries relatively less affected by the crisis--the Czech Republic, Slovakia and Slovenia--will have a hard time posting even positive growth. Meanwhile, Hungary and Latvia's economies have already deteriorated to the point where International Monetary Fund (IMF) help was needed late last year.
Central and Eastern Europe's ill health is primarily driven by two factors: collapsing exports and the drying up of capital inflows. Exports were key to the region's economic success, accounting for 80% to 90% of gross domestic product in the Czech Republic, Hungary and Slovakia. By far the biggest market for CEE goods is the Eurozone, now in recession.
Meanwhile, the global credit crunch has sapped capital inflows to the region. An easy flow of credit fueled Eastern Europe's boom in recent years, but the good times are gone. According to the Institute of International Finance, net private capital flows to emerging Europe are projected to fall from an estimated $254 billion in 2008 to $30 billion in 2009. Whether this is formally considered a "sudden stop" of capital or not, it will necessitate a very painful adjustment process. Read more...
http://www.forbes.com/2009/02/25/eastern-europe-eu-banks-euro-opinions-columnists_nouriel_roubini.html
Official: Budget projects $1.75 trillion deficit
Official: Budget projects $1.75 trillion deficit
Thursday February 26, 6:43 am ET By Martin Crutsinger, AP Economics Writer
Official: Obama budget projects $1.75 trillion deficit, seeks Medicare cuts
WASHINGTON (AP) -- President Barack Obama is sending Congress a budget Thursday that projects the government's deficit for this year will soar to $1.75 trillion, reflecting efforts to pull the nation out of a deep recession and a severe financial crisis. A senior administration official told The Associated Press that Obama's $3 trillion-plus spending blueprint also asks Congress to raise taxes on the wealthy in 2011 and cut Medicare costs to provide health care for the uninsured.
The president's first budget also holds out the possibility of spending $250 billion more for additional financial industry rescue efforts on top of the $700 billion that Congress has already authorized, according to this official, who spoke on condition of anonymity before the formal release of the budget.
The official said the administration felt it would be prudent to ask for additional resources to deal with the financial crisis, the most severe to hit the country in seven decades. He called the request a "placeholder" in advance of a determination by the Treasury Department of what extra resources will actually be needed.
The spending blueprint Obama is sending Congress is a 140-page outline, with the complete details scheduled to come in mid- to late April, when the new administration sends up the massive budget books that will flesh out the plan.
http://biz.yahoo.com/ap/090226/obama_budget.html
Thursday February 26, 6:43 am ET By Martin Crutsinger, AP Economics Writer
Official: Obama budget projects $1.75 trillion deficit, seeks Medicare cuts
WASHINGTON (AP) -- President Barack Obama is sending Congress a budget Thursday that projects the government's deficit for this year will soar to $1.75 trillion, reflecting efforts to pull the nation out of a deep recession and a severe financial crisis. A senior administration official told The Associated Press that Obama's $3 trillion-plus spending blueprint also asks Congress to raise taxes on the wealthy in 2011 and cut Medicare costs to provide health care for the uninsured.
The president's first budget also holds out the possibility of spending $250 billion more for additional financial industry rescue efforts on top of the $700 billion that Congress has already authorized, according to this official, who spoke on condition of anonymity before the formal release of the budget.
The official said the administration felt it would be prudent to ask for additional resources to deal with the financial crisis, the most severe to hit the country in seven decades. He called the request a "placeholder" in advance of a determination by the Treasury Department of what extra resources will actually be needed.
The spending blueprint Obama is sending Congress is a 140-page outline, with the complete details scheduled to come in mid- to late April, when the new administration sends up the massive budget books that will flesh out the plan.
http://biz.yahoo.com/ap/090226/obama_budget.html
RBS reports record anual loss ($34.4 Billion), the biggest in British corporate history
The Royal Bank of Scotland posted an annual loss of 24.14 billion pounds ($34.4 billion) -- the biggest in British corporate history -- and unveiled a massive restructuring plan on Thursday that will offload many of its international businesses.
The already part-nationalized bank also said it will dump 325 billion pounds of toxic assets into a government insurance program, a step that could result in the state increasing its stake to as high as 95 percent.
RBS Chairman Philip Hampton blamed the massive 2008 loss, which compared with a 7.3 billion pound profit in 2007, on the "unprecedented turbulence" in financial markets and deteriorating conditions around the world.
The bank's revenue fell 15 percent to 25.87 billion pounds.
RBS Chief Executive Stephen Hester, who replaced Fred Goodwin after he resigned in the wake of the bank's financial downfall, refused to make forecasts for the current "difficult" year but said he was confident the restructuring and the government assistance would return RBS to "standalone strength."
The bank said it planned to shift 240 billion pounds, or 20 percent, of its funded assets to a noncore division. Those assets will then be disposed of or run down over the next three to five years.
The already part-nationalized bank also said it will dump 325 billion pounds of toxic assets into a government insurance program, a step that could result in the state increasing its stake to as high as 95 percent.
RBS Chairman Philip Hampton blamed the massive 2008 loss, which compared with a 7.3 billion pound profit in 2007, on the "unprecedented turbulence" in financial markets and deteriorating conditions around the world.
The bank's revenue fell 15 percent to 25.87 billion pounds.
RBS Chief Executive Stephen Hester, who replaced Fred Goodwin after he resigned in the wake of the bank's financial downfall, refused to make forecasts for the current "difficult" year but said he was confident the restructuring and the government assistance would return RBS to "standalone strength."
The bank said it planned to shift 240 billion pounds, or 20 percent, of its funded assets to a noncore division. Those assets will then be disposed of or run down over the next three to five years.
The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble
The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble
Boomer wealth is evaporating
(CEPR) Center for Economic Policy and Research
This report builds upon previous CEPR projections to more accurately describe the current wealth prospects for the baby boom cohorts aged 45 to 54 and 55 to 64. The severity of the housing market meltdown, coupled with the recent collapse of the stock market, has had a severe negative impact on the wealth of these cohorts. Using data from the 2004 Survey of Consumer Finance and the November 2008 Case-Shiller 20 City Price Index, the authors create three possible scenarios for baby boomer wealth and find these households will enter retirement with little wealth beyond Social Security. For each cohort in 2004 and 2009, the paper analyzes net worth, financial assets, equity in real estate, percent of households in each cohort who will need cash to close on their primary residence, net worth of homeowners, net worth of non-homeowners, and the percent of homeowners who would need cash to close on their primary residence.
Download PDF: http://www.cepr.net/documents/publications/baby-boomer-wealth-2009-02.pdf
Plummeting house prices and investment losses will leave millions of baby boomers dependent on Social Security in their retirement
Press Release: February 25, 2009
Boomer wealth is evaporating
(CEPR) Center for Economic Policy and Research
This report builds upon previous CEPR projections to more accurately describe the current wealth prospects for the baby boom cohorts aged 45 to 54 and 55 to 64. The severity of the housing market meltdown, coupled with the recent collapse of the stock market, has had a severe negative impact on the wealth of these cohorts. Using data from the 2004 Survey of Consumer Finance and the November 2008 Case-Shiller 20 City Price Index, the authors create three possible scenarios for baby boomer wealth and find these households will enter retirement with little wealth beyond Social Security. For each cohort in 2004 and 2009, the paper analyzes net worth, financial assets, equity in real estate, percent of households in each cohort who will need cash to close on their primary residence, net worth of homeowners, net worth of non-homeowners, and the percent of homeowners who would need cash to close on their primary residence.
Download PDF: http://www.cepr.net/documents/publications/baby-boomer-wealth-2009-02.pdf
Plummeting house prices and investment losses will leave millions of baby boomers dependent on Social Security in their retirement
Press Release: February 25, 2009
Wednesday, February 25, 2009
Turkish Airlines plane crash at Amsterdam airport. Breaking News
Turkey plane crashes in Amsterdam, Turkish Airlines plane at Amsterdam airport, The plane crashed away from the runway
(Source BBC News, Photo NOS.nl)
For our Turkish readers, Reports say: 135 people on board, no or very few fatalities. According to Eye Witness reports, the plane simply dropped out of the air from very low altitude on near approach to the runway, the accident looks like a technical failure - with a heroic effort from the pilots to keep the plane in the air and reach the runway.
Update 18.45 CET Amsterdam, according to the latest report on NOS.nl (Dutch Television), there were 8 fatalities, 6 critical wounded and 86 wounded victims of the crash.
We apologize for the delay in reporting but we only put this on the site for our Turkish Visitors before we had to leave for other activities. However, reporting about the crash has been all afternoon on the Dutch, Turkish and International Media and TV.
A Turkish Airlines plane has crashed on landing at Amsterdam's Schiphol international airport.
The plane, with 135 passengers on board, crashed near the A9 motorway and suffered significant damage.
It was Flight 1951 from Istanbul and was a 737-800 aircraft.
One person has been killed, and 20 passengers were injured. But Turkish media said at least 50 people had survived unhurt and some 20 people were seen walking away from the plane.
The BBC's Geraldine Coughlan in the Hague says Dutch television has been showing pictures of helicopters at the scene, with about 20 ambulances and fire engines.
Schiphol is the fifth-largest passenger airport in Europe.
http://news.bbc.co.uk/2/hi/europe/7909683.stm
Tuesday, February 24, 2009
Stock Markets down to pre 1997 levels
Stock Markets down to pre 1997 levels
(Amsterdam,Feb 24, 1300 CET)
With stock markets in a continuous slump and reaching pre 1997 levels it's about time to make an analysis and/or prediction.
The markets are going down to the pre dot.com levels but the dot.com was an overoptimistic and unrealistic bubble as well, so in fact what we witness now is a double (or triple?) correction, the correction of the subprime lending bubble and the dot.com bubble. It is also a late correction of the after 9/11 bubble, the flood of the markets with cheap capital to stimulate the economy and keep up consumer levels. Anyway it's more or less a reckoning of the last 15 years.
In the mean time the world has dramatically changed, the more than 25 years old warnings about the dangers of the unlimited use of fossil fuels and the Global Warming (CO2 levels) got more media attention, and last years record Oil Price was a clear warning for the whole world and all levels of Society
The most powerful nation in the world, the United States of America, was first hit by the banking crisis, the credit crunch and the economic downturn. The Global Economy and the Financial system is interconnected and the crisis spreads very fast, as could have been expected.
But the U.S. has already made a shift with the election of Barack Obama as the new President. The large and enthousiastic groups of new voters like the 'millenials' or generation X and the reduced influence of the 'baby boomers' has been largely responsible for this.
The new U.S. Administration needs some time to restore and turn around the economy, huge amounts of money are needed to repair the crumbling infrastructure and the neglected health care system.
Until now the new President has not been challenged by international political developments and events. But the international credibility of the U.S. is heavily damaged in the past 9 years. The financial crisis is still far from over and trust in banks is further decreasing instead of increasing.
How about the rest of the World?
Although the recession is beginning to have an impact worldwide and politicians are becoming aware of the dangers (even the D word, e.g. "Depression" is heard occasionally), we do not expect a thirties style recession. May be for the population of industrialized nations it will mean a few vacations less a year, not buying all kinds of useless crap, postponing of the buying of the latest up to date car every year, quitting all kinds of unnecessary services, and in general literally the trimming of fat and becoming leaner.
Which is not such a bad idea to start with anyway.
Now, a couple hours later (17.00 CET), and the U.S. markets open and slightly up it is time to reflect.
Today (February 24) some rather dismal figures were released, U.S. Consumer Confidence index is plummeting, Housing prices dropped at a record rate in December 2008 and Fed Chairman Ben Bernanke warning the U.S. Economy is in its worst slide since the 1930's and recovery could start in 2010, not 2009.
In all this means there is no recovery and the bottom of the economic slump has not been reached yet.
So the global markets will go down further as well as will World Trade.
The European Governments are on a frantic mission with regular international meetings which probably will continue all Spring and part of Summer until the summer holiday season.
Protectionism and Nationalism is on the rise -as always in these circumstances- and has to be avoided at almost all costs. However, the French President Nicolas Sarkozy is in a 'catch as catch can' situation in his own country and has to push a soft protectionst agenda.
This will cause a turmoil in the EURO Zone and possibly a setback. May be a lot of European goverments have to pay the bill, because they simply forgot they have a more than 300 million population with it's own wishes and dreams. People want solutions, a better life and fast, they have no message for Eurocrats.
In it's first major crisis in 50 years the EU is facing a difficult time ahead.
(Feb 27, 2009, Amsterdam)
We think this global recession will turn out to be worser than expected an take longer than predicted by most experts. It is regrettable to reach this conclusion (and prediction) but we have no other choice. Goverments and Institutions around the world have to get used to new realities and have to come up with new strategies for economic restoration and development. New '21st Century Economy' strategies and this means the (long and difficult) road to new ways of thinking and changing habits. It is not going to be easy and it won't happen without troubles and disasters along the road, but there is no alternative.
More to follow...
(Amsterdam,Feb 24, 1300 CET)
With stock markets in a continuous slump and reaching pre 1997 levels it's about time to make an analysis and/or prediction.
The markets are going down to the pre dot.com levels but the dot.com was an overoptimistic and unrealistic bubble as well, so in fact what we witness now is a double (or triple?) correction, the correction of the subprime lending bubble and the dot.com bubble. It is also a late correction of the after 9/11 bubble, the flood of the markets with cheap capital to stimulate the economy and keep up consumer levels. Anyway it's more or less a reckoning of the last 15 years.
In the mean time the world has dramatically changed, the more than 25 years old warnings about the dangers of the unlimited use of fossil fuels and the Global Warming (CO2 levels) got more media attention, and last years record Oil Price was a clear warning for the whole world and all levels of Society
The most powerful nation in the world, the United States of America, was first hit by the banking crisis, the credit crunch and the economic downturn. The Global Economy and the Financial system is interconnected and the crisis spreads very fast, as could have been expected.
But the U.S. has already made a shift with the election of Barack Obama as the new President. The large and enthousiastic groups of new voters like the 'millenials' or generation X and the reduced influence of the 'baby boomers' has been largely responsible for this.
The new U.S. Administration needs some time to restore and turn around the economy, huge amounts of money are needed to repair the crumbling infrastructure and the neglected health care system.
Until now the new President has not been challenged by international political developments and events. But the international credibility of the U.S. is heavily damaged in the past 9 years. The financial crisis is still far from over and trust in banks is further decreasing instead of increasing.
How about the rest of the World?
Although the recession is beginning to have an impact worldwide and politicians are becoming aware of the dangers (even the D word, e.g. "Depression" is heard occasionally), we do not expect a thirties style recession. May be for the population of industrialized nations it will mean a few vacations less a year, not buying all kinds of useless crap, postponing of the buying of the latest up to date car every year, quitting all kinds of unnecessary services, and in general literally the trimming of fat and becoming leaner.
Which is not such a bad idea to start with anyway.
Now, a couple hours later (17.00 CET), and the U.S. markets open and slightly up it is time to reflect.
Today (February 24) some rather dismal figures were released, U.S. Consumer Confidence index is plummeting, Housing prices dropped at a record rate in December 2008 and Fed Chairman Ben Bernanke warning the U.S. Economy is in its worst slide since the 1930's and recovery could start in 2010, not 2009.
In all this means there is no recovery and the bottom of the economic slump has not been reached yet.
So the global markets will go down further as well as will World Trade.
The European Governments are on a frantic mission with regular international meetings which probably will continue all Spring and part of Summer until the summer holiday season.
Protectionism and Nationalism is on the rise -as always in these circumstances- and has to be avoided at almost all costs. However, the French President Nicolas Sarkozy is in a 'catch as catch can' situation in his own country and has to push a soft protectionst agenda.
This will cause a turmoil in the EURO Zone and possibly a setback. May be a lot of European goverments have to pay the bill, because they simply forgot they have a more than 300 million population with it's own wishes and dreams. People want solutions, a better life and fast, they have no message for Eurocrats.
In it's first major crisis in 50 years the EU is facing a difficult time ahead.
(Feb 27, 2009, Amsterdam)
We think this global recession will turn out to be worser than expected an take longer than predicted by most experts. It is regrettable to reach this conclusion (and prediction) but we have no other choice. Goverments and Institutions around the world have to get used to new realities and have to come up with new strategies for economic restoration and development. New '21st Century Economy' strategies and this means the (long and difficult) road to new ways of thinking and changing habits. It is not going to be easy and it won't happen without troubles and disasters along the road, but there is no alternative.
More to follow...
Sunday, February 22, 2009
European leaders meet amid euro-zone worries
European leaders meet amid euro-zone worries
BERLIN (Reuters) - European leaders met in Berlin on Sunday to agree a common stance on overhauling global financial rules but their summit risked being overshadowed by concerns about the fragility of euro zone and eastern European states.
The host, German Chancellor Angela Merkel, wants the meeting to reaffirm a commitment to free trade, stronger regulation of financial markets and coordinated action to shield the bloc from the worst downturn in the postwar era.
European countries would then take this message of unity to a broader summit of G20 nations in London on April 2, showing they are serious about delivering on an action plan agreed last November in Washington to combat the financial crisis and guard against future meltdowns.
But new tensions within the single currency bloc and the financial woes of European Union members to the east have cast a cloud over the meeting in the German capital.
Ahead of the gathering, the IMF threw its weight behind the idea of a common European bond to alleviate pressure on euro states such as Ireland and Greece that are being forced to pay hefty premiums over stronger bloc members to finance their debt.
(Dutch officials arriving in Berlin, source video NOS.nl)
BERLIN (Reuters) - European leaders met in Berlin on Sunday to agree a common stance on overhauling global financial rules but their summit risked being overshadowed by concerns about the fragility of euro zone and eastern European states.
The host, German Chancellor Angela Merkel, wants the meeting to reaffirm a commitment to free trade, stronger regulation of financial markets and coordinated action to shield the bloc from the worst downturn in the postwar era.
European countries would then take this message of unity to a broader summit of G20 nations in London on April 2, showing they are serious about delivering on an action plan agreed last November in Washington to combat the financial crisis and guard against future meltdowns.
But new tensions within the single currency bloc and the financial woes of European Union members to the east have cast a cloud over the meeting in the German capital.
Ahead of the gathering, the IMF threw its weight behind the idea of a common European bond to alleviate pressure on euro states such as Ireland and Greece that are being forced to pay hefty premiums over stronger bloc members to finance their debt.
(Dutch officials arriving in Berlin, source video NOS.nl)
Saturday, February 21, 2009
The Doing Business project...Download Free Reports
The Doing Business project...
provides objective measures of business regulations and their enforcement across 181 economies and selected cities at the subnational and regional level.
Compiled with the help of 6,700 business experts and government officials around the world, "Doing Business 2009" analyzes how difficult it is to comply with 10 different sets of business regulations that affect company lifecycles, from startup to closure. The World Bank's research team examined the number of procedures required to start a business and the ease and cost of transactions such as obtaining construction permits, hiring workers, getting credit, paying taxes, enforcing contracts and declaring bankruptcy. Each category is given equal weight to create an overall "ease of doing business" index and ranking.
http://www.doingbusiness.org/
Doing Business 2009 -- Full report now available for download! Azerbaijan was the top reformer in doing business, while Eastern Europe and Central Asia led the world’s regions in regulatory reforms, according to Doing Business 2009. Download the entire 211-page report to learn more about reforms and other changes to the business environment in 181 economies.
Download full report (PDF, 4.7MB) or by chapter
Also available in Arabic (PDF, 9MB), French (PDF, 5MB) and Spanish (PDF, 5MB)
http://www.doingbusiness.org/documents/fullreport/2009/DB09_Full_Report.pdf
Study: Singapore is No. 1 spot in the world for small businesses
The U.S. ranks third in a World Bank survey of the friendliest regulatory environments for startups and small companies. (Source CNN Money, read Article)
With the world in economic turmoil and the quest for a new 21st century economy gainig momentum, these reports provide (this report) very usefull information for business people, start ups, entrepreneurs, innovators and inventors who want to be part of the new business wave.
A hundred years ago a wave of innovation happened, almost 50 years ago a new wave started in California in what later became Sillicon Valley. The spirit of these entrepreneurs and innovators is still very much alive but lots of them today are simply looking for the best places to set up business.
For our Dutch readers we would like to point out that The Netherlands is not even in the first 20 of the best places to do business.
provides objective measures of business regulations and their enforcement across 181 economies and selected cities at the subnational and regional level.
Compiled with the help of 6,700 business experts and government officials around the world, "Doing Business 2009" analyzes how difficult it is to comply with 10 different sets of business regulations that affect company lifecycles, from startup to closure. The World Bank's research team examined the number of procedures required to start a business and the ease and cost of transactions such as obtaining construction permits, hiring workers, getting credit, paying taxes, enforcing contracts and declaring bankruptcy. Each category is given equal weight to create an overall "ease of doing business" index and ranking.
http://www.doingbusiness.org/
Doing Business 2009 -- Full report now available for download! Azerbaijan was the top reformer in doing business, while Eastern Europe and Central Asia led the world’s regions in regulatory reforms, according to Doing Business 2009. Download the entire 211-page report to learn more about reforms and other changes to the business environment in 181 economies.
Download full report (PDF, 4.7MB) or by chapter
Also available in Arabic (PDF, 9MB), French (PDF, 5MB) and Spanish (PDF, 5MB)
http://www.doingbusiness.org/documents/fullreport/2009/DB09_Full_Report.pdf
Study: Singapore is No. 1 spot in the world for small businesses
The U.S. ranks third in a World Bank survey of the friendliest regulatory environments for startups and small companies. (Source CNN Money, read Article)
With the world in economic turmoil and the quest for a new 21st century economy gainig momentum, these reports provide (this report) very usefull information for business people, start ups, entrepreneurs, innovators and inventors who want to be part of the new business wave.
A hundred years ago a wave of innovation happened, almost 50 years ago a new wave started in California in what later became Sillicon Valley. The spirit of these entrepreneurs and innovators is still very much alive but lots of them today are simply looking for the best places to set up business.
For our Dutch readers we would like to point out that The Netherlands is not even in the first 20 of the best places to do business.
Friday, February 20, 2009
Meredith Whitney starts her own business; Meredith Whitney LLC.
Meredith Whitney: A league of her own
In an exclusive interview with Fortune, the influential banking analyst talks about why it was time to go independent.
NEW YORK (Fortune) -- Meredith Whitney, the Oppenheimer & Co. banking analyst who called Wall Street's meltdown, is leaving to start her own business. And she says Fortune had a hand in her decision.
"It was the incredible women I met at the Fortune Most Powerful Women's summit that gave me the final push and confidence to go for it," says Whitney. "I am overwhelmed with support from incredibly inspiring people, many of whom I met at that conference." (Conference organizer, senior editor Pattie Sellers, shares her own thoughts about Whitney's move.)
But even before the summit, she was already laying the foundation of her new business, to be called Meredith Whitney LLC. To keep her shop truly independent, she rebuffed interested investors and put up all of the capital herself. (Read More about Meridith Whitney's new business...)
http://money.cnn.com/2009/02/19/news/economy/meredith_whitney.fortune/index.htm?postversion=2009021913
In an exclusive interview with Fortune, the influential banking analyst talks about why it was time to go independent.
NEW YORK (Fortune) -- Meredith Whitney, the Oppenheimer & Co. banking analyst who called Wall Street's meltdown, is leaving to start her own business. And she says Fortune had a hand in her decision.
"It was the incredible women I met at the Fortune Most Powerful Women's summit that gave me the final push and confidence to go for it," says Whitney. "I am overwhelmed with support from incredibly inspiring people, many of whom I met at that conference." (Conference organizer, senior editor Pattie Sellers, shares her own thoughts about Whitney's move.)
But even before the summit, she was already laying the foundation of her new business, to be called Meredith Whitney LLC. To keep her shop truly independent, she rebuffed interested investors and put up all of the capital herself. (Read More about Meridith Whitney's new business...)
http://money.cnn.com/2009/02/19/news/economy/meredith_whitney.fortune/index.htm?postversion=2009021913
Thursday, February 19, 2009
Brookings Institute: Vice President, Economic Studies William Gale about the Stimulus Package
Brookings Institute: Vice President, Economic Studies William Gale
Gale says that the stimulus package should give the economy the jolt that it needs but adds that it generates a few far reaching concerns.
As President Obama signs the much anticipated stimulus package into law, William Gale, vice president and director of Economic Studies at Brookings, says the economy will likely respond as anticipated. But, Gale says, one of the critical elements for the nation’s economic solvency is to ensure that there’s an end in sight for this unprecedented spending bill.
Transcript, read more
"The stimulus package is really only the first component of an overall recovery package. I see four components overall. The stimulus package, housing fix, a finance fix, and some sort of global coordination with other countries. I think the administration, now that it has passed the first of those it’s focused on the second and third, but we cannot forget that we are part of the global economy. If the global economy doesn’t recover that will not be good news for us, so we need to work with other countries on some sort of integrated package."
"...One of the issues that is always a topic of conversation in Washington is who gains and who loses? The stimulus package has a huge number of provisions that effect particular groups, but I think this is a case where the overall impact is gonna dominate any specific group impact. If the fiscal package, the stimulus, can turn the economy around, get people back to work, get businesses hiring again, consumers spending that is going to have a much larger impact on families than any particular $400 tax cut."
Gale says that the stimulus package should give the economy the jolt that it needs but adds that it generates a few far reaching concerns.
As President Obama signs the much anticipated stimulus package into law, William Gale, vice president and director of Economic Studies at Brookings, says the economy will likely respond as anticipated. But, Gale says, one of the critical elements for the nation’s economic solvency is to ensure that there’s an end in sight for this unprecedented spending bill.
Transcript, read more
"The stimulus package is really only the first component of an overall recovery package. I see four components overall. The stimulus package, housing fix, a finance fix, and some sort of global coordination with other countries. I think the administration, now that it has passed the first of those it’s focused on the second and third, but we cannot forget that we are part of the global economy. If the global economy doesn’t recover that will not be good news for us, so we need to work with other countries on some sort of integrated package."
"...One of the issues that is always a topic of conversation in Washington is who gains and who loses? The stimulus package has a huge number of provisions that effect particular groups, but I think this is a case where the overall impact is gonna dominate any specific group impact. If the fiscal package, the stimulus, can turn the economy around, get people back to work, get businesses hiring again, consumers spending that is going to have a much larger impact on families than any particular $400 tax cut."
A Swiss Bank Is Set to Open Its Secret Files
Business / World Business (New York Times Permalink)
A Swiss Bank Is Set to Open Its Secret Files
By LYNNLEY BROWNING Published: February 19, 2009
UBS, Switzerland’s largest bank, has agreed to divulge the names of well-heeled Americans suspected of using offshore accounts at the bank to evade taxes.
A Swiss Bank Is Set to Open Its Secret Files
By LYNNLEY BROWNING Published: February 19, 2009
UBS, Switzerland’s largest bank, has agreed to divulge the names of well-heeled Americans suspected of using offshore accounts at the bank to evade taxes.
Wednesday, February 18, 2009
Fed downgrades economic forecast for this year
Fed downgrades economic forecast for this year, warns of long road to recovery
WASHINGTON (AP) -- The Federal Reserve on Wednesday sharply downgraded its projections for the country's economic performance this year, predicting the economy will actually shrink and unemployment will rise higher.
Under the new projections, the unemployment rate will rise to between 8.5 and 8.8 percent this year. The old forecasts, issued in mid-November, predicted the jobless rate would rise to between 7.1 and 7.6 percent.
The Fed also believes the economy will contract this year between 0.5 and 1.3 percent. The old forecast said the economy could shrink by 0.2 percent or expand by 1.1 percent.
The last time the economy registered a contraction for a full year was in 1991, by 0.2 percent. If the Fed's new predictions prove correct, it would mark the weakest showing since a 1.9 percent drop in 1982, when the country had suffered through a severe recession.
The bleaker outlook represents the growing toll of the worst housing, credit and financial crises since the 1930s. All of those negative forces have plunged the nation into a recession, now in its second year.
"Given the strength of the forces currently weighing on the economy," Fed officials "generally expected that the recovery would be unusually gradual and prolonged," according to documents on the Fed's updated economic outlook.
Against that backdrop, unemployment -- now at 7.6 percent, the highest in more than 16 years -- will keep climbing and stay elevated for quite some time, the Fed predicted.
For now, Fed officials are more worried about falling prices, than rising ones.
The Fed didn't use the word "deflation," which is a dangerous bout of falling prices, but officials noted "some risk of a protracted period of excessively low inflation."
Falling prices sound like a gift at first -- at least to consumers. But a widespread and prolonged decline can wreak more havoc on the economy, dragging down Americans' wages, and clobbering already-stricken home and stock prices. Dropping prices already are hurting businesses' profits, forcing them to slice capital investments and lay off workers.
America's last serious case of deflation was during the Great Depression in the 1930s. Japan was gripped with a period of deflation during the 1990s, and it took a decade for that country to overcome those problems. More on Finance/Yahoo
WASHINGTON (AP) -- The Federal Reserve on Wednesday sharply downgraded its projections for the country's economic performance this year, predicting the economy will actually shrink and unemployment will rise higher.
Under the new projections, the unemployment rate will rise to between 8.5 and 8.8 percent this year. The old forecasts, issued in mid-November, predicted the jobless rate would rise to between 7.1 and 7.6 percent.
The Fed also believes the economy will contract this year between 0.5 and 1.3 percent. The old forecast said the economy could shrink by 0.2 percent or expand by 1.1 percent.
The last time the economy registered a contraction for a full year was in 1991, by 0.2 percent. If the Fed's new predictions prove correct, it would mark the weakest showing since a 1.9 percent drop in 1982, when the country had suffered through a severe recession.
The bleaker outlook represents the growing toll of the worst housing, credit and financial crises since the 1930s. All of those negative forces have plunged the nation into a recession, now in its second year.
"Given the strength of the forces currently weighing on the economy," Fed officials "generally expected that the recovery would be unusually gradual and prolonged," according to documents on the Fed's updated economic outlook.
Against that backdrop, unemployment -- now at 7.6 percent, the highest in more than 16 years -- will keep climbing and stay elevated for quite some time, the Fed predicted.
For now, Fed officials are more worried about falling prices, than rising ones.
The Fed didn't use the word "deflation," which is a dangerous bout of falling prices, but officials noted "some risk of a protracted period of excessively low inflation."
Falling prices sound like a gift at first -- at least to consumers. But a widespread and prolonged decline can wreak more havoc on the economy, dragging down Americans' wages, and clobbering already-stricken home and stock prices. Dropping prices already are hurting businesses' profits, forcing them to slice capital investments and lay off workers.
America's last serious case of deflation was during the Great Depression in the 1930s. Japan was gripped with a period of deflation during the 1990s, and it took a decade for that country to overcome those problems. More on Finance/Yahoo
By the way: " Have you seen Stanford lately?"
FBI finds Allen Stanford in VirginiaThu Feb 19, 2009
Stanford whereabouts unknown after charges: SEC
WASHINGTON (Reuters) - Federal regulators said on Wednesday they do not know the whereabouts of billionaire Texas banker Allen Stanford, charged with "massive" international financial fraud, federal regulators said on Wednesday.
"We are unaware of his whereabouts," SEC spokeswoman Kimberly Garber said from Texas. Asked if Stanford may be outside the United States, she said, "Certainly that's a possibility but we don't know.
(Source Reuters) Stanford whereabouts unknown after charges: SEC
U.S. marshals assisting the SEC have been unable to serve Stanford with court orders freezing assets and appointing a receiver to run his Stanford Financial Group companies since a raid on his Houston headquarters Tuesday, Garber said.
The FBI is in communication with the SEC regarding the Stanford case, FBI spokeswoman Shauna Dunlap said. She gave no more details. "The FBI is certainly aware of the SEC investigation, and we have been in contact with the SEC," Dunlap said.
The SEC said in court papers disclosed Tuesday that Stanford had failed to appear in recent weeks for testimony ordered by subpoena.
CNBC reported that he had tried to hire a private jet to fly one-way to Antigua from Houston, but the jet lessor refused to take his credit card.
Stanford Support for sports includes:
* Stanford's own private Twenty20 cricket competition in the Caribbean, including a $20 million game in November between England and his own team made up of West Indian players.
* Endorsement relationships with Fijian golfer Vijay Singh and England soccer player Michael Owen.
* Host sponsor of the 2009 Sony Ericsson Open tennis event in Biscayne, Florida on March 23-April 5.
* Sponsors venues at the Houston Polo Club and International Polo Club in Palm Beach, and sponsors the Stanford Charity Polo Day at the Royal Military Academy Sandhurst in the UK.
* In golf, it sponsors the PGA Tour's Stanford St. Jude Championship in Memphis, Tennessee.
* Sponsors the Stanford Antigua Sailing Week
Allen Stanford is accused of a fraud (not a Ponzi scheme), a fraud which could turn out to be from the same magnitude as the Madoff fraud.
Late news: unconfirmed rumours about Stanford International Bank being involved with money laundering in the Caribbean and for Mexican drug cartels.
Stanford clients swarm banks
(01:45) Report Reuters Video
Feb. 18 - From Mexico City to Caracas, hundreds of depositors lined up to pull money out of Stanford affiliated banks.
Regulators said they don't know where Stanford is. Fred Katayama reports.From South to North America, hundreds of anxious depositors lined up. They're rushing to pull out their money from banks affiliated with the Texas billionaire accused of fraud. This after U.S. regulators charged Allen Stanford with a "massive" $8 billion dollar fraud.In Houston, Texas, investor Romina Sumpter stood outside Stanford's U.S. headquarters.(SOUNDBITE)(English) Romina Sumpter, investor, saying:"I pray I don't lose everything I invested because it is my inheritance, and it only happens once in a lifetime, and I'm sad to see Mr. Stanford is doing this."Venezuelan bank regulators said Venezuelans had invested billions of dollars in Stanford's bank branch on the island of Antigua.In Antigua's capital, St. Johns, the line stretched around the corner of the Bank of Antigua. More than 600 people waited even though authorities said the bank had sufficient reserves and is separate from Stanford's affiliate that faces U.S. charges.In Mexico City, the dozens who lined up were mostly middle-aged and elderly. Karyna Kleinckwort, a widow, had invested all of her money there. She said, "We don't know what's going on. We are really worried and desperate."Regulators said they don't know where Stanford is. Using his Antiguan affiliate, Stanford International Bank, he's accused of fraudulently selling certificates of deposits that boasted higher than normal yields. But the Stanford case is a lot smaller than that of the 50 billion dollar fraud allegedly carried out by money manager Bernard Madoff. And so far, no criminal charges have been filed. Fred Katayama, Reuters.
Nederland begint de ernst van de recessie in te zien
Nederland begint de ernst van de recessie in te zien
Gisteren, dinsdag 17 februari 2009, na de publicatie van de cijfers van het CPB begon het langzamerhand ook in Nederland door te dringen dat er niet zomaar een conjunctuurschommelingetje is maar een serieuze recessie.
Dank zij de overweldigende belangstelling van de media konden we zgn. geschokte bewindslieden zien die 'geschrokken waren van de cijfers en dan met name van de verwachte sterk oplopende werkloosheid'.
Eigenlijk is de verkiezingsstrijd nu al losgebarsten want de cijfers hebben natuurlijk wel electorale consequenties. (Waar we nog wel meer over zullen horen).
De hele dag vielen deskundigen over elkaar heen in de media, met het aandragen van maatregelen, oplossingen en analyses, en zelfs prominente PvdA ex-bewindslieden die het enkele maanden geleden allemaal nog niet zo somber inzagen, waren om.
Verbaasd over de snelheid van de economische teruggang (of neergang?) was het elkaar vrijpleiten van het gebrek aan alertheid nogal populair, niemand had dit kunnen zien aankomen etc. Blijkbaar hadden ze nog ook nooit van Roubini, Soros en Warren Buffet gehoord.
Maar wat vooral opviel dat vrijwel niemand zich de vraag stelde of een Economie die 50% van het nationaal inkomen in de collectieve sector opbrandt wel een fundamenteel gezonde economie is. Dat was blijkbaar een taboe.
Dat komt nog wel, na het inzicht komt het voelen in dit geval.
Gisteren, dinsdag 17 februari 2009, na de publicatie van de cijfers van het CPB begon het langzamerhand ook in Nederland door te dringen dat er niet zomaar een conjunctuurschommelingetje is maar een serieuze recessie.
Dank zij de overweldigende belangstelling van de media konden we zgn. geschokte bewindslieden zien die 'geschrokken waren van de cijfers en dan met name van de verwachte sterk oplopende werkloosheid'.
Eigenlijk is de verkiezingsstrijd nu al losgebarsten want de cijfers hebben natuurlijk wel electorale consequenties. (Waar we nog wel meer over zullen horen).
De hele dag vielen deskundigen over elkaar heen in de media, met het aandragen van maatregelen, oplossingen en analyses, en zelfs prominente PvdA ex-bewindslieden die het enkele maanden geleden allemaal nog niet zo somber inzagen, waren om.
Verbaasd over de snelheid van de economische teruggang (of neergang?) was het elkaar vrijpleiten van het gebrek aan alertheid nogal populair, niemand had dit kunnen zien aankomen etc. Blijkbaar hadden ze nog ook nooit van Roubini, Soros en Warren Buffet gehoord.
Maar wat vooral opviel dat vrijwel niemand zich de vraag stelde of een Economie die 50% van het nationaal inkomen in de collectieve sector opbrandt wel een fundamenteel gezonde economie is. Dat was blijkbaar een taboe.
Dat komt nog wel, na het inzicht komt het voelen in dit geval.
Tuesday, February 17, 2009
Banks Face Eastern Europe Downgrades, Moody’s Says
Banks Face Eastern Europe Downgrades, Moody’s Says
Feb. 17 (Bloomberg) -- Moody’s Investors Service said some of Europe’s largest banks may be downgraded because of loans to eastern Europe, sending UniCredit SpA to its lowest in 12 years.
Moody’s sees “continuous downward rating pressure” in the region as a result of worsening asset quality and western banks’ reliance on short-term funding, the ratings company said in a report published today. UniCredit earned almost half its pretax profit from eastern Europe, Raiffeisen International Bank-Holding AG almost 80 percent in 2007 and Erste Group Bank AG of Austria more than 60 percent, Moody’s said.
The MSCI East Europe Financials Index dropped 9.9 percent to the lowest in almost six years after the Moody’s statement today. The International Monetary Fund has offered aid worth about $52 billion to Latvia, Hungary, Serbia and Ukraine. It may extend bailouts to Bulgaria, Romania, Lithuania and Estonia, according to Capital Economics research.
“The most risky parts of the western European banks’ businesses are in eastern Europe and when you decide to cut risks, you cut back on the most risky assets first,” Lars Christensen, an analyst at Danske Bank A/S in Copenhagen, said by telephone today. “This could add further risk in the region as the economies there may face large current account deficits if funding from western European banks is withdrawn.” Read more...
Feb. 17 (Bloomberg) -- Moody’s Investors Service said some of Europe’s largest banks may be downgraded because of loans to eastern Europe, sending UniCredit SpA to its lowest in 12 years.
Moody’s sees “continuous downward rating pressure” in the region as a result of worsening asset quality and western banks’ reliance on short-term funding, the ratings company said in a report published today. UniCredit earned almost half its pretax profit from eastern Europe, Raiffeisen International Bank-Holding AG almost 80 percent in 2007 and Erste Group Bank AG of Austria more than 60 percent, Moody’s said.
The MSCI East Europe Financials Index dropped 9.9 percent to the lowest in almost six years after the Moody’s statement today. The International Monetary Fund has offered aid worth about $52 billion to Latvia, Hungary, Serbia and Ukraine. It may extend bailouts to Bulgaria, Romania, Lithuania and Estonia, according to Capital Economics research.
“The most risky parts of the western European banks’ businesses are in eastern Europe and when you decide to cut risks, you cut back on the most risky assets first,” Lars Christensen, an analyst at Danske Bank A/S in Copenhagen, said by telephone today. “This could add further risk in the region as the economies there may face large current account deficits if funding from western European banks is withdrawn.” Read more...
Voorlopige ramingscijfers 2009 en 2010 beschikbaar
Voorlopige ramingscijfers 2009 en 2010 beschikbaar
Krimp van het bruto binnenlands product (BBP) van 3½%
In het kader van de voorbereiding van het Centraal Economisch Plan (CEP) heeft het CPB vandaag voorlopige ramingscijfers naar de betrokken ministeries gestuurd, om na te gaan of de gehanteerde gegevens over de uitgaven, inkomsten en beleidsvoornemens van de rijksoverheid goed verwerkt zijn. Ook zou er sprake kunnen zijn van nieuwe ontwikkelingen. In de komende weken wordt de raming verder uitgewerkt - uitmondend in de publicatie van het CEP op dinsdag 17 maart a.s. De voorlopige cijfers zijn vanaf vandaag meteen voor iedereen beschikbaar.
Afwijking t.o.v. eerdere raming
De vorige raming, die het CPB op 8 december 2008 heeft gepresenteerd, behelsde al een sterke economische terugval vanwege de kredietcrisis. Bij die raming is ook een variant gepresenteerd waarin de wereldhandel door een dieper dal gaat dan in de centrale projectie van december is verondersteld. De cijfers die het CPB vandaag naar buiten brengt, maken duidelijk dat de voorlopige CEP-raming met een krimp van het bruto binnenlands product (BBP) van 3½% zelfs nog iets negatiever uitkomt dan de pessimistische variant uit december, hoofdzakelijk als gevolg van het sterk verslechterende internationale beeld.
Pas op 17 maart inhoudelijke toelichting op raming
Het CPB geeft nooit toelichting op voorlopige cijfers, ook nu niet. In de komende weken wordt hard gewerkt aan het schrijven van het Centraal Economisch Plan. Op dinsdag 17 maart verschijnt de definitieve raming in het CEP. Dan zal deze ook uitgebreid worden toegelicht tijdens een persconferentie en in een persbericht.
Waarom presenteert het CPB nu voorlopige cijfers?
Het CPB heeft nooit eerder zelf concept-cijfers naar buiten gebracht. Wel leert de ervaring dat (vertrouwelijk verspreide) voorlopige CPB-prognoses in het algemeen toch gaan circuleren. Om die reden is besloten de voorlopige ramingscijfers zelf naar buiten te brengen, zodat alle geïnteresseerden hier gelijktijdig over kunnen beschikken. Bovendien voorkomt dit onduidelijkheid over de precieze status van de concept-raming. Vanwege de huidige, uitzonderlijke economische omstandigheden is de behoefte aan en aandacht voor de nieuwe ramingen nu bovendien extra groot.
Krimp van het bruto binnenlands product (BBP) van 3½%
In het kader van de voorbereiding van het Centraal Economisch Plan (CEP) heeft het CPB vandaag voorlopige ramingscijfers naar de betrokken ministeries gestuurd, om na te gaan of de gehanteerde gegevens over de uitgaven, inkomsten en beleidsvoornemens van de rijksoverheid goed verwerkt zijn. Ook zou er sprake kunnen zijn van nieuwe ontwikkelingen. In de komende weken wordt de raming verder uitgewerkt - uitmondend in de publicatie van het CEP op dinsdag 17 maart a.s. De voorlopige cijfers zijn vanaf vandaag meteen voor iedereen beschikbaar.
Afwijking t.o.v. eerdere raming
De vorige raming, die het CPB op 8 december 2008 heeft gepresenteerd, behelsde al een sterke economische terugval vanwege de kredietcrisis. Bij die raming is ook een variant gepresenteerd waarin de wereldhandel door een dieper dal gaat dan in de centrale projectie van december is verondersteld. De cijfers die het CPB vandaag naar buiten brengt, maken duidelijk dat de voorlopige CEP-raming met een krimp van het bruto binnenlands product (BBP) van 3½% zelfs nog iets negatiever uitkomt dan de pessimistische variant uit december, hoofdzakelijk als gevolg van het sterk verslechterende internationale beeld.
Pas op 17 maart inhoudelijke toelichting op raming
Het CPB geeft nooit toelichting op voorlopige cijfers, ook nu niet. In de komende weken wordt hard gewerkt aan het schrijven van het Centraal Economisch Plan. Op dinsdag 17 maart verschijnt de definitieve raming in het CEP. Dan zal deze ook uitgebreid worden toegelicht tijdens een persconferentie en in een persbericht.
Waarom presenteert het CPB nu voorlopige cijfers?
Het CPB heeft nooit eerder zelf concept-cijfers naar buiten gebracht. Wel leert de ervaring dat (vertrouwelijk verspreide) voorlopige CPB-prognoses in het algemeen toch gaan circuleren. Om die reden is besloten de voorlopige ramingscijfers zelf naar buiten te brengen, zodat alle geïnteresseerden hier gelijktijdig over kunnen beschikken. Bovendien voorkomt dit onduidelijkheid over de precieze status van de concept-raming. Vanwege de huidige, uitzonderlijke economische omstandigheden is de behoefte aan en aandacht voor de nieuwe ramingen nu bovendien extra groot.
Monday, February 16, 2009
G7 crisis talks, from the Scene Reuters Video
G7 crisis talks. From the Scene Reuters Video
(03:38)
Feb 15 - The G7 group of industrialised nations ends a meeting in Rome with a pledge to combat recession without distorting free trade.
The global financial crisis has sparked fears of a 1930s-style resurgence of protectionism and there is growing tension among the member states over the impact economic stimulus plans and state bailouts of industries could have on each other.
Reuters Economic Editor Nick Edwards reports from Rome.
(03:38)
Feb 15 - The G7 group of industrialised nations ends a meeting in Rome with a pledge to combat recession without distorting free trade.
The global financial crisis has sparked fears of a 1930s-style resurgence of protectionism and there is growing tension among the member states over the impact economic stimulus plans and state bailouts of industries could have on each other.
Reuters Economic Editor Nick Edwards reports from Rome.
CPB-cijfers vroegtijdig naar buiten op 17 februari
CPB-cijfers vroegtijdig naar buiten op 17 februari
Het Centraal Planbureau (CPB) brengt dit voorjaar de cijfers over de economie vroegtijdig naar buiten. Een woordvoerster van het CPB zei donderdag dat op 17 februari de voorlopige ramingen bekend worden gemaakt over de economische groei, werkloosheid en inflatie voor dit en komend jaar.
Officieel presenteert het Planbureau in maart de ramingen. Deze cijfers zijn van belang voor het kabinet om in de zogeheten voorjaarsnota eventueel het beleid aan te passen.
Verhoging AOW-leeftijd en dekkingsgraad pensioenen
13 februari
Dit memorandum beoogt te verduidelijken welke veronderstellingen het CPB heeft gehanteerd bij berekeningen van de effecten van verhoging van de pensioenleeftijd naar 67 jaar. Er zijn op dit moment twee varianten voor een dergelijke verhoging; deze worden apart behandeld. Daarna volgt een korte analyse van de effecten van beleid en economische ontwikkelingen op de dekkingsgraad van pensioenfondsen.
lees verder op de site van het CPB
CPB Memorandum 215
Verhoging AOW-leeftijd en dekkingsgraad pensioenen, download PDF
Het Centraal Planbureau (CPB) brengt dit voorjaar de cijfers over de economie vroegtijdig naar buiten. Een woordvoerster van het CPB zei donderdag dat op 17 februari de voorlopige ramingen bekend worden gemaakt over de economische groei, werkloosheid en inflatie voor dit en komend jaar.
Officieel presenteert het Planbureau in maart de ramingen. Deze cijfers zijn van belang voor het kabinet om in de zogeheten voorjaarsnota eventueel het beleid aan te passen.
Verhoging AOW-leeftijd en dekkingsgraad pensioenen
13 februari
Dit memorandum beoogt te verduidelijken welke veronderstellingen het CPB heeft gehanteerd bij berekeningen van de effecten van verhoging van de pensioenleeftijd naar 67 jaar. Er zijn op dit moment twee varianten voor een dergelijke verhoging; deze worden apart behandeld. Daarna volgt een korte analyse van de effecten van beleid en economische ontwikkelingen op de dekkingsgraad van pensioenfondsen.
lees verder op de site van het CPB
CPB Memorandum 215
Verhoging AOW-leeftijd en dekkingsgraad pensioenen, download PDF
VSBfonds blijft actief in Mens & Maatschappij en Kunst & Cultuur
VSBfonds blijft actief in Mens & Maatschappij en Kunst & Cultuur
15-02-2009
Als gevolg van een reorganisatie blijft VSBfonds de komende jaren alleen actief in de sectoren Mens & Maatschappij en Kunst & Cultuur. Hiervoor is een jaarlijks donatiebudget van € 26 miljoen beschikbaar. Het fonds stopt per 16 februari 2009 met het toekennen van donaties aan projecten op het terrein van Sport en Natuur & Milieu.
VSBfonds heeft duidelijke keuzes gemaakt en niet voor de 'kaasschaafmethode' willen kiezen. Hierbij is het fonds teruggegaan naar zijn wortels die ruim 200 jaar terug in de tijd gaan. De focus van zijn rechtsvoorgangers op 'ontwikkeling en beschaving van de gewone mens' wijzen, indien vertaald naar de huidige tijd, naar kern activiteiten in de sectoren Mens & Maatschappij en Kunst & Cultuur. Sport en Natuur & Milieu staan net iets verder af van dit gedachtegoed.
VSB-fonds ontslaat personeel en halveert budget
(Bron NRC)
Het fonds richt zich alleen nog op de sectoren ‘mens en maatschappij’ en ‘kunst en cultuur’. Van de 68 medewerkers worden er 33 ontslagen.
De maatregelen zijn een gevolg van de ineenstorting van Fortis, waarin het VSB-fonds met 2 procent van de aandelen (50 miljoen) een groot belang heeft. Door de enorme daling van het aandeel Fortis werd het vermogen van het VSB-fonds vorig jaar gehalveerd. Het donatiebudget gaat met meer dan de helft omlaag naar 26 miljoen euro per jaar.
15-02-2009
Als gevolg van een reorganisatie blijft VSBfonds de komende jaren alleen actief in de sectoren Mens & Maatschappij en Kunst & Cultuur. Hiervoor is een jaarlijks donatiebudget van € 26 miljoen beschikbaar. Het fonds stopt per 16 februari 2009 met het toekennen van donaties aan projecten op het terrein van Sport en Natuur & Milieu.
VSBfonds heeft duidelijke keuzes gemaakt en niet voor de 'kaasschaafmethode' willen kiezen. Hierbij is het fonds teruggegaan naar zijn wortels die ruim 200 jaar terug in de tijd gaan. De focus van zijn rechtsvoorgangers op 'ontwikkeling en beschaving van de gewone mens' wijzen, indien vertaald naar de huidige tijd, naar kern activiteiten in de sectoren Mens & Maatschappij en Kunst & Cultuur. Sport en Natuur & Milieu staan net iets verder af van dit gedachtegoed.
VSB-fonds ontslaat personeel en halveert budget
(Bron NRC)
Het fonds richt zich alleen nog op de sectoren ‘mens en maatschappij’ en ‘kunst en cultuur’. Van de 68 medewerkers worden er 33 ontslagen.
De maatregelen zijn een gevolg van de ineenstorting van Fortis, waarin het VSB-fonds met 2 procent van de aandelen (50 miljoen) een groot belang heeft. Door de enorme daling van het aandeel Fortis werd het vermogen van het VSB-fonds vorig jaar gehalveerd. Het donatiebudget gaat met meer dan de helft omlaag naar 26 miljoen euro per jaar.
Washington's Birthday/Presidents' Day February 16th U.S. Stock Markets closed
Washington's Birthday/Presidents' Day February 16th U.S. Stock Markets closed
Wallstreet is closed today.
Washington's Birthday was first declared a federal holiday by an 1879 act of Congress. The Monday Holiday Law, enacted in 1968, shifted the date of the commemoration of Washington's Birthday from February 22 to the third Monday in February, but neither that law nor any subsequent law changed the name of the holiday from Washington's Birthday to President's Day.
The third Monday in February has become popularly known as President's Day.
Wallstreet is closed today.
Washington's Birthday was first declared a federal holiday by an 1879 act of Congress. The Monday Holiday Law, enacted in 1968, shifted the date of the commemoration of Washington's Birthday from February 22 to the third Monday in February, but neither that law nor any subsequent law changed the name of the holiday from Washington's Birthday to President's Day.
The third Monday in February has become popularly known as President's Day.
Companies turning to Warren Buffet for financing
Buffett to buy $250M Tiffany debt
Jewelry maker becomes the latest company to turn to Berkshire Hathaway for financing.
(Source CNN Money)
NEW YORK (Reuters) -- Warren Buffett's Berkshire Hathaway Inc. has agreed to buy $250 million of debt from luxury jewelry maker Tiffany & Co., the latest in a string of high-yielding investments by the billionaire investor.
New York-based Tiffany said it sold Berkshire $125 million of eight-year notes and $125 million of 10-year notes, all yielding 10%. It said it will use the proceeds to refinance debt and for general corporate purposes.
The investment marks at least the seventh time since September that Berkshire has gotten at least a 10% payout by buying company bonds, preferred stock or convertible securities.
Many companies are turning to Berkshire for financing as the global credit crisis makes it too difficult or costly to raise money from institutional investors.
Jewelry maker becomes the latest company to turn to Berkshire Hathaway for financing.
(Source CNN Money)
NEW YORK (Reuters) -- Warren Buffett's Berkshire Hathaway Inc. has agreed to buy $250 million of debt from luxury jewelry maker Tiffany & Co., the latest in a string of high-yielding investments by the billionaire investor.
New York-based Tiffany said it sold Berkshire $125 million of eight-year notes and $125 million of 10-year notes, all yielding 10%. It said it will use the proceeds to refinance debt and for general corporate purposes.
The investment marks at least the seventh time since September that Berkshire has gotten at least a 10% payout by buying company bonds, preferred stock or convertible securities.
Many companies are turning to Berkshire for financing as the global credit crisis makes it too difficult or costly to raise money from institutional investors.
South Africa's economy. Tough times ahead
South Africa's economy. Tough times ahead
Feb 12th 2009 | JOHANNESBURG
(Source: From The Economist print edition)
But Africa’s biggest economy may still recover quickly from a looming recession.
ANY lingering hopes that South Africa might escape relatively unscathed from the global economic storms were dashed on February 5th when Tito Mboweni, governor of the central bank, predicted that Africa’s biggest economy would go through “a rough patch for the next three to four years”. Any politician who did not pass on that message to voters was “living in cloud-cuckoo-land”.
The same day, in an attempt to stimulate the economy and mitigate the effects of a recession, the bank chopped interest rates by a full percentage point to 10.5%, the biggest single reduction since 2003. As Mr Mboweni confessed at the time, he personally would have preferred a two-point cut. This week he signalled that if growth figures for the last quarter of 2008, due out on February 24th, were worse than expected, there could be a further cut in rates ahead of the monetary-policy committee’s next scheduled meeting in April.
Like the rest of Africa, South Africa had until recently been doing relatively well. Between 2004 and 2007, its economy grew by a perky 5% a year, after averaging a still respectable 3% over the previous decade. Last year it had been expected to expand by around 4%. But after slowing to a virtual standstill (up just 0.2%) in the third quarter—its worst performance in a decade—it will be lucky to reach 3% for the whole year. In the final quarter, the economy probably actually shrank, by as much as 4.6%, some economists reckon. Read more...
South African Government Information
2010 FIFA World Cup South Africa™
Click on image and download PDF
Feb 12th 2009 | JOHANNESBURG
(Source: From The Economist print edition)
But Africa’s biggest economy may still recover quickly from a looming recession.
ANY lingering hopes that South Africa might escape relatively unscathed from the global economic storms were dashed on February 5th when Tito Mboweni, governor of the central bank, predicted that Africa’s biggest economy would go through “a rough patch for the next three to four years”. Any politician who did not pass on that message to voters was “living in cloud-cuckoo-land”.
The same day, in an attempt to stimulate the economy and mitigate the effects of a recession, the bank chopped interest rates by a full percentage point to 10.5%, the biggest single reduction since 2003. As Mr Mboweni confessed at the time, he personally would have preferred a two-point cut. This week he signalled that if growth figures for the last quarter of 2008, due out on February 24th, were worse than expected, there could be a further cut in rates ahead of the monetary-policy committee’s next scheduled meeting in April.
Like the rest of Africa, South Africa had until recently been doing relatively well. Between 2004 and 2007, its economy grew by a perky 5% a year, after averaging a still respectable 3% over the previous decade. Last year it had been expected to expand by around 4%. But after slowing to a virtual standstill (up just 0.2%) in the third quarter—its worst performance in a decade—it will be lucky to reach 3% for the whole year. In the final quarter, the economy probably actually shrank, by as much as 4.6%, some economists reckon. Read more...
South African Government Information
2010 FIFA World Cup South Africa™
Click on image and download PDF
With anticipation growing ahead of the 2010 FIFA World Cup South Africa™, the official Match Schedule has been released. To find out where the games will be played in Cape Town, Durban, Johannesburg, Mangaung/Bloemfontein, Nelson Mandela Bay/Port Elizabeth, Nelspruit, Polokwane, Rustenburg, Tshwane/Pretoria between 11 June and 11 July 2010.
G7 finance ministers reject protectionist measures
G7 finance ministers reject protectionist measures
The Group of Seven finance ministers strongly rejected protectionism Saturday, pledging to work together to support growth and employment and to strengthen the banking system so the world can overcome its worst financial crisis in 50 years.
Still, bad economic news darkened the horizon. The final statement on their two-day meeting in Rome predicted a gloomy forecast, with the severe economic downturn continuing through most of 2009. That came a day after new economic data showed the recession in Europe deepening to its worst levels in decades.
The meeting marked the international debut of U.S. Treasury Secretary Timothy Geithner, who appealed to the "common imperative" to sustain open trade.
"These are global challenges and it is imperative that we work together to address them," Geithner told reporters afterward. "Effective global response will require sustained action by governments working with the international financial institutions." Read more...
February 14, 2009
Statement by Secretary Tim Geithner Following Meeting of the G7 Finance Ministers and Central Bank Governors
Statement by Secretary Tim Geithner – As Prepared for Delivery
Following Meeting of the G7 Finance Ministers and Central Bank Governors
Rome, Italy
From Slate Magazine. Geithner Pitches Plan Across the Pond
The Group of Seven finance ministers strongly rejected protectionism Saturday, pledging to work together to support growth and employment and to strengthen the banking system so the world can overcome its worst financial crisis in 50 years.
Still, bad economic news darkened the horizon. The final statement on their two-day meeting in Rome predicted a gloomy forecast, with the severe economic downturn continuing through most of 2009. That came a day after new economic data showed the recession in Europe deepening to its worst levels in decades.
The meeting marked the international debut of U.S. Treasury Secretary Timothy Geithner, who appealed to the "common imperative" to sustain open trade.
"These are global challenges and it is imperative that we work together to address them," Geithner told reporters afterward. "Effective global response will require sustained action by governments working with the international financial institutions." Read more...
February 14, 2009
Statement by Secretary Tim Geithner Following Meeting of the G7 Finance Ministers and Central Bank Governors
Statement by Secretary Tim Geithner – As Prepared for Delivery
Following Meeting of the G7 Finance Ministers and Central Bank Governors
Rome, Italy
From Slate Magazine. Geithner Pitches Plan Across the Pond
Japan, the world’s second-largest economy is shrinking.
Japan, the world’s second-largest economy shrinking, worst since 1974 Oil Shock
Feb. 16 (Bloomberg) -- Japan’s economy shrank at an annual 12.7 percent pace last quarter, the most since the 1974 oil shock, as recessions in the U.S. and Europe triggered a record drop in exports.
Gross domestic product fell for a third straight quarter in the three months ended Dec. 31, the Cabinet Office said today in Tokyo. The median estimate of 26 economists surveyed by Bloomberg News was for an 11.6 percent contraction.
Exports plunged an unprecedented 13.9 percent from the third quarter as demand for Corolla cars and Bravia televisions collapsed amid a slump that the Group of Seven nations said will persist for most of 2009. Toyota Motor Corp., Sony Corp. and Hitachi Ltd. -- all of which forecast losses -- are firing thousands of workers, heightening the risk a decline in household spending will prolong the recession.
“The economy is in terrible shape and the scary part is that we’re likely to see a similar drop this quarter,” said Seiji Adachi, a senior economist at Deutsche Securities Inc. in Tokyo. “All we can do is wait for overseas demand to pick up.”
The Nikkei 225 Stock Average fell 0.4 percent at the close in Tokyo, extending the year’s losses to 13 percent. The yen rose to 91.59 per dollar from 91.76 on speculation Japan will refrain from taking measures to weaken the currency. The yen’s 18 percent gain over the past year has compounded exporters’ woes by eroding the value of their overseas sales.
Worse Than U.S., Europe
The world’s second-largest economy shrank 3.3 percent from the third quarter, today’s report showed. That compared with the U.S.’s 1 percent contraction and the euro-zone’s 1.5 percent decline, which was the sharpest in at least 13 years.
“There’s no doubt that the economy is in its worst state in the postwar period,” Economic and Fiscal Policy Minister Kaoru Yosano said in Tokyo. “The Japanese economy, which is heavily dependent on exports of autos, electronics and capital goods, has been severely hit by the global slowdown.”
Feb. 16 (Bloomberg) -- Japan’s economy shrank at an annual 12.7 percent pace last quarter, the most since the 1974 oil shock, as recessions in the U.S. and Europe triggered a record drop in exports.
Gross domestic product fell for a third straight quarter in the three months ended Dec. 31, the Cabinet Office said today in Tokyo. The median estimate of 26 economists surveyed by Bloomberg News was for an 11.6 percent contraction.
Exports plunged an unprecedented 13.9 percent from the third quarter as demand for Corolla cars and Bravia televisions collapsed amid a slump that the Group of Seven nations said will persist for most of 2009. Toyota Motor Corp., Sony Corp. and Hitachi Ltd. -- all of which forecast losses -- are firing thousands of workers, heightening the risk a decline in household spending will prolong the recession.
“The economy is in terrible shape and the scary part is that we’re likely to see a similar drop this quarter,” said Seiji Adachi, a senior economist at Deutsche Securities Inc. in Tokyo. “All we can do is wait for overseas demand to pick up.”
The Nikkei 225 Stock Average fell 0.4 percent at the close in Tokyo, extending the year’s losses to 13 percent. The yen rose to 91.59 per dollar from 91.76 on speculation Japan will refrain from taking measures to weaken the currency. The yen’s 18 percent gain over the past year has compounded exporters’ woes by eroding the value of their overseas sales.
Worse Than U.S., Europe
The world’s second-largest economy shrank 3.3 percent from the third quarter, today’s report showed. That compared with the U.S.’s 1 percent contraction and the euro-zone’s 1.5 percent decline, which was the sharpest in at least 13 years.
“There’s no doubt that the economy is in its worst state in the postwar period,” Economic and Fiscal Policy Minister Kaoru Yosano said in Tokyo. “The Japanese economy, which is heavily dependent on exports of autos, electronics and capital goods, has been severely hit by the global slowdown.”
Sunday, February 15, 2009
Annual Forecast 2009: Major Global Trends: Recession, Russia, The Jihadist War
Annual Forecast 2009: Major Global Trends: Recession, Russia, The Jihadist War
The world begins 2009 in its first synchronized recession since 1974. The proximate cause of the global slowdown was the collapse of the U.S. subprime housing market, which touched off a liquidity crisis as American financial institutions that had participated in subprime were forced to set aside cash to rebalance their asset sheets. As the recession deepened, loans far healthier than those originated in subprime also went bad, compounding the need to rebalance and draining more capital out of the system. This contributed to a credit crunch that continued into the New Year. This “simple” credit crisis is hardly the end of the story.
If money is akin to water, then a liquidity crisis is analogous to a very low tide that exposes a host of dangers lurking beneath the surface. The United States sports the fewest of these dangers. Its culture of change means that inefficiencies are regularly and ruthlessly purged from its system. For example, the mortgage brokers who made subprime possible are all already out of business, and most of the investment houses that gorged on securities linked to subprime — up to and including Lehman Brothers and Merrill Lynch — have either gone bankrupt or been acquired by more stable institutions. This obsession with efficiency and rapid evolution results in the constant uncovering of problems, but this very constancy means that the problems tend to be small. In the current case, subprime and its related issues struck more or less at once, but the United States will be able to recover from the problems without getting caught up in unrelated issues. This hardly means that the American recession is a fun time — for one thing, the liquidity crisis has triggered a painful broad-based credit rollback — but the United States is not facing any deeper structural issues.
You can Download the Article and a PDF report by going to the Stratfor Global Intelligence Site: Annual Forecast 2009: Major Global Trends: Recession, Russia, The Jihadist War
Saturday, February 14, 2009
Bank failures: 13 in 2009, Friday the13th
Bank failures: 13 in 2009, Friday the 13th
Bank failures: 13 in 2009, Friday the13th
Closures in Nebraska, Florida, Illinois and Oregon bring the number of bank failures to 13 this year as the financial crisis continues to roll.
NEW YORK (CNNMoney.com) -- Four banks folded Friday, bringing the total number of banks to fail this year to 13.
Deposits at Sherman County Bank, based in Loup City, Neb., the first bank in the state to fail since 1990, will be taken over by Heritage Bank, based in Wood River, Neb., according to the Federal Deposit Insurance Corporation.
Meanwhile, accounts held by Riverside Bank of the Gulf Coast based in Cape Coral, Fla., will be assumed by TIB Bank based in Naples, Fla., the FDIC said. It is the second bank to fail in Florida this year and the fourth to go under in that state since the economic crisis unfurled.
Corn Belt Bank and Trust Company, based in Pittsfield, Ill., the third bank to fail in the state since January 2008, was also shuttered by state regulators, and its deposits were turned over to The Carlinville National Bank out of Carlinville, Ill.
Pinnacle Bank, Beaverton, Oregon, was closed by the Oregon Division of Finance and Corporate Securities. The FDIC entered into an agreement with Washington Trust Bank, Spokane, Washington, to assume all of the deposits of Pinnacle Bank.
Customers who banked with Sherman County Bank, Riverside, Corn Belt Bank, or Pinnacle Bank will automatically become customers of the new owners, and will retain their account protection under the FDIC, which insures single accounts up to $250,000, and joint accounts up to $500,000, the government agency said. Read Article...
Bank failures: 13 in 2009, Friday the13th
Closures in Nebraska, Florida, Illinois and Oregon bring the number of bank failures to 13 this year as the financial crisis continues to roll.
NEW YORK (CNNMoney.com) -- Four banks folded Friday, bringing the total number of banks to fail this year to 13.
Deposits at Sherman County Bank, based in Loup City, Neb., the first bank in the state to fail since 1990, will be taken over by Heritage Bank, based in Wood River, Neb., according to the Federal Deposit Insurance Corporation.
Meanwhile, accounts held by Riverside Bank of the Gulf Coast based in Cape Coral, Fla., will be assumed by TIB Bank based in Naples, Fla., the FDIC said. It is the second bank to fail in Florida this year and the fourth to go under in that state since the economic crisis unfurled.
Corn Belt Bank and Trust Company, based in Pittsfield, Ill., the third bank to fail in the state since January 2008, was also shuttered by state regulators, and its deposits were turned over to The Carlinville National Bank out of Carlinville, Ill.
Pinnacle Bank, Beaverton, Oregon, was closed by the Oregon Division of Finance and Corporate Securities. The FDIC entered into an agreement with Washington Trust Bank, Spokane, Washington, to assume all of the deposits of Pinnacle Bank.
Customers who banked with Sherman County Bank, Riverside, Corn Belt Bank, or Pinnacle Bank will automatically become customers of the new owners, and will retain their account protection under the FDIC, which insures single accounts up to $250,000, and joint accounts up to $500,000, the government agency said. Read Article...
Impatient investors want to know the specifics of what Team Obama is cooking up
Wall Street: Devil is in the details
Impatient investors want to know the specifics of what Team Obama is cooking up to soften the blow of the recession. The week ahead brings several opportunities.
NEW YORK (CNNMoney.com) -- A lack of clear communication between the government and Wall Street last week left investors scratching their heads and dumping their stocks. The week ahead brings a chance for a rapprochement.
President Obama is expected to sign into law Monday the much debated $787 billion economic stimulus package. Obama and his team are also expected to outline specifically why the plan will help soften the blow of the recession when other government efforts over the last year have had little impact.
The plan combines tax relief, aid and spending, and was passed in both the House of Representatives and the Senate last week with very little Republican support. (Full story)
Later in the week, Obama is expected to provide details on the administration's plan to modify home loans in a bid to limit foreclosures.
"We need specifics," said Joe Arnold, wealth manager at Dawson Wealth Management. "The market is back down near the November lows because we don't know specifically how and when these plans are going to have an impact."
Impatient investors want to know the specifics of what Team Obama is cooking up to soften the blow of the recession. The week ahead brings several opportunities.
NEW YORK (CNNMoney.com) -- A lack of clear communication between the government and Wall Street last week left investors scratching their heads and dumping their stocks. The week ahead brings a chance for a rapprochement.
President Obama is expected to sign into law Monday the much debated $787 billion economic stimulus package. Obama and his team are also expected to outline specifically why the plan will help soften the blow of the recession when other government efforts over the last year have had little impact.
The plan combines tax relief, aid and spending, and was passed in both the House of Representatives and the Senate last week with very little Republican support. (Full story)
Later in the week, Obama is expected to provide details on the administration's plan to modify home loans in a bid to limit foreclosures.
"We need specifics," said Joe Arnold, wealth manager at Dawson Wealth Management. "The market is back down near the November lows because we don't know specifically how and when these plans are going to have an impact."
The Art Market, Art Prices, A Second Tulip Mania
A Second Tulip Mania
The prices of contemporary art works have risen to astonishing levels in recent years. Insiders say it’s because we have been living through a golden age of art. Nonsense, argue Ben Lewis and Jonathan Ford, it is a classic investment bubble
Ben Lewis - Jonathan Ford
(Source Forbes.com, Prospect Magazine)
The bubble in contemporary art is about to pop. It has exhibited all the classic features of the South Sea bubble of 1720 or the tulip madness of the 1630s. It has been the bubble of bubbles—balancing precariously on top of other now-burst bubbles in credit, housing and commodities—and inflating more dramatically than all of them. While British house prices took six years to double at the start of this century, contemporary art managed it in just one, 2006-07. (Over the same period, old masters went up by just 7.6 per cent and British 17th to 19th century watercolours actually lost value.) Contemporary art in the emerging economies did even better. The value of its sales in China increased by 983 per cent in one year (2005-06). In Russia they rose 2,365 per cent in five years (2000-05), while its stock market increased by "only" about 300 per cent.
Even these numbers understate the incredible tulip-like increases in the value of the hottest artists. The Chinese painter Zhang Xiaogang saw his work appreciate 6,000 times, from $1,000 to $6m (1999-2008); work by the American artist Richard Prince went up 60 to 80 times (2003-2008). The German painter Anselm Reyle was unknown in 2003; you could have picked up one of his stripe paintings for €14,000. Now he has a studio with 60 assistants turning them out for about €200,000 each. Any figures for the whole contemporary art market are guesswork, though Christie's chief executive, Ed Dolman, recently estimated that it had grown in value from $4bn a year to somewhere between $20-30bn in the past eight years.
But this bubble is now deflating. Sotheby's share price has lost three quarters of its value over the past year, sinking from its peak of $57 in October 2007 to $9 in early November—close to its 1980s low of $8. The latest round of contemporary art auctions in London has gone badly. In October, the Phillips de Pury sale made only £5m—a quarter of the minimum estimate; at Christie's almost half the lots didn't sell; and an air of denial hung over the Frieze art fair like a fog. Upmarket dealers Matthew Marks and Iwan Wirth claimed to have clinched many big deals, but the reality was surely different. A leading New York gallerist was said to have sold very little and a well-known German dealer not a single work.
In his book, Manias, Panics, and Crashes, Charles Kindleberger observed that manias typically start with a "displacement" that excites speculative interest. It may come from a new object of investment or from the increased profitability of existing investments. It is followed by positive feedback as rising prices encourage less experienced investors to enter the market. Then, as the mania gets a grip, speculation becomes more diffuse and spreads to other types of asset. Fresh assets are created at an ever faster rate to take advantage of the euphoria and investors try to increase their gains by borrowing to buy assets or using derivatives. Credit ultimately becomes overextended, swindling and fraud proliferate, and the mania ends in panic as investors seek to liquidate their positions.
The art market has adhered spookily to Kindleberger's model. By 2004 it was clear that a boom in contemporary art was well underway ("The price of art," Ben Lewis, Prospect, October 2004.) At the Armory show, New York's trendsetting contemporary art fair, dealers sold $43m worth of art in four days, nearly twice as much as the previous year. There were huge price rises at auction, too. A 1996 sculpture of a stuffed horse hanging from a ceiling, Ballad of Trotsky, by the fashionable and witty Italian artist Maurizio Cattelan, sold for $2m at auction in May 2002. It had increased in value tenfold in two years. Gerhard Richter's paintings quadrupled in value between 2000 and 2004. Even then, buyers were paying $1m to $3m for a work by Hirst, Warhol, Basquiat or Koons. Those sums now seem quaint—last year a Koons went for $23m, a Hirst for $20m and a Basquiat for $15m. Read the Essay in Prospect Magazine...
The prices of contemporary art works have risen to astonishing levels in recent years. Insiders say it’s because we have been living through a golden age of art. Nonsense, argue Ben Lewis and Jonathan Ford, it is a classic investment bubble
Ben Lewis - Jonathan Ford
(Source Forbes.com, Prospect Magazine)
The bubble in contemporary art is about to pop. It has exhibited all the classic features of the South Sea bubble of 1720 or the tulip madness of the 1630s. It has been the bubble of bubbles—balancing precariously on top of other now-burst bubbles in credit, housing and commodities—and inflating more dramatically than all of them. While British house prices took six years to double at the start of this century, contemporary art managed it in just one, 2006-07. (Over the same period, old masters went up by just 7.6 per cent and British 17th to 19th century watercolours actually lost value.) Contemporary art in the emerging economies did even better. The value of its sales in China increased by 983 per cent in one year (2005-06). In Russia they rose 2,365 per cent in five years (2000-05), while its stock market increased by "only" about 300 per cent.
Even these numbers understate the incredible tulip-like increases in the value of the hottest artists. The Chinese painter Zhang Xiaogang saw his work appreciate 6,000 times, from $1,000 to $6m (1999-2008); work by the American artist Richard Prince went up 60 to 80 times (2003-2008). The German painter Anselm Reyle was unknown in 2003; you could have picked up one of his stripe paintings for €14,000. Now he has a studio with 60 assistants turning them out for about €200,000 each. Any figures for the whole contemporary art market are guesswork, though Christie's chief executive, Ed Dolman, recently estimated that it had grown in value from $4bn a year to somewhere between $20-30bn in the past eight years.
But this bubble is now deflating. Sotheby's share price has lost three quarters of its value over the past year, sinking from its peak of $57 in October 2007 to $9 in early November—close to its 1980s low of $8. The latest round of contemporary art auctions in London has gone badly. In October, the Phillips de Pury sale made only £5m—a quarter of the minimum estimate; at Christie's almost half the lots didn't sell; and an air of denial hung over the Frieze art fair like a fog. Upmarket dealers Matthew Marks and Iwan Wirth claimed to have clinched many big deals, but the reality was surely different. A leading New York gallerist was said to have sold very little and a well-known German dealer not a single work.
In his book, Manias, Panics, and Crashes, Charles Kindleberger observed that manias typically start with a "displacement" that excites speculative interest. It may come from a new object of investment or from the increased profitability of existing investments. It is followed by positive feedback as rising prices encourage less experienced investors to enter the market. Then, as the mania gets a grip, speculation becomes more diffuse and spreads to other types of asset. Fresh assets are created at an ever faster rate to take advantage of the euphoria and investors try to increase their gains by borrowing to buy assets or using derivatives. Credit ultimately becomes overextended, swindling and fraud proliferate, and the mania ends in panic as investors seek to liquidate their positions.
The art market has adhered spookily to Kindleberger's model. By 2004 it was clear that a boom in contemporary art was well underway ("The price of art," Ben Lewis, Prospect, October 2004.) At the Armory show, New York's trendsetting contemporary art fair, dealers sold $43m worth of art in four days, nearly twice as much as the previous year. There were huge price rises at auction, too. A 1996 sculpture of a stuffed horse hanging from a ceiling, Ballad of Trotsky, by the fashionable and witty Italian artist Maurizio Cattelan, sold for $2m at auction in May 2002. It had increased in value tenfold in two years. Gerhard Richter's paintings quadrupled in value between 2000 and 2004. Even then, buyers were paying $1m to $3m for a work by Hirst, Warhol, Basquiat or Koons. Those sums now seem quaint—last year a Koons went for $23m, a Hirst for $20m and a Basquiat for $15m. Read the Essay in Prospect Magazine...
CBS: Persconferentie 'De Nederlandse conjunctuur 2008'
CBS: Persconferentie 'De Nederlandse conjunctuur 2008'
Persbericht, vrijdag 13 februari 2009 9:30
Economie krimpt 0,6 procent in vierde kwartaal 2008
* Eerste krimp in vijf jaar
* Vooral export valt terug
* Investeringen iets lager, bescheiden groei consumptie
* Bijna 100 000 banen erbij
Volgens de eerste, voorlopige raming van het CBS is de Nederlandse economie in het vierde kwartaal van 2008 met 0,6 procent gekrompen ten opzichte van hetzelfde kwartaal een jaar eerder. Dit is de eerste krimp van de Nederlandse economie in meer dan vijf jaar. De teruggang is vooral toe te schrijven aan een sterke daling van de export van Nederlands product. De investeringen krompen licht. De consumptie liet een bescheiden en iets langzamere groei zien. De werkgelegenheid groeide echter met bijna 100 duizend banen nauwelijks minder dan in het derde kwartaal.
Kwartaal-op-kwartaalkrimp 0,9 procent
Ten opzichte van een kwartaal eerder kromp de Nederlandse economie in het vierde kwartaal van 2008 met 0,9 procent. Hierbij is rekening gehouden met werkdag- en seizoeneffecten. Deze kwartaal-op-kwartaalkrimp is de grootste sinds het begin van de jaren tachtig. Door de sterke teruggang in het vierde kwartaal laten nu ook de beide voorgaande kwartalen kwartaal-op-kwartaal een lichte krimp zien. Volgens de veel gebruikte definitie van recessie als twee opeenvolgende kwartalen met een negatieve groei verkeert de Nederlandse economie nu in een recessie.
Download tekst (De PDF bevat het volledige persbericht inclusief tabellen en grafieken, zie de link op de pagina.) Persbericht CBS
Voor 2009 wordt gerekend op een krimp van 2% voor de Nederlandse Economie
Persbericht, vrijdag 13 februari 2009 9:30
Economie krimpt 0,6 procent in vierde kwartaal 2008
* Eerste krimp in vijf jaar
* Vooral export valt terug
* Investeringen iets lager, bescheiden groei consumptie
* Bijna 100 000 banen erbij
Volgens de eerste, voorlopige raming van het CBS is de Nederlandse economie in het vierde kwartaal van 2008 met 0,6 procent gekrompen ten opzichte van hetzelfde kwartaal een jaar eerder. Dit is de eerste krimp van de Nederlandse economie in meer dan vijf jaar. De teruggang is vooral toe te schrijven aan een sterke daling van de export van Nederlands product. De investeringen krompen licht. De consumptie liet een bescheiden en iets langzamere groei zien. De werkgelegenheid groeide echter met bijna 100 duizend banen nauwelijks minder dan in het derde kwartaal.
Kwartaal-op-kwartaalkrimp 0,9 procent
Ten opzichte van een kwartaal eerder kromp de Nederlandse economie in het vierde kwartaal van 2008 met 0,9 procent. Hierbij is rekening gehouden met werkdag- en seizoeneffecten. Deze kwartaal-op-kwartaalkrimp is de grootste sinds het begin van de jaren tachtig. Door de sterke teruggang in het vierde kwartaal laten nu ook de beide voorgaande kwartalen kwartaal-op-kwartaal een lichte krimp zien. Volgens de veel gebruikte definitie van recessie als twee opeenvolgende kwartalen met een negatieve groei verkeert de Nederlandse economie nu in een recessie.
Download tekst (De PDF bevat het volledige persbericht inclusief tabellen en grafieken, zie de link op de pagina.) Persbericht CBS
Voor 2009 wordt gerekend op een krimp van 2% voor de Nederlandse Economie
Books, New York Times Book Review: 'Lords of Finance'
Read the First Chapter (Free)
‘Lords of Finance’
By LIAQUAT AHAMED Published: January 15, 2009
“Few members of the public knew the real truth — that for the last two weeks, as the world financial crisis had reached a crescendo and the European banking system teetered on the edge of collapse, the governor had been incapacitated by a nervous breakdown, brought on by extreme stress.”
LORDS OF FINANCE
The Bankers Who Broke the World
By Liaquat Ahamed
Illustrated. 564 pp. The Penguin Press. $32.95
Books / Sunday Book Review
Flying Blind
By JOE NOCERA Published: February 15, 2009
A grand narrative of the events leading to the Great Depression, built around the stories of four powerful central banker.
‘Lords of Finance’
By LIAQUAT AHAMED Published: January 15, 2009
“Few members of the public knew the real truth — that for the last two weeks, as the world financial crisis had reached a crescendo and the European banking system teetered on the edge of collapse, the governor had been incapacitated by a nervous breakdown, brought on by extreme stress.”
LORDS OF FINANCE
The Bankers Who Broke the World
By Liaquat Ahamed
Illustrated. 564 pp. The Penguin Press. $32.95
Books / Sunday Book Review
Flying Blind
By JOE NOCERA Published: February 15, 2009
A grand narrative of the events leading to the Great Depression, built around the stories of four powerful central banker.
Friday, February 13, 2009
Wild Optimism: Economist Sees Modest GDP Growth in Late 2009
This Counts as Wild Optimism: Economist Sees Modest GDP Growth in Late 2009
It's hard to be a saint in the city and it's even harder these days to be optimistic about the U.S. economy. According to a Pew Center poll, 30% of Americans think we're already in a depression while the econo-bears like Nouriel Roubini have seen their stature rise dramatically.
Relative to that, John Ryding, chief economist of RDQ Economics, is a wide-eyed optimist because he believes the U.S. economy will experience positive growth in the second-half of 2009 and the unemployment rate will peak at 9% in 2010, not reach the low-to-mid teens as many others forecast.
It's hard to be a saint in the city and it's even harder these days to be optimistic about the U.S. economy. According to a Pew Center poll, 30% of Americans think we're already in a depression while the econo-bears like Nouriel Roubini have seen their stature rise dramatically.
Relative to that, John Ryding, chief economist of RDQ Economics, is a wide-eyed optimist because he believes the U.S. economy will experience positive growth in the second-half of 2009 and the unemployment rate will peak at 9% in 2010, not reach the low-to-mid teens as many others forecast.
Nederland verkeert nu officieel in recessie
Nederland verkeert nu officieel in recessie
(Commentaar, Vrijdag 13 februari, 20.00 CET)
Al jaren zap ik het wekelijkse gesprek met de Minister President (Balkenende) direct weg, net als alles wat ik niet interessant, spannend of intelligent vind. Maar al enkele maanden volg ik dat gesprek, eigenlijk sinds ik enige tijd geleden opmerkte dat de heer Balkenende mij aan een 'in paniek geraakt konijn' deed denken.
Vandaag was de teneur van het gesprek (over de recessie), "schrik, we hebben het niet gezien, het gaat veel sneller dan we hadden gedacht, we wachten nog op cijfers, enzovoort".
Tja, als je volledig opgaat in waarden, normen, betuttelen en dingen samen doen, dan ontsnapt er wel eens iets aan je aandacht, dat kan de beste gebeuren. En een uitdrukking als: "It's the Economy, Stupids!" zou ongehoord goedkoop zijn tegenover die christelijke jongens die toch in een of ander opperwezen geloven.
Er gebeurt dus voorlopig niets, ergo er komt nog geen goed doordacht, uitgebalanceerd en intelligent plan om verdere schade aan de economie te voorkomen.
Wachten op nog meer alarmerende cijfers van het CPB of CBS misschien?
Eerst nog een vergaderingetje van de G7 of de G20?
Of wat rapporten van de EU, de OESO of het IMF?
Of moet de ECB de rente nog 1.5% verlagen?
Een 'Commissie van Wijze Mannen', kan ook wel eens helpen
Wint de vergadercultuur het toch?
Hoe dan ook er is geen excuus voor besluiteloosheid en gebrek aan inzicht, dus het Kabinet zal op korte termijn met het gezamenlijke water voor de dokter moeten komen.
Enfin, de Premier is in Davos op het Forum geweest, en zal daar ongetwijfeld ook de President Commissaris van de Koninklijke Olie, Jeroen van der Veer ontmoet hebben, die hem daar zijn favoriete open deuren deuntje in de trant van "de wereldbevolking neemt in de komende 40 jaar met 30% toe tot ruim 9 of 10 miljard' wel zal hebben laten horen.
Wat er ook gaat gebeuren hoewel, het is goed voor Shell, in elk geval, don't worry, be happy!
(Commentaar, Vrijdag 13 februari, 20.00 CET)
Al jaren zap ik het wekelijkse gesprek met de Minister President (Balkenende) direct weg, net als alles wat ik niet interessant, spannend of intelligent vind. Maar al enkele maanden volg ik dat gesprek, eigenlijk sinds ik enige tijd geleden opmerkte dat de heer Balkenende mij aan een 'in paniek geraakt konijn' deed denken.
Vandaag was de teneur van het gesprek (over de recessie), "schrik, we hebben het niet gezien, het gaat veel sneller dan we hadden gedacht, we wachten nog op cijfers, enzovoort".
Tja, als je volledig opgaat in waarden, normen, betuttelen en dingen samen doen, dan ontsnapt er wel eens iets aan je aandacht, dat kan de beste gebeuren. En een uitdrukking als: "It's the Economy, Stupids!" zou ongehoord goedkoop zijn tegenover die christelijke jongens die toch in een of ander opperwezen geloven.
Er gebeurt dus voorlopig niets, ergo er komt nog geen goed doordacht, uitgebalanceerd en intelligent plan om verdere schade aan de economie te voorkomen.
Wachten op nog meer alarmerende cijfers van het CPB of CBS misschien?
Eerst nog een vergaderingetje van de G7 of de G20?
Of wat rapporten van de EU, de OESO of het IMF?
Of moet de ECB de rente nog 1.5% verlagen?
Een 'Commissie van Wijze Mannen', kan ook wel eens helpen
Wint de vergadercultuur het toch?
Hoe dan ook er is geen excuus voor besluiteloosheid en gebrek aan inzicht, dus het Kabinet zal op korte termijn met het gezamenlijke water voor de dokter moeten komen.
Enfin, de Premier is in Davos op het Forum geweest, en zal daar ongetwijfeld ook de President Commissaris van de Koninklijke Olie, Jeroen van der Veer ontmoet hebben, die hem daar zijn favoriete open deuren deuntje in de trant van "de wereldbevolking neemt in de komende 40 jaar met 30% toe tot ruim 9 of 10 miljard' wel zal hebben laten horen.
Wat er ook gaat gebeuren hoewel, het is goed voor Shell, in elk geval, don't worry, be happy!
Explosieve stijging faillisementen in horeca in januari
Explosieve stijging faillisementen in horeca in januari
11 februari 2009
Volgend het Horeca vakblad Proostmagazine was er in januari 2009 een meer dan 50% toename van het aantal faillissementen in de horeca.
Hoewel de cijfers van het Centraal Bureau voor de Statistiek voor de horeca over 2008 nog positief leken (twee procent minder faillisementen dan in 2007) laten andere cijfers over de eerste maand van dit jaar een heel ander beeld zien: uit onderzoek van Dun & Bradsteet blijkt dat het aantal horecabedrijven dat in deze maand op de fles ging met 53 procent toenam ten opzicht van januari 2008.
Het totaal aantal faillissementen is in januari 2009 gestegen met 47 procent ten opzichte van dezelfde maand in 2008. Uit de cijfers van het CBS bleek al de stijgende trend van het aantal bedrijven dat failliet gaat, die eind vorig jaar is ingezet. Dun & Bradstreet signaleert niet alleen dezelfde trend, maar bevestigt ook de sombere verwachtingen voor 2009 met de stijgende faillissementcijfers van januari. Sabine Besselink: "Een dergelijke explosieve stijging ten opzichte van dezelfde maand een jaar eerder is al lang niet meer voorgekomen. Ook als we kijken naar het voortschrijdend gemiddelde over drie maanden, dan is de groei van het aantal faillissementen duidelijk waarneembaar."
11 februari 2009
Volgend het Horeca vakblad Proostmagazine was er in januari 2009 een meer dan 50% toename van het aantal faillissementen in de horeca.
Hoewel de cijfers van het Centraal Bureau voor de Statistiek voor de horeca over 2008 nog positief leken (twee procent minder faillisementen dan in 2007) laten andere cijfers over de eerste maand van dit jaar een heel ander beeld zien: uit onderzoek van Dun & Bradsteet blijkt dat het aantal horecabedrijven dat in deze maand op de fles ging met 53 procent toenam ten opzicht van januari 2008.
Het totaal aantal faillissementen is in januari 2009 gestegen met 47 procent ten opzichte van dezelfde maand in 2008. Uit de cijfers van het CBS bleek al de stijgende trend van het aantal bedrijven dat failliet gaat, die eind vorig jaar is ingezet. Dun & Bradstreet signaleert niet alleen dezelfde trend, maar bevestigt ook de sombere verwachtingen voor 2009 met de stijgende faillissementcijfers van januari. Sabine Besselink: "Een dergelijke explosieve stijging ten opzichte van dezelfde maand een jaar eerder is al lang niet meer voorgekomen. Ook als we kijken naar het voortschrijdend gemiddelde over drie maanden, dan is de groei van het aantal faillissementen duidelijk waarneembaar."
Wednesday, February 11, 2009
Trekken aan een dood paard
Trekken aan een dood paard
Aan een dood paard trekken.(Je inspannen voor iets, dat tot mislukken gedoemd is)
Ik bedoel hier niet mee de voortdurende schommelingen op de beurs en de (misschien tè) hooggespannen verwachtingen over het Obama Stimulus Plan.
Gisteren, 10 Februari 2009, mocht Timothy Geithner het meer dan 800 miljoen dollar plan presenteren. De verwachting is dat het uiteindelijk benodigde plan rond de 2 biljoen dollar (2000 miljard) zal gaan kosten en dat het nog maar het eerste is in een reeks plannen om de Amerikaanse Economie te herstellen. De Amerikaanse beurzen reageerden teleurgesteld met dalingen van 4 tot ruim 5 procent.
Belasting voordeeltjes, Keynesiaanse infrastuctuur investerings voorstellen, etc, het mocht de beurs allemaal niet echt bekoren.
Vandaag is er weer de hoop dat de verdere onderhandelingen over het reddingplan nieuwe impulsen kunnen geven.
Dat noemen wij 'trekken aan een dood paard', de beurs reageert nu al maanden op de bailout plannen, eerst van de vorige regering en nu van de nieuwe regering. Idem met de bailout plannen voor de auto-industrie.
Bij gebrek aan fundamenteel goed nieuws grijpt de beurs elk nieuwtje aan.
Maar er is weinig goed nieuws, de cijfers worden steeds slechter, was er eerst sprake van het creeëren van 3 miljoen nieuwe banen, nu wordt 4 miljoen gehoord, binnen een half jaar 5 miljoen waarschijnlijk.
De bankiers met de volvette bonussen worden geschoren, zitten doodstil en geven deemoedig toe dat ze fouten gemaakt hebben.
Er is een incidenteel wat hap snap beleid met de vraag om BTW verlagingen (de in recordtempo onderuitgaande auto branche in Nederland), terwijl op globaal niveau de gebakken luchtballonnetjes opgaan met gedachten aan protectionisme en meer nationalisme.
Maar iets nieuws op het gebied van de 21ste Eeuwse Economie zien we nog niet.
Misschien moet dat van theoretici en moderne holistisch denkende economen of toekomstige Nobel Prijswinnaars komen of gewoon van onderop, de doeners van de 'grass-roots'.
Reageren op kleine stijgingen in de Dow, NASDAQ of S&P 500 is aan een dood paard trekken.
Aan een dood paard trekken.(Je inspannen voor iets, dat tot mislukken gedoemd is)
Ik bedoel hier niet mee de voortdurende schommelingen op de beurs en de (misschien tè) hooggespannen verwachtingen over het Obama Stimulus Plan.
Gisteren, 10 Februari 2009, mocht Timothy Geithner het meer dan 800 miljoen dollar plan presenteren. De verwachting is dat het uiteindelijk benodigde plan rond de 2 biljoen dollar (2000 miljard) zal gaan kosten en dat het nog maar het eerste is in een reeks plannen om de Amerikaanse Economie te herstellen. De Amerikaanse beurzen reageerden teleurgesteld met dalingen van 4 tot ruim 5 procent.
Belasting voordeeltjes, Keynesiaanse infrastuctuur investerings voorstellen, etc, het mocht de beurs allemaal niet echt bekoren.
Vandaag is er weer de hoop dat de verdere onderhandelingen over het reddingplan nieuwe impulsen kunnen geven.
Dat noemen wij 'trekken aan een dood paard', de beurs reageert nu al maanden op de bailout plannen, eerst van de vorige regering en nu van de nieuwe regering. Idem met de bailout plannen voor de auto-industrie.
Bij gebrek aan fundamenteel goed nieuws grijpt de beurs elk nieuwtje aan.
Maar er is weinig goed nieuws, de cijfers worden steeds slechter, was er eerst sprake van het creeëren van 3 miljoen nieuwe banen, nu wordt 4 miljoen gehoord, binnen een half jaar 5 miljoen waarschijnlijk.
De bankiers met de volvette bonussen worden geschoren, zitten doodstil en geven deemoedig toe dat ze fouten gemaakt hebben.
Er is een incidenteel wat hap snap beleid met de vraag om BTW verlagingen (de in recordtempo onderuitgaande auto branche in Nederland), terwijl op globaal niveau de gebakken luchtballonnetjes opgaan met gedachten aan protectionisme en meer nationalisme.
Maar iets nieuws op het gebied van de 21ste Eeuwse Economie zien we nog niet.
Misschien moet dat van theoretici en moderne holistisch denkende economen of toekomstige Nobel Prijswinnaars komen of gewoon van onderop, de doeners van de 'grass-roots'.
Reageren op kleine stijgingen in de Dow, NASDAQ of S&P 500 is aan een dood paard trekken.
China's export value down 17.5% in January
China's export value down 17.5% in January
China's export volume decreased 17.5 percent year-on-year to 90.45 billion US dollars in January, the General Administration of Customs said on Wednesday.
The import volume, however, fell by a much larger degree of 43.1 percent to 51.34 billion US dollars.
Total foreign trade was 141.8 billion US dollars, with the trade surplus up 102 percent over the same month of last year to 39.1 billion US dollars.
While the January trade figures were "in part distorted by the affect of the Chinese new year, they indicate a continuing deterioration in the underlying fundamentals," said Wang Qing, chief analyst on Chinese economy with Morgan Stanley Asia.
Of the total January external trade, foreign-funded companies accounted for 52.2 percent, or 74.05 billion US dollars, down 32.3 percent from a year ago, and state-owned businesses made up 22.3 percent, or 31.65 billion dollars, down 34.8 percent.
The total included 27.93 billion US dollars in trade between China and the European Union, down 18.7 percent; 22.25 billion dollars in trade between China and the United States, down 15.2 percent; and 14.5 billion dollars in trade between China and Japan, down 28 percent.
China's export volume decreased 17.5 percent year-on-year to 90.45 billion US dollars in January, the General Administration of Customs said on Wednesday.
The import volume, however, fell by a much larger degree of 43.1 percent to 51.34 billion US dollars.
Total foreign trade was 141.8 billion US dollars, with the trade surplus up 102 percent over the same month of last year to 39.1 billion US dollars.
While the January trade figures were "in part distorted by the affect of the Chinese new year, they indicate a continuing deterioration in the underlying fundamentals," said Wang Qing, chief analyst on Chinese economy with Morgan Stanley Asia.
Of the total January external trade, foreign-funded companies accounted for 52.2 percent, or 74.05 billion US dollars, down 32.3 percent from a year ago, and state-owned businesses made up 22.3 percent, or 31.65 billion dollars, down 34.8 percent.
The total included 27.93 billion US dollars in trade between China and the European Union, down 18.7 percent; 22.25 billion dollars in trade between China and the United States, down 15.2 percent; and 14.5 billion dollars in trade between China and Japan, down 28 percent.
Wall St. pans bank bailout plan
Wall St. pans bank bailout plan
(02:04) Reuters Video Report
Feb. 10 - The Treasury's new bank rescue strategy was dead on arrival, as far as Wall Street was concerned, with investors still unclear if the plan will work.
Critics say Treasury Secretary Timothy Geithner's $2 trillion plan provides little detail on how banks will get rid of toxic assets and start lending again, while at the same time, opening up banks to new scrutiny by the American taxpayer. US stocks closed sharply lower. Conway Gittens reports from New York. SOUNDBITES:
# Treasury Secretary Timothy Geithner
# Milton Ezrati, market strategist and chief economist, Lord Abbett
# Michael Henry, senior executive of financial industry strategy, Accenture
(02:04) Reuters Video Report
Feb. 10 - The Treasury's new bank rescue strategy was dead on arrival, as far as Wall Street was concerned, with investors still unclear if the plan will work.
Critics say Treasury Secretary Timothy Geithner's $2 trillion plan provides little detail on how banks will get rid of toxic assets and start lending again, while at the same time, opening up banks to new scrutiny by the American taxpayer. US stocks closed sharply lower. Conway Gittens reports from New York. SOUNDBITES:
# Treasury Secretary Timothy Geithner
# Milton Ezrati, market strategist and chief economist, Lord Abbett
# Michael Henry, senior executive of financial industry strategy, Accenture
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