President-elect Barack Obama said the U.S. will soon face a $1 trillion budget deficit and similar shortfalls are in store "for years to come" as the government grapples with a recession and other spending demands. A "trillion dollar deficit will be here before we even start the next budget," Obama said after meeting in Washington with his economic advisers, including Peter Orszag, who has been designated as director of the Office of Management and Budget. "Potentially we've got trillion-dollar deficits for years to come, even with the economic recovery we are working on."
A "trillion dollar deficit will be here before we even start the next budget," Obama said after meeting in Washington with his economic advisers, including Peter Orszag, who has been designated as director of the Office of Management and Budget. "Potentially we've got trillion-dollar deficits for years to come, even with the economic recovery we are working on."
Ethiopia's parliament has passed a controversial bill imposing tight restrictions on aid agencies. Foreign agencies are prohibited from a number of areas including human rights, equality, conflict resolution and the rights of children. Local groups that receive more than 10% of their funding from abroad are also banned from working in these areas. Under discussion for months, the bill has already been considerably modified amid objections from aid organisations
Ethiopia's parliament has passed a controversial bill imposing tight restrictions on aid agencies.
Foreign agencies are prohibited from a number of areas including human rights, equality, conflict resolution and the rights of children.
Local groups that receive more than 10% of their funding from abroad are also banned from working in these areas.
Under discussion for months, the bill has already been considerably modified amid objections from aid organisations
The new US Congress has opened, amid a row as the choice to fill President-elect Barack Obama's vacant Senate seat was blocked from the chamber's floor. Senate Democrats had vowed to prevent Roland Burris taking the Illinois seat because he was picked by scandal-hit Illinois Governor Rod Blagojevich. Mr Burris said officials turned him away when he arrived to be sworn in. The Democrats are in charge of both chambers and about to welcome one of their own into the White House.
The new US Congress has opened, amid a row as the choice to fill President-elect Barack Obama's vacant Senate seat was blocked from the chamber's floor.
Senate Democrats had vowed to prevent Roland Burris taking the Illinois seat because he was picked by scandal-hit Illinois Governor Rod Blagojevich.
Mr Burris said officials turned him away when he arrived to be sworn in.
The Democrats are in charge of both chambers and about to welcome one of their own into the White House.
Awami League leader Sheikh Hasina has been sworn in for a second stint as prime minister of Bangladesh. The ceremony in the capital, Dhaka, marked a return to democracy after two years of army-backed rule. The Awami League won a landslide in elections last week, in a major turnaround in its leader's fortunes. Sheikh Hasina and her rival Khaleda Zia - both former prime ministers - had been jailed for suspected corruption but released to contest the vote.
Awami League leader Sheikh Hasina has been sworn in for a second stint as prime minister of Bangladesh.
The ceremony in the capital, Dhaka, marked a return to democracy after two years of army-backed rule.
The Awami League won a landslide in elections last week, in a major turnaround in its leader's fortunes.
Sheikh Hasina and her rival Khaleda Zia - both former prime ministers - had been jailed for suspected corruption but released to contest the vote.
India's prime minister today accused "official agencies" in Pakistan of being behind the Mumbai terrorist attacks, raising hackles in its nuclear-armed neighbour.In an address to his country's elected officials, the prime minister, Manmohan Singh, offered his strongest views on the three-day assault by "terrorists" which left more than 170 dead.It comes a day after Delhi handed over a dossier that it says incriminates Pakistani groups and nationals who were involved in a "criminal conspiracy". India has demanded that those responsible be extradited and tried in Indian courts, a demand which Pakistan's prime minister has dismissed."There is enough evidence to show that, given the sophistication and military precision of the attack, it must have had the support of some official agencies in Pakistan," said Singh.
India's prime minister today accused "official agencies" in Pakistan of being behind the Mumbai terrorist attacks, raising hackles in its nuclear-armed neighbour.
In an address to his country's elected officials, the prime minister, Manmohan Singh, offered his strongest views on the three-day assault by "terrorists" which left more than 170 dead.
It comes a day after Delhi handed over a dossier that it says incriminates Pakistani groups and nationals who were involved in a "criminal conspiracy". India has demanded that those responsible be extradited and tried in Indian courts, a demand which Pakistan's prime minister has dismissed.
"There is enough evidence to show that, given the sophistication and military precision of the attack, it must have had the support of some official agencies in Pakistan," said Singh.
India's Prime Minister has raised the war of words with Pakistan by claiming its authorities "must have" had a hand in the terror attack on Mumbai that killed 172 people. In the most outspoken comments yet from an Indian official, Manmohan Singh said the sophistication of the November attacks meant the terrorists must have had the support of some "official agencies in Pakistan". While he stopped short of directly accusing the Pakistani government, Mr Singh's comments drew a defiant response from Pakistan. The country's Foreign Ministry accused Mr Singh of engaging in a "propaganda offensive".
India's Prime Minister has raised the war of words with Pakistan by claiming its authorities "must have" had a hand in the terror attack on Mumbai that killed 172 people.
In the most outspoken comments yet from an Indian official, Manmohan Singh said the sophistication of the November attacks meant the terrorists must have had the support of some "official agencies in Pakistan".
While he stopped short of directly accusing the Pakistani government, Mr Singh's comments drew a defiant response from Pakistan. The country's Foreign Ministry accused Mr Singh of engaging in a "propaganda offensive".
So blathering on like this only risks humiliating the pakistani govt to no good result. And I suspect that hte Indian PM knows this, which makes me wonder what he knows is so bad within the indian establishment that he's willing to risk a war to hide it. keep to the Fen Causeway
BEIJING (Reuters) - China faces surging protests and riots in 2009 as rising unemployment stokes discontent, a state-run magazine said in a blunt warning of the hazards to Communist Party control from a sharp economic downturn. The unusually stark report in this week's Outlook (Liaowang) Magazine, issued by the official Xinhua news agency, said faltering growth could spark anger among millions of migrant workers and university graduates left jobless. "Without doubt, now we're entering a peak period for mass incidents," a senior Xinhua reporter, Huang Huo, told the magazine, using the official euphemism for riots and protests. "In 2009, Chinese society may face even more conflicts and clashes that will test even more the governing abilities of all levels of the Party and government."
BEIJING (Reuters) - China faces surging protests and riots in 2009 as rising unemployment stokes discontent, a state-run magazine said in a blunt warning of the hazards to Communist Party control from a sharp economic downturn.
The unusually stark report in this week's Outlook (Liaowang) Magazine, issued by the official Xinhua news agency, said faltering growth could spark anger among millions of migrant workers and university graduates left jobless.
"Without doubt, now we're entering a peak period for mass incidents," a senior Xinhua reporter, Huang Huo, told the magazine, using the official euphemism for riots and protests.
"In 2009, Chinese society may face even more conflicts and clashes that will test even more the governing abilities of all levels of the Party and government."
There are a lot of educated people in China who are not going to be fooled by WesternMediaMadness (not that they don't have their own.) There are dozens or perhaps millions of individuals and families who have been actually lifted out of the mud in one or two generations, and who appreciate the troubles that such a feat causes.
Me thinks that there is an over-riding purpose of injecting an internal article like this into the public debate. It could be being used to raise the hackles of those who believe that the people steering the bus for the last couple decades deserve a chance to re-balance after all the good they have done, and after the shell shock of the current international thief-created economic mess that they have been handed.
I still think that China has turned the corner, and that they can now create their own wind...there are enough people who can consume their own creations, and enough by a long shot who can be brought to that transition state from mere survival to actual creation.
N.B.; Not that I'm wearing rose-colored mistake-hiding glasses to gross mis-alignments of eco-friendly long term decisions that could have been, or the lagging effects of biGbrotheR-itis.
Nor do I ignore that we in the West still have many opportunities to grow ourselves and our civilization in progressive ways as well.
(I must stop reading Fuentes in the morning.) Never underestimate their intelligence, always underestimate their knowledge.
Frank Delaney ~ Ireland
China's economy will probably grow by about 8 per cent this year, the central bank's research bureau forecast on Tuesday, the latest in a string of relatively optimistic estimates. Some analysts have predicted a much sharper slowdown for the world's fourth-largest economy, to as little as 5 per cent, as factory output growth grinds to a halt and exports shrink from their year-earlier levels.However, government officials and researchers have centred around the view that China can engineer growth of about 8 per cent this year -- the pace officially targeted by Beijing as what it considers necessary to create enough new jobs.
Some analysts have predicted a much sharper slowdown for the world's fourth-largest economy, to as little as 5 per cent, as factory output growth grinds to a halt and exports shrink from their year-earlier levels.
However, government officials and researchers have centred around the view that China can engineer growth of about 8 per cent this year -- the pace officially targeted by Beijing as what it considers necessary to create enough new jobs.
The research bureau of the People's Bank of China (PBOC) added its voice to that consensus, saying in a report that they expect a relatively modest slowdown from their estimate of 9.3 per cent growth for all of 2008. The economy expanded by 9.9 per cent from a year earlier in the first nine months of 2008.
Over the past, say, 20 years China's annualized GDP rate has ranged 7% - 10%. By contrast, Bloomberg reporting on Q4 factory orders implies the value and volume of US domestic exports is an accurate indicator of further decline in economic activity, including import consumption.
The U.S. economy contracted at a 0.5 percent annual rate in the third quarter [?], the Commerce Department said Dec. 23. The economy probably shrank at a 4.3 percent annual rate in the last three months of 2008 [?], the biggest contraction since 1982, according to the median estimate of 51 economists surveyed last month by Bloomberg.
Inexplicably, the FRB had forecast a safe bet GDP growth 1.3% - 2.0%. Rather than "wealth" lost and a negative rate of change in GDP to accommodate a liquidation of financial sector contributions, at least, to it. Since the FRB counts on money supply manips to inflate GDP value anyway. (See WTO, 2000 - 2007. So much for factor analysis.) Oops.
Unlike Westworld however, China is sitting on a HH "savings glut" in its own currency which will undoubtedly be managed to replace foreign direct investments and nondurable goods spending. (This much I figured from Shanghai road-shows several years ago.) Concern trolls of Europa will worry about China's inflation targets --which they cannot determine-- as its key sectors have been closed to ForEx arbitrage. Oh, and securities "transparency."
Henry Liu posed an interesting question, China's inflation-free route from crises, just two weeks ago as if anticipating the geopolitical alarm of the G7. I take it, the PRC is positioned to reinvent government bonds.
The solution to this structural problem can also be summed up in one sentence: China must finance plants with sovereign credit to produce for the domestic market where consumer purchasing power will come from high wages, with sovereign credit repaid from increased tax revenue from a vibrant domestic economy. ... For China, the only viable strategy is to shift these bankrupt export factories in the coastal regions toward the domestic market. But the domestic market at present is too weak in consumer demand due to low wages to absorb the overcapacity in export. Thus no funds are available in private credit and capital markets to finance urgently needed restructuring of the export sector on a national scale. Market forces are simply not up to the task. To kick-start a new economic strategy of shifting the Chinese economy from export dependency to domestic construction, the Chinese government needs to establish a Commission to Restructure the Chinese Economy (CRCE) as a special agency in the State Council under the direct control of the office of the premier, with emergency powers to deal with the unemployment fallout from the sudden collapse of the export sector that will soon threaten social stability. The proposed CRCE should have full authority to formulate and implement a national economic recovery program with appropriate and adequate credit-creation power to finance an urgently needed recovery to provide full employment at high wages. Equally importantly, the CRCE must have full government authority to commit unconditionally to the timely repayment and retirement of this temporary debt created by sovereign credit. ... The financial institutions accepting the work-creation certificates can treat such certificates as commercial paper that can be discounted at commercial banks, which in turn can discount them at the People's Bank of China, the central bank. The process would provide the needed liquidity to facilitate the payment of wages outside the range of the government's fiscal budget. The CRCE would undertake to redeem one fifth of all work-creation certificates issued through the central bank as the economy and tax revenue recover and expand. As collateral for the certificates, the Finance Ministry would deposit in the central bank a corresponding amount of tax vouchers good for paying taxes. As the Ministry of Finance redeems work-creation certificates, the tax vouchers would be returned to the Finance Ministry.
For China, the only viable strategy is to shift these bankrupt export factories in the coastal regions toward the domestic market. But the domestic market at present is too weak in consumer demand due to low wages to absorb the overcapacity in export. Thus no funds are available in private credit and capital markets to finance urgently needed restructuring of the export sector on a national scale. Market forces are simply not up to the task.
To kick-start a new economic strategy of shifting the Chinese economy from export dependency to domestic construction, the Chinese government needs to establish a Commission to Restructure the Chinese Economy (CRCE) as a special agency in the State Council under the direct control of the office of the premier, with emergency powers to deal with the unemployment fallout from the sudden collapse of the export sector that will soon threaten social stability.
The proposed CRCE should have full authority to formulate and implement a national economic recovery program with appropriate and adequate credit-creation power to finance an urgently needed recovery to provide full employment at high wages. Equally importantly, the CRCE must have full government authority to commit unconditionally to the timely repayment and retirement of this temporary debt created by sovereign credit. ...
The financial institutions accepting the work-creation certificates can treat such certificates as commercial paper that can be discounted at commercial banks, which in turn can discount them at the People's Bank of China, the central bank. The process would provide the needed liquidity to facilitate the payment of wages outside the range of the government's fiscal budget.
The CRCE would undertake to redeem one fifth of all work-creation certificates issued through the central bank as the economy and tax revenue recover and expand. As collateral for the certificates, the Finance Ministry would deposit in the central bank a corresponding amount of tax vouchers good for paying taxes. As the Ministry of Finance redeems work-creation certificates, the tax vouchers would be returned to the Finance Ministry.
That or circulate scrip in the fashion of Lincoln. To fund employment and wages, ergo demand for domestic investment and consumer goods that is not dependent on consumer credit creation by bankers. Gee. Diversity is the key to economic and political evolution.
Welcome to 2009. This is a year in which the fate of the world economy will be determined, maybe for generations. Some entertain hopes that we can restore the globally unbalanced economic growth of the middle years of this decade. They are wrong. Our choice is only over what will replace it. It is between a better balanced world economy and disintegration. That choice cannot be postponed. It must be made this year.We are in the grip of the most significant global financial crisis for seven decades. As a result, the world has run out of creditworthy, large-scale, willing private borrowers. The alternative of relying on vast US fiscal deficits and expansion of central bank credit is a temporary - albeit necessary - expedient. But it will not deliver a durable return to growth. Fundamental changes are needed.
We are in the grip of the most significant global financial crisis for seven decades. As a result, the world has run out of creditworthy, large-scale, willing private borrowers. The alternative of relying on vast US fiscal deficits and expansion of central bank credit is a temporary - albeit necessary - expedient. But it will not deliver a durable return to growth. Fundamental changes are needed.
The chairman of India's Satyam Computer Services on Wednesday confessed to fixing the IT outsourcing company's books for the past "several" years, the country's first major fraud case to emerge following the global financial crisis. In a letter to Satyam's board, B Ramalinga Raju resigned after admitting to wildly inflating Satyam's margins to paint a picture of good performance and retain his management position in one of the worst scams to have hit India's outsourcing sector. Satyam is India's fourth biggest information technology outsourcing firm by revenue and is listed in New York and Mumbai, and the scam has rocked the country's business world.
In a letter to Satyam's board, B Ramalinga Raju resigned after admitting to wildly inflating Satyam's margins to paint a picture of good performance and retain his management position in one of the worst scams to have hit India's outsourcing sector.
Satyam is India's fourth biggest information technology outsourcing firm by revenue and is listed in New York and Mumbai, and the scam has rocked the country's business world.
And I love this: Satyam faces risk of losing governance award How come? "Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
In 2008, the Treasury market had its best annual rally in more than 25 years on fears of global credit crisis, recession, deflation. 10yr and 30yr Treasury yields fell to all-time lows and T-bill yields even dipped into negative territory for the first time since the Great Depression. The total return of the 30-year bond was c. 45%, its best year since 1982. Treasuries in general returned 14%, outperforming S&P 500 by 53 percentage pointsIn 2009, any signs of a less than dire economic outcome as deflation may burst the bubble in Treasuries. With the U.S. government expected to issue between $1.5 trillion to $2 trillion of debt into the $5 trillion Treasury market to finance its rescues of the financial system, the risk of a sudden drop in prices is growing. 10yr and 30yr Treasuries are still yielding between 2-3%, 2yr notes less than 1%, T-bills near zero. The TIPS market is anticipating less than 0.5% annual inflation for the next 10 years (ML)
Oil prices rose above $50 a barrel on Tuesday amid a growing belief that Opec is succeeding in delivering cuts in production. Oil traders have been largely sceptical about the cartel carrying out the three output cuts totalling 4.2m barrels a day it has announced since September. But preliminary evidence of lower supplies has now pushed prices higher.The clearest signal of Opec's success in cutting production came on Tuesday in a record narrowing of the price spread between lower-quality, heavy sour crude - which constitutes the bulk of the cartel's output - such as Dubai oil, and higher-quality, light sweet oil, such as the international benchmark Brent oil.
Oil traders have been largely sceptical about the cartel carrying out the three output cuts totalling 4.2m barrels a day it has announced since September. But preliminary evidence of lower supplies has now pushed prices higher.
The clearest signal of Opec's success in cutting production came on Tuesday in a record narrowing of the price spread between lower-quality, heavy sour crude - which constitutes the bulk of the cartel's output - such as Dubai oil, and higher-quality, light sweet oil, such as the international benchmark Brent oil.
