WASHINGTON (Reuters) - U.S. consumer spending and housing sales rose more than expected in October while new claims for jobless benefits fell sharply last week, suggesting the economic recovery was gaining traction. An unexpected decline in orders for long-lasting U.S. manufactured goods, however, tempered some of the optimism and was a reminder that recovery from the most brutal recession in 70 years would be gradual. The Commerce Department on Wednesday reported that consumer spending, which normally accounts for over two-thirds of U.S. economic activity, increased 0.7 percent last month after falling 0.6 percent in September. That was above market expectations for a gain of 0.5 percent.
WASHINGTON (Reuters) - U.S. consumer spending and housing sales rose more than expected in October while new claims for jobless benefits fell sharply last week, suggesting the economic recovery was gaining traction.
An unexpected decline in orders for long-lasting U.S. manufactured goods, however, tempered some of the optimism and was a reminder that recovery from the most brutal recession in 70 years would be gradual.
The Commerce Department on Wednesday reported that consumer spending, which normally accounts for over two-thirds of U.S. economic activity, increased 0.7 percent last month after falling 0.6 percent in September. That was above market expectations for a gain of 0.5 percent.
SHANGHAI/HONG KONG (Reuters) - Chinese banks, under government pressure to shore up their finances, are set to unleash a wave of billions of dollars in capital raising that could strain equity markets but also spur innovation in debt instruments. The banks could go to the market with a slew of new stock and bond offers as they look to raise as much as 300 billion yuan ($44 billion) over the next few years, according to some estimates. The move would follow a surge in bank lending in the first half of this year, encouraged by the central government under its broader 4 trillion yuan economic stimulus plan. But now the regulator, worried about a lending bubble, is cautioning banks to ensure their capital is adequate. Three of the country's top four listed banks, Bank of China Ltd (601988.SS) (3988.HK), China Construction Bank (601939.SS) (0939.HK) and Bank of Communications (601328.SS) (3328.HK) have already started work on fundraising proposals, a source told Reuters on Monday. "There's no doubt there will be a massive wave of fund raising from Chinese banks, but the key question is when, where and how," said Fan Kunxiang, analyst at Haitong Securities Co. "If banks all rush to sell shares within a short period, it would unavoidably be a blow to the stock market."
SHANGHAI/HONG KONG (Reuters) - Chinese banks, under government pressure to shore up their finances, are set to unleash a wave of billions of dollars in capital raising that could strain equity markets but also spur innovation in debt instruments.
The banks could go to the market with a slew of new stock and bond offers as they look to raise as much as 300 billion yuan ($44 billion) over the next few years, according to some estimates.
The move would follow a surge in bank lending in the first half of this year, encouraged by the central government under its broader 4 trillion yuan economic stimulus plan. But now the regulator, worried about a lending bubble, is cautioning banks to ensure their capital is adequate.
Three of the country's top four listed banks, Bank of China Ltd (601988.SS) (3988.HK), China Construction Bank (601939.SS) (0939.HK) and Bank of Communications (601328.SS) (3328.HK) have already started work on fundraising proposals, a source told Reuters on Monday.
"There's no doubt there will be a massive wave of fund raising from Chinese banks, but the key question is when, where and how," said Fan Kunxiang, analyst at Haitong Securities Co. "If banks all rush to sell shares within a short period, it would unavoidably be a blow to the stock market."
Nov. 25 (Bloomberg) -- First it was corporate bonds, then stocks. Now it's time to buy commercial real estate in the U.K., according to strategists in Edinburgh advising on about 400 billion pounds ($663 billion) of assets. Standard Life Investments is telling investors to consider increasing the proportion of money they hold in stores, office buildings and warehouses, said Andrew Milligan, head of global strategy. Today, the commercial property market compares with where stocks were about seven months ago, said Mike Turner at Aberdeen Asset Management Plc. "It's the last major asset class where there is still a higher risk premium than warranted, so we've been looking at it," Turner said in an interview at his office in the Scottish capital. "April is a good expression of the stage we're at, just off the lows and starting to gain some traction." After gains this year in stocks and corporate bonds, Scotland's biggest fund management firms are honing in on where they reckon money can be made next.
Nov. 25 (Bloomberg) -- First it was corporate bonds, then stocks. Now it's time to buy commercial real estate in the U.K., according to strategists in Edinburgh advising on about 400 billion pounds ($663 billion) of assets.
Standard Life Investments is telling investors to consider increasing the proportion of money they hold in stores, office buildings and warehouses, said Andrew Milligan, head of global strategy. Today, the commercial property market compares with where stocks were about seven months ago, said Mike Turner at Aberdeen Asset Management Plc.
"It's the last major asset class where there is still a higher risk premium than warranted, so we've been looking at it," Turner said in an interview at his office in the Scottish capital. "April is a good expression of the stage we're at, just off the lows and starting to gain some traction."
After gains this year in stocks and corporate bonds, Scotland's biggest fund management firms are honing in on where they reckon money can be made next.
In the first three quarters of 2009, profits at financial institutions soared 198 percent, the biggest nine-month gain since records began in 1948. Earnings were down 65 percent in the nine months ended in December 2008, the biggest such decrease on record. "The financials were a basket case," said Naroff. "The companies are coming off such a low basis that it's easy to get a big increase." The Standard & Poor's Financial Supercomposite Index has climbed 123 percent since March 9, compared with a 63 percent gain in the S&P 500 Index. The S&P 500 fell to a 12-year low on March 9. The jump in profits is probably not evenly distributed among banks, said Naroff, making it less likely that the money will find its way back into the economy in the form of loans. "Unfortunately, not every company is a Goldman," Naroff said. "Not everyone is going to make tons of money." The banking system's ability to boost lending and spur business investment "will look more like a slow stream than a river."
In the first three quarters of 2009, profits at financial institutions soared 198 percent, the biggest nine-month gain since records began in 1948. Earnings were down 65 percent in the nine months ended in December 2008, the biggest such decrease on record.
"The financials were a basket case," said Naroff. "The companies are coming off such a low basis that it's easy to get a big increase."
The Standard & Poor's Financial Supercomposite Index has climbed 123 percent since March 9, compared with a 63 percent gain in the S&P 500 Index. The S&P 500 fell to a 12-year low on March 9.
The jump in profits is probably not evenly distributed among banks, said Naroff, making it less likely that the money will find its way back into the economy in the form of loans.
"Unfortunately, not every company is a Goldman," Naroff said. "Not everyone is going to make tons of money." The banking system's ability to boost lending and spur business investment "will look more like a slow stream than a river."
Car giant General Motors has firmed up plans to cut 9,000 jobs across Europe, saying that up to 60% will be in Germany. Nick Reilly, a senior official of the US car maker, met employee representatives at a meeting in Germany to go through the firm's detailed plans for the future. Mr Reilly said that "difficult decisions" will have to be made and repeated that jobs will have to be lost. Production in Europe will be cut by about 20% and around 9,000 jobs will be lost, with between 50 and 60% in Germany, he said.
Car giant General Motors has firmed up plans to cut 9,000 jobs across Europe, saying that up to 60% will be in Germany.
Nick Reilly, a senior official of the US car maker, met employee representatives at a meeting in Germany to go through the firm's detailed plans for the future.
Mr Reilly said that "difficult decisions" will have to be made and repeated that jobs will have to be lost.
Production in Europe will be cut by about 20% and around 9,000 jobs will be lost, with between 50 and 60% in Germany, he said.
A senior executive from General Motors, the car manufacturer, has promised some 25,000 workers at Opel's German operation that none of the factories will shut. But he said the company's plan will still see the total workforce being reduced by around 9,000 people, leaving the threat of closure hanging over otherfacilities in Britain, Spain, Belgium and Poland.
A senior executive from General Motors, the car manufacturer, has promised some 25,000 workers at Opel's German operation that none of the factories will shut.
But he said the company's plan will still see the total workforce being reduced by around 9,000 people, leaving the threat of closure hanging over otherfacilities in Britain, Spain, Belgium and Poland.
Millions of bank customers hoping to be refunded overdraft charges have been dealt a major blow by a Supreme Court judgement.The court has overturned earlier court rulings that allowed the Office of Fair Trading to investigate the fairness of charges for unauthorised overdrafts. At stake in the case, which has run for over two years, is an estimated £2.6bn of annual income for the banks. Campaigners said they were shocked and disappointed with the decision.
Millions of bank customers hoping to be refunded overdraft charges have been dealt a major blow by a Supreme Court judgement.
The court has overturned earlier court rulings that allowed the Office of Fair Trading to investigate the fairness of charges for unauthorised overdrafts.
At stake in the case, which has run for over two years, is an estimated £2.6bn of annual income for the banks.
Campaigners said they were shocked and disappointed with the decision.
A bunch of rich privileged people ruled to protect the interests of a bunch of rich privileged people. I am amazed people are even surprised that happens. keep to the Fen Causeway
The historian is concerned with finished facts, a journalist has to be concerned not just with real-time information but with the near future. So all these secrets are getting a bit distracting. Just over a year ago I, like many others, was obsessed with the question: what is the government about to do about the banking crisis? The revelation yesterday of what they actually did - unleash a £61.7bn secret loan to HBOS and RBS - is a reminder that even for journalists, what happened in the past may be the most important question. Because Mervyn King and Alistair Darling's revelations, delivered in the anodyne and obscure language the British state uses when it wants to drop an embarrassed bombshell, raise more questions.
The historian is concerned with finished facts, a journalist has to be concerned not just with real-time information but with the near future. So all these secrets are getting a bit distracting.
Just over a year ago I, like many others, was obsessed with the question: what is the government about to do about the banking crisis?
The revelation yesterday of what they actually did - unleash a £61.7bn secret loan to HBOS and RBS - is a reminder that even for journalists, what happened in the past may be the most important question.
Because Mervyn King and Alistair Darling's revelations, delivered in the anodyne and obscure language the British state uses when it wants to drop an embarrassed bombshell, raise more questions.
Gold is the ultimate currency. It resists the attempts by the monetary authorities to debase it, because except for concerted attempts to suppress its price through non-profitseeking selling at key market points by central banks, and naked short selling by the global commercial banks in the paper markets, gold cannot be created and controlled by financial engineers like Ben Bernanke. It provides a refuge, a store of wealth for private citizens during a period of general currency risk. .... Alan Greenspan himself states the case most eloquently in his famous essay from 1966 Gold and Economic Freedom. [And here we will go to that link and quote more extensively than did Jesse:] Gold and Economic Freedom by Alan Greenspan [written in 1966] This article originally appeared in a newsletter: The Objectivist published in 1966 and was reprinted in Ayn Rand's Capitalism: The Unknown Ideal An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense - perhaps more clearly and subtly than many consistent defenders of laissez-faire - that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.
It resists the attempts by the monetary authorities to debase it, because except for concerted attempts to suppress its price through non-profitseeking selling at key market points by central banks, and naked short selling by the global commercial banks in the paper markets, gold cannot be created and controlled by financial engineers like Ben Bernanke.
It provides a refuge, a store of wealth for private citizens during a period of general currency risk.
....
Alan Greenspan himself states the case most eloquently in his famous essay from 1966 Gold and Economic Freedom. [And here we will go to that link and quote more extensively than did Jesse:]
Gold and Economic Freedom by Alan Greenspan [written in 1966] This article originally appeared in a newsletter: The Objectivist published in 1966 and was reprinted in Ayn Rand's Capitalism: The Unknown Ideal An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense - perhaps more clearly and subtly than many consistent defenders of laissez-faire - that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.
This article originally appeared in a newsletter: The Objectivist published in 1966 and was reprinted in Ayn Rand's Capitalism: The Unknown Ideal
An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense - perhaps more clearly and subtly than many consistent defenders of laissez-faire - that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.
Ayn Rand's "philosophy" is a map which, when followed, seems to have blown up the world's largest economy. Who could have imagined that putting in charge of that economy a man who did not believe in the morality or appropriateness of the fundamental structure of that economy or in performing many of his legislatively mandated regulatory functions could end so badly? More than a few, it seems.
I do not know if gold is the ultimate currency, but it does seem, just now, to be a store of value superior to the US Dollar, and it seems likely to retain that superiority for a while before it too falls back to, or at least towards earth. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
It is not like international standards of measurement or temperature that are constants defined by the universe, gold is just another barometric phenomenon, flawed as any other.
It might be a useful device to sya there cannot be any more money in an economy than the quantity of gold priced in local currency. That might stop Wall St valuing itself in several multiples of the net worth of the planet, but I'm sure the manic idiots would find some way to finagle their way around it. keep to the Fen Causeway
It might be a useful device to sya there cannot be any more money in an economy than the quantity of gold priced in local currency.
but by and large wealth can be re-distributed but cannot be created or destroyed.
What are you talking about?
Making a new film doesn't spontaneously create wealth, it just gets moved from consumer to producer. Same with inventions, same even with mining raw materials. keep to the Fen Causeway
Right, because an illuminated manuscript isn't worth more than a roll of parchment and a bottle of ink. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
People live in a community close to an iron orebody. Exploiting it will cost 100 million euros. No one in the community has that kind of money. The wealthiest man in the comunnity has 2 million euros, and he can scrape together a total 15 million from interested risk-takers.
Thankfully, people in the community deposit their savings in the bank, and the friendly banker is interested in being the intermediate between the public and the new mining business. So he takes their savings, lends them to the new company, which builds a mine. The banker gets net interest, the public jobs and interest on their accounts, and the investor get profits.
None of this new wealth had been possible without the finacial services provided by the friendly banker. Peak oil is not an energy crisis. It is a liquid fuel crisis.
Oh, wait ...
The community doesn't see a penny - although they may be left with an interesting eyesore and mass unemployment when the mining is 'no longer economic.'
Where is this paradise where 'friendly bankers' interact with 'a community'?
It may happen in isolated instances, but it's hardly the norm, is it?
Or uh, where would these 85 million come from, if the company only has 15? Peak oil is not an energy crisis. It is a liquid fuel crisis.
And why would the initial investors want to cede control of their company to the construction company? Peak oil is not an energy crisis. It is a liquid fuel crisis.
But suppose that the construction company doesn't have any other business opportunities because there's a depression. Here you have: an idle construction company, idle prospective miners, a community with an idle iron ore, and investors with 15% of the cash necessary to mobilize all these resources.
Money is very useful, and fiat money more so, in greasing economic activity. But in situations where resources are idle because of lack of money you have to monetize the resources internally to a partnership in order to make things happen. If the construction company wants to become a partner, the project happens. If they don't, it doesn't. If they don't have other projects available, they lie idle, too.
As Minsky put it, anyone can create money, the problem is to have it accepted as such. Partnership arrangements are ways to turn assets into money acceptable to the partners. If you bring enough of the community into the partnership you may even be able to feed everyone. Otherwise they can all line up at the employment office and the soup kitchen. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
The purpose of Kjell Holmstrands Klöver [Clover, the name of his currency] is that the money should stay in the local area. He means the capital should stay in Orsa [where he lives] and not end up somewhere else. That's why he also opposes the Euro.
- We shall keep our money in our own country, he says. The Euro means we'll have to send even more money to the bureaucrats in Frankfurt/Brussels. Then we'll have to stand there with the cap in our hand and bow and beg, so the merciful gentlemen will give us back some of our own money. Peak oil is not an energy crisis. It is a liquid fuel crisis.
We're talking about depression economics here: the problem of mobilizing sufficient, willing local resources when there isn't enough money locally and no access to credit from the broader economy. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Does anyone have any hard evidence about the actual number of community-profit projects, as opposed to the usual rape-and-pillage finance?
I can think of one - and the bank involved is very unusual, with a rare record of community interest.
If you want to prove there are more than isolated counter-examples, show me evidence of systemic banking generosity and community engagement.
It's a bit of a bonkers argument to be making at a time when communities and individuals are struggling but the banks aren't lending - and the banks and the FT are saying so.
Adam Smith said it better: "It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest." Peak oil is not an energy crisis. It is a liquid fuel crisis.
Big industry requires big finance and big finance changes the economic game away from Smith's marketplace of petty merchants, tradesmen and farmers. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Smiths principle is still valid though, but I fear this simple thought experiment by now has been wrung dry of its use. :) Peak oil is not an energy crisis. It is a liquid fuel crisis.
Smiths principle is still valid though
[the general equilibrium theory of Neoclassical Economics] means that, for those subsystems of the economy where conditions are apt, the market can be relied upon, particularly if the market is not relied upon for the overall stability of the economy the determination of the pace and even the direction of investment income distribution and 4) the determination of prices and outputs in those sectors that use large amounts of capital assets per unit of input or per worker
And the other point was that mobilizing resources increases wealth. That's why people are willing to mobilize resources today for a benefit tomorrow.
That finance can be predatory is not under dispute either. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Everyone I know who's a farmer or manage forest and need capital to do that. Not to mention the iron mine north of the city they'll rehabilitate for about 100 million euros... Peak oil is not an energy crisis. It is a liquid fuel crisis.
Nice if you can find it.
People live in a community close to an iron orebody. Exploiting it will cost 100 million euros.
If they are willing and able to contribute the work in kind, you can do this. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
But I see no reason why they would accept payment in shares. They have bills to pay, and these bills cannot be payed with mining company shares, but only with cash. Peak oil is not an energy crisis. It is a liquid fuel crisis.
If everyone demands hard cash and there is no banker around, the project doesn't get going. You mentioned a "community" being involved in this. Presumably the "community" has a local economy that provide some of the services these contractors would use their cash for, again in kind or by accepting the scrip issued by the mining partnership as a local currency. And once we're talking about it in these terms, what fraction of the community's GDP is 100 million, in your example? En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Presumably the "community" has a local economy that provide some of the services these contractors would use their cash for, again in kind or by accepting the scrip issued by the mining partnership as a local currency. Some, but certainly not all.
And once we're talking about it in these terms, what fraction of the community's GDP is 100 million, in your example? What do you think? A city of 30-35.000 maybe, so a GDP around 1 billion euros? Peak oil is not an energy crisis. It is a liquid fuel crisis.
Why cannot the share circle be widened to include these suppliers?
The problem is the assumption that everyone is a delocalised service provider who wants hard cash so they can bugger off. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Second, because this would tie up everyones capital (like a forced investment in some global index fund) and stop people from buying that TV, car, vacation or investing in their own small business.
To resolve these problems and ease transactions, the state decided to launch a universal scrip: the currency. Peak oil is not an energy crisis. It is a liquid fuel crisis.
So in your example, the "community" charters a corporation and gives it the power to issue 85 thosand worth of scrip to fund the construction of the mine. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
And how should this community empower a corporation like that? Only the state has that legal authority, or the scrips will not be legal tender. Peak oil is not an energy crisis. It is a liquid fuel crisis.
Then again, it need not work. But it has happened here and there in the course of history. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Peak oil is not an energy crisis. It is a liquid fuel crisis.
I'm finding the notion fanciful that this stakeholder can advance 85% of the investment "in kind" (in a local community example where there's only 15% of the investment to be found in cash).
Meanwhile, in the real world - the bankers come in, strip mine the wealth, and it gets sucked into an offshore account in the Cayman Islands, where it's turned into drugs. The community doesn't see a penny - although they may be left with an interesting eyesore and mass unemployment when the mining is 'no longer economic.'
Next you'll be tellng me that financial services create actual wealth instead of capturing actual wealth and filling their balance sheet using virutual wealth.
During the LSE's last serious outage in September, traders largely chose not to trade rather than shift wholesale to LSE rivals on the grounds that the LSE, having by far the largest market share, was still the benchmark for reliable pricing.However it has become harder in recent months for the LSE to rely on that mentality among dealers as its market share has fallen below 60 per cent in FTSE 100 stocks. Chi-X has captured 25 per cent of the FTSE 100, while BATS has almost 8 per cent.The LSE said the latest outage had been caused by "a number of connectivity issues" that affected two of the "gateways" into the exchange's order books that are used by traders. The LSE has about 50 such gateways, which are the mechanism by which traders get access to the order book.
However it has become harder in recent months for the LSE to rely on that mentality among dealers as its market share has fallen below 60 per cent in FTSE 100 stocks. Chi-X has captured 25 per cent of the FTSE 100, while BATS has almost 8 per cent.
The LSE said the latest outage had been caused by "a number of connectivity issues" that affected two of the "gateways" into the exchange's order books that are used by traders. The LSE has about 50 such gateways, which are the mechanism by which traders get access to the order book.
