The G-20 has agreed on plans to fight the global downturn. But its approach will only lay the foundation for the next, bigger crisis. Instead of "stability, growth, jobs," the summit's real slogan should have been "debt, unemployment, inflation."

Czech trade unions plan mass protest on May 16

Czech trade unions have called upon their members to stage a mass protest against the impacts of the financial crisis upon the Czech labour market on May 16. On Friday, a spokesperson for the Bohemian-Moravian Confederation of Trade Unions said that organizers were expecting tens of thousands of Czechs to attend the planned demonstration. According to the trade unions' confederation, the steps the government has taken to battle the financial crisis in the Czech Republic have not helped solve employees' problems. Union representatives said that thousands of lay-offs had been caused by the economic downturn, and the government was using the opportunity to amend the Labour Code in employers' favour.

...The Iran-Venezuela Joint Bank, based in Tehran, has an initial capital base of 200 million dollars, with each nation providing half of the funds, the state broadcaster said.

The Export Development Bank of Iran, which is under sanctions from the US Treasury, was tasked with creating the joint bank with the Venezuelans.

"The capital will be raised to 1.2 billion dollars with the aim of supporting joint economic, industrial and mining projects as well as speeding up the current projects," the report said.

...Chavez on Friday denounced a decision by the Group of 20 in London to commit one trillion dollars to the International Monetary Fund (IMF) and other global bodies to help struggling economies.

"They have decided to strengthen the main culprit, the IMF, while this fund should be eliminated," he was quoted as saying by the state broadcaster.

The U.S. Senate and House of Representatives approved a fiscal 2010 budget plan that embraces the initiatives in President Barack Obama's $3.55 trillion proposal, but trims it to avoid exploding the federal deficit.

...Obama has disputed a grim Congressional Budget Office warning that the federal budget deficit could hit 1.845 trillion dollars this year under the Obama proposal, quadrupling the 2008 record shortfall and reaching to 13.1 percent of the total US economic output.

The House resolution would trim the deficit to 1.2 trillion dollars in 2010, compared to the president's figure of 1.4 trillion.

The FBI has seized a multi-million dollar Palm Beach house and luxury goods belonging to disgraced US financier Bernard Madoff. Madoff, 70, is in a New York jail awaiting sentencing for running a multi-billion-dollar Ponzi scheme.

"President Hans-Rudolf Merz regrets this procedure. The list does not specify the criteria on the basis of which it was drawn up. Switzerland is not a tax haven," the finance ministry said in a statement late Thursday.
   
The three-tier list categorising tax havens and financial centres by their degree of cooperation was endorsed by the G20 leaders meeting in London Thursday.
   
Switzerland was placed in the middle tier of countries, which have adopted the Organisation of Economic Cooperation and Development's standards on exchanging tax information but not yet "substantially" implemented them.
   
The government formally decided on March 13 to ease the country's banking secrecy and fully adopt OECD tax standards.

The nation's unemployment rate shot up from 8.1 to 8.5 percent last month, new figures out today show, as employers continued to slash jobs in the face of slumping demand.

The economy shed 663,000 jobs in March, the fourth straight month in which job losses have topped 600,000, according to Labor Department data.

A total of 5.1 million jobs have been lost since the recession began in December 2007, and more than 13 million people are unemployed.

The labor market is actually weaker than the official unemployment rate indicates. Groups excluded from the official count include people who are working part time but would rather be working full time, people who want to work but haven't looked for a job in the past month, and people who have become discouraged and given up looking. If those groups are included, the unemployment rate is 16.2 percent, up slightly from February.

Timothy Geithner and his predecessor Henry Paulson have been the public faces of the U.S. government's battle against the global economic crisis. But even as the secretaries of the Treasury have garnered the headlines -- as well as popular anger surrounding bank bailouts and corporate bonuses -- another official has quickly amassed great influence by committing trillions of dollars to keep markets afloat, radically redefining his institution and taking on serious risks as he seeks to rescue the American economy. Without a doubt, this crisis is now Ben Bernanke's war.

Although the ECB Council disappointed markets by cutting rates by a less-than-expected quarter percentage point, to 1.25 per cent, focus centred on M. Trichet's remarks on the possibility of "unconventional measures" when rates eventually do find a floor, which he suggested would be relatively soon.

M. Trichet said during the regular press conference that follows every ECB decision that "I would say very candidly as regarding the main policy rate it is not the lowest limit. I do not exclude that we could in a very measured way go down from the present level". He said the ECB's Governing Council would decide whether to take further "non-standard" steps in its monetary policy at its next policy meeting in May.

"It's an important message that I tell you that the next decision-making rendezvous, we will tell you what has been decided for the non-standard measures."

What could it mean?

In the long run, we're all dead. John Maynard Keynes

I.B.M. appears on the verge of acquiring Sun Microsystems, a longtime rival in the computer server and software markets, for nearly $7 billion.

The two companies have been negotiating for weeks, ironing out terms of an agreement that would turn I.B.M. into the dominant supplier of high-profit Unix servers and related technology.

I.B.M. is offering $9.50 a share, down from a bid of $10 a share, said people familiar with the discussions who were not authorized to speak publicly. The new agreement would restrict I.B.M.'s ability to walk away from the deal, these people said.

Even at $9.50 a share, the deal would value Sun, based in Santa Clara, Calif., at close to $7 billion. It is close to a 100 percent premium based on Sun's value before rumors of an acquisition spread last month...

Although in a slump of nearly a decade, Sun is one of the largest sellers of server computers and is known for systems based on its Sparc chips. It has a vast software portfolio, including the Solaris operating system , the open-source MySQL database and the Java programming language.

BILL MOYERS: So you're suggesting, saying that CEOs of some of these banks and mortgage firms in order to increase their own personal income, deliberately set out to make bad loans?

WILLIAM K. BLACK: Yes.

BILL MOYERS: How do they get away with it? I mean, what about their own checks and balances in the company? What about their accounting divisions?

WILLIAM K. BLACK: All of those checks and balances report to the CEO, so if the CEO goes bad, all of the checks and balances are easily overcome. And the art form is not simply to defeat those internal controls, but to suborn them, to turn them into your greatest allies. And the bonus programs are exactly how you do that.
...
BILL MOYERS: To hear you say this is unusual because you supported Barack Obama, during the campaign. But you're seeming disillusioned now.

WILLIAM K. BLACK: Well, certainly in the financial sphere, I am. I think, first, the policies are substantively bad. Second, I think they completely lack integrity. Third, they violate the rule of law. This is being done just like Secretary Paulson did it. In violation of the law. We adopted a law after the Savings and Loan crisis, called the Prompt Corrective Action Law. And it requires them to close these institutions. And they're refusing to obey the law.

BILL MOYERS: In other words, they could have closed these banks without nationalizing them?

WILLIAM K. BLACK: Well, you do a receivership. No one -- Ronald Reagan did receiverships. Nobody called it nationalization.

BILL MOYERS: And that's a law?

WILLIAM K. BLACK: That's the law.

BILL MOYERS: So, Paulson could have done this? Geithner could do this?

WILLIAM K. BLACK: Not could. Was mandated--

BILL MOYERS: By the law.

WILLIAM K. BLACK: By the law.
...
BILL MOYERS: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?

WILLIAM K. BLACK: Absolutely.

BILL MOYERS: You are.

WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They're scared to death of a collapse. They're afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we'll run screaming to the exits. And we won't rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it's foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, "We just can't let the big banks fail." That's wrong.
...

Hat tip NBBooks

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet