As noted in yesterday's thread, our "Davos" question seems to have been the first one to have been asked, to Richard Edelman.

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

Guardian | IMF: UK economy will be hardest hit in worst recession since second world war

Britain's economy will be the hardest hit in the developed world in what is expected to be the "deepest recession since the second world war," the International Monetary Fund said today.

The IMF now expects the UK economy to shrink by 2.8% this year, compared with the 1.3% it was forecasting in November. This is worse than the 2% average drop in output the body has estimated for advanced nations.

Global growth is expected to fall to 0.5% this year as the "scale and scope of the current financial crisis have taken the global economy into uncharted waters".

Official figures last week confirmed that Britain fell into recession at the end of 2008. The UK economy slumped by 1.5% in the final three months of the year - worse than expected by analysts and sparking fears of a deep and prolonged recession. Over 2008 as a whole, the British economy shrank by 0.7%.

The EU is expected to slump 2%, and the US by 1.6%.

[Drew's WHEEEEE™ Technology]

Be nice to America. Or we'll bring democracy to your country.

In yet another article about how to deal with the crisis, Martin Wolf moves yet one step further by specifically mentioning the "illusory profits" of the financial sector in recent years (quoting a FSA chair speech, see below).

But he cannot avoid taking a snipe at the "savings glut" again, in conclusion:

It is going to be very hard to generate substantial net borrowing by households and non-financial corporations in the high-income countries with high internal debt. It is unimaginable that they will return to levels of private-sector borrowing, spending and increases in debt that characterised these countries for so long. Countries with large current account surpluses have long demanded an end to the profligate borrowing and spending of the customers upon whom they depended. They should have been careful what they wished for: they have now got it. Enjoy!

Effectively, he is endorsing blackmail of the prudent by the reckless.

Here's what Adam Turner, the new chairman of the FSA (Financial Services Authority) has to say:

it is also possible that the importance of financial services as a percent of GDP has been swollen by two other factors - one of which is illusory and short term, and the other harmful and longer term.

• The illusory one arises from mark to market profits in a rising market. If the bank and near-bank system in total holds a net long position in those assets which we mark to market - which it does - and if irrational exuberance can push the price of those assets to irrationally high levels (which I think it clearly did in the years running up to early 2007) then mark to market accounting will swell declared profit in an unsustainable way, but in a way which, reflected in bonuses, may reinforce management and traders' determination to do more of the clever stuff, which is delivering those profits;

• The possible long-term and harmful possibility is rent extraction. For there must be a suspicion that some and perhaps much of the structuring and trading activity involved in the complex version of securitised credit, was not required to deliver credit intermediation efficiently, but achieved an economic rent extraction made possible by the opacity of margins and the asymmetry of information and knowledge between end users of financial services and producers. Simply put, wholesale financial services, and in particular that element devoted to securitised credit intermediation and to the trading of securitised credit instruments - grew to a size unjustified by the value of its service to the real economy, and is now going through a downsizing, part of which is cyclical, but part a permanent one-off adjustment to a more economically efficient size.

Now of course, if you are an extreme Chicago school economic liberal, what I have said cannot be the case. If the industry grew dramatically in the decade to 2007 that must be because it was performing value added services: if complex product innovations were able to sustain themselves economically, they must have been socially useful innovations. But after what has happened, I think we know that that is not the case.

That speech is certainly worth reading.

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

Pan-Africanism | Hureaux Perez | 28 Jan 2009

The late Pan-African scholar Aime Cesaire addressed this ideological barbarity and practice many years ago in his exchanges on colonialism with the Haitian poet Renee Depestre.  At the root of Hitlerism, said Cesaire, we find the inability of the western "progressive" to recognize himself in the actions of the classic imperial world, which was the actual progenitor of the policies which led the Third Reich:

Yes, it would be worthwhile to study clinically, in detail, the steps taken by Hitler and Hitlerism to reveal to the very distinguished, very humanistic, very Christian bourgeois of the twentieth century that without his being aware of it, he has a Hitler inside him, that Hitler inhabits him, that Hitler is his demon, that if he rails against him, he is being inconsistent, and that, at bottom, what he cannot forgive Hitler for is not crime in itself, the crime against man, it is not the humiliation of man as such, it is the crime against the white man, the humiliation of the white man, and the fact that he applied to Europe colonialist procedures which until then had been reserved exclusively for the Arabs of Algeria, the coolies of India, and the blacks of Africa.

And that is the great thing I hold against pseudo-humanism: that for too long it has diminished the rights of man, that its concept of those rights has been - and still is - narrow and fragmentary, incomplete and biased and, all things considered, sordidly racist.

Incorrigible | Palast | 28 Jan 2009

Now that certainly deserves a bonus. And let's face it, a butthole that big needs a $35,000 toilet. Instead, the guy that paid the $50 billion, Bank of America Chairman Kenneth Lewis, is keeping his job. Lewis is the same guy that just spent billions more on buying Countrywide Financial, the sub-prime mortgage loan sharks that have brought America to its knees and put Bank of America into effective bankruptcy. (Note to Mr. Lewis: the only thing worse than getting cancer is PAYING for it.)

But dumber than Lewis is the loser who OK'd paying Bank of America for its losses on Merrill, who traded a pile of turds for a stack of gold -- our gold from the U.S. Treasury. That was Tim Geithner, Obama's pick for Treasury Secretary, who's now answering questions at Senate confirmation hearings about his funky tax filings. Tiny Tim was head of the New York Federal Reserve Bank during the Bush regime. Along with Bush's Secretary of the Treasury, Geithner came up with that $700 billion bail-out that loaded banks with loot on their way to insolvency. Bank of America got $25 billion of it to spend on Thain's company Merrill. That was before the extra $20 billion was weedled by Thain.

So why, President Obama, have you given us Tiny Tim to save our sorry nation's economic behind? What's with that?

Waiver

Diversity is the key to economic and political evolution.

It's the Economy, Girlfriend | The Onion

The economic crisis came home to 27-year-old Megan Petrus early last year when her boyfriend of eight months, a derivatives trader for a major bank, proved to be more concerned about helping a laid-off colleague than comforting Ms. Petrus after her father had a heart attack.

For Christine Cameron, the recession became real when the financial analyst she had been dating for about a year would get drunk and disappear while they were out together, then accuse her the next day of being the one who had absconded.

Dawn Spinner Davis, 26, a beauty writer, said the downward-trending graphs began to make sense when the man she married on Nov. 1, a 28-year-old private wealth manager, stopped playing golf, once his passion. "One of his best friends told me that my job is now to keep him calm and keep him from dying at the age of 35," Ms. Davis said. "It's not what I signed up for."

They shared their sad stories the other night at an informal gathering of Dating a Banker Anonymous, a support group founded in November to help women cope with the inevitable relationship fallout from, say, the collapse of Lehman Brothers or the Dow's shedding 777 points in a single day, as it did on Sept. 29.

In addition to meeting once or twice weekly for brunch or drinks at a bar or restaurant, the group has a blog, billed as "free from the scrutiny of feminists," that invites women to join "if your monthly Bergdorf's allowance has been halved and bottle service has all but disappeared from your life."

Theirs is not the typical 12-step program. ...

Truth unfolds in time through a communal process.

more animals

You can't be me, I'm taken

Check this link, provided by NBBooks in this diary on Kos: political power of just 6 banks is problem which I've requested be reposted over here.

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

EU Chief Praises Finland's Economic Model

These remarks would also be directed toward Sweden were Barroso in Stockholm...

Barroso said the rest of the world should look toward Finland as an example.

"Finland has created wealth not through easy money, not with casino money, but with work, discipline and ideas," he said. "I think it's a good lesson not only for Europe but the whole world."

The EU chief said that the global financial crisis is not a result of insufficient regulation or oversight, but simply because people want to get rich quick without working for it.

Vanhanen referred to Finland's experiences during the severe recession of the early 1990s. He noted that the state made major investments in new technologies, which helped to pull the country out of the slump. The premier stressed that the government must play a more active role in the economy.

Vanhanen was gilding the lily. Though 3.5% GDP investment in R&D did help, the most important decision imo was to create Roskapankkia (Rubbish Banks) that would hold devalued/unsellable assets that could be held and sold off (some profitably) during recovery.

Barroso is wrong about 'insufficient regulation', but in other ways he's promoting an OK social liberal POV.

The get-rich-quick, get-fame-quick state of mind is the fundamental problem. It's the old what-is-happiness argument, but one that has not been fully addressed.

You can't be me, I'm taken

see more puppies

You can't be me, I'm taken

Internet Ad Spending Soars, Magazines Suffer

The amount of money spent on media advertising last year edged up by 1.7 percent compared with the previous year. However traditional print media suffered a decline in ad revenue.
Companies spent 34.2 percent more money on internet advertising than in 2007. Online ads accounted for one-tenth of the total ad spend.

This will all look very different in 12 months time. Finnish newspapers have yet to take a heavy hit from phenomena such as Craigslist simply because of the language - but there are Finnish versions coming up. The main daily, Helsingin Sanomat, is largely subscription and this may help survival. The tabloids may suffer.

TV advertising is touch and go - if people spend more time at home, then it may survive, thought injured - but all the signs are for a severe cutback. That could put Yle, the license-funded state broadcaster, in a better position (which I will take into account in my pitches to them)

I am expecting a switch of ad-spend to online, and will trim my sails accordingly ;-)

You can't be me, I'm taken

The weather sucks. It isn't even snowing properly, just a slushy mix of rain and wet snow - basically sidewalks covered in solid puddles of slush. So, what to do. How about some hot cocoa. Yeah, the soluble stuff isn't too good, even premium versions, and making it from scratch is a pain - except it isn't.

Take some decent quality unsweetened cocoa powder in a small bowl or cup, add sugar to taste, cinnamon and/or nutmeg optional. Stir with implement of choice (I find chopsticks are a very underrated kitchen tool). Add some water and stir mixture into a smooth paste. Add a bit of decent quality vanilla extract. In the meantime, take a mug, add milk, microwave. Remember to leave room for the chocolate paste - stuff melts, it doesn't dissolve into the milk. Stir paste into milk.

Enjoy

PS This trick works for making cold chocolate milk in the appropriate season, though the paste has to be fairly thin for that.

PPS - Heat the milk before adding the chocolate.

I wanted to get your take and opinion on what Centrica says wind power costs

http://www.theregister.co.uk/2009/01/26/london_array_finance_worries/

The Financial Times reported at the weekend that Paul Golby, chief executive of E.ON UK - which owns 30 per cent of the Array venture - says that "the economics [of the Array] are looking pretty difficult".

Offshore windfarms like the Array are much more expensive to build and maintain than onshore ones, costing roughly twice as much. The FT quotes energy major Centrica as estimating the cost of offshore capacity at £3m per megawatt, more than double what it costs to build nuclear stations.

The cost of the electricity produced is even worse than this figure indicates; wind farms' average output over time is around 30 per cent of their capacity, whereas nuclear stations typically run at 90 per cent. Thus, it costs more than six times as much to build a given level of power production using windfarms as it does using nuclear.

For Bruce: The House apparently just bumped up the mass transit funding in the stimulus by a few billion.  They're also apparently going to return to it in a green energy bill a little later this year.

Obama's approval is now at only 60%.

In Alabama.

Going to go lie down.

Be nice to America. Or we'll bring democracy to your country.