Geopolitical and economic warnings

I have to sadly admit that in my first primary leadership directorship position I too was very inexperienced in running a large organization and as a result tripped myself up out of ignorance more then anything else. Needless to say anyone going into these positions would benefit from management training and a mentor program. Learning on the job is almost always a challenge when out there in a work environment without the proper management support group. Even now, years later, I'm still learning and now choose to avoid management situations for the simple reason of not liking those who were in a position of power over me. It really doesn't matter if it is a boss or a board of directors. These people tend to become fickle or temperamental when stressed too. Then their coping ego from youth comes out and runs the show. The stress of these type of positions is a big load and incompatibility on the job between personalities even worse. In various reports I read about workers, most unhappiness and stress is related to how workers are treated by those above them. It did not surprise me that some employees recreate situations that really had to do with their unresolved parental authority issues. However, the lessons learned along the way is hire people who are smarter, who know how to work as a team member and allow each other the freedom to be their own person in the job.

I grew to appreciate the team and truly dislike the drama king or queen who goes around inventing crisis after crisis just so they can look good fixing what wasn't broken in the first place.

So now I do have a deeper empathy for those in these positions yet am also deeply critical when I see leaders who use their power to exploit others.

I agree with this metwa3 "a society based on both intelligence and morality. One has no value without the other." Take away the word a hierarchical. I've worked with large groups of people who were very peaceful and focused on harmony. IMPO, people who are elected into office are servants to the citizens. It is their role to represent their communities. Therefore it is also important for them to identify what their personal stand is on issues and get out of the popularity game before running for office.

If one has intelligence and morality then decisions that one makes means something. Whereas, one without the other can lead to disaster. To say, 'this is what I stand for' and stick by it takes a lot of courage. People like to be liked. Yet being a wuss isn't going to win anyone a popularity contest in the end either. I still think students need to take leadership classes in high school and experiment with what a role like this in the community is really like. Role playing is a good way to get a felt sense of what this is and to determine if one is even cut out to be a leader in the first place. But this is on a different track, isn't it?

Jim Rogers on November 9, 2011
100% Chance of Crisis Worse Than 2008: Jim Rogers
VIDEO: http://video.cnbc.com/gallery/?video=3000056231

http://en.wikipedia.org/wiki/Jim_Rogers

James Beeland Rogers, Jr. (born October 19, 1942) is an American investor, author, and financial commentator.[2] He is currently based in Singapore. Rogers is the Chairman of Rogers Holdings and Beeland Interests, Inc. He was the co-founder of the Quantum Fund with George Soros and creator of the Rogers International Commodities Index (RICI).

Rogers is an outspoken proponent of the free market, but he does not consider himself a member of any school of thought. Rogers acknowledged, however, that his views best fit the label of Austrian School of economics.[3][4]

November 9, 2011 – NEW YORK – U.S. markets extended their losses Wednesday afternoon as escalating sovereign debt worries in Italy and Greece put significant pressure on equities and cyclical commodities. The Dow Jones Industrial Average (DJIA) tumbled as much as 408.69 points, or 3.4%, to 11,761.49 as of 2:15pm ET – marking its worst day since a 3.5% plunge on September 22. Risk aversion turned sharply higher, with the CBOE Volatility Index (VIX) surging 31.0% to 35.99. The gold sector held up particularly well this morning despite broad-based weakness in stocks and commodities, but succumbed to the selling pressure this afternoon, albeit modestly. COMEX gold futures were lower by $16.40, or 0.9%, at $1,782.80 per ounce, while the AMEX Gold Bugs Index (HUI) fell 2.0% to 592.56. The Dow ended -389 down, a drop of 3,2% by the closing bell. –IB Times

Italy nearing point of no return: The yield on benchmark 10-year Italian government bonds IT:10YR_ITA -0.55% was seen at 7.07% in recent trades, according to FactSet Research, up 67 basis points from Tuesday and above the 7% level viewed as a crucial threshold. The yield spiked to more than 7.4% in earlier activity. The 7% level was seen as the point of no return earlier in the crisis for Greece, Ireland and Portugal, forcing those countries to seek aid from euro-zone partners and the International Monetary Fund. “As the evidence of Greece, Ireland and Portugal has shown, once 7% is broken, the yield starts to rise exponentially. Every extra 1% on the yield structure for Italy’s debt profile costs an extra 3 billion euros ($4.1 billion) in service charges,” said Stephen Pope, managing director of Spotlight Ideas, a London consulting. –Market Watch

ASX 200 falls by 3 per cent, biggest drop in two months
Debt crisis in Italy deepens as borrowing costs hit 7pc
7pc is often the tipping point when countries need to be bailed out

AUSTRALIAN shares have plunged more than 3 per cent lower today as the never-ending eurozone crisis has entered dangerous new territory.
THE Australian dollar has fallen more than two US cents on news of a leadership crisis in Greece, and record highs for Italian bonds. Bank of New Zealand currency strategist Mike Burrowes said that fears around Italian bonds were the main driver pushing markets down overnight.

Read more: http://www.news.com.au/business/australian-dollar/australian-dollar-falls-two-us-cents-on-eurozone-crisis/story-fn6t6wad-1226190823516#ixzz1dHXmlshk


Italy, the eighth largest economy in the world is in debt of $2.2tn. Overnight, rates on Italian bonds rose past 7 per cent. When Ireland, Greece and Portugal hit this 7 per cent mark - they needed to be bailed out. But Italy is "too big to bail" and the possible contagion effect from a failure of Italy is causing global markets to fall.
Other news spooking markets is that French and German officials are exploring the idea of a smaller eurozone, sparking fears that this could be the start of a eurozone breakup.

Read more: http://www.news.com.au/business/markets/shares-set-to-open-sharply-lower/story-e6frfm30-1226190840805#ixzz1dHXDck2t


Italy fears send US stocks down 2 per cent on open
US stocks have dropped two per cent, following European markets lower as the eurozone crisis shifts to Italy.
Five minutes into trade on Wednesday the Dow Jones Industrial Average was down 236.96 points, or 1.95 per cent, to 11,933.22.
The tech-heavy Nasdaq Composite fell 61.68 points, or 2.26 per cent, to 2,665.81.
The broader S&P 500 sank 27.60 points, or 2.16 per cent, to 1,248.32.
"Europe stocks are lower today because of Italy, a far larger problem than Greece because of its size. The drop in the major European stocks in New York trading shows just how bad it is getting all over again,'' said Jon Ogg of 24/7 Wall Street.

Read more: http://www.news.com.au/business/markets/italy-fears-send-us-stocks-down-2-per-cent-on-open/story-e6frfm30-1226190826249#ixzz1dHYK0lbE

November 10, 2011 – PARIS – German and French officials have discussed plans for a radical overhaul of the European Union that would involve setting up a more integrated and potentially smaller euro zone, EU sources say. “France and Germany have had intense consultations on this issue over the last months, at all levels,” a senior EU official in Brussels told Reuters, speaking on condition of anonymity because of the sensitivity of the discussions. “We need to move very cautiously, but the truth is that we need to establish exactly the list of those who don’t want to be part of the club and those who simply cannot be part,” the official said. French President Nicolas Sarkozy gave some flavor of his thinking during an address to students in the eastern French city of Strasbourg on Tuesday, when he said a two-speed Europe — the euro zone moving ahead more rapidly than all 27 countries in the EU — was the only model for the future. The discussions among senior policymakers in Paris, Berlin and Brussels raised the possibility of one or more countries leaving the euro zone while the remaining core pushes on toward deeper economic integration, including on tax and fiscal policy. The change has been discussed on an “intellectual” level but had not moved to operational or technical discussions, the EU official said. A French finance ministry spokesman denied there was any project in the works to reduce the currency bloc’s membership. “There have been no conversations between French and German authorities at any level on decreasing the size of the euro zone,” the spokesman said. A radical overhaul of the European Union would be opposed by many members. “This will unravel everything our forebears have painstakingly built up and repudiate all that they stood for in the past sixty years,” one EU diplomat told Reuters. “This will redraw the map geopolitically and give rise to new tensions. It could truly be the end of Europe as we know it.” In Berlin, European Commission President Jose Manuel Barroso warned about the economic costs of any splits in the euro zone. Germany’s gross domestic product could contract and its economy would shed one million jobs, he said in a speech. Barroso said any push toward deeper economic policy integration should not come at the price of creating new divisions among EU members. “There cannot be peace and prosperity in the North or in the West of Europe, if there is no peace and prosperity in the South or in the East,” he said. To an extent the taboo on a country leaving the 17-member currency bloc was already broken at the G20 summit in Cannes last week, when German Chancellor Angela Merkel and Sarkozy both effectively said that Greece might have to drop out if the euro zone’s long-term stability was to be maintained.

November 14, 2011 – LONDON – Former British Prime Minister Tony Blair warned on Sunday that the collapse of the euro would be “catastrophic” and urged Europe to move fast to support the currency. Blair said European leaders faced “very difficult and painful” choices and a “long-term framework of credibility” was needed to see off the crisis. Speaking following the resignation of Italian Prime Minister Silvio Berlusconi on Saturday, Blair said there had “never been a tougher time to be a leader than right now.” But he said the “whole weight” of European institutions – including the European Central Bank – must get behind the euro if it was to survive. He told BBC TV that economies had to align and that “the myth that the Italian and German economies were the same – that 10-year myth has now evaporated.” Measures required to bring stability to the euro would be painful, he warned, but added: “If the single currency broke up, it would be catastrophic.” Blair, who was premier for a decade until 2007, was also asked if his former finance minister Gordon Brown had been right to push hard for Britain to stay out of the euro when Labour was in power. “He was right, although I would also say by the way, I was never in favor of doing it unless the economics were right,” Blair replied. British Prime Minister David Cameron will meet German Chancellor Angela Merkel in Berlin on Friday for talks on the euro’s difficulties and the economy. Cameron said on Friday there was still “a big question mark” over the future of the Eurozone and stressed it was not in Britain’s interests for the single currency to break up but the government is “preparing for every eventuality.” –Channel News Asia http://www.channelnewsasia.com/stories/afp_world_business/view/1165166/1/.html

As Italy brings in a new government in a bid to try and stabilize its battered economy, fears of a Eurozone contagion have hit France. Economists warn that the 300 billion euros of Italian debt that French banks hold leave it dangerously exposed to the spiraling financial crisis.

Anxiety about debt and deficits are looming large in France. The government has just announced its toughest budget since world war two as it tries to slash the public deficit and hang onto its coveted triple A credit rating. But despite the tax increases and spending cuts, economists warn the Eurozone crisis is getting ever closer to France.

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https://www.youtube.com/user/keymastermind77?feature=mhee#p/a/f/0/Uuc2aWJnmQ8

Carol wrote:
https://www.youtube.com/watch?v=kzGJWtYnAdE&feature=related
Eddie Hobbs - TV3 - The Euro Collapse

Good one Carol.

http://en.wikipedia.org/wiki/Eddie_Hobbs

Eddie Hobbs (born 11 October 1962) is an Irish celebrity Financial Advisor. Hobbs worked for Zurich Life 1979 to 1991 and left his position as Marketing Manager to set up a fee-based financial planning company TIPS. In March 1993 Hobbs published a landmark report "Endowment Mortgages The Hometruth" which collapsed sales of endowment homeloans in Ireland by June 1993 after the banking and life insurance industry failed to deal with his critique. In 1995 Hobbs was made a non-executive director in the financial services firm Taylor Asset Management but resigned from it and TIPS in Jan 1996. In May 1996 after a two month investigation, Hobbs lodged a complaint with the Irish regulator about the handling of two client files by Tony Taylor CEO of the Taylor Group. Tony Taylor fled Ireland and was located living under an alias in Eastbourne UK in 1999 by an investigator reporting to Hobbs. Taylor was extradicted and pleaded guilty to five counts of fraud, forgery and destruction of documents for which he was sentenced to five years in prison. Hobbs himself was never implicated in any issues relating to company affairs and in 2007 he was exonerated by the Irish High Court and praised by the presiding judge for showing "efficiency and determination and for not standing idly" when he pursued Taylor's activities from 1995 to 1996.

In 1996 he submitted a complaint to The Competition Authority alleging that the Government supported Irish Insurance Federation Remuneration Agreement was offensive to competition law since 1991,had engendered a culture of consensus decision making, restricted competition and prevented costs and commission disclosure to consumers. The complaint was upheld in 1998 forcing the Government to introduce statutory commission and charges disclosure. The Life industry was forced to reissue its product range to comply with the Insurance Act 2000. Hobbs acted in a voluntary capacity as a director and Finance spokesperson for The Consumers association of Ireland from 1993 to 2006

November 17, 2011 – WASHINGTON - “There is definitely going to be another financial crisis around the corner,” says hedge fund legend Mark Mobius, “because we haven’t solved any of the things that caused the previous crisis.” We’re raising our alert status for the next financial crisis. We already raised it last week after spreads on U.S. credit default swaps started blowing out. We raised it again after seeing the remarks of Mr. Mobius, chief of the $50 billion emerging markets desk at Templeton Asset Management. Speaking in Tokyo, he pointed to derivatives, the financial hairball of futures, options, and swaps in which nearly all the world’s major banks are tangled up. Estimates on the amount of derivatives out there worldwide vary. An oft-heard estimate is $600 trillion. That squares with Mobius’ guess of 10 times the world’s annual GDP. “Are the derivatives regulated?” asks Mobius. “No. Are you still getting growth in derivatives? Yes.” In other words, something along the lines of securitized mortgages is lurking out there, ready to trigger another crisis as in 2007-08. And what of the derivatives sitting on the balance sheet of the Federal Reserve? Here’s another factor behind our heightened state of alert. “Through quantitative easing efforts alone,” says Euro Pacific Capital’s Michael Pento, “Ben Bernanke has added $1.8 trillion of longer-term GSE debt and mortgage-backed securities (MBS).” Think about that for a moment. The Fed’s entire balance sheet totaled around $800 billion before the 2008 crash, nearly all of it Treasuries. Now the Fed holds more than double that amount in mortgage derivatives alone, junk that the banks needed to clear off their own balance sheets. “As the size of the Fed’s balance sheet ballooned,” continues Mr. Pento, “the dollar amount of capital held at the Fed has remained fairly constant. Today, the Fed has $52.5 billion of capital backing a $2.7 trillion balance sheet. “Prior to the bursting of the credit bubble, the public was shocked to learn that our biggest investment banks were levered 30-to-1. When asset values fell, those banks were quickly wiped out. But now the Fed is holding many of the same types of assets and is levered 51-to-1! If the value of their portfolio were to fall by just 2%, the Fed itself would be wiped out.” -Yahoo

November 17, 2011 – TOKYO – The International Energy Agency has estimated that Japan would need to spend $3 billion per month on additional oil and LNG in 2012 if the country’s nuclear power output falls to zero next year, the executive director of the International Energy Agency, Maria van der Hoeven, told reporters Wednesday. Speaking to Platts in Tokyo, van der Hoeven said that Japan would need an extra 460,000 b/d of oil and 30 billion cubic meters of gas in 2012 if the country had no nuclear power output. When asked about Japan’s winter oil and gas demand outlook, Van der Hoeven declined to comment as the country’s actual demand situation would depend on the country’s nuclear output situation, which remained uncertain. Japan is about to enter its winter power demand season, which normally runs through December-March, and the weather and nuclear utilization rates have a direct impact on crude, fuel oil and LNG consumption for thermal power generation. Japanese power utilities have hiked their oil and LNG consumption to make up for their shortfall in nuclear output in the wake of the devastating March 11 earthquake, and subsequent nuclear outages across the country amid safety concerns. Only 11 nuclear reactors are currently operating in Japan with a combined capacity of 9.864 GW, representing 20% of the country’s total installed capacity of 48.96 GW spread over 54 reactors, according to Platts calculations. It is widely expected that none of the nuclear plants shut for scheduled maintenance would be allowed to restart any time soon because of stress test conditions imposed by the government in July. If none of the nuclear reactors are allowed to restart in the coming months, Japan is scheduled to lose its nuclear output completely in April or May 2012 because of the Japanese regulation that requires nuclear power plants to carry out scheduled maintenance at their reactors at least once every 13 months. If this happens, it would be the first time Japanese nuclear power production has fallen to zero since it commenced in 1966. Speaking at a press conference in Tokyo, van der Hoeven expressed her concern over rising crude oil prices that will have “negative impact” on ailing economies in Europe and “poor developing countries.” -Platt

Western financial treasuries bubble: “Because fears are spreading about even top-rated European states, investors favour relatively safer U.S. Treasuries and JGBs,” said Shogo Fujita, chief Japan bond strategist at Bank of America Merrill Lynch. The European debt woes have benefited JGBs, which have attracted safe-haven bids thanks to Japan’s ability to finance its debt domestically despite its huge debt burden, now standing at 200 percent of GDP. -Reuters

To put this crisis into perspective, investors favor the so-called ‘relative safety’ of U.S. Treasuries and Japanese Government Bonds and it is precisely this kind of thinking that should keep us all up at night. Such a move by the world’s financial wizards is the long-term equivalent of burning money. Why? Japan’s debt to GDP ratio is already at 200%. That means for every $1 (or Yen) the entire Japanese economy is capable of generating in a given year- there’s $2 more in debt that it has to repay. When you spend more than you have; you’re bankrupt. When you spend more than you’re capable of producing- you’re a black-hole. If that hole wasn’t too large for Tokyo to climb out of, consider this- Japan has to maintain the health and retirement of one of the largest aging populations in the industrialized world; it has to pay down in deficit, become immune to the Eurozone debt cancer, avoid any more natural disasters, and it has to nearly rebuild its entire energy infrastructure from ground-zero while importing nearly all of its oil and natural gas. Sadly, the U.S. is no better off. The Federal Reserve, the U.S. Central Bank or Lender of last resort, has now become the largest holder of U.S. debt in the world- exceeding the obligations of even China. All this is happening during a recession and under the shadow of a potential conflict looming for the U.S. in the Middle East with Iran and under a U.S. budget deficit crisis that has already pierced the $15 trillion dollar mark. To put a trillion dollars in some kind of substantial context, if you opened a business at the time of Christ, 2000 years ago, and if you lost one million dollars a day in that business; it would still take you another 700 years to lose a trillion dollars. It’s an inconceivable amount of money. Total U.S. debt obligations now actually exceed $54 trillion dollars. If that wasn’t bad enough, sovereign debt is causing bond markets in Europe to implode. Insured risk markets will follow- including the unregulated $600 trillion dollar derivatives market which will topple banks and sovereign treasuries will follow that disembowelment. People who think the modern world as we know it can’t possibly end apparently didn’t hang around in class long enough to realize there was homework.

U.S. stocks fell, sending the Standard & Poor’s 500 Index to the lowest level in a month, as concern grew that Europe’s debt crisis will worsen and lawmakers will fail to agree on plans to cut the American deficit.

Commodity and technology shares had the biggest declines among 10 groups in the S&P 500, falling at least 2.1 percent. Sears Holdings Corp. (SHLD) slid 4.6 percent as the retailer reported a steeper loss. Applied Materials Inc. (AMAT), a producer of chipmaking equipment, sank 7.5 percent as forecasts trailed estimates. Jefferies Group Inc. (JEF) retreated 2 percent and dropped below $10 intraday for the first time since March 2009.

The S&P 500 lost 1.7 percent to 1,216.13 at 4 p.m. in New York. Losses accelerated after it fell below 1,229.10, its closing level on Nov. 9 after sinking 3.7 percent. The gauge dropped below its 100-day average. The Dow Jones Industrial Average sank 134.86 points, or 1.1 percent, to 11,770.73.

“It’s a risk-off day,” Michael Shaoul, chairman of Marketfield Asset Management in New York, which oversees $1 billion, said in a telephone interview. “There’s a lot of liquidation in the commodity space. You have the obvious story of European yields. The supercommittee may disappoint, but I don’t think this is going to be a main driving force behind this market. There’s too much stuff going on.”

Stocks fell as Reuters reported a euro-area official as saying there are no aid plans for Italy from the European Financial Stability Facility. Spanish bonds sank, driving 10- year yields to the highest since the euro was introduced, as borrowing costs climbed at an auction. Republicans and Democrats on Congress’s supercommittee hardened their positions with less than a week until the deadline to propose deficit cuts.

read more at link above

FRANKFURT — The financial stability of Europe has come down to one institution, the European Central Bank, which is now under heavy new pressure to rescue the euro — or possibly see it collapse.

Mr. Zapatero made his unusually blunt statements on a day when markets sagged further and contagion continued its seemingly inexorable spread from the small economies on Europe’s periphery to Italy, Spain and even France at the core. Spain was forced Thursday to pay nearly 7 percent on an issue of 10-year debt, the highest since 1997, while investors demanded the largest premium for buying French as opposed to German debt in the decade-long history of the euro.

Only the fiercely conservative stewards of the European Central Bank have the firepower to intervene aggressively in the markets with essentially unlimited resources. But the bank itself, and its most important member state, Germany, have steadfastly resisted letting it take up the mantle of lender of last resort.

European politicians and analysts say that unbending stance now threatens the survival of the euro and the broader integration of Europe itself.

“There is no solution to the crisis without the E.C.B.,” said Charles Wyplosz, a professor at the Graduate Institute in Geneva and co-author of a standard textbook on European integration. “The amounts we are talking about are too big for anybody but the E.C.B.”

At issue is whether the bank has the will — or the legal foundation — to become a European version of the Federal Reserve in the United States, with a license to print money in whatever quantity it considers necessary to ensure the smooth functioning of markets and, if needed, to essentially bail out countries that are members of the euro zone.
read more at link: http://www.nytimes.com/2011/11/18/world/europe/european-central-bank-resists-calls-to-act-in-debt-crisis.html?_r=1&hp

AS the debt mess in Europe deepens, bankers are pressing Greece’s bond holders to swallow big losses. Leading the charge is BNP Paribas, the big French bank, which has been hired by the Greek government to help persuade investors to accept a deal that would cut the value of their investments in half.

On paper, this restructuring would be voluntary. Bond holders would exchange their old Greek bonds, at a 50 percent loss, for new ones that would mature in 30 years. Painful, yes. But in theory, such a move would help Greece get a handle on its debt, and that would be good for everyone.

Behind the scenes, however, BNP officials seem to be twisting some arms. A big point of contention is — surprise! — derivatives.

Investors who own Greek debt and have bought insurance on it, in the form of credit default swaps, wonder why they should accept the offer that’s on the table. If Greece stops paying after the restructuring, those swaps are supposed to cover their losses, much the way homeowners’ insurance would cover a fire.

The International Swaps and Derivatives Association agrees. The group, which represents the industry and is largely controlled by big banks, says anyone who doesn’t like the offer can walk away. “If a payment is missed, trigger the C.D.S. and be made whole,” the group said on its Web site.

BNP and its client, Greece, want to corral as many investors as they can. The more bond holders they persuade, the more that Greece would benefit — and the more the bank would collect in fees.

So it is perhaps unsurprising that some recent meetings have taken on a forceful tone, according to three portfolio managers who attended three different sessions with BNP Paribas. The investors spoke on condition of anonymity because they feared retaliation by the bank.

Contrary to what the I.S.D.A. says, the BNP Paribas bankers have been telling bond holders that their credit insurance may not pay off down the road, because after the restructuring is completed, the terms of the old debt might be changed, these money managers said.

Normally, investors would shrug off such an argument.

But the warnings from BNP Paribas carried weight, the money managers said, because of one of the officials who was making them. She is Belle Yang, a BNP specialist who also happens to serve on a powerful I.S.D.A. committee. The panel, the “determinations committee” for Europe, decides what constitutes a “credit event” in Greece or elsewhere on the Continent.

read more at link http://www.nytimes.com/2011/11/20/business/credit-default-swaps-as-a-scare-tactic-in-greece.html?src=me&ref=business

November 20, 2011 – NEW DELHI – India’s rupee, Asia’s worst performing currency this year, could be bound for “uncharted waters,” analysts say, as fears about Eurozone debt and a slowing economy pump demand for the U.S. dollar. The rupee slipped to 51.20 per U.S. dollar Friday — a 32-month low — with no sign that it has bottomed out. “There’s nothing preventing the rupee heading into uncharted waters. We don’t really know where it will stabilize against the dollar,” Abheek Barua, chief economist of India’s HDFC bank, told AFP. The rupee has fallen 15 percent since July on worries over the debt crisis and concern about deceleration in Asia’s third-largest economy, sparked by 13 rate hikes that have failed to curb near double-digit inflation. Former chief Indian government economic advisor Shankar Acharya has warned the economy could grow by under seven percent in the financial year ending March 2012 — down from 8.5 percent last year. “The currency is suffering from global risk aversion which is likely to increase rather than decrease as well as from weakening domestic macroeconomic fundamentals,” Dariusz Kowalczyk, economist at Credit Agricole, told AFP. Money has been flowing out of India into U.S. assets such as treasury bills — seen as safe bets in times of crisis. The falling rupee is bad news for India, aggravating inflation and pushing up the price of imports. India is a net importer of foreign goods, with one-third of the total made up of crude oil imports used to power the energy-hungry nation. Other imports include steel, coal and rubber, driving up costs for manufacturers that will be passed on to consumers. –China Post http://www.chinapost.com.tw/business/asia/india/2011/11/21/323501/Eurozone-debt.htm

Smoke in the Balkans: Belgrade — The Eurozone debt crisis is stoking growing fears of spillover in the small and vulnerable economies of the Balkans, with stricken Italy and Greece close neighbors and major trade partners. A World Bank report this week warned that the debt crisis, with its epicentre in Greece, could see economic links under threat, with trade, direct investment, bank lending and foreign remittances all at risk. Trade with the EU is a key driver for exports and overall economic growth in the region, accounting in some cases for up to half of all activity, it said. For Serbia, Bosnia, Macedonia, Montenegro, Kosovo and Albania, some 58.2 percent of their total exports in 2010 went to the European Union, mainly to Italy and Germany. Concerns are even greater in Croatia which plans to join the EU in 2013. “Almost all foreign banks in these countries are from EU countries, with a comparatively high share of Greek- and Italian-owned banks. Further stress on their respective parent banks could potentially create another credit crunch in the region,” warned World Bank economist Ron Hood. The World Bank projects growth in the region of 2.5 percent in 2011 and 2.1 percent in 2012 — but only if the eurozone crisis is resolved, which appears increasingly open to debate as more and more member states get into trouble. “Should the crisis worsen, economic growth in these countries could be much worse,” Hood said. Serbian Central bank governor Dejan Soskic warned that his country has “already been touched by the crisis.” “As a result, economic activity suffers and projections for next year’s growth are in danger,” Soskic said, with 2012 current forecast at 1.5 percent. -AFP http://www.google.com/hostednews/afp/article/ALeqM5hBN9j5hXuWptViWxy9k4npRMTcgQ?docId=CNG.bc1544f3ba2793e2651e8857913886d8.391

The real bailout no one’s discussing: Nervous investors around the globe are accelerating their exit from the debt of European governments and banks, increasing the risk of a credit squeeze that could set off a downward spiral. Financial institutions are dumping their vast holdings of European government debt and spurning new bond issues by countries like Spain and Italy. And many have decided not to renew short-term loans to European banks, which are needed to finance day-to-day operations. If this trend continues, it risks creating a vicious cycle of rising borrowing costs, deeper spending cuts and slowing growth, which is hard to get out of, especially as some European banks are having trouble meeting their financing needs. “It’s a pretty terrible spiral,” said Peter R. Fisher, head of fixed income at the asset manager BlackRock and a former senior Treasury official in the George W. Bush administration. The pullback — which is increasing almost daily — is driven by worries that some European countries may not be able to fully repay their bond borrowings, which in turn would damage banks that own large amounts of those bonds. It also increases the already rising pressure on the European Central Bank to take more aggressive action. –New York Times excerpt https://myaccount.nytimes.com/auth/login?URI=/2011/11/19/business/global/lenders-flee-debt-of-european-nations-and-banks.html&OQ

Across the European Union - the ongoing debt crisis has sparked an upheaval in the bloc's political landscape. From Greece to Italy, unelected Eurocrats are on the ascendant - as democracy gives way to a desperate struggle for economic survival. Wasting little time, Mario Monti unveiled his new strategy the very day he took office - more austerity, more cuts, and more tax hikes. But markets are far from convinced - with debt interest rates across the EU reaching catastrophic levels this week. RT's Daniel Bushell reports.

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November 19, 2011 – BERLIN - Don’t they know it’s the End of the world? If you like your Wall Street analysis with a heavy dollop of rapture and Armageddon, today was the day for you. Blame the weighty issues of the day (Europe, mostly), and yesterday’s big selloff for the spasm of bearishness. It started off with Nomura’s Bob Janjuah. He said that any talk of the ECB saving Europe was a mere pipedream, and that if the ECB did go whole-hog buying up peripheral debt to suppress yields, then that would prompt a German departure from the Eurozone. Germany appears to be adamant that full political and fiscal integration over the next decade (nothing substantive will happen over the short term, in my view) is the only option, and ECB monetization is no longer possible. I really think it is that clear and simple. And if I am wrong, and the ECB does a U-turn and agrees to unlimited monetization, I will simply wait for the inevitable knee-jerk rally to fade before reloading my short risk positions. Even if Germany and the ECB somehow agree to unlimited monetization I believe it will do nothing to fix the insolvency and lack of growth in the Eurozone. It will just result in a major destruction of the ECB‟s balance sheet which will force an ECB recap. At that point, I think Germany and its northern partners would walk away. Markets always want short, sharp, simple solutions. But then there was Deutsche Bank’s Jim Reid, who is always sober, but not usually wildly negative. He offered up one of the most bearish lines in history in regards to German opposition to ECB debt monetization: If you don’t think Merkel’s tone will change then our investment advice is to dig a hole in the ground and hide. But it got even wilder with the latest from SocGen’s Dylan Grice. Again, he’s always pretty negative, but he cranked it up a notch, comparing Germany’s policy today against the policies that enabled the rise of Hitler. Specifically, he said that post-Weimar, Germany became too aggressive about fighting inflation, thus prompting deflation, thus prompting more unemployment, thus enabling the rise of the Nazis:

George Goncalves writes US and Europe: At the Point of No Return? “…we were wrong in assuming one could be optimistic around the EU policy process and have learned our lesson not to accept apathy as a sign that all is factored in as its clear downside risks remain. In fact, we could be approaching the point of no return for the fate of the euro, the European financial system and more broadly the concept of a singular economic zone for Europe; this obviously would change the path for the US and the global economy in a heartbeat too. We still believe there is time to prevent worst-case scenarios, but these sort of watershed moments reveal one thing, that market practitioners are ill-equipped to navigate the political process, especially one that is driven by 17 different governments.” -Business Insider http://www.businessinsider.com/apocalyptic-analyst-notes-2011-11#ixzz1eACSvXOY

Currency Wars in EU commence: Britain will soon be forced to scrap the pound and join the euro, one of Germany’s most senior figures said yesterday. In a chilling threat to UK sovereignty, German finance minister Wolfgang Schauble predicted that all Europe would one day use the single currency. “It will happen perhaps faster than some in the British Isles currently believe,” he said. His sinister warning followed the emergence of a secret German plan to build a powerful new economic government for the eurozone and block an EU referendum in Britain. A leaked German foreign ministry memo detailed plans for a new European Monetary Fund. It also claimed the EU’s treaty could be altered to centralize more power without triggering a vote. In a further sign of growing German supremacy within the EU, David Cameron was yesterday rebuffed by Chancellor Angela Merkel in talks over how to tackle the euro crisis. Last night British opponents of the EU were horrified by the bellicose threat to Britain’s economic independence. Tory MP Peter Bone said: “I would be happy to have a bet with the German finance minister that the euro will disappear before the pound. It is a completely absurd suggestion that will never happen.” -Express http://www.express.co.uk/posts/view/284656/Germans-try-to-kill-off-pound

The 2nd Battle of Britain: Sir John Major has warned that a Franco-German plan to introduce a financial transaction tax across Europe was akin to directing a “heat-seeking missile” at the City of London. Hours after David Cameron failed to persuade Angela Merkel to drop the idea of such a “Tobin tax” in the EU, the former prime minister highlighted deep British unease over the issue by accusing Paris and Berlin of fanning the flames of Euro-scepticism. Britain would be able to veto the introduction of the tax in the EU because all taxation matters have to be agreed by all 27 members of the EU. But France and Germany would be able to use what are known as “enhanced co-operation” powers under the Lisbon treaty to introduce the tax in the 17 members of the Eurozone. Britain objects to this because the tax – 0.1% on stock and bond trades and 0.01% on derivatives – could still apply in the City. Merkel made clear in their discussions that she will give no ground on a key British recommendation – that the European Central Bank should act as the “lender of last resort” for the Eurozone. -Guardian excerpt http://www.guardian.co.uk/business/2011/nov/18/tobin-tax-city-london-john-major

GIABO is a movement and soon to be PAC that advocates for the people against the large banks that have come to occupy every level of government and influence around the globe. A coordinated rebellion to remove people in power in the political and financial arenas who are not being found guilty of their dishonest practices. A comprehensive and sophisticated assault, organized by commoners in the work force against a small, elite group of bankers and politicians working harmoniously to destroy the free market.

There is a bull market in dissent.

As Occupy Wall Street saw a massive day of action, people working on Wall Street actually got pink slips. It's reportedly the second week of major layoffs. Job cuts on Wall Street are supposed to be brutal coming up here with firms expected to shed 75,000 jobs according to CNN. Credit Suisse, Bank of America, JP Morgan, Citigroup, Goldman Sachs, UBS all reportedly making cuts. So are we gonna see bankers start occupying Wall Street? We asked financial journalist and host of Keiser Report Max Keiser about it. We also track his evolution from working on Wall Street as a broker to occupying it today.

To watch more visit us @ https://www.youtube.com/CapitalAccount

Think about this as it was posted in October 2009.

World's major powers including China and Russia don't want to 'finance' American military adventures anymore. That's the view of Max Keiser, finance critic and former stockbroker. He says China and Russia are interested in collapsing the US economy by rejecting the dollar

This week Max Keiser and co-host, Stacy Herbert, report on thieves, hustlers, bankers and a Saudi prince. In the second half of the show, Max talks to Rick Falkvinge of the Swedish Pirate Party, about copyright and hot war between hackers and NATO.

In this edition of the show Max interviews Satyajit Das, author of Extreme Money. He talks about the global economic crisis and the recent credit crunch.

Carol wrote:

https://www.youtube.com/watch?v=6iXhAPTGyfQ

In this edition of the show Max interviews Satyajit Das, author of Extreme Money. He talks about the global economic crisis and the recent credit crunch.

I just loved listening to this Das guy. Thank you Carol.

As Fiat Matrix begins crashing- investors look for an exit
Posted on November 21, 2011
November 21, 2011 – NEW YORK – The Dow has taken a -249 point tumble. We’re done folks. CNBC is reporting that there are now clients running out of the markets entirely because they do not believe their customer funds are safe.

That’s the end of it.

The belief that there are more MF Globals has now taken hold.

The thieves have pushed it too far and now we’ve got the start of a global liquidity run, and with good reason. The authorities both in the regulatory side and on the prosecutorial side have refused to put a stop to the thievery and now the risk factors have turned into realized risk.

The market is done folks. You can be right but if you make your bet in the markets, are right, and then get screwed anyway when someone steals the money and nobody goes to jail there comes a time when people begin to understand that it can happen to them and will unless they depart the market.

We’re there folks. Oh sure, there will be rallies and there will be selloffs. But there is no longer a market, there is no longer a thing to trade, and there is no longer a reason to believe that superior analysis will lead to profit or even safety.

This isn’t just about speculators – it is also about farmers, shippers, airlines, manufacturing concerns, everyone in business who has a need to hedge.

More than four years ago, I said that the government had to step in and demand that both off-balance sheet games be ended permanently and in all forms and that all derivatives had to be put on an exchange, without exception, and that every dollar of underwater position had to be backed by an actual dollar of capital in real money, held and known to be safe.

The regulators refused and now it appears that what was put up on a regulated exchange was effectively stolen. Well folks, then none of your investment accounts — not your IRA, 401k, not even your bank account — is safe. Diversification is a strategy but the risk remains. It is up to you to decide how much you’re willing to risk losing to a crook. If the answer is “none” or you cannot reduce the at-risk portion of your assets to what you’re willing to lose to fraud then you can no longer participate in the market at all, in any form, nor even do business with a bank. That sucks, but it is what it is and if this meme spreads — and it will until it’s stopped — we run the risk of a “sudden stop” economic event. –Market Ticker http://market-ticker.org/akcs-www?post=197878&page=1

Germany, Europe's economic powerhouse, has been seen as totally safe, solid and stable. But its weak bond sale auction recently has sparked fears that the debt crisis is beginning to threaten Europe's strongest economy.

November 25, 2011 – BERLIN – The euro extended its recent slide against major rivals on Friday as European equities fell across the board on irresolute European debt crisis. The recent run of bad news crippled the already flaccid European currency, with the rating agency Fitch slashing Portugal’s credit rating to junk while Moody’s cut Hungary’s investment-grade rating. French President Nicolas Sarkozy and German Chancellor Angela Merkel said at a joint press conference with Italian Prime Minister Mario Monti that they were confident the new Italian PM was capable of tacking his country’s economic challenges. However, the positive mood was overturned as Germany strongly opposed to Eurobunds. Although traders earlier believed that Germany will soften its stance on common bonds following poor bond auctions, Merkel reiterated her opinion that the eurobonds are “not needed and not appropriate.” Meanwhile, the Financial Times reported that the European Financial Stability Facility may not be able to increase its capacity from the current 440 billion euros to over 1 trillion euros due to worsening of market conditions over the past month. Thus far, the U.K. FTSE 100 index fell 0.55 percent, Germany’s DAX dropped 0.70 percent and France’s CAC-40 index slipped to 0.61 percent. -NASDAQ
http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201111250702rttraderusequity_0320&title=euro-extends-slide-as-eurozone-crisis-cripples-markets


France and Germany have warned that a blow-out in Italy's giant debt mountain would signal "the end of the euro." November 25, 2011 – PARIS – Italy had to pay record rates to raise €10bn this morning, while France and Germany warn that a blow-out in its giant debt mountain would signal “the end of the euro.” Meanwhile, EU Economic and Monetary Affairs Commissioner Olli Rehn has upped the pressure on Italian Prime Minister Mario Monti’s new government, calling for “an ambitious timeline” on economic reforms. “Italy is faced with formidable challenges,” Mr Rehn told Italian lawmakers during a visit to Rome. “The new government needs to deliver on fiscal consolidation and adopt bold measures to re-launch growth,” he said. ”Full and effective implementation will be key,” he said, adding: “It would be essential to give strong signals to citizens and markets with a clear and ambitious roadmap for reform and an ambitious timeline.” In its bond auction, Italy was forced to pay a rate of 6.504% on bonds due in six months and 7.814% on bonds due in two years – dangerous levels that analysts say could drive Italy insolvent within months. A day after a summit in Strasbourg with German Chancellor Angela Merkel and French President Nicolas Sarkozy, Mr Monti’s press office reported the two leaders had said a debt collapse in Italy would be “the end of the euro.” Ms Merkel and Mr Sarkozy “said they were aware that a collapse of Italy would inevitably be the end of the euro, stalling the process of European integration with unpredictable consequences,” it said in a statement. Mario Monti promised the two leaders that further fiscal consolidation in Italy “will be implemented rapidly with measures to boost growth.” Commissioner Rehn is this afternoon meeting Mr Monti, who was installed on 16 November after market pressures and a parliamentary revolt ousted his predecessor Silvio Berlusconi. Italy has been forced to agree to auditing of its books by the European Union and the International Monetary Fund and the European Commission has said more austerity measures may be needed to balance the budget by 2013. A first report from the monitoring mission is due on Tuesday, Mr Rehn said. Italy’s debt emergency has set off alarm bells around the world over concerns that it could break the eurozone. –RTE News


SHANGHAI -- China's four largest banks issued about CNY100 billion ($16 billion) in new loans in the first three weeks of November, a marked slowdown in credit growth compared with late October, the 21st Century Business Herald reported Wednesday, citing unnamed people familiar with the matter.

New yuan loans within the banking system are likely to total around CNY500 billion this month, the report said, down from CNY587 billion in October.

Although the central bank has gradually eased restrictions on credit, loan growth remained lackluster because of a shortage of deposits and a lack of profitable projects amid a slowing economy, the report said.

China's big four banks are Industrial & Commercial Bank of China Ltd. ( 1398.HK), China Construction Bank Corp. (0939.HK), Agricultural Bank of China Ltd. (1288.HK) and Bank of China Ltd. (3988.HK).

Faced with a deteriorating global economic outlook, the Chinese government recently signalled its intention to "fine-tune" monetary policy. Analysts have widely interpreted this as referring to the selective easing of lending restrictions in sectors such as agriculture, public housing and small business.

In its latest effort to partially ease monetary policy, the central bank has decided to cut its reserve requirement ratio for several small rural lenders in eastern Zhejiang province, a person familiar with the situation said Tuesday.

The reserve requirement ratio for the small lenders will fall by 50 basis points to 16%, effective Friday, the person said. Currently, large banks are required to keep 21.5% of customer deposits in the central bank's coffer as reserves. Newspaper website: http://www.21cbh.com

November 24, 2011 – BERLIN – The European Union demanded Wednesday sweeping powers to override national budgets and proposed issuing joint Eurozone bonds to help resolve and prevent a repeat of the debt crisis. “Without stronger governance, it will be difficult if not impossible to sustain the common currency,” EU Commission chief Jose Manuel Barroso said of his latest legislative proposals. The head of the executive EU arm, Barroso presented radical plans that would allow him and Economy Commissioner Olli Rehn to decide to intervene in national policymaking. Each said such new powers were a pre-condition for pooling Eurozone government bonds, presented as a future safeguard. Chancellor Angela Merkel immediately repeated Germany’s opposition to joint Eurozone bonds, saying the approach would not work — just as investors shunned an issue of German 10-year bonds, considered the Eurozone gold standard. French President Nicolas Sarkozy voiced the conviction, which he said Merkel shared, that the 17 Eurozone nations must “better integrate and that at the heart of that integration France and Germany must grow closer and be the base of stability in the Eurozone and Europe in general. There is no other choice,” he stressed. Such closer integration would mean no over-reaching national budgets and no “fiscal dumping.” Countries with excessive budget deficits must make efforts to bring them down, he added, addressing a meeting of French mayors in Paris. However the Netherlands, which backs stronger budget policing, meanwhile warned that plans for fiscal convergence also face an “uphill struggle.” Without naming the objectors, Finance Minister Jan Kees De Jager said: “There are those who resist further discipline.” The proposals, which concern only the Eurozone at this stage, must now journey through the EU’s 27 member states and the European Parliament. –Yahoo News
http://uk.news.yahoo.com/eu-launches-bid-rewrite-eurozone-budgets-032511566.html



Portugal cut to junk status: Fitch cuts Portugal’s “rating” to “trash” The financial rating agency cut the “rating” of Portugal at one level, placing it on a level considered “junk”. The prospects continue to be “negative.” Fitch “concluded its review of the fourth quarter of sovereign debt of Portugal. The large budgetary imbalances, the high indebtedness in all sectors and the adverse macroeconomic forecasts mean that the sovereign credit profile is no longer consistent with a rating of high quality investment “, reveals the Agency of information in a note published today. Thus, Fitch decided to put the country’s financial rating “BB +” from “BBB-”. A descent of a level, but that puts the “rating” of Portugal in a level considered “junk”, i.e. speculative investment. – Jornaldenegocios translated
http://www.jornaldenegocios.pt/home.php?template=SHOWNEWS_V2&id=521673