Bubbles, Bailouts and Stimulus Plans

Mong Palatino, a Filipino currently living in California, has posted the second of his articles for Global Voices on the global economic crisis:

Identifying the economic woes of the United States is crucial. But we should also understand that other countries are also grappling with bankrupt companies and shrinking economies. Many countries are also implementing their own stimulus plans. What are some of the examples used by bloggers around the world when they discuss the bubble economies, bailout of banks and stimulus plans of their countries?
Global: Bubbles, Bailouts and Stimulus Plans

He’s now planning more articles and has requested help identifying bloggers on these topics:

3rd article

— Stories about creative / ingenious ideas of entrepreneurs in remodeling
their businesses in response to the crisis
— industries which are flourishing despite / because of the crisis
— survival tips
— effect of crisis on small businesses, big corporations

4th article

– a brief overview of global job losses
— migrant workers returning home because of downsizing
— job hunting stories
— changes in the job market, job preparation.

Please leave any suggestions in Comments.

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100 Responses

  1. He’s now planning more articles and has requested help identifying bloggers on these topics:

    Kev,

    You should have his people call JMc’s people.

    😉

  2. My people have organised for me to meet with Ben (Bernanke) and George (Soros)so I’ll be out of the country for a while 😉

  3. Bon Voyage John. Oh, and take your time. We’ll hold down the fort while you’re away. Bye.

    Are you still here, John?

  4. Just a quick word of encouragement Kevin, I’m glad you’ve put your balls on the chopping block raising this topic on this blog site. I admire that! 🙂 🙂 🙂 🙂 Remember some people have their heads stuck up their arses, they just can’t help themselves

  5. Funny. Is there an echo in here? Hello.

  6. John McPhilbin, on March 19th, 2009 at 7:59 pm Said

    Remember some people … they just can’t help themselves

    I am in furious agreement! The evidence abounds. And on a daily (hourly?) basis.

  7. Nature5

    It’s hard to tell when you’re offering an agreement or an insult sometimes.

  8. If you want to know just how bad things really are you have to look no further than the US Fed Reserves latest move.
    It’s a deeply, deeply desperate move which will obviously have flow on effects in major way .

    Federal Reserve’s move to print money shows perilous policy failure
    http://www.theaustralian.news.com.au/business/story/0,28124,25212624-643,00.html
    IT’S an ominous day when the world’s economic superpower starts printing money to buy its own government’s debt.

    “Who’s going to buy the bonds?” Paul Keating asked two weeks ago. Who would finance a US budget deficit forecast to swell to $US1.7 trillion ($2.5trillion) this year?

    Now US Federal Reserve chairman Ben Bernanke has revealed part of the answer: the central bank itself will buy $US300 billion of US Treasury bonds and pay for them by electronically printing the money.

    The extraordinary move immediately pushed down long-term US interest rates, which set the benchmark for mortgage rates in the nation.

    The markets lapped it up, just as they welcomed the Bank of England’s move early this month to buy British government bonds.

    Both central banks have cut their official interest rates about as low as they can go. So now they are using “quantitative easing” – literally expanding the quantity of money sloshing around their economies.

    With deflation now the big fear, the aim is to get institutions lending again. But the strategy obviously carries the enormous risk of stoking future inflation.

    No wonder China’s Premier Wen Jiabao said last week he was worried about the safety of China’s $US740 billion holding of US Treasury securities. He will be worrying even more now Washington will end up using inflation to “monetise” away huge debts.

    This extraordinary move is being driven by the same policy failure that has caused the International Monetary Fund to forecast, yet again, that the global recession will be even deeper than previously thought.

  9. Another headline, it just goes to show what happens when governments and the banking and finance communities have had their heads stuck up their backsides over an extended period of many years.

    US prints money to stave off deflation
    http://business.smh.com.au/business/us-prints-money-to-stave-off-deflation-20090319-93bl.html
    THE US has resorted to printing money in a desperate attempt to resuscitate its economy and ward off growing concerns over its foreign debt.

    Yesterday the US Federal Reserve said it would buy $US300 billion ($453 billion) worth of bonds issued by another branch of government: the Treasury.

    The unprecedented move follows similar efforts in Britain and Japan and is an attempt to encourage inflation to prevent a bigger threat: deflation, or a sustained fall in prices.

    The central bank will also buy $US750 billion in mortgage-backed securities from troubled lenders, taking total purchases of toxic assets to $US1.25 trillion.

  10. Nature5

    The DOW and Nasdaq dead cats bouncing? I think so, what about you?.

  11. US prints money to stave off deflation

    OK John. You got me on that one. I don’t like it.

    😦

  12. Tony and John,

    I like how they are calling the printing of money the “Zimbabwe solution”…. well, not like…..

  13. I don’t think the IMF are a fan of Obama either.

    But strangley (or not), they are right behind Labor over here.

    Interesting to see how the other mob defend themselves now.

  14. I have at times commented on the masses looking to alternatives when capitalism becomes extreme due to its own greed.

    Looks like France could be the next to elect an extremist government at the next election.

    http://www.news.com.au/story/0,27574,25214409-23109,00.html

  15. Joni

    I’m gob -smacked by the decision to just print money. Essentially they are devaluing the dollar in the hope that somewhere down the track they can re-value it upward. This is a huge and desperate risk given that the major problem is solvency (due to the erosion wealth from toxic assets clogging the banking and finance system).

    They also seem to be ignoring the fact that countries such as China, Japan and oil rich M/E countries are heavily invested in the US. In fact, they’re relying on China for most of their huge loans. China have major challenges of their own as does Japan.

    I mentioned recently to Elise that a major danger in the US was not only deflation due to shrinking demand but also the risk of hyperinflation caused by counter-measures of printing money and pumping it into the system. That’s when she told me to seek professional help LOL

  16. John

    I am gob-smacked as well regarding printing of money, the Zimbabwe solution of which we all laughed at and criticised.

    Wonder when we will have the US$1,000,000,000 note arrive, or is it already in the design phase.

  17. Saving the world’s banks a priority!

    Krugman has been spot on all along.

    The New York Times
    Op-Ed Columnist
    After the Money’s Gone
    By PAUL KRUGMAN
    Published: December 14, 2007
    http://www.nytimes.com/2007/12/14/opinion/14krugman.html
    What’s going on in the markets isn’t an irrational panic. It’s a wholly rational panic, because there’s a lot of bad debt out there, and you don’t know how much of that bad debt is held by the guy who wants to borrow your money.

    How will it all end? Markets won’t start functioning normally until investors are reasonably sure that they know where the bodies — I mean, the bad debts — are buried. And that probably won’t happen until house prices have finished falling and financial institutions have come clean about all their losses. All of this will probably take years.

    Meanwhile, anyone who expects the Fed or anyone else to come up with a plan that makes this financial crisis just go away will be sorely disappointed.

  18. Shane

    And people wonder why the GFC has been getting my back up?

  19. Gee John,

    Quoting articles from December 2007 to back up your relentless negativity…?

    What next, the Old Testament?

    Better start building that ark…

    We’re all doomed! DOOMED!!!

  20. Reb

    Is ignoring the truth really that painful for you?

  21. John

    Getting your back up is one thing, being a realist is another as well.

    Even with the GFC happening I try to keep things in perspective because there are so many nostradamus’s out there at the moment predicting everything from armageddon to lush pastures of gold.

    Publishing only negative aspects of any topic slowly wears down the nation to a population of doom and gloomers who have no visions as they have been told there is no future.

  22. Reb

    It’s alright for you to sledge on various topics when it’s obvious idiocy is at work. But it’s not okay for me to point out the obvious is that right?

  23. Shane

    I always provide reasoning behind my analysis and the indicators – they always remain open for debate.

  24. Furthermore…

    I fail to see why you’re constant approach in quoting other so called “economists” that share your pessimism adds any credibility to your position.

    Four months ago economists were saying that the Aussie dollar would slump to US 49 cents…Woops WRONG!!

    Eight months ago they were saying it would reach parity with the US dollar by December 2008…Woops WRONG!

    But please John, don’t let their constant inability to accurately predict the future prevent you from constantly referencing them to support your argument. It would spoil the fun.

  25. I don’t quote ad hoc reb, I only quote when I agree with what they’re saying.

  26. I’m not across the details here by any stretch, but printing money really does seem to be clutching at straws of the last gasp variety.

  27. John,

    In case you haven’t noticed – there is no more “panic selling” in the market..

    I recgonise that that fact probably hasn’t crossed your radar seeing as your wholly focused on anything that suggests the opposite (like your article from 2007) 🙄

    But howabout taking a look at what is actually happening NOW, seeing as you claim to be a “realist” n’ such…

  28. I focus on economic principles reb. No more panic selling in the market? We’re seeing a very tentative rally – pure speculation given nobody really knows what could blow up next.

  29. I don’t quote ad hoc reb, I only quote when I agree with what they’re saying.

    That’s my point precisely. You only quote people who share your relentless negativity and doomsday predictions. If you were really a “realist” as you claim, perhaps you would occasionally glance at other reports that suggest that things aren’t quite so bad.

  30. I’m not talking about the recent rally John.

    I’m talking about panic selling. Which is something we haven’t seen for 2 or 3 months now.

    In terms of economic cycles, once the panic selling stops, it is generally regarded as a signal that the bottom of the market has already been reached – something which a number of economists have already declared is behind us.

  31. Reb

    That’s my point precisely. You only quote people who share your relentless negativity and doomsday predictions. If you were really a “realist” as you claim, perhaps you would occasionally glance at other reports that suggest that things aren’t quite so bad.

    I simply relay on the fundamental weaknesses and unfortunately, there’s no real light at the end of this tunnel until everything gets shaken out.

    But look on the bright side reb, it’s not the end of the world and some day they’ll be a recovery (not anytime soon though).

  32. pure speculation given nobody really knows what could blow up next.

    Exactly. NO ONE KNOWS what may happen next, but for some reason you’re wholly focused on siding with those that predict armageddon..

    Rather than accuse those that have a differing opinion from yours as “having their head up their arse” or “their blinkers on”, why don’t you have a think about your propensity for relentless negativity and pessimism and what that actually says about you as an individual.

  33. Reb

    In terms of economic cycles, once the panic selling stops, it is generally regarded as a signal that the bottom of the market has already been reached – something which a number of economists have already declared is behind us.

    The markets aren’t exactly in alignment with the economic cycles – in fact, the markets will reflect both hopes and fears until a clearer picture emerges. Temporary rallies were plentiful after the 1929 crash and mainly because people went back into the market hoping they could recoup their losses. Relying on greater fools is a dangerous strategy, but you’ll always find some.

  34. Once again reb, people don’t know where the bodies – I mean bad debts are hidden – that’s an inescapable reality. You’re asking me to ignore what I know in favour of sugar-coating my opinions.

  35. Reb

    Rather than accuse those that have a differing opinion from yours as “having their head up their arse” or “their blinkers on”, why don’t you have a think about your propensity for relentless negativity and pessimism and what that actually says about you as an individual.

    You seem to forget who started ridiculing who first. You couldn’t stop at agreeing to disagree you started sledging me. You’ve been at it for a while and quite frankly, I’ve started firing back and will continue to do so until you grow up a little.

  36. You seem to think that your biting sarcasm is a healthy trait, sometime it is and sometimes it isn’t. Using in an offensive instead of defensive manner only lowers you. I had thought of you as being more mature than you’ve been acting of late.

  37. You seem to forget who started ridiculing who first. You couldn’t stop at agreeing to disagree you started sledging me. You’ve been at it for a while and quite frankly, I’ve started firing back and will continue to do so until you grow up a little.

    Excuse me? All I did was point out that you’re ongoing commentary on the GFC has been relentlessly negative, so much so, that your relentless almost daily posts on the GFC have had to be curtailed due to feedback from others here on the blog.

    It’s fine that we disagree, however please point out where I’ve actually “sledged you” as you claim.

    Your the one that accused me of having “my head up my arse”.

    Perhaps you ought to reflect upon who really needs to do the “growing up.”

  38. You know what John, you go for it.

    After hearing the news that Gillard supports introducing McDonalds into Maths courses…& reading stuff like the article below by Paul Craig Roberts that demonstrates how pathetic this whole US bailout is, I’m at the point where I’ve had enuff.

    The corporatre media are full of sh*t…the politicians are full of sh*t…the CEOs are full of sh*t…and they’ve created one unholy mess…and we will all pay for it.

    I only came back to this blog today because of the outrageous attempt at electoral manipulation by the Murdoch media here in QLD…but ya know wha?…it’s a waste of time. Ya can’t TRUST the fckers…NONE of them.

    My wife said to me last night:
    “it’s killing you worrying about politics and the economy…you can’t beat the mass media messages, they’re too big…”

    She’s right. Even Lindsay Tanner mentioned something similar on Q&A a while back.

    A vein in my eye burst the other day. My leg swelled to the size of a balloon. I now have diabetes.

    And for what?

    March 19, 2009

    A Program of Financial Concentration
    Was the Bailout Itself a Scam?
    By PAUL CRAIG ROBERTS

    http://www.counterpunch.com/roberts03192009.html

    You win Rupert. Money & influence rule the day. Again.
    N’

  39. I might add, I do think Anna Bligh is a nice lady. I think that’s why they want her gone.

    Anyway, i’m fckn depressed…particularly after reading this:

    ABC news on-line

    As people in the US struggle to pay their mortgages or rent, ABC correspondent Kim Landers reports from North Carolina as a sheriff’s deputy goes door-to-door evicting people.

    People who can no longer pay their mortgage or their rent dread a knock on the door from the police or the local sheriff’s department.

    In Durham County in North Carolina the doorknockers are a special group of sheriff’s deputies, who see first-hand the impact of the tough economic times on families.

    When people lose their jobs, their home, a sheriff’s deputy like Scott Oakley comes knocking.

    Here, evictions and property seizures are becoming more common.

    Much of the time the renters or the owners are already gone, but not today.

    At one house on a busy highway, Sadie Wright waits with her one-year-old daughter.

    “My name’s Sadie Wright and this is Serenity Gaskin. She’s a good girl,” she said.

    “We were in the middle of taking a nap. We knew they were coming, but you know.”

    Ms Wright says she does not blame the sheriff’s deputy.

    “Oh, they can’t do nothing. They doing what they’re paid to do. You can’t ask no extra of them. Doesn’t matter if they have a heart or not, there’s nothing they can do,” she said.

    So here’s a pick me up…cause REAL music really helps when I’m low:

    Ry Cooder – How Can A Poor Man Stand Such Times And Live

    N’

  40. Nasking,

    It really concerns me to hear that you are literally worrying yourself sick over politics. It’s good to take a healthy interest, but when it starts affecting you like that, you really must put things into perspective.

    I know I’ve mentioned this before, but Dale Carnegie taught me how to worry only about the things you can do something about. For everything else, ask yourself: What’s the worst that can possibly happen (to me)? Then, if the worst does happen, can I deal with it?

    If the worst happens to most people during this GFC, it will mean they might lose their job, or their money, or even their home. It won’t happen to many, but even those who suffer this fate will still be able to feel the sun on their face, hear the sound of birds, and hopefully still enjoy something to eat and drink.

    They will be alive. The same can’t necessarily be said for those who are worrying themselves sick.

    “Every day above ground is a good day.”

    P.S. Don’t worry about Reb and JMc above. They’ll get over their little spat and will go back to throwing their good-natured jabs at each other.

  41. Tony

    I am thinking of giving them a big foam stick to beat each other with.

    But remember – an optimist is someone who drowns in a half full bath, whereas a pessimist drowns in a half empty bath.

  42. Tony,

    Good point(s).

    In recent years, I’ve adopted a new methodology for evaluating the relative importance or urgency of a situation – largely from 20+ years working in the corporate sector.

    In every working environment, most of us, if not on a regular basis, then at some point, will be faced with work pressures that make us worry about things unneccessarily.

    For example, what will happen if I don’t finish this job / report / project etc by the deadline I’ve been given??

    What if the stationery doesn’t arrive on time??

    What if I fail to deliver on what I’m exepected to deliver?

    What if my work isn’t up to scratch??

    I used to worry myself sick about these types of things until, I learned a whole new approach to evaluating the critical importance of things not happening by certain due dates, and it all comes down to asking myself one simple question:

    “Is anyone going to die if this doesn’t happen by the deadline?”

    In most if not all cases, the answer is no.

    Which then allows one to keep things in perspective and prepare for alternative solutions without freaking out about the consequences.

    It may seem trivial, but it’s actually quite a helpful and healthy way of keeping things in perspective…

    🙂

  43. Reb

    I’m the one that accused you of having “your head up my arse”.

    Yes I did. But only after you threw this humdinger. A little over the top attempt at belittling my opinions perhaps?

    reb, on March 19th, 2009 at 9:55 am Said:

    John McPhilbin:

    “because like you I’m more a realist when it comes to economic thinking. ”

    LOL!!! A “realist?” LOL!!!

    LOL!!! LOL!!! LOL!!! LOL!!! LOL!!! LOL!!!

    Seriously John, please stop it!! That’s the funniest thing you’ve said all year!!

    ha ha ha …hee-heee! Please, no more, my sides are gonna split!!

    LOL!

    🙂 🙂 🙂 🙂

  44. I don’t think John’s bath has seen any water for decades…

  45. Is that the best (worst) you could come up with John? 🙄

  46. Don’t you think that’s a bit tame in comparison to telling someone “they’ve got their head up their arse?”

    honestly…. 🙄

  47. Reb,

    Another thing you can do when going through a particularly bad phase in your life – we all have them – and find yourself on the edge of despair:

    Think of the worst things that have ever happened to you, and how badly you felt about them at the time.

    Now, think how you feel about them now, and how much less disastrous they seem in hindsight.

    Try to remember this, next time you’re in a ‘bad place’.

    “Things are never as bad as they seem.”

  48. reb, on March 20th, 2009 at 10:54 am Said:

    Is that the best (worst) you could come up with John? 🙄

    And you took offense at having to pull your head out of your arse to come out with more biting comments (LOL)

  49. Okay, I apologise Reb, your ‘head up your arse’ is off limits.

  50. …it’s not for me to tell you what you can and can’t do with your head (wink)

  51. …and it’s not for me to tell you what you can and can’t do with your arse…

    😉

  52. “Things are never as bad as they seem.”

    Ain’t that the truth…

    Unless of course, you’re being issued with the last rites…

  53. Touche, can’t do much with it since the operation

  54. Unless of course, you’re being issued with the last rites…

    lol. Well yes, there’s always that.

  55. How do you know when your in a recession? Someone you know loses their job.

    How do you know when you’re in a depression? You loss your job.

    Frankly, I could care less about losing my job or how the economy is going. Shit, I’ve been without employment for 5 years.

  56. Okay, ignore my grammar

  57. …oh, and I don’t care about losing money simply because I’ve already lost most of it and not due to the GFC.

    You’re right ..it’s never as bad as you imagine it to be.

    So when I do highlight negative trends don’t take it personally, I don’t.

  58. Whenever I start feeling sorry for myself and the trying times in my life I simply look out on the footpath and see people in wheel chairs, or disabled and realise my problems are minute compared to what others endure every day. Gives me a reality check every time.

  59. If they’ve got to the stage of printing more dosh, the system’s screwed.

    People refer to the Zimbabwe solution, but this type of “solution” pre-dates that shit-hole by a long-shot. The last time the printing presses were put into overdrive in any of the G-7 countries was during the Great Depression.

    It didn’t work then and it won’t work now.

  60. Evan, on March 20th, 2009 at 11:26 am Said:

    If they’ve got to the stage of printing more dosh, the system’s screwed.

    People refer to the Zimbabwe solution, but this type of “solution” pre-dates that shit-hole by a long-shot. The last time the printing presses were put into overdrive in any of the G-7 countries was during the Great Depression.

    It didn’t work then and it won’t work now.

    Remember guys, it was Evan and not me who wrote the above (wink)

  61. “If they’ve got to the stage of printing more dosh, the system’s screwed.”

    I agree. Didn’t the Nazi’s try that?

  62. They did reb.

  63. reb & John, do you think there’s no more panic selling because there’s nothing left to sell? Just askin’………..

    I must admit I’m inclined to John’s way of thinking. I don’t think the world has hit rock bottom yet by a long chalk, not because I’m being unnecessarily pessimistic (although I’m a pessimist by nature), but because it’s world-wide. That’s not going to be fixed any time soon.

    I hope I’m wrong; in fact I’ll be overjoyed to be proved so. Anyone……..?

  64. “I simply look out on the footpath and see people in wheel chairs, or disabled and realise my problems are minute compared to what others endure every day. Gives me a reality check every time.”

    shaneinqld, I remember my time helping to bring the disabled out of those dreadful institutions they were stuck in here in QLD during the Joh years…& assisting them to adjust to independent home living. Had my photo proudly taken w/ Bob Hawke who came to visit one of the new homes for a group of disabled people we gave mobility assistance to…I could tell it meant alot for him to see them free of those horrendous institutions, finally out in the community as ACTIVE CITIZENS.

    I just wonder how many disabled & mood/mentally challenged people will be stuck in those awful institutions again if Springborg wins? If the old “electric shock therapy…zappers” will be used again to quiet dissenters down? And what role will big pharma serve in keeping good people down?

    Thanks for the concern Tony…but I live in QLD…I think we have plenty to worry about going on past events here.
    N’

  65. Jane

    reb & John, do you think there’s no more panic selling because there’s nothing left to sell? Just askin’

    It’s interesting what’s happening now with these rallies and there’s bound to be more falls, simply because many investors are oscillating between optimism and pessimism and they’re not sure, nor is anyone else, as to which direction markets will take.

    I mentioned before that with so many losses some investors (major players) may be manipulating the markets in the hope that the greater fools will buy in at the higher prices. The economic outlook certainly doesn’t inspire confidence.

  66. nasking

    My niece has down syndrome, my sister always treated her exactly the same as her other 2 children, she went to school until the age of 18, she was punsihed and had chores to do, she grew up being treated as a normal child in a loving household.

    She now works at one of the shelters in Sydney full time. She has to walk and catch a public transport bus to get to work, then she has to do it all again to get home. She has a key to the house as her mother arrives home from work later than she does. She has to get in the clothes and unpack and pack the dishwasher, peel the vegetables and have them ready for the microwave for dinner.

    Her up bringing and her routine have given her independence we never thought possible, thanks to the discipline and love of her mother ( father left years ago ).

  67. Nasking:

    Thanks for the concern Tony…but I live in QLD…I think we have plenty to worry about going on past events here.

    You live in QLD.

    You have plenty to worry about.

    Agreed.

  68. Jane:

    reb & John, do you think there’s no more panic selling because there’s nothing left to sell? Just askin’

    I agree with Shane that the economic outlook doesn’t inspire confidence.

    In saying that though, where markets are at the moment is, by historical standards, where the “turning point” ought to begin.

    The problem is that no one can predict when the turning point will be.

    And in fact the only way to identify the “turning point” will probably be 12 to 18 months after it has happened – looking back retrospectively.

    No one can accurately predict what is going to happen tomorrow, next week, next month or next year, yet there is no shortage of “economists” who keep speculating about what’s going to happen, never mind people who are prepared to believe them.

    As I mentioned earlier, four months ago economists were saying that the Aussie dollar would slump to US 49 cents…They were wrong.

    Eight months ago they were saying it would reach parity with the US dollar by December 2008…They were wrong again.

    12 months ago economists were saying that we’d ”
    never see petrol prices below $80 a barrell ever again.”

    It’s now around $47 a barrell.

  69. Soros has had a good handle on this crisis and its causes from the very beginning.

    George Soros interview: A very good crisis
    http://www.theaustralian.news.com.au/business/story/0,28124,25211027-643,00.html
    George Soros is having a very good crisis. Other investors are wilting, political power structures are being upended and market economists are scrambling to fashion new theories, but the world’s most famous speculator is having a belated heyday.

  70. shaneinqld, on March 20th, 2009 at 12:01 pm. Great post Shane and very well done to your sister in having such a sensible approach to rearing her daughter. For the disabled, a lot of it is all about expectations. The lower the bar, the lower the achievement.

  71. Min

    It is a wonderful credit to my sister and a joy for all of us to see Kylie have the independence in her life. She loves television and can tell you what will be on every channel for the next week and at what time. Can also tell you what has happened on nearly all shows, although we need her siblings to translate most of the time, as they understand every word she says.

  72. Good for Kylie & her Mum shaneinqld…a committed parent or guardian can make all the difference.

    Mobility assistance organisations also help.
    And traineeships.

    You might find this worth reading:

    http://bega.yourguide.com.au/news/local/news/general/living-well-with-down-syndrome/1464859.aspx

    N’

  73. Might I also add that useful is an education system which doesn’t act as if it’s throat is about to be cut should a parent make an application for simple assistance such as size 14 font and be allowed to wear a hat in class.

  74. Reb – If they’ve got to the stage of printing more dosh, the system’s screwed.
    I agree. Didn’t the Nazi’s try that?

    No Reb, hyperinflation occurred during the Weimar Republic. It was this disaster that actually fostered the rise of the Nazis.

  75. The system could be more flexible. Comes down to funding as well. And help from parents. Parents just received cash…they need to pay their school fees and help purchase products the schools can’t afford. Rather than just griping…as so many do.
    N’

  76. Life’s Great Mysteries, #452.

    How come when I put my AmEx bill on my Visa, it’s stupid, but when the government does it, it’s stimulus?

  77. Tony

    If your rate on Visa is less than Amex it is sensible not stupid.

  78. Dead cats and dogs having their day seems to be the debate of the day LOL

    Dead cat bounce or dog having its day?
    Michael Pascoe
    http://business.smh.com.au/business/dead-cat-bounce-or-dog-having-its-day-20090320-940e.html
    “Oil’s back above US$50 a barrel, copper traded above US$4000 overnight and the Australian share market has had its best two weeks since November, if anyone can remember back that far. So is this the dogs having their day, or another dead cat bounce, like November?

    Correction: a dead cat bounce implies a rally off the floor that then falls back to the floor. After early November’s burst of enthusiasm to nearly 4300 on the All Ords, the cat fell back through the floor, the basement and well into the foundations. Even after the past fortnight’s welcome relief, we’re still the thick end of 900 points behind that false dawn.

    Indeed, a dead cat bounce wouldn’t be such a bad thing if the market’s floor has been established around the March 6 lows. The bad news keeps coming – another IMF downgrade anyone? – but investors searching for value, or at least better returns than they can get on the term deposits that are now rolling over, could steadily build confidence from such a notion.”

  79. I tend to see it in terms of ‘capitulation shells’…the next shell is at 2400 for the All Ords, and 3600-3800 for the DJIA. Otherwise, I can just ignore the bounces and the quants.

    And…the analysis of the Great Game re quantitative easing is all about positioning China in a pincer, imho. Fly away debts, devalue savings, etc; where China is just the scapegoat du jour…quite obviously the dynamic is multipartite and not bipartite. Let the currency (and trade) wars begin!

  80. Meanwhile, in other vaguely interesting news of the week…

    Turner to end light-touch regulation

    Lord Turner, chairman of the Financial Services Authority, set out plans to curb banks’ ability to take excessive risks by forcing them to hold more capital and increase their holdings of liquid assets and cash. He pledged to scrutinise any institution that could threaten the stability of the financial system….In his 122-page document, Lord Turner supported calls for the creation of a pan-European regulatory body – a move the FSA and the City of London have previously opposed – as the only way to save the European market for financial services. “We’ve got to think about how to run a single market in retail banking without a European federal government,” he said….The government is expected to use the report as the basis for Britain’s negotiations with the G20 group of developing and developed nations when they meet in London early next month. Mr Brown’s spokesman said the proposals “provide a blueprint” for wider reforms.

    Stimulus is fine, but re-regulation shapes the future (and perceptions about the past).

    And couldn’t let this one pass…it’s a good example of why the neo-cons shouldn’t be accorded exclusive ambit over tax policy as a fiscal tool – whether that’s relief, or raises, or adjusments to the mix to promote progessivity – in a post-Keynesian world…US passes 90pc tax on bailout bonuses.

  81. And another good overview (if one ignores the embedded, jingoistic spin and can substitute in the real actors, and the implicit politics, for the obscuring financial labels)…Why dealing with the huge debt overhang is so hard.

  82. Let the trade wars begin?

    Credit crisis puts squeeze on ties between China, India
    http://www.theaustralian.news.com.au/business/story/0,28124,25215153-36375,00.html

    SPATS over toys, tires and iron ore are stoking tension between China and India, as the two Asian giants try to pry open each other’s markets and soften the impact of the global economic slowdown.

    China’s exporters covet a growing India to help offset slowing demand from the US. Yet India is accusing Chinese companies of swamping its market with what it can’t sell elsewhere, and has lodged anti-dumping cases against China at the World Trade Organisation.

    The trade disputes are testing efforts to improve what has long been a prickly relationship between the two neighbours.

  83. John McPhilbin, on March 20th, 2009 at 5:28 pm

    The USA and (expansionist) Japan in 1941…

    India and (expansionist) China in 2009…

    Here we go, JMc…? History reapeats itself?

  84. Oops, 5600-5800 for the DJIA*…those points are roughly where the next layer of capital, and the real economy along with it, starts going catabolic, or what Rudd refers to as ‘cannibalising itself’; expectations or not, people must meet their bills and it will be ‘sell, sell, sell’, even if it means losing an arm and a leg.

  85. That’s the last time I go to the dentist and leave you lot to your own devices. The mood in the chair was a lot cheerier anyway.

    The consensus seems to be that no one else knows what’s going to happen. Economics is the science of hindsight so let’s not ask the economists. I put some faith in the so-called real economy to get things going. Or to quote the economist on the ABC the other lunchtime, the price rise was caused by an over supply of demand. This expert also repeatedly talks of profit losses.

    Incidentally has anyone posted one of those useful blog links for Mong’s articles? Cant find them amongst the speculation (now there’s an accidental double entendre).

  86. Kevin?

    The consensus seems to be that no one else knows what’s going to happen.

    You and your dentist with he/she doing all the talking? 😀

  87. TB

    I was referring to the online experts.

    The dentist’s a Melbourne supporter so he has to be an optimist. He says he’s never been so busy. Is that counter-intuitive?

  88. Kevin,

    I went to the dentist today too. He wounded me in more ways than one. Just to rub it in, there was a brand new Mercedes in his car park. Recession? Pffft.

  89. Is it true that CEOs often get cash bonuses after sacking staff and reducing their corporate wages bills?

  90. Yes or No:

    Yes. Often new CEOs are recruited when a business is performing poorly. Typically they have the following mandate:

    1. Reduce costs
    2. Increase profitability

    The quickest way to make an impact in both of these areas is to sack staff.

  91. Is it true that CEOs often get cash bonuses after sacking staff and reducing their corporate wages bills?

    It’s a little bit more complex than that. The bonus isn’t for sacking staff, it’s a reward for being the sort of person who can make hard decisions and carry them out.

  92. Agreed Miglo.

    It’s just that 99.9% of the time the “hard decisons” generally involve sacking staff….

  93. Agreed reb.

    Staff just happen to be a very expensive overhead. Fortunately I don’t fall into that category. I work for a pittance.

  94. a pittance?

    Judging by your taste in wine, why do I find this hard to believe..?

  95. BTW, I had the Mojo Shiraz last night with dinner. Very pleasant drinking once again.

    Followed by a schooner of bailey’s with ice for dessert.

  96. I hope you didn’t pay too much for the Mojo.

  97. $26.

  98. Too much.

  99. Mong’s extended output looks interesting, at least, Kevin. And the mild rebuke was effective to the extent that it prompted me to go looking. I’d be interested in Mong’s views about where he thinks the recent Ph initiative for Constitutional change, to allow more foreign ownership of lands and businesses, fits into his activisms pro social development and contra nepotic economic, social and political dynasties, as against a backdrop of a manipulated historical anti-imperialist nationalism by the political elites, and the leaching away of light industries from the Ph to other places, and the failure to attract new industries and investors capable of investing in sustainable indigenous industries and communities capacity developments in genuine, commensal partnerships. But they’re all just thoughts.

  100. It seems that Peter Dutton sees value where Turnbull sees risk.

    Liberal invests in big four banks
    http://www.smh.com.au/national/liberal-invests-in-big-four-banks-20090321-94yy.html
    A KEY member of the shadow front bench was investing heavily in Australian banks at the very time Opposition Leader Malcolm Turnbull was attacking the Government’s banking guarantee for promoting “risky behaviour”.

    Shadow health minister Peter Dutton – who served as assistant treasurer in the previous Howard government and then as shadow finance minister last year – apparently did not think the “risky behaviour” referred to by Mr Turnbull would have a detrimental effect on the share price of the big four.

    Mr Dutton began buying bank stocks just weeks after the guarantee was announced as parliamentary debate over the decision was ramping up.

    Records of share transactions provided to the registrar of members’ interests by Mr Dutton show he purchased Westpac, Commonwealth, ANZ and National shares repeatedly between November 2008 and February 2009.

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