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Archive for the ‘ECONOMY’ Category

Western economies poised to account for less than 50pc of world GDP

In AMERICA, ECONOMY, EUROPE on 02/06/2009 at 5:47 PM

The Centre for Economics and Business Research (CEBR) is forecasting that because of the downturn and China’s economic resilience, the combined contribution from the US, Canada and Europe to world GDP will be 49.4pc in 2009, down from 52pc in 2008. CEBR said prior to the financial crisis Western world GDP was not expected to fall below 50pc until 2015. The West’s contribution to global GDP has been steadily falling since 2004, when it was about 60pc, but the recession has accelerated that process, CEBR said… Daily Telegraph

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Merkel attacks central banks – Berlin breaks the unwritten rule

In ECONOMY, GERMANY on 02/06/2009 at 9:44 AM

It is not the first time that Angela Merkel, the German chancellor, has complained about the ultra-loose monetary policy being conducted in the Anglo-Saxon world. But when she attacked the European Central Bank on Tuesday, for its planned purchase of cover bonds – an unconventional way to help financial markets recover – Ms Merkel broke an unwritten ban on German leaders commenting on monetary policy close to home. The message, it seems, is that Berlin is more worried than people had assumed. The chancellor is not just concerned about the long-term inflationary potential of excessive monetary loosening… Financial Times

Ireland set to go bust, claims economic historian

In ECONOMY, EIRE, EUROPE, ITALY on 29/05/2009 at 2:51 PM

A dire warning that the Republic is a prime candidate to go bust has come from one of the world’s leading economic historians. “The idea that countries don’t go bust is a joke,” said Niall Ferguson, Harvard professor and author of The Ascent of Money. “The debt trap may be about to spring” he said, “for countries that have created large stimulus packages in order to stimulate their economies.” His chosen prime candidate to go bust is “Ireland, followed by Italy and Belgium, and UK is not too far behind”. Argentina is top of his list of shaky countries but “the argument that it can’t happen in major western economies is nonsense”… The Independent

Dollar stops being Russia’s basic reserve currency

In AMERICA, ECONOMY, RUSSIA on 19/05/2009 at 6:29 AM

The US dollar is not Russia’s basic reserve currency anymore. The euro-based share of reserve assets of Russia’s Central Bank increased to the level of 47.5 percent as of January 1, 2009 and exceeded the investments in dollar assets, which made up 41.5 percent, The Vedomosti newspaper wrote. The dollar has thus lost the status of the basic reserve currency for the Russian Central Bank, the annual report, which the bank provided to the State Duma, said. In accordance with the report, about 47.5 percent of the currency assets of the Russian Central Bank were based on the euro, whereas the dollar-based assets made up 41.5 percent as of the beginning of the current year… Pravda

EU plans stress tests for banks in Europe

In ECONOMY, EUROPE, IMF on 12/05/2009 at 6:36 AM

Europe signalled today that it will to take new steps to try to bolster confidence in its badly tainted banks after the International Monetary Fund (IMF) urged it to take bolder steps to underpin the battered sector. Officials in Brussels and among European banking supervisors indicated that the EU is set to follow the lead set by Washington and carry out new “stress tests” to establish the resilience of its banks by September. The tests are expected to be carried out by individual country’s national regulators, according to common guidelines to be set by the EU’s Committee of European Banking Supervisors. “The decision was taken by EU finance ministers,” one government official in Brussels said… The Times

Bank of Japan governor says US must tackle household debt

In AMERICA, ECONOMY, JAPAN on 24/04/2009 at 11:38 AM

Japan’s central bank chief said on Thursday the United States must take “painful” steps to root out ills such as household debt to pull out of its downturn, warning that stimulus measures alone were not enough. Speaking in New York ahead of annual World Bank and International Monetary Fund meetings in Washington, Bank of Japan governor Masaaki Shirakawa also cautioned not to mistake glimmers of economic hope for a real recovery. Mr Shirakawa welcomed monetary easing and stimulus packages around the world, saying governments and central banks needed to convince the public that unpopular plans to salvage banks were for the greater good. AFP / Telegraph

Stiglitz Says Ties to Wall Street Doom Bank Rescue

In AMERICA, ECONOMY, OBAMA on 17/04/2009 at 1:35 PM

The Obama administration’s bank- rescue efforts will probably fail because the programs have been designed to help Wall Street rather than create a viable financial system, Nobel Prize-winning economist Joseph Stiglitz said. “All the ingredients they have so far are weak, and there are several missing ingredients,” Stiglitz said in an interview yesterday. The people who designed the plans are “either in the pocket of the banks or they’re incompetent.” The Troubled Asset Relief Program, or TARP, isn’t large enough to recapitalize the banking system, and the administration hasn’t been direct in addressing that shortfall, he said… Bloomberg

Tax Day Becomes Protest Day

In AMERICA, ECONOMY on 15/04/2009 at 1:46 PM

Today American taxpayers in more than 300 locations in all 50 states will hold rallies — dubbed “tea parties” — to protest higher taxes and out-of-control government spending. There is no political party behind these rallies, no grand right-wing conspiracy, not even a 501(c) group like MoveOn.org. So who’s behind the Tax Day tea parties? Ordinary folks who are using the power of the Internet to organize. For a number of years, techno-geeks have been organizing “flash crowds” — groups of people, coordinated by text or cellphone, who converge on a particular location and then do something silly, like the pillow fights that popped up in 50 cities earlier this month… Wall Street Journal

Why Legalizing Marijuana Makes Sense

In AMERICA, DRUGS, ECONOMY on 02/04/2009 at 6:18 PM

For the past several years, I’ve been harboring a fantasy, a last political crusade for the baby-boom generation. We, who started on the path of righteousness, marching for civil rights and against the war in Vietnam, need to find an appropriately high-minded approach to life’s exit ramp. In this case, I mean the high-minded part literally. And so, a deal: give us drugs, after a certain age — say, 80 — all drugs, any drugs we want. In return, we will give you our driver’s licenses (I mean, can you imagine how terrifying a nation of decrepit, solipsistic 90-year-old boomers behind the wheel would be?)… Time

Can Marijuana Help Rescue California’s Economy?

In AMERICA, DRUGS, ECONOMY on 13/03/2009 at 7:26 AM

Could marijuana be the answer to the economic misery facing California? Democratic state assemblyman Tom Ammiano thinks so. Ammiano introduced legislation last month that would legalize pot and allow the state to regulate and tax its sale — a move that could mean billions of dollars for the cash-strapped state. Pot is, after all, California’s biggest cash crop, responsible for $14 billion a year in sales, dwarfing the state’s second largest agricultural commodity — milk and cream — which brings in $7.3 billion a year, according to the most recent USDA statistics. The state’s tax collectors estimate the bill would bring in about $1.3 billion a year in much needed revenue, offsetting some of the billions of dollars in service cuts and spending reductions outlined in the recently approved state budget… Time