Daily Digest - Dec 29
- As if Things Weren't Bad Enough, Russian Professor Predicts End of U.S.
- How Iceland Collapsed, (video)
- Crisis deepens in Japan and China as Asian exports plunge
- Cars leaving lots without drivers
- Cars pile up at the wharves (video)
- Fifty Herbert Hoovers
- Venezuela to seize gold concessions as oil falls
- Private Equity Firms Are Near Deal to Buy IndyMac
- Kulongoski to pursue mileage tax
- 21 Dumbest Moments in Business 2008
MOSCOW -- For a decade, Russian academic Igor Panarin has been predicting the U.S. will fall apart in 2010. For most of that time, he admits, few took his argument -- that an economic and moral collapse will trigger a civil war and the eventual breakup of the U.S. -- very seriously. Now he's found an eager audience: Russian state media.
In recent weeks, he's been interviewed as much as twice a day about his predictions. "It's a record," says Prof. Panarin. "But I think the attention is going to grow even stronger."
Prof. Panarin, 50 years old, is not a fringe figure. A former KGB analyst, he is dean of the Russian Foreign Ministry's academy for future diplomats. He is invited to Kremlin receptions, lectures students, publishes books, and appears in the media as an expert on U.S.-Russia relations.
"There's a 55-45% chance right now that disintegration will occur," he says. "One could rejoice in that process," he adds, poker-faced. "But if we're talking reasonably, it's not the best scenario -- for Russia." Though Russia would become more powerful on the global stage, he says, its economy would suffer because it currently depends heavily on the dollar and on trade with the U.S.
The shock data came as the Japanese Cabinet Office warned that the world's second biggest economy is now deteriorating at an "exceptionally high pace".
Shipments collapsed to almost all markets in North America, Europe, and Asia, following a pattern already set in recent days by South Korea, Taiwan, and China. Thailand on Monday said its exports fell 19pc in Novermber.
It is unclear to whether the violent drop is distorted by a "one-off" inventory shock as companies slash stocks, or whether it is the start of a trade slump that threatens Asia's entire export strategy.
"We think this is very serious," said Stephen Jen, currency chief at Morgan Stanley. "These export surplus countries are super-leveraged to the West, and now we're seeing a multiplier effect (in reverse) as the intra-Asian trade model is stress-tested. What's incredible is that Japan has run a trade deficit for two months in a row despite the fall in oil prices. The next country to watch is going to be Germany," he said.
A half-dozen trailers rolled up to Eckenhoff Cadillac Buick Pontiac GMC in Jenkintown bright and early and wiped the lot clean of $8.4 million in inventory - Hummers, Cadillacs and all.
"Load up, leave. Load up, leave. . . ." The funereal rhythm of repossession transfixed the sales guys next door at Hopkins Ford Lincoln Mercury, who watched through their showroom window as the devastating news descended on their neighbor.
GMAC, the beleaguered financing arm of General Motors Corp., had called the loan that had enabled Scott Eckenhoff to stock new and used vehicles. Big trailers carted away the collateral from a Big Three retailer that had been hanging on by a thread.
GMAC also cleared out Eckenhoff's used-car lot in Maple Shade, which held another batch financed by a GMAC "floor-plan" credit line.
Car Market - total collapse
No modern American president would repeat the fiscal
mistake of 1932, in which the federal government tried to balance its
budget in the face of a severe recession. The Obama administration will
put deficit concerns on hold while it fights the economic crisis.
But even as Washington tries to rescue the economy, the nation
will be reeling from the actions of 50 Herbert Hoovers - state
governors who are slashing spending in a time of recession, often at
the expense both of their most vulnerable constituents and of the
nation's economic future.
These state-level cutbacks range from small acts of
cruelty to giant acts of panic - from cuts in South Carolina's juvenile
justice program, which will force young offenders out of group homes
and into prison, to the decision by a committee that manages California
state spending to halt all construction outlays for six months.
CARACAS, Venezuela - Venezuela will seize several gold mining concessions that previous governments granted private operators, in a bid to supplement falling oil prices with proceeds from state-controlled gold, President Hugo Chavez said Saturday.
Chavez named no specific contracts or companies to be affected, but his mining minister has vowed to next year take over the nation's largest mine, Las Cristinas, which is operated by Canadian mining company Crystallex International Corp.
IndyMac Bancorp, one of the largest banks to fail as a result of the subprime mortgage crisis, is close to being sold to a consortium of private equity and hedge fund firms in a complex deal partly financed by the federal government, people involved in the deal said.
IndyMac customers waited in July to withdraw money from the bank, which teetered and collapsed after a senator questioned it.
The Federal Deposit Insurance Corporation, along with a team of former Lehman Brothers bankers who are now with Deutsche Bank and Barclays Capital, has been engaged in the sale process since federal regulators declared IndyMac insolvent in July and seized the company.
The deal is in the final stages of negotiations, which are private, and could be announced as early as Monday, these people said, though they cautioned that the talks could still fall apart.
A year ago, the Oregon Department of Transportation announced it had demonstrated that a new way to pay for roads - via a mileage tax and satellite technology - could work.
Now Gov. Ted Kulongoski says he'd like the legislature to take the next step.
As part of a transportation-related bill he has filed for the 2009 legislative session, the governor says he plans to recommend "a path to transition away from the gas tax as the central funding source for transportation."
The governor wants the task force "to partner with auto manufacturers to refine technology that would enable Oregonians to pay for the transportation system based on how many miles they drive."
The online outline adds: "The governor is committed to ensuring that rural Oregon is not adversely affected and that privacy concerns are addressed."
21 Dumbest Moments in Business 2008