Daily Digest

Daily Digest - November 5

Thursday, November 5, 2009, 10:54 AM
  • Crisis Compels Economists To Reach For New Paradigm
  • State Budgets: How Bad Will It Get?
  • Why Dilbert Is Doomed
  • FED Gives Banks Deadline To Submit Exec Pay Proposals
  • States Are Pondering Fraud Lawsuits Against Banks
  • New Role For Goldman: Taking Away People's Homes
  • Risks And Rewards On China's New Stock Board
  • Small Banks Move In As Giants Falter
  • Call It A Smart Thermostat
  • Toxic Waste Threatens Vital Water Source In The Southwest

Economy

Crisis Compels Economists To Reach For New Paradigm (M.W.)

The crisis has exposed the inadequacy of economists' traditional tool kit, forcing them to revisit questions many had long thought answered, such as how to tame disruptive boom-and-bust cycles.

State Budgets: How Bad Will It Get? (M.W.)

At a time of crisis, while the federal government injects unprecedented stimulus (tax cuts and expenditure increases) into the U.S. economy, the fifty states are doing the exact opposite. State tax hikes and expenditure reductions will continue to undermine or slow any recovery.

Why Dilbert Is Doomed (M.W.)

Where are tomorrow's jobs going to come from? The jobs of tomorrow are not what you'd expect.

FED Gives Banks Deadline To Submit Exec Pay Proposals (M.W.)

Regulators stressed that the Fed was not looking to cap overall pay but instead wanted the banks to structure bonuses in ways that do not encourage excessive risk taking.

States Are Pondering Fraud Lawsuits Against Banks (M.W.)

Frustrated by the banks’ inability or unwillingness to stop an avalanche of foreclosures, the states are considering lawsuits over the creation and marketing of millions of bad loans as well as the dismal pace of mortgage modifications.

New Role For Goldman: Taking Away People's Homes (M.W.)

Joining other Wall Street firms that bought millions of subprime mortgages, Goldman companies have gone to courts from California to Florida seeking approval to foreclose on the homes of middle- and lower-income Americans who couldn't keep up with their loans' soaring monthly payments.

Risks And Rewards On China's New Stock Board (M.W.)

The opening of a Nasdaq-style stock board in China is already being seen as a watershed moment for the country’s capital markets, providing new but volatile opportunities for mainland Chinese investors and an alternative source of financing for start-up companies.

Small Banks Move In As Giants Falter (M.W.)

Texas banker Edward Speed has started a campaign urging Texans to take their cash out of big banks and turn it over to small homegrown institutions. He started a Web site, bankwithtexans.org, urging people to switch their accounts from “out-of-state carpetbaggers” to local institutions that never embraced risky Wall Street investments. Across the country, community banks are trying to tap into the public’s outrage over Wall Street greed to lure customers from their big multinational competitors.

Environment

Call It A Smart Thermostat (M.W.)

As utilities install more smart meters in homes, EcoFactor aims to take things even further by gathering data about the weather to adjust a home’s air-conditioning and heating systems..Besides learning when homeowners tend to turn on their heat or air-conditioning, EcoFactor monitors weather down to the zip code level. Every 60 seconds, its algorithms take that data and calculate how much electricity use can be reduced while keeping the occupants comfortable.

Toxic Waste Threatens Vital Water Source In The Southwest (M.W.)

More than 60 years after Los Alamos scientists assembled the nuclear bombs dropped on Hiroshima and Nagasaki, lethal waste is seeping from mountain burial sites and moving toward the edge of the Rio Grande, one of the most important water sources in the Southwest.

16 Comments

saxplayer00o1's picture
saxplayer00o1
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Posts: 4065
Re: Daily Digest - November 5

"Commercial real estate values will fall 40 percent, on average, from their peaks in mid-2007, and up to 50 percent in some sectors, according to the 2010 edition of Emerging Trends in Real Estate, released on Thursday by the Urban Land Institute and PricewaterhouseCoopers LLP.

It will be the worst commercial real estate decline since the Great Depression, eclipsing the 1990s savings-and-loan crisis, according to the report."

"As the worst recession since the Great Depression appears to be ending, the Social Security Administration grapples with an unprecedented flood of disability applications due to aging baby-boomers and heavy job losses.

Pending claims are expected to jump 70 percent this year, said Dan Allsup, spokesman for Illinois-based Allsup Inc., which represents people applying for disability payments.

"The number of people held up at the initial level is just exploding," Allsup said, blaming that giant jump on the ailing economy and what he terms the "silver tsunami" of America's graying population."

"Delinquencies in commercial mortgage-backed securities (CMBS) accelerated in October, according to a report from Barclays Capital (BarCap).

The 30-plus day delinquency rate jumped 41bps to 5.5% in October as current loans deteriorated and transferred to special servicers. For the past three months, delinquencies have grown an average of 34bps, and BarCap analysts expect the pace to increase through 2009 and into 2010."

"Nov. 5 (Bloomberg) -- Allstate Corp., the largest publicly traded U.S. home and auto insurer, is paring its municipal-bond holdings because state and local governments are “not in great shape,” Chief Executive Officer Thomas Wilson said.

“We’ve just recently begun to reduce our exposure to municipals because we are uncomfortable with some of the fiscal practices of some of the government entities,” Wilson said yesterday in an interview after the Northbrook, Illinois-based company reported a third-quarter profit. “If you look at their balance sheets or income statements and put it in financial terms, they are not in great shape.”"

"Nov. 5 (Bloomberg) -- The global speculative-grade default rate rose to 12.4 percent in October, the highest proportion of defaults since the Great Depression, according to Moody’s Investors Service."

"We might as well state this outright: The United States Government is on a trajectory to default on its obligations. In its current financial condition, it will not be able to fund its forecasted budget deficits and unfunded Social Security and Medicare promises on top of its current debt obligations.

This isn’t official yet, and we don’t know when the market will react to it, but there is no longer any doubt about the extent of its trajectory. There simply isn’t enough taxing power, value creation or outside capital willing to support its egregious spending."

"BIRMINGHAM, Ala. (CN) - JPMorgan Securities will cough up or forego receipt of more than $720 million to settle an SEC complaint about the Jefferson County sewer bond fiasco that left the county on the verge of bankruptcy. Two JP Morgan executives paid more than $8 million in bribes to get the county's $5 billion bond business, according to the settled federal complaint."

"In taped conversations, the men acknowledged the payments were "scam transactions" and "payoffs" that were "the price of doing business," according to the SEC complaint."

"Maryland will likely have to increase payments to its teacher and employee pension funds by $189 million next year, lawmakers learned this week as officials with the State Retirement Agency broke down its results from fiscal 2009.

Pension officials said the state’s pension funds have promised to pay out $17.5 billion more than Maryland has put aside. The State Retirement and Pension System has about $28.6 billion."

"To plug a $475 million budget gap -- the largest since Daley's 1995 school takeover -- CPS is raising property taxes by $43 million and cutting 450 more jobs. Some of them may be teachers.

Swamped with pension costs, Huberman has warned that next year's budget gap could approach $900 million. That means "everything is on the table," including increased class size, teacher layoffs and pay cuts and a reduction in pension contributions, he said."

"To keep the public pension systems solvent, the state expects its $524 million share of pension costs this year to jump to at least $1 billion in 2010-11, $3 billion the following year and $4 billion the year after that, according to the Senate Appropriations Committee. School districts will see their pension contributions increase from a little under 5 percent now to up to 30 percent."

"The board in charge of San Jose's police and firefighter pensions today will decide what rate of return on investments to use in its projections. Should it be 8 percent, or 7.5?

It may seem picayune. But this decision will have profound implications for taxpayers, and it will tell them a great deal about the priorities of the board's members."

"There is growing consensus among experts that 8 percent is an unrealistically high estimate that hides the true cost of the pensions.

Next year, for example, San Jose is forking over an additional $45 million to its two pension funds — close to the cost of libraries and code enforcement combined — primarily to help make up for the funds' $1 billion in losses. And that's in addition to the $137 million or so taxpayers are expected to contribute to meet current funding obligations."

"The trailing 12-month global speculative-grade default rate edged up to 12.4% in October from a revised level of 12.3% in September 2009, breaking the post-depression record high of 12.2% reached in July 1991, said Moody's Investors Service in its latest monthly default report. A year ago, the global default rate stood at only 3.0%."

National debt at $11.97 trillion according to treasurydirect.gov (higher than what the national debt clocks say)

"Thousands of borrowers on the verge of foreclosure will soon have the option of renting their homes from Fannie Mae, under a policy announced Thursday.

The government-controlled company, through its new "Deed for Lease" program, will allow borrowers to transfer ownership to Fannie Mae and sign a one-year lease, with month-to-month extensions after that."

14A) "This is nothing other than yet another scam to avoid recognition of bad paper Fannie took on their books and has a HUGE embedded loss."

"This is yet another scam folks, all courtesy of our government who will do anything to avoid admitting the extent of the liabilities that are now in Fannie and Freddie's portfolio (and by extension, partially in The Federal Reserve as well!)

But the economy is getting better, right?

That's why we keep seeing scheme after scheme, scam after scam, all intended to do one and only thing - avoid a true and accurate accounting of losses that have already occurred."

 (The info above was posted at Nathan's Economic Edge)

 

..........No, you don't have to ask the government to do this. It's all they do.

Johnny Oxygen's picture
Johnny Oxygen
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Get yer gold while you can.

From Jim Sinclairs site

 

Investors emptying COMEX warehouses

In order to secure gold at the lowest possible price, US investors are turning to the complex, lengthy process of taking delivery of gold futures contracts. By buying gold contracts in deliverable months and wait for them to expire, sophisticated investors are emptying COMEX warehouses. The incredible hassle of trying to pry gold out of Comex warehouses appeals to investors because no other place in the US offers a price equal to the Comex exchange. Nothing even comes close.

Guiding investors through the delivery process are gold and silver brokers like JB Slear who specialize in helping high net worth clients take delivery of gold and silver futures contracts. These advisors are necessary because, as investors are discovering, that there is trouble at Comex warehouses:

1) Delays and complications in the delivery process have become increasingly commonplace. It is taking weeks and possibly even months, and sometimes dozen of inquiries, for investors to get the gold they already own out of the warehouse.

2) More restrictions are being applied to overseas buyers requesting delivery.

3) Some brokerages will not help with the delivery process or refuse to help even after the commissions are paid.

4) The cost in just about everything "Comex" is increasing

5) Investors withdrawing their 100oz. bars from the Comex depositories are being given bars with incorrect serial numbers or weight.

With the difficulties and irregularities in the COMEX delivery process, many, including gold brokers like JB Slear, have doubts as to whether there is gold in inventory to match existing warehouse receipts.

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printfaster
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Re: Daily Digest - November 5

Re Why Dilbert is doomed

We cannot have an economy nursing each other.  The healthcare professions are already oversaturated and will succumb to labor saving measures, and medical tourism, even in the face of Obamacare.  Today the typical x-ray is read in India and the results sent over the internet.  We import our spanish speaking nurses from the Phillipines, our doctors from India.  Soon we will be sending our patients there.

We need the Dilbert jobs because we need and economy based on engineering and scientific development, not services.  Otherwise we become Ecuador.

 

Davos's picture
Davos
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Re: Get yer gold while you can.
Johnny Oxygen wrote:

From Jim Sinclairs site

 

Investors emptying COMEX warehouses

In order to secure gold at the lowest possible price, US investors are turning to the complex, lengthy process of taking delivery of gold futures contracts. By buying gold contracts in deliverable months and wait for them to expire, sophisticated investors are emptying COMEX warehouses. The incredible hassle of trying to pry gold out of Comex warehouses appeals to investors because no other place in the US offers a price equal to the Comex exchange. Nothing even comes close.

Guiding investors through the delivery process are gold and silver brokers like JB Slear who specialize in helping high net worth clients take delivery of gold and silver futures contracts. These advisors are necessary because, as investors are discovering, that there is trouble at Comex warehouses:

1) Delays and complications in the delivery process have become increasingly commonplace. It is taking weeks and possibly even months, and sometimes dozen of inquiries, for investors to get the gold they already own out of the warehouse.

2) More restrictions are being applied to overseas buyers requesting delivery.

3) Some brokerages will not help with the delivery process or refuse to help even after the commissions are paid.

4) The cost in just about everything "Comex" is increasing

5) Investors withdrawing their 100oz. bars from the Comex depositories are being given bars with incorrect serial numbers or weight.

With the difficulties and irregularities in the COMEX delivery process, many, including gold brokers like JB Slear, have doubts as to whether there is gold in inventory to match existing warehouse receipts.

Good snippet, look forward to reading the rest this evening. I have heard a lot of this sort of thing discussed on FSN before. If what they say is correct then the way I see it is: These morons have created 2 trillion in funny money so gold should be at 8k an ounce. I suspect if there is ANY accuracy to the above articles this could be the 8k kindling point.

Perhaps we have 2 world series games playing out, right here, right now?

freeeeeman's picture
freeeeeman
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Re: Daily Digest - November 5
printfaster wrote:

Today the typical x-ray is read in India and the results sent over the internet.  We import our spanish speaking nurses from the Phillipines, our doctors from India.  Soon we will be sending our patients there.

We need the Dilbert jobs because we need and economy based on engineering and scientific development, not services.  Otherwise we become Ecuador.

seems like protecting some domestic industries would be a good thing. i was (more or less) called stupid yesterday for suggesting as much. if we continue to off shore everything so it's cheaper (b/c nike shoes are so much cheaper now, right?), then we won't have as many jobs here domestically. supply/demand tells me that wages go down in that scenario... certainly unemployment goes up...

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest - November 5

We cannot have an economy nursing each other.  The healthcare professions are already oversaturated and will succumb to labor saving measures, and medical tourism, even in the face of Obamacare.  Today the typical x-ray is read in India and the results sent over the internet.  We import our spanish speaking nurses from the Phillipines, our doctors from India.  Soon we will be sending our patients there.

 Here's one example of Medical Tourism.

"The cost for health care in Thailand is about one fifth of what you would pay in the United States or Europe, making it more significant that in 2008, foreign patients generated an estimated $6 billion USD for Thailand. According to one international medical travel journal, the Royal Thai Government has put together a five-year plan that aims to double this revenue by 2014.

Deloitte Consulting estimated 750,000 Americans traveled abroad for health care services in 2007, a figure that was expected to double last year, with a forecasted global market expansion of more than 20% annually going forward to 2012. Thailand is ready to meet the growing industry by continuously making sure international standards are met and offering a level of hospitality not found in any other medical center around the world at affordable prices.

People are traveling to Thailand for routine maintenance like dental to cosmetic surgery, gastric bypass surgery and heart surgery. Medical tourists can undergo and recover from many non-invasive procedures during a normal two-week holiday in Thailand.".......

"Thailand's ultra-new and modern hospitals are less than a decade old and feel more like luxury hotels catering to tourists, than places to treat the infirm"

 

Dragline's picture
Dragline
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Re: Daily Digest - November 5

Interesting article from mainstream source regarding the correlation between gold price and poor monetary policies

http://www.minyanville.com/articles/gold-record-high-strategists-analysts-deficit-debt-US-minyanville/index/a/25289

Montana Native's picture
Montana Native
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Re: Daily Digest - November 5

Re Why Dilbert is doomed

We cannot have an economy nursing each other.  The healthcare professions are already oversaturated and will succumb to labor saving measures, and medical tourism, even in the face of Obamacare.  Today the typical x-ray is read in India and the results sent over the internet.  We import our spanish speaking nurses from the Phillipines, our doctors from India.  Soon we will be sending our patients there.

My Wife and I both work in health care. We constantly hear friends and family talk about how at least the health care fields are promising. Our inside line is "not everyone can be a Nurse" or a PA ,Pharmacist, Xray tech etc. I think most people just cant grasp the fact that we produce very little and consume so much. Logically this model does not compute.

 

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dps
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Re: Daily Digest - November 5

For those that like real data, this is from Broomfield, Colorado:

begin quote:

The September 2009 SCFD month-to-date (MTD) sales and use tax revenue was $3,270,871.71 as compared to September 2008 tax revenue of $3,624,896.23. The 2009 MTD variance is ($354,024.52), which is a 9.76% decrease over September 2008.

The 2009 year-to-date (YTD) sales and use tax revenue total is $27,103,508.37 compared to YTD 2008 $31,734,880.79.

The variance is ($4,631,372.42), which is a 14.59% decrease in YTD 2009 over YTD 2008.

We continue to close the gap between YTD 2009 and YTD 2008 revenue, moving nearer to our projected 2009 fiscal year decrease of 12% over 2008.

end quote.

quoted from email from:

Executive Director

Scientific & Cultural Facilities District

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest - November 5

to have Fannie rent rather than foreclose. Don't miss this one, it's good! Start at about 1 1/2 minutes into this. 

"Nov. 5 (Bloomberg) -- U.S. state and local government pensions are underfunded by $1 trillion and may need to seek federal guarantees for their debt, according to Orin Kramer, chairman of New Jersey’s Investment Council."

"NEW YORK (Reuters) - New York state's three-year deficit might top the governor's forecast by $3.6 billion, hitting $27.5 billion, as income and sales taxes continue to lag, the state comptroller said in a report on Thursday."

Scroll down and look at the numbers under "latest observations"

"Resurging expectations of yuan appreciation have made dollars more scarce in China's foreign exchange market, tripling six-month dollar fundingcosts and creating new complications for Beijing's stable yuan policy.

Over the past two months, Chinese banks have become eager to sell extra dollars to the central bank, fearing the US currency could fall in value, while their corporate clients are increasingly keen to borrow dollars to buy yuan, to speculate on yuan appreciation or for arbitrage.

With expectations of yuan strength unlikely to die down any time soon, Chinese dollar funding costs are set to keep rising in coming months and could climb prohibitively high, jeopardizing banks' foreign exchange business as well as corporate dollar funding for purposes such as trade and investment, dealers said.

"There is an acute dollar shortage on the market," said a dealer at a Chinese commercial bank in Shenzhen.

"The situation is likely to worsen in coming months as banks don't want to retain dollars and some of their clients are borrowing dollars to conduct arbitrage trading."

 

..........Let's give the government a hand for their brilliant ideas with Fannie and for not being able

to figure out how self destructive these ideas of theirs are.

Erik T.'s picture
Erik T.
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Re: Daily Digest - November 5
JohnnyOxygen wrote:

2) More restrictions are being applied to overseas buyers requesting delivery.

I wasn't aware of such restrictions. Does anyone have a link to where these restrictions are described in detail?

Thanks,

Erik


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Damnthematrix
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Re: Daily Digest - November 5

AP IMPACT: Clunker pickups traded for new pickups

http://news.yahoo.com/s/ap/20091104/ap_on_bi_ge/us_cash_for_clunkers

WASHINGTON – The most common deals under the government's $3 billion Cash for Clunkers program, aimed at putting more fuel-efficient cars on the road, replaced old Ford or Chevrolet pickups with new ones that got only marginally better gas mileage, according to an analysis of new federal data by The Associated Press.

The single most common swap — which occurred more than 8,200 times — involved Ford F150 pickup owners who took advantage of a government rebate to trade their old trucks for new Ford F150s. They were 17 times more likely to buy a new F150 than, say, a Toyota Prius. The fuel economy for the new trucks ranged from 15 mpg to 17 mpg based on engine size and other factors, an improvement of just 1 mpg to 3 mpg over the clunkers.

Owners of thousands more large old Chevrolet and Dodge pickups bought new Silverado and Ram trucks, also with only barely improved mileage in the middle teens, according to AP's analysis of sales of $15.2 billion worth of vehicles at nearly 19,000 car dealerships in every state. Those deals helped the Ford F150 and Chevy Silverado — along with Ford's Escape midsize SUV — climb into the Top 10 most-popular vehicles purchased with the government rebates. The most common truck-for-truck and truck-for-SUV deals totaled at least $911 million.

<MORE>

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tomwil
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Re: Daily Digest - November 5

Look at the date on this article:

Sunday, June 28, 2009

*****Trouble At COMEX Warehouses*****

by Eric deCarbonnel

The Huffington Post reports about COMEX warehouses.

Where's The Gold?
Nathan Lewis
June 26, 2009 07:45 AM

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Re: Daily Digest - November 5

Freeeeeman,

      I saw your post yesterday and I'm sorry I didn't comment then but I think you are very close to the mark.  From what I remember of the response to you're quote,it was merely stating the conventional wisdom that everyone focusing on their area of comparitive advantage leads to greater overall efficiency and therefore everyone benefits.  I think that we will need to be changing this paradigm as you were saying.  We have to start looking towards the overall benefits/costs of our actions and policies.  Efficiency at the cost of gutting local jobs and economies can work wonderfully over the short term but will fail in the long term.  Also, the benefits of that system will accrue to a small portion of the population while the whole population will bear the costs.  I also think we have to question the value of efficiency.  An efficient system is also a fragile system.  We need to work on a resilient system with lots of built in redundancies for a more constrained energy future.

                                                                                                         Kevin

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Spill
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Re: Daily Digest - November 5
freeeeeman wrote:
printfaster wrote:

Today the typical x-ray is read in India and the results sent over the internet.  We import our spanish speaking nurses from the Phillipines, our doctors from India.  Soon we will be sending our patients there.

We need the Dilbert jobs because we need and economy based on engineering and scientific development, not services.  Otherwise we become Ecuador.

seems like protecting some domestic industries would be a good thing. i was (more or less) called stupid yesterday for suggesting as much. if we continue to off shore everything so it's cheaper (b/c nike shoes are so much cheaper now, right?), then we won't have as many jobs here domestically. supply/demand tells me that wages go down in that scenario... certainly unemployment goes up...

Well I didn't use the word stupid, and since you're able to add logic, albeit faulty, to your idea, you're certainly smarter than the average policy-maker these days. (Apologies for not answering to your response yesterday, busy days)

But it can't work, it won't work, the only time in history protectionism has ever worked was when Warren G Harding piled it on in 1920-1921, and that was because many other countries didn't notice it untill it was removed again (no information-society then). Protectionism will always come back from abroad, bigger and badder. It's an economic drug that should be faced with the words "Just say no" like all other drugs.

In fact, the potential for a massive disaster is even bigger today. China and the US have basicly begun a minor tradewar, even if it's still very small, it's clearly directed between these two entities. In the current global political climate (with a complete lack of common sense going around), that leaves a HUGE opening for other countries (especially anti-US countries that also fear the coming chinese "superpower" or half-superpower), to go and say "These countries are protectionist, we'll tariff both of them up, since they started protectionism, it's their own fault". Obviously there's also countries that will claim the US started it and block the US only.

Economicly these countries have a great reason to block the US. The fact that the US will have to export its way out of this crisis means that eventually there will be loads of cheap items coming from the US. The view that this will eventually shed jobs by the millions will sooner or later reach leaders worldwide, and the interest in blocking the US will be even bigger.

Lately, for example, Brazil have gone in and introduced a tax on foreign investment in order to hurt and smother their own currency, because their currency was rising in value too rapidly, which was hurting their tradebalance. If they're already ready to go that far, telling US exporters to go stuff it would be just what they need.

So not only is there potential for an economic blowback from the targeted country, but also from around the world.

In that case, the US cannot block back. Remember, the debtor is the US, it's the US who has to export its way out of this, so economic isolation will hurt the US much more than others if there's a tradewar. China has all the goods and all the productive capacity, and with the US consumption falling faster than gravity can pull it, the loss for China in blocking the US eventually isn't as big as one would think.

The US needs the free trade more than other countries.

The focus you had on your second entry yesterday about the higher US wages being the key thing in making the US living-standards higher is, by all means, a cruel point. If another person could do my work cheaper than me, thus creating a cheaper product, in the end allowing poorer people access to said asset, why should I be kept on the job and the other person not?? If US wages would fall, THAT would be more competitive, and allow US citizens to keep their jobs and keep their productive capacities. Wages would never fall to the levels in China and India, since their products also need to pay back the cost of transportation (across a gigantic ocean in this case), so lowered-wage US products would outcompete asian products faster than expected. The high wages and the following high consumption is what brought about the high trade-(im)balance that you so clearly state "means that foreigners own the US", and if that's your problem, lowering wages will fix that.
Protectionism that will come back and prevent the US from exporting, wont.

If the political leaders would then cut spending to the point that they can cut taxes, it would soften this blow.

The flip side of this, by keeping wages high, it just keeps uncompetitiveness high, meaning less manufacturing jobs, less exports, higher tradeimbalance, which will eventually cause the currency to fall, and thus end up with the same situation: Lower US wages, in terms of purchasing-power anyway.

If you want to see a protectionist economy, you dont need to find a history-book. I openly encourage you to examine Russia's economy today. They've isolated themselves. Tariffs and taxes here and there and everywhere. They've grown uncompetitive due to their protectionism and unwillingness to let the free market function, and that has not decreased poverty, it has increased it.

Damnthematrix's picture
Damnthematrix
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Re: Daily Digest - November 5

British Airways axes another 1,200 jobs

By Europe correspondent Emma Alberici

http://www.abc.net.au/news/stories/2009/11/07/2736018.htm?section=justin

British Airways (BA) will cut another 1,200 jobs after reporting a record loss of $500 million for the first half of the year.

Shares in the airline took off on the London Stock Exchange - jumping more than 6 per cent - with the profit announcement taking to 4,900 the number of jobs that will be lost at the company by March 2010.

Revenues over the six months to September were also down 14 per cent.

BA chief executive Willie Walsh called it the most difficult year in the history of aviation.

Unite, the airline industry union, is threatening strikes during the busy Christmas period if BA continues with plans to cut the number of cabin crew on long haul flights.

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