10-23-2008, 06:10 PM | #1 (permalink) | |
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Financial Crisis
Trade finance: is international trade grinding to a halt? - MoneyWeek
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letter of credit - Google News I love this quote: "without trade finance, global commerce will shrink" "shrink" - ha! Maybe if we think about all the other problems the western economies have, and then if these start being refused more regularly - and I fear they will, there are a lot more banks, globally, that are going to the wall - the collapse of this system will be epoch-altering. Stock up on tinned goods (nothing dry unless you've got a reliable water source and ability to clean it - where do the chemicals to clean your water come from? are there significant stocks of those chemicals?) and shotguns. I'm only semi-joking. ------ So, the markets are tanking, currencies are dying, credit is in chaos, banks are collapsing and more will go, corporate defaults of junk bonds are going to go up (and the FED has been taking those as collateral), hence corporate bankruptcies on a large scale are expected, house prices are going through the floor, peak oil could well be upon us, there's no manufacturing base any more (at least in the US and UK, effectively), and and and... The sky is falling? I genuinely feel we need to get away from authorities and large organisations, have collective will to keep ALL organisations small and medium sized if possible, cooperatives/mutual in structure with small entrepreneurs also - but no power kept in the hands of a small cabal, relative to the size of the governed/administered. I mean all, not just government, but businesses, health services, insurers, banks, etc, etc, etc. The currency system needs to be changed. Fiat, debt backed being replaced by something with no debt attached at inception. Hopefully something along the lines of complementary currencies as they're called now. Something that encourages work, encourages production and discourages the formation of elites. The big problems we have are due to strict dogma, authority and power. Dogma is force against history and critical thinking. Authority is a force against natural progress, critical thinking and freedom. Power corrupts. Absolutely. Open minds and critical thinking can be brought through media and education. Authority can be dissolved by proper checks and balances which are relative to the size of the governed and grow/are broken into smaller pieces as populations change. Power will always corrupt, but petty power in small doses can't hurt too much. right? *crosses fingers* Oh, and yes, ^^^ this is a form of SOCIALISM. Including markets, hard work and security for all. Efficiency isn't the aim. Satisfying human needs and progress are. These are just sketchy thoughts at an early hour of the morning, for me. What do you think is going to happen? How do you think things will go in the coming 4 or 5 years? Utopian? Dystopian (why have all those rights been taken away, why so much random authority in the last few years has been built up - on a threat that has killed much fewer people than traffic...?) Not much change? Where do you think we are and where do you think it's going?
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"I do not agree that the dog in a manger has the final right to the manger even though he may have lain there for a very long time. I do not admit that right. I do not admit for instance, that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race, a more worldly wise race to put it that way, has come in and taken their place." - Winston Churchill, 1937 --{ORLY?}-- |
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10-24-2008, 10:30 AM | #2 (permalink) |
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Location: Cottage Grove, Wisconsin
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Thanks for posting this.
Yikes. I'm pessimistic about the direction of the economy, and that shipping graph makes me more so. How everything will shake out depends on a lot of things. Will the political configuration allow the proper countermeasures? Will those come soon enough? How will people react when they start losing their jobs? It's still early in the game. |
10-30-2008, 07:39 PM | #3 (permalink) |
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Over the next decade, maybe less, maybe much less... The US MUST fix it's budget deficit. It either goes into it's social programs, bigtime, or it goes into its military budget.
Military all the way. lack of military power for a state that is not strong in any other manner = end of empire, end of reserve status. But this crisis might just push this way, way, way faster. The trends go towards the dollar losing ground against the dollar. things tend to move slowly until enough people get past the ideological insanity that it "it can't happen" and then it happens quickly. Almost all of the economists that predicted this credit crisis thought it would be moving over 5 to 6 years til it was all over, i think it'll be the same sort of timeframe, but it'll include a change of reserve currency. The crisis will end the idea that the dollar is invincible, when that goes, it's a short leap to the end of the dollar as reserve currency, no matter what the fundamentals. The debt, public plus private, denominated in dollars, is simply ridiculous - particularly in contrast to the other large currencies. Maybe, just maybe, it may just switch to the yuan or the yen, but... the euro is the denomination of the world's biggest economy. It's going to happen. The next few years or up to ten. Nothing more. The end of the reserve currency status will immediately bankrupt the US govt if it continues on the current path. Unfortunately, only the wingnut Ron Paul is telling what is _true_ to the country and the world, as a politician, instead of Obama or McCain. There is no new Roosevelt on offer.
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"I do not agree that the dog in a manger has the final right to the manger even though he may have lain there for a very long time. I do not admit that right. I do not admit for instance, that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race, a more worldly wise race to put it that way, has come in and taken their place." - Winston Churchill, 1937 --{ORLY?}-- |
10-31-2008, 06:23 AM | #4 (permalink) |
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Location: Cottage Grove, Wisconsin
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Again, it's pretty difficult to predict how things are going to unfold. How things unfold depends on the answers to the very large political questions that the US and the world will soon answer, but at the moment, no one is entirely sure what the political configuration in the US is going to be.
It's a mistake to make the dollar into a fetish as Ron Paul does because the dollar is ultimately a political issue. The dollar could retain it's standing and at the same time, the US could lose autonomy over currency policy through international. Whether you peg the dollar to gold, move to another reference currency, or regulate international flows of capital, the end result is the same: a loss of political autonomy. Ron Paul's idea of pegging it to gold is a particularly clumsy and inflexible, and he knows it. It's part of a shock therapy to get the US economy to look like a neoliberal fantasy land. It's not going to fly, especially not now. If i were to bet on a likely outcome, i'd say it would be a structure of international regulation because that gives all actors a maximum of flexibility and because it would provide some tools for managing capital flows and whatever other problems may arise. Existing institutions may end up with new roles. I'm curious to see what comes out of that WTO meeting in November. Anyway, i revisited this thread because i wanted to note that Industrial Carriers, a Ukranian shipper went bankrupt a couple weeks ago. Britannia Bulk is said to be in deep trouble now. |
10-31-2008, 06:41 AM | #5 (permalink) | |
Super Moderator
Location: essex ma
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i've been busy with other stuff lately so haven't been able to devote my attention to tracking this fiasco as i previously had...but i'm starting to get back up on the horse. things have undergone an interesting devolution since the vaunted "bailout" was passed and passed over into an incoherent recapitalization non-plan...now there's other new and strange developments..this little piece from naomi klein gives an outline...i post it not only because i think it's kinda interesting (and a way-station in my own process of getting back up on the horse) but also because i quite like the analogy at the center of the argument between what the bush people are doing and the portugese leaving mozambique:
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the new issue of le monde diplo offers a more trenchant critique of the current state of affairs. here's a commercial (they do this...they still want to sell paper copies. can't blame them, really. besides, this is in french): Le Monde diplomatique - novembre 2008 on the shipping industry, this little apercu is interesting: Hellenic Shipping News - Worldwide Online Daily Newspaper on Hellenic and International Shipping more lunatic overbuilding, more neo-liberal inspired "planning" that assumed expansion was a steady state... in this case, as in alot of others, the underlying dynamic which situates industry problems are of their own making. it doesn't seem that volume is really decreasing that fast...
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a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite |
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10-31-2008, 09:46 AM | #6 (permalink) | |
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Many greek shipping companies are expected to go bankrupt also, and soon. Troubling.
__________________
"I do not agree that the dog in a manger has the final right to the manger even though he may have lain there for a very long time. I do not admit that right. I do not admit for instance, that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race, a more worldly wise race to put it that way, has come in and taken their place." - Winston Churchill, 1937 --{ORLY?}-- |
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10-31-2008, 10:09 AM | #7 (permalink) | |
Easy Rider
Location: Moscow on the Ohio
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10-31-2008, 11:23 AM | #8 (permalink) |
Junkie
Location: bedford, tx
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I couldn't even read the article by klein. The title blew it all to hell and i'm tired of reading partisan hack bashing.
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"no amount of force can control a free man, a man whose mind is free. No, not the rack, not fission bombs, not anything. You cannot conquer a free man; the most you can do is kill him." |
10-31-2008, 06:25 PM | #10 (permalink) |
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and unless you follow the system, then you won't understand why there is a temporary surge in the dollar.
also, if you follow history, you should be aware of the phenomenon that is the 'dead cat bounce'.
__________________
"I do not agree that the dog in a manger has the final right to the manger even though he may have lain there for a very long time. I do not admit that right. I do not admit for instance, that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race, a more worldly wise race to put it that way, has come in and taken their place." - Winston Churchill, 1937 --{ORLY?}-- |
02-15-2009, 05:27 PM | #11 (permalink) | |
warrior bodhisattva
Super Moderator
Location: East-central Canada
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Japan’s 4th-Quarter G.D.P. Falls 3.3%
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This is a major indicator suggesting that global trade is in dire straits. Japan--the world's second largest economy--has taken its single biggest hit in 35 years. To note about the Asian economy in general is its export reliance. It's easy focus on the U.S. economy considering its prominence and sensationalism, but we should also be looking elsewhere. Thanks in part to globalization, and also in part to an awkward synchronization, this crisis is very much global. We shouldn't be expecting too much of the Obama administration's stimulus package. One nation can only do so much with conditions like these. The economic solution will be an international one.
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Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot |
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02-15-2009, 05:45 PM | #12 (permalink) |
Super Moderator
Location: essex ma
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i think the dithering about how to proceed and the problems of co-ordination are all examples of the cognitive problems this crisis is generating. under neo-liberalism in the states, the reality of erasure of the nation-state as a meaningful center of controls over capital flows were minimized by fairy tales of self-regulating markets on the one hand and neo-con style nationalism at the level of military action on the other. in other parts of the metropole, neoliberalism advanced a bit further in rendering problematic the nation-state, but there remain significant limits on how far thinking has been able to go. there's no doubt a circular relation between these limits and the post world-war-2 international structure, which is now obviously problematic and which now obviously has to be altered--the only question really is how much further things have to devolve for the political classes which are beholden to nation-state level social hierarchies for their own positions realize that the jig is basically up and that advantages can be accrued to those who are more rather than less proactive in shaping the new institutional infrastructure--assuming they don't dither so long that the entire capitalist house of cards falls in on itself.
if that happens, there are interesting essays to be written on clay tablets about the implications of cognitive crisis atop economic crisis.
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a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite |
02-16-2009, 09:48 AM | #13 (permalink) |
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Location: Cottage Grove, Wisconsin
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There's very little reporting on Japan. One thing that gets lost hear is that it is a pretty large market itself. Now maybe it has "only" 1/10th the population of China or India, but being a rich country, people generally have more money. You would think that there would be a certain room to maneuver. However,
one of the problems here is that Japan has been following a de facto policy of de-industrialisation, much like the US did in the years after the oil shock of '73. More and more production is off shore, especially in China. Agriculture was wiped out by free trade agreements, and a lot of foodstuff comes from Asian neighbours and even further afield. We have a fairly good idea about effective responses to unemployment and depression in functioning industrial economies. I'm not sure we have a clear idea of what to do about a depression in a largely de-industrialised economies. |
02-16-2009, 10:21 AM | #14 (permalink) |
Super Moderator
Location: essex ma
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Government Beyond Obama? - The New York Review of Books
this is from the ny review of books and is an outline of a new thing by jeff madrick called "the case for big government" even in this cliff-notes forms, the information and argument amounts to a demolition of neoliberal pieties concerning the evils of the state in relation to markets and all that. there are a host of matters that could benefit from a basic rethinking of the existing order even within the sorry state of affairs that is post-neoliberal capitalism. i think you can find a little list of them in the review, and i won't spare you the trouble of reading it by repeating the list here. there are two basic problems that run beyond this, though---one guyy raises just above about the types and directions state action can and should take in a deindustrialized context. to even begin to address that, the entertainment complex that is the major media would probably have to begin repeating to people that deindustrialization has happened so that they come to discover for themselves in that way that free americans seem to freely discover that they want to want what they are told they want in the way they are told to want it that perhaps it's a good idea to begin actually looking at reality as it is, and not as they want it to be. from there, the obvious questions are--what directions should be gone in and to what end? the second question is the amount of time available before the existing house of cards lurches into another phase of implosion, and from that follows another, which is whether the obama administration has the stomach to undertake a fundamental change of organization and direction and whether they are going to get ahead of the question by driving the debate or remain as they currently are, which is in a largely reactive mode, attempting to appease the paleolithic right and retaining elements of their outmoded worldview as a price for playing in the same sandbox as they are. personally, i think that the administration has to be much more radical than it has been and fast or it will find itself sucked into the giant vacuum that neoliberalism has spent 40 odd years putting into place.
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a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite |
02-17-2009, 08:05 PM | #15 (permalink) |
immoral minority
Location: Back in Ohio
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After watching IOUSA and Frontline tonight on how the stock market killed the banks (because of what the banks did), and now seeing the ripple effects through out the world economy, this isn't looking good. I mean, it looks good in my little world (within 5 miles of me), but the overall fiscal picture is pretty shocking. And while I still have time to work and save for retirement, I'm not sure what will happen to the millions of people 50-70 that are still working and planning on retiring in the next year or two, if they lost a large amount of money in the stock market.
I'm not sure what they will have to do in order to fix this. But if the whole economy dries up, this might not be very good. If the US government runs out of money in 5-10 years, there will be some major problems. Has anyone heard how things are going in Iceland? |
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credit, crisis, financial, letters |
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