The most recent event of note, here in Southeast Asia, is the recent turmoil in Thailand. This has been brewing for such a long time, since former Prime Minister Thaksin Shinawatra was deposed in 2006. This is the same year that the Global Understanding Movement (GUM) was formed. We have no connection to Thaksin being deposed! Since then, a rainbow has graced the streets of Bangkok and other cities.
There have been the red-shirt supporters of Thaksin and the yellow-shirt supporters of those opposed to Thaksin and his allies. Then there have been the blue-shirt people wearing masks in Pattaya, who were there to supposedly protect the ASEAN meeting and show their opposition to the red shirts.
In the build up to the September 2006 military coup, which saw Thaksin removed from office, there had been pressure put on Thaksin and his policies by a group called the People’s Alliance for Democracy (PAD).
The PAD were not a political party, but a political pressure group formed by individuals concerned by the power wielded by Thaksin and the direction he was taking Thailand. PAD had some influential backers including those with links to the media, army and Royal Palace.
Supporters of PAD adopted the yellow shirt and made international headlines at the end of 2008, when television viewers around the world were shown images of the occupation of Bangkok’s Suvarnabhumi airport. The main distinguishing feature was the yellow shirts worn by the protesters, adopted by the protesters to show their allegiance to the king.
The Red Shirts managed to force the abandonment of the meeting of the Association of Southeast Asian Nations (ASEAN) in Pattaya, where several world leaders were scheduled to attend, by breaking into the venue. Some leaders were whisked away by helicopter, including Vietnam’s Prime Minister.
Thaksin, a multibillionaire media tycoon was elected in 2001 on a populist platform that promised universal healthcare and cash handouts to poor villagers. He was ousted from power in a bloodless army coup in 2006 and has been in exile abroad since being sentenced last October to two years in prison after being convicted of a corruption charge by Thailand's Supreme Court.
It’s reported that he’s been in negotiations to recover US$2.2 billion of family-owned assets that are now frozen in Thai banks. Those negotiations reportedly stalled because of the military's unwillingness to negotiate and the government's efforts to have Thaksin extradited to serve a two-year prison sentence for criminal conflict of interest charges.
Last Wednesday, Thailand's government announced it has revoked Thaksin’s passport with effect from April 12th because he stands accused of helping to stoke the recent anti-government hostility. Thaksin frequently addressed his followers by video or letter and called for his followers to engage in a revolution.
"Now that they have tanks on the street and the soldiers are coming out, so it is time for the people to come out for a revolution," Thaksin said. He later pushed for an end to violence. "We absolutely reject any form of violence, and reject the efforts of such enemies to tarnish what we stand for, to portray us as a mob, and to legitimize a crackdown on our people," he said in an open letter to the Thai people.
"I reiterate my call here to all my fellow Thais that our struggle for democracy must be non-violent. We must build the future we seek through the force of our ideas and our principles, and resist all the suppressive and aggressive attempts by the state and state-sponsored thugs to provoke us and incite us to violence," he said.
On April Fool’s Day, Deputy Prime Minister Suthep Thaugsuban said the government wanted to avoid violence, he offered to negotiate directly with the exiled Thaksin. "If talks can bring peace to the country, I am ready to meet him anywhere, because Thaksin is the only person that can end the siege."
Thasin responded, "Negotiation is out of the question. We are talking about the nation's future now."
After the Red Shirts withdrew from their blockade of the Prime Minister’s office, PM Abhisit Vejjajiva said, “The government does not view its success on this occasion as a victory over the protesters and should this be considered a victory, it is one for all Thai people."
Where now?
The recent events, following on from previous disruptions that were shown on TV screens around the world, have badly affected Thailand’s tourism industry, which accounts for about 12% of the country’s GDP.
Thaksin’s trusted aide and former minister in Thaksin’s government, Jakrapob Penkair, now leader of the United Front for Democracy Against Dictatorship (UDD) distinguished himself throughout the chaos and some say he could emerge as the opposition's next prime ministerial candidate. This is of course presuming that Thailand will continue to have elections.
Some observers say that this is only one battle in the war. Thai society is on-edge because nobody knows what will happen when the highly revered 81-year-old monarch, King Bhumibol eventually passes away. He is of ill health and many wonder how long he will live. When he does, many predict that pent-up frustrations will boil over.
A key-player is Privy Council President Prem Tinsulanonda, whom Thaksin recently alleged together with his close associate General Surayud Chulanont, were among the masterminds behind the 2006 coup. This is a public accusation that the royal advisory body was acting outside of its legal mandate.
Some say that Thaksin's calls for a national uprising were no idle threat and that the protest group, could in the weeks ahead stir more trouble at the provincial level.
There are reports that Thaksin operatives had for the past two years clandestinely funnelled small arms through Cambodia to his supporters in various north-eastern provinces, where Thaksin's grassroots support runs deep. The arms had been moved and distributed with the help of former Communist Party of Thailand (CPT), an ideologically driven insurgent group active in the 1960s and 1970s that frequently criticized the royal family during its years of armed resistance. The group was disbanded in the 1980s, but some of its former student leaders were among Thaksin's top aides while he was in government.
It is without doubt that Thailand has not seen the last of public discontent; there are other battles to be fought before the war is won. When and where, nobody knows.
How about a little understanding?
The motto of the Global Understanding Institute is: Let us live together in harmony
The Global Understanding Institute seeks to share understanding of the world around us through provision of global and local forums to exchange and express views for all interested and concerned citizens of the world. We owe it to each other to communicate in a polite, logical and rational manner that takes into consideration racial, religious and political sensitivities.
We seek to foster multicultural, pluralistic communities and to create peace between neighbours. This is based on the fundamental principles of human and humanitarian rights. Our goal is to aid any interested and concerned citizen of the world to understand others, to be understood themselves especially during times of crisis or conflict, and to bring peace and reconciliation where there are differences.
At this stage, I don’t know how the Global Understanding Institute can play a role in Thailand, but that is not going to stop us from trying to find out. I am actively reaching out to Thai friends, who represent all colours of the rainbow, to see what can be done.
We may not be successful, but at least we must try. If any readers of this post can assist in this worthy goal, please contact me. Together, let’s try to make a difference.
Showing posts with label crisis. Show all posts
Showing posts with label crisis. Show all posts
Thursday, April 16, 2009
Friday, March 20, 2009
Financial Crisis, 20 Mar 2009: Weekly Wrapup
The market’s corrosive slide has had a surprising bounce over the past weeks. In fact, had you picked the bottom of a few weeks ago, and you would have been part of the best 2-week run of the S&P500 since 1974.
A cursory look at the last week’s close to this week’s close alone would not show that. The week-to-week change in the Dow was a modestly buoyed 54-point rise: from 7,223.98 on the close of 13 March to today’s close of 20 March at 7,278.38. That modest rise does not tell the complete story of the volatile market for the week.
Just as one comparing the present day’s close to the close of 7,270.89 on 25 February would have left out the volatile weeks in between.
Wall Street began with a rocky Monday, which saw an up-and-down day nearly as high as 7,400 and then falling back to near 7200. The Dow then had strong positive days Tuesday and Wednesday, including cresting over the 7,550 mark on Wednesday, 18 March, before it eroded, giving back nearly all the gains over Thursday and Friday. Friday alone the Dow sank back 122.42 points or –1.65%. The NASDAQ and the S&P500 were likewise off –1.8% and –2% respectively.
The rise of the Dow from less than 6,500 on 9 March to the over 7,550 intraday high on Wednesday represented a 16.15% rise in value. In the short term, that is a very bright reversal of the downward plummet of stocks. However, the Dow is still down 17% on the year.
AIG Bonus Pay — Cherry on Top?
The week’s financial news was filled with the comments about the AIG bonus pay of $165 million to its financial products unit managers and the government’s demand that it be returned, either voluntarily or through a special tax that sailed through Congress. Tim Geithner and Senator Christopher Dodd were both hammered and taken to task for letting provisions for such bonuses slip into the Congressional bailout package in the first place.
The bonuses were simply the “cherry on top” of a terrible heart-stopping dessert for the American tax payer. All of it is relative mountains-and-molehills compared to the amount of money already plowed into AIG. $182.5 billion of public money was invested into the company. The company is going to be forced to repay the costs of the bonuses to the taxpayers, and, on top of that, the individual compensation will now face a specially-passed 90% tax. As will any bonus compensation made to individuals with incomes greater than $250,000 working at companies that received $5 billion or more in federal bailout funds.
A Trillion Here, A Trillion There...
The U.S. Federal deficit for 2009 is likely going to be $1.8 trillion, and another $1.4 trillion for 2010. The Congressional Budget Office (CBO) announced that it projects Federal deficits to accrue another $9.3 trillion in debts between 2009 and 2017. The national debt already stands over $11.0 trillion (specifically $11,039,686,130,898.10 as of 19 March 2009).
The Federal Reserve waded into the situation by offering to buy back $300 billion of Treasury bills, and to acquire $750 billion of Fannie Mae and Freddie Mac mortgage-backed securities, and another $100 billion of their outstanding debts.
The gross U.S. debt had been as low as 58% of Gross Domestic Product in 2000. By the time of the end of the Bush administration, that had risen to about 75%. This year’s deficit alone will amount to 11.9% of GDP. The next year deficit will be an estimated 7.9%.
As the national debts pile on, so do the unemployment figures.
Job Losses Mount
The national average for unemployment in Febrary was measured 8.1% by the Bureau of Labor Statistics. However, that rate may rise given new information out of leading industrial states like California and Ohio.
In California, the unemployment rate rose in February to 10.5%, the highest since April 1983. The 116,000 Californian jobs shed in February were the most lost in a single month in 19 years. Even the normally ebullient Silicon Valley has been hard hit. Last year, the unemployment rate was 5.1%. Today it is over 10%.
Likewise, Ohio faces a 9.4% unemployment rate, up from 8.4% in January — the worst situation since 1984. A year before it had stood at 5.9%. There were well over a half-million unemployed in Ohio in February 2009 — 566,000 — versus 349,000 unemployed a year ago in February 2008.
Global Setback
The U.S. economic recession is not a localized market issue. The International Monetary Fund acknowledged today that the entire global economy is now in a recession. The overall world’s production will slump 1% over 2009. Some economies will grow, but not as fast as they used to. Most will be in recession, and some be hit far harder than others. Japan, for instance is expecting a retraction of 5.8% in its GDP. Europe will be down 3.2% on average. The U.S. will have a relatively mild 2.6% retraction.
The question will be how fast the global economy can spring back after sustaining such precipitous losses. It also doesn’t mean that the problems will go away. Even if the market sprang back 16% over the past few weeks trading, there are still tremendous problems to be burdened, including the incurred national debts of various stimulus packages which were used to get the market moving again.
Sustainability is not done by simple means and gross averages. One cannot water a plant “on average” by drowning it one day after weeks of drought. Likewise, the instability of the present up-and-down market is not a sign of good health. It came at a price, which will be burdened for years and decades to come.
A cursory look at the last week’s close to this week’s close alone would not show that. The week-to-week change in the Dow was a modestly buoyed 54-point rise: from 7,223.98 on the close of 13 March to today’s close of 20 March at 7,278.38. That modest rise does not tell the complete story of the volatile market for the week.
Just as one comparing the present day’s close to the close of 7,270.89 on 25 February would have left out the volatile weeks in between.
Wall Street began with a rocky Monday, which saw an up-and-down day nearly as high as 7,400 and then falling back to near 7200. The Dow then had strong positive days Tuesday and Wednesday, including cresting over the 7,550 mark on Wednesday, 18 March, before it eroded, giving back nearly all the gains over Thursday and Friday. Friday alone the Dow sank back 122.42 points or –1.65%. The NASDAQ and the S&P500 were likewise off –1.8% and –2% respectively.
The rise of the Dow from less than 6,500 on 9 March to the over 7,550 intraday high on Wednesday represented a 16.15% rise in value. In the short term, that is a very bright reversal of the downward plummet of stocks. However, the Dow is still down 17% on the year.
AIG Bonus Pay — Cherry on Top?
The week’s financial news was filled with the comments about the AIG bonus pay of $165 million to its financial products unit managers and the government’s demand that it be returned, either voluntarily or through a special tax that sailed through Congress. Tim Geithner and Senator Christopher Dodd were both hammered and taken to task for letting provisions for such bonuses slip into the Congressional bailout package in the first place.
The bonuses were simply the “cherry on top” of a terrible heart-stopping dessert for the American tax payer. All of it is relative mountains-and-molehills compared to the amount of money already plowed into AIG. $182.5 billion of public money was invested into the company. The company is going to be forced to repay the costs of the bonuses to the taxpayers, and, on top of that, the individual compensation will now face a specially-passed 90% tax. As will any bonus compensation made to individuals with incomes greater than $250,000 working at companies that received $5 billion or more in federal bailout funds.
A Trillion Here, A Trillion There...
The U.S. Federal deficit for 2009 is likely going to be $1.8 trillion, and another $1.4 trillion for 2010. The Congressional Budget Office (CBO) announced that it projects Federal deficits to accrue another $9.3 trillion in debts between 2009 and 2017. The national debt already stands over $11.0 trillion (specifically $11,039,686,130,898.10 as of 19 March 2009).
The Federal Reserve waded into the situation by offering to buy back $300 billion of Treasury bills, and to acquire $750 billion of Fannie Mae and Freddie Mac mortgage-backed securities, and another $100 billion of their outstanding debts.
The gross U.S. debt had been as low as 58% of Gross Domestic Product in 2000. By the time of the end of the Bush administration, that had risen to about 75%. This year’s deficit alone will amount to 11.9% of GDP. The next year deficit will be an estimated 7.9%.
As the national debts pile on, so do the unemployment figures.
Job Losses Mount
The national average for unemployment in Febrary was measured 8.1% by the Bureau of Labor Statistics. However, that rate may rise given new information out of leading industrial states like California and Ohio.
In California, the unemployment rate rose in February to 10.5%, the highest since April 1983. The 116,000 Californian jobs shed in February were the most lost in a single month in 19 years. Even the normally ebullient Silicon Valley has been hard hit. Last year, the unemployment rate was 5.1%. Today it is over 10%.
Likewise, Ohio faces a 9.4% unemployment rate, up from 8.4% in January — the worst situation since 1984. A year before it had stood at 5.9%. There were well over a half-million unemployed in Ohio in February 2009 — 566,000 — versus 349,000 unemployed a year ago in February 2008.
Global Setback
The U.S. economic recession is not a localized market issue. The International Monetary Fund acknowledged today that the entire global economy is now in a recession. The overall world’s production will slump 1% over 2009. Some economies will grow, but not as fast as they used to. Most will be in recession, and some be hit far harder than others. Japan, for instance is expecting a retraction of 5.8% in its GDP. Europe will be down 3.2% on average. The U.S. will have a relatively mild 2.6% retraction.
The question will be how fast the global economy can spring back after sustaining such precipitous losses. It also doesn’t mean that the problems will go away. Even if the market sprang back 16% over the past few weeks trading, there are still tremendous problems to be burdened, including the incurred national debts of various stimulus packages which were used to get the market moving again.
Sustainability is not done by simple means and gross averages. One cannot water a plant “on average” by drowning it one day after weeks of drought. Likewise, the instability of the present up-and-down market is not a sign of good health. It came at a price, which will be burdened for years and decades to come.
Friday, March 13, 2009
Financial Crisis, 13 Mar 2009: Dow 7,223.98, +53.92 (+0.75%)
Today the market rose to close the week up, with the Dow Jones Industrial Average back over 7,200. It was up 53.92 points on the day (+0.75%), ending at 7,223.98. For the week the Dow bounced back nearly 600 points over the prior week’s close of 6,626.94, recovering all the losses of the prior week and well over its close at 7,062.93 of two weeks ago. That is a rise of over 9% for the week, and a net rise for March of 2.28%.
Though this is welcome news, having a “two-week high” is nothing to really get complacent about. World Bank President Robert Zoellick warned of all economic stimuli giving the world economy a “sugar high” speaking in London before the start of the G20 Summit.
Another bit of good news for the “buy American” crowd was that the U.S. trade deficit fell 9.7% to $36 billion for the month of January. This was down $2 billion compared with expectations. Adjusted for inflation, the real trade deficit was $41 billion. However, this news must be couched in the fact that all global trade is significantly down for the year. And in the long run, it could hurt many industries and international relationships that rely upon global trade for their success.
Many elements of the world economy are still shaking out after the downturn. European powers are considering protectionism. They are still in a great deal of insecurity over their eastern European debt obligations. Austria, which had extensive dealings with eastern Europe after the fall of the Iron Curtain, now finds itself in a greatly insecure position.
China is trying to avoid having its trade deficit with the U.S. shrink, and is mulling over the security of U.S. Treasury bonds. Meanwhile, the U.S. has dispatched a Navy destroyer, the USS Chung-Hoon, to protect a maritime surveillance ship, the Impeccable, off the Chinese coast. Along with the other issues, a prognosis of uncertainty is developing between the U.S., the present pre-eminent world power, and China, the developing powerhouse of Asia.
So while the news for the week is extremely good for the short term, there remains a great deal of uncertainty for the coming year ahead.
Though this is welcome news, having a “two-week high” is nothing to really get complacent about. World Bank President Robert Zoellick warned of all economic stimuli giving the world economy a “sugar high” speaking in London before the start of the G20 Summit.
Another bit of good news for the “buy American” crowd was that the U.S. trade deficit fell 9.7% to $36 billion for the month of January. This was down $2 billion compared with expectations. Adjusted for inflation, the real trade deficit was $41 billion. However, this news must be couched in the fact that all global trade is significantly down for the year. And in the long run, it could hurt many industries and international relationships that rely upon global trade for their success.
Many elements of the world economy are still shaking out after the downturn. European powers are considering protectionism. They are still in a great deal of insecurity over their eastern European debt obligations. Austria, which had extensive dealings with eastern Europe after the fall of the Iron Curtain, now finds itself in a greatly insecure position.
China is trying to avoid having its trade deficit with the U.S. shrink, and is mulling over the security of U.S. Treasury bonds. Meanwhile, the U.S. has dispatched a Navy destroyer, the USS Chung-Hoon, to protect a maritime surveillance ship, the Impeccable, off the Chinese coast. Along with the other issues, a prognosis of uncertainty is developing between the U.S., the present pre-eminent world power, and China, the developing powerhouse of Asia.
So while the news for the week is extremely good for the short term, there remains a great deal of uncertainty for the coming year ahead.
Thursday, March 12, 2009
Financial Crisis, 12 Mar 2009: Dow 7,170.06, +239.66 (+3.46%)
For the third straight day, the Dow Jones has ended higher. For the first time this month, the Dow closed above the 7,000 mark at 7,160.06.
A Dimmed Light Shines Brighter
General Electric, even though it was downgraded by Standard & Poor’s from AAA to AA+, jumped up $1.08 a share, up 12.72%, to $9.57. Investors had worried the downgrade would have been even worse.
If Not a Bottom, a Ledge
Meanwhile other aspects of the economy looked to be settling according to the U.S. Department of Commerce. Retail spending in February, though still down slightly by 0.1%, was not as bad off as some forecast. Excluding automotive industry, it was actually up 0.7%. Overall retail spending in January, even including the automotive market, was actually up 1.8%. Unemployment remains a chief worry to the sustainability of the consumer spending rate.
The present week has been a welcome relief to a market that has seemed nearly in free-fall since October of last year. While prospects are still too murky to determine if this is a bottom to the crevasse, it is possibly at least a ledge that the market has landed safely upon.
Madoff Guilty
Today also marks the day that Bernie Madoff pled guilty to running a massive corrupt investment scheme that lost billions. “I operated a Ponzi scheme,” he told the U.S. District Court judge.
Go to G20
The leaders of the G20 are preparing to meet this week. The U.S. is proposing two major initiatives:
Stay tuned for the news from the G20 summit later this month.
A Dimmed Light Shines Brighter
General Electric, even though it was downgraded by Standard & Poor’s from AAA to AA+, jumped up $1.08 a share, up 12.72%, to $9.57. Investors had worried the downgrade would have been even worse.
If Not a Bottom, a Ledge
Meanwhile other aspects of the economy looked to be settling according to the U.S. Department of Commerce. Retail spending in February, though still down slightly by 0.1%, was not as bad off as some forecast. Excluding automotive industry, it was actually up 0.7%. Overall retail spending in January, even including the automotive market, was actually up 1.8%. Unemployment remains a chief worry to the sustainability of the consumer spending rate.
The present week has been a welcome relief to a market that has seemed nearly in free-fall since October of last year. While prospects are still too murky to determine if this is a bottom to the crevasse, it is possibly at least a ledge that the market has landed safely upon.
Madoff Guilty
Today also marks the day that Bernie Madoff pled guilty to running a massive corrupt investment scheme that lost billions. “I operated a Ponzi scheme,” he told the U.S. District Court judge.
Go to G20
The leaders of the G20 are preparing to meet this week. The U.S. is proposing two major initiatives:
- Push for a 2-year stimulus plan from all G20 nations equal to 2% of that nation’s GDP. The U.S. stimulus plan signed by President Obama is already equivalent to 3% of GDP.
- Expand the IMF’s emergency fund for developing nations from $50 billion to $500 billion. The U.S. would contribute $100 billion to that fund and would seek other nations to underwrite the other $400 billion in necessary funds.
Stay tuned for the news from the G20 summit later this month.
Wednesday, March 11, 2009
Financial Crisis, 11 Mar 2009: Dow 6,929.68, +3.19 (+0.05%)
Today the market flirted with the 7,000 mark, crested it, and then spent the day in up-and-down trading. A late-in-the-afternoon rally almost brought the Dow to a close at the 7,000 mark, before a final tumble to close just 3 points higher than the previous day.
The intraday low was 6,867.55, meaning that the present support for this level is not firmly established. With the Dow plunging and rising hundreds of points per day, we will likely see a great deal of volatility yet to come.
The general trend for the day was a rapid peak in the AM, followed by a long steady decline. The reversal of that trend to the end-of-the-day rally somewhat mirrors the experience of 6 March 2009, when the market hit new recent lows.
The good news is that at 6,929.68, the Dow has recovered 7.6% from the low of 6,440.08. The unknown propositions are whether it will be able to remain above that point, and whether we have reached a valley, or a bump on the downward slope.
The airline industry, for one, sees that there may be some fair weather flying ahead. Delta, for one, saw “revenue trends stabilizing and not getting worse.” BofA-Merrill Lynch even upgraded JetBlue.
The issue about whether we’ve reached bottom requires everyone to consider “capitulation.” When some people simply abandon their positions in the market and take their losses. Mark Hulbert of MarketWatch is not convinced we’ve reached a point of capitulation yet, and warns that to be too overly bullish at present may be mistaking a bear market rally for the real McCoy of a reversal of a down trend.
The intraday low was 6,867.55, meaning that the present support for this level is not firmly established. With the Dow plunging and rising hundreds of points per day, we will likely see a great deal of volatility yet to come.
The general trend for the day was a rapid peak in the AM, followed by a long steady decline. The reversal of that trend to the end-of-the-day rally somewhat mirrors the experience of 6 March 2009, when the market hit new recent lows.
The good news is that at 6,929.68, the Dow has recovered 7.6% from the low of 6,440.08. The unknown propositions are whether it will be able to remain above that point, and whether we have reached a valley, or a bump on the downward slope.
The airline industry, for one, sees that there may be some fair weather flying ahead. Delta, for one, saw “revenue trends stabilizing and not getting worse.” BofA-Merrill Lynch even upgraded JetBlue.
The issue about whether we’ve reached bottom requires everyone to consider “capitulation.” When some people simply abandon their positions in the market and take their losses. Mark Hulbert of MarketWatch is not convinced we’ve reached a point of capitulation yet, and warns that to be too overly bullish at present may be mistaking a bear market rally for the real McCoy of a reversal of a down trend.
Financial Crisis, 10 Mar 2009: Dow 6,926.49, +379.44 (+5.8%)
Yesterday the Dow Jones Industrial Average (DJI) roared back up 379.44 points to close at 6,926.49, up 5.8% on the day. This raised the Dow to close to its February close, just above 7,000.
The good news in perspective shows how far the market has yet to recover. It was still down over 2,000 points on the calendar year 2009, which it began over 9,000. For the full twelve month proceeding period, it is far off the 13,000+ value it held back in May 2008. It is estimated by Stephen Schwarzman of Blackstone Group LP that 40-45% of the world’s wealth has been destroyed by the downturn.
Yet for Wall Street and for those dependent on their portfolio, 10 March 2009 was a welcome relief.
The market cited the reason for the significant uptick was surprising news from Citibank, which internally shared a memo it had made a profit in the first two months of 2009. That message leaked to the market, and there was a definite bounce.
Other good news included Rep. Barney Frank, Chairman of the House Financial Services Committee, saying that the “uptick” rule, which curbs short selling, may be reimposed by the Securities and Exchange Commission. While in prior days many free market philosophies would have seen this as government interference, in today’s market active involvement of watchdogs is seen as a healthy thing for all parties.
The good news in perspective shows how far the market has yet to recover. It was still down over 2,000 points on the calendar year 2009, which it began over 9,000. For the full twelve month proceeding period, it is far off the 13,000+ value it held back in May 2008. It is estimated by Stephen Schwarzman of Blackstone Group LP that 40-45% of the world’s wealth has been destroyed by the downturn.
Yet for Wall Street and for those dependent on their portfolio, 10 March 2009 was a welcome relief.
The market cited the reason for the significant uptick was surprising news from Citibank, which internally shared a memo it had made a profit in the first two months of 2009. That message leaked to the market, and there was a definite bounce.
Other good news included Rep. Barney Frank, Chairman of the House Financial Services Committee, saying that the “uptick” rule, which curbs short selling, may be reimposed by the Securities and Exchange Commission. While in prior days many free market philosophies would have seen this as government interference, in today’s market active involvement of watchdogs is seen as a healthy thing for all parties.
Friday, March 6, 2009
Financial Crisis, 6 Mar 2009: Dow 6,626.94, +32.50 (+0.49%)
The Tao of Dow
The week ended on a massive rally. An brisk morning start began Wall Street’s day 50 points higher than the prior evening’s close, and a quick surge led the Dow Jones Industrial Average (DJIA) to an early intraday high of 6,755.17.
However, the swift exuberance was extinguished shortly after 9:45 AM, and the rest of the day was a rocky decline, dipping below the 6,500 level before before 3:00 pm. The intraday low of 6,470.11 was hit right around 3:24 pm. Then, something sparked in the market, and the last half-hour was filled with a massive upsurge to close at 6,626.94. For the day, the Dow was up +32.50 (+0.49%).
It was the silver lining to a terrible week. Had the last half-hour not occurred, the market would have been down over 400 points on the week. As it was, it was “only” down a little over 300 points, from 6,932.23 Monday’s opening to Friday’s close at 6,626.94. This is net drop of 4.4% for the week as a whole. Except for one thing.
The prior week’s Friday close was 7,062.93. Given a Friday-to-Friday analysis, the week was down just shy of 436, or –6.17%.
The market had held up reasonably well for the first half of the week, cresting the 6,950 point twice in the week (Monday and Wednesday). Yet resistance collapsed on Thursday and Friday with the terrible economic news of more job losses and talks of insolvency for General Motors.
Unemployment Rate Crests 8.0%
As reported by Madlen Reed of the Associated Press, the U.S. government’s Bureau of Labor Statistics released figures that the economy has been shedding well over 600,000 jobs each month for the past quarter:
One can read the Bureau’s report directly online. The release of the Employment Situation begins grimly:
Otherwise, key opportunities will pass for small businesses and individuals too, causing markets to shut down completely.
The stimulus bill, ideally, is geared to address joblessness immediately. Without a change in the current economy, joblessness will rise to well over 10-12% in the span of the next quarter or two, causing even more chaos.
Rent and Torn
While everyone is focused presently upon the home buyers fiasco, increasing unemployment can also lead to massive disruptions to renters also. Property management companies are being hit as people have to leave their present rentals as jobs dry up, or they may decide to room together to save rent, Many newly completed apartment complexes or recently purchased properties are finding they are already underwater and priced out of the present market.
The UK is seeing a rapid decline in rental values over the past year, upwards of 11.7% in areas around London, and 14.3% around Manchester, as the economy tightens and more home owners put unsold properties out for let.
New York City is likewise seeing a decline in rentals, too. Given various incentives being offered by landlords, rates have been calculated to have dropped upwards of 10-15%, as reported by the New York Times on 30 January 2009.
The word “recession” has been used so far, though the use of the term “depression” is now starting to be considered, such as by this article in the Salt Lake Tribune. We would have to reach an unemployment rate of 10% and be in this crisis for three years before it formally qualifies according to technical definitions. The old joke cited by Amity Shlaes indicates the key difference: “A recession is when you lose your job. A depression is when I lose mine.”
Yet for many in the United States today, the symptoms already clearly indicate the condition. Such patients cannot afford to wait for the formal diagnosis. And for millions this is not an easy joke to laugh off.
The week ended on a massive rally. An brisk morning start began Wall Street’s day 50 points higher than the prior evening’s close, and a quick surge led the Dow Jones Industrial Average (DJIA) to an early intraday high of 6,755.17.
However, the swift exuberance was extinguished shortly after 9:45 AM, and the rest of the day was a rocky decline, dipping below the 6,500 level before before 3:00 pm. The intraday low of 6,470.11 was hit right around 3:24 pm. Then, something sparked in the market, and the last half-hour was filled with a massive upsurge to close at 6,626.94. For the day, the Dow was up +32.50 (+0.49%).
It was the silver lining to a terrible week. Had the last half-hour not occurred, the market would have been down over 400 points on the week. As it was, it was “only” down a little over 300 points, from 6,932.23 Monday’s opening to Friday’s close at 6,626.94. This is net drop of 4.4% for the week as a whole. Except for one thing.
The prior week’s Friday close was 7,062.93. Given a Friday-to-Friday analysis, the week was down just shy of 436, or –6.17%.
The market had held up reasonably well for the first half of the week, cresting the 6,950 point twice in the week (Monday and Wednesday). Yet resistance collapsed on Thursday and Friday with the terrible economic news of more job losses and talks of insolvency for General Motors.
Unemployment Rate Crests 8.0%
As reported by Madlen Reed of the Associated Press, the U.S. government’s Bureau of Labor Statistics released figures that the economy has been shedding well over 600,000 jobs each month for the past quarter:
| Month | Job Losses | Jobless % |
| December 2008 | 681,000 | 7.2% |
| January 2009 | 655,000 | 7.6% |
| February 2009 | 651,000 | 8.1% |
One can read the Bureau’s report directly online. The release of the Employment Situation begins grimly:
Nonfarm payroll employment continued to fall sharply in February (-651,000), and the unemployment rate rose from 7.6 to 8.1 percent… Payroll employment has declined by 2.6 million in the past 4 months. In February, job losses were large and widespread across nearly all major industry sectors…As major corporations continue to have unstaunched losses, and as Wall Street melts, the possibility is for small corporations and individuals to move into market segments to compete — if, and this is a big if — they are able to free their own capital or to raise funds from other sources, and if market conditions and regulations allow them to enter business unfettered.
The number of unemployed persons increased by 851,000 to 12.5 million in February, and the unemployment rate rose to 8.1 percent. Over the past 12 months, the number of unemployed persons has increased by about 5.0 million, and the unemployment rate has risen by 3.3 percentage points.
Among the unemployed, the number of job losers and persons who completed temporary jobs increased by 716,000 to 7.7 million in February. This measure has grown by 3.8 million in the last 12 months.
The number of long-term unemployed (those jobless for 27 weeks or more) increased by 270,000 to 2.9 million in February. Over the past 12 months, the number of long-term unemployed was up by 1.6 million.
Otherwise, key opportunities will pass for small businesses and individuals too, causing markets to shut down completely.
The stimulus bill, ideally, is geared to address joblessness immediately. Without a change in the current economy, joblessness will rise to well over 10-12% in the span of the next quarter or two, causing even more chaos.
Rent and Torn
While everyone is focused presently upon the home buyers fiasco, increasing unemployment can also lead to massive disruptions to renters also. Property management companies are being hit as people have to leave their present rentals as jobs dry up, or they may decide to room together to save rent, Many newly completed apartment complexes or recently purchased properties are finding they are already underwater and priced out of the present market.
The UK is seeing a rapid decline in rental values over the past year, upwards of 11.7% in areas around London, and 14.3% around Manchester, as the economy tightens and more home owners put unsold properties out for let.
New York City is likewise seeing a decline in rentals, too. Given various incentives being offered by landlords, rates have been calculated to have dropped upwards of 10-15%, as reported by the New York Times on 30 January 2009.
The word “recession” has been used so far, though the use of the term “depression” is now starting to be considered, such as by this article in the Salt Lake Tribune. We would have to reach an unemployment rate of 10% and be in this crisis for three years before it formally qualifies according to technical definitions. The old joke cited by Amity Shlaes indicates the key difference: “A recession is when you lose your job. A depression is when I lose mine.”
Yet for many in the United States today, the symptoms already clearly indicate the condition. Such patients cannot afford to wait for the formal diagnosis. And for millions this is not an easy joke to laugh off.
Friday, February 27, 2009
Financial Crisis, 25 Feb 2009: Dow 7,062.93, -119.15 (-1.66%)
Today began and ended badly, with a bit of modest hope in the middle.
At the opening bell, the Dow opened far below the close of the prior day, at 7,099.49. Within the first hour, it had sunk to an intraday low of 7,033.62. The rest of the morning was an uphill struggle. By noon the index climbed to 7,180, but met resistance which it was unable to overcome.
The rest of the afternoon was filled with Wall Street digesting the most recent proposal for the U.S. government to salvage ailing Citicorp, along with news of the worst annualized quarterly dip in GDP for the past 25 years: a drop of 6.2% in the fourth quarter of 2008.
During the afternoon, the market eroded. From the intraday high of 7,195.46, prices tumbled first after the 2:00 pm bell, then after the 3:00 pm bell, and finally, in the minutes before the closing 4:00 pm bell, until the market closed at 7,062.62, thus setting a new annual low.
In all, the U.S. market has already lost 18%-20% of its value since the beginning of the year.
Market Index Performance
27 February 2009
DJIA
Day: -119.15, –1.66%
Week: –4.1%
February: 11.7%
Year-to-Date: –19.5%
S&P500
Day:
Week: –4.5%
February: 11%
Year-to-Date: –18.6%
NASDAQ Composite Index (COMPX)
Day: –13.63; –0.98%
Week: –4.4%
February: 6.7%
Year-to-Date: –12.6%
Wilshire 5000
Day: –145.50, –1.91% (7,473.97)
Week: –4.96% (from 7,863.89)
February: –10.42% (from 8,343.79)
Year-to-Date: –20.2% (from 9,364.50)
Sources:
At the opening bell, the Dow opened far below the close of the prior day, at 7,099.49. Within the first hour, it had sunk to an intraday low of 7,033.62. The rest of the morning was an uphill struggle. By noon the index climbed to 7,180, but met resistance which it was unable to overcome.
The rest of the afternoon was filled with Wall Street digesting the most recent proposal for the U.S. government to salvage ailing Citicorp, along with news of the worst annualized quarterly dip in GDP for the past 25 years: a drop of 6.2% in the fourth quarter of 2008.
During the afternoon, the market eroded. From the intraday high of 7,195.46, prices tumbled first after the 2:00 pm bell, then after the 3:00 pm bell, and finally, in the minutes before the closing 4:00 pm bell, until the market closed at 7,062.62, thus setting a new annual low.
In all, the U.S. market has already lost 18%-20% of its value since the beginning of the year.
Market Index Performance
27 February 2009
DJIA
Day: -119.15, –1.66%
Week: –4.1%
February: 11.7%
Year-to-Date: –19.5%
S&P500
Day:
Week: –4.5%
February: 11%
Year-to-Date: –18.6%
NASDAQ Composite Index (COMPX)
Day: –13.63; –0.98%
Week: –4.4%
February: 6.7%
Year-to-Date: –12.6%
Wilshire 5000
Day: –145.50, –1.91% (7,473.97)
Week: –4.96% (from 7,863.89)
February: –10.42% (from 8,343.79)
Year-to-Date: –20.2% (from 9,364.50)
Sources:
Thursday, February 26, 2009
Financial Crisis, 25 Feb 2009: Dow 7,181.78, -88.81 (-1.22%)
Once again the Dow closed down below 7,200. It was up for most of the day, peaking in the morning hours above 7,400 (7,204.31 to be precise), before cascading down the rest of the day.
This is the fourth day this week the Dow sunk below 7,200, and the second day this week it closed below that point. Based on the trend established after declining from the highs over 9,000 around early January, the Dow seems poised to fall to 7,000.
Tomorrow may prove a crucial test of support above that number.
This is the fourth day this week the Dow sunk below 7,200, and the second day this week it closed below that point. Based on the trend established after declining from the highs over 9,000 around early January, the Dow seems poised to fall to 7,000.
Tomorrow may prove a crucial test of support above that number.
Tuesday, February 24, 2009
Financial Crisis, 24 Feb 2009: Worldwide Slump, Latvia Collapses
Mountain View, CA (Global Understanding)
Markets around the world are reeling at the pressures brought about by the global economic crisis. It cuts across all sectors: financial, credit, manufacturing, exports, energy, transportation, tech. There are few safe haven economies, few stocks, few sectors. According to reports from the Davos conference, the global crisis in the past five tumultuous quarters has already destroyed 40% of the world’s wealth.
Latvia Collapses, Eastern Europe Teeters
In addition, governments are continuing to collapse due to the strain of recession. First there was Iceland. Now the east of Europe braces itself. Latvia is in the throws of a 12% retraction of its economy. Under intense domestic pressure, including violent protests in January, Latvia’s Prime Minister and government resigned on Monday (22 Feb 2009). The IMF plan to rescue its economy is at risk of faltering. Swedish banks, who hold much of Latvia’s debt obligations, are worried over default.
All of Eastern Europe is teetering on the brink. The Ukraine, a far larger nation than Latvia, is likewise facing a 12% contraction of its economy. An outstanding debt obligation of $1.7 trillion from Eastern European nations towards the rest of Europe represents a hanging sword over the Euro zone economies.
If even 10% of the debt of Eastern Europe defaults, as many fear including Ambrose Evans-Pritchard writing in the 15 February Daily Telegraph, it can cause a panic in the Western European economies and lead to a global economic collapse.
The Human Toll: 400,000 More Children Projected to Die in 2009
To put the global crisis in perspective, the World Bank now estimates that an an additional 400,000 children around the world will die in 2009 due to their families falling into extreme poverty. That is an increase in the overall global death rate of 6 per 100,000.
It is the equivalent of taking the entire urban population of a city the size of Miami, Florida, or Oakland, California, and starving it to death.
Though times are tight, consider providing to an international relief organization this year. You may save a life, or a whole family.
Markets around the world are reeling at the pressures brought about by the global economic crisis. It cuts across all sectors: financial, credit, manufacturing, exports, energy, transportation, tech. There are few safe haven economies, few stocks, few sectors. According to reports from the Davos conference, the global crisis in the past five tumultuous quarters has already destroyed 40% of the world’s wealth.
Latvia Collapses, Eastern Europe Teeters
In addition, governments are continuing to collapse due to the strain of recession. First there was Iceland. Now the east of Europe braces itself. Latvia is in the throws of a 12% retraction of its economy. Under intense domestic pressure, including violent protests in January, Latvia’s Prime Minister and government resigned on Monday (22 Feb 2009). The IMF plan to rescue its economy is at risk of faltering. Swedish banks, who hold much of Latvia’s debt obligations, are worried over default.
All of Eastern Europe is teetering on the brink. The Ukraine, a far larger nation than Latvia, is likewise facing a 12% contraction of its economy. An outstanding debt obligation of $1.7 trillion from Eastern European nations towards the rest of Europe represents a hanging sword over the Euro zone economies.
If even 10% of the debt of Eastern Europe defaults, as many fear including Ambrose Evans-Pritchard writing in the 15 February Daily Telegraph, it can cause a panic in the Western European economies and lead to a global economic collapse.
The Human Toll: 400,000 More Children Projected to Die in 2009
To put the global crisis in perspective, the World Bank now estimates that an an additional 400,000 children around the world will die in 2009 due to their families falling into extreme poverty. That is an increase in the overall global death rate of 6 per 100,000.
It is the equivalent of taking the entire urban population of a city the size of Miami, Florida, or Oakland, California, and starving it to death.
Though times are tight, consider providing to an international relief organization this year. You may save a life, or a whole family.
Monday, February 23, 2009
Financial Crisis, 23 Feb 2009: Dow 7,114.78, -3.41%
Mountain View, CA (Global Understanding Institute)
Today was another bottom-bursting day for the U.S. stock market. The Dow Jones Industrial Average (DJIA:DJI) plunged 250.89 points, or 4.31%, to settle at 7,114.78. The last time the index closed this low was in 1997, over a decade ago.
The broader Standard & Poor’s 500 (SP500) was also down 26.72, or 3.47%, closing at 743.33. Both indexes are off by about 50% from their highs back in October 2007, and are back to levels of April-May 1997.
The NASDAQ index was also down 53.51, or 3.71%, closing at 1,387.72.
Dow Down and Chernin On the Way Out
Speaking of a falling of the value of the Dow, News Corp (NASDAQ:NWSA), the company that bought the venerable Dow Jones corporation for $5 billion in 2007, dropped $0.26, or 4.3%, to close at $5.78.
News Corp announced the planned departure of Peter F. Chernin, its #2 executive under Rupert Murdoch, when his contract comes due in June. Mr. Chernin, a Democrat, was known to have significant contentions with members of the Murdoch family, and with other executives in the Fox News division. This latest plunge brings News Corp down to about a quarter (25.53%) of the value its 52-week high of $22.64.
Stimulus in Time?
In an indirect reply to Republican Governor Jindal of Louisiana, Barack Obama spoke at the National Governors’ Association dinner about whether the stimulus was partisan pork (Jindal’s contention) or bipartisan recognition of necessity (Obama’s position).
Yet there is a sharp rise in concern about the Federal deficit. Overall, 59% of surveyed Americans in a Washington Post-ABC News poll described themselves as “very concerned” with the budget deficit, up 10 percentage points over when President Bush was in office. Under President Bush the U.S. debt grew from approximately $5 trillion to $10 trillion, the projected debt is presently at $10.85 trilion (as per the Brillig.com U.S. National Debt Clock). It is likely to rise to more than $12 trillion in 2009 through bailouts, the stimulus package, and a revenue shortfall due to the recession.
One looming question remains: whether the medicine of the stimulus package can be administered to the patient quick enough to prevent more castastrophic organ failure in the meanwhile. One dire scenario paints a default of the U.S. public debt by summer 2009. China has started to lose its appetite for U.S. dollars, and will have to afford its own $600 billion internal stimulus bill in 2009.
He also needs to, and has pledged to bring down the ballooning Federal deficit so that longer term massive budgetary hemmoraghing can be staunched. It is already at $1.3 trillion and may rise as high as $1.5 - $2 trillion in 2009. Plans released today by the Obama administration set goals of having the deficit to $533 billion by 2013.
In order to pull off this massive restructuring of the U.S. economy, indeed, the global economy, many things have to go right. It will take a combination of best faith efforts, cooperation, innovation, good governance, and the right amount of sheer luck for all the factors to fall into place.
Today was another bottom-bursting day for the U.S. stock market. The Dow Jones Industrial Average (DJIA:DJI) plunged 250.89 points, or 4.31%, to settle at 7,114.78. The last time the index closed this low was in 1997, over a decade ago.
The broader Standard & Poor’s 500 (SP500) was also down 26.72, or 3.47%, closing at 743.33. Both indexes are off by about 50% from their highs back in October 2007, and are back to levels of April-May 1997.
The NASDAQ index was also down 53.51, or 3.71%, closing at 1,387.72.
Dow Down and Chernin On the Way Out
Speaking of a falling of the value of the Dow, News Corp (NASDAQ:NWSA), the company that bought the venerable Dow Jones corporation for $5 billion in 2007, dropped $0.26, or 4.3%, to close at $5.78.
News Corp announced the planned departure of Peter F. Chernin, its #2 executive under Rupert Murdoch, when his contract comes due in June. Mr. Chernin, a Democrat, was known to have significant contentions with members of the Murdoch family, and with other executives in the Fox News division. This latest plunge brings News Corp down to about a quarter (25.53%) of the value its 52-week high of $22.64.
Stimulus in Time?
In an indirect reply to Republican Governor Jindal of Louisiana, Barack Obama spoke at the National Governors’ Association dinner about whether the stimulus was partisan pork (Jindal’s contention) or bipartisan recognition of necessity (Obama’s position).
U.S. popular sentiment is overwhelmingly on the President’s side at this time. And that time is limited. A Washington Post-ABC poll projects about two-thirds (64%) of Americans support the $787 billion stimulus bill.You know, when I hear people say, “Well, there’s a lot of waste in this program,” well -- from my perspective at least, keeping teachers in the classroom is not wasteful; from my perspective, tax cuts to 95% of working families is not wasteful; from my perspective, providing all of you additional resources to rebuild roads and bridges and levees and dams that will enhance the quality of life of your state but also make it more economically competitive -- that’s not wasteful.
And so, if we agree on 90% of this stuff, and we’re spending all our time on television arguing about 1, 2, 3 percent of the spending in this thing, and somehow it’s being characterized in broad brush as wasteful spending, that starts sounding more like politics. And that’s what right now we don’t have time to do. ...
— President Barack Obama
Yet there is a sharp rise in concern about the Federal deficit. Overall, 59% of surveyed Americans in a Washington Post-ABC News poll described themselves as “very concerned” with the budget deficit, up 10 percentage points over when President Bush was in office. Under President Bush the U.S. debt grew from approximately $5 trillion to $10 trillion, the projected debt is presently at $10.85 trilion (as per the Brillig.com U.S. National Debt Clock). It is likely to rise to more than $12 trillion in 2009 through bailouts, the stimulus package, and a revenue shortfall due to the recession.
One looming question remains: whether the medicine of the stimulus package can be administered to the patient quick enough to prevent more castastrophic organ failure in the meanwhile. One dire scenario paints a default of the U.S. public debt by summer 2009. China has started to lose its appetite for U.S. dollars, and will have to afford its own $600 billion internal stimulus bill in 2009.
He also needs to, and has pledged to bring down the ballooning Federal deficit so that longer term massive budgetary hemmoraghing can be staunched. It is already at $1.3 trillion and may rise as high as $1.5 - $2 trillion in 2009. Plans released today by the Obama administration set goals of having the deficit to $533 billion by 2013.
In order to pull off this massive restructuring of the U.S. economy, indeed, the global economy, many things have to go right. It will take a combination of best faith efforts, cooperation, innovation, good governance, and the right amount of sheer luck for all the factors to fall into place.
U.S. Pledges $900 Million in Aid to Gaza
The total cost of the destruction of the war in Gaza was estimated initially at $1.9 billion (see the Global Understanding 19 January 2009 report). Now the U.S. is proposing picking up about half the cost of rebuilding via direct aid to the people of the devastated territory.
The U.S. must balance its involvement carefully. It must avoid fomenting anti-U.S. sentiment and touching off more unrest in the region. It must avoid antagonizing the Hamas-led local government, which will be made even more complex because the U.S. will not allow the donated funds to be handled by the Hamas government. It may stand accused of working as a collaborator with Israel for the political-economic control of the area.
Other Arab nations are also donating funds. Saudi Arabia is putting in $1 billion. Qatar is donating $250 million, and added another $30 million to U.N. projects in Gaza.
This puts the total pledged contributions to rebuild Gaza from three donors alone at over the recent estimations of damages: $1 billion (Saudi Arabia) + $900 m (U.S.) + $250 m (Qatar) = $2.15 billion pledges vs. $1.9 billion damages.
However, such pledges still need to be approved by the U.S. Congress, which is faced with a gigantic U.S. deficit and a local economic crisis of its own to deal with.
Financial aid may or may not be welcomed. It may or may not be siezed or diverted from its intended use. Many variables remain between the proverbial road paved with good intentions and the creation of actual paved roads.
Lastly, it must be recognized that any amount of economic contribution cannot ever directly heal the psychic traumas suffered by the population, fully heal the crippled and wounded, or raise the dead. There will be animosities, distrusts, and underminings of efforts for years to come. Such pains and hard hearts will be require time for any deep trust and for a lasting truce to build.
The U.S. must balance its involvement carefully. It must avoid fomenting anti-U.S. sentiment and touching off more unrest in the region. It must avoid antagonizing the Hamas-led local government, which will be made even more complex because the U.S. will not allow the donated funds to be handled by the Hamas government. It may stand accused of working as a collaborator with Israel for the political-economic control of the area.
Other Arab nations are also donating funds. Saudi Arabia is putting in $1 billion. Qatar is donating $250 million, and added another $30 million to U.N. projects in Gaza.
This puts the total pledged contributions to rebuild Gaza from three donors alone at over the recent estimations of damages: $1 billion (Saudi Arabia) + $900 m (U.S.) + $250 m (Qatar) = $2.15 billion pledges vs. $1.9 billion damages.
However, such pledges still need to be approved by the U.S. Congress, which is faced with a gigantic U.S. deficit and a local economic crisis of its own to deal with.
Financial aid may or may not be welcomed. It may or may not be siezed or diverted from its intended use. Many variables remain between the proverbial road paved with good intentions and the creation of actual paved roads.
Lastly, it must be recognized that any amount of economic contribution cannot ever directly heal the psychic traumas suffered by the population, fully heal the crippled and wounded, or raise the dead. There will be animosities, distrusts, and underminings of efforts for years to come. Such pains and hard hearts will be require time for any deep trust and for a lasting truce to build.
Wednesday, February 4, 2009
ƒ((Think+Act)•(Local+National+Regional+Global))
The old “think global, act local” paradigm needs to be both local and global thinking and acting. If we just think about what is going on overseas, and we do not act upon it, it is the political equivalent of the mathematician who mentally solved for preparing a month’s worth of meals and starved to death because he left the implementation of the proof to others. We have to think local and act local. Plus, we have to think global and act upon such thoughts. We also need to think in scalable terms. “Local” can be defined as a neighborhood or village. Or a city, a county, or even a state. There are holistic paradigms beyond the nation as well: regions, alliances, continents. Where do we focus ourselves? Locally? Nationally? Internationally? The right answer is a Boolean “AND” statement.
This global crisis is unprecedented. Because we are mutually interdependent as national and regional economies we cannot just solve our issues at home, or foist them off on others abroad.
There are a few events coming up to deal with economic events, both on a local, national, and global basis:
Local:
If you have more thoughts on the state of the economy in your area or around the world please share your thoughts. We can also use a “Economic Crisis” volunteer group to work more on collective information gathering, analysis and policy work. Please contact us if you would like to share your experience, knowledge, and ideas, and to become involved.
Peter Corless.
petercorless@mac.com
650-906-3134 (mobile)
This global crisis is unprecedented. Because we are mutually interdependent as national and regional economies we cannot just solve our issues at home, or foist them off on others abroad.
There are a few events coming up to deal with economic events, both on a local, national, and global basis:
Local:
- Puppy Love (Economic Recovery Meeting), Mountain View, CA, Saturday, 7 February, 12:00 - 6:00 pm, 551 Chiquita Avenue, Mountain View, CA
- Economic Recovery Potluck (Economic Recovery Meeting), Palo Alto, CA, Sunday, February 8 from 1:00 PM - 3:00 PM, 400 Miramonte Avenue, Palo Alto, CA 94306
- Financing the United Nations: More Effective Funding for Global Priorities, 11 February 2009, 9:30 AM - 2:30 PM, Global Policy Forum, New York City
- Forum on the Solidarity Economy 2009: Building Another World, 19-22 March 2009, University of Massachusetts, Amherst
- LUX ’09 International Forum - Globalisation of Solidarity, 22-25 April 2009, Schifflange, Luxembourg
- World Economic Forum, various annual and special events
If you have more thoughts on the state of the economy in your area or around the world please share your thoughts. We can also use a “Economic Crisis” volunteer group to work more on collective information gathering, analysis and policy work. Please contact us if you would like to share your experience, knowledge, and ideas, and to become involved.
Peter Corless.
petercorless@mac.com
650-906-3134 (mobile)
Thursday, January 29, 2009
Showdown at Davos
Where to start?
The World Economic Forum summit of global leaders held this week at Davos, Switzerland, has been the economic equivalent of the shootout at the OK Corral.
(Putin speaks out at Davos' opening; Source: RT; Time: 31:20)
It behooves each world leader to admit their own nation’s contribution to the problem. Each can say many domestically-pleasing, often-too-safe and sage-sounding points, plinking their neighbors and rivals with rhetorical spitwads, and leave aside much of the trash in their own backyards. The harder work is in mapping a way past such parochialism.
It is all-too-easy to blame the West. Indeed, the U.S. is definitely culpable for much of the mess occurring in the world today. The EU as well. However, each nationstate on the planet is in its own way a contributor to and participant in the present crisis. In other ways, each is a necessary partner for the solutions.
What none of the global leaders seemed to be able to do was to offer a mea culpa, and accept responsibility for their part in the creation of the problem. The Chinese Premier described China specifically as a “responsible nation,” yet he meant that as a way to praise his regime’s leadership, not as an acceptance of its role in causing the present harm.
Of all the leaders, and even for all of his self-congratulatory praise of Russia, Vladimir Putin must be credited for being focused most on the future and the collective dialogue, rather than the insular defense of the status quo, celebration of past successes, or place in the present status.
The real question is which of the various world leaders in office today will step up to the role of key moderators of the global crisis. To gain the trust of others, they must be willing and capable of self-criticism, engendering in their peers the careful balance of spirit in admittance of fault, acceptance of error, while not lowering sights from an end-state goal.
Emergent powerhouse Brazil surely was not interested in such a role, with President Lula instead attending an “anti-capitalist jamboree.” The United States was pretty much sitting on the sidelines too, citing the transition of the new administration. The highest-level administration representative sent to the conference was Senior White House aide Valerie Jarrett.
The most upbeat of speakers featured in the headlines this week from Davos was former U.S. President Bill Clinton, who said:
The World Economic Forum summit of global leaders held this week at Davos, Switzerland, has been the economic equivalent of the shootout at the OK Corral.
(Putin speaks out at Davos' opening; Source: RT; Time: 31:20)
- 28 January: Vladimir Putin began the gunslinging by delivering a keynote speech indirectly accusing the U.S. and China of steering the world into economic gridlock, and also took a backhanded swipe at the ineffectiveness of the international community containing international crises, and even directly contributing to them: “Frankly speaking, we all know that provoking military and political instability, regional and other conflicts is a helpful means of distracting the public from growing social and economic problems. Such attempts cannot be ruled out, unfortunately.” Carefully parsed, it ignored Russia’s own complicity in many global crises and instead proposed Russia as the solution the world is waiting for. Aside from the inherent propagandistic nature of a national leader speaking before assembled dignatories, his half-hour long speech was filled with many sound fundamental arguments: a depreciation or write-off of bad debts, a return to fundamental economic bases, and a recognition of global economic interdependence: “We should not despair. This crisis can and must be fought, also by pooling our intellectual, moral and material resources.” After his prepared speech, he also turned down a question of assistance from U.S. technology leader Michael Dell. Thus, much of his rhetoric could be described as a sort of political “slap and tickle.” Stingingly rebuking, yet enticing of the possibilities.
- 29 January: In comparison, Putin’s keynote was placid and friendly compared to the heated exchange between Turkish PM Recep Tayyip Erdogan and Israeli President Shimon Perez: Talking about Gaza, Erdogan excoriated a defensive and vocal Perez, accusing the Israeli leader by saying, “You kill people,” and walked off stage. Perez had spent 25 minutes defending Israel’s position, while Erdogan had only gotten 12 minutes in response. He left with an ominous rebuke of the moderators and organizers, “I will not come to Davos again.” Though afterwards, he took time to note that he has maintained a position that anti-Semetism is a crime against humanity, he was supported in his abandonment of the discussion by Arab League Secretary Amr Moussa, who said of the Israeli leadership, “They don’t listen.” Erdogan’s wife went further, saying “All Peres said was a lie. It was unacceptable.”
- 29 January 2009: Chinese Premier Wen Jiabao then verbally opened fire on the U.S. for leading the world down the primrose path into global recession. Not expressly naming his target, he spoke of “excessive expansion of institutions in blind pursuit of profit.” Besides the arresting headline quotes, the full text of his speech is revealing. Of course, China remained blameless in the international march of folly, even as it continues to use eminent domain to seize small farms and village houses to pave the way for giant state-run businesses, industrial plants and hydropower projects, often with little or no compensation. This was referred to obliquely by speaking of China’s plan to “push ahead comprehensive industrial restructuring and upgrading.” He neatly bypassed the issue of China fueling the financing crisis by being the primary beneficiary from buying up U.S. investments and securities, profiting greatly, and then dumping them, such as their withdrawal from Fannie Mae and Freddie Mac in 2008. The road to recovery included a stimulus package for China focused on helping for the rural and poor, investing in infrastructure and specifically mentioning earthquake protection. How much of this was said to reassure the global financial community, and how much was left to address the increasingly unhappy domestic audience of China remains an exercise for the audience. The other statement which could be taken as a staggering exaggeration of fact was this: “Steady and fast growth of China's economy is in itself an important contribution to global financial stability and world economic growth.” For it has been the rapid growth of China’s economy which has in many ways fueled food, resource, ecological and energy crises, and caused instability around the world. To alter the old axiom, “What is good for GM is good for America,” Wen Jiabao tried to argue in effect, “What is good for China is good for the world.” Maybe not so much. Lastly, his speech may have been more to paint a desired vision than an actual condition when he said, “There is harmony and stability in our society.” Again, maybe not so much.
It behooves each world leader to admit their own nation’s contribution to the problem. Each can say many domestically-pleasing, often-too-safe and sage-sounding points, plinking their neighbors and rivals with rhetorical spitwads, and leave aside much of the trash in their own backyards. The harder work is in mapping a way past such parochialism.
It is all-too-easy to blame the West. Indeed, the U.S. is definitely culpable for much of the mess occurring in the world today. The EU as well. However, each nationstate on the planet is in its own way a contributor to and participant in the present crisis. In other ways, each is a necessary partner for the solutions.
What none of the global leaders seemed to be able to do was to offer a mea culpa, and accept responsibility for their part in the creation of the problem. The Chinese Premier described China specifically as a “responsible nation,” yet he meant that as a way to praise his regime’s leadership, not as an acceptance of its role in causing the present harm.
Of all the leaders, and even for all of his self-congratulatory praise of Russia, Vladimir Putin must be credited for being focused most on the future and the collective dialogue, rather than the insular defense of the status quo, celebration of past successes, or place in the present status.
The real question is which of the various world leaders in office today will step up to the role of key moderators of the global crisis. To gain the trust of others, they must be willing and capable of self-criticism, engendering in their peers the careful balance of spirit in admittance of fault, acceptance of error, while not lowering sights from an end-state goal.
Emergent powerhouse Brazil surely was not interested in such a role, with President Lula instead attending an “anti-capitalist jamboree.” The United States was pretty much sitting on the sidelines too, citing the transition of the new administration. The highest-level administration representative sent to the conference was Senior White House aide Valerie Jarrett.
The most upbeat of speakers featured in the headlines this week from Davos was former U.S. President Bill Clinton, who said:
“This financial crisis proves, as nothing else should or could, the fundamental fact that global interdependence is more important than anything else in the world today… We cannot escape each other. Divorce is not an option.We can hope that, in due time, other presently-serving international leaders will echo similar sentiments, backed with cooperative international policies and plans providing a roadmap to the achievement of a new sustainable system of global economics.“This is not a time for denial or delay. Do something. Give people confidence by showing confidence… Don't give up. Don't bet against yourself. Don't bet against your country. This is still a good time to be alive.”
Wednesday, January 21, 2009
Gaza Withdrawal: Revised Casualty Figure: 1,284 Dead, 4,336 Wounded?
Israeli troops complete pullout from Gaza StripThe patterns which had fueled the most recent conflict are beginning again, in many ways returning back to status quo ante. The porous Egyptian border is being used to create a black and grey market for goods.
JERUSALEM (Associated Press) – Israel's last troops left the Gaza Strip on Wednesday, although the cease-fire was frayed when its navy opened fire toward beaches in northern Gaza, and smugglers' tunnels that were targeted in the 23-day campaign against Hamas were active again at the Egyptian border. [Read More]
Returning life to the way things were before a war is generally considered good, when it is a resumption of normal, peaceful civilian life. If it is the resumptions of clandestine arms shipments and other illicit trading, then there will be little accomplished by the offensive to have curbed the systemic hostilities.
The Israeli government has conceded to open an investigation into allegations that white phosphorus (WP) was used against civilian populations. This may have impacts upon the United States’ own behavior, considering the controversy surrounding the use of white phosphorus by U.S. forces in Fallujah in 2005. Amnesty International’s Briefing on Applicable Law on Gaza clarifies the argument in terms of standards of international law.
First war tally: 1,284 Gazans dead, 4,336 woundedThe good news, such as it is, contends that according to these revised casualty figures, less people are dead and wounded than first reported. These revised figures from the Palestinian Center for Human Rights bring down the initial reports of 1,324 dead and 5,400 wounded. However, that latter figure is still the one cited by the Health Ministry. The difference comes from what constitutes a “casualty.” The ministry counted psychological trauma as well as physical injury, where the rights center did not. The rights group also contends the Health Ministry double-counted certain casualties.
KHAN YOUNIS (Associated Press), Gaza Strip – Squatting in the rubble, his briefcase perched atop his knees, the human rights researcher interviewed residents of a house shelled by Israel as he compiled a list of Gazans killed and wounded during Israel's offensive against Hamas.Yasser Abdel Ghafar's work is part of a painstaking endeavor by the Palestinian Center for Human Rights to count the casualties of the 23-day war. The group released a final tally Wednesday, saying 1,284 Gazans were killed and 4,336 wounded, the vast majority civilians. [Read More]
Israel, for its part, disputes both figures, stating both reports severely undercount the number of combatants. It will take time to sort the truth from the propaganda. Yet for now, children are still having pieces of white phosphorus picked out of their wounds, detected only when smoke started pouring out from under their bandages.
Saturday, January 17, 2009
Lord’s Resistance Army (LRA): 620 Dead, 400 Abducted, 100,000 Refugees
Readers Caution: The following report contains graphic descriptions of brutality and violence.
While Gaza maintains the top headlines, deep in the bowels of Africa the Lord’s Resistance Army (LRA) has spread its brand of violence across four nations. Uganda, Sudan, the Democratic Republic of Congo (DR Congo), and the Central African Republic (CAR) have all reported violent attacks and increasing incursions.
Since an offensive started during the Christmas Massacres of 2008, 620 are dead, 400 were abducted, and 100,000 refugees have fled their homes. The death toll is difficult to establish. The figure of 620 comes from a report released today by Human Rights Watch. It covers the period from 24 December 2008 to 13 January 2009. Other organizations have cited 400 or 500. The latter figure was used by the United Nations Security Council (UNSC) condemnation of the events occurring. Yet one this is certain: the number is rising.
Yet the UNSC has little direct sway over events. The Lord’s Resistance Army is not a member of the United Nations. Thus sanctions and threats hold little influence over their actions. The facts on the ground show who has power. And the LRA is not withholding any of its power, which it has unleashed upon innocent people region-wide.
Disfigurement, dismemberment, looting, raping, sexual slavery, kidnapping, and the burning of schools, churchs, even whole villages make it sound like this was a modern day advent of the Vikings. Some science fiction dystopia. But this is not a historical textbook or a Hollywood movie. This is true, raw human brutality. Bats and axes used to cause the mass-murders have been found left behind at the scenes of carnage.
While Gaza maintains the top headlines, deep in the bowels of Africa the Lord’s Resistance Army (LRA) has spread its brand of violence across four nations. Uganda, Sudan, the Democratic Republic of Congo (DR Congo), and the Central African Republic (CAR) have all reported violent attacks and increasing incursions.
Since an offensive started during the Christmas Massacres of 2008, 620 are dead, 400 were abducted, and 100,000 refugees have fled their homes. The death toll is difficult to establish. The figure of 620 comes from a report released today by Human Rights Watch. It covers the period from 24 December 2008 to 13 January 2009. Other organizations have cited 400 or 500. The latter figure was used by the United Nations Security Council (UNSC) condemnation of the events occurring. Yet one this is certain: the number is rising.
Yet the UNSC has little direct sway over events. The Lord’s Resistance Army is not a member of the United Nations. Thus sanctions and threats hold little influence over their actions. The facts on the ground show who has power. And the LRA is not withholding any of its power, which it has unleashed upon innocent people region-wide.
Disfigurement, dismemberment, looting, raping, sexual slavery, kidnapping, and the burning of schools, churchs, even whole villages make it sound like this was a modern day advent of the Vikings. Some science fiction dystopia. But this is not a historical textbook or a Hollywood movie. This is true, raw human brutality. Bats and axes used to cause the mass-murders have been found left behind at the scenes of carnage.
“Hundreds of people have been slaughtered and this just goes on,” said Joel Bisubu of Justice Plus. “We need food and medical supplies for the injured, but even more, we need protection.”Justice Plus is a Congolese NGO. Joel Bisubu is quite familiar with the carnage of Sub-Saharan Africa, having reported on it for years.
“People are forced to choose between peace and justice. But you can't have peace without justice. The people who are dead are dead. But if you try to compromise peace for justice, that doesn't help.”Human Rights Watch, though, backdates the latest outbreak of violence to a combined offensive begun by Uganda, with the support of Sudan, Central African Republic and the Democratic Republic of Congo:— Joel Bisubu, regarding the Congolese civil war, 2006
“The LRA attacks followed the beginning of a joint military operation on December 14, led by the Ugandan army with support from the Congolese, Southern Sudanese, and Central African Republic armies. The Ugandan army attacked the LRA headquarters in Congo's Garamba National Park, near the border with Sudan.Following the attack, the LRA dispersed into several groups, each of which targeted civilians along its path. The rebels waited until December 24 for the most devastating of their attacks, waiting until people had come together for Christmas festivities, then surrounding and killing them by crushing their skulls with axes, machetes, and large wooden bats. Most of the few who survived also had head wounds, but two 3-year-old girls had serious neck injuries, suffered when LRA combatants tried to twist off their heads.
In the village of Batande, three miles from Doruma, near the Sudanese border, the LRA killed at least 80 people on December 25 when village residents had gathered for Christmas lunch after the morning church service. LRA members surrounded the people, tied them up with rope or rubber strips from bicycle tires, and then separated the men and boys from the women and girls. They took the men and boys about 40 meters from the church and killed them immediately with blows to the head. They took the women and girls into the forest in small groups and raped many of them before crushing their skulls.”
It is obvious that “Operation Lighting Thunder” the military offensive designed to purge the region or force the LRA to sign a peace deal, only stirred the hornet’s nest. After the 14 December campaign opened against them, all pretense of ethical behavior and all the laws of war were thrown out the window. Any Christian beliefs once espoused by the Lord’s Resistance Army were buried alongside the bloody bodies and burned up in the flames of torched houses of worship.
Episcopal Reaction in Sudan
The death of a Christian lay reader, Wilson, who tried to rescue two young boys abducted in the Episcopal Diocese of Mundri, has spurred a call to action. Matthew Davies of Episcopal Life covers the story in full detail, including more history regarding the conflict. His article describes how Wilson and another young man learned that the LRA had kidnapped two children, and set off in pursuit. When they caught up to the LRA, they were brutally killed. Yet in a way, Wilson’s efforts succeeded. The boys, though horribly traumatized by the event, were left alive alongside the road by the departing soldiers.
Others have not been so lucky. A reverend’s daughter abducted along with 11 others from a village. Entire villages of elderly people, women and children being forced to flee dozens of miles head of the fighting. The dead and the wounded.
Alexander Baumgarten, international policy analyst for the Episcopal Church's Office of Government Relations, has called for U.S. Episcopalians and others to focus their support on two particular partner organizations: Resolve Uganda and Enough! Project. While the news is very grim, the summation of optimism can still be found in the words of Janet O’Neill, of Episcopal Relief and Development:
The key question is whether a settlement can be achieved with people who commit such atrocities with impunity. While it would be heartening to see true Christ-like conversions to a life of peace and goodwill from an existance of rapine and murder, many of the soldiers of the Lord’s Resistance Army are not likely to give up the lifestyles they have become accustomed to. It is time work towards such miracles for the people of Africa."We need to act to shine whatever light can be brought into this dark, dark situation. We must pray for peace, advocate for peace, demand that politicians in the region pursue a settlement with the LRA. We must mobilize resources to ensure that the lack of food and shelter can be met and the basic humanitarian needs are provided."
— Janette O'Neill, Episcopal Relief and Development Fund
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