Armchair Revolutionaries

Hi to everybody...how it's done in simple terms...

Hi to everybody...here's a more than interesting video...

Hi to everybody...interesting article here on the possible problems during the USA election...
http://www.mtv.com/news/articles/1597618/20081021/story.jhtml

Hi to everybody...heard something today from my American friend that some of the machines when you vote for Obama are coming up as a vote for McCain!! Are they really trying already to fix the vote? If it's proved that the machines have been tampered with, how are they ever going to prove who won if it's as close a call as the Bush/Gore election? That was a coup if ever there was one...the last thing the USA needs is another election result that throws up massive doubts as to who really won...must be the dirtiest campaign ever fought...you would think that the organizers of the election would make 100 per cent certain that the machines were tamper proof or were working properly...seems even that's beyond them...

Hi to everybody...I'll let this speak for itself.

Hi to everybody...help!!!

Osborne and Mandleson have been away enjoying life on the ocean wave in Corfu and other exotic climes so may have missed the public ire over fiddling MPs recently.

This is a sorry state of affairs which even has the Speaker of House of Commons and his shady spouse up to their ears in the financial merde along with the MPs who voted against reforming their expenses.

So, just when they thought it was safe to stretch the old sea-legs in the face of an embittered public, they find themselves the targets of not unreasonable credit crunch anger at politicians living high on the hog while 'not' discussing further contributions to their holiday, sorry, election, finances.

So what are we to make of the MP for Croydon, pulling a six month sickie while claiming his full pay for doing bugger all for his constituents, but meanwhile working in the City at something called 'origination'? Originating what? Frauds?

http://www.thisislondon.co.uk/standard/article-23576340-details/MP+worked+for+a+City+firm+while+on+paid+sick+leave+from+Commons/article.do

Hi to everybody...not much else she can get wrong...just about made every gaffe possible...got booed loudly for this one...

Hi to everybody...damn...this is age showing, and venom from the audience...

Hi to everybody...for anybody who may be interested...here's last night's debate - the final one - before the election in nineteen days...it appeared the only weapons in McCain's arsenal was to try to tear Obama's character to shreds and once again resort to telling the people how he has served his country in the past, which is actually completely irrelevant in today's global chaos...he just looks tired and old and somehow lost...if he, by some terrible misfortune, wins, Palin will be president within a couple of years looking at the state McCain is in now after only a few months in the midst of hard politics...then we truly are screwed...

Hi to everybody...sat and listened to this tonight and it is definitely very, very scary...

Hi to everybody...the whole debate between Obama and McCain isn't up on YouTube yet but here's a small excerpt...

Quite extraordinary how somebody sees a war as a success while everything in it points in completely the opposite direction...

Hi to everybody...good article today in the Independent...

20 reasons for the crunch

The finger of blame points widely, encompassing greedy bankers, the Iraq war and even Margaret Thatcher

By Sean Farrell and Sean O'Grady
Tuesday, 7 October 2008

China

The source of the greatest of the "global imbalances" still troubling the world economy. The Chinese government has kept the exchange rate of the yuan low to stimulate exports and build up foreign currency reserves – principally in dollars. These were then lent back to the West, driving down interest rates and fuelling a real estate bubble.

The liquidity bubble

The unprecedented flow of cheap money looking for a home flooded the West's economies. Trade surpluses were recycled in the early part of the decade. This stimulated the "search for yield" and, in turn, the mispricing of risk as investor s imagined the high returns they were offered were safer than they proved.

Search for yield

With interest rates low and money sloshing around the system, investors sought out increasingly risky assets for a higher return. Demand squeezed prices so little premium was paid for extra risk. When sub-prime mortgage borrowers started defaulting, the market rediscovered risk with devastating consequences.

Sub-prime lending

With interest rates low and liquidity in plentiful supply, lenders threw caution to the wind, lending billions for high margins to people who found they could not afford repayments when rates rose. Often seen as the cause of the crisis, but in fact the most visible symptom of a 10-year debt binge.

Leverage

Cheap money caused the world to go on a leverage spree. Individuals borrowed to invest in property or buy goods; investors used cheap debt to invest in higher-yielding assets, or borrowed against existing investments; bank lending outstripped customer deposits and activities were kept off balance sheet. The shortage of credit as the debt is unwound threatens to bring the economy to a halt.

Originate and distribute

The craze for higher yielding investments allowed banks to parcel up loans through mortgage securitisation, packaging of corporate debt and other means for sale to investors. This was meant to disperse risk, but when confidence collapsed banks were left with billions of pounds of loans they had not offloaded. No one knew where the debt was, causing further market seizure.

Alan Greenspan

One of Mr Greenspan's predecessors, William McChesney Martin, said his job was to "to take away the punch bowl just as the party gets going". Alan's legacy was less happy; the Greenspan put, the idea that whenever the markets took a tumble the Fed would be along with an interest rate cut to get the party going again. Now only the most dramatic cuts in rates can restore market confidence.

The Democrats

A Democrat president, Bill Clinton, oversaw the repeal of the Glass-Steagall Act in 2000, which had separated commercial and investment banking since the last banking crash in the early 1930s. Although sponsored by Republicans and the banking industry, the administration let the move get off the ground. Later the Democrats also blocked reform of Fannie Mae and Freddie Mac.

The Republicans

Nobel economics prize winner Joseph Stiglitz famously called President Bush's adventure in Iraq "the three trillion-dollar war", a third more than the Vietnam war. Like 'Nam, its effects have been economically devastating, fuelling America's long boom and her appetite for imports and credit.

Regulators

The watchdogs argue it is not their job to run banks, but from London to New York and Reykjavik regulators failed to rein in the excesses of the financial industry. Competition between financial centres for business added to the belief that the market would operate efficiently, producing laissez-faire policies that were exposed in summer 2007.

Credit rating agencies

Regulators left judgements on the quality of debt sold to "sophisticated" investors to Standard & Poor's, Moody's and the like. But the agencies got too close to the issuers of debt, slapping top-notch ratings on batches of structured credit containing risky loans. Investors chose to believe them until things were too late.

Financial Services Authority

Britain's main financial regulator is sticking its nose in to all aspects of banks' affairs now, but only after a humiliating admission that it failed to keep a check on Northern Rock in the months before the bank's near-implosion.

Greedy bankers

Many in the City losing their jobs will have made millions from short-term bonuses for market speculation. Traders' bosses in the boardroom let the casino continue because their pay was also linked to short-term results. The authorities' price for bailouts will be attempted curbs on bankers' pay.

Consumers/housebuyers

It's easy to blame traders, bank bosses and watchdogs, but no one was forcing us to take 125 per cent mortgages or to rack up debts to pay for Caribbean holidays and Jimmy Choo shoes..

Margaret Thatcher

The high priestess of market economics has much to answer for; the deregulation of the mortgage market; encouraging the demutualisation of the building societies; selling off council housing; and encouraging the national obsession with home ownership.

Moral hazard

An idea that proved all too powerful in the minds of men such as Mervyn King. Fear of the consequences made him, arguably, unwilling to help stricken banks. Erring on the side of caution, he misjudged the greater hazard of systemic risk.

Gordon Brown

Oversaw the biggest real estate boom in British history and gave the impression he had abolished the economic cycle. "No return to boom and bust" was the mantra, but the budget deficits he ran up only made matters worse. Tony Blair watched him do it.

Mark-to-market accounting

"Fair-value" accounting was meant to bring greater openness to company accounts, forcing banks to admit the market price of securities on their balance sheets. But with no market for many of these assets, banks have hadto take massive writedowns, creating a spiralling loss of confidence. Pressure is building for the rules to be suspended or changed.

Basel 2

The Basel 2 bank capital rules did not ensure banks had enough liquidity. Northern Rock and Bradford & Bingley met the capital rules, but that didn't stop depositors getting scared. The rules are said to encourage banks to run with less capital in the good times, leaving them exposed when the market turns.

Estate agents

They were just doing their jobs, but they sold the houses and no one likes them. Going out of business at a rate of knots.

Hi to everybody...Technomist asked an interesting question....here's what I found out about who owns the USA's huge debt...

Click on it to see larger version.

Here's the site I got it from....
http://www.optimist123.com/optimist/2005/11/pie_chart_of_wh.html

Here's the latest figures....the above is 2005...
http://www.ustreas.gov/tic/mfh.txt

I've just found a pie chart of the latest figures...interesting to compare 2005 with now...

Hi to everybody...how the world is changing...rather quickly now...

Margareta Pagano: Will China tip the US 'balance of financial terror'?

Sunday, 5 October 2008

The former US Treasury Secretary, Larry Summers, calls it the "the balance of financial terror". A noted academic, Summers, who served under President Bill Clinton, was referring to the relationship between the US and its newer creditors, such as China, the Middle East and Russia. Foreign countries now own nearly a quarter, some $2.6 trillion, of the total US debt. They also own more than $14 trillion in US assets – that's more than the total US national output.

By far the biggest chunk of this debt is still owned by the Japanese, with US Treasuries worth $593.4bn. But soaring up the debt table is China, which now controls $518.7bn, more than 8 per cent higher over the past year, and equal to about half of the total $1.2 trillion it holds in reserve assets. Oil-rich states are also snapping up T-bills as though they are going out of fashion – up 29 per cent on the year to $173bn. On top of this, the US has a trade deficit with China in the first six months of this year of $142bn – and it is still growing.

Behind all the figures lurks some intriguing realpolitik. The success of the US rescue package depends as much on the support of China and the Middle East as it does on the American taxpayer. Ultimately, it is the Chinese and Middle Eastern governments – and their taxpayers, which will decide the fate of the biggest financial rescue plan in history. Indeed, one of the reasons the US authorities say they had to rescue Fannie Mae and Freddie Mac was to reassure the Chinese government that US securities really were secure.

They are going to have to do so again for this latest bail-out. Apparently one of the first things Hank Paulson, the US Treasury Secretary, plans now the package has gone through is a "road show" in Beijing to explain the rescue and why the US is not going to explode. As the ex-chairman of Goldman Sachs, Paulson has had good relations with China – visiting the country more than 70 times, chairing Tsinghua University's business school and helping the former Chinese president save an area of outstanding environmental importance.

But Paulson will need to do more than go down on one knee to persuade the more sceptical Chinese – and there are many – that this rescue will work. There are some signs that the Chinese are being co-operative, and this may explain why the dollar has been strengthening during this recent crisis despite such low interest rates.

If they decide not to buy any more of the new debt, or dump existing debt, then the outlook for the US is truly dire. Interest rates will have to be pushed up again to attract new investors. It is a zero sum game: if the foreign holders do pull out then they would only be hurting their own investments.

We've known for some time that the growth of the emerging economies such as Russia, China and India through globalisation would eventually dilute the power of the US. Philosopher John Gray thinks American political leaders are oblivious to what is really going on. He believes the present crisis is pushing the US into a fall as catastrophic and swift as that of the Soviet Union when the Berlin Wall came down. It's far too early to say if he is right, but what will be really interesting to watch is China's response to this crisis. Will it assert its authority or continue as a peaceful trade partner: the balance of financial terror exchanging debt for toys?

We do live in interesting times.

I was up at the North Korean border earlier this year and had a look over the Yalu River at North Korea from the Chinese side. I saw nothing like this there..

Hi to everybody...here's the debate between the two VP's - it's long one and half hours so you'd have to be patient if you want to hear it all...LOL..

I've only just found the complete debate so haven't seen it all myself yet...

Hi to everybody...here's an alternative view to the bailout...basically it's saying that Japan tried exactly the same twenty years ago and it didn't work and has taken twenty years for them to recover....

Cherie Blair, according to yesterday's Telegraph, angered delegates at a fringe meeting at Conservative Party conference by suggesting that those who wished to change the Human Rights Act were advocating the return of slavery or disagreed with the sanctity of life.

'There were hisses and angry shouts from the crowd, which included a number of victims' relatives, as Mrs Blair, a leading human rights lawyer, was drowned out and forced to abandon her argument.

Mr Bowman told Mrs Blair: "Where the human rights are concerned I'm wondering if there's a possibility that when somebody decides, like the perpetrator of the crime against Sally, to go out armed of a night to murder, waits until the coast is clear then rapes, bites, desecrates the body of an 18-year-old girl, [then] I personally believe that that man's human rights should be waived to a degree.

"I think that there should be an amendment to the Human Rights Act where someone if they choose to step outside being a human being, they choose to commit an inhuman act, then the Human Rights Act does not apply."

Mrs Blair insisted that the Act was "part of the solution not part of the problem".'

I know we are often told, mainly by herself, that Cherie Blair is a 'Leading Human Rights Lawyer', but has anyone got any evidence for this?

Has anyone ever seen or heard of any major cases in which she has actually advanced any Human Rights which benefit ordinary people (I don't include corporations paying her to protect their property interests).

Or is she called a 'leading' lawyer because she has taken silk and in the past charged a huge sum of money for her advice (as you would be able to if you were married to a PM).