Archive for the ‘business’ Category

This Time: Obama Woos Wall Street For Support

March 24, 2009

The Obama administration, after months of criticizing Wall Street, has been scrambling to woo top bankers and financiers to back its latest bailout plan.

The Wall Street Journal

In recent days, in spite of public furor over huge bonuses paid at American International Group Inc., the administration has concluded that it needs the private sector to play a central role in fixing the economy. So over the weekend, the White House worked to tone down its Wall Street bashing and to win support from top bankers for the bailout plan announced Monday, which will rely on public-private investments to soak up toxic assets.

But weeks of searing criticism by politicians and the public had left bankers leery of working with the government. After brainstorming about what to do about that problem, the White House resolved to try to take control of the debate, according to several administration officials. In weekend television appearances, President Barack Obama and other administration officials tempered their criticisms of the financial sector.

Read the rest:

Fleeing Obama’s Taxes in Switzerland

March 12, 2009

The tidy towns and mountain vistas of Switzerland are an unlikely setting for an oil boom.

Yet a wave of energy companies has in the last few months announced plans to move to Switzerland — mainly for its appeal as a low-tax corporate domicile that looks relatively likely to stay out of reach of Barack Obama’s tax-seeking administration.


In a country with scant crude oil production of its own, the virtual energy boom has changed the canton or state of Zug, about 30 minutes’ drive from Zurich, beyond all recognition. Its economy was based on farming until it slashed tax rates to attract commerce after World War Two.

It still has a chocolate-box old town with views over a lake to the high Alps, but is now surrounded by gleaming corporate offices — including commodity trader Glencore and oil refiner Petroplus — shopping malls and housing developments.

Local authorities say about 13 percent of full-time jobs in Zug canton are in the raw materials sector.

Over the past six months companies including offshore drilling contractors Noble Corp and Transocean, energy-focused engineering group Foster Wheeler and oilfield services company Weatherfield International have all announced plans to shift domicile to Switzerland.

“Switzerland has a stable and developed tax regime and a network of tax treaties with most countries where we operate,” Transocean Chief Executive Bob Long said in a statement in October, when it announced its move. “As a result, the redomestication will improve our ability to maintain a competitive worldwide effective corporate tax rate.”

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Money People Hope China and U.S. Get Along Better Fast

February 2, 2009

The fear is that the U.S. and China continue to tals past each other….

By Alan Wheatley
The International Herald Tribune

China has just ushered in the Year of the Ox, which is typically associated in the lunar calendar with calm, fortitude and success through toil.

That’s just as well, for China and the United States will need great calm and fortitude if they are to repair, through hard work, the damage done by the accusation of the new U.S. Treasury secretary, Timothy Geithner, that Beijing manipulates its currency.

Now, it is true that the yuan’s exchange rate is controlled by the People’s Bank of China. How else did the central bank accumulate nearly $2 trillion in reserves? Was it by accident that the yuan rose 20 percent against the dollar over three years only to become rooted to the spot since last July?

Of course not. China, with extensive capital controls, actively manages its exchange rate.

But manipulation is a dirty word in currency diplomacy. If the Treasury were to determine in its next report to Congress in the spring that China manipulated the yuan, it would be obliged under U.S. law to begin negotiations with Beijing on the issue.

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Fed Delivers Gloomy Economic Outlook

January 28, 2009

The Federal Reserve, gave a bleak outlook for the U.S. economy, saying that while it expected a “gradual recovery” to begin later this year, significant risks remain.

“Industrial production, housing starts, and employment have continued to decline steeply, as consumers and businesses have cut back spending,” the Fed said in the statement. “Furthermore, global demand appears to be slowing significantly.”

Fed Chairman Ben Bernanke and his colleagues are battling a three-headed economic monster: crises in housing, credit and financial markets that — taken together — haven’t been seen since the 1930s.

From CNN Business:

From the Associated Press:

Federal Reserve Chairman Ben Bernanke before testifying before ... 
Federal Reserve Chairman Ben Bernanke before testifying before the House Financial Services Committee on Capitol Hill, November 18, 2008.(Molly Riley/Reuters)

China’s Annual New Year Migration “Biggest Ever” Due To Economy

January 22, 2009

The largest annual migration on earth is now in progress as China prepares for the Lunar or Asian New Year.

China has a migrant population of several million workers who mostly leave rural homes for industrial and manufacturing areas to work in places like  Guangzhou, the capital of Guangdong province.

The migrant workers are among 188 million people heading home for the holidays.  To be in one’s family home at New Years makes for a “lucky” year, according to Chinese culture and belief.

This year the migration started weeks earlier than normal as China closes shop due to the troubled economy.  Many workers ill not return to work this year for the same reason: the economy is grinding downward.

Most experts say this is the largest migration ever in China because of the global economic downturn.  Railroads are overwhelmed by the number of travelers.

“Last year, I went back home five or six days before the holiday started. This year, I’m going back about 20 days earlier,” said migrant Huang Mingren as he waited for his train, three weeks ago.

Now many travelers are saying they have no jobs to return to.

“‘I’ll go home and stay for the first time in more than 20 years,” said Le Hong. “No jobs in city any more.”

China fears that social unrest and dissent will grow due to the economic troubles and several important anniversaries.  Thirty years ago, Chinese students started a pro-democracy uprising in Tiananmen Square.

Tiananmen Square in 1989.

By John E. Carey
Wakefield Chapel, Virginia


China’s jobless migrants go home early for holiday
 Economic Slowdown Already Sees 600,000 Chinese Migrants Relocate
 China’s Slowing Growth, Unemployment Leads Toward Social Unrest
Shortage of trains strains China’s holiday rush, simmering unrest problem

A migrant worker nears the train station in Guangzhou, southern ... 
A migrant worker nears the train station in Guangzhou, southern China’s Guangdong province.  Some 188 million Chinese are expected to squeeze onto China’s train network to return home for the Chinese Lunar New Year.(AP Photo/William Foreman)

Jobless rate jumps to 7.2 percent in December

January 9, 2009

The nation’s unemployment rate bolted to 7.2 percent in December, the highest level in 16 years, as nervous employers slashed 524,000 jobs. The labor market is expected to remain weak as mass layoffs continue.

The Labor Department’s report, released Friday, underscored the terrible toll the deepening recession is having on workers and companies, and highlights the hard task President-elect Barack Obama faces in resuscitating the flat-lined economy.

By JEANNINE AVERSA, AP Economics Writer

People stand in line as they wait to talk with potential employers ... 
People stand in line as they wait to talk with potential employers during a job fair at Rutgers University Wednesday Jan. 7, 2009, in New Brunswick, N.J. The nation’s unemployment rate bolted to 7.2 percent in December, the highest since early 1993, as nervous employers slashed 524,000 jobs.(AP Photo/Mel Evans)

For all of 2008, the economy lost a net total of 2.6 million jobs. That was the most since 1945, when nearly 2.8 million jobs were lost. Although the number of jobs in the U.S. has more than tripled since then, losses of this magnitude are still being painfully felt.

With employers throttling back hiring, the nation’s jobless rate averaged 5.8 percent last year. That was up sharply from 4.6 percent in 2007 and was the highest since 2003.

Although economists were forecasting even more payroll reductions in December — around 550,000 — job losses in both October and November turned out to be deeper than previously estimated. Revised figures showed that the employers slashed 584,000 positions in November and another 423,000 in October.

Read the rest:

China fears recession riots

January 7, 2009

A stark warning by state media Wednesday of possible mass unrest in China signalled deepening fears over the global recession, as Europe grappled with more job losses and an energy cutoff during a winter freeze.

The economy of Asian powerhouse China might become so bad in the next few months that the fabric of the world’s most populous nation could start unraveling, the authoritative weekly Outlook, published by the Xinhua news agency, warned in its latest edition.

By Beth O’Connell, AFP

The magazine said that “enterprise closedowns, layoffs and labour disputes have significantly increased” and with workers’ livelihoods threatened, “their pent-up discontent could easily burst out… and spark mass conflicts.”

European workers are also feeling the brunt of the global recession with official data showing that the number of people out of work in Germany rose by 114,000 in December to 3.1 million.

On Britain’s high street, iconic retailer Marks & Spencer said it would slash up to 1,230 jobs and close 27 stores as consumer spending, the driver of the British economy, shrinks.

Analysts expect the Bank of England to intervene in this recessionary climate Thursday and cut its key interest rate to the lowest ever level.

Read the rest:

India Looks Great on the Outside; Work Needed on the Inside

January 1, 2009

India has not developed as the West did: slowly, systematically; first getting railroads right, then cars, then planes; first bringing drinking water and toilets to people, then figuring out how to bring them Wi-Fi. No: India prefers Last Things First.

Indian engineers are so sophisticated that Airbus has outsourced to them the building of certain airplane doors. But Indians have yet to build doors for their own commuter trains in Mumbai, which carry millions of people every day and kill hundreds of them every year simply because they have no door.

From the International Herald Tribune

India has become an automotive powerhouse, with a single company, Tata Motors, producing both the world’s cheapest car and the expensive Jaguar brand. But it has yet to teach the people in those cars to wear seat belts and stay on their own side of the road.

India roars ahead in education. Its Indian Institutes of Technology are among the world’s best engineering schools, and it is building more. Which is good news for everyone – except the millions of schoolchildren who could never dream of getting in, since their teachers are absent, their textbooks arrive months after school begins and they “graduate” unable to read, write or add.

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China’s Business Corruption: Rags to Riches to Really Big Trouble

December 16, 2008

Billionaire Wong Kwong-yu personifies the journey China has taken since it launched sweeping economic reforms 30 years that transformed the communist country into an economic power.

But as Wong — founder and chairman of the country’s biggest appliance chain — is finding, getting rich in China is still plenty risky.


Born into poverty, Wong built a fortune selling appliances to a nation of consumers hankering for a modern, affluent lifestyle. Estimates of his wealth vary, but an October report by Shanghai-based researcher Rupert Hoogewerf named him the wealthiest Chinese individual, with assets worth about 43 billion yuan ($6.3 billion).

Last month, however, Beijing police confirmed that the 39-year-old Wong was the focus of an investigation into alleged economic crimes. His whereabouts are unclear. His company, Gome Electrical Appliances Holdings, has released scant information since it suspended its shares from trading in Hong Kong last month.

Scores of Chinese entrepreneurs like Wong have made fortunes by exploiting economic niches neglected by the state-run companies that still dominate many strategically vital businesses, such as banking.

But the loopholes and gray areas that are crucial assets in the early years sometimes come back to haunt those tycoons later — what some in China call the “original sin” problem. And apart from potential entanglement in corruption scandals, wealth inevitably draws unwelcome attention from the authorities. In China, the road to success often runs from rags to riches to, eventually, really big trouble.

“It’s not because the government discourages wealth, but because of the ‘original sin’ problem,” said Ge Dingkun, a professor of strategy and entrepreneurship at the China Europe International Business School in Shanghai.

“Typically, the companies grew when the relevant legal system was lacking and they had to give ‘sweets’ to officials to get anything done that was not clearly legislated at that time, the so-called gray areas,” Ge said.

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America’s Future? Grim Reality Unless Major Changes Are Adopted

December 10, 2008

In the future, America will be more diverse, more open to gays and more ploitically correct.

Americans will be even more caring for the human rights of their fellow man.

But Americans will generally be less wealthy, more stupid, more drug addicted and mezmerized by the future of the Internet and “Dancing With The Stars.”

Can another conclusion be reached?

America has lost or given away its industrial prowess.  Even the “Big 3” auto companies are on the public dole.


Drug and alcohol abuse and addiction are up.  And if you go to any hospital for “care,” you’ll end up loaded with drugs.

Americans are working harder, playing less and earning less for more than ever before.

And our schools are failing miserably.

America still has massive military might: but many lawmakers want to give this away and spend the money on “other priorities.”

The USS Ronald Reagan
Above: Symbol of American greatness or a big bill payer?

In the future America, food security may be an issue, we could run out of water, and our health care system may collapse.

I didn’t make all this up: I am just good at reading the tea leaves (and the headlines).

Barack Obama has a full plate.  And so do parents, lawmakers, teachers and business executives: if we want to see a brighter future for our grandchildren.


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California Water Crisis Signals Warning for Other States

Lofty Hopes, Dreams Shattered By Politics, Terrorism, Economy, Other Realities