Thread: BRIC+ News & comments

  1. #141
    Valued Senior Member Carcano's Avatar
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    Quote Originally Posted by Billy T View Post
    It is too late for me to edit post 134 with more details on point 3 of it and the footnote, showing that Obama's SEC and FBI are now awake and going after the cooks, which GWB's SEC and FBI turned a blind eye towards.
    I wish them well but lets hope Obama's SEC demonstrates more integrity than Inspector General Elizabeth Coleman...

    Still in office after this debacle:
    http://www.youtube.com/watch?v=cJqM2tFOxLQ

    http://www.federalreserve.gov/oig/oig_bio.htm

    Elizabeth A. Coleman was appointed Inspector General for the Board effective May 6, 2007. In this role, Ms. Coleman leads a staff responsible for promoting economy, efficiency,and effectiveness within Board programs and operations. The Office of Inspector General (OIG) is also responsible for preventing and detecting waste, fraud, and abuse at the Board, among other duties. The OIG achieves its legislative mandate through audits, evaluations, investigations, legislative reviews, and by keeping the Chairman of the Board and Congress fully informed.

  2. #142
    Please use Sugar Cane Alcohol Billy T's Avatar
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    Quote Originally Posted by Carcano View Post
    I wish them well but lets hope Obama's SEC demonstrates more integrity than Inspector General Elizabeth Coleman...

    Still in office after this debacle:
    http://www.youtube.com/watch?v=cJqM2tFOxLQ....
    Elizabeth A. Coleman was appointed Inspector General for the Board effective May 6, 2007. In this role, Ms. Coleman leads a staff responsible for promoting economy, efficiency,and effectiveness within Board programs and operations. ...
    Not quite sure why this GWB appointment is a criticism of Obama and based only on the Youtube link you gave I would say she is more lacking in intelligence and courage than "integrity." I could have given a better response than she did to the question: "Have you investigated the FED allowing Lehman Bros. to fail?"

    I would have said:
    "As is well known, Lehman was not a bank and there was no legal authority for the FED to aid or regulate non-banks. That is part of the reason why the FED's powers are now being expanded to include all financial institutions."

    And as the questioning congressman was not really seeking informtion, but harrasing her, trying to score points with his voters by being tough, I would have added:
    "I'm suprised you are ignorant of this fact, which has been repeately discused in even common newspapers."

    On the question to her about "Who has recieved the 2 tillion expansion of the FED's assets (the newly created money)?" I would have said:
    "I do not have the detailed break down at the moment, but will get it for you if you wish; however, as you should know, there are only 12 banks in which the Fed has accounts, so all the newly created funds were deposited in them."

    She was, however, more diplomatic than I am and just ducked all his hostile questions by saying:
    "We are still investigating that and have not yet completed our investigations."

    Again, I do not see what this GWB carry over has to do with Obama. Perhaps you will explain that to me?
    Last edited by Billy T; 06-20-09 at 10:18 AM.

  3. #143
    Valued Senior Member Carcano's Avatar
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    Quote Originally Posted by Billy T View Post
    I could have given a better response than she did to the question: "Have you investigated the FED allowing Lehman Bros. to fail?"

    I would have said:
    "As is well known, Lehman was not a bank and there was no legal authority for the FED to aid or regulate non-banks.
    Lehman was a holding company which did own commercial banks....as in Lehman Brothers Bank:

    http://www.linkedin.com/companies/lehman-brothers-bank

    I would not have supported saving Lehman myself but the Fed does have the authority to act as a lender of last resort with its discount rate for many kinds of financial institutions.

    An example would be the Fed's Sept. 16 loan of 85 billion to AIG...an insurance company.
    Last edited by Carcano; 06-20-09 at 03:41 PM.

  4. #144
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    Quote Originally Posted by Billy T View Post
    Not quite sure why this GWB appointment is a criticism of Obama.
    She is one of the top financial regulators in the US Billy...if you were president wouldnt you call her in to find out if she knows whats going on?

    And fire her if she turns out to be deliberately clueless???

  5. #145
    Valued Senior Member Carcano's Avatar
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    Quote Originally Posted by Billy T View Post
    And as the questioning congressman was not really seeking information, but harrassing her...
    To label congress's mandate to question federal regulators as 'harassment' could rightly be regarded as treason Billy.

  6. #146
    Valued Senior Member Carcano's Avatar
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    Quote Originally Posted by Billy T View Post
    "We are still investigating that and have not yet completed our investigations."
    After 8 months of 'review' she still knows approximately nothing???

  7. #147
    Please use Sugar Cane Alcohol Billy T's Avatar
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    Quote Originally Posted by Carcano View Post
    To label congress's mandate to question federal regulators as 'harassment' could rightly be regarded as treason Billy.
    No. when one is grandstanding, asking questions that he (and most infomed persons already know) it is not "treason," but stating a simple truth. He should for example know that the FED has only 12 (perhaps it is 16, but I'm pretty sure it is 12) banks that it deposits in. They are the same banks that are aurthorized to bid on bonds, I believe. Other banks and brokers work thru them, as I understand it. He does not need to ask where the FED sent ~2 trillion it it created when it accepted the Treasury's newly issued paper as an asset. It deposited those fund to the Treasury's account in those 12 banks.

    His questioning was not to learn what he already knew, but to get votes by appearing tough on C-Span. I.e. "grandstanding."
    Last edited by Billy T; 06-20-09 at 07:08 PM.

  8. #148
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    Quote Originally Posted by Billy T View Post
    He does not need to ask where the FED sent 2 trillion it it created when it accepted the Treasury's newly issued paper as an asset.
    Of course Congress needs to ask where the money went Billy.

    Maybe you are no longer a US taxpayer...maybe you dont care?

  9. #149
    Please use Sugar Cane Alcohol Billy T's Avatar
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    Quote Originally Posted by Carcano View Post
    Of course Congress needs to ask where the money went Billy. ...
    Yes, I agree, but you seem to think that the FED spent the 2 trillion.

    The FED did not spend one dime of the 2 trillion. They CREATED THAT MONEY and deposited it to the US Treasury accounts in up to 12 banks. The US Congress spends the money via the Treasury, not the FED.


    Some of the 2 trillion has not yet been spent. Some is being used to bail out banks etc. Some spent for the stimulus programs. Some was used for tax refunds to tax payers, etc. etc. - All of the Treasury's payments are authorized by CONGRESS, not one dime is spent by the FED (expect as Congress has provided for their salaries, the up keep on the FED's offices etc.)

    Either you are just ignorant or harrassening me like the congressman did his witness by asking where, why, and how the FED spent the money.
    Last edited by Billy T; 06-20-09 at 07:10 PM.

  10. #150
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    Quote Originally Posted by Billy T View Post
    The FED did not spend one dime of the 2 trillion. They CREATED THAT MONEY and deposited it to the US Treasury accounts in up to 12 banks. The US Congress spends the money via the Treasury, not the FED.
    You havent got a clue if this is the case or not...and neither does Congress.

    How would they know? The Fed refuses to be audited and when its own inspector general shows up for a hearing people like you expect them to talk about the weather!!!

    Even Bloomberg has sued under the freedom of information act to get disclosure on the loans.

    Ive already explained that the Fed has the legal authority to loan money to a wide diversity of financial entities...like the 85 billion to AIG for example.

  11. #151
    Please use Sugar Cane Alcohol Billy T's Avatar
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    the FED has for years made loans to banks via the "discount window" but banks have become increasing reluctant to borrow from the Fed as that has come to betakien as a sign of weakness - They met their reserve requirement more now by borrowing "over nite" for another bank that has more than its reserve requirements.

    Recently the FED has accepted as loan security high grade comercial paper as firms could not get more convetional loans form banks. I do not know to what extent these corporate notes are public information. To some extent the same relutance that the banks now have about borrowing at the discount window may (probably does) apply to a corporation borrowing from the FED by giving the FED a corporate bond. As the object is to help get the economy moving again, make loans available, etc. it would be counter productive to publicise that XYZ corp needed to borrow from the FED so I expect that this information is not readly available. If XYZ corp new it would be in the WSJ the next day, they might not borrow, credit would remain tight etc.

    I don't know many of the details. We are getting off the point. I said that the Congressman was "grandstanding" by asking questions that he should have known - the newly created 2 trillion was deposted to the Treasury accounts and he surely knew that. The question YOU are now raising about the FED accepting corportate paper is a different subject. I do not know if the easing of credit than makes is worth the risk of default or not, so will not disscuse this or be further diverted to that new subject.

  12. #152
    Please use Sugar Cane Alcohol Billy T's Avatar
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    "... The so-called BRIC nations (Brazil, Russia, India and China) have been outperforming the market. Through June 10, 2009, according to The Economist, Brazil is up 70.5%, Russia is up 77.5%, China is up 65.9% and India is up 65.3% (all in U.S. dollar terms). In the same period, the Emerging Markets MSCI was up 39.2%, World MSCI was up just 10.3% and the S&P 500 just 4%. It seems that the decoupling theory that was so criticized recently is back and stronger than ever! ..."

    From: http://www.zacks.com/stock/news/2117...erican+Markets

    Same thing from another source:

    " ...Today, with a few notable exceptions, the emerging markets of 2009 have better growth prospects, larger foreign reserves, less sovereign debt, a more stable banking system, and higher savings rates than their Western counterparts.

    Since the start of 2009, Chinese stocks have risen 58%, Brazil rebounded 32%, and India has soared 48%. Even Russia, the market that investors love to hate, came roaring back with a gain of nearly 80% at its peak. {slightly lower stock market gains than above as this includes the pull back of the last few days.}
    The S&P 500's loss of 1% seems barely worthy of mention.The BRIC economies—Brazil, Russia, China, and India—together accounted for 7.5% of global output in 1998. That has doubled* to more than 15% in 2008. China and Russia are even making noises about the creation of a new, global reserve currency.

    Emerging markets today have dramatically increased their profile on the global economic stage, embarking on a massive acquisition spree in the US and Europe, buying up brands, technologies, and expertise. ..."

    From: http://www.moneyshow.com/investing/a...U&scode=011415

    -------------
    *Note: To more than double in 10years, is an average growth rate of 7% or more. US and EU are now contracting for at least the third quater in a row. The "green shoots" are not there, but some of the profits from them are, just not the jobs. Brazil has been creating more formal jobs than it lost for last three months and the informal jobs never stopped growing. - They are all domestic market related - many selling on the streets, cleaning homes, small farms, self employed auto mechanics, etc. Brazilians who have lost their job in the US are returning home to find work in ever greater numbers - so not counted in the US unemployed numbers. Brazil's May 2009 net job creation was about 80% of the average in prior 5 months of May. (2003 thru 2008.)

    US an EU had a nice dance on credit and now must pay the piper.
    Last edited by Billy T; 06-23-09 at 09:21 PM.

  13. #153
    Did anyone posted this link...if not here it is...

    The American Empire Is Bankrupt


    http://www.truthdig.com/report/item/...e_is_bankrupt/

  14. #154
    Please use Sugar Cane Alcohol Billy T's Avatar
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    Quote Originally Posted by kmguru View Post
    ... The American Empire Is Bankrupt. {see:} http://www.truthdig.com/report/item/...e_is_bankrupt/
    They are more pessimistic than me!

    They have slight error in text: Brazil and China are still talking about dropping the dollar for bilateral trade - not a "done deal" yet. In some ways it is effectively done as China has such a deal with Argentina and Uruguay which are part of Mercosul, a quasi-free trade group, most members of which already have option of not using dollars for bilateral trade. ("Quasi" as each has long, but annually decreasing, list of items that each member can place internal tariffs on. A multi-nation, free-trade region is being "phased in.") China just signed a "don't use dollar for bilateral trade” agreement with Peru and, I think but not sure, has one with Chile already.

    Also from Bloomberg today, June 26:
    “… China’s central bank renewed its call for a new global currency and said the International Monetary Fund should manage more of members’ foreign-exchange reserves, triggering a decline in the U.S. dollar. 'To avoid the inherent deficiencies of using sovereign currencies for reserves, there’s a need to create an international reserve currency that’s delinked from sovereign nations,' the People’s Bank of China said in its 2008 review released today. 'The IMF should expand the functions of its unit of account, Special Drawing Rights', the report said. …”

    {Billy T insert: China is not alone in this POV and it is happening. All central banks, on average, are reducing the dollar fraction of their reserves faster than 1% / year. I.e. Article also notes: }*

    “…At the end of 2008 the dollar accounted for 64 percent of global central bank reserves, down from 73 percent in 2001, according to the IMF in Washington. …”
    All from: http://www.bloomberg.com/apps/news?p...d=a5z7pjiZoYpg
    ---------------------------
    *Not included is yesterdays 7.2 billion China took mainly** from reserves to buy, mainly an Iraq oil field in the Kurd’s part of Iraq, paying only $36/ barrel of proven oil reserves and only $17/ barrel of proven + probably oil reserves. This data from my local paper today, which seems to have stolen from second ref. below, but here is one of Bloomberg’s stories on the deal:

    “…China Petrochemical Corp., the nation’s second-biggest oil company, will gain reserves in Iraq’s Kurdistan and West Africa upon completing its C$8.3 billion ($7.2 billion) purchase of Addax Petroleum Corp. … The deal, {gives} Sinopec Group control of 42.5 million barrels of proven and probable reserves in Iraq’s Kurdish territory, where the start of oil exports earlier this month sparked a wave of takeover interest. China has spent as much as $5.4 billion since December on oil assets in Singapore, Syria and Kazakhstan. …”

    For more details see: http://www.bloomberg.com/apps/news?p...d=amJyYy434t7k
    Or
    http://www.forbes.com/2009/06/24/ira...ews_newsletter

    {7.2+5.4= 12.6 Billion buying oil in the ground (a rate greater then 2 billion / month.) And that does not count the oil production loans of 12 billion to Venezuela, $10 billion to Brazil and ???? to Russia to be repaid in oil. China is also planning on joining Russia & Brazil in buying IMF bonds, 50 billion worth.}

    **Possibly totally from reserves. All that is known is that in April 09, China reduce not only the dollar fraction but also the total of US Treasure paper by 4.4 billion dollars.
    This is all as I predicted years ago:
    China is easing out of dollars slowly, to avoid self inflicted injury by killing the dollar now. I.e. China is buying real assets instead of only Treasury paper. The Treasury paper China is still buying is ALL with short term to maturity so China will not need to sell in depressed secondary market. China can just hold and collect full face value.
    Also in yesterday’s paper is fact that China is buying more iron ore from Brazil. Vale is now shipping 56 million tons / month, up 26% since January 2009. China has iron ore, but all known at surface is low grade. A few days ago, China announce discovery of higher grade ore, but it is a mile deep – open pit mining not feasible so still cheaper to buy form Brazil. (26%, by chance, is now fraction of China’s imported iron ore that comes from Brazil, also.) Vale is also planting dendê, which yield 10 times more bio-diesel than soy bean / acre, to be self sufficient in diesel by 2014. (For mining equipment and the transport to ports trains also. Part is being planted on land recovered from strip mining and the rest on abandoned pasture!)
    Last edited by Billy T; 06-26-09 at 02:37 PM.

  15. #155
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    Following from: http://www.bloomberg.com/apps/news?p...d=aQ.zWVPnOYYg

    "The dollar declined the most against the euro in a month and dropped versus the yen after China repeated its call for a new global currency. ...

    Brazil’s real gained 2 percent to 1.9363 versus the greenback, its biggest weekly increase in June, as the sale of shares in Visa Inc.’s local credit-card processing affiliate attracted foreign investors to the world’s biggest initial public offering in more than a year.

    The dollar depreciated 2.6 percent to 7.8926 South African rand and 1.4 percent to 7.8002 Swedish krona as the People’s Bank of China said in its 2008 review there’s a need for a global reserve currency “delinked from sovereign nations.” ..."

  16. #156
    Please use Sugar Cane Alcohol Billy T's Avatar
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    From Hsu's just released Email news letter:

    "Ever since the election of a pro-China president last year, the relationship between Taiwan and China has greatly improved. The two nations have worked closely to create direct air, postal and shipping links across the straits. And today, we learned of another bold step taken to boost Taiwanese and Chinese ties. 'Taiwan's Ministry of Economic Affairs announced the 100 industries and projects that it would allow Chinese investment, including manufacturing, infrastructure and service.

    This is another step in the right direction, and the improved relationship is helping Taiwan's economy recover from the global economic crisis. In fact, due to the island's closer relationship with the mainland, Taiwan's stock market has popped 36% year to date. ''

  17. #157
    Please use Sugar Cane Alcohol Billy T's Avatar
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    "General Motors do Brasil Ltda sold 55,629 vehicles last month, {June} the highest monthly sales volume in the company's 84-year history in Brazil."

    More at: http://news.morningstar.com/newsnet/...00593_univ.xml

    "GM reported sales of 174,785 cars and light trucks in June." --- That is down 34% YoY for GM USA.
    From: http://news.morningstar.com/newsnet/...00593_univ.xml

    As a tax on cars was reduced, Brazil sold most cars ever (1.44 million) in second quarter of 2009. Here is the change:

    All cars with motor <1001cc normally taxed at 7%, now 0% for stimulation of sales.
    Gasoline motor cars:
    1001 to 2000 cc normally 13% now 6.5%
    >2000 cc unchanged at 25%
    Alcohol / or Flex Fuel cars:
    1001 to 2000 cc normally 11% now 5.5%
    >2000 cc unchanged at 18%

    Note small cars are treaded the same for both fuels but mid size alcohol fuel cars get a greater temporary reduction and large alcohol fuel cars have always had less tax. AFAIK, the two fuels have the same tax on their energy content. (Tax / liter on alcohol is 70% of the tax on gasoline as alcohol has only 70% of the energy content.) The main reason for buying alcohol fueled cars is that it cost much less to drive per mile.
    Last edited by Billy T; 07-02-09 at 12:51 PM.

  18. #158
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    China is making modern energy efficient housing, not wasteful urban sprawl.

    It may not appeal to you now, but when Gasoline is $20/ gallon it will.

    China needs to increasing import raw materials, energyand food stocks:

    "... trade between Africa and China has surged from just over $6.5 billion in 1999 to $107 billion in 2008. ..."

    And does not care from where or how it gets it, if it is cheap.

    "... China too is hedging its bets between Mr Mugabe and Mr Tsvangirai. ... In offering Zimbabwe such a huge dollop of credit, {pledged $950 million} China is signalling that it is in the country to stay. ..."

    Both quotes from: http://www.economist.com/world/midea...ry_id=13964261

    “"... Global demand won’t recover to the pre-crisis levels within two to three years,” Xia Bin, head of the financial institute at the State Council Development and Research Center, said today at a forum in the southern Chinese city of Shenzhen. “The rebound we’ve seen in China’s economy in the first half has been driven by increased investment to make up for the slump in external demand.” China has to boost domestic consumption by increasing household income and not just through gains from property and stocks, Xia said. ..."
    From: http://www.bloomberg.com/apps/news?p...d=ay5VLXmvWVHs

    I of course agree with Xia and have been saying this would be how China changes to prosper as US and EU sink into depression for some years now. I.e. China is transforming from an export based economy to one supplying the growing domestic demand and paying for the raw materials, energy and food stocks it needs to continue a high GDP growth rate with exports to develop many emerging and other countries in the Southern Hemisphere mainly. Suppliers of these goods, like Brazil, will avoid the depression by becoming an "economic colony" of Asia, especially China.
    Last edited by Billy T; 07-04-09 at 09:02 PM.

  19. #159
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    "... agreement, signed in Rome on July 6 in the presence of Chinese President Hu Jintao and Italy Prime Minister Silvio Berlusconi, is another step toward turning Fiat into a global automotive giant. Targeting the growing China auto industry, Fiat will invest $559 million in the venture, which plans to begin production in China's Hunan Province in the second half of 2011. The facility will initially have the capacity to make 140,000 cars and 220,000 engines per year, and may later increase to maximum of 250,000 cars and 300,000 engines per year. The first model to roll off the production line will be the Linea sedan. ..."

    From: http://www.businessweek.com/globalbi...077_696269.htm

    China is already the world's biggest auto maket (if EU is not considered as a whole, I think, but does have more car sales than the USA, in anycase now.) and certainly the fastest growing. Fiat wants in on a good thing too.

  20. #160
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    By making more engines than vehicles, is that a vote of confidence in their engineering ??

    Or one upmanship on Volkswagon ?.

    One in the boot ( trunk ) and one under the bonnet :-))

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