China's export-price inflation is masking the extent of a slowdown in growth in overseas shipments, Royal Bank of Scotland Group Plc. said.
``Rising export prices exaggerate the strength of export growth,'' Ben Simpfendorfer, a Hong Kong-based economist for the bank said in an interview today. ``If the value of goods sold is rising, it will appear as if overall export growth is strong even if the volume of goods sold is weakening.''
China's government may be tilting its policy toward supporting growth, rather than fighting inflation, after exports cooled in the first half
Manufacturing in China contracted for the first time since a survey began in 2005 as export demand faltered and factories closed to clear the air before the Olympic Games.
....
The expansion of the world's fourth-biggest economy slowed for the fourth straight quarter in the three months through June on weaker U.S. demand. China raised tax rebates for shipments of textiles and garments today and the commerce ministry is pressing for slower yuan gains to protect exporters
Come September, we'll see how much of this was the Olympic games, and how much was the bursting of a bubble.
As a response to Mr. Harris, while I thank you for your perspective, I will put my faith in the fact that Chinese are human beings with the same animal spirits as everybody else.
1998 and the std. was finalized about 1997 time frame. Yes, and it due to US corporations. They couldn't even agree on a national network standard and put different systems in different spectrums and protocols.
They don't charge for incoming calls. Period. And the overall pricing is much more reasonable. So, what do you get? Mobile networks deployed all over Europe while the United States was/is way behind. I mean 3G is this amazing thing in the US when it has been deployed I think going on 10 years now in Japan and EU. Even worse, (as usual) AT&T who invested the mobile phone, literally blew the entire thing up in terms of making it a business. I think they recently finally figured it out but for years, nope.
Same is true with broadband. In the United States it's very high priced in comparison and then we don't have deployment in many rural areas. We're way behind and we invented it.
I guess that's what one gets when corporations survive that should go under by plain stupid business models, price plans, whose product roadmap must only have two phrases, squeeze the consumer and layoffs planned after completion of project x. Oh yeah the third thing on their powerpoint slides, make sure I personally get a huge bonus with backdated options and all sorts of funds for raping the company and make sure Press releases are believed by Wall Street and take Hedge Fund manager x in the private jet to my Island for entertaining.
According the NY Times article, Merrill is loaning Lone Star $5 Billion to buy the $6.7 Billion in assets off of them.
Now here's the kicker: if the value of the mortgage-backed securities deteriorates even further then Lone Star has to eat the first $1.7 Billion in losses. However, for every dollar the value of the assets fall past the first $1.7 Billion Merrill Lynch is on the hook.
So in other words, if the value of the assets fall to zero, then Lone Star would lose $1.7 Billion, but Merrill Lynch would lose another $5 Billion.
Asian economies which are still growing rapidly don't have much exposure to the banking crisis. America may have serious problems but the global economy is much, much stronger than it was in 1929.
Citibank is surviving on Saudi money.
Citibank isn't going under because investors are wealthy enough to handle the losses.
For the moral investor. Take an asset-backed loan off of the bank at $.22 on the dollar- and offer the family to change their unaffordable mortgage into rent overnight without needing to move.
Suddenly you've just created your own retirement business. At 1/5th the price.
I frankly have no idea regarding the SME and OPIC and if there is the pass through concept that you're talking about that leverages lower cost labor. Homework I guess.
What I do know about OPIC is that its worker rights conditionalities exist on two levels. That the country must be "taking steps to implement" int'l work rights, but OPIC also provides unique conditions on the projects with regard to child labor, timely payment of wages, et.al., that address the circumstances of each project.
Philosophically, I would agree with you that the US needs to invest in itself. I just don't think that the goals of promoting economic development internationally and improving infrastructure domestically are mutually exclusive. You certainly shouldn't invest overseas to the exclusion of US infrastructure, but it shouldn't be dependent. A little now will save us a lot later down the road. That's my opinion.
Your last point seems to point to the current account deficit and ancillary issues associated with it.
To me, OPIC does't fit there...its probably part of something larger you feel strongly about. Having studied the organization, I can tell you that it doesn't "give away" anything. For permission to spend from its own profits, the agency helps give developing countries a helping hand. It's not going to change the course of history, but it may give hope to someone who doesn't know what that means today.
OPIC changes things, one project at a time, one life at a time. Not for corporate greed, or for favored investors, or to lose money or hurt average Americans who pay the bills that kill, but as a unique tool. The people who monitor OPIC, the NGOs supporting workers issues or the environment, the corporates the small businesses interests, the Hill....none of them will be completely satified.
For a government agency, that just means that OPIC is probably, finally doing something right.
Cerebrus took Chrysler private, this little treat isn't going to show up on any corporate annual report.
This aspect of the effort to take public companies private is going to play hell in the long time, because it's going to remove a layer of transparency that's always existed because of SEC reporting requirements.
NASHVILLE, Tenn. (AP) — Nissan North America Inc. said Wednesday it will offer buyouts to about 6,000 employees at the company's two Tennessee plants and eliminate a night shift at one plant because rising fuel prices and the economic downturn have slowed sales of trucks and sport utility vehicles.
The technicians and salaried employees at the assembly plant in Smyrna and powertrain plant in Decherd will be offered a lump sum of $100,000 or $125,000 depending on tenure, as well as medical and car purchase benefits, the company said.
And there's been talk that Toyota may be planning to do the same thing down at its plant in Southern Indiana.
With Detroit switched over to VEBAs this is likely to put these companies at a cost advantage as compared to the transplants in a matter of a few years.
I note they bought the 51% stake of GM's GMAC (financing) unit....
Ha! How the garbage gets taken out by friends.
Note Dan Quayle is their spokesman.
When, if ever, are people of both parties going to plain call out this pay back after leaving office of Politicians to sit on boards or be spokesmen for these sorts of companies who magically get to write and more importantly, about the only things that get passed, legislation from Congress and the administration?
I saw Pelosi on the daily show go on and on about how they simply can't do anything until they get 60 Democratic Senators.
Now what kind of bullshit is that when the Corporate party has the most representation in both Congress and the White House (Judiciary TBD!)
AFL-CIO Testimony is not saying to dissolve the OPIC. What they say is they want further reforms and transparency. They also say that the charter is a good thing and are trying to get reforms for the organization.
You need raw data to prove your case on sm. business. For example a body shop can be a small business. (What's a body shop?). A body shop is a contracting organization whose business model is pure labor arbitrage. They pay their workers less and then try to obtain large contracts, usually from foreign MNCs (multinational corporations). India has built up heavily it's economy by such methods. India GDP is now ~7.5% BPO (business process outsourcing) and these profits can absolutely be traced back to the US middle class pocket books. In other words, out of US workers income and straight transfer to India. That's the difference. There is economic global expansion and then there is pure labor arbitrage. MNCs hunting the globe, squeezing costs, i.e. an arbitrage model, vs. an expansion model.
Now it's quite clear that OPIC from the deals being made have been party to that from the testimony.
Then, on a higher level, one must wonder where is the government directive, department, iniative on the federal level to invest in the United States? We have areas in the US that truly are approaching 3rd world and need investment, support, resources badly. It seems philosophically the focus is always external to the US instead of investing in the US, as if she is a deep well which will never run dry and that is just not the case. They are sucking off pretty much well most of the investments made from 1934-1980 without putting much back in. In terms of US investments, from the citizens to infrastructure, the US is seen as an unlimited credit card to be used for purposes which defocus what is in the United States (and her people's) interests.
What I said was stuck on stupid is not you but the policy, overall to tie foreign policy to economic policy and that's when they trade away US assets, contracts, funds, intellectual property, military know how (e.g. U.S. Nuclear Technology - India and Pakistan) on some nebulous foreign policy agenda which from history, sure as hell doesn't look like it has any real payout in the national interest by a long shot. There are other ways to develop nations economically but literally handing over huge chunks of the United States economy just ain't it.
(Think Japan and their global presence, yet they are not selling their citizens short in the process).
Also, bear in mind I did not write this blog post. I'm merely commenting on it.
Suppose you were a crony corporatist President, Fed Chairman, or Treasury Secretary. Your cronies, the Wall Street investment banks, come to you doing their best imitation of Jim Cramer's "They're dying out there!!!" meltdown from last August.
Your cronies are insolvent.
How do you save them? Maybe you (1) lower interest rates so they can rebuild their balance sheets, (2) look the other way while they run up commodities and profit mightily from same, (3) allow them to move their toxic garbage onto Federal agency balance sheets, (4) look the other way while they profit mightily from mounting bear raids on other stocks, and then (5) immunize them against retaliatory bear raids.
First of all, naked short selling is supposed to be illegal. It's common sense. Should it be illegal to sell something that you don't own? Yes.
Secondly, why only these 19 banks? Why not other banks that are in real trouble, like WaMu?
Thirdly, large banks are usually not the targets of naked shorts. Small businesses are, and these can be wiped out by naked shorts.
Finally, why only a notice? Probably because the people most responsible for the naked shorts are also the ones that the SEC is now shielding.
For the record, you started the sarchasm, and I took the "stuck on stupid" personally. But I respect your rules and your format and respond as follows.
The actual statutory reference made in the AFL statement is as follows:
Section 231 (h), "to further to the greatest degree possible, in a manner consistent with its goals, the balance of payments and employment objectives of the United States, (i)...and to seek to support those developmental projects having positive trade benefits to the US."
(l)"to decline to issue any contract or insurance...or enter into any agreement to providing financing ...if the Corporation determines that such investment is likely to cause a significant reduction in the number of employees in the US." Section (k)(1) bans support for runaway plants.
Appropriations language, seperate from this authorizing language requires the corporation to report ANY job loss to Congress.
231A(1) The Corporation may insure or finance a project only if the country in which the project is being undertaken is taking steps to adopt and implement laws that extend internationally recognized worker rights in that country.
231B The Board of Directors of the Corporation shall not vote in favor of any action proposed to be taken by the corporation that is likely to have significant adverse envirobnmentl impacts that are sensitive, diverse or unprecedented.
The presumption of this thread is of a government agency that harms the US economy by taking jobs and businesses overseas -- at taxpayer expense no less -- and then harms the countries it operates in, all for the multinationals.
That's simply not supported by the facts.
The agency has a long history of dealing with big business, but that's changed. It still does business with larger businesses because in many instances, the smaller companies cannot provide a energy resources, extension of credit et al, that larger companies do. And these firms have add on benefits for the US economy by subcontracting at home.
But the change has been for the better. And for its larger infrastructure projects, the agency now requires local community involvement, a very positive step.
The agency has taken its mandates for the environment and worker rights and transparency very seriously. As a matter of policy -- not mandated by Congress - the agency has joined the EITI, the Extractive Industries Transparency Initiative, which requires companies and countries to publish what they pay.
OPIC has augmented is anti corruption activities with a new handbook and hotline. The agency has pledged to make more information available to the public.
The agency voluntarily announced a 20% cut in Greenhouse Gas emissions for the agency's portfolio over ten years. No other USG agency has done so yet.
In sum, the agency has evolved and continues to evolve in its corporate social responsibility. These are solid, proactive changes.
The AFL and Heritage...and CATO, Brookings, AEI are all entitled to their view of what the agency does and what the agency should do. But the underlying facts about OPIC, from the statute up, make it the kind of agency that should be emulated, not denigrated.
That's what I'm seeing, zero enforcement, a law which is supposed to apply to all stocks, yet magically was "whipped out" for just 19 and on a "timed" basis, and yes, isn't it interesting some of these announcements of commodities going on? Another example is the rumor mill on WaMu and the piling on of shorts.
As I understand it, there used to be a limited exception to the ban on "naked shorts", and that was for broker/dealers who nevertheless had to use their "best efforts" to locate stock to borrow, first, before they went nekkid. At some point whether formally or just (surprise, surprise) lack of enforcement, the "best efforts" requirement ceased to exist. This enabled "bear raids" where people could simulataneously by enormous amounts of short interest and at the same time pass on rumors of, e.g., insolvency.
It's not clear to me at all that this wasn't the case with Fannie and Freddie.
The fact remains, if naked shorting is bad, then presumably it is bad for all publicly traded stocks, not just certain favored "crony" stocks.
In a similar vein, BTW, I'm wondering about the June 8 Morgan Stanley note calling for $150/barrel oil by July 4, that it appears just happened to come out simultaneously with SemGroup being caught short in oil. Their forced unwinding may have been behind the recent upward spike, and of course it put them out of business. Did somebody know something and apply a short squeeze?
Here's something ridiculous. The SEC put on notice naked shorts on 19 companies, pretty much all of them financials. Now they extended that until August 12. But the thing is, naked shorts are supposed to be illegal. (this means someone can short more stock than has been issued!)
More from Bloomberg:
From Bloomberg, Aug. 1, 2008:
Come September, we'll see how much of this was the Olympic games, and how much was the bursting of a bubble.
As a response to Mr. Harris, while I thank you for your perspective, I will put my faith in the fact that Chinese are human beings with the same animal spirits as everybody else.
1998 and the std. was finalized about 1997 time frame. Yes, and it due to US corporations. They couldn't even agree on a national network standard and put different systems in different spectrums and protocols.
Europe's had widespread 3G phones for a decade now? Oh man are we behind the 8 ball!
Who owns the Economist? Last I heard rewriting GDP figures wasn't their forte so isn't that one new!
oops, I guess I'm just whinin!
They don't charge for incoming calls. Period. And the overall pricing is much more reasonable. So, what do you get? Mobile networks deployed all over Europe while the United States was/is way behind. I mean 3G is this amazing thing in the US when it has been deployed I think going on 10 years now in Japan and EU. Even worse, (as usual) AT&T who invested the mobile phone, literally blew the entire thing up in terms of making it a business. I think they recently finally figured it out but for years, nope.
Same is true with broadband. In the United States it's very high priced in comparison and then we don't have deployment in many rural areas. We're way behind and we invented it.
I guess that's what one gets when corporations survive that should go under by plain stupid business models, price plans, whose product roadmap must only have two phrases, squeeze the consumer and layoffs planned after completion of project x. Oh yeah the third thing on their powerpoint slides, make sure I personally get a huge bonus with backdated options and all sorts of funds for raping the company and make sure Press releases are believed by Wall Street and take Hedge Fund manager x in the private jet to my Island for entertaining.
According the NY Times article, Merrill is loaning Lone Star $5 Billion to buy the $6.7 Billion in assets off of them.
Now here's the kicker: if the value of the mortgage-backed securities deteriorates even further then Lone Star has to eat the first $1.7 Billion in losses. However, for every dollar the value of the assets fall past the first $1.7 Billion Merrill Lynch is on the hook.
So in other words, if the value of the assets fall to zero, then Lone Star would lose $1.7 Billion, but Merrill Lynch would lose another $5 Billion.
Asian economies which are still growing rapidly don't have much exposure to the banking crisis. America may have serious problems but the global economy is much, much stronger than it was in 1929.
Citibank is surviving on Saudi money.
Citibank isn't going under because investors are wealthy enough to handle the losses.
For the moral investor. Take an asset-backed loan off of the bank at $.22 on the dollar- and offer the family to change their unaffordable mortgage into rent overnight without needing to move.
Suddenly you've just created your own retirement business. At 1/5th the price.
A few points.
I frankly have no idea regarding the SME and OPIC and if there is the pass through concept that you're talking about that leverages lower cost labor. Homework I guess.
What I do know about OPIC is that its worker rights conditionalities exist on two levels. That the country must be "taking steps to implement" int'l work rights, but OPIC also provides unique conditions on the projects with regard to child labor, timely payment of wages, et.al., that address the circumstances of each project.
Philosophically, I would agree with you that the US needs to invest in itself. I just don't think that the goals of promoting economic development internationally and improving infrastructure domestically are mutually exclusive. You certainly shouldn't invest overseas to the exclusion of US infrastructure, but it shouldn't be dependent. A little now will save us a lot later down the road. That's my opinion.
Your last point seems to point to the current account deficit and ancillary issues associated with it.
To me, OPIC does't fit there...its probably part of something larger you feel strongly about. Having studied the organization, I can tell you that it doesn't "give away" anything. For permission to spend from its own profits, the agency helps give developing countries a helping hand. It's not going to change the course of history, but it may give hope to someone who doesn't know what that means today.
OPIC changes things, one project at a time, one life at a time. Not for corporate greed, or for favored investors, or to lose money or hurt average Americans who pay the bills that kill, but as a unique tool. The people who monitor OPIC, the NGOs supporting workers issues or the environment, the corporates the small businesses interests, the Hill....none of them will be completely satified.
For a government agency, that just means that OPIC is probably, finally doing something right.
Cerebrus took Chrysler private, this little treat isn't going to show up on any corporate annual report.
This aspect of the effort to take public companies private is going to play hell in the long time, because it's going to remove a layer of transparency that's always existed because of SEC reporting requirements.
In other news, have you seen about Nissan.
And there's been talk that Toyota may be planning to do the same thing down at its plant in Southern Indiana.
With Detroit switched over to VEBAs this is likely to put these companies at a cost advantage as compared to the transplants in a matter of a few years.
Wikipedia on Cerberus.
I note they bought the 51% stake of GM's GMAC (financing) unit....
Ha! How the garbage gets taken out by friends.
Note Dan Quayle is their spokesman.
When, if ever, are people of both parties going to plain call out this pay back after leaving office of Politicians to sit on boards or be spokesmen for these sorts of companies who magically get to write and more importantly, about the only things that get passed, legislation from Congress and the administration?
I saw Pelosi on the daily show go on and on about how they simply can't do anything until they get 60 Democratic Senators.
Now what kind of bullshit is that when the Corporate party has the most representation in both Congress and the White House (Judiciary TBD!)
AFL-CIO Testimony is not saying to dissolve the OPIC. What they say is they want further reforms and transparency. They also say that the charter is a good thing and are trying to get reforms for the organization.
You need raw data to prove your case on sm. business. For example a body shop can be a small business. (What's a body shop?). A body shop is a contracting organization whose business model is pure labor arbitrage. They pay their workers less and then try to obtain large contracts, usually from foreign MNCs (multinational corporations). India has built up heavily it's economy by such methods. India GDP is now ~7.5% BPO (business process outsourcing) and these profits can absolutely be traced back to the US middle class pocket books. In other words, out of US workers income and straight transfer to India. That's the difference. There is economic global expansion and then there is pure labor arbitrage. MNCs hunting the globe, squeezing costs, i.e. an arbitrage model, vs. an expansion model.
Now it's quite clear that OPIC from the deals being made have been party to that from the testimony.
Then, on a higher level, one must wonder where is the government directive, department, iniative on the federal level to invest in the United States? We have areas in the US that truly are approaching 3rd world and need investment, support, resources badly. It seems philosophically the focus is always external to the US instead of investing in the US, as if she is a deep well which will never run dry and that is just not the case. They are sucking off pretty much well most of the investments made from 1934-1980 without putting much back in. In terms of US investments, from the citizens to infrastructure, the US is seen as an unlimited credit card to be used for purposes which defocus what is in the United States (and her people's) interests.
What I said was stuck on stupid is not you but the policy, overall to tie foreign policy to economic policy and that's when they trade away US assets, contracts, funds, intellectual property, military know how (e.g. U.S. Nuclear Technology - India and Pakistan) on some nebulous foreign policy agenda which from history, sure as hell doesn't look like it has any real payout in the national interest by a long shot. There are other ways to develop nations economically but literally handing over huge chunks of the United States economy just ain't it.
(Think Japan and their global presence, yet they are not selling their citizens short in the process).
Also, bear in mind I did not write this blog post. I'm merely commenting on it.
Looks like the NYT is also asking questions about the value of banks assets because of the Merrill Lynch deal.
Suppose you were a crony corporatist President, Fed Chairman, or Treasury Secretary. Your cronies, the Wall Street investment banks, come to you doing their best imitation of Jim Cramer's "They're dying out there!!!" meltdown from last August.
Your cronies are insolvent.
How do you save them? Maybe you (1) lower interest rates so they can rebuild their balance sheets, (2) look the other way while they run up commodities and profit mightily from same, (3) allow them to move their toxic garbage onto Federal agency balance sheets, (4) look the other way while they profit mightily from mounting bear raids on other stocks, and then (5) immunize them against retaliatory bear raids.
Just supposin'....
I covered naked short selling in this diary.
First of all, naked short selling is supposed to be illegal. It's common sense. Should it be illegal to sell something that you don't own? Yes.
Secondly, why only these 19 banks? Why not other banks that are in real trouble, like WaMu?
Thirdly, large banks are usually not the targets of naked shorts. Small businesses are, and these can be wiped out by naked shorts.
Finally, why only a notice? Probably because the people most responsible for the naked shorts are also the ones that the SEC is now shielding.
For the record, you started the sarchasm, and I took the "stuck on stupid" personally. But I respect your rules and your format and respond as follows.
The actual statutory reference made in the AFL statement is as follows:
Section 231 (h), "to further to the greatest degree possible, in a manner consistent with its goals, the balance of payments and employment objectives of the United States, (i)...and to seek to support those developmental projects having positive trade benefits to the US."
(l)"to decline to issue any contract or insurance...or enter into any agreement to providing financing ...if the Corporation determines that such investment is likely to cause a significant reduction in the number of employees in the US." Section (k)(1) bans support for runaway plants.
Appropriations language, seperate from this authorizing language requires the corporation to report ANY job loss to Congress.
231A(1) The Corporation may insure or finance a project only if the country in which the project is being undertaken is taking steps to adopt and implement laws that extend internationally recognized worker rights in that country.
231B The Board of Directors of the Corporation shall not vote in favor of any action proposed to be taken by the corporation that is likely to have significant adverse envirobnmentl impacts that are sensitive, diverse or unprecedented.
The presumption of this thread is of a government agency that harms the US economy by taking jobs and businesses overseas -- at taxpayer expense no less -- and then harms the countries it operates in, all for the multinationals.
That's simply not supported by the facts.
The agency has a long history of dealing with big business, but that's changed. It still does business with larger businesses because in many instances, the smaller companies cannot provide a energy resources, extension of credit et al, that larger companies do. And these firms have add on benefits for the US economy by subcontracting at home.
But the change has been for the better. And for its larger infrastructure projects, the agency now requires local community involvement, a very positive step.
The agency has taken its mandates for the environment and worker rights and transparency very seriously. As a matter of policy -- not mandated by Congress - the agency has joined the EITI, the Extractive Industries Transparency Initiative, which requires companies and countries to publish what they pay.
OPIC has augmented is anti corruption activities with a new handbook and hotline. The agency has pledged to make more information available to the public.
The agency voluntarily announced a 20% cut in Greenhouse Gas emissions for the agency's portfolio over ten years. No other USG agency has done so yet.
In sum, the agency has evolved and continues to evolve in its corporate social responsibility. These are solid, proactive changes.
The AFL and Heritage...and CATO, Brookings, AEI are all entitled to their view of what the agency does and what the agency should do. But the underlying facts about OPIC, from the statute up, make it the kind of agency that should be emulated, not denigrated.
That's what I'm seeing, zero enforcement, a law which is supposed to apply to all stocks, yet magically was "whipped out" for just 19 and on a "timed" basis, and yes, isn't it interesting some of these announcements of commodities going on? Another example is the rumor mill on WaMu and the piling on of shorts.
As I understand it, there used to be a limited exception to the ban on "naked shorts", and that was for broker/dealers who nevertheless had to use their "best efforts" to locate stock to borrow, first, before they went nekkid. At some point whether formally or just (surprise, surprise) lack of enforcement, the "best efforts" requirement ceased to exist. This enabled "bear raids" where people could simulataneously by enormous amounts of short interest and at the same time pass on rumors of, e.g., insolvency.
It's not clear to me at all that this wasn't the case with Fannie and Freddie.
The fact remains, if naked shorting is bad, then presumably it is bad for all publicly traded stocks, not just certain favored "crony" stocks.
In a similar vein, BTW, I'm wondering about the June 8 Morgan Stanley note calling for $150/barrel oil by July 4, that it appears just happened to come out simultaneously with SemGroup being caught short in oil. Their forced unwinding may have been behind the recent upward spike, and of course it put them out of business. Did somebody know something and apply a short squeeze?
Here's something ridiculous. The SEC put on notice naked shorts on 19 companies, pretty much all of them financials. Now they extended that until August 12. But the thing is, naked shorts are supposed to be illegal. (this means someone can short more stock than has been issued!)
So, are we being set up for the wild short ride?
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