lunedì 7 dicembre 2009
From: SIGNS OF AN END-GAME SHOWDOWN WITH WASHINGTON
THE REPORT REFERS TO QUOTE 'THE RAPIDLY DETERIORATING ECONOMIC ENVIRONMENT'.
Readers and subscribers will be well aware that we know, and have in the past, referenced the participation of the World Bank in certain Fraudulent Finance operations. However the quality and professionalism of World Bank and IMF staff is, generally speaking, second to none: so that a clear distinction must be drawn between abuse of the international institution's inner workings (via its tax-exempt bank account privileges, for instance), and the professional work of the staffers.
The World Bank has just issued a report, summarised below, which provides new information on the impact of this crisis, which has been prolonged by the criminal behaviour of US office-holders and operatives, on parts of the Rest of the World (the phrase we use to distinguish everywhere else from the United States itself). We append a summary of the new report:
The global financial crisis is having a devastating impact on families in emerging Europe and Central Asia, with the risk of the region giving back a fifth of the poverty reduction gains of the past decade, according to a new World Bank report. By 2010, there could be over 10 million more poor people in the region, and close to an additional 25 million more who were almost middle class but now just above the poverty line (relative to pre-crisis projections) with the potential of losing their homes, jobs, and basic services.
The new report, 'The Crisis Hits Home – Stress-Testing Households in Europe and Central Asia', takes a unique look at the impacts of the global financial crisis at the household level in this region. According to the report, families are being hit by credit market shocks, the increasing prices of goods and services, and rising unemployment.
“The global financial crisis risks reversing the substantial gains and improvements in living standards achieved by the Europe and Central Asia region over the last few years”, said Luca Barbone, Director for Poverty Reduction and Economic Management in the World Bank’s Europe and Central Asia Region. “One of the tragic impacts of the crisis has been that the middle income countries that had turned the corner, are the ones hardest hit. Across countries in the region, unemployment levels have risen while economic activities have collapsed. Poverty will rise. Families are being stretched to the limit”.
• Editor's inserted Note:
See data for the collapse of exports, in the narrative above. See also the report's reference below to quote 'THE RAPIDLY DETERIORATING ECONOMIC ENVIRONMENT' unquote.
CREDIT MARKET SHOCKS
The report says that stress tests recently conducted by the World Bank on household loans show that ongoing macroeconomic shocks to interest rates, exchange rates, and household income may increase the numbers of families that are unable to pay back their debt.
For example, up to 20 percent more families with mortgages and other loans in Lithuania and Hungary could be at risk of defaulting on their loans.
PRICE SHOCKS IN THE PIPELINE
The food and fuel crisis may not be over. International commodity price levels have not returned to pre-2007 levels. In addition, falling currencies in some countries are now generating a new round of price increases. Because food represents a very large share of the poor’s total consumption – in some of the low-income countries of Europe and Central Asia, the food share of consumption among the poor is 70 to 80 percent – the poorest consumers will again be vulnerable.
In addition, in a number of countries, such as Belarus, Moldova, and Ukraine, the utility reform program remains largely incomplete. As a result, a number of countries will have to adjust their energy tariffs to cost-recovery levels in the coming years.
EMPLOYMENT AND INCOME SHOCKS
Over the recovery period following the 1998 Russian crisis through 2006, more than 50 million people moved out of poverty in the region. However, the poverty impact of this crisis will be enormous. The RAPIDLY DETERIORATING GLOBAL ECONOMIC ENVIRONMENT [sic] is eroding the region’s substantial gains and, given the increased poverty projections, is threatening the welfare of a total of about 160 million people – close to 40 million people who are poor and approximately 120 million people who are just above the poverty line.
It is the middle-income Commonwealth of Independent (CIS) countries that have seen the largest and most significant downward revisions to their Gross Domestic Product growth projections.
COPING WITH THE CRISIS
According to the report, lessons from the region’s own experiences with previous crises suggest that temporary economic shocks have a lasting impact on human development, as families cut back their education and health investments in response to a banking or exchange rate crisis.
Compared to past crises, the scope for households in Europe and Central Asia to fall back on their traditional coping strategies – from secondary employment and money transfers from friends and family to working abroad – is much more limited.
sabato 5 dicembre 2009
YOU LIE ! ! ! ! !
The clarion call rings out coast to coast in real time with numero uno as the accused. And the accuser is forced to apologize---not for being factually inaccurate but because it is politically incorrect to embarrass the king when he has no clothes.
But it is not the statement uttered that is being identified. The action is but one more example of the modus operandi. As the old humor goes: “How can you tell if the bureaucrat is lying ??” Answer: “Is his mouth moving?”
Is the imposition of the income tax any different ? Unfortunately, no. The pursuit of a livelihood has long been an acknowledged component of the constitutional Right of Liberty. Constitutional Rights are secured for We the People and have never been suitable objects for revenue taxation. If the tax agency can legally impose a tax, the agency can confiscate 100 percent of the revenue generated by the source. Have you ever heard of slavery ?? It has only been prohibited by plantation owners; it has not been prohibited if imposed by government.
“But the courts will protect me.” you cry. Have you not been listening ?? The courts are but one more agency of the bureaucracy. The courts receive their funding, and salaries, from the wealth confiscated from the citizenry. Would the Mafia cheerfully grant a patsy leave from extortion ??
How would the courts lie to me, you ask ?? Oh, let me count the ways. Better yet, let me describe how they do it for income tax adjudication. The attached file is an analysis of the US v Vroman case wherein the Ninth Circuit court of appeals presented a position expounded in various other circuits.
Read it and weep---but be informed.
Lawyers, as a franchised entity of the court, and even as CEO’s of established “freedom” think tanks, seem disinclined to confront the king with his lack of apparel. An organized mutiny by professionals, in all circuits, could conceivably “correct the abuses to which we have become accustomed.” Perhaps you may know of some individual who may find the writing of interest.
The academic analysis of Vroman is not to be considered legal advice.
Tuesday Barter Report, December 1, 2009
International tourists are now counted each year in tens of millions, and tourism is today the largest single industry on earth. Huge investments have been made globally in hotels catering to foreign visitors. With the economic difficulties affecting these countries, the problem is how to fill hotel rooms to the point where these investments remain viable.
Many national tourism authorities are using countertrade to expand their business opportunities. For example:
· Canadian farmers supplying barley to a U.S. customer were offered trips to Las Vegas in exchange.
· A chain of spa hotels has been constructed in Hungary by an Italian company with partial payment in vacations and holidays at the hotels.
· To pay for gas piped from Russia, Turkey has considered setting up tourist parks with hotel complexes in Yalta and Baku.
· Cuba has set up a tourist enterprise, Cubanacan SA, to develop organized tours, seaside vacations, and congresses. The hard currency earnings will pay for the foreign expertise to increase hotel capacity and occupancy.
· Cuba also signed contracts with certain countries to construct eight hotels at Varadero, in exchange for sugar, tobacco and nickel.
· India has offered tourism packages on its list of exports available for countertrade deals.
· Egypt once paid for television receivers, supplied by a Japanese company, with tourism for Japanese nationals.
The major advantage of this form of countertrade is that it gives these countries the opportunity to sell their tourism in Western countries where they do not possess effective marketing access.
By Paul Grignon
This video production explains in simple and straight forward language (with supporting animated visuals) the true nature of money and the dysfunctional and undemocratic nature of the global banking system, describing the process of money creation and the catastrophic impact compound interest has on society and national and global economy.
by Benjamin Fulford
The other night I got called by Fuji Television, a major Japanese network. They told me they wanted to invite me to speak on a news program about Obama’s economic policies. I explained to them that Obama was presiding over an economic disaster of historic proportions. Using only data that came from official sources I showed how the real unemployment rate was 17.5%. I explained in detail how the US government was faking its economic data. I showed how Obama borrowed $1 trillion from the Chinese last year and had already spent it and was not getting any more. I told them to check various governments official data to confirm that no foreigners were buying US government bonds. They asked me to look at the site called recovery.gov. I looked at it and explained to them that it was all smoke and mirrors. It was just unkept promises and feel good talk. The TV producer told me to wait a minute because he had to talk to his superior. He then said to me “I am sorry but your television appearance has been cancelled. The aim of this program is to convince the Japanese they should imitate the US.” In other words a so-called “news” program decides in advance what it wants to tell the Japanese people and damn the facts. Running a program like that for an evil foreign group is treason. Real news programs just objectively provide the facts and let the people form their own opinions. We are calling for an international advertising boycott of Fuji Television until they clean up their act. We are also asking people to phone Fuji Television and ask for their public relations department to explain why they are doing this. Fuji’s telephone number is 813-5500-8888. It is time to discipline the corporate media worldwide.
by Benjamin Fulford
The shift of the global financial center of gravity to Asia means that the United Nations, the IMF, the World Bank and probably the European Union are all doomed institutions. This is already beginning to manifest itself in the form of increasingly desperate high-level phone calls from these various institutions asking for Asian money. They are being told no because all of these institutions are corrupt and have inflicted pain and suffering on many people around the world.
We will need to replace these institutions with entirely new ones to be built from scratch. The Chinese would like to have a new United Nations to be headquartered in Laos. It is also likely that many arbitrary colonial borders will be redrawn as a part of this move.
Hong Kong is going to replace the City of London as the world’s main financial center.
The Chinese have also already replaced the World Bank as the world’s biggest helpers of developing nations. An entirely new institution is going to be set up in Japan to replace the IMF.
The Western countries will be increasingly marginalized and cut off from the global flow of trade until they stop their endless, mindless war-mongering. However, once the West purges its body politic of the evil cabal that infected it, it will use its still superior technical and scientific might for the greater good of humanity and the planet. The uncorking of all the suppressed scientific knowledge will trigger the start of an age of wonder and discovery.
Also, since we do not know what is out there in the universe, the West’s superior military ability will be used to protect the planet in the case of any emergencies.
Soon, we are all going to be living on a much nicer planet.
|Greater Atlantic Bank||Reston||VA||32583||December 4, 2009||December 4, 2009|
|Benchmark Bank||Aurora||IL||10440||December 4, 2009||December 4, 2009|
|AmTrust Bank||Cleveland||OH||29776||December 4, 2009||December 4, 2009|
|The Tattnall Bank||Reidsville||GA||12080||December 4, 2009||December 4, 2009|
|First Security National Bank||Norcross||GA||26290||December 4, 2009||December 4, 2009|
|The Buckhead Community Bank||Atlanta||GA||34663||December 4, 2009||December 4, 2009|
James Grant: Requiem for the dollarSubmitted by cpowell on Sat, 2009-12-05 03:58. Section: Daily Dispatches
In this long essay from The Wall Street Journal, James Grant of Grant's Interest Rate Observer remarks that the Federal Reserve "isn't overtly manipulating" the gold market. His implication is that the Fed might be manipulating the gold market covertly. Maybe this is a small step in the right direction by someone who surely is erudite enough to know better already.
* * *
Requiem for the Dollar
By James Grant
The Wall Street Journal
Saturday, December 5, 2009
Ben S. Bernanke doesn't know how lucky he is. Tongue-lashings from Bernie Sanders, the populist senator from Vermont, are one thing. The hangman's noose is another. Section 19 of this country's founding monetary legislation, the Coinage Act of 1792, prescribed the death penalty for any official who fraudulently debased the people's money. Was the massive printing of dollar bills to lift Wall Street (and the rest of us, too) off the rocks last year a kind of fraud? If the U.S. Senate so determines, it may send Mr. Bernanke back home to Princeton. But not even Ron Paul, the Texas Republican sponsor of a bill to subject the Fed to periodic congressional audits, is calling for the Federal Reserve chairman's head.
I wonder, though, just how far we have really come in the past 200-odd years. To give modernity its due, the dollar has cut a swath in the world. There's no greater success story in the long history of money than the common greenback. Of no intrinsic value, collateralized by nothing, it passes from hand to trusting hand the world over. More than half of the $923 billion's worth of currency in circulation is in the possession of foreigners.
In ancient times, the solidus circulated far and wide. But it was a tangible thing, a gold coin struck by the Byzantine Empire. Between Waterloo and the Great Depression, the pound sterling ruled the roost. But it was convertible into gold -- slip your bank notes through a teller's window and the Bank of England would return the appropriate number of gold sovereigns. The dollar is faith-based. There's nothing behind it but Congress.
But now the world is losing faith, as well it might. It's not that the dollar is overvalued -- economists at Deutsche Bank estimate it's 20% too cheap against the euro. The problem lies with its management. The greenback is a glorious old brand that's looking more and more like General Motors.
You get the strong impression that Mr. Bernanke fails to appreciate the tenuousness of the situation -- fails to understand that the pure paper dollar is a contrivance only 38 years old, brand new, really, and that the experiment may yet come to naught. Indeed, history and mathematics agree that it will certainly come to naught. Paper currencies are wasting assets. In time, they lose all their value. Persistent inflation at even seemingly trifling amounts adds up over the course of half a century. Before you know it, that bill in your wallet won't buy a pack of gum.
For most of this country's history, the dollar was exchangeable into gold or silver. "Sound" money was the kind that rang when you dropped it on a counter. For a long time, the rate of exchange was an ounce of gold for $20.67. Following the Roosevelt devaluation of 1933, the rate of exchange became an ounce of gold for $35. After 1933, only foreign governments and central banks were privileged to swap unwanted paper for gold, and most of these official institutions refrained from asking (after 1946, it seemed inadvisable to antagonize the very superpower that was standing between them and the Soviet Union). By the late 1960s, however, some of these overseas dollar holders, notably France, began to clamor for gold. They were well-advised to do so, dollars being in demonstrable surplus. President Richard Nixon solved that problem in August 1971 by suspending convertibility altogether. From that day to this, in the words of John Exter, Citibanker and monetary critic, a Federal Reserve "note" has been an "IOU nothing."
To understand the scrape we are in, it may help, a little, to understand the system we left behind. A proper gold standard was a well-oiled machine. The metal actually moved and, so moving, checked what are politely known today as "imbalances."
Say a certain baseball-loving North American country were running a persistent trade deficit. Under the monetary system we don't have and which only a few are yet even talking about instituting, the deficit country would remit to its creditors not pieces of easily duplicable paper but scarce gold bars. Gold was money -- is, in fact, still money -- and the loss would set in train a series of painful but necessary adjustments in the country that had been watching baseball instead of making things to sell. Interest rates would rise in that deficit country. Its prices would fall, its credit would be curtailed, its exports would increase and its imports decrease. At length, the deficit country would be restored to something like competitive trim. The gold would come sailing back to where it started. As it is today, dollars are piled higher and higher in the vaults of America's Asian creditors. There's no adjustment mechanism, only recriminations and the first suggestion that, from the creditors' point of view, enough is enough.
So in 1971, the last remnants of the gold standard were erased. And a good thing, too, some economists maintain. The high starched collar of a gold standard prolonged the Great Depression, they charge; it would likely have deepened our Great Recession, too. Virtue's the thing for prosperity, they say; in times of trouble, give us the Ben S. Bernanke school of money conjuring. There are many troubles with this notion. For one thing, there is no single gold standard. The version in place in the 1920s, known as the gold-exchange standard, was almost as deeply flawed as the post-1971 paper-dollar system. As for the Great Recession, the Bernanke method itself was a leading cause of our troubles. Constrained by the discipline of a convertible currency, the U.S. would have had to undergo the salutary, unpleasant process described above to cure its trade deficit. But that process of correction would -- I am going to speculate -- have saved us from the near-death financial experience of 2008. Under a properly functioning gold standard, the U.S. would not have been able to borrow itself to the threshold of the poorhouse.
Anyway, starting in the early 1970s, American monetary policy came to resemble a game of tennis without the net. Relieved of the irksome inhibition of gold convertibility, the Fed could stop worrying about the French. To be sure, it still had Congress to answer to, and the financial markets, as well. But no more could foreigners come calling for the collateral behind the dollar, because there was none. The nets came down on Wall Street, too. As the idea took hold that the Fed could meet any serious crisis by carpeting the nation with dollar bills, bankers and brokers took more risks. New forms of business organization encouraged more borrowing. New inflationary vistas opened.
Not that the architects of the post-1971 game set out to lower the nets. They believed they'd put up new ones. In place of such gold discipline as remained under Bretton Woods -- in truth, there wasn't much -- markets would be the monetary judges and juries. The late Walter Wriston, onetime chairman of Citicorp, said that the world had traded up. In place of a gold standard, it now had an "information standard." Buyers and sellers of the Treasury's notes and bonds, on the one hand, or of dollars, yen, Deutschemarks, Swiss francs, on the other, would ride herd on the Fed. You'd know when the central bank went too far because bond yields would climb or the dollar exchange rate would fall. Gold would trade like any other commodity, but nobody would pay attention to it.
I check myself a little in arraigning the monetary arrangements that have failed us so miserably these past two years. The lifespan of no monetary system since 1880 has been more than 30 or 40 years, including that of my beloved classical gold standard, which perished in 1914. The pure paper dollar regime has been a long time dying. It was no good portent when the tellers' bars started coming down from neighborhood bank branches. The uncaged teller was a sign that Americans had began to conceive an elevated opinion of the human capacity to manage financial risk. There were other evil omens. In 1970, Wall Street partnerships began to convert to limited liability corporations -- Donaldson, Lufkin & Jenrette was the first to make the leap, Goldman Sachs, among the last, in 1999. In a partnership, the owners are on the line for everything they have in case of the firm's bankruptcy. No such sword of Damocles hangs over the top executives of a corporation. The bankers and brokers incorporated because they felt they needed more capital, more scale, more technology -- and, of course, more leverage.
In no phase of American monetary history was every banker so courageous and farsighted as Isaias W. Hellman, a progenitor of an institution called Farmers & Merchants Bank and of another called Wells Fargo. Operating in southern California in the late 1880s, Hellman arrived at the conclusion that the Los Angeles real-estate market was a bubble. So deciding -- the prices of L.A. business lots had climbed to $5,000 from $500 in one short year -- he stopped lending. The bubble burst, and his bank prospered. Safety and soundness was Hellman's motto. He and his depositors risked their money side-by-side. The taxpayers didn't subsidize that transaction, not being a party to it.
In this crisis, of course, with latter-day Hellmans all too scarce in the banking population, the taxpayers have born an unconscionable part of the risk. Wells Fargo itself passed the hat for $25 billion. Hellmans are scarce because the federal government has taken away their franchise. There's no business value in financial safety when the government bails out the unsafe. And by bailing out a scandalously large number of unsafe institutions, the government necessarily puts the dollar at risk. In money, too, the knee bone is connected to the thigh bone. Debased banks mean a debased currency. (Perhaps causation works in the other direction too.)
Many contended for the hubris prize in the years leading up to the sorrows of 2008, but the Fed beat all comers. Under Mr. Bernanke, as under his predecessor, Alan Greenspan, our central bank preached the doctrine of stability. The Fed would iron out the business cycle, promote full employment, pour oil on the waters of any and every major financial crisis, and assure stable prices. In particular, under the intellectual leadership of Mr. Bernanke, the Fed would tolerate no sagging of the price level. It would insist on a decent minimum of inflation. It staked out this position in the face of the economic opening of China and India and the spread of digital technology. To the common-sense observation that these hundreds of millions of willing new hands, and gadgets, might bring down prices at Wal-Mart, the Fed turned a deaf ear. It would save us from "deflation" by generating a sweet taste of inflation (not too much, just enough). And it would perform these feats of macroeconomic management by pushing a single interest rate up or down.
It was implausible enough in the telling and has turned out no better in the doing. Nor is there any mystery why. The Fed's M.O. is price control. It fixes the basic money market interest rate, known as the federal funds rate. To arrive at the proper rate, the monetary mandarins conduct their research, prepare their forecast -- and take a wild guess, just like the rest of us. Since December 2008, the Fed has imposed a funds rate of 0% to 0.25%. Since March of 2009, it has bought just over $1 trillion of mortgage-backed securities and $300 billion of Treasurys. It has acquired these assets in the customary central-bank manner, i.e., by conjuring into existence the money to pay for them. Yet -- a measure of the nation's lingering problems -- the broadly defined money supply isn't growing but dwindling.
The Fed's miniature interest rates find favor with debtors, disfavor with savers (that doughty band). All may agree, however, that the bond market has lost such credibility it once had as a monetary-policy voting machine. Whether or not the Fed is cranking too hard on the dollar printing press is, for professional dealers and investors, a moot point. With the cost of borrowing close to zero, they are happy as clams (that is, they can finance their inventories of Treasurys and mortgage-backed securities at virtually no cost). The U.S. government securities market has been conscripted into the economic-stimulus program.
Neither are the currency markets the founts of objective monetary information they perhaps used to be. The euro trades freely, but the Chinese yuan is under the thumb of the People's Republic. It tells you nothing about the respective monetary policies of the People's Bank and the Fed to observe that it takes 6.831 yuan to make a dollar. It's the exchange rate that Beijing wants.
On the matter of comparative monetary policies, the most expressive market is the one that the Fed isn't overtly manipulating. Though Treasury yields might as well be frozen, the gold price is soaring (it lost altitude on Friday). Why has it taken flight? Not on account of an inflation problem. Gold is appreciating in terms of all paper currencies -- or, alternatively, paper currencies are depreciating in terms of gold -- because the world is losing faith in the tenets of modern central banking. Correctly, the dollar's vast non-American constituency understands that it counts for nothing in the councils of the Fed and the Treasury. If 0% interest rates suit the U.S. economy, 0% will be the rate imposed. Then, too, gold is hard to find and costly to produce. You can materialize dollars with the tap of a computer key.
Let me interrupt myself to say that I am not now making a bullish investment case for gold (I happen to be bullish, but it's only an opinion). The trouble with 0% interest rates is that they instigate speculation in almost every asset that moves (and when such an immense market as that in Treasury securities isn't allowed to move, the suppressed volatility finds different outlets). By practicing price, or interest-rate, control, the Bank of Bernanke fosters a kind of alternative financial reality. Let the buyer beware -- of just about everything.
A proper gold standard promotes balance in the financial and commercial affairs of participating nations. The pure paper system promotes and perpetuates imbalances. Not since 1976 has this country consumed less than it produced (as measured by the international trade balance): a deficit of 32 years and counting. Why has the shortfall persisted for so long? Because the U.S., uniquely, is allowed to pay its bills in the currency that only it may lawfully print. We send it west, to the central banks of our Asian creditors. And they, obligingly, turn right around and invest the dollars in America's own securities. It's as if the money never left home. Stop to ask yourself, American reader: Is any other nation on earth so blessed as we?
There is, however, a rub. The Asian central banks do not acquire their dollars with nothing. Rather, they buy them with the currency that they themselves print. Some of this money they manage to sweep under the rug, or "sterilize," but a good bit of it enters the local payment stream, where it finances today's rowdy Asian bull markets.
A monetary economist from Mars could only scratch his pointy head at our 21st century monetary arrangements. What is a dollar? he might ask. No response. The Martian can't find out because the earthlings don't know. The value of a dollar is undefined. Its relationship to other currencies is similarly contingent. Some exchange rates float, others sink, still others are lashed to the dollar (whatever it is). Discouraged, the visitor zooms home.
Neither would the ghosts of earthly finance know what to make of things if they returned for a briefing from wherever they were spending eternity. Someone would have to tell Alexander Hamilton that his system of coins is defunct, as is, incidentally, the federal sinking fund he devised to retire the public debt (it went out of business in 1960). He might have to hear it more than once to understand, but Congress no longer "coins" money and regulates the value thereof. Rather, it delegates the work to Mr. Bernanke, who, a noted student of the Great Depression, believes that the cure for borrowing too much money is printing more money.
Walter Bagehot, the Victorian English financial journalist, would be in for a jolt too. It would hardly please him to hear that the Fed had invoked the authority of his name to characterize its helter-skelter interventions of the past year. In a crisis, Bagehot wrote in his 1873 study "Lombard Street," a central bank should lend without stint to solvent institutions at a punitive rate of interest against sound collateral. At least, Bagehot's shade might console itself, the Fed was faithful to the text on one point. It did lend without stint.
If Bagehot's ghost would be chagrined, that of Bagehot's sparring partner, Thomson Hankey, would be exultant. Hankey, a onetime governor of the Bank of England, denounced Bagehot in life. No central bank should stand ready to bail out the imprudent, he maintained. "I cannot conceive of anything more likely to encourage rash and imprudent speculation..., " wrote Hankey in response to Bagehot. "I am no advocate for any legislative enactments to try and make the trading community more prudent."
Hankey believed in the price system. It might pain him to discover that his professional descendants have embraced command and control. "We should have required [banks to hold] more capital, more liquidity," Mr. Bernanke rued in a Senate hearing on Thursday. "We should have required more risk management controls." Roll over, Isaias Hellman.
So our Martian would be mystified and our honored dead distressed. And we, the living? We are none too pleased ourselves. At least, however, being alive, we can begin to set things right. The thing to do, I say, is to restore the nets to the tennis courts of money and finance. Collateralize the dollar—make it exchangeable into something of genuine value. Get the Fed out of the price-fixing business. Replace Ben Bernanke with a latter-day Thomson Hankey. Find -- cultivate --battalions of latter-day Hellmans and set them to running free-market banks. There's one more thing: Return to the statute books Section 19 of the 1792 Coinage Act, but substitute life behind bars for the death penalty. It's the 21st century, you know.
----James Grant is editor of Grant's Interest Rate Observer and the author, most recently, of "Mr. Market Miscalculates" (Axios Press).
Israeli central banker says world must accept a weaker dollar
By Daniel Bases
Thursday, December 3, 2009
NEW YORK -- Bank of Israel Governor Stanley Fischer said on Thursday the world has to accept a weaker U.S. dollar in order to ensure the global economy recovers soundly.
"We also have to realize, what is hard to get across, there has to be a global rebalancing. Either the U.S. runs a very long period of recession, which is a really bad idea, or the dollar has to weaken, so that balance of payments can be straightened out," Fischer said in response to a question during a business breakfast in New York.
"So we have got to accept, as do other people, there has to be appreciation vis-a-vis the American dollar. Most people have kind of accepted that. It is just that when it gets out of line that people get nervous," he said.
The Israeli shekel has recently strengthened against the U.S. dollar, trading at around 3.7750 per greenback. In October it hit its best levels in 10 months, trading as strong as 3.67 per U.S. dollar.
In the August through October period the central was intervening heavily in order to stop the shekel from appreciating rapidly against the greenback which would give relief to Israeli exports.
The U.S. dollar index, which measures the greenback against a basket of major trading-partner currencies, has fallen roughly 16.75 percent since it peaked in early March of this year when global markets hit bottom and investors were seeking a safe haven.
Fischer acknowledged the strong economic connection with the United States and its importance for the global economy but cautioned that heavily export-oriented countries have to move away from relying on the United States to buy their goods and services.
"So I think we've all got to accept the fact that the dollar is likely to be weaker and our currencies relative to the dollar are going to be stronger. The U.S. has to reduce its imports ... or we won't get a prosperous global economy," he said.
"You have at one end the Chinese just not budging. At the other end the Brazilians have massive appreciation ... trying to use capital controls and various things," he said in reference to measures put in place to limit the real's rise.
On the issue of inflation, which he reiterated is likely to rise above the current top end of its 1-3 percent target range in the coming months, Fischer said he would not be a buyer of gold.
As recently as Nov. 23, the central bank increased its key lending rate by a quarter of a percentage point to 1 percent, a level it said was still "accommodative" and would support further economic recovery.
Still, given the rising inflation pressures, he said he was not interested in making a move similar to that of India's central bank, which spent $6.7 billion in early November to buy 200 tonnes of gold from the International Monetary Fund.
Spot gold prices touched another record high on Thursday, rising to $1,226.10 before slipping back to $1,214."If you really think that the future is high inflation in the world economy, then you hold gold. I don't think that is the future. I don't see us in a high-inflation environment. Without committing, I don't think we are going into gold any time soon," he said.
Legal Sector Loses 2,900 Jobs in November
December 04, 2009
The pace of job loss in the United States slowed significantly in November, according to the Bureau of Labor Statistics' monthly jobs report. The economy shed just 11,000 jobs in November, the lowest such figure since December 2007. The overall unemployment rate fell to 10 percent, down from 10.2 percent in October. Here's analysis of the jobs report from The New York Times.
So how did the legal services sector fare in November? Not quite as well. When seasonally adjusted the sector lost 2,900 jobs. Since November 2008, the sector has lost a total 41,800 jobs. Still, the 2,900 dip is half the number of jobs shed in October when the BLS reported legal services providers cut 5,800 positions. That followed a report of 2,000 jobs lost in September.
This article first appeared on The Am Law Daily blog on AmericanLawyer.com.
"Joint Urban Operations," Joint Publication 3-06, November 8, 2009.
This publication provides joint doctrine for the planning, execution, and assessment of joint operations in an urban environment and explains how they differ from operations undertaken in other environments.
"Counterterrorism," JP 3-26, November 13, 2009.
This publication provides joint doctrine for the planning and execution of counterterrorism across the range of military operations.
In recent years, the People’s Republic of China (PRC) has bolstered its diplomatic presence and garnered international goodwill in the developing world through financing infrastructure and natural resource development projects, assisting in the execution of such projects, and backing PRC state enterprises in many developing countries. This report examines China’s foreign assistance and government-supported, often-preferential investment ventures in three regions: Africa, Latin America (Western Hemisphere), and Southeast Asia. These activities often are collectively referred to as “economic assistance” by some analysts and in this report.
Much of China’s “economic assistance” does not constitute “official development assistance” (ODA) as measured by the Organization for Economic Co-operation and Development (OECD) and as generally provided by members of the OECD. However, many activities have an aid component—they are secured through official bilateral agreements, promote development, and provide economic benefits to recipient countries that otherwise might not be made possible.
Furthermore, they are not strictly commercial or do not result in foreign ownership of productive assets, and thus they do not qualify as foreign direct investment (FDI). In terms of development grants, the primary form of assistance provided by major aid donors, China is a relatively small source of global aid. However, when China’s commercial and concessional loans, technical assistance, and state-sponsored or subsidized investments are included, the PRC becomes a major source of economic assistance.
This report is largely based upon research conducted in 2007-2008 by graduate students at the New York University Robert F. Wagner Graduate School of Public Service under the supervision of Wagner School faculty and CRS specialists. The students’ findings, while not comprehensive, suggest a dramatic increase in PRC economic assistance and state-sponsored investment from 2002 through 2007. The numbers provided in this report are not meant to be interpreted as reliable foreign aid totals. Furthermore, some PRC loans or aid pledges may not have been fulfilled and some aid pledges that include multiple projects or that span several years may have been counted more than once.
According to the Wagner School research, during the 2002-2007 period, Africa received the greatest amount of loans and other economic assistance, followed by Latin America and Southeast Asia. The findings suggest that China’s aid activities in Africa and Latin America serve the PRC’s immediate economic interests, while those in Southeast Asia relate to longer term diplomatic or strategic objectives. In Africa and Southeast Asia, PRC-sponsored infrastructure and public works projects constitute the most common form of activity, while in Latin America, where some countries are more developed, Chinese natural resource development projects are more prominent. China is fast becoming a top trading partner with Africa and Southeast Asia, and it is second to the United States as a market for Latin American commodities and goods.
Although the PRC’s economic assistance activities are a highly visible reminder of China’s growing diplomatic and economic influence, or “soft power,” the European Union, the United States, and Japan continue to dominate foreign investment in Africa, Latin America, and Southeast Asia.
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venerdì 4 dicembre 2009
Don't bank on it! Challenging the World Bank's role in future climate finance
A joint publication by the Bretton Woods Project, ActionAid, Christian Aid, Friends of the Earth, Practical Action, Tearfund, World Development Movement and WWF-UK
The briefing is available in PDF at:
Despite a superficial 'climate makeover', UK civil society organisations conclude that the World Bank is still a long way from operating in transparent, participatory and accountable ways, or lending upon a truly green portfolio, and therefore should not be trusted with the world's climate funds.
Pakistan gets only $345m of $1.61bn World Bank pledge
Dawn, 1 December 2009
The elusive search for global financial rules
Project Syndicate, 1 December 2009
IMF studying bank transaction tax option - Lipsky
Reuters, 30 November 2009
Malawi leader blames World Bank, IMF for forex shortages
http://www.google.com/hostednews/afp/article/ALeqM5js7JaPX6Rz87BuUFaqWDQ8VdN-lw AFP, 26 November 2009
IMF: back from the dead by Jayati Ghosh
Livemint, 23 November 2009
IMF head eyes global currency change, presses on yuan
Reuters, 17 November 2009
Roma, 3 dic. (Adnkronos) - Mario Caligiuri è stato nominato nel comitato
scientifico internazionale del Mediterranean Council for Intelligence
Studies (Mcis), un network di studiosi recentemente fondato ad Atene con
lo scopo di promuovere gli studi di intelligence nei Paesi del
Mediterraneo. Il Presidente, informa una nota, è il greco John Nomikos e
il vice Presidente è la coordinatrice della sezione italiana Stefania
Ducci. Mario Caligiuri è professore all'Università della Calabria e a «La
Sapienza» di Roma. Nell'ateneo calabrese è direttore del Master in
Intelligence e del Centro Studi sull'Intelligence, promossi su impulso del
Presidente emerito della Repubblica Francesco Cossiga. «Con la nomina di
Mario Caligiuri, considerato uno dei più accreditati accademici europei
nello studio dell'intelligence - ha affermato Stefania Ducci - si è inteso
dare un riconoscimento a chi per primo in Italia ha fatto conoscere
l'intelligence nelle università, come strumento di sicurezza e di
democrazia». «L'intelligence - ha commentato Caligiuri - sarà sempre di
più lo strumento strategico del futuro, sopratutto per l'Italia che è
immersa nel Mediterraneo, che diventerà a breve l'area di libero scambio
più estesa del pianeta e i cui Paesi già adesso producono sette volte il
Prodotto Interno Lordo della Cina». (Sin/Col/Adnkronos) 03-DIC-09 10:37 NNN
I COMMENTI VENERDÌ 4 DICEMBRE 2009 PAGINA 13
SERVIZI (POCO) SEGRETI: ORA LO STATO CERCA GLI 007 IN TV
di MARIO CALIGIURI
OGNI VOLTA che qualcosa in Italia non si comprende o è poco chiara vengono sistematicamente tirati in ballo i servizi segreti. Anche nel recente caso Marrazzo è aleggiata questa presenza. La questione principale, secondo me, è che in Italia manca una cultura dell’intelligence, nel senso che storicamente anche i principali responsabili politici ed economici non hanno ben utilizzato e compreso l’importanza di questo strumento fondamentale per la sicurezza.
L’INTELLIGENCE è conoscenza e infatti cerca di “comprendere” la realtà, mentre lo forze di polizia e la magistratura la devono “dimostrare”.
Confermando la necessità di regole chiare che consentano l’operatività, la trasparenza e il controllo di questi organismi così particolari e necessari, rimane fondamentale la selezione degli operatori. Fonte di polemiche e inchieste parlamentari, l’individuazione degli agenti segreti nel nostro Paese dal 1995 in poi, è avvenuta esclusivamente tra coloro i quali facevano parte della pubblica amministrazione, forze dell’ordine ed esercito in primo luogo.
NEGLI ALTRI STATI, soprattutto in quelli anglosassoni, le assunzioni avvengono soprattutto nella società civile e in particolar modo nelle università. La nuova legge del 2007 prevede che l’accesso alle Agenzie di informazione avvenga innanzi tutto tramite concorso pubblico. Utilissima e limpida come linea di principio, tale disposizione, forse, per trovare piena applicazione ha bisogno di qualche specificazione, per la necessaria riservatezza che deve tutelare gli operatori. Accogliamo pertanto come novità importante che proprio ieri sui telegiornali nazionali si sia comunicata la possibilità di inviare dei curriculum per individuare le professionalità più adatte a svolgere compiti fondamentali per la sicurezza democratica ed economica, che è il primo dovere di uno Stato nei confronti dei propri cittadini. Superiamo quindi i luoghi comuni, affrontando la sfida di un Paese moderno che intende utilizzare l’intelligence come strumento di democrazia.
giovedì 3 dicembre 2009
Alla Goldman Sachs hanno paura e i dipendenti chiedono porto d'armi
di Chiara Zamin, www.ilsole24ore.com
2 dicembre 2009
martedì 1 dicembre 2009
Fonte: Il Sole 24 ORE [scheda fonte]
|I titoli di stato greci stanno perdendo terreno da una settimana portando il differenziale con i bund tedeschi ai massimi da luglio e facendo salire il timore che gli investitori stranieri possano decidere di portare i loro soldi in luoghi più sicuri.|
Il termometro della febbre di Atene, l'anello debole di Eurolandia, è uno spread arrivato a ben 170 punti base, il punto più elevato dallo scorso 14 luglio: ieri il differenziale è salito di altri 13 punti raggiungendo il tasso del 4,98%, rispetto al 3,27 dei bund tedeschi, una nuova voragine per il Tesoro greco costretto così a pagare un sovrapprezzo per non rischiare di avere le aste deserte.
Il problema è che il deficit per il 2009 è salito al 12,7%, il più elevato dell'Unione europea dopo quello irlandese, mentre il governo del socialista George Papandreou, appena nominato, ha annunciato di volerlo ridurre al 9,8% l'anno prossimo. L'Ocse però avverte che nel 2011 il disavanzo tornerà al 10% perché le misure annunciate dall'esecutivo sono una tantum.
«Inutile negare che i nodi stanno venendo al pettine», ammette un analista locale. Le previsioni di deficit del budget iniziali erano al 3,7% e in pochi mesi sono schizzate oltre il 12,7 per cento. La Commissione europea, sempre più impaziente, la settimana scorsa ha aperto una procedura di deficit eccessivo e ha chiesto al Consiglio di mandare un monito ad Atene usando l'articolo 104.8 del Trattato di Maastricht (che prevede di rendere pubbliche le raccomandazioni della Commissione come forma di pressione), una procedura usata solo due volte in passato: nel 2006 per la Germania e nel 2004 per la stessa Grecia. Il Consiglio vuole evitare di applicare sanzioni ma è molto preoccupato. Senza contare che l'esposizione delle banche di Francia, Germania e Italia nei confronti della Grecia ammontava a giugno, secondo dati della Bri, a 122 miliardi di dollari.
Anche l'Ocse ha lanciato l'allarme sulla tenuta dei conti pubblici mentre l'ufficio statistico greco ha annunciato il calo del Pil dello 0,3% nel terzo trimestre, un segnale in controtendenza rispetto a quasi tutti gli altri paesi che cautamente stanno risalendo la china.
In un contesto di politica monetaria dove la Bce è intenzionata a ridurre la liquidità in circolazione la situazione greca pesa anche sulle banche locali, che hanno perso terreno in borsa sull'onda di indiscrezioni secondo le quali sarebbero state invitate a ridurre la loro esposione in bond per favorire i prestiti alle imprese.
Ora il nuovo Governo si trova a un bivio: da un lato deve, come promesso in campagna elettorale, rilanciare l'economia aumentando la spesa pubblica mentre dall'altro deve ridurre il deficit di bilancio per ridare fiducia agli investitori.
Così il governo socialista greco, alle prese con la Finanziaria che verrà discussa a giorni in parlamento, si appresta a congelare salari, pensioni e assunzioni per far fronte all'emergenza economica. Con la nuova legge di bilancio saranno bloccati salari e pensioni al di sopra di duemila euro lordi mensili: un provvedimento che riguarderebbe 500mila impiegati e 400mila pensionati su una popolazione di 11 milioni di persone. Gli altri avranno aumenti appena sopra il tasso di inflazione. Inoltre saranno bloccate per il 2010 tutte le assunzioni pubbliche, salvo i settori chiave di sanità, scuola e sicurezza. Naturalmente questi annunci hanno fatto salire la tensione sociale già elevata. L'organo del partito comunista, Rizospastis, denuncia «un attacco frontale» contro i lavoratori e ha convocato una mobilitazione di piazza per il 24 novembre.
Secondo il quotidiano di destra Adesmeftos Typos «Papandreou si è rimangiato le promesse elettorali» di continuare ad aumentare salari e pensioni al di sopra dell'inflazione. La stampa socialista ha annunciato le misure parlando di un «piano di austerità» ma anche di «un'iniezione di liquidità» e investimenti nell'economia per 10 miliardi di euro grazie e fondi nazionali ed europei, senza però chiarire da dove arrivino le risorse. Per il conservatore Kathimerini si tratta però di «timide misure» senza riforme strutturali. Papandreou ha avvertito che il Paese rischia la bancarotta, lamentando di essersi trovato una situazione finanziaria molto peggiore di quella che era stata annunciata dal precedente esecutivo.
Bank Ordered to Pay $6 Million in Damages -- and $10 Million in Attorney Fees
Judge notes other side's failure to provide its own legal bills for comparison, calling defendant's 'silence on this issue ... more than deafening'
December 01, 2009
The folks over at Emigrant Savings Bank won't easily forget Kirkland & Ellis. On behalf of Metavante Corp., the firm won $6 million in damages against the bank last May, after a breach of contract bench trial before Milwaukee federal district court Judge J.P. Stadtmueller. That was bad, but here's a big, fat insult to add to that injury: Last Friday the judge ordered Emigrant to pay nearly $10 million in attorney fees and costs to Kirkland and a Wisconsin firm.
The underlying case involves a technology outsourcing agreement Emigrant signed with Metavante in 2004. Metavante, represented by the Milwaukee firm Kravit Hovel & Krawczyk, claimed in a Wisconsin state court suit that Emigrant broke the terms of the agreement. Emigrant's lawyers at Constantine Cannon filed counterclaims and had the case removed to federal court. As the May 2009 trial date approached, Metavante brought in Kirkland.
Following a two-week trial, Stadtmueller ruled in favor of Metavante on all of its claims and rejected all of Emigrant's. He also ordered Emigrant to pay Metavante's legal bills, which he said was required under the outsourcing agreement. Emigrant objected to the bills submitted by Kirkland and Kravit Hovel, arguing that it shouldn't have to pay the full amount since the judge did not award Metavante the entire termination fee it sought. Emigrant also questioned the reasonableness of the fees.
But in Friday's decision, Stadtmueller rejected both of Emigrant's arguments. He found that under the agreement between Emigrant and Metavante, the legal costs of the "prevailing party" in a dispute would be paid by the other side and that Metavante was the prevailing party. And in dismissing Emigrant's objections to the reasonableness of Metavante's legal bills, he noted the seriousness of Emigrant's counterclaims, which "made the the stakes of the litigation immense, as Metavante would have been forced to pay hundreds of millions of dollars in damages as a result of an adverse judgment."
The judge also noted Emigrant's unwillingness to disclose its own legal bills for the sake of comparison. "Perhaps most damaging for Emigrant is their failure to disclose any of the costs and attorneys' fees incurred by themselves in this litigation, which would provide a strong basis to gauge the reasonableness of Metavante's fee petition," he wrote. "While Emigrant is not required to disclose [its] own costs to demonstrate the unreasonableness of Metavante's costs, the defendant's silence on this issue is more than deafening."
Emigrant's legal bills -- whatever they are -- are only going to get bigger. The bank has appealed Judge Stadtmueller's $6 million damage award to the 7th U.S. Circuit Court of Appeals (pdf) and has brought on none other than David Boies of Boies, Schiller & Flexner to help out on the appeal. Metavante, which is sticking with Kirkland at the 7th Circuit, filed its response brief (pdf) last week.
We left a message with Robert Begleiter of Constantine, who represented Emigrant at trial, but didn't hear back. (Fun fact: Emigrant CEO Howard Milstein's wife, Abby Milstein, is a partner at Constantine.)
Paul Garcia and Andrew Bloomer of Kirkland & Ellis represented Metavante at trial. Not surprisingly, Garcia told us Judge Stadtmueller got the fees opinion "exactly right," but said he expects Emigrant to appeal this ruling as well. "It's not over," he said.
This article first appeared on The Am Law Litigation Daily blog on AmericanLawyer.com.
Real Estate Lawyer's Suicide a Sign of Desperate Times for Some
Douglas S. Malan
December 01, 2009
Attorney James F. Ripper had a professional career that a lot of lawyers would have been proud of.
He had practiced for 37 years and his disciplinary record was clean. He was operating a small Rocky Hill, Conn., firm called Real Estate Resources LLC, which focused on commercial and residential transactions, environmental issues and zoning and land use matters.
Then the real estate market took a nosedive, and his practice followed. He started falling behind on rent for his office suite in a building on Silas Deane Highway. At some point, he got desperate for money, and state grievance officials think Ripper dipped into his clients' accounts and took about $125,000.
His situation became untenable. On Nov. 13, Ripper, 64, hanged himself in his Wethersfield, Conn., home. "It appears he saw no way out," said Mark Dubois, the state's chief disciplinary counsel. "This hits close to home because it's such a small bar. He was well thought of by everyone."
Ripper left behind a wife and two adult children.
Ripper's office continues to be staffed by paralegals, none of whom wanted to comment for this story. An attorney was to be named trustee of his practice last week.
Real Estate Resources LLC is just down the street from Lawyers Concerned for Lawyers, a crisis intervention service for bar members. "Some lawyers I know knew him for a long time, and they said they had no clue" of Ripper's troubles, said Beth Griffin, the group's executive director. "You lose a lawyer, whatever the reason, and it's inevitably sad."
Attorney John F. Harvey Jr., of Barry, Harvey & Later in Wethersfield, was a law partner of Ripper's about 25 years ago before Ripper went solo. The two had not socialized since then, but they saw each other occasionally during real estate transactions.
Harvey was across the table from Ripper during a closing about a week before Ripper's death. "He just seemed like himself, just a cooperative, sweet person," Harvey said. His suicide "is an absolute shock and no one can believe it. It's just completely out of the blue."
Dubois said there are usually a couple of lawyer suicides each year in the state, and there could be more that he's not aware of because he doesn't receive official police reports.
"I thought we'd see more of this a year ago," when the economy got significantly worse, Dubois said, "but I wonder if people are now starting to be tapped out on their credit lines and home equity."
'ON HIGH ALERT'
Suicide among lawyers has long been documented to occur two to six times as often as in the general population, according to the American Bar Association. And recessionary times are not helping. Earlier this year, the ABA offered a free online program to members that focused on preventing suicides during a bad economy.
That program came on the heels of the high-profile suicide of Mark Levy, a Washington, D.C., appellate lawyer who regularly argued cases before the U.S. Supreme for the high-powered firm of Kilpatrick Stockton.
Levy shot himself in his office just a few days after learning that Kilpatrick Stockton was laying him off. "We're on high alert because of Mark Levy," said Griffin, of Lawyers Concerned for Lawyers.
Griffin has heard from several lawyers in similar life positions as Ripper and Levy -- men in their late 50s or early 60s who are facing layoffs, mandatory retirement in their firms, or are feeling their grasp on their practices slip away because the practice of law now requires technological savvy to stay profitable.
"It's hard for lawyers to adjust," Griffin said. "They'll ask me, 'What am I going to do now? All I've ever done is be a lawyer.'"
Just as troublesome are the lawyers who won't open up and talk to someone when they're feeling overwhelmed, Griffin said. "We're educated, as lawyers, to be helpers," she said, and lawyers aren't always comfortable asking for help.
It's not just older lawyers, Griffin said. She gets calls from law school students who read about thousands of young associates being laid off and wonder how they're going to make money in the profession.
Real estate, one of the traditional bread-and-butter practice areas for young lawyers, no longer is as profitable, Dubois said. Consolidations have wiped away local banks. More basic legal work, like real estate document preparation, is heading overseas to India where lawyers with 30 years' experience charge $10 an hour for their services.
"There are more people fighting over a smaller pot and they have to compete with price," Dubois said. "That makes it difficult to pay the rent."
Ripper's case "may be, sadly, the story of another lawyer who became irrelevant" due to rapid changes in the practice of law, Dubois said.
When lawyers are solo practitioners or work in law firms with a handful of attorneys -- as the majority of the bar membership does -- it's easy for lawyers to feel lost and helpless, said Fairfield attorney Frederic Ury.
That opens the door for Connecticut to consider adopting a law office management assistance program, as several others states have done, Ury said. Those programs, much like Lawyers Concerned for Lawyers, are designed to be confidential, but they offer help in getting lawyers' practices back in order when they lose control of their finances or the workload overwhelms them.
"In those programs, people come in and help you not do something drastic," said Ury, who heads a state bar association task force on the future of the legal profession. "At a time like this, that would be something worthwhile to look at."
Ury said there's little time for socializing when lawyers are scrambling for business, and members of the bar don't interact with each other enough to know when a fellow bar member is in trouble.
Harvey, the Wethersfield attorney, said the topic of lawyers feeling like they're losing control never comes up in conversations until something tragic happens.
"I don't think lawyers talk about any of this until after the fact," he said. "People are just running around, trying to help their clients and get home by 6 o'clock."
The confidential hotline for Lawyers Concerned For Lawyers in Connecticut, a crisis intervention and support group, is 1-800-497-1422.
lunedì 30 novembre 2009
UAE central bank creates emergency cash fund for banksSubmitted by cpowell on Sun, 2009-11-29 16:40. Section: Daily Dispatches
By Martin Dokoupil and Raissa Kasolowsky
Sunday, November 29, 2009
DUBAI -- The United Arab Emirates' central bank set up an emergency facility on Sunday to support bank liquidity in the first policy response to Dubai's debt woes that threatened to paralyze lending and derail economic recovery.
Dubai rocked the financial world on November 25 when it said it would ask creditors of Dubai World, the conglomerate behind its rapid expansion, and Nakheel, builder of its palm-shaped islands, to agree to a standstill on billions of dollars of debt as a first step to restructuring.
As a result, banks face heavy losses and the risk that fearful depositors could rush to remove cash from the system, and threatening interbank lending with the second largest Arab economy still facing a downturn this year.
"It might support the market a little bit but I don't think it is enough," said Shawkut Raslan, head of brokerage at Prime Emirates brokerage. "I think some foreigners will take their money of the country and others will be afraid to put their money into these markets."
The central bank policy move came late on Sunday as Dubai's Supreme Fiscal Committee gathered to prepare a statement before market open on Monday in an attempt to reassure investors.
The central bank said it opened a "special additional liquidity facility linked to their current accounts" at 50 basis points over 3-month Emirates interbank offered rate (EIBOR), but offered no further details.
The central bank also said the banking system was more sound and liquid than a year ago, when the global crisis ended the oil and real estate fueled boom in Arab Gulf, the world's top oil producing region.
The monetary authority said on Saturday it was closely watching events stemming from the Dubai debt crisis to ensure there is no negative impact on the UAE economy.
Before the Dubai debt crisis, the UAE economy was seen falling by 1.1 percent this year before returning to a 2.9 percent growth in 2010, a Reuters poll of analysts showed earlier this month.
Analysts said the central bank's move was a preventive measure to avoid a possible capital flight and a run on deposits when markets reopen on Monday after a four-day holiday break.
"It is important because the main concern is that there might be some panic behavior by depositors in Dubai and by bankers who want to take deposits out of the banking system," said John Sfakianakis, chief economist at Banque Saudi Fransi-Credit Agricole Group in Riyadh.
Senior bankers in Abu Dhabi, Dubai's oil-rich cousin in the UAE federation, told Reuters on Friday Abu Dhabi banks have built up an exposure to Dubai-based companies worth at least 30 percent of their loan books.
In reaction to Dubai's debt problems, Fitch Ratings has said it downgraded Dubai Bank, Tamweel, and Bahrain's TAIB Bank.
The facility "would cover the immediate concerns related to deposits in the UAE banks," said Ghanem Nuseibeh, senior analyst at Political Capital consultancy. "It doesn't mean that lending would necessarily ease. It is no guarantee for depositors. We still don't know the extent of the UAE banks' exposure to Dubai's problems," he said.
State-run Dubai World had $59 billion of liabilities as of August. A large proportion of Dubai's total debt of $80 billion and repayment of Nakheel's $3.5 billion worth of Islamic bonds, which were originally due to mature on December 14, was widely expected by the market to be met.
Last year the UAE finance ministry poured $6.8 billion into bank deposits, the first tranche of a $19.1 billion rescue facility it set up to help lenders weather the onslaught of the global credit crisis.It deposited another $6.8 billion into banks in November 2008, but has not made any statements since regarding the remainder of those funds. This came after the central bank set up a $13.6 billion emergency bank facility to combat the crisis.
Chavez's Historic Call for a Fifth Socialist International
Caracas -- Addressing delegates at the International Encounter of Left Parties held in Caracas, November 19-21, Venezuelan president Hugo Chavez stated "the time has come for us to convoke the Fifth International." Faced with the capitalist crisis and the threat of war that is putting at risk the future of humanity, "the people are clamoring for" greater unity of left and revolutionary parties willing to fight for socialism, he said.
Like his call in 2005 to build "21st Century Socialism" and his call in 2006 for the creation in Venezuela of a new, mass revolutionary party - the United Socialist Party of Venezuela (PSUV) - Chavez's call to unite the left in a new International is historic.
It builds on the experience of the four previous socialist "internationals", the first created by Karl Marx in 1864, which collapsed. The Second International was formed in 1889, but fell apart when representative parties sided with their own governments in the bloodshed of World War I.
The Third International was founded in the aftermath of the Russian Revolution. However, as Chavez said, it "degenerated" under Stalinism and "betrayed" struggles for socialism around the world.
Leon Trotsky founded the Fourth International in 1938. However, Trotsky died in 1940 and his followers never succeeded in building mass support.
This call for a new international is also historic because of the political authority of Chavez himself: the leader of a revolutionary movement made up of millions struggling for a socialist society.
Following the approval by a majority of the delegates, of a special resolution in favor of founding of the "Fifth Socialist International as a space for socialist-oriented parties, movements and currents in which we can harmonize a common strategy for the struggle against imperialism, the overthrow of capitalism by socialism," Chavez reaffirmed his call, this time in his opening remarks as president of the United Socialist Party of Venezuela to the party's 1st Extraordinary Congress, which began on November 21.
In front of 772 delegates elected from the grassroots in an unprecedented process involving close to a million party militants, he requested that the proposal be included in the agenda of the Congress.
"I call on this First Extraordinary Congress of the United Socialist Party of Venezuela to include in its agenda for debate, the proposal to convene political parties and currents to create the Fifth Socialist International as a new organization that fits the time and the challenge in which we live, and that can become an instrument of unification and coordination of the struggle of peoples to save this planet."
The Congress, which will last until April 2010, the month that the founding congress of the Fifth International has been set for, will now discuss the proposal. This discussion "must go out to the people, to the social organizations and other forms of popular power in the country," according the plan proposed by Chavez.
Likewise, this decision will be discussed by left parties around the world, who will have to take a position in the face of this transcendental proposal, which undoubtedly will be taken up will full vigor by a mass revolutionary party in construction.
Unity in the face of imperialist counter-offensive
The central discussion on the first day of the Encounter of Left Parties was the issue of the new imperialist offensive in the region, exemplified by the expansion of US military bases and the coup in Honduras.
Present were delegates from 55 parties from more than 30 countries, representing elements of the old and new emerging left, including a number of Communist and social democratic parties from Asia and Europe, national liberation forces from Africa and the Middle East, new left parties such as Die Linke (Germany), Left Bloc (Portugal), Left Party (France), and radical and left forces from Latin America, some older, such as the Sandinista National Liberation Front (FSLN) and some newer, such as the Movement Towards Socialism (Bolivia) and, of course, the PSUV.
Almost all attempts to create a new model of society in the 20th century were destroyed by imperialism, explained Nicolas Maduro, PSUV leader and Venezuela's foreign minister. "There was only one experience that had the sufficient political, military and popular force, together with a revolutionary leadership, which was able to overcome all of imperialism's plans: the Cuban Revolution."
With the turn of the Century, new revolutionary movements and political leaderships emerged, changing the face of the region. The election of Barack Obama created many expectations and hope among vast sections of the population that new relations with the US, based on dialogue, would be possible. But this illusion was quickly shattered by the actions of thenew administration Maduro said.
The Bolivarian Alliance for the Peoples of Our Americas (ALBA) - "a solid project of integration and union of our countries and peoples" - advanced this year, incorporating Ecuador and various Caribbean countries; however the first blow by imperialism was dealt in Honduras with the June 28 military coup. The coup was aimed at ALBA and carried out with US support, he said.
Shortly afterwards came the announcement of the US-Colombia military agreement to hand over 7 new military bases to the US, "a powerful threat against the revolutionary movements in our continent," Maduro added.
In this scenario, the unity of progressive and left forces is necessary in order to create a movement for peace and justice in the region with the power to convert the continent into a "territory free of US bases," he argued.
Jorge Marti, head of the International relations department of the Communist Party of Cuba, noted that currently, "the left is not up to the challenge it faces"- the reason why it is necessary to clearly delineate a strategy for united struggle.
While it is quite possible that right wing forces could win elections soon to be held in Chile and Brazil, Nidia Diaz from the Farabundo Marti National Liberation Front (FMLN) of El Salvador pointed out that, "if we only think about electoral victories and not in the accumulation of social forces for change, it is easy to paint a negative picture." It is essential that the left promotes Chavez's proposal of establishing peace bases as focal points for agitation, action and mobilization of our peoples, she added.
"We are merely spokespeople for our people who today are resisting" explained Honduran Foreign Minister Patricia Rodas. Our responsibility is to construct a common space for parties to come together and consolidate the union of our peoples "and make possible the creation of a never before seen, diverse force" because they want to destroy "the very same democracy which we laid down our arms for," she said.
Rounding off the day's contributions, PSUV leader and Education Minister Hector Navarro affirmed "the problem is not the bases, the problem is the structural crisis of capital...what we are confronting is the question of the survival of humanity." Therefore this scenario, which brought together some of the most important left forces in the world, must be seen as a theater of operations from which to unleash a struggle in defense of humanity, he argued.
A Socialist International of the 21st Century
The second day kicked off with a discussion about what type of coordination was necessary.
Valtar Pomar, international relations secretary of the Workers' Party (PT) of Brazil outlined his party's position, putting forward a strategy focused on unity around regional integration, or in more classical terms ‘anti-imperialism'. If we made socialism our lowest common denominator for unity, this would inevitably lead to division; Pomar contended saying for this reason the PT would continue to prioritise the Sao Paulo Forum (FSP).
Aristóbulo Isturiz, one of the regional vice-presidents of the PSUV, responded that the left needs spaces that are more dynamic and active that the FSP.
The FSP was formed in the early nineties as an initiative of the PT to regroup the Latin American left in the context of the collapse of the Soviet Union. Today, the Forum, much like the PT, has drifted far from its more radical roots to becoming a talkfest dominated by reformist forces.
While differences began to emerge in discussion, it was Chavez's interventions that night which marked a dividing line. "Yankee imperialism is preparing a war in Latin America...it has almost always been the case that the US has pulled itself out of a situation of crisis via war" he warned.
At the same time, the conditions to build socialism are ripe, he argued. "That is why I ask...that you allow me continue to go forward, together with those who want to accompany me, in the creation of the Fifth Socialist International."
A new international without manuals and impositions, explained Chavez, and where differences are welcomed.
He sharply criticized the example the Communist Party of the Soviet Union which imposed its dogmas such as "socialism in one country" on its satellite parties internationally. This led many Communist Parties in Latin America to turn their backs on Che Guevara due to his rejection of Soviet dogmatism, Chavez said.
In rejection of the failed projects of "real socialism" and social democracy, a new International should embody the spirit and accumulated heritage left to humanity by the founders of the first four Internationals: Karl Marx, Frederick Engels, Clara Zetkin, Rosa Luxemburg, Jose Carlos Mariategui and Leon Trotsky he stated.
It should also incorporate the ideas of Latin American radicals and liberators such as Simon Bolivar, Francisco Morazan, Maurice Bishop and Sandino, Chavez contended.
A new project of left coordination has to be an international to confront imperialism, defeat capitalism and struggle for 21st Century Socialism. It is necessary to work together in the elaboration of a manifesto around which to unify criteria in regards to 21st Century Socialism, he continued.
Chavez's response to the interjection of one delegate who stated that there already existed other organizations for coordination among political parties was swift and sharp: there exist many spaces for discussion, but none for concrete action, which is why today many of them are finished.
"We have wasted a lot of time, we continue to waste time, looking for excuses to justify our inactivity. I consider such behavior to be a betrayal of the hope of our peoples". What we need is a unity of left parties, "but parties that are truly left."
"It is up to us to assume the role of the vanguard"
While various parties expressed their reservations the following day, arguing that within such a meeting it was only possible to reach unity over specific points and that a deep programmatic debate was necessary before any deeper unity was possible, the response in favor of the proposal was very strong.
"We cannot continue simply debating.... we need to clearly define what it is that we want, and the alternative project for Latin America is socialism" affirmed Salvador Sanchez Ceren, FMLN leader and vice-president of El Salvador, speaking in favor of the proposal.
Sanchez's comments provoked a reaction from El Salvadorean president Mauricio Funes, an independent elected on the FMLN slate, who distanced himself and his government from any support for 21st Century Socialism.
The Bolivian delegation from the Movement Towards Socialism relayed to the meeting the news that they had phoned the national leadership of the party, as well as president Evo Morales, who all agreed to come onboard the project and participate actively in all the preparatory commissions for the founding congress.
Country Alliance leader and Ecuadorian Minister of Government, Ricardo Patiño also announced his party's decision to participate.
Pledging the active support of the Honduran "resistance", Rodas added her voice to the chorus of support for the proposal.
That is, the actually existing political leaderships of the most important movements for change - to which must be added the Cuban Communist Party who did not express a formal position in the meeting - expressed their will and desire to work towards an organization of international coordination.
Together with a special resolution to create a "working group comprised of those socialist parties, currents and social movements who endorse the initiative, to prepare an agenda which defines the objectives, contents and mechanisms of this global revolutionary body", a document entitled the Caracas Commitment was also approved.
The document affirmed that faced with "structural crisis of capital, which combines the economic crisis, with an ecological crisis, a food crisis, and an energy crisis, and which together represents a mortal threat to humanity and mother earth", the only alternative possible is "Socialism of the 21st century".
Once again highlighting the lessons of the first four internationals, this time in the PSUV Congress, Chavez pointed out that all of them had been convoked from Europe, "where the thesis of scientific socialism emerged with force in the heat of the great popular, workers struggles, and the domination of the bourgeoisie".
Today, however, "the epicenter of revolutionary struggle is in our America. And Venezuela is the epicenter of this battle. It is up to us to assume the role of the vanguard and we have to assume it, so that we realize and become aware of the huge responsibility we have on our shoulders."
(Federico Fuentes participated in the International Encounter of Left Parties as representatives of the Socialist Alliance).