World Economy thread

[RPK]

Link

No US bank failures for a week; 1st time in 3 mths

New York, Oct 11 (PTI) For the first time in more than three months, a week has passed without any US bank failure.

Ravaged by the financial meltdown, the count of bank collapses were on the rise, with an average of nearly ten banks going out of business every month in 2009.

Spurring hopes that signs of stabilisation are on the horizon, no bank failures were reported for the week ended October 9 as per data available with the Federal Deposit Insurance Corporation (FDIC).

The Federal agency, which insures deposits of over 8,000 American banks, is also often appointed as the caretaker of failed entities.

Since June 19 this year, at least one bank has gone belly up every week and so far this year, a staggering 98 entities have been shut down.

 

[Vladimir79]

Russia to dominate nuclear energy markets

According to estimates from the International Atomic Energy Agency (IAEA), global reliance on nuclear energy will double by 2030, with the number of nuclear power plants (NPP) rising by 60pc. As President Dmitry Medvedev put it recently, Russia could claim a quarter of the world’s “nuclear pie”.

Why are so many countries focusing on nuclear energy? The answer is simple: the world needs a cheap and reliable power source. The pressure of high oil and gas prices, coupled with the need to cut greenhouse gas emissions, have superseded fears over nuclear power.


Fast times ahead for atomic energy There are 10 nuclear power plants (31 power-generating units) in Russia, and they generate 16pc of the country’s total electricity supply. By 2015 there will be 40 power-generating units, providing a quarter of all electricity.

In China, NPPs produce 2.3pc of domestic output; in the US it’s 20pc, and in France, 80pc. Over the next few years, China plans to construct about 100 plants, while the US hopes to build twice as many.

The nuclear boom has boosted uranium prices by more than 10 times over the past five years, driving the cost of one power generating unit to between $5-6bn. With things as they are, countries with uranium reserves and nuclear technology will hold sway in the global power industry for the next two to four decades.

Russia is a member of an elite nuclear club which offers huge future benefits. First, few countries in the world know the secrets of building state-of-the-art and reliable power plants. Second, few countries possess uranium enrichment technology. And finally, the countries producing fuel for nuclear power plants can be counted on the fingers of one hand.

Russian companies are ready to provide the entire cycle of production, from uranium mining to NPP construction. Today, Russia accounts for 40pc of the world’s uranium enrichment facilities, 17pc of the international fuel market, 28pc of NPP building capacity and 8pc of uranium mining.

So far, Russia’s uranium needs are covered from Soviet-era stockpiles of nuclear weapons, but what will happen next? To be on the safe side, Moscow has decided to secure access to foreign uranium reserves. Russia’s Rosatom Nuclear Energy State Corporation has already signed uranium contracts with South Africa and Australia.

Another way is to deepen co-operation with uranium-rich nations in the first place, for example Central Asian republics and Mongolia. Neighbouring Kazakhstan has the world’s third largest reserves of uranium, after the US and South Africa. Mongolia is next, occupying fourth place, but its prospective reserves (1.3m tonnes) could make it one of the world’s largest uranium suppliers.

Today, Russia has joint uranium mining projects with Kazakhstan, Armenia and Namibia. Following Dmitry Medvedev’s visit to Ulan Bator in the summer, Rosatom is also preparing to initiate production in Mongolia. Rosatom experts possess the world’s most advanced uranium mining technology. Fifteen foreign companies have tried to start up uranium production in Mongolia over the past 15 years, but were unable to plough the country’s virgin nuclear soil.

Russia’s exploration and production technology now allows for the development of deposits that were earlier deemed unrecoverable. With these resources, Russia’s uranium reserves could be multiplied “at least by a factor of three, or maybe five or even 10”, according to Rosatom chief Sergei Kiriyenko.

Those countries that co-operate with Rosatom in uranium production will receive nuclear fuel supply guarantees for the next 60 years. Russia is also ready to offer the unique services of the international uranium enrichment centre in the Siberian city of Angarsk.

Fast neutron reactors will also be instrumental in solving the uranium fuel problem. Conventional reactors can use only 5kg from a tonne of uranium, while fast neutron reactors will be able to use up to 700kg. “With fast reactors, our uranium reserves will last for a millennium,” estimates Nikolai Oshkanov, director of the Beloyarsk nuclear power plant.

Russia and China are currently in talks to build a new fast reactor, with a capacity of 800MW. According to estimates, Russia is 10-15 years ahead of the rest of the planet in this respect.

Russia also has something to offer in another prospective area: floating nuclear power stations, based on nuclear shipbuilding technology. The IAEA values the world market for such stations at between $300bn and $600bn.

They are vital for remote regions, where power lines or organic fuel supplies are inexpedient. Such floating stations could also be used to desalinate sea water, for example, in the Persian Gulf countries or on an ocean shelf.


RN Dossier

Russian nuclear reactors successfully operate in 10 countries, and there are construction projects running in three others.

Another 17 nations, from Brazil and Egypt to Ukraine and the Czech Republic, are in talks with Rosatom on new projects.

Russia is ready to build another four power generating units for India’s Kudankulam nuclear power plant.

Rosatom also has certain interests in Turkey, Southeast Asia, North Africa and Latin America.


Safety first: the lessons of Chernobyl

Russia has begun to use active and passive safety systems to make atomic power stations more reliable.

According to RM Topchan, deputy director of the Atomic Energy Project Institute, these include the use of a trap for liquefied nuclear fuel, the installation of a defence mechanism for human error and triple back-up equipment.

After the terrorist events of recent years, Russian atomic power stations have significantly increased their physical defences. As a result, and according to objective indices, Russia has a high level of security.

In terms of the most important criteria, for instance, the number of unplanned automatic stoppages at a reactor in the course of 7,000 hours of operation, Russia is on the same level as Germany and Japan and significantly ahead (in terms of operational reliability) of the United States and Japan.

Russia Now - Welcome to the nuclear club - Telegraph

 

[RPK]

fullstory

Recession-hit Britain to sell off state assets: PM

London, Oct 12 (AFP) The British government will sell off a raft of state assets to help reduce its debt, Prime Minister Gordon Brown was to announce today.

The government is to sell off USD 25.4 billion, of assets, Brown was to say, according to extracts from a keynote speech he was to give in London.

Brown was to outline details of initial sales that could raise three billion pounds, including the Channel Tunnel linking Britain to France; the 33 per cent stake in European uranium corsortium URENCO; the Tote bookmakers; the River Thames crossings at Dartford, east of London; and the Student Loans Company.

Brown is aiming to halve Britain's deficit over the next four years.

"We also need a deficit reduction plan that supports growth and jobs, not one that snuffs out recovery before it has started," Brown was to say.

 

[Pintu]

Reuters link on ASEAN summit :

Trade row hangs over ASEAN summit, security tight | Reuters

Regards

 

[Pintu]

The Associated Press: Massive security at Asian summit in Thailand

Massive security at Asian summit in Thailand

By DENIS D. GRAY (AP) – 21 hours ago

CHA-AM, Thailand — Thailand has deployed more than 36,000 military and police to guard a summit of Asian leaders, working to prevent any repeat of the disruptions that shut down another meeting earlier this year, an official said Thursday.

The government is still smarting from the storming of the East Asian Summit in April in the seaside city of Pattaya, where anti-government protesters charged through thin police ranks and forced the evacuation of several leaders by helicopter and boat.

A main protest organizer said no new demonstrations are planned this week.

Leaders of 16 Asian and Pacific nations, including Thai Prime Minister Abhisit Vejjajiva, will gather Friday for an annual conference of the Association of Southeast Asian Nations in Cha-am, a beach resort 200 kilometers (120 miles) south of Bangkok.

About half of the security forces mobilized have thrown a security cordon around this summit venue, and the others will be on alert in the Thai capital, said government spokesman Panitan Wattanayagorn. He said 20 newly bought bulletproof SUV's will chauffeur leaders to their meetings.

"Security forces have also set up emergency escape routes by land, air and sea," he said. "We don't expect it to be necessary but we want to be ready and to assure leaders that they will be able to meet without distraction."

Security forces have also been empowered to impose curfews and restrict freedom of movement around Cha-am and Bangkok.

Roadblocks were thrown up around the summit venue Thursday. Sniffer dogs patrolled hotels and even local fishermen were stopped from going out to sea.

Thailand has been rocked by years of protests and counterprotests by supporters and opponents of former Prime Minister Thaksin Shinawatra, who was ousted in a 2006 military coup on accusations of corruption, abuse of power and disrespect to the country's monarch.

Nearly 10,000 demonstrators took to Bangkok's streets last Saturday, demanding a pardon for Thaksin and that he be allowed to return from exile.

However, Nattawut Sai-kua, one of the protest leaders, said no demonstrations will be staged during the conference.

"There is no plan to protest or disrupt the summit," he said. He added that a protest letter will be handed to ASEAN representatives outside the security zone.

The three-day conference includes the annual gathering of the 10-member ASEAN leaders and those of China, Japan, South Korea, India, Australia and New Zealand.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

ASEAN is due to unveil a human rights body for Southeast Asia, sign a declaration on climate change and discuss food security, disaster management, bio-energy and economic integration. The group aims to set up an economic community by 2015.

China wants to expand regional trade and investment and plans a $10 billion infrastructure building fund to deepen ties with its Southeast Asian neighbors. A free trade zone between China and ASEAN is slated to be completed by January 2010.

As at previous ASEAN conferences, violation of human rights in military-ruled Myanmar, which joined the group in 1997, could cast a shadow over the proceedings. The international community is urging ASEAN to pressure the junta to reform.

The group prefers to steer clear of the internal affairs of its members, and with Myanmar recently allowing detained democracy leader Aung San Suu Kyi contact with Western diplomats and the United States unveiling a new policy of trying to engage rather than shun the country's leaders, the tone at the conference may be more positive.

The leaders of Cambodia, Indonesia and Malaysia were not expected to arrive in time for Friday morning's opening ceremony, Thai Foreign Minister Kasit Piromya said.

Cambodian Prime Minister Hun Sen is hosting an official visit by South Korean President Lee Myung-bak, Indonesia is swearing in a new government and Malaysia's government was presenting its budget to Parliament, he said.

 

[NSG_Blackcats]

End of recession!!! US economy grows in 3Q at 3.5%​

Washington: The economy grew at a 3.5 percent pace in the third quarter, the best showing in two years, fuelled by government-supported spending on cars and homes. The Commerce Department's report on Thursday delivered the strongest signal yet that the economy entered a new, though fragile, phase of recovery and that the worst recession since the 1930s has ended.

Many analysts expect the pace of the budding recovery to be plodding due to rising unemployment and continuing difficulties by both consumers and businesses to secure loans. Still, the much-awaited turnaround ended the streak of four straight quarters of contracting economic activity, the first time that's happened on records dating to 1947.

Link

 

[Pintu]

Developed world should shun protectionism: Anand Sharma- Politics/Nation-News-The Economic Times

Developed world should shun protectionism: Anand Sharma
8 Nov 2009, 1900 hrs IST, IANS

NEW DELHI: Commerce Minister Anand Sharma Sunday said if developed countries resorted to protectionist measures, it could lead to prolonging the economic slowdown.

"If countries go in for protectionist measures, this could be counter-productive and only prolong recession," Sharma told delegates at the World Economic Forum's India Economic Summit here.

The minister said most countries were coming out of recession and hoped they would not adopt such measures.

"When we talk about protectionism, India has shown the way (in not adopting it). We have signed free trade agreement with ASEAN. We took the steps to re-energise the WTO talks," he told reporters on the sidelines of the conference.

Sharma was referring to the pact India recently signed with the 10-member Association of South East Asian Nations (ASEAN) and ongoing trade negotiations at the World Trade Organisation (WTO).

He also contended that while India's trade continued to fall, the steepness of the decline has been arrested.

"Whether this turnaround will be durable is to be seen in the coming months," the minister said.

 

[ppgj]

a nice article.

The $ reserve currency conundrum- Opinion-The Economic Times

The $ reserve currency conundrum

9 Nov 2009, 0400 hrs IST, U R Bhat,

With India purchasing of 200 tonnes of gold from the IMF for US$ 6.7 billion last week — a far cry from the 67 tonnes of gold that India had to
humiliatingly pledge in 1991 to stave off an imminent forex crisis — the debate on the need to diversify the forex reserves of the surplus countries has gathered fresh momentum.

Some developing countries have argued that the pain of structural adjustments in their economies consequent to the global financial meltdown has been felt more by countries other than the US because, unlike others, the US can pay for its massive imports in its own domestic currency. This is facilitated by the pre-eminent role of the dollar as a global currency that is held as reserves by countries with surplus trade balances.

China has been known to be actively diversifying away from the dollar over the last few months by investing in strategic holdings of non-ferrous metals and oil wells abroad but with nearly $2 trillion in foreign currency reserves, it has not much of an option but to participate in the process of adjustment in the global balance of payments in order to ensure the safety of its massive financial claims on the rest of the World.

Over the last few months discordant notes have been emanating from several countries holding large dollar reserves questioning the special safe haven status enjoyed by the dollar and the inability of the US as the issuer of the global currency to maintain its value. With the dollar depreciating by upwards of 20% vis-à-vis the major currencies — euro, yen and British pound since the onset of the global financial crisis, there is an urgent need to arrest the falling value of the dollar reserves of the reserve holding countries.

Being the issuer of a global currency is indeed a special privilege enjoyed by the issuer country but along with this privilege comes the possibility of running large current account deficits because of the requirement to supply large quantities of the currency.

There is the additional consequence of a potential loss of export competitiveness on account of the possible appreciation of the currency if it
becomes a popular reserve currency. There are understandably limits to current account deficits and currency appreciation that the issuer country can sustain and this is the reason why other currencies have not been able to significantly displace the dollar as the global currency of choice. With the increasing role of China in international trade, the renminbi can become a reserve currency over time but this will require the country to abolish capital controls and allow its value to be determined in the free market that will inevitably lead to the weakening of the vice like grip of the Chinese government on its economy.

Russian President Dmitry Medvedev has recently presented an interestingly different perception about the state of the world stating that the artificially maintained unipolar system was based on one big centre of consumption financed by a growing deficit and thus growing debt, one formerly strong reserve currency and one dominant system of assessing assets and risks. He went on to castigate the US military presence across the world stating that it survives on what is effectively a massive subsidy by the rest of the world while the US continues to appropriate the exports, companies and real estate of the rest of the world in exchange for paper money of questionable worth.

While it is easy to dismiss the perception as Communist propaganda there is certainly more than a grain of truth in the rather provocative interpretation of the state of the unipolar world. There is no denying the fact that the global financial meltdown of the last two years is largely because of the simple fact that the unbridled consumption by the US and its citizens has been going on unchecked for an unsustainably long period.

It is worth recapitulating the process by which the global economy currently finds itself in dire straits. Unbridled consumption by US citizens, US buyouts of foreign companies and the massive US military spending across the World — all paid for in the domestic currency of the US — find their way ultimately to the foreign central banks of the countries that have balance of payment surpluses. These dollars are effectively recycled by the central banks back to the US when they invest in “safe” financial assets like US treasury bonds.

The other alternative for these surplus countries is to let their currencies appreciate in the free market relative to the Dollar with negative ramifications on their export competitiveness, the health of their export intensive businesses and unemployment. As long as the export surplus countries continue to hoard dollars which is effectively US IOUs, despite being the world’s largest debtor country, the US does not have to undergo IMF style “structural adjustments”.

The standard prescriptions under ‘structural adjustment programmes’ are tax and interest rate hikes, currency devaluation, reduction in trade and fiscal deficits, pruning social safety nets, selling government-owned enterprises and natural resources, etc., to the satisfaction of pressing creditors. However, it is surprising to note that the US response to the financial crisis over the last two years is at complete variance to the “standard” operating procedure in a structural adjustment programme.

Indeed, to the lay observer it appears that the global reach of the mighty military prowess of the US sits rather uncomfortably with the perceptible decline in its economic strength. These apparent contradictions would possibly take decades to get reconciled but history has been witness to many events that appeared incredulous when the first undercurrents were visible.

The fall of the once mighty British pound as a reserve currency between the two World Wars, a defeated Japan in the second World War becoming an economic powerhouse, and more recently, the leap of Communist China from utter poverty to relative prosperity — all in a few decades — are examples worth recalling. It is therefore reasonable to prophecy that the longer the US continues to live off the savings of others, the more likely it is that the laws of economics would catch up with it some time.

 

[jakojako777]

End of recession!!! US economy grows in 3Q at 3.5%​

Washington: The economy grew at a 3.5 percent pace in the third quarter, the best showing in two years, fuelled by government-supported spending on cars and homes. The Commerce Department's report on Thursday delivered the strongest signal yet that the economy entered a new, though fragile, phase of recovery and that the worst recession since the 1930s has ended.

Many analysts expect the pace of the budding recovery to be plodding due to rising unemployment and continuing difficulties by both consumers and businesses to secure loans. Still, the much-awaited turnaround ended the streak of four straight quarters of contracting economic activity, the first time that's happened on records dating to 1947.

Link

With all the respect but that article should go to JOKES thread! Who normal would be drugged into believing USA "recovery" based on printing of TRILLIONS of $ !
This is just HYPER MEGA bubble of centuries that will explode USA economy at the end !:viannen_10:

 

[Pintu]

High capital flow may destabilise currency, asset prices: IMF- Indicators-Economy-News-The Economic Times

High capital flow may destabilise currency, asset prices: IMF
13 Nov 2009, 2217 hrs IST, PTI

NEW DELHI: International Monetary Fund (IMF) today warned that the surge in capital flows into developing countries could destabilize local currencies and asset prices.

"While capital inflows are generally beneficial, they can raise risks of rapid and potentially destabilizing movements of currencies and asset prices...The resurgence of capital flows to emerging markets, including several in Asia, is presenting policy challenges," IMF Managing Director Dominique Strauss-Kahn said in a speech at a conference in Singapore.

The resurgence reflects the favourable outlook for the region, but also a renewed appetite for higher-risk assets as financial conditions normalise, he said.

However, he said the policy makers have a range of tools available to mitigate the effects of these inflows.

"They include exchange rate appreciation, tighter fiscal policy, and, where appropriate, lower interest rates. In addition, macro-prudential instruments can limit the risk of asset price bubbles," he noted.

Market-based controls on capital inflows can help reduce the volatility of such flows, he said, however, adding these measures are costly and tend to lose effectiveness over time.

India is experiencing a surge in foreign capital inflow powered by initial recovery in the global economy. However, the finance ministry is not concerned at present and says no specific action is required to arrest it.

 

[Pintu]

Oil prices slide close to one-month lows- Indicators-Economy-News-The Economic Times

Oil prices slide close to one-month lows
13 Nov 2009, 2212 hrs IST, AGENCIES

LONDON: World oil prices slid on Friday close to one-month lows as traders switched focus to weak demand and rising inventories in key energy consuming nation the United States.

New York's main contract, light sweet crude for delivery in December, fell as low as 75.57 dollars per barrel, before pulling back to 76.41, down 53 cents from Thursday's closing level.

Brent North Sea crude for December hit a low of 75.03 dollars a barrel. It later traded at 75.65 dollars, down 37 cents.

"Prices fall to their lowest level in almost a month, pressurised by a bearish set of US weekly oil data," said Barclays Capital analyst Kevin Norrish in a research note to clients.

"Yesterday's US data shows a continuation of the trend which has now been in place for a while, whereby the supply system tries to adjust to continued weak demand."

Crude futures had slumped Thursday on a huge jump in US crude stockpiles indicating weaker American demand for oil. New York crude had dropped 2.34 dollars and London Brent oil shed 1.93 dollars.

The US Department of Energy said American crude oil reserves surged 1.8 million barrels in the week ending November 6, more than the 200,000 barrels anticipated by the market.

US gasoline or petrol stockpiles unexpectedly jumped by 2.5 million barrels while distillates, which include diesel and heating fuel, rose by around 300,000 barrels.

In earlier deals on Friday, prices had traded in positive territory, in line with the weaker dollar, and in a knee-jerk reaction to Thursday's sharp falls.

The European single currency firmed against the dollar on Friday after news that the eurozone recession has officially ended.

Europe's deepest recession since World War II officially ended on Friday when the world's biggest single trading bloc joined Japan and the United States in returning to growth, official data showed.

The weaker level of the greenback makes dollar-priced oil cheaper for buyers using stronger currencies. This therefore tends to stimulate demand and prices.

"As long as the dollar does not weaken dramatically, it looks like oil prices will be under selling pressure," said analysts at US-based energy consultancy Cameron Hanover.

"The weak dollar has been this market's sole bullish factor," they added in a note to clients.

Traders also assessed the latest monthly review from the Paris-based International Energy Agency (IEA), a global energy watchdog advising top industrialized nations.

Global oil demand is heading higher than expected as economic recovery gathers pace notably in China, but rising prices could derail expansion, the IEA said earlier this week.

 

[Koji]

Russian Modernisation Failing

http://www.economist.com/world/europe/displayStory.cfm?story_id=14973198&source=features_box_main
“STABILITY” was once the buzzword in Russia; now it is “modernisation”. In reality, there is little of either. Russia’s future is less predictable and modernisation more elusive than either was a decade ago. Yet the shift in language creates expectations of change. And in recent months, President Dmitry Medvedev has been talking and writing of little else.

In doing so, he is stirring ghosts of perestroika in the late 1980s. In April 1985 Mikhail Gorbachev, as the new general secretary of the Communist Party, talked of negative trends in the economy and the need to speed up scientific and technological progress, while preserving stability and political continuity. At times Mr Medvedev’s speeches sound uncannily like postmodern renditions of Mr Gorbachev’s. His diagnosis is relentless: a primitive, commodity-based economy that cannot create prosperity; the lack of reforms; and all-pervasive corruption. And his vision of the future is charged with excitement: a Russia bursting with nanotechnology and nuclear-powered spaceships. Yet ultimately his recipe for change is implausible.


His “plain-spoken analysis of past mistakes is more convincing than his formula for putting them right,” The Economist wrote of Mr Gorbachev in 1986. Much the same could now be said of Mr Medvedev. Unable and unwilling to touch the foundations of the political system that created him, Mr Medvedev has been reduced to uninspiring talk of simplifying Russia’s 11 time-zones and of creating business incubators at universities.

Indeed, there is perceived to be a growing gap between Mr Medvedev’s words and reality. That reality includes the recent sudden death of a corporate lawyer in a Moscow jail. Sergei Magnitsky worked for Hermitage Capital, an investment fund run by Bill Browder, once a loyal Putinist who was barred from Russia in 2005 after feuding with firms close to the Kremlin. Last year Mr Browder complained that a gang of bent policemen had stolen his Russian companies and used them to embezzle $230m of state funds.

The Russian authorities retaliated with a $17.4m tax case against Hermitage and arrested Mr Magnitsky, who had uncovered evidence of fraud and implicated the policemen who arrested him. In jail he developed a severe medical condition but was left without treatment, a fact that he meticulously documented in his diary. Investigators seem to have denied him help in an effort to extract a confession. On November 16th he died of an abdominal rupture.

Mr Magnitsky’s death was shocking, but hardly unusual: many people die in pre-trial detention across Russia, and even more in prison. Even so, the death of a successful lawyer working for a Western company has shaken young Russian professionals. This week Sergei Guriev, head of Russia’s New Economic School, had planned to publish an article in Vedomosti, Russia’s leading business paper, about “whether modernisation is impossible without political liberalisation.” Instead he wrote about Mr Magnitsky. “Without an article about Sergei’s death, talking about all other aspects of Russian modernisation is pointless…Who cares if the RTS equity index is rising or falling, or what is happening with interest or exchange rates, if life has no value?”

After meeting human-rights activists, Mr Medvedev ordered an investigation into Mr Magnitsky’s death and into conditions in Russian detention centres. Prison doctors or wardens may be punished. But Mr Medvedev is unlikely to stop the hostage-taking, corporate raids by state agencies, rent-seeking and corruption that have become part of a system. It is a system that began in 2000 under President Vladimir Putin, when Vladimir Gusinsky, a media tycoon, was hounded out of the country. It kept a pregnant Yukos lawyer and the firm’s fatally ill manager in prison in a vain effort to make them testify against their old boss, Mikhail Khodorkovsky, who is now on trial once more. And it is the main obstacle to Russia’s modernisation.

Mr Guriev suggests that the reason Russia has failed to modernise is that its ruling class can pocket rents from things as they are. Serious modernisation threatens them because it would require stronger institutions that would make this harder. This rent-seeking psychology is transmitted right down the bureaucratic chain, with each man taking a slice for himself.

For all his fine words, Mr Medvedev is not an independent politician. He was picked by Mr Putin (who is now prime minister) for his loyalty and obedience. Despite much speculation, there are few signs of any falling-out between the two. Each plays his part. Mr Medvedev is the good cop who talks up modernisation, meets human-rights groups and negotiates nuclear-arms treaties with America’s Barack Obama. Mr Putin, the bad cop, runs Russia and distributes the money, as he made clear in the recent conference of his United Russia party.

Yet Mr Medvedev’s talk of modernisation, even if no more than that, will resonate with many educated Russians, who increasingly believe that their country is heading in the wrong direction. As Mr Medvedev himself has put it, “a need for change has become particularly obvious in the past few months.” Russia was hit harder than any other G20 economy by the financial crisis. After a decade of oil-fired growth, GDP will shrink by 8% this year. The oil price is high enough to sustain public spending, but may not meet expectations of rising salaries and pensions. Real wages, which had been growing by over 10% a year for a decade, are falling. As one Russian businessman sums up, “Putin’s model of restoring Soviet symbols, lifestyle and incomes has run out of steam. Nobody has any strategy or even vision of what this country should become.”

Under Mr Putin the political system is held together by the collective interest of those who divide up rents, combined with occasional repression. If the oil price stays flat or falls, that formula may keep working only if the repression is stepped up. Even that could be problematic: an epidemic of confessions on the internet by disgruntled and badly paid Russian policemen, plus a wave of police violence, point to a corrupt and uncontrollable force. Even a senior United Russian figure recently called the police unreformable; he went on to call for the force’s disbandment.

The deterioration of democratic institutions in Russia since Mr Putin came to power in 2000 has led the country into a dead-end that is reminiscent of the late 1980s. Back then the Soviet Union could not meet people’s growing expectations and the economy was running out of resources. Today’s Russia is hardly the Soviet Union. It has basic freedoms and a large private sector, even if it is stifled by corruption. It also has reserves of $430 billion—not $3 billion as in December 1991.

Yet unless oil prices rise again, Kremlin leaders may face the same choice as their Soviet predecessors did: to preserve themselves (and their country) by more repression or more liberalisation. Mr Gorbachev chose liberalisation. Mr Putin, who believes that the collapse of the Soviet Union was the greatest geopolitical catastrophe of the 20th century, is unlikely to make the same choice. But it may prove hard for him to find enough support for his repressive system.


[mod]While posting next time try to read carefully , the topic of the thread[/mod]

 

[Daredevil]

Global sovereign debt to hit $49.5 trln-Moody's

11.24.09, 4:31 PM ET
UNITED STATES -
NEW YORK (Reuters) - Global sovereign debt is expected to hit $49.5 trillion by year end, a 45 percent climb since 2007 as the credit crisis takes a toll, Moody's Investors Service said on Tuesday.

The expected $15.3 trillion increase in worldwide government debt is more than 100 times the inflation-adjusted cost of the Marshall plan, Moody's said in a report.

The Marshall Plan, a U.S. effort to rebuild Western Europe after World War II, cost an estimated $13 billion in unadjusted dollars.

Sovereign debt ballooned during the global credit crisis as countries funded massive bailouts, shifting risk from corporate to government balance sheets.

"Not surprisingly, the G7 countries account for 78 percent of the increase, as their fiscal accounts have been hit hardest by the crisis," Jaime Reusche, associate analyst in Moody's sovereign risk group, said in the report.

The G7 or group of seven major industrial nations are Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.

Moody's said it expects global government debt to total 80 percent gross domestic product in 2010, up from a 10-year low of 63 percent in 2008.

Debt will also be less affordable, as measured in terms of interest payments relative to revenue, Reusche said.

For advanced industrial countries, interest payments are expected to total 6.1 percent of revenues in 2010, up from 4.3 percent in 2007.

"As growth turns negative in 2009 for most countries, the relative debt load becomes harder to bear," Moody's said.

In the United States, government debt is expected to rise to $14.48 trillion in 2010 from $12.29 trillion in 2009 and $10.27 trillion in 2008, the Moody's report said.

 

[NSG_Blackcats]

Japan unveils new $81 billion stimulus package

Japan’s government on Tuesday unveiled a new stimulus package worth nearly $81 billion to keep the fragile recovery in the world’s second-biggest economy from veering off track.

Prime Minister Yukio Hatoyama and his Cabinet agreed to 7.2 billion yen ($80.6 billion) in new spending after days of negotiations with coalition partners. The announcement had been expected on Friday but was delayed by disagreements.

 

[Pintu]

http://www.nytimes.com/2009/12/10/business/global/10yen.html

Japanese Economy Grew More Slowly Than First Thought

By REUTERS
Published: December 9, 2009

TOKYO — The Japanese economy grew at a far slower pace in the third quarter than first thought as capital spending fell, according to revised figures released Wednesday, but a double-dip recession was considered unlikely with exports rebounding and corporate spending showing signs of bottoming out.

The figures also showed that personal spending had improved because of government subsidies. The data could increase pressure on politicians and the Bank of Japan to devise new policies for the corporate sector, which is lagging behind gains in private consumption.

The revised data showed that gross domestic product grew 0.3 percent in the quarter from July through September compared with the government’s preliminary estimate of 1.2 percent growth.

On an annualized basis, the economy expanded 1.3 percent, against the government’s initial reading of 4.8 percent.

The government, led by the Democratic Party and in power for about three months, announced a stimulus package of ¥7.2 trillion, or about $81 billion, Tuesday that focused on the household sector by providing support for job seekers and extending subsidies on energy-efficient goods. But economists warned that the stimulus measures might not have much effect, as there was insufficient new spending, and the pace of economic recovery would be very slow unless further steps were taken.

Reuters

 

[Pintu]

The Associated Press: Amid crisis, Cuba falls short on home-building

Amid crisis, Cuba falls short on home-building

(AP) – 30 minutes ago

HAVANA — Cuba built about 20,000 homes in 2009, meeting barely 60 percent of its modest annual construction goal and further exacerbating a severe housing crunch, the official press said Thursday.

A report prepared for Sunday's session of parliament indicates that authorities missed by more than a third the target of building 32,000 homes this year.

There was no reason given for shortfall, reported in the Communist Party newspaper Granma. Cuba's cash-strapped economy has been pummeled by the global economic crisis, however, causing officials to slash imports of food and other basics as the country's foreign debt balloons.

In September 2005, Fidel Castro said housing was such a priority that his country would build 100,000 new homes per year. That goal proved so overambitious that by 2008, officials had lowered annual projections to 50,000 homes, then sliced them to 32,000 for 2009 — a bar that still proved far too high.

The communist government controls nearly all construction. Even operations as simple as obtaining building materials for home improvement usually mean turning to a black market supplied by state employees who steal goods from work.

Cuba reported in 2006 that its housing shortage had reached half a million homes — and that was before three hurricanes hit the island in 2008, leaving tens of thousands homeless.

The Cuban parliament meets in full sessions just two days a year and usually gives unanimous approval to proposals put forward by the leadership.

 

[Daredevil]

Dire economic situation in UK threatening its social life.

Moody’s warns of 'social unrest’ as sovereign debt spirals

Britain and other countries with fast-rising government debts must steel themselves for a year in which “social and political cohesiveness” is tested, Moody’s warned.

By Edmund Conway
Published: 7:35PM GMT 15 Dec 2009

Riot police clash with protestors during an anti G20 demonstration near the Bank of England. Moody's has warned future tax rises and spending cuts could trigger more social unrest.

In a sombre report on the outlook for next year, the credit rating agency raised the prospect that future tax rises and spending cuts could trigger social unrest in a range of countries from the developing to the developed world.
It said that in the coming years, evidence of social unrest and public tension may become just as important signs of whether a country will be able to adapt as traditional economic metrics. Signalling that a fiscal crisis remains a possibility for a leading economy, it said that 2010 would be a “tumultuous year for sovereign debt issuers”.

It added that the sheer quantity of debt to be raised by Britain and other leading nations would increase the risk of investor fright.

Strikingly, however, it added that even if countries reached agreement on the depth of the cuts necessary to their budgets, they could face difficulties in carrying out the cuts. The report, which comes amid growing worries about Britain’s credit rating, said: “In those countries whose debt has increased significantly, and especially those whose debt has become unaffordable, the need to rein in deficits will test social cohesiveness. The test will be starker as growth disappoints and interest rates rise.”

It said the main obstacle for fiscal consolidation plans would be signs not necessarily of economic strength but of “political and social tension”.
Greece, where the government has committed to drastic cuts in public expenditure, has suffered a series of riots over the past year which are thought to have been fuelled by economic pressures.

 

[Armand2REP]

What are your Global neighbours buying? Find out here...

What Your Global Neighbors Are Buying - Interactive Graphic - NYTimes.com

 

[NSG_Blackcats]

Obama’s policies will send more jobs to India, China: Jindal

Indian-American Louisiana Governor Bobby Jindal has claimed that the Obama Administration’s policies on trade and healthcare will lead to additional spending and send more “good paying” jobs to countries like India and China. “The President said he didn’t want us to fall behind countries like Brazil, China, India. But, I’ll tell you what, if they pursue card check and cap and trade and this massive health care bill and more government borrowing and more government taxes, we will be sending even more good paying American jobs to those countries,” Jindal told the Fox News.

His comments came as U.S. President Barack Obama said in his first State of the Union address on Thursday that he will slash tax breaks to American firms that move jobs abroad. Jindal, a rising star of opposition Republican Party, claimed that Obama’s speech was filled with contradictions.

He said they seem to think “if they just talk enough about this - one of the longest State of the Unions in modern history since at least President Clinton’s time - American people will embrace higher taxes, higher deficit spending, more government programmes“. “Firstly, he (Obama) talks about a freeze but he doesn’t get it to start until next year,” Jindal said. “He (Obama) says government doesn’t create jobs. Yet he wants government to spend tens of billions of dollars on this new jobs bill.” The Governor underlined the need to “stop these bills because they’re going to raise taxes.”

 

[Pintu]

http://economictimes.indiatimes.com/articleshow/5630710.cms

Buffett says worst is over, but recovery uneven
1 Mar 2010, 1752 hrs IST, REUTERS

NEW YORK: Warren Buffett said the US has passed the worst of what he called an economic Pearl Harbor, yet admitted that the recovery could be slow, including at his Berkshire Hathaway Inc.

"We got past Pearl Harbor," Buffett said on Monday on CNBC television. "We will win the war, and it's going slightly our way."

Buffett nevertheless said business is "slow" in many areas, as consumers adopt a more cautious mindset about spending.

Berkshire itself has about 80 operating businesses that sell such things as car insurance, carpeting, ice cream, industrial components, paint and underwear.

"There's a few businesses that have really had a fair amount of bounce," while others show no improvement, he said. "It's getting better, but at a very, very slow pace."

A $26.5-billion takeover last month of Burlington Northern Santa Fe Corp, the second-largest US railroad, cost Berkshire the last of its "triple-A" ratings from major credit agencies.

Buffett raised about half of the $15.9 billion of cash used for the takeover, Berkshire's largest, in credit markets.

He said the downgrades had virtually no impact on Berkshire, perhaps costing just a few hundredths of a percentage point in extra yield on debt it issues.

"I think we deserve a quadruple-A" rating, which does not exist, he joked.

On Saturday, Berkshire published its annual report. This included Buffett's widely-read shareholder letter, in which he struck a more optimistic tone than a year earlier. Full-year profit at the Omaha, Nebraska-based company rose 61 per cent.