Category - Economics

Venezuela declares ‘economic emergency’ amid currency woes

France24, January 16

Venezuela’s socialist government decreed an “economic emergency” on Friday that will expand its powers and published the first data in a year that shows the depth of a recession fueled by low oil prices and a sputtering state-led model.

The central bank, which has been lambasted by critics of President Nicolas Maduro’s government for hiding statistics since the end of 2014, said the South American OPEC nation’s economy shrank 4.5 percent in the first nine months last year.

Inflation soared in that period to an annual rate of 141.5 percent, the world’s worst. Venezuela’s oil-dependent economy is forecast to perform abysmally again in 2016. Maduro lost control of the National Assembly in a December election due to voter ire over the crisis.

The government’s decree, which the opposition-led assembly says it has the power to approve or reject, sets a 60-day “economic emergency” and would give Maduro wider powers to intervene in companies or limit access to currency.

“We are confronting a true storm,” Maduro said during his state-of-the-nation address to Congress. “This is not Maduro’s storm, as some believe, it is a situation throughout the country that affects every Venezuelan family.”

Is Anyone Really Surprised By This?

PaulRyanBeardOutside the Beltway, the right is livid with new Speaker Paul Ryan’s trillion-dollar spending deal with Democrats.

Conservative pundit Ann Coulter says Ryan, just seven weeks on the job, is ripe for a primary challenge. “Paul Ryan Betrays America,” blared a headline on the conservative site Breibart.com. And Twitter is littered with references to the Wisconsin Republican’s new “Muslim beard.”

Source: Fury of the right falls on Ryan | TheHill

Did anyone think that Paul Ryan had a chance of herding the Republican cats in the House? If so, I’d say you should go back to huffing exhaust fumes.

But in a nod to the critics, Ryan has also emphasized that he “inherited” the flawed omnibus from his predecessor, ousted Speaker John Boehner (R-Ohio), and that the cake was “already baked” by the time he was handed the reins in late October.

Those arguments have done little to sway some of Ryan’s critics, particularly on conservative talk radio.

Laura Ingraham denounced the spending package as an “omni-bust” and said Ryan should be “regarded as a declared enemy of the Base.” Mark Levin said Ryan is “already a disaster” and criticized the funding package for increasing the number of visas for foreign workers.

Criticism has also come from Rush Limbaugh, the king of conservative talk radio, who declared that the GOP sold the country “down the river.”

There is no chance in hell that the Republicans in the House are going to be able to work together and accomplish anything remotely resembling sane government. The remnants of the Tea Bagger……. err, I mean Tea Party brigade are as yet uncowed, and still of sufficient numbers to stonewall any attempts at serious compromise; especially when egged on by the hard right conservative pundits. That Ryan didn’t dismantle the bi-partisan coalition allowing for the passage of the budget at least shows he wants to be productive. But he doesn’t have the numbers, any more than John Boehner did, to be strictly partisan in running the House of Representatives.

In the end it all comes down to whether the hard-line conservatives want to have total, uncompromising power, or whether they want to be leaders. They can’t have it both ways.

Götterdämmerung: – Noises Off

  Being the first in a planned Twilight series of observations and ruminations on the state of the world and its denizens, past, present and future.

Return On Investment: As ye sow, so shall ye reap.

  When I was a teenager, I drove a 1924 Star. It rattled, creaked, squeaked, clinked, clanked, banged, jangled, clattered and protested mightily when called upon to actually move, but it did get me to school and an occasional jaunt into the countryside. We had to scrounge up old tires and spare parts, even machining some pieces in shop class, since Durant Motors was long out of business. Keeping it on the road became increasingly difficult and complicated. I finally decided it wasn’t worth the time, money and cussing. It might have had some value to an antique auto collector, but it had a negative ROI as a useful means of transportation. As I look around, a great deal of what I see reminds me of that old car.
There are a lot of individual pieces that need to work together. And they aren’t.
Read More

Eurozone crosses Rubicon as Portugal’s anti-euro Left banned from power

Constitutional crisis looms after anti-austerity Left is denied parliamentary prerogative to form a majority government

The Telegraph, By Ambrose Evans-Pritchard, October 23

Portugal has entered dangerous political waters. For the first time since the creation of Europe’s monetary union, a member state has taken the explicit step of forbidding eurosceptic parties from taking office on the grounds of national interest.

Anibal Cavaco Silva, Portugal’s constitutional president, has refused to appoint a Left-wing coalition government even though it secured an absolute majority in the Portuguese parliament and won a mandate to smash the austerity regime bequeathed by the EU-IMF Troika.

He deemed it too risky to let the Left Bloc or the Communists come close to power, insisting that conservatives should soldier on as a minority in order to satisfy Brussels and appease foreign financial markets.

Democracy must take second place to the higher imperative of euro rules and membership.

Novara Media: 4 Things You Need to Know About Portugal’s Political Crisis

The New China Syndrome

American business meets its new master

Harpers, By Barry C. Lynn, November 2015

It’s May Day, and a rambunctious crowd of well-dressed people, many carrying blue and yellow parasols, has pushed into a Ford dealership just north of Chongqing, China. Mist from a car wash catches the sun, and I watch a man in a striped shirt poke at the gleaming engine of a midsize Mondeo while his wife sits in the driver’s seat and turns the wheel. Overhead, a giant banner of a Mustang painted Communist Party red ripples in the spring breeze.

At the showroom door, I am greeted by three saleswomen who smile and stare, clearly shocked to see a Westerner. Finally, a manager leads me over to a young man, the resident expert in English. Other than the Ford logo and the corporate mantra of the moment, go further, the front of his card is entirely in Mandarin. He carefully pronounces his name for me: Yi Xuanbo. Then he leads me past a potted rubber plant to a small aluminum table and hands me a paper cup of tea.

Yi places a luxurious brochure on the table and flips to a picture of a silver Mondeo hovering over the Manhattan skyline. He then turns to a page extolling the interior and the sound system — in English, the accompanying text describes the car as “a sensory palace.” Yi tells me how much a basic Mondeo costs before taxes: 179,800 yuan, or about $28,000. I ask him whether he owns a Ford and he shakes his head, but with a smile. “I think maybe next year, I can buy one, too.”

Business Insider: China is making a new 5-Year Plan — and it’ll decide the fate of the global economy

Greece Votes In Its Second Election Of 2015

Polls indicate a tight race going into the vote.

The Huffington Post, By Nick Robins-Early, September 20

Greek voters may be feeling déjà vu Sunday as they head to the polls to cast their ballots in the country’s second election and third national vote of this year.

The two previous votes, the first of which brought former Prime Minister Alexis Tsipras’ left-wing Syriza party to power in January and the second of which rejected a proposed bailout deal, cast long shadows over today’s election.

Tsipras’ Syriza party is vying for reelection after a rebellion from members opposing the international bailout split the party in July. Tsipras resigned in August to pave the way for snap elections, hoping to consolidate his power after the schism with a new victory.

There were reports of low turnout in the early hours of the election. At one polling station in Athens, the pace was slow, and some who came out to vote there voiced a general sense of fatigue with the state of Greek politics.

The Telegraph Live Blog: Greek elections live: Tsipras vows to form new government as Syriza on course for narrow electoral win
Voter turnout set to be lowest in history with Syriza predicted to gain 30-34pc of the vote. Follow for latest updates from Athens

Syriza rule out Grand Coalition

Nikos Pappas, close aide of Alexis Tsipras, has told Greek media the party will not form a coalition with New Democracy. That maintains the line they’ve held throughout the campaign, despite ND’s insistence they can work with the Leftist party.

The Guardian’s Live Blog: Exit polls put Syriza on course for victory – live updates

Delighted – and mightily relieved – Syriza supporters stood, cheered and burst into applause as the first exit polls flashed up on the big screen in the party’s marquee on Korai square in central Athens.

Aristotelis Poulai, a commercials producer, said the result was “probably the best that Greece could do at the moment. I am more of the radical left so forgive me for not being completely thrilled – Syriza will have to make alliances. But it’s the best result possible right now.”


Updated exit poll confirms Syriza’s lead

Here you go. New exit polling data has just been released, and it confirms that Alexis Tsipras’s party is in poll [sic – and/or very punny] position.


The latest projection from Mega TV suggests Syriza could scoop as many as 145 seats.

That’s only a few shy of January’s election, when it got 149.


China stuns financial markets by devaluing yuan for second day running

Stocks, currencies and commodities fall sharply across region as investors fear a stalling China economy and possible currency war despite Beijing’s assurances.

The Guardian, By Martin Farrer & Fergus Ryan, August 11

Beijing – China stunned the world’s financial markets on Wednesday by devaluing the yuan for the second consecutive day, triggering fears the world’s second largest economy is in worse shape than investors believed.

The move sent fresh shockwaves through global markets, pushing shares sharply lower and sending commodity prices further into reverse as traders feared the move could ignite a currency war that would destabilise the world economy.

There were widespread losses in Asia, and in Europe stock markets suffered falls of about 1%, with the FTSE 100 tumbling almost 2% at one stage.

[…]

The unexpected yuan devaluation saw Chinese stocks slump in Hong Kong, with the Hang Seng China Enterprises Index sliding 2.6%, extending its loss this quarter to 15%. The Shanghai Composite Index lost 1% to 3,886.32 and the CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 1.2% to 4,016.13 points.

TPP talks make progress but no deal on Pacific trade

BBC, August 1

Negotiators from 12 Pacific nations have finished a week of talks without agreement on a regional trade deal.

But the US trade representative Michael Froman said ministers were more confident than ever that a deal on the proposed Trans-Pacific Partnership was within reach.

He said it would support jobs and economic growth.

Among the sticking points were issues relating to the automobile sector and access to dairy markets.

No date has been set for the next round of talks.

So the Greeks are holding a vote tomorrow. Paul Craig Roberts thinks it’s a big deal.

Sunday’s Vote Will Determine Liberty Or Serfdom — Paul Craig Roberts

According to history books, democracy originated in Greece. Of course, historians could be mistaken, but this is the prevailing view among Western populations with enough awareness to be interested to know.

What we are witnessing today, July 2, 2015, is that after 2,500 years in the Western World only the current Greek government is interested in democracy. The Greek government, to the surprise and consternation of every other European government, has called a referendum for the Greek people to decide the fate of Greece. For resorting to democracy, the Greek government has been universally denounced in the Western World.

So much for Western democracy.

The greatest and most successful propaganda scam in history is the one that convinces the world that they are nobody if they are not part of The West, the indispensable peoples, the exceptional peoples. If you are not part of The West you are nobody, nonexistent, a nothing.

This prevailing propaganda might prevail in Greece on Sunday, in which case a fearful and intimidated Greek population might vote against the only government that, instead of accepting a payoff from Greece’s enemies, fought for the welfare of the Greek people.

If the Greeks vote for their oppressors and against their own government, democracy in the EU will cease to exist.

2,500 years ago Greeks saved their independence from the Persian Empire. Sunday’s vote will tell us whether Greeks have again served liberty or whether they have succumbed to Washington’s Empire.

The fate of all Europeans and of Americans themselves will be settled on Sunday.

Zero Hedge: Greeks Split On Greferendum As Credit Suisse Says “No” Vote Defies “Rationality”
Zero Hedge: Massive “No” Demonstration Floods Athens’ Syntagma Square As Tsipras Speaks – Live Webcast
The Automatic Earth: The Troika Turns Europe Into A Warzone
Ian Welsh: How to Create a Viable Ideology

Jobs Report Disappoints, Participation Rate Falls to Lowest Since 1977

Bloomberg Business, By Sho Chandra, July 2

The U.S. labor market took one step forward and one back in June as job creation advanced while wages stagnated and the size of the labor force receded.

The addition of 223,000 jobs followed a 254,000 increase in the prior month that was less than previously estimated, a Labor Department report showed Thursday in Washington. The jobless rate fell to a seven-year low of 5.3 percent as more people left the workforce.

The figures indicate corporate managers are confident they can temper hiring and meet demand against a backdrop of stronger consumer spending and feeble overseas markets. At the same time, more moderate job gains may still be enough to reduce the unemployment rate, consistent with the Federal Reserve’s perceived timetable to raise borrowing costs by year-end.

“One month’s low number wouldn’t shake our optimism,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. “The job market still has a ways to go but we’re making progress.”