the rally is likely over, western actives will sink further&further

Corrupt “experts”, paid cash for that dirty job even in credit crunch times,  were disseminating during the April SR rally their usual bullshit, CRIMINAL disnformation they R paid 4. Hell is waiting for them: they’ll have all the time they want, to study Political Economy and to repent down there, at home … In Dante’s terms, they should & will suffer infinitely, the  souffrance they inflicted to the naive people believing their BULLSHIT optimism, spread on purpose in the middle of the worst ever crisis of Capitalism.

Please, remember the bloody Warren Buffet, Obama’s richest friend, who right  in the middle of the Fall of the Wall Street Temple, said last December “it was time 2 buy”. He bought, and lost all those $. We the poor, can’t afford such a luxury propaganda game.

Time 2 buy will come soon, most likely  in a couple of years time:

iff, provided the crisis will play thoroughly,   and bring to an end its own chirurgical work, no one else can do: to clean the ground, to make room (no room – in a filled up space of resources allocation) in order to allow for a new mechaism of growth to self-organize, emerge, and establish its coeherent, new economic geography & interregional DIVISION OF LABOUR. Marxian & Austrian, Hayekian & Schumpeterian sagesse, that neo-converted Keynesans (most of them actually never read  Keynes) and profiteering Obamist blatanty ignore.  

As we discuss in our teaching blog, things are not that simple & straightforward: there are  many mistakes in the Austrian  credo, although not so many  as their adversaries argue. First of all: why the hell in our MIXED  economies, that is a variety – from SF – LA to Beijing-Tokyo –  of combinations, mixes of  free markets (full of monopolies & market failures: what  Austrians oversee, for their ideological bias at odds with science) & Statism, should the most ineffcient fail, and the crisis VISIBLE  FOOT make a proper job of resources liberation from bad, worst uses? Monopolies, Detroit, Mr Profumo’s Unicredit: they R all TOO BIG TO FAIL. Who fails, is the foreclosure victim, not his killer.

In sum: while monetary policies are doing their job – they keep the crisis fever at the right temperature, avoiding a fall into stagdeflation  –  fiscal stimuli are most likely useless, 0 multiplier hence 0 impact (apart a Mob, Mafiosa misallocation of buying rights to friends, friends of friends etc. – e.g. Obama’s stimulus over-concentrating public exp. in Washington DC versus FDR’s regional balancing policy, iconised by the TVA, Tennesse Valley Authority).



says – from official sources, and itself an official, public-communist source – that China power use is currently dropping -4% (April 2009 n April 2008) at odds with evidently  FALSE official GDP figures from the Empre, saying that   China is growing 6% but will B up soon to 7%. Can you believe there was such a sudden jump of energy efficiency : +10??? 6 – (-4) = 10.

Published in: on May 5, 2009 at 8:38 am  Leave a Comment  
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doctor doom’s 2009

Nouriel Roubini has now a weekly column on Forbes, where some synthesis is made of the much richer rge material (unique, very deep and informative news “clusters”; regular blogs or interventions by some of the best macroeconomists). This is an invitation to read regularly, as an amateur, both “Doctor Doom” Forbes column, and the free sections of (while a professional economist is obliged to subscribe to rge):

Doctor Doom

A Global Breakdown Of The Recession In 2009

Nouriel Roubini, 01.15.09, 12:01 AM EST

Forecasting pain, from the U.S. to Australia.


With the industrial world already in outright recession and the emerging world navigating toward a hard landing (growth well below potential), I expect global growth to be flat (around -0.5%) in 2009.

This will be the worst global recession in decades as the fallout of the most severe financial crisis since the Great Depression took a toll first on the U.S. and then–via a variety of channels–on the rest of the global economy.

Here is a global breakdown of my forecast.

The United States economy is only halfway through a recession that started in December 2007 and will be the longest and most severe in the post-war period. U.S. gross domestic product will continue to contract throughout all of 2009 for a cumulative output loss of 5%.

One last look at 2008 will reveal a very weak fourth quarter with GDP growth contracting about -6% in the wake of a sharp fall in personal consumption and private domestic investment.

I see the real GDP growth contraction playing out through the year as follows: first quarter 2009: -5%; second quarter 2009: -4%; third quarter 2009: -2.5%; fourth quarter 2009: -1%–adding up to a yearly real GDP growth of -3.4% for the U.S. in 2009.

This forecast is much worse than the current consensus forecast seeing a growth recovery in the second half of 2009; I also predict significantly weak growth recovery–well below potential–in 2010. (…)

The latest cyclical upswing in the Eurozone was largely driven by a temporary but powerful boost to domestic investment from disappearing risk premia in the aftermath of the adoption of the single currency and by external demand from a buoyant world economy.

Both demand sources fizzled out by the second half of 2008, leaving the Eurozone as a whole and its largest members exposed to diverging deleveraging patterns in the face of suboptimal EMU-wide automatic fiscal stabilizer mechanisms.

The latest record-low readings of leading and sentiment indicators point to a severe recession ahead in 2009 that shapes up to be worse than the 1992-93 crisis. For the Eurozone, I expect a below-consensus contraction in real GDP of around -2.5% (…)

We believe China will experience a hard landing in 2009, with growth unlikely to exceed 5%, a sharp slowdown from the 10% average of the last five years. The reversal of capital flows and high credit cost will pull down India‘s growth significantly, to around 5% in 2009 from an estimated 6% in 2008.


This graph, now in the front page of the Greenberg geo-eco think thank of the CFR (where we always read two of our favourite blogs: Follow the money by the International Economics “Sherlock Holmes” Brad Setser (*); and the delightful political incorrectness of  Amity Shlaes’ Forgotten man: healthy antidotes to FDR or BO’s santifications), is quite informative.

RAQ (Rarely Asked Q.) Did u know, before having looked at it, that the 2nd NewEconomy bubbbbbble (2003-07)  was much more  pervasive cross-country, than the so much advertised 1st one (1994-2001)?


(*) We are much more than friends, in brotherhood from decades with Otaviano Canuto, himself an rge blogger, Catou and all their beautiful family. Nonetheless, our esteem of Otaviano as an economist made a big jump upward a few weeks ago, when we discovered, in an exchange of comments on a recent post, he had … something to teach to Brad. Before, we believed anything alike impossible, i.e. beyond human limits.

photo of the crying year



Liang Kexin, 7, who lost her left leg during the earthquake, plays with toy bricks in a ward at the Xiehe Hospital. More than ten thousand injured people were moved to eighteen provinces by train and air, according to the Ministry of Health.

Photo: © by Qiu Yan, photographer. Photo Director of the Changjiang Daily.

Born in Hubei Province in China and still living there, World Press Photo winner Qiu Yan is 46 and used a Canon 1D Mark II for his images.  “Most of the photographs were taken there about a week after the earthquake had happened,” on the 12th of May  in  China’s Sichuan Province.

The December issue of “Enter”, a publication of the World Press Photo Educ. Dept,  has chosen this set of photo for one in a group of 4 galleries, where also one notes, for their bio-social meaning, the coloured takes in Capetown refugee camps,  by  Eren Aytug who went there from Turkey. Enter’s cover has another earthquake photo.

G 20: the real start is in April – RIMANDATI AD APRILE

Photo: January 30, 2007. REUTERS/Jason Reed

The Times cartoon. © Peter Brooks





LI PENSAVAMO BOCCIATI; INVECE SON SOLO RIMANDATI AD APRILE: e’ un risulato magro ma sopra le aspettative.

Il G20 era atteso come  un buco nell’acqua, invece ha sorpeso, pur senza entusiasmare affatto:

– da un lato, ultimo grido liberista del 2° Millennio, seppellito nel marzo-settembre 2008

– dall’altro, un primo vagito del nuovo millennio Chindiano che avanza: focus sulla regolazione forte (?) della Finanza, anche se .. leggete il testo finale integrale: final statement. Le rating agencies? Devono … registrarsi, e’ tutto. Ma erano ben note e nelle dita di una mano!  Niente guillotine per  il loro top management, non una notte in prigione e nemmeno a casa senza liquidazione. Il FT le aveva trovate con le dita nella marmellata: usavano modelli TRUCCATI per valutare il rischio, lo sapevano e coprivano per mesi e mesi, continuando a barare.  Al confronto, il Watergate era una cosa da educande.

– Occhio Obama: col gradualismo alla Gordon Brown non si va da nessuna parte, si lasciano tutti gli attori e le istituzioni-chiave al loro posto. CI VUOLE UNA RIVOLUZIONE (al momento senza nome, così sarà più creativa ed al passo coi problemi).



Surprise surprise: Gordon Brown again, the win-win guy of global summits! 

For  a sorting out lame-duck (GWB, US), another one (GB, GB) stays with us forever. Gordon Brown had reached below zero poll evaluations, for his treacherous delaying tactics on Northern Rock: oh, dear! He was so shy and  timid (Blair complex?),  before statalism became fashionable again (the real Millennium cut is in 2008, either March or September). But now he’s the star, at least before B.Ob. enters the stage.



Brown Wins Reform Demands

U.K. Prime Minister Gordon Brown appeared to win many of his key demands to reform the global regulatory system and restart the Doha round of trade talks at the meeting of G-20 

As expected by everybody, lame duck GWB did not get anything from  Sat. 15th G20 meeting. Markets didn’t bet a buck on such a meeting, so perhaps they will not fall down dramatically on Monday. The G20:

+ has already become a focal institution (as Gordon Brown has underlined), and will have some work to do next year, particularly in the next meeting before April 30. First of all, verify whether the March deadline (see G20 document below) has been met for the emergency Global Finance re-regulation. By now the G20:

did not start any coordination of fiscal stimuli (from now on  the focus of policies), nor of  monetary and credit policy guidelines; in such a way, national and (at most) regional policies are already ending up: either  in “beggar your neighbour”; or becoming a ground for knittimg new international alliances: e.g., see the rge discussion on China’s fiscal plan:

the timing of the Chinese package is likely influenced both by domestic demands, and the external outlook. The timing before the G20 heads of state is clearly significant.


The hypothesis sounds right to me. China is trying to knit alliances around the US, to decouple.

+ dealt mainly with the financial meltdown, with a gradual approach (not mentioning the roots of today’s problems);

+ further work might follow, namely in the FSF coordinated by Mr Draghi, which should include BRIC and deal with change in  Bretton Wood institutions;

  –  no real finance reform, nonetheless: look at RATING AGENCIES (perhaps the most bastard subcriminals, the FT found them conspiring and treaching). They just need to … register !!!  Fuckoff.

 Pleaded for pursuing an “Open Global Economy”, AS IF it was not a dead walking: sooner or later bailout protectionism will give the floor to trade protectionism and capital controls; we bet the deadline of resurrecting the Doha Round by December  will NOT work;

apparently ignored the risks of an open deflation, signalled by the lack of response of gold and stock markets to the massive national rescue plans.  

∑ – Final G20 mark: – 5 + 3 = -2.  Only such a nerd as G Brown gets good marks! The other pupils most come back in the April session, with new essays 2B evaluated.

Even if its financial and institutional (IMF and WB) plan had to be timely applied, this would not change much of the current severe global recession by insufficient demand, on the verge of degenerating into a low consumption-led depression in the US – on behalf of the irresponsibility and laissez faire of Pres. Bush and his staff, even after the subcrime bubble imploded in August 2007, i.e. 15 months ago: 15 months lost, waiting for Godot. Luckily Godot is about to come from Chicago. This is why Russia asked to recall the G20 soon, and got it.

The real test will be whether their minimalist approach to focus upon an immediate stabilisation of financial markets will get any result soon. Dedline: March 31. This is the core of their long final statement:

9. We commit to implementing policies consistent with the following common principles for reform.

• Strengthening Transparency and Accountability: We will strengthen financial market transparency, including by enhancing required disclosure on complex financial products and ensuring complete and accurate disclosure by firms of their financial conditions. Incentives should be aligned to avoid excessive risk-taking.

• Enhancing Sound Regulation: We pledge to strengthen our regulatory regimes, prudential oversight, and risk management, and ensure that all financial markets, products and participants are regulated or subject to oversight, as appropriate to their circumstances. We will exercise strong oversight over credit rating agencies, consistent with the agreed and strengthened international code of conduct. We will also make regulatory regimes more effective over the economic cycle, while ensuring that regulation is efficient, does not stifle innovation, and encourages expanded trade in financial products and services. We commit to transparent assessments of our national regulatory systems.

 Promoting Integrity in Financial Markets: We commit to protect the integrity of the world’s financial markets by bolstering investor and consumer protection, avoiding conflicts of interest, preventing illegal market manipulation, fraudulent activities and abuse, and protecting against illicit finance risks arising from non-cooperative jurisdictions. We will also promote information sharing, including with respect to jurisdictions that have yet to commit to international standards with respect to bank secrecy and transparency.

 Reinforcing International Cooperation: We call upon our national and regional regulators to formulate their regulations and other measures in a consistent manner. Regulators should enhance their coordination and cooperation across all segments of financial markets, including with respect to cross-border capital flows. Regulators and other relevant authorities as a matter of priority should strengthen cooperation on crisis prevention, management, and resolution.

• Reforming International Financial Institutions: We are committed to advancing the reform of the Bretton Woods Institutions so that they can more adequately reflect changing economic weights in the world economy in order to increase their legitimacy and effectiveness. In this respect, emerging and developing economies, including the poorest countries, should have greater voice and representation. The Financial Stability Forum (FSF – directed by Mr Draghi, NdR) must expand urgently to a broader membership of emerging economies, and other major standard setting bodies should promptly review their membership. The IMF, in collaboration with the expanded FSF and other bodies, should work to better identify vulnerabilities, anticipate potential stresses, and act swiftly to play a key role in crisis response. 

Today’s rge is full of interesting clusters on G20 related issues:

  •  G20 Nations Agree More Concerted Efforts, Regulatory Coordination
  •  Will Coordinated Policy Interventions Prevent a Global Recession?
  •  Towards A New Financial Order: Regulatory Issues Tackled At The G-20
  •  Liquidity Trap Possibility: What’s the Solution?
     G20 Nations Debate Coordinated Fiscal Stimulus
     Economists Debate: What Should Be Accomplished at the G20?

Financial Communism


Whoever will be at the White House. Although:

Lex, FT on  Friday 18.

Better Fed than dead
This was the week that socialism came to Washington. The US government had to firm up its “implicit” support of the government sponsored enterprises, Fannie Mae and Freddie Mac which between them own or guarantee 22 per cent of the $24,300bn borrowed by US households and non-financial businesses.

So Fannie and Freddie, traditional tools of the debt-based US housing policy that lead to the subcrime crisis, own or guarantee up to $ 5.2 trillion. Although it was well  known they are a target of foreign investment,  few had in mind that F&F are MORE THAN 10% IN COMMUNIST CHINESE HANDS.

Brad Setser on Sat. 12

Too Chinese (and Russian) to fail?

Brad corrects official data, estimating that China holds NOT JUST $ 422, BUT $500-600 bn of Fannie and Freddie GSE (Gov. sponsored ent.s), i.e. 10% of the outstanding stock (5.2 trillions) and almost 15% of China’s GDP. Russia has $156 bn, more than 10% of its GDP.

I would certainly expect that Vice Premier Wang is on the phone to Paulson this weekend, politely asking how exactly the US plans to backstop the Agencies. (…)

MORE IN SETTSER’s BLOG, quoted this morning July 17th by LEX, FT: “China and Fannie Mae”, and in our static page: AAA Updates on subcrimes.

Published in: on July 20, 2008 at 11:05 am  Leave a Comment  
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Chinese pre-imperial foreign policy


0ld Bob was short in ammunitions – such  a primary ingredient for a hungry country and the illegally delayed 2nd turn of elections. Now he is playing John Wayne with three million rounds of assault rifle ammunition, 3 000 mortar rounds and 1500 rocket-propelled grenades. We read this on today’s Mail&Guardian, Joburg.

Thabo Mbeki, SA President, has always been the only responsible for Robert Mugabe being still in power, his last resort – since when insanity draw Mugabe to destroy the developing Zimbabwean economy.

– Angola is already a Chinese colony, although US military influence is not yet out of the country.

– 1 month ago, acting for intraregional-international class solidarity, Durban dockers and a sentence had kept the deadly cargo on the ship.

– As usual, it is business as usual according to Beijing. Behind such a false mercantilist ideology, the  game rule is imperialism: LET’S HARARE DIE FOR THE SAKE OF BEIJING FUTURE.

Go and see a few drawings by the greatest political satire cartoonist in the world, Zapiro (see our page). On Mugabe and his complices, e.g.:

Zapiro makes better political analyses than most newspaper leaders and political scientists, and has no pity: he was asked in court 10 mn Rands by the next SA President, Jacob Zuma.

Many recent analyses have shown how Mugabe’s psychology went just wrong: the last hypothesis is that he’s driven by envy towards Mandela (Mail & Guardian; Slate). There are solutions for madness; the problem is that, with only two exceptions (Tanzania and SA), the great African Socialist and Pan-africanist State leaders became all lifetime dictators. Even a literate and a poet in Senegal (negritude). Mugabe has lost the elections and goes for a 2nd turn: this is why he needs some young weapon for his veterans.



In the mean time, in Gauteng (Joburg) townships, abandoned by Gods and Govt.s, this week xenophobic riots have exploded, and unfortunately killed 5 poor Zimbabweans (political refugees that would be killed on the border, had they to return home), plus attacked Mozambicans.

PHOTO: Paul Botes, M&G. Residents at the Ramaphosa informal settlement try to salvage building material before the blaze overtakes them on May 20.

Residents at the Ramaphosa informal settlement try to salvage building material before the blaze overtakes them on May 20.

updates (June 3): after BLOODY SUNDAY (May 18th), deads count  became  62. Xenophobia spreads acrss the country. Cape’s Somalis reveal that 600 of them were killed in the last few years !

“I don’t think I’d come back here [South Africa],” said Mr Moyo. “The guns were so explosive, bam bam bam bam. It is better if I am beaten up at home when my family knows where I am. If I am killed here my family will suffer, thinking: ‘Where is he? Why didn’t he come home?’” (FT, May 15)

On this: field interviews in Alexandra’s township in the M&G’s op-eds by  Michael Trapido.

UPDATE (M&G, Capetown, June 3). 

“They are terrorised, they are traumatised … and some of them [can] resort to violence because they think, now, everywhere is violence,” said Somali businessman Hoosein Omar.
The large Somali community in Cape Town, South Africa’s second biggest city and top tourist attraction, has been a particular focus of anger from poorer residents of the city, who accuse the migrants of stealing their jobs.

Hundreds of mostly Somali traders marched to Parliament in Cape Town on Monday to protest against the anti-immigrant attacks.

“We are African. We are from this soil. I am not a foreigner … and this soil is Africa,” Abdul Kadir Karakoos, a Somali leader in Cape Town, told reporters.
He said 600 Somalis had been killed in anti-immigrant violence in South Africa since 2002.
More than 50 000 Mozambicans and Zimbabweans have returned home because of the unrest, which has now subsided.
The violence started in a Johannesburg township on May 11 before spreading to other cities, with mobs wielding machetes and axes, driving foreigners from their homes.


Controversial Chinese arms arrive in Harare

Johannesburg, South Africa
17 May 2008 14:30
A controversial shipment of arms from China and destined for Zimbabwe has arrived in Harare, the Weekender newspaper reported on Saturday — apparently thanks to assistance by the South African government. The report said the Zimbabwean government had confirmed that three million rounds of assault rifle ammunition, 3 000 mortar rounds and 1 500 rocket-propelled grenades — ordered from the Chinese government — had arrived in Harare. The South African government has denied media reports that it assisted in the delivery of the arms by fuelling the Chinese vessel, the An Yue Jiang, that was transporting the arsenal. There are fears that President Robert Mugabe is planning to use force to storm back to power in Zimbabwe’s presidential run-off election to be held on June 27. He has deployed the army, police and intelligence units across Zimbabwe to campaign for him through intimidation and coercive tactics, the report said. The Weekender quoted a Mozambican online newspaper, Canal de Moçambique, which reported that the ship had been refuelled by the SAS Drakensberg off the coast of South Africa before sailing north to offload its deadly cargo. It reported that the ship was offloaded at Ponta Negra in the Democratic Republic of Congo. However, Zimbabwean government officials said it was offloaded in Angola. Canal de Moçambique reported that President Thabo Mbeki gave “a direct instruction” to Deputy Defence Minister Mluleki George to send the SAS Drakensberg to refuel the An Yue Jiang. Presidential spokesperson Mukoni Ratshitanga dismissed the reports, saying “it seems that the season of propaganda is upon us”. George said he had not received instructions from Mbeki to dispatch the SAS Drakensberg and that the allegations had no substance. However, the Canal de Moçambique article also said the arms were flown to Harare in an Ilyushin Il-76 belonging to Avient Aviation, a freight charter airline based in Zimbabwe but registered in the United Kingdom. This was confirmed by government officials in Harare, the Weekender said. Zimbabwe’s Deputy Information Minister, Bright Matonga, confirmed the weapons had been delivered. The Angolan government’s assistance came after an appeal by Southern African Development Community (SADC) chairperson Zambian President Levy Mwanawasa to member states to bar the delivery of the ammunition to Zimbabwe, saying the arms could deepen the country’s election crisis. The United States and British governments had also exerted concerted pressure on the SADC and China to stop the ship from docking in the region. The ship has been spotted off the coast of Port Elizabeth, the Weekender said. — Sapa


Africa must be more hard-nosed with China

05 May 2008
A shipment of weapons from China destined for Zimbabwe’s Robert Mugabe is an obvious cause for the West to denounce Beijing’s involvement in Africa.   

Delivery of Weapons to Zimbabwe Thwarted

Southern African Nations Keep Chinese Ship From Unloading

Washington Post Foreign Service
Wednesday, April 23, 2008; Page A12

JOHANNESBURG, April 22 — A Chinese ship carrying weapons and ammunition for Zimbabwe’s military may be headed back home, reports said, after repeated attempts to deliver its cargo were frustrated by a coalition of legal activists, union workers and human rights groups.

The region’s resistance to the shipment, which drew praise from the United States on Tuesday, marks a dramatic turn from southern Africa’s traditional embrace of Zimbabwe’s President Robert Mugabe and its reverence for national sovereignty.

It also signals the strength of South Africa’s mounting backlash against President Thabo Mbeki‘s traditionally deferential dealings with Mugabe. The resistance from union workers, almost all of whom are members of his African National Congress, was decisive in preventing the ship from unloading its cargo of bullets and mortars on schedule.

The 489-foot An Yue Jiang was near the Cape of Good Hope on Tuesday night, headed northwest at a modest speed, according to Lloyd’s Marine Intelligence Unit, based in London. But Chinese Foreign Ministry spokeswoman Jiang Yu said that because the shipment could not be unloaded, despite being part of a “perfectly normal trade,” the cargo would probably return to China. Jiang added that she hoped the incident would not be “politicized.”

(…) A court in Durban, South Africa, where the ship initially docked, blocked its unloading in a temporary order that rights activists are seeking to make permanent. Union workers have been at least as crucial in hindering delivery.

Zim arms ship heads for Angola, says Mozambique

19 April 2008
A Chinese ship carrying arms to Zimbabwe, which was turned away from South Africa, is heading to Angola in hopes of docking there, the transport minister of Mozambique said on Saturday. The ship left South African waters on Friday after a court refused to allow the weapons to be transported across South Africa.

Burma and Sichuan, China

From BBC week in picture.  Photo AP. A statue of Buddha sits in water at a temple heavily damaged in Rangoon’s periphery.More than a week after Cyclone Nargis hit Burma, aid is still very slow to reach parts of the country worst affected by the disaster. Photo AFP. A terrible earthquake has affected the Sichuan Province, China. The army has been deployed, and specialized rescue teams arrived in solidarity from Taiwan (which the PRC considers part of its territory), Japan, Russia, Singapore and South Korea.  

Published in: on May 17, 2008 at 2:43 am  Leave a Comment  
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