Financial Times

Financial Times

Mr. Right Wing, TK, why did you choose to become a lapdog for die-hard PPP Marxists like Moses and Ramjattan?

 Why are you calling the man a lapdog and no what account except you are all truly irresponsible with words? Ramotar was actually editor of a Marxist tome and left lots of writings on his love for the Leninist creed. His party still commits itself to Democratic Centralism in managing its affairs.

I say it the way I see it. I don't care who is offended. It is my right to question the integrity and character of any politician who goes on the aggressive side. TK and many others have been dreaming of the day when new a political party would emerge on the scene to replace the PPP as the representer of East Indians. Their view of the PPP is not all wrong. They see the party as one that has misled IndoGuyanese for a half century. What is so interesting is that the AFC is now dominated by members of the PPP.

It is not a matter whether you care what I think but whether you care what you think.

I do not know on what basis you challenge TK's character. As an agent of or as one inclined to accepting the PPP as is; that is perplexing. The aggregate character profile of the PPP party and its explicit culture is that of the aggressively corrupt. There is no moral basis for how they want to rule. Their way alone cannot be the way in a democratic, plural and multiracial society.

I  question your understanding of what you do as an individual outside that PPP culture. If I am mistaken and you are already be swept up in that melange of necrotiizing amorality; woe is you. The party as it presently stands, is under pinned by a system of rhetorical ethic. It is useless as a source for guidance or as lessons for life. 

It is the right of anyone to want to replace any Party. That is healthy political activism.  If you get the vibe that the PPP represent East Indian ( and I do not doubt the logical necessity of your conclusion), it is an unworkable reality for our society. Cooperation with not a subjugation of other pluralities must be the norm.

That brings us full circle to your question. TK must get along with others in the society and  his party be they old communist or  new liberal capitalists. It is about all of us getting a say and  those representing us being respected and included in the deciding  as we make our way in the world.

Moses and Khemraj were the most two senior Marxists after Jagan in PPP. Moses is still a Marxist.

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Reading his columns and other writings I would say he is far from right wing. 

Rumouthar is a commie clown

Extremely far right wing.

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I was not aware that someone who is "extremely far right wing" votes for Obama?  

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You see the world as black and white...as too simplistic. But there are gray spots all over. There is much complexity. Furthermore, I support the idea of a third party and not a personality.

The pursuit of Socialist ideology is what destroyed Guyana.  Those who supported or took part in furthering the cause, weather under the PPP or PNC have no place to hide.  They have blood on their hands and carry the guilt of the nation.  Many still don't see their folly but try their utmost to excuse it away.

Some gravitate among political parties .. like from ..

PPP/C => ROAR => AFC => ???

Hmmm...someone has a serious problem making parallels.

US DECLINE?

http://www.bloomberg.com/news/...d-that-s-rising.html

BTW, even Britain is gaining from Putin's corruption and power grab as Russian billionaires choose to live in UK.

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Forget about the Russians, the French and Greeks are buying up property like crazy. Hollande has threaten the rich with a top rate of 75% and over 200,000 rich French now live and work in Chelsea, some even commute daily to work in France via Eurostar.

I see Tar_K has morphed into a camudi

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Hahaha. I was wondering the same. 

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Interesting info Sunil. BTW...duh is meh neighbor Ali walking through meh backyard. The man was heading for the other neighbor pool but they shut him out

FYI:

http://www.bloomberg.com/news/...-southeast-asia.html

Chinese consumers of thermal coal and iron ore are asking traders to defer cargos and – in some cases – defaulting on their contracts, in the clearest sign yet of the impact of the country’s economic slowdown on the global raw materials markets.

The deferrals and defaults have only emerged in the last few days, traders said, and have contributed to a drop in iron ore and coal prices.

“We have some clients in China asking us this week to defer volumes,” said a senior executive with a global commodities trading house, who warned that consumers were cautious. “China is hand to mouth at the moment.”

A senior executive at another large trading house also confirmed there had been defaults and deferrals in both thermal coal and iron ore.

China’s economy grew 8.1 percent in the first quarter from the same period of 2011, the weakest rise in nearly three years but still pointing to a so-called soft landing.

Other key economic indicators followed by Chinese policy makers, including electricity consumption, rail cargo volumes and disbursement of bank loans, point to a sharper slowdown, suggesting the risk of a hard landing.

Soft commodities such as soybeans and cotton have also seen Chinese customers default in the past two weeks, a trader at a third global trading house said.

Highlighting a “worrying” weakness in consumer spending inside China, Kim Youngha, the head of Samsung’s China operations, said he expected the domestic market for technology goods to grow 7 percent this year in China, down from 10 percent last year.

Yu Song, analyst at Goldman Sachs, told clients last week that Chinese economic activity was “exceedingly weak”. In response to recent dismal data, the Chinese central bank has cut the portion of deposits that banks must hold as reserves to encourage the flow of credit.

As the world’s main engine of commodities consumption, the Chinese business cycle is key for raw materials markets. The country is particularly important for bulk commodities such as iron ore, used in steelmaking, and thermal coal, used to fire power plants.

It is the world’s largest importer of iron ore, accounting for roughly 60 percent of the seaborne market, while it ranks as the second top importer of coal, behind Japan and with a market share of 20 percent of global trade.

Because of slowing economic growth and the high domestic stockpiles of many raw materials, China’s commodities imports in April, the latest month for which data are available, were unexpectedly weak, with iron ore imports hitting a six-month low and copper imports at an eight-month low.

Iron ore and thermal coal are critical to the profitability of blue-chip miners such as BHP Billiton , Vale of Brazil, Rio Tinto , Xstrata and Anglo American . The miners, under pressure from investors, have announced they will reduce investment in the next few years due to cooling commodities markets.

The price of the benchmark iron ore with 62 percent iron content in Singapore fell on Friday to $135.25 a metric ton, down nearly 9 percent from the end April. Colin Hamilton, commodities analysts at Macquarie, said sentiment in the iron ore market was “pretty weak”.

“People are worried about China and China is worried about Europe,” he said. “Everyone is worried about growth. You cannot decouple Europe from China.”

Thermal coal prices in the Australian port of Newcastle, the benchmark for Asia, fell on Friday to $97.5 a metric ton after breaking below the $100 level earlier this month for the first time in 18 months.

The slump in thermal coal prices is also due to higher exports by U.S. miners, which face lower domestic demand because of the lowest natural gas prices in a decade.

Additional reporting by Leslie Hook in Beijing and Robin Kwong in Taipei

Financial Times

May 21, 2012 7:40 pm

Time to plan a velvet divorce for the euro

By Gideon Rachman

As I read the umpteenth article on the “Grexit”, a phrase from the filmMarathon Man ran around my head. In this cult-thriller, Laurence Olivier plays a war criminal turned dentist who tortures Dustin Hoffman by drilling through his dental nerves without anaesthetic. As he does so, he asks repeatedly “Is it safe?”

“Is it safe?” is the question European leaders have been asking themselves for months, as they contemplate Greece leaving the eurozone. Late last year I found myself discussing this very question with a senior European politician. He had noticed that I had written repeatedly that the eurozone was a flawed construction that was likely to collapse. If that was the case, I was asked, would it not be better to break the whole thing up now?

At this point, I heard myself becoming shifty and evasive – “The trouble,” I replied, “is that I keep being told that a break-up would cause a catastrophe. Until I can tell you convincingly why that’s untrue, I can’t responsibly advocate it.”

But prevarication is no longer good enough. In the coming months, Europe may be forced to decide.

So – to answer the question that I dodged back in December – yes, I do think that it would ultimately be better if the eurozone broke up. This might not involve a complete reversion to national currencies. A hard core of euro-users, centred on Germany, might survive. But the current euro will have to go.

It is true that the transition from here to there will be painful and dangerous. My colleague Martin Wolf laid out an updated version of the full horror scenario in Friday’s FT – involving a breakdown of law and order in Greece, and financial collapse across Europe. How could anyone responsibly run that risk?

The answer is that the alternatives to eurozone break-up are inherently implausible and deeply unattractive. At the weekend G8 leaders called for Greece to stay in the eurozone. Their present plan seems to involve some magical mix of stimulus and austerity that restores both budgetary balance and growth. But even if they can agree a real plan and even if it works – and neither outcome is likely – the eurozone’s structural problems would remain.

Without the option of devaluing their currencies, uncompetitive economies are left with “internal devaluation” – otherwise known as wage cuts and mass unemployment. It is true that countries such as Greece badly need economic reforms. But these reforms – conducted within the straitjacket of monetary union with Germany – are causing political and economic turmoil.

The real problem, however, is political. The euro does not have a political union behind it so it simply lacks the key institutions needed to make monetary union work. There is no strong central government to enforce budgetary discipline and no large federal budget to fund transfers from rich to poor areas. And, as we are discovering, there is no euro-wide bank-deposit insurance scheme.

In theory, the eurozone might rectify this error by moving to a real political union. But the idea of a permanent transfer of sovereignty from Athens to Brussels has been rejected by all sides in Greece. Meanwhile, in Germany, the idea of a transfer union – involving a permanent gush of subsidies from northern to southern Europe – remains anathema.

Even if EU politicians were able to overcome such objections and create a real federal union, this giant new entity would essentially hollow out the powers of national democracies. Sacrificing national self-rule on the altar of the euro is inherently objectionable – and would invite a nationalist backlash across Europe. This “cure” for the ills of the euro would be worse than the disease.

Since the long-term alternatives to the break-up of the eurozone lack credibility, it is necessary to think about how to manage such an event – rather than simply dismissing it as too dangerous to contemplate. Unfortunately, the break-up plans that Europeans are already drawing up behind closed doors are too limited.

They envisage a Greek exit, followed by a determined effort to throw up afirewall that prevents other countries being sucked into the crisis. This has unfortunate echoes of the past two years, during which the EU has consistently tried and failed to confine the crisis to Greece. In fact, the exit of Greece would unleash contagion, by making it clear that membership of the euro need not be permanent. Markets would inevitably round on the next vulnerable countries.

Allowing the fate of the euro to be driven by a succession of market panics would be the worst possible way of breaking up the single currency. It would involve the loss of billions of euros of public money as the EU burnt through its firewall. The political and economic turmoil that followed would cause public panic and discredit the politicians in charge.

It would be infinitely preferable if EU leaders were to make a rational assessment of which countries are willing and able to stay in the euro – and announce plans to work on an amicable and orderly divorce between the stayers and the goers. Only by acting in this way might they finally achieve their oft-stated goal of “getting ahead of events”. Almost all euro-users adopted the currency without a referendum, and they could leave the same way.

It is true that even a “velvet divorce” for the eurozone would involve enormous dangers. But at least it would offer a believable exit from the present maze. As a (very) German proverb puts it – “Better an end with horror, than a horror without end.”

Financial Times

May 22, 2012 7:10 pm

Germany rules out common euro bonds

By Chris Giles in London, Peter Spiegel in Brussels and Quentin Peel in Berlin

©Reuters

Germany refused to share the debt burden of stressed eurozone peers on Tuesday, ignoring two of the most influential international economic bodies which offered support for proposals championed by Paris, Rome and Brussels ahead of a summit.

Angela Merkel, Germany’s chancellor, has argued that any co-mingling of eurozone debt would remove incentives for southern economies to adopt structural reforms. The calls from the International Monetary Fund and the Organisation for Economic Co-operation and Development came on the eve of Wednesday’s EU summit.

François Hollande, France’s new president, has strongly backed common eurozone bonds – which would ease funding constraints for the eurozone’s stressed periphery but potentially raise German borrowing costs by diluting its creditworthiness across the currency union. German officials made clear the idea was a non-starter in Berlin.

“There is no way of introducing them under the current [EU] treaties. Indeed, there is an explicit ban on them,” one senior German official said, adding Berlin would not drop its opposition in the foreseeable future. “That’s a firm conviction which will not change in June.” Increased jitters over how Europe’s banking system would be affected by an exit of Greece from the eurozone have lent urgency to the latest discussions over measures to tackle the sovereign debt crisis.

Mr Hollande has vowed to raise eurozone bonds at the informal summit. He won backing from the OECD, which in its twice-yearly economic outlookspecifically called for such bonds, saying they were needed to break a vicious circle “involving high and rising sovereign indebtedness, weak banking systems, excessive fiscal consolidation and lower growth.”

“We need to get on the path towards the issuance of euro bonds sooner rather than later,” Pier Carlo Padoan, the OECD chief economist, told the Financial Times.

Christine Lagarde, the IMF chief, also called for more burden-sharing. Though she stopped short of explicitly backing euro bonds, she said “more needs to be done, particularly by way of fiscal liability sharing” – a thinly veiled reference to such debt instruments.

Diplomats said the summit, which just last week looked like it would be a highly scripted affair on European growth, had become increasingly unpredictable, with leaders struggling with how to respond to the havoc wreaked by political instability in Greece. Officials emphasised that no formal decisions would be taken.

The euro bonds debate could produce fireworks between Mr Hollande and Ms Merkel – a possibility that has captivated officials involved, given the comparatively harmonious Franco-German relationship in the latter years of Nicolas Sarkozy’s tenure. But most diplomats believe Ms Merkel would succeed in blocking any proposal, producing more smoke than fire. “They say that when Germany and France don’t co-operate, we have a problem,” one senior diplomat from a smaller EU country said. “And when they do, we have a problem, too.”

Of more urgent concern are ongoing discussions over eurozone banks, with officials saying the fear of a Greek eurozone exit has forced leaders to contemplate massive rescues, particularly in Spain. Rising estimates of bad loans have forced Madrid to part-nationalise one bank and face the increasing likelihood it will need to inject more government money into others.

Senior EU officials question whether Madrid, which has faced rising bond market borrowing costs, has the financial wherewithal on its own, spurring a furious series of negotiations over whether the eurozone needs to move quickly towards a common bailout and deposit guarantee scheme.

Although officials said such reforms have pushed themselves onto tonight’s agenda, it remains unlikely any can be agreed quickly, making the European Central Bank the last line of defence if Greece forces more immediate action.

Additional reporting by Joshua Chaffin in Brussels

That's simply a matter of the so-called "oligarchs" settling in their philosophical homeland.

Financial Times

India is one of the most over-rated country.  I never saw the political and cultural maturity which could make it a leading nation.  Too much petty differences, cultural vices, internal divisions, all which run deep, will keep them relegated for generations.  They over celebrate minor achievements that has no impact in the grander scheme of things.

I have to say, Guyana has "devolved" a bit like India.

FYI:

http://www.cnbc.com/id/47573095

China has it's act together, they will take action on the domestic front to spur growth.

Correct. They have no intention of sacrificing their economy to bail out a bunch of hedge fund gangsters.

The US did not bail out hedge funds but investment banks, an insurance company and an auto manufacturer.

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The problem with China is there is an excess capacity and stimulus will only enhance that excess. Western corporations are also waking up to the idea that China is not the best place to do business. They can stimulate if they start building infrastructure on the western front where it is badly needed. However these things are not shovel ready and will take time. The Chinese downturn will need to run its course especially since it is coming off of a real estate decline.

I'm sorry, but your assessment is incorrect and appears to be just a repetition of Obama administration press releases. The bailout is far more complex than simply direct payments through the congress. For example, the so-called bailout of the auto sector was money that went directly to the counterparties of derivatives deals made by auto companies -- so really, it was a bailout of the auto industry's creditors. Those wagers should have been simply annulled, instead. Also, the Federal Reserve is far more involved in the bailouts than is the congress, but the taxpayer still ultimately pays the bill. The Fed buys up worthless pieces of crap held by hedge funds, etc., at full face value.

Again you are wrong about the auto bailout. The government actually took an equity stake in the auto company. But you have made a good point vis-a-vis the Federal Reserve. Indeed the purpose of QE was to buy up toxic assets, which would have indirectly helped the hedge funds as they went on to get a piece of the action. I am not a defender of hedge funds I am simply stating the fact that the hedge funds indirectly benefit from Fed Reserve interventions but they did not start the fire. The hedge funds take on risks and some of them fail causing their shareholders, often rich people, to lose money. The problem is the investment banks speculating with depositors' monies and then we have to bail them out when they fail.

Which is why we need a restoration of Glass-Steagall, and anyone who opposes that should be properly viewed as an enemy of the masses of people who are suffering due the present collapse.

I agree with you there Henry...it would be great to get back Glass-Steagall.

The present collapse has little to do with the absence of glass-stegall. It is more systemic and has to be addressed more than with this as a panacea. The same goes for the gold standard or any regime of FDRlike  mishmash of  neoMarxist Larouche ideas merging with a socialist or interventionist Galbrathian paradigm. We are in deep shit for the political separation into camps with irreconcilable differences and that is across culture, politics and economics. America has to re Americanize itself. That means rethinking of ways to reconcile with its ideals.