Category Archives: Finance

Arab Revolutions and Oligarchs: with a Little Help from their Friends…….

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      BFF
What would you think if I sang out of tune,

Would you stand up and walk out on me.

Lend me your ears and I’ll sing you a song,

And I’ll try not to sing out of key.

Oh I get by with a little help from my friends,

Mmm,I get high with a little help from my friends,

Mmm, I’m gonna try with a little help from my friends……..
The Beatles (also sung by Joe Cocker and Arab Oligarchs)

“It is hard to say for sure who took down the portrait of the revolution’s most famous martyr, Mohamed Bouazizi, from its perch atop a garish gold statue on the street where he set himself on fire, touching off a season of revolt across the Arab world. One man said unnamed counterrevolutionaries did it, and another man said it was damaged by rain. Mr. Bouazizi’s neighbors say it was taken down in disgust, several weeks ago, after his mother, uncle and siblings left Sidi Bouzid, an act the neighbors considered a betrayal……. But more than that, they said they were furious at being left behind, in a place with no jobs, money or hope, without the famous Bouazizis to give voice to their despair……. It is a measure of the deep frustration in Sidi Bouzid that a few people have lashed out at the town’s favorite son. That anger is misplaced, most residents say, blaming the lack of progress here on the transitional government, which has moved slowly to address one of the revolution’s central complaints — youth unemployment — especially here in the towns of central Tunisia, where the uprising began. The bitterness here stands in stark contrast to a guarded optimism elsewhere in Tunisia about the progress of the revolution, and it threatens to undermine the gains: Several times in the last few months, disputes over jobs have led to deadly episodes of violence……..In Tunisia, as in Egypt, the optimism fueled by a popular uprising has crashed into the cold reality that life has not quickly improved, and in many cases has even grown more challenging as economies stall and interim leaders struggle to build a new system……….

The Tunisian revolution is still unfinished, anymore than the revolution in Egypt. In both countries long-term dictators were overthrown but their appointees, whether civilian or military, are trying to keep the old order in place. In Egypt the military is asserting its supreme power and it looks set to keep on playing a leading role no matter who wins the ‘election’. The military rulers are almost certainly looking to oversee a “soft democracy”, slightly more open than under Mubarak, perhaps with leaders having term limits as in Iran (but the power of the military in Egypt, like that of the clergy in Iran, will have no term limits). In Tunisia there is probably more consensus among the people about the future of the country, but real change will be hard.
 
Both countries will eventually look more to the IMF and World Bank for financial help and advice on how to manage their economies. The IMF and IBRD are the same institutions that funded and advised the old regimes: ergo, don’t hold your breath expecting anything new. Both countries will also look to the West for help and advice, look to the same insane deregulated economic/financial system that has driven us to the brink of another depression.
Then there are the Arab counterrevolutionaries, flush with cash, who did not wish for the Egyptian and Tunisian uprisings to succeed but now seek to subvert them. Now the Arab absolute monarchs and their media are talking as if they were behind the uprisings in Tunisia and Egypt the whole time. They are holding the line, these Arab counterrevolutionaries, in Libya, Yemen, Syria, and Bahrain, and they are making sure it does not start elsewhere. With a little help from their friends.
Cheers
mhg



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The Lehman Precedent and Goldman’s Catharsis: WTF Rates Standard & Poor ?………….

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Standard & Poor’s is taking great pains to defend its “A” rating for Lehman Holdings Inc. The rating company fired off a report Wednesday asserting that the recent collapse of the investment banking firm was a case of negative market sentiment — whether or not grounded in fundamentals — creating significant difficulties that led the company to the point of failure. “In our view, Lehman had a strong franchise across its core investment banking, trading, and investment management business,” S&P stated. “It had adequate liquidity relative to reasonably severe and foreseeable temporary stresses.” The ratings service insisted that looking beyond the current downturn, the firm had good earnings-generating ability. “We believe the downfall of Lehman reflected escalating fears that led to a loss of confidence ………..

Thus wrote Paul Krugman in Sept. 2008 about Standard and Poor (S & P) high rating of Lehman Bros just before it collapsed. Ergo, the S & P downgrading U.S. debt is probably as meaningless as its high grade of Lehman. Good point. I think I asked around that time: wtf rates S & P?
Goldman Sachs evaded the fate of Lehman because it had, it has, too many people in Washington in its deep pockets. That would have been a better lesson, a needed financial catharsis. Dommage……..
Cheers
mhg



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White House and U.S. Congress Engineer another Market Crash………….

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What began as a weak day in the stock markets ended in the worst rout in more than two years, as investors dumped stocks amid anxiety that both Europe and the United States were failing to fix deepening economic problems. With a steep decline of around 5 percent in the United States on Thursday, stocks have now fallen nearly 11 percent in two weeks. Markets have been plunging as investors sought safer havens for their money — including Treasury bonds, which some had been avoiding during the debate over extending the nation’s debt ceiling…….With investors in the United States already focusing anew on fragile economic growth and high unemployment, waves of selling of stocks began in Europe and continued throughout the day in the United States. Analysts said the market still might have further to fall, as investors reassess the dimming economic prospects……..”

As someone said, or maybe as someone ought to have said: asinine politicians espouse asinine economic policies and create disaster. Clearly there is no shortage of asinine politicians in the United States Congress, from both parties, although the Republicans seem to earn the prize (in asininity). There is nothing more asinine in economics than forcing a contractionary economic policy during a deep recession. Even if it is for the sake of the higher goal of political expediency. Is like Roosevelt’s double-dip recession in the mid 1930s?
I know, I know, the situation in Europe helped, but the main culprits are in Washington, DC.
Cheers
mhg




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Saudi Arabia: a Political Statement or a Twenty Billion Dollar Phallic Symbol………..

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SAUDI billionaire Prince Alwaleed bin Talal has launched a project to build the world’s tallest tower at more than 1000 metres in the Red Sea city of Jeddah. The project to built a tower topping Dubai’s world’s highest building, Burj Khalifa, “will soon see the light after the signing of a $1.2 billion agreement” between Prince Alwaleed’s Kingdom Holding Co and construction giant Bin Laden Group, the Saudi tycoon said. It will take 36 months to build the tower, said the Saudi businessman, a nephew of King Abdullah and one of the kingdom’s wealthiest men. He did not say when construction will begin. Prince Alwaleed said the tower was intended to “send a message of strength” reflecting the OPEC kingpin’s economic and political stability….The tower, which will be part of a $US20 billion ($18.29 billion) project north of Jeddah, would top Dubai’s 828-metre Burj Khalifa, which was opened last year……..“Our message is political,” he said…………..

A political message at the cost of $ 20 billion.
What is all this obsession with tall(est) towers in the Middle East these days. First there was Burj Dubai, whom they changed to Burj Khalifa after Shaikh al-Nahayan who pulled the nuts of the Dubai rulers from the fire. Then there was talk of which tower is more ‘leaning’ the Tower of Pisa or some other UAE tower. Then the Saudis built the tallest clock tower in the whole fucking wide world: an ugly travesty right over the Holy Mosque, possibly built over the destroyed remains of some ancient Islamic monument (they princes have been busy destroying houses of the Sahaba of the prophet and other ancient monuments to build their high-rise money machines). Now they are going to build this: the tallest tower in the whole wide world, relegating the Khalifs (al-Nahayan) Tower to second class status. I bet the al-Nahayan will add a few stories on top of the Burj Khalifa to make it taller by about the proverbial ‘nine inches’. It is all symbolic phallic game-playing, I suspect. Maybe there are feelings of “inadequacy” somewhere and this si just another way of trying to make up for it
.
(I figure a $ 20 billion makes as much sense as a $ 20 billion political statement).
Cheers
mhg




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World Revolution Redux? a Wal-Mart World, PIGS of Europe, Arab Spring, Che Guevara……….

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S. Robson “Rob” Walton, Walmart chairman, has a net worth of about $19.7 billion. And he’s only number 9 on the list of 2010’s top 20 richest Americans. Walmart workers, meanwhile, make around $8.75 an hour—about $18,000 a year. They’d have to work over a million years to approach what the chairman of Walmart Stores is sitting on. Alice and Jim Walton each have about $20 billion, and Christy Walton has $24 billion. Last year Jonathan Turley noted that the CEO of Walmart, Michael Duke, makes his average employee’s yearly salary every hour………..

This is not just an American phenomenon anymore, although the gap tends to be wider in America and the third world (including the Middle East where the gap may possibly be the widest now) than in Europe or Japan. From Russia to Ireland, and south to the Middle East, income gaps are widening among working people and their corporate and government leaders. The middle classes, usually the pillars of stability wherever they exist, are being truly squeezed, forcing a very few of them upward, pushing the vast majority of them down the ladder. That is when revolutions erupt: when the middle class, if it exists, is threatened, when very few are at the top and most are at the bottom. Think France 1789, Russia 1917, China 1949, Iran 1979. The now-aborted Arab Spring was at least partly a bread and butter issue, about depots taking away both freedom and a chance at decent living.
Just when we thought Europe was irrevocably in its post-revolutionary stage, we are getting the ‘uprisings’ in Greece and Spain, not to mention the perennial French issue-oriented little ‘uprisings’. Advice to many older Europeans, especially in the PIGS countries: don’t throw away your Che Guevara posters and caps yet.
Okay, I may be exaggerating a bit, barely, so don’t sell the farm yet…..
Cheers
mhg




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