Saturday, April 30, 2005

While We Contemplate Trade War With China....

Bangalore software hit six billion dollars, up 52 percent!

Like, whoa, dudes, way to go! As we scream ourselves hoarse at the Chinese trying to get them to cut loos from our dying dollar, here is another hole in Dyke America! Not only are we not pugging it, Microsoft wants to "fix" it by importing the people who are doing this so they can do it here too!

Like...wow.

(Mr. Gowda) said 198 technology companies and eight hardware firms started operations in Bangalore last year, including global names such as Unisys Global Services, CapGemini Consulting, Volvo India and Google Online India.

Dell just announced they are joining the gang down in India, too. And a host of others. The place is getting pretty crowded.

I guess, we plan to tackle that when the last computer job leaves America.

America Plays Paper/Scissors/Rock With China

There is much startling news about our rapidly deteriorting status in Asia today. All the forces that have been subterra are beginning to start earthquakes. This is the beginning of the Great Power Tsunami.

According to the NYT, Mr. Portman's (trade negotiator) nomination was held captive for several days by Senator Evan Bayh, Democrat of Indiana, who was demonstrating his irritation over what he and other lawmakers consider the administration's ineffective trade relations with China.

Indeed. We are awfully irritated with China for China is doing exactly what the Japanese have done with impunity for years except for the copyright violations. The Japanese were the ones worried about us violating their copyrights (ahem)! Nonetheless, America has many worries concerning China. We want to tell them how to adjust their currency, for example.

The Japanese hold $750billion of our currency and so we are mum. Can't rock THAT boat.

Congress is yelling pretty hard now. They even proposed a very hostile tariff on Chinese goods. This would start a war, a real war, if we did this. But we don't care. Yet at the same time, we basically surrendered much of our power in Asia today and then we will THREATEN them with a full bore trade war? The same things that are sinking our ship vis a vis China is true with Japan! And Japan will be our "ally" in this economic struggle?

This is why China is focusing attention on bringing Japan to heel. The Japanese will resist this, of course. They have used American power and gullibility to strengthen Japan after the WWII disaster. They have no intention of surrendering this power. It will be wrest from their hands...by the Chinese.

I remember when Americans were frightened of Japanese economic domination. President Reagan ran on "Buy America" and upstart retailer, Walmart, used this as their logo, "Buy Walmart means buying American". Then Reagan ran off to Japan to collect his $2.5 million bribe and our attempts at fixing the woes vis a vis Japan collapsed.

Now we are at it again, doing it backwards. Keeping "free trade" but not really doing it. Manipulating our currency while demanding others not do the same. Ask the Europeans. They are very steamed by Bush and Congress destroying the dollar.

And currency is hinged on the credit of a country and our wild spending as shown in the latest bill that spend wildly on miitary tools and adventures like there is no tomorrow and the sky is the limit...STINKS. Only we can fix this and note that Congress would rather provoke a trade war with China rather than clean house themselves.

Testing the Water: China Plays Currency Games

sage
http://acc6.its.brooklyn.cuny.edu/~phalsall/images.html
The the longest time Americans have demanded the Chinese revalue their currency. No such demands are made with Japan who can't connect their perpetual depression with their perpetual currency game of constantly devaluing the yen by purchasing excess American dollars which we happily churn out and ship off to Japan. Since the Japanese hold much more of our debt than the Chinese, one would suppose we would be much angrier about their currency manipulations.

After all, it is Japanese cars that are killing our native car industry!

But, as usual, geopolitical games of Go trump mere domestic politics and we allow this to continue. On the other hand, our identical situation with China somehow ticks off everyone in our government!

So several interesting things happened this week that roiled the international currency markets, all of which came out of China:

China Bank Chief Hits at Communists

Two senior Chinese bank executives have made a provocative public call for the role of the ruling Communist party in financial institutions to be curbed

The chairman of China Construction Bank and the biggest shareholder of the country's largest property lender describe in an interview in financial magazine Caijing how the CCB's board has operated in the shadow of a party-controlled committee inside the bank. The comments were made by Xie Ping, who heads Central Huijin Investment, a majority shareholder in two of the big four state banks now preparing for overseas listings


Heads will roll. I can't predict which heads yet. Byzantine games are being played. Either Mr.Xie Ping is going to regret his remarks or he is being so bold because the Central Committee itself is divided on this issue. Right now, the Chinese can't go to a bank and get a "pay interest, no principal" loan. Nor can they get a credit card with a similar, minimum balance. Instead, the banks in China are being run like banks were run when I was younger: some frowning guy sits there and grills you for several hours before grudgingly giving you a loan after interviewing your entire circle of associates. I have sat through such grillings.

There are many who see Americans and think, if only we could live like that! Certainly, if Japan and China were to emulate us, the "crisis of too much savings" will collapse instantly.

Then yesterday a mysterious thing happened:
the yuan shot up for a few minutes in international currency trading.
Until this afternoon, China had ignored the demands. But as traders drifted back to their desks from lunch in Asian financial capitals on Friday, the yuan suddenly broke out of its prescribed trading range. No one knows for sure if the move was deliberate or a result of a technical glitch.

But regardless of whether it was a Chinese test of their ability to manage a rising yuan or simply a case of the Chinese central bank briefly failing to buy enough dollars to keep supporting the American currency, traders noticed it and the prices for many other currencies began to shift in response.

The yuan climbed until it took 8.270 of them to buy a dollar instead of the usual 8.276. That difference, of only six thousandths of a yuan, might not seem like much of a change.

But it came on the eve of a weeklong holiday in China and at a time of intense speculation that a Chinese revaluation of the currency, which has been fixed by Beijing against the dollar for years, might be imminent. The brief appreciation, a hint of further rises if the yuan were to float, was enough to roil currency markets around the world.


Here is the official Chinese news media:

China does not plan to revalue its currency, the yuan, during next week's Labor Day holiday, a central bank spokesman said Friday, quashing rumors that such a change was imminent.

"As far as we know, there's no adjustment expected in the yuan exchange rate," Bai Li, spokesman for the People's Bank of China, told Dow Jones Newswires.


Sounding like a Daoist philosopher, the official explained:

Bai declined to comment on the movement, saying: "It's up to the market to explain any market activities."

So today, the market struggles to figure out what happened. They wonder if some lowly clerk made an error in the published numbers or if the moon went into eclipse or if their rulers, Hu and Wen forgot to check their bank balances...all speculation by speculators.

One thing, this may have been a test of the system to see exactly how delicate it is and to see what the response would be. I am betting the ruling party is pleased to see all this repressed energy. When to use it is all up to them. You can bet, they are discussing this energetically but in their byzantine way...secretly.

Friday, April 29, 2005

Pretending This Debate Over Healthcare is a Picnic

nurse
http://www.florence-nightingale-avenging-angel.co.uk/index.html

Everyone thinks, if you play nice, you won't get gored by an angry bull or ants won't crawl up your pants but in the real world anyone who isn't careful about these sorts of things learns the hard way. You don't play golf when you hear thunder. You don't swim in a rip tide. You don't go out in a blizzard in a bikini.

Krugman talks about medical reform and ends with this gem:

O.K., let's not turn this into a Bush-bashing session. President Bush didn't cause the crisis in American health care. His health care policies have made things only a little bit worse.

The point, instead, is that even though all the evidence suggests that we would be much better off under a system of universal coverage, any such move will be fiercely opposed, on principle, by conservatives who want us to move in the opposite direction.

And reform will also be opposed by powerful vested interests - my next subject in this series.


Um, Bush is the leader, the top CEO and open advocate of those powerful vested interests that are interested in withholding health care or charging an arm and a leg for it...in third world countries, the very poor are today being forced to sell body parts like an eye or kidney or some such to pay the bills! Are we going to be Soleynt Greened? Is this the ultimate plan? Are we nothing but excess flesh to be culled or devoured?

This question is top of the agenda. Bashing Bush is part of the process of FIGHTING these "powerful interests" who have zero interest in keeping us alive. The minute we can't give them wealth, they want us out and gone.

Bashing Bush is 100% vital to the onerous fight we are now in. I suspect the owner of the NYT, a very rich man who benefitted greatly from the Bush tax cuts is eager to please his fellow ruling class buddy. The NYT knows they can't utterly alienate their fairly liberal audience so they allow two "liberal" voices on an editorial page filled to the gills with right wing shills. The right wing shills can name call and attack with robotic moronic energy but the two liberals must tippy toe and heaven forfend the NYT or the editorialists show the picture of Bush KISSING the Saudi Prince! That is Bush bashing.

Cleaning up Bush's inane and impossible speech is also done by the NYT for the same reason. Poor baby. Can't bash him.

While he is being coddled to death, we are being strangled to death.

BASH BUSH. He is destroying our economy!

Medicaid Patients Slated For Death

grave
http://www.ancestralbranches.com/tombstones/gravestones.html

I didn't see this headline. But there it is: Medicaid is going to be cut again, this time a huge whack of $10 billion. This means people will die or be much unhealthier. I once took care of a man who was released from the hospital after losing his job. He had no health insurance and his teeth were rotting so badly, he was literally dying from it. Rotting teeth is what shortened the lives of many humans in ancient times like about 100 years ago. I got him Medicaid help. He couldn't get his teeth fixed but he could get them pulled so he at least wasn't running a high fever and dying.

This is what is going to be cut. Rob is alive and well and working today and paying taxes. In the New World Order of the GOP, there would be no help and Rob would be dead and his little girl begging on the streets.

Meanwhile, taxes are cut on corporate entities yet again to the tune of $106 billion.

The whole world is watching this with amazement. When a government is deep in a deficit hole, you don't cut corporate taxes. With the rich becoming wildly richer, you don't cut taxes yet again. Especially when this means a half a trillion in red ink. What also dismays me is the fiction of what our budget really is. All pronouncements say, "2.6 trillion dollars" but leaves out the "off the budget" bunker buster bombs that drive the numbers well over $3 trillion.

This year is the first time since 1997 that Congress has used the budget to trim the explosive growth of so-called entitlement programs, particularly Medicaid. It directs lawmakers to reduce the growth of entitlements - including farm subsidies and a federal pensions guarantee as well as Medicaid - by a total of $35 billion over the next five years.

http://www.ancestralbranches.com/tombstones/images/25.jpg

Mr. Bush originally proposed a $51 billion reduction. The architects of the Congressional budget say the $35 million is significant nonetheless.

"This is a major step," Senator Judd Gregg, Republican of New Hampshire and chairman of the Senate Budget Committee, said of the entitlement trims.

Mr. Gregg and his House counterpart, Representative Jim Nussle of Iowa, say the budget will fulfill Mr. Bush's goal of cutting the federal deficit in half over five years, bringing the figure down to $210 billion in 2010.


I am scratching my head over this. Cut $106 billion in taxes and then cut services to Americans by $35 billion is going to bring us CLOSER to solvency? Huh? Did I fail second grade math? Again, they leave out the wars and other "black bag" spending in these figures. Still makes nearly no sense.

The number one cause for bankruptcy with the lower working class is emergency medical bills. I have seen this first hand. Three years ago, a dairy farmer up highway 22 here in NY died of a heart attack at a county fair. The ambulance came when he collapsed. He waved them off. "Don't take me in, I will lose my farm," he said. He then died and "bought the farm" as they used to laconically say in the good ole days. In a sane world this man would still be alive.

Thursday, April 28, 2005

I am Year of the Tiger and Apple has Tiger Coming Out Tomorrow

apple
Apple stock performance this year...up and away!

And I will be reporting on this, am going to the Apple party here in Albany, New York, at Crossgates Mall. Any readers in the area, hope you come too. I got an email from Apple saying A FREE POWERBOOK will be given away at the store tomorrow. Incentive time!

From the excellent AMERICAblog:

Bill Gates lies to National Public Radio
by John in DC - 4/28/2005 01:56:00 PM

I hate to say "lie" because I wanted to trust Gates on all of this. He really has been great on gay issues, and his foundation has been tremendous on AIDS funding. And he personally supports the state gay rights bill. And all of that is great.

So WTF was Gates talking about with NPR today?
NPR: "Was it a mistake to make the steps on the gay rights bill that you did, changing your support."

Gates: "We didn't change... we chose not to get involved in that."


Microsoft isn't doing too well considering they are a near monopoly

Microsoft profit nearly doubles, but rev lags hopes (MSFT) By Michael Paige
LOS ANGELES (MarketWatch) - Microsoft Corp. (MSFT) late Thursday said its fiscal third-quarter net profit nearly doubled and, while revenue rose 4.9% it lagged analysts' expectations. Microsoft said its quarterly profit rose to $2.56 billion, or 23 cents a share, from $1.32 billion, or 12 cents a share, a year ago. Revenue increased to $9.62 billion from $9.18 billion a year ago. The company said its per-share profit included a charge of 5 cents a share for legal items and reflected stock-based compensation expenses. On average, Wall Street analysts had expected a profit before items of 32 cents a share on revenue of $9.83 billion, according to a Thomson First Call survey.


Microsoft has more EU problems.

In March 2004, the EU found Microsoft guilty of preventing competition, and ordered it to open up its systems.
A year later, the EU says the software giant has not done enough.

In addition to a 497m euro ($640m; £343m) fine in March 2004, the EU ordered Microsoft to open up its core software systems to rivals.


On line, many gays and supporters of civil rights are calling for a Microsoft boycott. I asked for this years ago because of the attempts at creating a vast monopoly which was bad for us all on too many levels. Note how seldom they reengineer Windows! Slooooooow. Monopolies are bad. Industry wide standards are good things, this means crossover abilities. But exclusive monopolies are bad. Very bad.

It All Falls Apart

miss

For weeks we have been treated to a virtual Mississippi river of propaganda explaining how high energy costs no longer matter and doesn't effect the markets and interest instability doesn't matter either, housing values will rise forever in a hyper inflated fashion which isn't really a bubble....pop.

Economy grows at slowest pace in two years

APR. 28 8:41 A.M. ET The economy lost momentum in the opening quarter of 2005, growing at an annual rate of 3.1 percent. The slowest pace of expansion in two years, amid soaring gasoline prices and rising interest rates, offered new evidence the economy has hit another "soft patch."

The latest reading on gross domestic product, released by the Commerce Department on Thursday, showed that consumers and businesses turned cautious in their spending in the January-to-March quarter, a key factor in the slower economic growth. High energy prices and rising borrowing costs are causing Americans to tighten their belts a bit.


Just last week the line was, there is no belt tightening. Reporters are supposed to notice the obvious and editors should punish pundits who can't analyze their way to the corner store without a guide.

Jobless claims climb.

Initial claims rose 21,000 to a seasonally adjusted 320,000 last week, the Labor Department said. Read the full report.

The department could identify no special factors behind the increase, which was in line with the expectations of most Wall Street economists. See Economic Calendar.

Initial claims rose 21,000 to a seasonally adjusted 320,000 last week, the Labor Department said. Read the full report.

The department could identify no special factors behind the increase, which was in line with the expectations of most Wall Street economists.


OK. Readers of Culture of Life News knows that last week we ran a series of articles explainin the amazing 200+ point climb in stocks which seemed irrational on the surface. The economic indicies are all showing great weakness. The ones that matter the most, the "historic index" if you will, are in terrible shape. No country at any time in history can run the raging trade and budget deficits America has created for very long! It is literally impossible. All kinds of excuses are carted out to explain this situation and to excuse responsibility for it. As our CEO executives get arrested for economic crimes, all wail that they know nothing and have no control over their own criminal enterprises.

One government report after another details the failings and crimes of our own government and all reports end with, "We hold no one responsible for this". Just because one evades responsibility for things doesn't make them dissappear.

Elsewhere, the NYT notes:

''I think the GDP numbers have kept inflation on the front burner and that's obviously weighing on the day's action,'' said Bryan Piskorowski, market analyst at Wachovia Securities. ''But bonds are not reacting super badly to these numbers. We're at a pivotal point right now. What the bond market is trying to do is determine at what point do we see light at end of the tunnel with regard to the Fed? So we're taking some solace in that.''

They pray for cheap loans below the rate of inflation. It benefits others to keep the cheap loans going. This is why we pretend the Japanese and Chinese are forcing us to have cheap money so the export/import merry-go-round won't stop turning. We are addicted to this unreal funding. After five years of the economy "not being in recession" we are forced to treat all events as emergencies. Under Clinton, the cost of lending rose and rose relentlessly yet the economy hummed. Since the GOP took over our entire government, the economy limps along with a thousand crutches all of which are breaking now, one by one.

Any tiny event destroys it all. Like a rotted oak that still stands but has been hollowed out by termites and carpenter ants, even the tiniest breeze can bring it crashing down.

Wednesday, April 27, 2005

America Pretends to be a Helpless Baby

baby

"The Global Savings Glut" by Robert Samuelson of the Washington Post.

We are all taught that saving is good -- indeed, Americans are often chided for spending too much and saving too little. But what if the problem of today's global economy is that people elsewhere -- in Europe, Asia and Latin America -- are saving too much and spending too little? Former Princeton University economist Ben Bernanke argues that this is precisely the case. He calls it "the global savings glut."

The power of a good idea is that it dispels common confusions. Bernanke's global savings glut is just such a notion. It helps explain (a) the huge U.S. trade deficits; (b) the weakness of the current economic recovery (now 3 1/2 years old); and (c) the difficulty of doing anything about (a) and (b).

As a rule, saving is good. It helps individuals afford big-ticket items (a home, college tuition), protect against emergencies and prepare for retirement. For societies, it provides funds for productive investments in new factories, technologies and businesses.


This article is hilarious. The economist who came up with this latest excuse for our irresponsible economics reminds me of small children when they are doing something very naughty. "He MADE me do it," the child whines while pointing to usually a smaller and younger child. Good mothers seldom are impressed with this sort of reasoning.

There is no "global glut in savings". There are many billion and millionaires who squirrel massive amounts of money out of country so it won't be taxed or traced. We see how they operate like at the trial of the CEO of Tyco. he wails, "I didn't know where the money came from or where it went, the kids over there made me lose all that money and bankrupt my company!" Of course, the kids over there were all in his pay and under his supervision.

Modern supervison in America: far from super like Superman seeing through walls, this super vision is blind as a bat. Especially when committing crimes.

You can bet the millions this childish CEO "lost" became lost when it flew overseas to dissappear into that vast stew of semi legal or outright illegal slush funds. This money doesn't come from an army of grannies saving pennies and carting them to the bank every week. This money comes from drug lords, international terrorists, military/industrial contractors especially in America, gun runners who do business with everyone and movie moguls.

They created this huge fund that moves about sort of like Jabba the Hut, slumping and sloshing about seeking to devour more international print outs. For the USA has been printing money like crazy and shipping it out so it won't cause inflation at home and this spongey creature is sucking it all in.

This is seperate from Government banks. We all know they have been suctioning off money thanks to manipulations of currencies in the "open" market which is really a rigged game run for the benefit of currency dealers and governments in collusion with various entities at home. For example, Japan keeps the yen in a very narrow range, the "red" zone being 100 yen to a dollar. They move heaven and earth, shifting funds, buying dollars and buying American debts to keep this steady state going in their favor.

China does this too, they learned how from the Japanese. The Chinese are playing a different game, though. They aren't as interested as the Japanese at keeping American market share no matter what, they are concerned with sabotaging America's increasingly fragile economy.

So the money pours into America. As other countries go begging for funds, the Great Players pour money into America's ever gaping maw. We burp and tell other nations begging for money to "pony up and pay up" and to pay high interest rates and other dreadful handicaps which they can't afford. Then we go back to slurping with Jabba the Hut, happy as a pig in a poke.

Unfortunately, this feast is doomed to end with our slaughter if we don't wake up.

We are doing this to ourselves. The world will or won't save whatever but we certainly can clean house and stop this mad train of events. We are not helpless little children, we are the world's biggest empire and greatest power! Therefore, we can and should be shaping events instead of blaming others and then going out begging and stealing.

This is what Superchild Barneke and the writer of the Washinton Post whine: Whatever the problems, Americans can't fix them. The common view that our budget deficits (which Bernanke correctly thinks should be reduced) cause our trade deficits is simply wrong. The two are only loosely connected. That unconventional conclusion is also inconvenient, because it measures our powerlessness.

When the helpless giant, America, collapses, don't expect mommy to pick us up and change our diapers. Expect to be eaten by wolves. And no one will weep for us.

This article is courtesy of Paul who alerted me by email. Thanks!

Introducing the Financial Pages.

This is where the buck stops. Dead in its tracks. This is the currency wars page. This is where we talk about stock markets and real estate markets and pigs in the poke and poking economists in the eye with a sharp stick.

The history of economics and the history of money will be discussed here, too. The logo for this page is historical money I own. I can't go to a bank and redeem these notes because their currency failed in the past and they are now no longer valid. Each one of these notes have a history we ignore at our peril. They represent a terrible past, a bloody past. People died because of these pieces of fragile paper.

Each one's fall involved our families in harsh ways, dealing death and destruction.

The history of money is sobering. And we will discuss it in relation to the news as the news happens.

Thank you,

Elaine Supkis, editor