Fearless economic forecasts

Dominique Strauss-Khan

In a warning delivered by IMF Managing Dir. Dominique Strauss-Khan during a conference of African finance ministers and central bank governors, the International Monetary fund (IMF) speaks of the deepening global financial crisis and the possibility that the world’s economic growth will be zero.

The financial meltdown can cause massive suffering, social displacement, and chaos in vulnerable countries.

The effects of the downturn may not be fast in reaching Africa, but Srausse-Khan said, “continued deleveraging by the world’s financial institutions, combined with a collapse in consumer and business confidence, is depressing domestic demand across the world.”—-Philstar (03/10/09)

Warren Buffet

On the other hand, American billionaire Warren Buffet who has the common sense of living “below his means” believes America will bounce back even though “it has fallen off a cliff.” The “Oracle of Omaha” who predicted the worst case scenario in the last 6 months, watches a nation swept with a housing slump, high unemployment, and inflation. He sees lack of confidence, confusion, and fear are defining consumer behavior at this time.—The Washington Times/ AP (03/09/09, Funk J)

Harry S. Dent

Similar gloomy predictions have been made by American economist Harry S. Dent in his book “The Great Depression Ahead : How to Prosper in the Crash Following the Greatest Boom in History.” The book is a good read. He speaks of this year as a bad season—ushering economic turmoil that none of the current generation has seen.

Nouriel Roubini

Nouriel Roubini, professor of NYU’s Stern School of Busicness believes the US recession could last up to 36 months. With no hope of ending the recession this year, “Dr. Doom” said,, “Growth is going to be close to zero and unemployment rate well above 10 percent into next year.”—-CNBC (03/09/09, Wells, J)

Pres. Barack Obama

But President Barack Obama offers bright economic forecasts with his proposed $3.55 trillion budget. He predicts that the economy will shrink by only 1.2%, and will recover in 2010 with a growth of 3.2%. However, non-partisan analysts believe this is overly-optimistic.—McClatchy Newspapers (02/26/09, Hall, K)

The public is less upbeat than Obama, but people are willing to give him the benefit of the doubt. Midway in the 100-day honeymoon period after assuming presidency, he gets a 67% approval rating, a very good grade at this time when Americans are fearful and disconsolate over the financial ruin they are dealing.(Photo Credit: Atsibatsi)=0=

============================================================

In spite of a collapsing financial world, $18.4 billion were spent for greedy bonuses in Wall Street

If there is consolation to American taxpayers damaged by the economic meltdown, Pres. Barack Obama criticized billions of astounding spending. He decried as “shameful” and “irresponsible” the $18.4 billion bonuses distributed during the past year for workers in Wall Street. Yes! In spite of a 44% cut on yearend perks given to the money merchants, the amount clearly shows the extravagance and greed of the people who are partly to blame for the financial crisis. A staggering $18.4 billion was spent as giveaways in spite of the $700 billion bail-out they asked and handed over by the government because of a crumbling economy.

This news doesn’t help the effort to bring back trust in the system. The disclosure speaks of top officials still engaged in reckless spending, some using large amounts of money in the shadows to continue their vice.

Amidst joblessness, home sales slump, and poor stock performance, Obama is facing the challenge of making the public believe. Congress has just approved the $825 billion “stimulus package” which is basically another big spending to mitigate the damaging effects of the financial mess. More enraged Americans fear that unless transparency and ethical practice in business is restored, there is little reason to hope that confidence will come back and the economy will be fixed in due time. (Photo Credits: Epicharmus x 2)=0=

Iceland’s government fails as the economic crisis worsens

After attempts to reverse Iceland’s financial crisis since October last year, Reykjavik’s government has collapsed amid street protests from citizens who set fires and hold noise barrages with pots and saucepans. Having lost trust in government, angry Icelanders protest a mismanaged economy, worsening joblessness, and rising cost of goods.

Prime Minister Geir Haarde couldn’t quell the public’s disappointment after Iceland’s currency lost its value and banks failed that mirrored the financial troubles in Wall Street and many countries in Europe.

“The IMF announced in November it would pump about $827 million into the Icelandic economy immediately, with another $1.3 billion coming in eight installments. Iceland’s Nordic neighbors — the governments of Finland, Norway, Denmark and Sweden — announced they would lend Iceland another $2.5 billion.”—CNN.com/europe (01/25/09, Nyeberg, P)

Calling for an earlier election in May, Haarde, who had been afflicted with cancer, resigned and announced he wouldn’t run for another election. Fearing national bankruptcy, he dissolved the coalition government he headed— formed by the Social Democrat party and Independence party.

With the government’s future uncertain, the island-country’s figurehead President Olafur Ragnar Grimsson said he would consult with Iceland’s four main political parties before asking that an interim government is formed.

Similar economic and political troubles are happening in many parts of the world as well. Hard hit are the economies of the United States (USA) and Great Britain which have embarked on their respective financial remedies. The outlook of the crisis at this time is grim even if economic bail-out packages at the expense of taxpayers have been laid out. Nobody seems to know how and when the financial mess will end. Ordinary citizens are left confused and fearful of what next will happen. (Photo Credit: Nele en Jan; Jon Palma)=0=

===========================================================

Obama psyches the Americans of grim economic times

I don’t know of anyone who hasn’t been affected by the financial crisis caused by the meltdown of business in America. The most pitiful are the people who honestly saved and invested only to find out their portfolio has failed. They don’t have the luxury of youth and time to recoup the loss.

Those who rely on fixed income may find themselves without money if retirement and pension don’t pay. The jobless and hungry are easily agitated. Economic hardship is a perfect recipe for social unrest. With the public’s high expectations on the new administration, it’s dangerous if Barack Obama fails.

Barely two weeks before Obama is to be inaugurated as president, his campaign promises don’t jibe well with the gloomy realities of the times. His dire warnings prepare the spooked public of the bumpy road ahead. Spending is needed more than what the government originally told the people.

Obama can only say in grim and gray terms on how he’ll solve the economic problem, but he doesn’t give specifics. The cost of the stimulus package he asks the congress on Thursday, January 8, 2009 hasn’t been determined, but experts say it should not be more than $1 trillion dollars. The federal budget deficit is huge and critics warn of deeper pain if the government shoulder the money woes of private entrepreneurs.

There’s no guarantee that the bail-out of the banking system, the auto manufacturers, and housing industry will work. The economy is rife with dreary predictions of worsening unemployment, bankruptcies,and unrelenting housing slump. Americans are confused and want transparency in the transactions which put their life savings and taxes in line.

At a Glance, January 8, 2009:

540,000 unemployed projected for Jan. ’09 (up from 492,000 in Dec. ’08)
4.5 million workers on unemployment aid
2.4 million jobs lost in 2008
1.2 trillion dollars Federal Budget deficit
1 trillion dollars—estimated stimulus package needed

As of January 8, 2009, the joblessness is expected to have risen from 492,000 to 540,000 based on the number of newly-laid off people seeking state unemployment aid. The approximate number of workers taking unemployment benefits is at 4.5 million, many of whom are finding hard to get jobs.

Assuming that 500,000 additional jobs have been lost last month, it is estimated that at least 2.4 million jobs disappeared in 2008. Business downsizing and closures continue. The trend will be more elucidated on Friday, January 9, 2009 when the Department of Labor releases the most current employment report. The federal budget deficit is expected to reach $1.2 trillion this year, about 3X bigger than the previous year.

Like most Americans, I want Obama to succeed. Casting away politics, I feel it’s in our interest that the economy bounces back on its track. Yet, the public is suspicious and worried; their confidence is at its deepest low. In spite of bipartisan support, many aren’t optimistic that a quick recovery will come. Obama is asking for more government infusion of money, a stage for a possible run-away spending that isn’t in his “change” and “yes, we can” campaign plan.

The uncertainty which fuels this lack of confidence is magnified by the ugly economic picture. Even if the public keeps quiet, the cultural and social environment which made the people endure and outlast the Great Depression in the 1930’s might be slipping away— at worst, it might be nonexistent. Today’s Americans belong to a different generation of innovators. Whether the values of trust, honesty, and fair play have been eroded to impair recovery, nobody seems confident to answer.

There’s real fear as there’s hope. But many are shocked that the rules of governance and citizenship are quickly being changed to suit a social agenda whose end they don’t know. They aren’t used to live in poverty or be dictated upon on how they will use their money. Even if they pride themselves of resiliency, industry, and independence, the overall picture isn’t good. (Photo Credit: bscott2007)=0=

RELATED BLOG: “Dr. Doom’s economic crystal ball & the need to say the truth”
Posted by mesiamd at 10/30/2008

==============================================================

Michael Jackson’s white sequined glove for sale

King of Pop Michael Jackson had known what economic downturn means early on. Before the money crunch of Wall Street hugged the news, Michael already met his own financial rut. Because of insolvency, Neverland, his fabled private 2,800-acre (1,100 hectares) amusement park in Los Olivos, California was a subject of foreclosure proceedings. Last month he had to settle out of court with a Bahraini prince on a lawsuit of a failed music deal. This is on top of a child molestation case he had ot endure a few years back.

The 50-year old reclusive music star is now about to tap cash from his personal effects. It was announced that the famous beaded white glove he used in the “Billie Jean” video will be put out for sale along with other items. To woo the highest bidder, the glittery glove and some 2,000 pieces of his memorabilia will be auctioned to realize cash, part of which will be used to support charities.

Jackson’s story continues to befuddle his fans. His life tells of a tragi-comic tale of a ride in a world that is often solicitous, but at times— harsh and forbidding. Looking at the state of things, what is clear is money problem affects not only the poor but the super rich as well. (Photo Credit: www. Bongo News.com) =0=

==========================================================

Longer recession blues as more jobs are lost in USA

As the first week of December ends, Americans are bracing for bleaker economic news today as the report of joblessness from last November will be released by the Labor Department.

From October’s 6.5%, the unemployment rate is expected to rise to about 6.8% as more pink slips for laid-off workers, estimated to be about 320,000, are issued as the Christmas holiday closes in.

“Just in recent days, household names like AT&T Inc., DuPont, JPMorgan Chase & Co., as well as jet engine maker Pratt & Whitney, a subsidiary of United Technologies Corp., and mining company Freeport-McMoRan Copper & Gold Inc. announced layoffs.”—AP (12/05/08, Aversa, J)

It is said that since the start of the year 1.2 million jobs have been lost. It is feared that this can further aggravate the financial woes being suffered by the three big US auto companies: General Motors Corp (GM,) Chrysler LLC and Ford Motor Co.

Partly due to confusion, anger, and lack of knowledge, ordinary Americans are divided if bail outs of these companies are the solution to the problem. Capitol Hill is still weighing in whether to give the $34 billion asked for by the auto industry managers for their company’s survival.

The guarantee of tax-payers’ money to rescue these failing companies are the last that Americans want, but they seem to have little options. With a national debt of about $10.7 trillion dollars, America still talks big about money and spending. There are those who have been not been roused to the reality that the economy is truly in bad shape.

But, the conscientious public is thinking whether the nation can afford the extravagance, greed, and recklessness its leaders and citizens have been used to. In spite of assurances, the competence and ethical integrity of those running America are now being questioned. The issue of confidence in the American system is causing ripples in business circles worldwide.

As predicted by many business analysts, USA is likely to be stuck for a long haul in a deep recession whose post-war average duration is 10 months, the longest at 16 months. This December marks the 12th month of the current recession whose existence has been muddled for sometime by economic experts until just recently.

At the disclosure of the recession, President-elect Barack Obama announces a 2.5 million job generation plan which may cost the government $500 billion to finance. The staggering amount make the ordinary citizens dizzy as the new administration is headed for a glittery inaugural bash in January 20, 2009.

Confidence on America’s leaders has been under the cloud of doubt since the down-turn of the stock market and the failure of banking and housing industries. Next comes the the auto industry. The fall-out of these economic troubles to the world in spite of optimistic assurances isn’t completely known, but many are hurting and many more are going to be hurt. (Photo Credits: wwww.fortunewatch.com) =0=

RELATED BLOGS: “Mr. Fix & the tall challenge to keep USA & the world to believe that we can quickly come out of the financial mess” Posted by mesiamd at 11/22/2008; “Like Filipinos, Americans Have Money Troubles Too!” Posted by mesiamd at 7/16/2008

Mr. Fix & the tall challenge to keep USA & the world to believe that we can quickly come out of the financial mess

It is said that when a new president gets elected in the United States, Wall Street gets exuberant and the market becomes cocky. Renewed confidence and optimism bring an upward trend in stocks trading in America and the rest of the world. The upward trend hasn’t happened in President-elect Barack Obama, the Mr. Fix expected by many to deliver the world from this troubling economic mess.

Since the Great Depression (1930’s to the 1940’s,) America suffers from the worst financial downturn. On Friday, November 21, 2008, on midday trading, the Dow Jones Industrials (DJI) tumbled 67.47 points further, or 0.89 percent, to 7,484.82. The Standard & Poor’s 500 Index (.SPX) lost 8.85 points, or 1.18 percent, to 743.59. The Nasdaq Composite Index (.IXIC) was down 17.82 points, or 1.35 percent, at 1,298.30.

In spite of the $700 billion bailout, the market continues to slide. With the public confused of what is going on, economic planners need more money for bailouts to keep the economy on track and stable.

There are those who seriously doubt whether this will work as instability and business losses continue. Financial leaders like Ben Shalom Bernanke of the Federal Reserve and Henry Paulson of the Treasury have a short window period to work on before the full blown effects of the crisis appear early next year.

Joblessness at 6.5%, the highest since 1994, is expected to top 8.5% in 2009. It feeds the fire of uncertainty, raising doubts on the usefulness of helping the floundering US auto and banking industry.

More business close-downs are feared. The housing market has almost screeched into a halt leaving many homes in foreclosures. American auto manufacturers brace for bankrupcies. The public is spooked by advisories of store closings. Americans are angered and worried.

The usual honeymoon period given to an incoming administration may not last long as the impatient public can’t wait for the magical fruition of Obama’s promise during the campaign. A scramble to form a government cabinet to help the new president shows signs of old hands from the Clinton administration which make people to ask if it’s the same traditional politics that will be at play. Without guarantee of success, there is palpable anxiety over leaders with checkered past trying to reprogram the nation’s socio-economic direction.

Obama is in a bind. There is a growing belief that the recession will last longer than what has been experienced in recent history. Some are thinking that it can grow worse to precipitate the hapless conditions of the Great Depression. Though not much can be done by individual US citizens to prevent the worse, sensible measures like focusing on one’s job, belt-tightening in personal finance, and deciding wisely on investment strategies are recommended.

Global economies are suffering. The American sniffle has worsened and spread into a global pneumonia whose end result is basically unknown. A protracted economic malady is likely to bring instability and stagnation. It makes civil unrest and chaos more likely particularly in the poor countries where hunger is common.

Meanwhile, the public overwhelmingly craves that Obama comes victorious in reversing the ugly course of business. How best he can do it is subject to debate and entails vigilant waiting. While he prepares for his inauguration in January, Americans gripped with worry need to give him time and the benefit of the doubt. (Photo Credits: JSDart)=0=

RELATED BLOG: “Dr. Doom’s economic crystal ball & the need to say the truth” Posted by mesiamd at 10/30/2008

Refusing to take off from the campaign: a clue to Obama’s questionable decision making?

With Sen. Barack Obama gaining fresh lead over Sen. John McCain, the presidential candidate of the Democrats, in projecting that he can do multi-tasking if elected, repudiated McCain’s call to temporarily stop the campaign and postpone the political debate with Obama on Friday September 26, 2008 to help in solving the financial crisis that threatens collapse of the economy, the worst since the Great Depression.

In a display of bipartisan leadership, McCain takes another smart move which if successful, will make Obama puny in governance and inexperienced in setting priorities. It’s from the backlash of the financial crisis on the Republicans that he earns a significant lead over McCain, a GOP member tied up by party affiliation with the Bush administration.

Obama wants to pursue votes instead of being with the legislators to tackle the $700 billion bail-out package proposed by the administration and objected to by the Democrats. But Obama,confident that he can do many tasks at the same time, agrees to meet with Pres.George W. Bush and McCain on this issue. The readiness of McCain to sacrifice losing an election to solve a high-profile economic issue is suggested by his decision. He halted his campaign including a stop on all his advertisements.

McCain comes along consistent with his campaign message of putting the country “first” above all other ambitions. But surely, the Democrats dismiss his decision as part of a McCain’s “photo op” with the congress. It remains to be seen whether the maverick in McCain will have windfall in his decision the same way he got in choosing Gov. Sarah Palin as his running mate. Certainly, the financial crisis is tops on the minds of Americans right now. Photo Credit: Mario Zucca; Afrael=0=

Obama takes a statistical lead on the 41st day before election; McCain suspends campaign and debate to address financial crisis

Presidential candidate Barack Obama gains 6 point lead over John McCain today September 24, 2008, 41 days before the November 4 election. Obama’s present advantage is probably a windfall from the blame the Republican party is getting from the financial meltdown bogging the market after Fannie Mae, Freddie Mac, Lehman Brothers, Bear Stearns, among others filed government protection from bankruptcy.

The genesis of the economic crisis is traced on long-standing corporate greed pervasive in Wall Street, the weak oversight by government regulators for many years, corruption, and the lack of accountability in the banking system, making both Democratic and Republican parties culpable.

In 2001, the Bush administration had pushed for a tightening of the mortagage lending, but Democrats like Cong. Barney Frank (D-MA) head of house financial services committee blocked the initiative.

Citing urgency of the matter, McCain,in a display of leadership, cancels a scheduled debate with Obama on Friday night, September 26, 2008, to focus in bringing a bipartisan solution to the crisis. A bail-out financial package is needed to be passed by the Congress to avert further damage in the economy.

At this time, Obama doesn’t want to stop his campaign. He thinks he can do the campaigning and helping fix the economic crisis at the same time. The impasse in the proposed $700 billion bailout of the financial institutions need to be addressed quickly to avert full-blown economic collapse. (Photo Credit: Mario Zucca)=0=

2009 national budget, 100,000 jobs, & the Asian poverty line

P1.415 Trillion
The 2009 national budget, 15% higher than of 2008, has been approved by Pres. Gloria M. Arroyo and will be submitted to Congress. Manila Bulletin (08/26/08, Rosario,B)

24.5 Million
The number of Filipinos who fall below the “Asian poverty line” of $1.35/day spending, according to the Asian Development Bank (ADB.) An estimate of purchasing power and level of financial hardship, the Philippines’ percentage of people below the poverty line (29.5%) is better than India, Bangladesh,, and Cambodia, but worse than Pakistan, Indonesia, Vietnam and Sri Lanka . ABS CBN News.com/Newsbreak (08/27/08, Rimando,L)

1
The remaining flying C-130 Hercules plane the Philippine Air Force (PAF) has after the recent crash in Davao City; all pilots and crew remain missing and are presumed dead. Malaya (08/27/08, Chua, J.)

P1 Billion
To bring home medals in future Olympics and to augment competitiveness, a proposed increase in the budget of the Philippine Sports Commission, double the previous amount of P500-600 million, was aired by Monico Puentebella, RP chief of Olympic Mission. Though not strictly implemented, Philippine Amusement and Gaming Board Corp (PAGC0R,) is mandated by law to give 5% of its gross income to the sports development. GMA TV News (08/26/08)

29 Cases
This reported new HIV cases/ month of 2007-2008 is higher than the 20/month of the previous years. Since 1984, a total of 3,305 HIV cases have been reported in the Philippines and 310 people have died from AIDS. These figures are low-prevalence statistics which can change into high prevalence or to an epidemic if HIV cases continue to rise. AFP (08/26/08)

24
Number of maids, including Filipinos, who died in Lebanon as reported by Human Rights Watch, the New York based the group who said that Overseas Foreign Workers (OFW’s) from countries like the Philippines, Sri Lanka and Ethiopia were forced to suicide by jumping out of buildings because of isolation, difficult working conditions and maltreatment from their employers. AFP (08/26/08)

P406.8 Billion
The amount paid by the Philippines for its loan between January to July this year, 0.6% less than the amount paid for the period of 2007. Lower by 6.9% from P249.88 billion, the principal debt payments totaled P232.6 billion. Interest payments totaled P174.22 billion, up 9.2 percent from P159.49 billion. PDI (08/28/08, Remo, M.)

74,581 Families
The number of families with 362,475 persons displaced as of August 27, 2008 in the war between MILF rebels and Philippine Government forces in Mindanao, said the National Disaster Coordinating Council (NDCC.) To escape the fighting, 33, 438 families (156,059 people) fled to 152 evacuation sites. At least 55 have died in the ongoing hostilities. GMA TV News (08/27/08)

100,000 Jobs
Bureau of Immigration (BI) Marcelino Libanan claimed this number of jobs which can be generated with the granting of indefinite visas for foreigners who can provide at least 10 gainful employment opportunities for Filipinos in their businesses. Manila Bulletin (08/28/09, Ramirez, J.)Photo Credit: Simmons,A.=0=