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5 Reasons Why You Wont Get Rich In Cuba June 3, 2015

Posted by tkcollier in Economy & Business, Geopolitics, In The News.
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2006_08_01t121905_450x332_us_cubaPresident Barack Obama’s historic normalization talks with Cuba have brought about a lot of excitement in business circles, and hardly a day goes by without new reports of U.S. investors, lawyers and entrepreneurs flocking to the island. But I’m afraid most of them will lose their shirts there.

In a recent interview, U.S. Secretary of Commerce Penny Pritzker told me that even though Cuba is a small economy, the Cuban people are entrepreneurial , and have a great economic potential. “It’s a beginning, you have to start. And by starting, things will evolve,” she said.

My opinion: Maybe so. But for the time being, as Florida International University business professor Jerry Haar has rightly — and only half-jokingly — commented, the most profitable businesses dealing with Cuba will be those that put together conferences and seminars on doing business in Cuba.

Obama did the right thing in starting normalization talks with Cuba’s military dictatorship, although he should be much more forthright in demanding basic freedoms on the island. But the administration should tone down its claims that the U.S.-Cuba honeymoon will lead to political and economic changes on the island, and to great business opportunities for foreign companies. It won’t, at least in the near future.

via Andres Oppenheimer: Cuba: Very big fuss over very small economy | Miami Herald Miami Herald.

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NBA Ownership – The World’s Most Exclusive Club April 27, 2014

Posted by tkcollier in Economy & Business, Lifestyle, Sports.
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NBA teams are clearly ego purchases, but rich guys hate losing money … and that’s about ego, too. In 2010 and 2011, six NBA franchises sold or changed hands, and another four were practically thrown on Craigslist.2 That’s one-third of the league. A steady stream of billionaires crunched numbers and came to the same conclusion: Unless it’s a killer market, the NBA isn’t a good investment. During 2011’s lockout, Philly sold for a measly $280 million as the league frantically looked for a New Orleans buyer (and didn’t find one).

Everything flipped in December of that year, after the NBA negotiated an owner-favorable collective bargaining agreement (and then some) that included a 50-50 revenue split, shorter long-term deals and a more punitive luxury tax system, as well as a pay-per-view event in which David Stern and Adam Silver poured Dom Perignon on each other’s heads and danced over the ruins of Billy Hunter’s career. Fine, I made that last one up. From there, everything kept breaking the NBA’s way. In no particular order …

lebron-james-cover• The economy rebounded (at least in rich guy circles).

• LeBron became the league’s most famous and talented superstar since MJ, right as we suddenly had the deepest pool of under-27 stars in 20-plus years.

• The 2013 Finals went down as one of the greatest Finals ever, followed by a LeBron-Durant rivalry emerging that could and should carry the rest of the decade.

• Americans stopped caring about PEDs and started worrying about concussions right when everyone should have started worrying about PEDs in basketball (a sport that rarely has any concussions).

• The YouTube/broadband/iPad/GIF/Instagram/Twitter era turned basketball into a 24/7 fan experience — just the ideal sport for the Internet era, the kind of league in which your buddies email you a bizarre Kobe Bryant tweet, an endearing Spurs team selfie and a ridiculous Blake Griffin dunk GIF in the span of three hours (and by the way, that happened to me yesterday).

• A new multimedia rights deal is coming soon … and it’s going to easily double the current deal.

(Repeat: easily double it.)

And I didn’t even mention basketball grabbing the no. 2 spot behind soccer as the world’s most popular sport. I’m not sure when it happened, but it happened. Buy an NBA franchise in 2014 and deep down, you’re thinking about stuff like, I wonder if fans from 250 countries will be paying for League Pass 20 years from now? Throw in the other breaks and that’s how you end up climbing from here …

via The World’s Most Exclusive Club «.

If You Also Hate The Time Change… November 3, 2013

Posted by tkcollier in Economy & Business, health, Lifestyle.
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AccordUS Time Zonesing to Time and Date, a Norwegian Newsletter dedicated to time zone information, America started using four time zones in 1883. Before that, each city had its own time standard based on its calculation of apparent solar time (when the sun is directly over-head at noon) using sundials. That led to more than 300 different American time zones. This made operations very difficult for the telegraph and burgeoning railroad industry. Railroads operated with 100 different time zones before America moved to four, which was consistent with Britain’s push for a global time standard.

Now the world has evolved further—we are even more integrated and mobile, suggesting we’d benefit from fewer, more stable time zones. Why stick with a system designed for commerce in 1883? In reality, America already functions on fewer than four time zones.

 Research based on time use surveys found American’s schedules are determined by television more than daylight.  That suggests in effect, Americans already live on two time zones.

via Daylight Saving Time Is Terrible: Here’s a Simple Plan to Fix It – Allison Schrager – The Atlantic.

Corporate Logos for the States of America June 25, 2013

Posted by tkcollier in Economy & Business, Humor.
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Coporate States Logos of AmericaThe Corporate States of America Made by Steve… – Maps on the Web.

Did Cocaine Fuel the Financial Bubble? April 17, 2013

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The controversial former drug tsar David Nutt told the London Sunday Times this weekend that cocaine-using bankers with their “culture of excitement and drive and more and more and more … got us into this terrible mess”.

Nutt, who was sacked for claiming that ecstasy was as safe as horse riding, told the Sunday Times that abuse of cocaine caused the financial meltdown.

“Bankers use cocaine and got us into this terrible mess,” he told the paper adding that the drug made them “overconfident” and led to them taking more risks. Nutt, who is professor of neuropsychopharmacology at Imperial College, claimed that cocaine was perfect for a banking “culture of excitement and drive and more and more and more. It is a ‘more’ drug”

There were also lots of stories about some of the big swingers in New York enjoying a line or 10 of an evening. Bernie Madoff’s office was apparently known as “the North Pole” such were the gargantuan quantities of “snow” to be found there and most bankers are aware of the published allegations that Jimmy Cayne (former CEO of Bear Stearns) had an anti-acid medication bottle that was filled with cocaine.

Scarface!!!!!!!!!!1Dr Chris Luke, an A&E specialist based at Cork University Hospital, Ireland, who has studied the effects of cocaine on bankers, has stated that “prominent figures in financial and political circles made irrational decisions as a result of megalomania brought on by cocaine usage”. He concludes that “people were making insane decisions and thinking they were 110% right … which led to the current chaos.”

Greed, selfishness, ignorance and ruthlessness also played their part, of course, but I think it would be foolish not to see the role that the drug played in creating the bubble.

Did cocaine use by bankers cause the global financial crisis? | Business | The Guardian.

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else October 14, 2012

Posted by tkcollier in Economy & Business, Geopolitics, philosophy & politics.
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Extractive states are controlled by ruling elites whose objective is to extract as much wealth as they can from the rest of society. Inclusive states give everyone access to economic opportunity; often, greater inclusiveness creates more prosperity, which creates an incentive for ever greater inclusiveness. Elites that have prospered from inclusive systems can be tempted to pull up the ladder they climbed to the top. Eventually, their societies become extractive and their economies languish.

Several recent studies have shown that in America today it is harder to escape the social class of your birth than it is in Europe. Educational attainment, which created the American middle class, is no longer rising.

Economists point out that the woes of the middle class are in large part a consequence of globalization and technological change. Culture may also play a role. In his recent book on the white working class, the libertarian writer Charles Murray blames the hollowed-out middle for straying from the traditional family values and old-fashioned work ethic that he says prevail among the rich (whom he castigates, but only for allowing cultural relativism to prevail).

The crony capitalism of today’s oligarchs is far subtler than Venice’s. It works in two main ways.

The first is to channel the state’s scarce resources in their own direction. This is the absurdity of Mitt Romney’s comment about the “47 percent” who are “dependent upon government.” The reality is that it is those at the top, particularly the tippy-top, of the economic pyramid who have been most effective at capturing government support — and at getting others to pay for it.

Exhibit A is the bipartisan, $700 billion rescue of Wall Street in 2008. Exhibit B is the crony recovery. The economists Emmanuel Saez and Thomas Piketty found that 93 percent of the income gains from the 2009-10 recovery went to the top 1 percent of taxpayers. The top 0.01 percent captured 37 percent of these additional earnings, gaining an average of $4.2 million per household.

via The Self-Destruction of the 1 Percent – NYTimes.com.

Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds October 3, 2012

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The analysis links periods of slow and rapid growth to the timing of the three industrial revolutions (IR’s), that is, IR #1 (steam, railroads) from 1750 to 1830; IR #2 (electricity, internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals, petroleum) from 1870 to 1900; and IR #3 (computers, the web, mobile phones) from 1960 to present. It provides evidence that IR #2 was more important than the others and was largely responsible for 80 years of relatively rapid productivity growth between 1890 and 1972. Once the spin-off inventions from IR #2 (airplanes, air conditioning, interstate highways) had run their course, productivity growth during 1972-96 was much slower than before. In contrast, IR #3 created only a short-lived growth revival between 1996 and 2004. Many of the original and spin-off inventions of IR #2 could happen only once – urbanization, transportation speed, the freedom of females from the drudgery of carrying tons of water per year, and the role of central heating and air conditioning in achieving a year-round constant temperature.

Even if innovation were to continue into the future at the rate of the two decades before 2007, the U.S. faces six headwinds that are in the process of dragging long-term growth to half or less of the 1.9 percent annual rate experienced between 1860 and 2007. These include demography, education, inequality, globalization, energy/environment, and the overhang of consumer and government debt. A provocative “exercise in subtraction” suggests that future growth in consumption per capita for the bottom 99 percent of the income distribution could fall below 0.5 percent per year for an extended period of decades.

via Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds.

How Our 1% Compares August 25, 2012

Posted by tkcollier in Economy & Business, Geopolitics.
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It’s right out of 1880s America:

In China, less than 1% of households control more than 70% of private financial wealth.

In the US today, we’re talking somewhere between 40 and 45 percent.

Globally, says, John Bussey in the WSJ, the number is “nearly 40%,” so America’s not much off the norm.

For China to truly advance and become a genuine competitive threat, the political system has to decide to divorce wealth from political power.  Otherwise we’re looking at decay and decline and a very short “Chinese century.”

US hit that moment and launched itself into a multi-decade progressive era that cleaned up a lot of things but government most of all.

As I have said many times, the world needs a small army of Teddy Roosevelts right now – but China most of all.

via Thomas P.M. Barnett’s Globlogization – Blog – China’s looming populist problem.

Boomer or Bust – The War Against Youth March 30, 2012

Posted by tkcollier in Economy & Business, Lifestyle, Politics.
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The recession didn’t gut the prospects of American young people. The Baby Boomers took care of that.

David Frum, former George W. Bush speechwriter, had the guts to acknowledge that the Tea Party’s combination of expensive entitlement programs and tax cuts is something entirely different from a traditional political program: “This isn’t conservatism: It’s a going-out-of-business sale for the Baby Boom generation.”

The impasse of the moment is, tragically, the result of the best aspects of the Boomers’ spirit. The native optimism that emerged out of the explosively creative postwar world led them to believe that growth would go on forever; that peace and prosperity were the natural state of things. Their good intentions seem like willful naivete today, but the intentions were genuine. Clinton actually believed that globalization would export the First World rather than bring the Third World home; it did both.

via Young People in the Recession – The War Against Youth – Esquire.

1% Getting Richer In European Welfare States Too March 9, 2012

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As the chart from the Roine and Waldenström study shows, the share of income for the top 1% in these seven countries generally follows the same trend line. That means domestic policy can’t be the principal reason for the current spread between high earners and others. Since the 1980s, that spread has increased in nearly all seven countries. The U.S. and Sweden, countries with very different systems of redistribution, along with the U.K. and Canada show the largest increase in the share of income for the top 1%.

The main reasons for these increases are not hard to find. Adding a few hundred million Chinese and Indians to the world’s productive labor force after 1980 slowed the rise in income for workers all over the developed world. That’s the most important factor at work. The top 1% gain relatively because they are less affected by the hordes of newly productive workers.

But the top 1% have another advantage. Many of them have unique skills that are difficult to replicate. Our top earners include entrepreneurs, rock stars, professional athletes, surgeons and lawyers. Also included are the managers of large international corporations and, yes, bankers and financiers

via Allan Meltzer: A Look at the Global One Percent – WSJ.com.

Which Countries Have Profited the Most from Globalization February 22, 2012

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China Cost Advantages Erode as U.S., Mexico Gain January 5, 2012

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China, which is experiencing negative pressure as an exporter because of wage inflation, exchange-rate pressures and higher freight rates, could lose its cost advantage vis-à-vis U.S. production in four years if freight rates rise at 5 percent annually, according to the 2011 U.S. Manufacturing-Outsourcing Cost Index.

Since 2007, Mexico, some locations in Europe and locations in Asia other than China have gained a competitive advantage for offshore manufacturing. In addition to Mexico, emerging LCCs, including India, Vietnam, Russia and Romania, had lower landed cost for their exports to the U.S.

via China Cost Advantages Erode as U.S., Mexico Gain, Report Says | Journal of Commerce.

China Has Divested 97 Percent of Its Holdings in U.S. Treasury Bills June 17, 2011

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China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury.

Treasury bills are securities that mature in one year or less that are sold by the U.S. Treasury Department to fund the nation’s debt.

Mainland Chinese holdings of U.S. Treasury bills are reported in column 9 of the Treasury report linked here.

Until October, the Chinese were generally making up for their decreasing holdings in Treasury bills by increasing their holdings of longer-term U.S. Treasury securities. Thus, until October, China’s overall holdings of U.S. debt continued to increase.

Since October, however, China has also started to divest from longer-term U.S. Treasury securities. Thus, as reported by the Treasury Department, China’s ownership of the U.S. national debt has decreased in each of the last five months on record, including November, December, January, February and March.

via China Has Divested 97 Percent of Its Holdings in U.S. Treasury Bills | CNSnews.com.

Garbage is USA’s Most Containerized Export June 14, 2011

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America Chung Nam, the sister company and supplier of wastepaper to China’s largest containerboard manufacturer, was the largest American exporter of containerized goods by volume in 2010 for the 10th year in a row, according to the latest Journal of Commerce Top 100 Importers and Exporters annual rankings.

The California-based company shipped a total of 300,800 20-foot equivalent units from the U.S. in 2010. The volume was 16 percent ahead of the 259,300 TEUs America Chung Nam exported in 2009.

America Chung Nam, founded in 1990, sends recycled paper goods to Chinese paper mills, which are then converted into fiberboard, cardboard, and packaging. The company has their customer base in the U.S., Asia and Europe. In addition to containerboard, they also exports plastic recyclables.

Recycling paper, plastics and scrap metal is good not only for the environment but also for reducing the U.S. foreign trade deficit. Then, it comes back to us, as Wal-Mart remained the No. 1 importer of containerized ocean cargo, increasing its shipping volume into the United States 1.8 percent in 2010. The world’s largest retailer imported 696,000 20-foot equivalent units last year, up from 684,000 TEUs in 2009. The company also was No. 39 on the Top Exporters 2010 list with 28,000 TEUs shipped out of the U.S.

via Wastepaper Giant ACN Was Top US Exporter | Journal of Commerce.

The Great Disruption Has Arrived June 8, 2011

Posted by tkcollier in Economy & Business, Enviroment, Food, Geopolitics.
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Why didn’t more of us see it coming? After all, the signals have been clear enough – signals that the ecological system that supports human society is hitting its limits, groaning under the strain of an economy simply too big for the planet. But we didn’t and, as a result, the time to act preventatively has past.Now we must brace for impact. Now comes The Great Disruption.It is true that the coming years won’t be pleasant, as our society and economy hits the wall and then realigns around what was always an obvious reality: You cannot have infinite growth on a finite planet. Not ‘should not’, or ‘better not’, but cannot. We can, however, get through what’s ahead – if we prepare. (more…)

How Greedy States & Cities Were Fleeced $4 Billion By Wall Street November 10, 2010

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For more than a decade, banks and insurance companies convinced governments and nonprofits that financial engineering would lower interest rates on bonds sold for public projects such as roads, bridges and schools. That failed promise has cost more than $4 billion, according to data compiled by Bloomberg, as hundreds of borrowers from the Bay Area Toll Authority in Oakland, California, to Cornell University in Ithaca, New York, quietly paid Wall Street to end agreements since 2008.

The termination payments to Wall Street firms come at the worst possible time. The longest recession since the Great Depression left states facing budget gaps of $72 billion next fiscal year, according to the National Conference of State Legislatures. U.S. cities saw their general fund revenue fall the most since at least 1986 in the budget year that ended June 30, according to the National League of Cities.

Wall Street banks and insurers peddled financial derivatives known as interest-rate swaps to governments and nonprofits that bet they could lower the cost of borrowing. There were as much as $500 billion of the deals done in the $2.8 trillion municipal bond market before the credit crisis, according to a report by Randall Dodd, a senior researcher on the Financial Crisis Inquiry Commission, published by the International Monetary Fund in June.

via Wall Street Collects $4 Billion From Taxpayers as Swaps Backfire – Bloomberg.

China Gobbles Up the World’s Copper November 2, 2010

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China is prospecting for mineral treasures around the world as it develops faster than any major economy in history. Its copper use is growing so quickly that by 2035 global demand for the metal may outstrip supply by 11 million tons, according to CRU, a London-based mining and metals consulting firm.

More than half of China’s 1.3 billion people live in rural areas. Over the next 15 years, the country will need 50,000 skyscrapers, 170 mass transit systems and urban housing for 350 million people as it develops the interior, according to a 2009 study by the McKinsey Global Institute, a research arm of New York-based McKinsey & Co. That represents a potential doubling of the domestic market for autos, appliances, televisions and other consumer goods.

Copper—first smelted over wood fires 10,000 years ago—is at the center of it all, conveying the country’s electrical pulse and providing the nervous system for the computers, dishwashers and microwaves China makes for the world.

via China Boss in Peru on $50 Billion Peak Bought for $810 Million – BusinessWeek.

China Abandons The Abacus October 19, 2010

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China said today that it’s raising interest rates by a quarter of a percentage point.

That’s a big deal. China hasn’t raised interest rates since 2007, and the move is a sign of strength for China’s economy.

One interesting detail: It’s the first time in modern history that China’s central bank made an interest-rate move that wasn’t a multiple of .09.

“The reason is that on the abacus, adding multiples of nine was much easier than adding multiples of 10. So the modern People’s Bank of China inherited that special character from the old days,” an economist with Citigroup in Beijing told Reuters. (more…)

The Scariest Unemployment Graph I’ve Seen Yet July 20, 2010

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The median duration of unemployment is higher today than any time in the last 50 years. That’s an understatement. It is more than twice as high today than any time in the last 50 years.

via The Scariest Unemployment Graph I’ve Seen Yet – Business – The Atlantic.

China Grows Protectionist Alienating Business Supporters July 20, 2010

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In some ways, I do think the Chinese government has been pretty stupid over the past year in executing its “Pissing Off As Many Countries As Possible” strategy. China rankled the Europeans over its climate change diplomacy at Copenhagen. For all of Beijing’s bluster, it failed to alter U.S. policies on Tibet and Taiwan. It backed down on the Google controversy. It overestimated the power that comes with holding U.S. debt. It alienated South Korea and Japan over its handling of the Cheonan incident, leading to joint naval exercises with the United States — exactly what China didn’t want. It’s growing more isolated within the G-20. And, increasingly, no one trusts its economic data.

This doesn’t sound like a government that has executed a brilliant grand strategy. It sounds like a country that’s benefiting from important structural trends, while frittering away its geopolitical advantages. Alienating key supporters in the country’s primary export markets — and even if Chinese consumption is rising, exports still matter an awful lot to the Chinese economy — seems counterproductive to China’s long-term strategic and economic interests.

via Beijing has alienated the most pro-China interest groups in the United States and Europe | Daniel W. Drezner.

Business Jobs, Not Government Jobs, Create Wealth July 18, 2010

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In the two decades of the 1980s and 1990s, the United States created 73 million new private sector jobs—while simultaneously losing some 44 million jobs in the process of adjusting its economy to international competition. That was a net gain of some 29 million jobs. A stunning 55 percent of the total workforce at the end of these two decades was in a new job, some two-thirds of them in industries that paid more than the average wage. By contrast, continental Europe, with a larger economy and workforce, created an estimated 4 million jobs in the same period, most of which were in the public sector (and the cost of which they are beginning to regret).

Over the years, the transformation of American industry has been nothing short of phenomenal. U.S. companies replaced large, mass-produced consumer products with sophisticated goods derived from intellectual output and knowledge-based interests, the fastest-growing segment of the world’s economy. Management was assisted by a level of labor flexibility that is the envy of both Europe and Asia. Europe struggles with the legacy of the steam age in the form of craft, union, and management demarcations that limit management’s role. In Asia, management is often stifled by large, oligopolistic networks and government mandates.

via Obama’s Anti-Business Policies Are Our Economic Katrina – US News and World Report.

Relax, We’ll Be Fine April 6, 2010

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The U.S. is on the verge of a demographic, economic and social revival, built on its historic strengths. The U.S. has always been good at disruptive change. It’s always excelled at decentralized community-building. It’s always had that moral materialism that creates meaning-rich products. Surely a country with this much going for it is not going to wait around passively and let a rotten political culture drag it down.

via Op-Ed Columnist – Relax, We’ll Be Fine – NYTimes.com. (more…)

Federal pay ahead of private industry March 16, 2010

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Federal employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations, a USA TODAY analysis of federal data finds.

Accountants, nurses, chemists, surveyors, cooks, clerks and janitors are among the wide range of jobs that get paid more on average in the federal government than in the private sector.

Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.

via Federal pay ahead of private industry – USATODAY.com.

The Rising Sovereign Debt Crisis March 16, 2010

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Bond giant PIMCO spoke of a “sovereign debt explosion” that has taken the world into uncharted waters and poses a major threat to economic stability. “Our sense is that the importance of the shock to public finances in advanced economies is not yet sufficiently appreciated and understood,” said Mohamed El-Erian, the group’s chief executive.

Mr El-Erian said most analysts are still using “backward-looking models” that fail to grasp the full magnitude of what has taken place in world affairs since the crisis. Some 40pc of the global economy is in countries where governments are running deficits above 10pc of GDP, with no easy way out.

Italy has to refinance 20pc of its entire debt – the world’s third largest after Japan and the US – tapping the bond markets for a total €259bn this year. Belgium has to roll over 22pc of its substantial debt.

via Eurozone could risk ‘sovereign debt explosion’ – Telegraph.

Treasury Secretary Timothy Geithner March 15, 2010

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At first, some people on Wall Street feared that the Obama Administration was simply seeking a pretext for taking over embattled firms like Citigroup and Bank of America, as liberal Democrats had urged. But Geithner was resolutely opposed to such an option, at least at that stage. He and Ben Bernanke, the Fed chairman, intended to use the stress tests to bolster banks’ finances rather than nationalizing them. “That would have been a deeply transforming policy mistake,” he said to me. “The country would have suffered for decades. We’d have spent hundreds of billions of dollars more that we didn’t need to spend, and would have been stuck in those institutions for years.”

In fact, some commentators agreed that the Treasury and the Fed were being too tough on banks.  One of these skeptics was Richard Bove, an analyst at Rochdale Securities, who has been following the financial industry since 1965. He has since changed his mind. “Geithner recognized that the system needed overkill on security and soundness to rebuild the confidence that was lacking,” he said. According to Bove’s calculations, U.S. banks now have more capital as a percentage of assets than in any year since 1935. “He built in that safety and soundness throughout the industry. As time goes on, I’m getting more and more respect for him.”

Between March 9th and May 7th, when the results of the stress tests were announced, the Dow rose by almost two thousand points, and the spread between AAA and BAA bonds—a reliable indicator of financial distress—fell sharply

Read more: via Treasury Secretary Timothy Geithner : The New Yorker.

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