Archive for the ‘assets’ Category

Evidence of a recession piles higher with new data

November 1, 2008

Evidence of a recession piled ever higher Friday, with new figures showing Americans are spending less and gloomy about the economy, while the government signaled it won’t buy stock in the financing arms of auto companies to prop them up. The Commerce Department reported consumer spending dropped a sharp 0.3 percent in September while their incomes, the fuel for future spending, managed only a small 0.2 percent gain.

By MARTIN CRUTSINGER, AP Economics Writer

That followed a report a day earlier that the U.S. economy shrank by 0.3 percent in the third quarter. The accepted definition of a recession is two straight quarters of a shrinking economy.

Closing out the worst October in 21 years but one of the best weeks ever, investors did some bargain shopping on Wall Street, snapping up stocks that have plunged in value. The Dow Jones industrial average gained nearly 145 points.

Wall street broker Michael Kilkenny works the  trading floor ... 
Wall street broker Michael Kilkenny works the trading floor of the New York Stock Exchange shortly after the market opened Tuesday, Oct.28, 2008 (AP Photo/David Karp)

Meanwhile, the outgoing Bush administration sent signals to automakers and other industries hoping for government purchases of their stock that they probably won’t qualify for the program.

Administration officials, who spoke on condition of anonymity because the program is still being put together, said it was unlikely the auto companies would be able to qualify for direct government purchases of stock in their auto-financing arms as part of the $250 billion stock purchase program.

They could still be eligible for government purchases of bad assets, such as auto loans, under a separate program that is expected to spend $100 billion initially. The government plans to buy stock in banks and lift bad assets on their books as part of the financial system bailout.

The wrangling over the broader rescue program continued, with Democrats stressing Congress wants the package to be used to pump new loans into the economy, not diverted to stockholders or executives or to buy other banks.

“I am deeply disappointed that a number of financial institutions are distorting the legislation that Congress passed,” said House Financial Services Committee Chairman Barney Frank, D-Mass. He announced hearings on the rescue package Nov. 12 and 18.

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http://news.yahoo.com/s/ap/20081101/ap_on_bi_go_ec_fi/financial_
meltdown;_ylt=AuQ4x5cBIgpi2w42kt0KBHas0NUE

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Fighting inflation: Vietnam and China take different measures

March 21, 2008

The State Bank of Vietnam has been taking a lot of measures to tighten monetary policies in order to curb inflation. It has issued VND20,300bil worth of compulsory bonds, raised state banks’ basic interest rates, raised the compulsory reserve ratio, and has been purchasing foreign currencies at a moderate level.  
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The said moves have had big impacts on the operation of commercial banks and led to a lot of side effects. The capital shortage has become more and more serious with the interest rate once hitting 25-27% per annum. Under the government’s instructions, the State Bank of Vietnam and Ministry of Finance will join forces to transfer the government’s money now kept at five state owned banks to State Bank branches for management. 
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The transfer of VND52tril is believed will have big impacts on the monetary market. Experts say that the move may cause the lack of VND25tril for the banks, worsening the banks’ liquidity. Also aiming to curb inflation, the State Bank of Vietnam has asked commercial banks to limit loans for real estate and securities investments, and tighten consumer credit. The State Bank of Vietnam has urged commercial banks, which provided loans with mortgaged stocks, to ask for more mortgaged assets from clients as stock prices are decreasing.
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If clients cannot give more mortgaged assets, commercial banks have to force them to bargain shares away to terminate credit contracts. As a result, a big volume of money has been flowing from the stock market to commercial banks’ coffers.
 Commercial banks have nearly stopped loaning to securities investors; this is considered one of the main reasons behind the stock market’s continued falls in the last time.  Lacking capital for production and business, which may lead to production stagnation and lower competitiveness, higher unemployment, continued falls of the stock market, are all consequences of the tightened monetary policies. 
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Meanwhile, the Chinese government has put forward six groups of measures to fight high inflation, which include: (1) encouraging production expansion, especially the production of key products like food and foodstuffs (2) controlling tightly industries which use food and foodstuffs as materials (3) strengthening its storage system, controlling imports and exports, stabilising domestic prices. Moreover, it has also thought of measures to give allowances to poor people and control its distribution network to prevent massive price increases. 

(Source: TBKTVN)From: VietnamNetBridge

Global paradigm shift

October 17, 2007

Arnaud de Borchgrave
The Washington Times
October 17, 2007

…new actors on the global stage that defy accountability. There are some 3,000 hedge funds, sans code of conduct, with $1.7 trillion under management, which is expected to double in five years.

For years, the Bush administration discounted, even pooh-poohed, the vast amount of U.S. paper held by China. It’s about $750 billion of the $1.3 trillion in the central banks of Asian countries (mostly China, Japan and Taiwan).

America’s critics abroad saying and writing Washington must borrow $3 billion a day to keep its standard of living while fighting costly wars in the Middle East and Afghanistan was dismissed as cheap shots. Bush administration experts said China would only be hurting itself if it decided to suddenly redeem U.S. paper or buy euros instead. At 1.40 to the dollar, the euro looks pretty sexy to central bankers holding mountains of dollars….

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http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20071017/COMMENTARY/110170003