Archive for the ‘dollars’ Category

Commentary: Say no to the auto bailout

November 13, 2008

General Motors, Ford, Chrysler and the United Auto Workers union are pouring millions of dollars into a lobbying campaign for a taxpayer bailout.

The money devoted to influence peddling in Washington would be better spent on improving quality and finding ways to reduce a bloated cost structure, but both management and UAW have decided that fleecing taxpayers is a better option.

A taxpayer bailout would be a terrible mistake. It would subsidize the shoddy management practices of the corporate bureaucrats at General Motors, Ford and Chrysler, and it would reward the intransigent union bosses who have made the synonymous with inflexible and anti-competitive work rules.

Perhaps most important, though, is that a bailout would be bad for the long-term health of the American auto industry. It would discriminate against the 113,000 Americans who have highly-coveted jobs building cars for Nissan, BMW and other auto companies that happen to be headquartered in other nations.

These companies demonstrate that it is possible to build cars in America and make money. Putting them at a competitive disadvantage with handouts for the U.S.-headquartered companies would be highly unjust.

A bailout also would be bad for General Motors, Ford and Chrysler. The so-called Big Three desperately need to fundamentally restructure their practices. More specifically, the car companies need to endure some short-term pain in order to restore long-term viability. But that won’t happen if politicians raid the treasury.

From CNN

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Goldman suspends GM rating, Chrysler urges aid

November 13, 2008

Goldman Sachs suspended its rating on General Motors Corp on Thursday and said the automaker needs at least $22 billion in federal aid, while Chrysler said it would be “very difficult to survive” without government support.

By Soyoung Kim, Reuters

Chrysler LLC Chief Executive Bob Nardelli said Chrysler was losing money due to a decline in U.S. auto sales to 25-year lows, and said Chrysler would seek federal money for its liquidity and restructuring needs.

In one of his few appearances since merger talks between GM and Chrysler broke off, Nardelli said Chrysler must have broader ties with U.S. automakers or alliances with overseas competitors to ride out the industry downturn.

The auto industry has stepped up lobbying efforts for government support and the heads of the three U.S.-based automakers are expected to testify next week before a congressional committee considering aid for the industry.

The Bush administration said the government could quickly disburse $25 billion in loans already approved by Congress. However, the administration has responded coolly to an aid plan being shaped by Democrats, which includes using part of the $700 billion financial rescue package to provide additional liquidity for the auto industry.

U.S. President-elect Barack Obama is considering appointing someone to lead efforts to help the auto industry return to health, an Obama aide said on Thursday.

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Severe economic crisis threatens Pakistan’s stability

October 14, 2008

By Saeed Shah, McClatchy Newspapers

ISLAMABAD, Pakistan — A worsening economic crisis in Pakistan is pushing millions more people into poverty, and experts fear that it could help Islamic extremists recruit new converts.
A Pakistani money-changer counts US dollars in Islamabad on ... 
A Pakistani money-changer counts US dollars in Islamabad on October 8, 2008. Already nearly broke when the global financial crisis took hold, Pakistan now faces further woes that could take the nuclear-armed nation’s security situation closer to the edge, experts said.(AFP/File/Aamir Qureshi)

The crisis began early this year, as democracy was restored after more than eight years of military rule. Now Pakistan’s hard currency reserves have shrunk to $3.5 billion , and without an international rescue package, America’s key ally in the fight against al Qaida is likely to default on foreign debt repayments in the next two months, economic experts said.

Inflation is running at 25 percent, according to official figures, electricity is in short supply, and Pakistan’s currency, the rupee, has been devalued 25 percent against the dollar. Investor confidence has fallen so low that on Monday, police had to surround the Karachi Stock Exchange to protect it from angry investors. The Exchange already had lobbied the government unsuccessfully to be allowed to close for two weeks.

Terrorist acts by Islamist insurgents have accelerated capital flight and discouraged foreign direct investment. Depositors are lined up at banks to withdraw their money or to send it abroad.

“The canvas of terrorism is expanding by the minute,” said Faisal Saleh Hayat , a member of parliament and a former interior minister under Pervez Musharraf , the U.S.-backed former president. “It’s not only ideological motivation. Put that together with economic deprivation and you have a ready-made force of Taliban , al Qaida , whatever you want to call them. You will see suicide bombers churned out by the hundred.”

“In Pakistan , there are a huge proportion of people just above the poverty line. A slight shock in their income can push them below the poverty line,” said Sadia Malik , director of the Mahbub ul Haq Human Development Center in Islamabad , the capital. “This is the kind of shock that would have pushed a huge number of people into the poverty trap,”

The prices of wheat, rice and milk have more than doubled in the last year. The price of flour used to make roti bread, the food staple, has jumped from 12 rupees ( 15 cents ) a kilo last year to 28 rupees ( 35 cents ). Economists warn that prices would spiral even higher if Pakistan defaulted on its foreign debt.

Before the crisis, an estimated that 56 million Pakistanis, around a third of the population, already were living below the poverty line….

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Fed takes new steps to ease crisis

March 17, 2008
By JEANNINE AVERSA, AP Economics Writer 
Sunday night 2148 Eastern Time

WASHINGTON – The Federal Reserve, in an extraordinarly rare weekend move, took bold action Sunday evening to provide cash to financially squeezed Wall Street investment houses, a fresh effort to prevent a spreading credit crisis from sinking the U.S. economy.
US dollar and pound sterling banknotes. The pound has posted ... 

The central bank approved a cut in its lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created another lending facility for big investment banks to secure short-term loans. The new lending facility will be available to big Wall Street firms on Monday.

“These steps will provide financial institutions with greater assurance of access to funds,” Federal Reserve Chairman Ben Bernanke told reporters in a brief conference call Sunday evening.

The Fed acted just after JP Morgan Chase & Co. agreed to buy rival Bear Stearns Cos for $236.2 million in a deal that represents a stunning collapse for one of the world’s largest and most venerable investment banks. Just on Friday the Fed had raced to provide emergency financing to cash-strapped Bear Stearns through JP Morgan. Days earlier the Fed announced a set of other unconventional steps to thaw out a credit market in danger of freezing shut.

The new lending facility — described as a cousin to the Fed’s emergency lending “discount window” for banks — is geared to give investment houses a source of short-term cash on a regular basis — if they need it.

It will be in place for at least six months and “may be extended as conditions warrant,” the Fed said. The interest rate will be 3.25 percent and a range of collateral — including investment-grade mortgage backed securities — will be accepted to back the overnight loans.

Treasury Secretary Henry Paulson said he was pleased by Sunday’s developments.

“Last Friday, I said that market participants are addressing challenges and I am pleased with recent developments. I appreciate the additional actions taken this evening by the Federal Reserve to enhance the stability, liquidity and orderliness of our markets,” he said.
Queen Victoria (front) and Queen Elizabeth 2 (back) depart for ... 
Queen Victoria (front) and Queen Elizabeth 2 (back) depart for a Royal Rendezvous at Sydney Harbour in February 2008. The global cruise industry is putting on a brave face as it sails into seas darkened by a faltering US economy, a weak dollar and record oil prices, major cruise ship operators said at their annual convention.(AFP/File/Anoek de Groot)

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U.S. Economy: Dark News

January 5, 2008

By John E. Carey
Peace and Freedom
January 5, 2008

Dark news of trouble for the U.S. economy continued to pile up at the start of 2008.

The dollar fell Friday as a disappointing US payrolls survey ...
The dollar fell Friday as a disappointing US payrolls survey highlighted soft economic conditions that boosts the risk of recession and further rate cuts by the Federal Reserve.(AFP/File/Bertrand Langlois)

On Friday, January 4, 2008, a Labor Department report said the U.S. economy edged a step closer to recession in December by producing only 18,000 new jobs, its worst performance in four years, and sending the unemployment rate to a two-year high of 5 percent.

Outside government, private sector jobs actually shrank by 13,000 in December.

According to the Labor Department, lay-offs were across the spectrum of American jobs.

Manufacturers, builders, banks and even retailers laid off more than 100,000 workers at the height of the Christmas shopping season.

The construction trades shed 49,000 jobs and manufacturing lost 31,000 workers.

The housing crisis has put hundreds of thousands of people involved in the construction trades out of work. The trickle down impact is hitting furniture manufacturers and all kinds of other businesses from appliance manufacturers to curtain and carpet makers.

Gas and home heating oil price increases seem likely following reports that petroleum has now hit $100.00 per barrel. Gasoline prices impact all drivers and have already contributed to price hikes on everything from milk and eggs to FedEx deliveries.

Tightening credit, a slumping housing market, oil prices and a staggering stock market are starting to take a toll on the American housewife and wage earner.

Peter Gosselin and Walter Hamilton wrote in the Los Angeles Times, “The [job] losses were widespread, suggesting that the economy’s troubles run deep. They were compensated for by gains in only a few areas, especially health care, food service and government.”

“Economists viewed the report as the most powerful indication to date that the United States could well be falling into a recessionary downturn,” wrote Peter Goodman and Mike Grynbaum in the New York Times.

“This report raises threats” because of the way it undercuts consumers, said Stephen Gallagher, economist at Societe Generale. “Up to this report, employment gains have been seen as sufficient to support the consumer” and keep the economy afloat.

President Bush has been upbeat on the economy but he met yesterday with a host of economic advisors to hear options on how the U.S. government can jump start the economy.

“This economy of ours is on a solid foundation, but we can’t take economic growth for granted,” he said after meeting with a White House working group on financial markets.


The Economy is Slowing, Losing Altitude

U.S. Economy: Storm Warning

Making Cents of Our Economy

Jobless rate jump augurs ill economy

January 5, 2008

By Patrice Hill
Washington Times
January 5, 2008

Unemployment soared to 5 percent last month while job gains nearly ground to a halt, the clearest sign yet that the economy has stalled in the wake of last fall’s housing and credit crisis.
Manufacturers, builders, banks and even retailers laid off more than 100,000 workers at the height of the Christmas shopping season, the Labor Department reported yesterday. Those losses were barely offset by employment gains in education, health, leisure, government and business services, which produced a net increase of just 18,000 jobs.
Job growth for the month and for all of 2007, at 1.33 million, were the lowest since 2003. Outside government, private sector jobs actually shrank by 13,000 in December….

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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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