Archive for the ‘investments’ Category

Global Financial Meltdown: Iceland, Mired in Debt, Blames Britain for Woes

November 2, 2008

No one disputes that Iceland’s economic troubles are largely the country’s own fault. But there may be more to the story, at least in the view of Iceland’s government, its citizens and even some outsiders. As grave as their situation already was, they say, Britain — their old friend, NATO ally and trading partner — made it immeasurably worse.

By Sarah Lyall
The New York Times

The troubles between the countries began three weeks ago when Britain took the extraordinary step of using its 2001 antiterrorism laws to freeze the British assets of a failing Icelandic bank. That appeared to brand Iceland a terrorist state.

“I must admit that I was absolutely appalled,” the Icelandic foreign minister, Ingibjorg Solrun Gisladottir, said in an interview, describing her horror at opening the British treasury department’s home page at the time and finding Iceland on a list of terrorist entities with Al Qaeda, Sudan and North Korea, among others.

In a volatile economic climate, in which appearance matters almost as much as reality, being associated with terrorism is not a good thing.

“The immediate effect was to trigger an almost complete freeze on any banking transactions between Iceland and abroad,” said Jon Danielsson, an economist at the London School of Economics. “When you’re labeled a terrorist, nobody does business with you.”

Iceberg with hole edit.jpg

The Icelandic prime minister, Geir H. Haarde, accused Britain of “bullying a small neighbor” and said the action was “very out of proportion.” In a recent speech in Beijing, Sir Howard Davies, a former deputy governor of the Bank of England and now the director of the London School of Economics, said that Britain had used a “beggar thy neighbor” approach to Iceland.

And an online petition signed so far by more than 20 percent of Iceland’s population said the British prime minister, Gordon Brown, had sacrificed Iceland “for his own short-term political gain,” thereby turning “a grave situation into a national disaster.”

Iceland’s financial problems had been brewing for some time. This past spring, the country’s banks, bloated with foreign deposits and debts, began to falter. This fall, as the financial crisis deepened, the government took over two of the country’s three largest banks.

Britain’s government, alarmed about the tens of thousands of accounts held by its citizens, companies, local governments and charities, froze the British assets of one of the failed banks, Landsbanki. It also seized the assets of Kaupthing Singer & Friedlander, the British subsidiary of another Icelandic bank, Kaupthing.

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China sits out global crisis, focusing on own growth

October 11, 2008

By Tim Johnson, McClatchy Newspapers

BEIJING — China sits on a huge pile of money, and its policymakers crave global assets. So why doesn’t China spend a little and save the world from global financial meltdown?

Economists give a number of reasons why China prefers to sit on the sidelines of the global turmoil, focusing instead on protecting its economy and maintaining growth powered by consumers at home.

“In this type of global crisis, the best China can do is take care of itself,” said Qing Wang, chief economist on China for Morgan Stanley . “Its role in the global economy is still quite small.”

An employee counts Renminbi banknotes at Bank of China branch ...

An export powerhouse, China has amassed foreign reserves of $1.81 trillion , an unprecedented stockpile, and is awash in the savings of its thrifty citizens. That war chest has drawn cries from other corners of the globe for China to help bail out the global financial system — a cry that’s been resisted in China .

Economists said it is easy to overlook that China’s foreign reserves are already largely locked up — including some $1 trillion in U.S. government bonds.

“The money is already spent. . . . It’s not sitting there in cash,” Wang said.

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Quantum founder: Leap into China stocks; Teach Kids Chinese

December 17, 2007

“The very best advice of any kind that I can give you is to teach your children or your grandchildren Chinese,” Jim Rogers writes in A Bull in China. “It is going to be the most important language of their lifetimes.”

Q: The language that spells success?

A: Chinese.

Take it from Jim Rogers, a hugely successful investor, who has studied China ever since he traveled there 23 years ago.

Rogers, co-founder of Quantum Fund, is a plainspoken investor who amassed a fortune through shrewd foreign investing in publicly traded companies and commodities.

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Investing in China: Famously Volatile, Richly Rewarding

July 21, 2007

By Tomoeh Murakami Tse and Ariana Eunjing Cha
Washington Post Staff Writers
Sunday, July 22, 2007; Page F01

It’s the money tree that keeps on giving.

Despite warnings about the lack of transparency, corruption scandals and companies with shaky financials, the Chinese stock market has leaped 300 percent in the past two years.

No other major market in the world has rewarded investors as generously. Consider: Brazil, Russia and India — the other fast-growing countries that make up the so-called BRIC economies — gained at most 170 percent over the same period. The Standard & Poor’s 500-stock index rose 24 percent.

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Related: We at Peace and Freedom believe that despite the terrific potential for wealth; China’s record on human rights and corruption detracts significantly from her opportunities.  Before investors enter the China market, we recommend they review her overall record in the international community.  See:

Chinese dissident was tortured

Frightening Scenes: Beijing’s Brutal Dirty Laundry

China Planning a Surreal Facade for Summer Olympic Games: Beijing 2008

Despite outcry, many Americans can’t live without China goods