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Jan. 23 (Bloomberg) -- Timothy Geithner’s warning that President Barack Obama believes China is “manipulating” its currency may trigger renewed tensions between two of the world’s three biggest economies.
Tilinpäätöksessä näkyvät luvut eivät anna Googlen Suomen toiminnan volyymeistä oikeaa kuvaa, sillä konserni laskuttaa ilmeisesti verotuksellisista syistä Irlannin yhtiönsä kautta.
Some optimistic experts are now saying that though this will be a turbulent year for global markets, the worst of the financial crisis is now behind us. Would it were so. We believe that 2009 will be tougher than many anticipate.
We enter the new year grappling with the most serious global economic and financial crisis since the Great Depression. The U.S. economy is, at best, halfway through a recession that began in December 2007 and will prove the longest and most severe of the postwar period. Credit losses of close to $3 trillion are leaving the U.S. banking and financial system insolvent. And the credit crunch will persist as households, financial firms and corporations with high debt ratios and solvency problems undergo a sharp deleveraging process.
Worse, all of the world's advanced economies are in recession. Many emerging markets, including China, face the threat of a hard landing. Some fear that these conditions will produce a dangerous spike in inflation, but the greater risk is for a kind of global "stag-deflation": a toxic combination of economic stagnation, recession and falling prices. We're likely to see vulnerable European markets (Hungary, Romania and Bulgaria), key Latin American markets (Argentina, Venezuela, Ecuador and Mexico), Asian countries (Pakistan, Indonesia and South Korea), and countries like Russia, Ukraine and the Baltic states facing severe financial pressure.
Policy remedies will have limited effect as insolvency problems constrain the effectiveness of monetary stimulus, and the risk of rising interest rates (following the issuance of a wave of public debt) erodes the growth effects of fiscal stimulus packages. Only when insolvent banks are shut down, others are cleaned up, and the debt level of insolvent households is reduced will conditions ease. Between now and then, we can expect further downside risks to equity markets and other risky assets, given the likelihood that markets will continue to be jolted by worse-than-expected financial news.
The U.S. twin fiscal and current-account deficits will rise over the next two years as the country runs trillion dollar-plus fiscal deficits. We're all aware that foreign actors have financed most of this debt over the past several years. During the 1980s, the U.S. also faced the burdens of twin deficits, but relied on financing from key strategic partners like Japan and Germany. This time, the situation is more worrisome because today's financing comes not from U.S. allies, but from strategic rivals like Russia, China and a number of relatively unstable petrostates. This leaves the U.S. perilously dependent on the kindness of strangers.
There's some good news in this interdependence. The mutually assured economic destruction that this relationship implies ensures that China can't simply pull the plug on all this financing without suffering a considerable amount of self-inflicted pain. Reducing its financing of Washington would, among other things, put significant upward pressure on the value of China's currency, sharply undermining its export sector and, therefore, the country's economic growth.
But over time, the ability and willingness of China and others to finance U.S. deficits will diminish as they begin to run fiscal deficits of their own. They'll need to use their financial resources at home just as a tsunami of U.S. Treasury bond issuances peaks.
Politics will make matters worse, primarily because governments in both the rich and the developing worlds are intervening in their economies more broadly and deeply than at any time since the end of World War II. Policy makers around the world are hard at work crafting stimulus packages filled with subsidies and protections they hope will breathe new life into their domestic economies, and preparing to rewrite the rules and regulations that govern global markets.
Why is this dangerous? At the G-20 summit a few weeks ago, world leaders pledged to address the crisis by coordinating their economic policy responses. That's not going to happen, because politicians design stimulus packages with political motives -- to satisfy the needs of their constituents -- not to address imbalances in the global economy. This is as true in Washington as in Beijing. That's why politics will drive the global economy more directly (and less efficiently) in 2009 than at any point in decades. Its politics that is creating the biggest risk for markets this year.
This is part of a worrisome long- term trend. In China and Russia, where histories of command economics predispose governments toward what we've come to call state capitalism, the phenomenon is especially obvious. National oil companies, other state-owned enterprises, and sovereign wealth funds have brought politicians and political bureaucrats into economic decision-making on a scale we haven't seen in a very long time.
Now the U.S. has gotten in on the game. New York, once the financial capital of the world, is no longer even the financial capital of the U.S. That honor falls on Washington, where lawmakers are now injecting populist politics into economics decisions. Companies and sectors that should be left to drown are being floated lifeboats. This drama is also playing out across Europe and Asia. As engines of economic growth, Shanghai is losing ground to Beijing, Mumbai to Delhi, and Dubai to Abu Dhabi.
Global markets will also face the more traditional forms of political risk in 2009. Militancy in an increasingly unstable and financially fragile Pakistan will continue to spill across borders into Afghanistan and India. National elections in Israel and Iran risk bringing the international conflict over Iran's nuclear program to a boil, injecting new volatility into oil markets. The impact of the financial crisis on Russia's economy could produce significant levels of unrest across the country. And Iraq may face renewed civil violence, as recently dormant militia groups compete to fill the vacuum left by departing U.S. troops.
The world's first global recession is just getting started.
But over time, the ability and willingness of China and others to finance U.S. deficits will diminish as they begin to run fiscal deficits of their own. They'll need to use their financial resources at home just as a tsunami of U.S. Treasury bond issuances peaks.
Nouriel Roubini, RGE Monitor
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There is no safe haven from the crisis as all countries are affected, and the collapse in aggregate demand may bring about prolonged deflation, Roubini added.
"We have to worry today about not ending up like Japan. That's the risk for the global economy," he said.
The rise in the price of gold is a signal of fear that countries and corporations may default on debt rather than of worries about future inflation, and the precious metal is used as a "safety valve."
Falling stock prices and very low bond yields are signaling depression, while credit spreads are still very wide, indicating fear of defaults, according to Roubini. And even the fast-growing Asian economies aren't spared.
"If you look at the data in emerging markets and around Asia, East Asia, there is a hard landing," he said. "All the numbers out of China suggest… the manufacturing sector is already in a recession."
Protectionism is the next danger, as history shows that it prolonged the 1930s depression, he said, regarding remarks by U.S. Treasury Secretary Timothy Geithner that China was "manipulating" its currency to help its exports.
"Certainly starting a war with China on the issue of the currency is very, very dangerous," he said. "The US is relying on the kindness of strangers -- Russia, China, the Gulf States … to finance a huge, and growing, twin current account and fiscal deficit," Roubini said.
"If China were to pull the plug on financing the US dollar, then we'd have a freefall of the dollar," he added.
Kiitän kauniisti, jonkin aikaa ihan työksenikin korkoja ja korkojohdannaisia pohdiskelin, toivottavasti jäi edes jotain niistä ajoista muistiin.
Roubinin uusin kommentti kriisiin.
Muistaakseni Tomppa sanoit, että jos Kiina lopettaisin USA:n luotottamisen, niin seurauksena olisi kaikkea muuta kuin inflaatiota. Roubinilla on ilmeisen toisenlainen näkemys.
Roubinin uusin kommentti kriisiin.
Muistaakseni Tomppa sanoit, että jos Kiina lopettaisin USA:n luotottamisen, niin seurauksena olisi kaikkea muuta kuin inflaatiota. Roubinilla on ilmeisen toisenlainen näkemys.
There is no safe haven from the crisis as all countries are affected, and the collapse in aggregate demand may bring about prolonged deflation, Roubini added.
...
The rise in the price of gold is a signal of fear that countries and corporations may default on debt rather than of worries about future inflation, and the precious metal is used as a "safety valve."
What's left looks like a duck, walks like a duck, flies like a duck, and squawks like a duck. And that duck is deflation no matter what Humpty Dumpty suggests.
"Hähäääää, mäpä tiesin enkä tehny asialle mitään!"
Samaa mieltä, OMXH:n pohjiksi arvailen jotain 4000-4500 väliltä..Jep, tää on niin tätä.
Muutenkin kun 100 ihmistä sanoo aina eri tavalla, niin ainahan sitä joku voi jälkikäteen itseään guruksi sanoa.
Mä ennusta ettän vuonna 2012 talous kukoistaa ja tämä taantuma oli vain kuoppa kurssikäyrällä. Katotaan olenko guru 2012.
Ihan varmasti ei maailma tähän kaadu:D.Jep, tää on niin tätä.
Muutenkin kun 100 ihmistä sanoo aina eri tavalla, niin ainahan sitä joku voi jälkikäteen itseään guruksi sanoa.
Mä ennusta ettän vuonna 2012 talous kukoistaa ja tämä taantuma oli vain kuoppa kurssikäyrällä. Katotaan olenko guru 2012.
En nyt oikein ymmärrä mitä muutakaan hän voisi tarkoittaa kuin inflaatiota jos sanoo, että "If China were to pull the plug on financing the US dollar, then we'd have a freefall of the dollar." Itse ymmärsin tekstistä, että deflaatio on akuutti huoli ja protektionismi ja inflaatio myöhempiä huolia. Jos Kiina vetäisi USA:n talouden johdot seinästä ja dollarin arvo lähtisi tippumaan, niin miksi muut menisivät perässä?
Niin, on se Tavja komissioineen vaan niin typerä.SniffDaddy sanoi:"Hähäääää, mäpä tiesin enkä tehny asialle mitään!"
Niin, on se Tavja komissioineen vaan niin typerä.
Ja olen aika usein kuullut tälläkin palstalla sen suuntaisia kannanottoja että minkä päättäjät maailmanlaajuiselle kriisille mahtaa. Varsinkaan kun markkinoiden oikeamieliseen toimintaan ei saa puuttua millään tavalla. Varsinkaan joku edustuspresidentti, joka vain heiluttelee kättä ja juttelee pirun typeriä..
Markkinoilla ei ole moraalia -"eikä kuulukaan olla!" -, mutta annetaan silti kaikki valta maailman asioista niihin käsiin..