Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Fri 01.30.2009
Federal Reserve sets stage for Weimar-style Hyperinflation The Federal Reserve has bluntly refused a request by a major US financial news service to disclose the recipients of more than $2 trillion of emergency loans from US taxpayers and to reveal the assets the central bank is accepting as collateral. Their lawyers resorted to the bizarre argument that they did so to protect ‘trade secrets.’ Is the secret that the US financial system is de facto bankrupt? The latest Fed move is further indication of the degree of panic and lack of clear strategy within the highest ranks of the US financial institutions. Unprecedented Federal Reserve expansion of the Monetary Base in recent weeks sets the stage for a future Weimar-style hyperinflation perhaps before 2010.
Are we in a Depression? I was in Vancouver at the first of the week. Joe Martin had me on a panel at his January Gold show. I got a lot of questions while I was there about the state of the economy that is obviously on the minds of many. And then Ken Gerbino did a piece on Tuesday listing the reasons there would not be a depression. I have a world of respect for Ken; he's a friend and a very astute guy. In this case, he happens to be dead wrong. Readers should understand first of all, there is no definition for either recession or depression; they are variations of the same thing. So someone could rightly argue that the Great Depression wasn't really a Great Depression but more of a Great Recession on Crack. There is no line in the sand as it were. In 1932 we were the world's greatest creditor nation. Today we are the world's greatest debtor nation. Anyone who can read has known since 2001 when Treasury Secretary Paul O'Neil released his study on the state of US finances that we are essentially bankrupt as a nation. At that time we were some $43 trillion in debt. It's more like $100 trillion and growing daily now.
'Buy American' hotly debated Business groups opposed The first of what might be many trade disputes during the Obama presidency erupted on his first full day in the White House. On Jan. 21, the House Appropriations Committee voted 55-0 for an amendment increasing the "Buy American" mandate for infrastructure projects funded by the $819 billion stimulus bill. The amendment, introduced by Rep. Peter J. Visclosky, an Indiana Democrat who chairs the Congressional Steel Caucus, would require the use of American-made iron and steel for infrastructure projects funded by the stimulus bill. Sen. Byron L. Dorgan, North Dakota Democrat, has introduced an even more restrictive "Buy American" mandate in the Senate. "If we are going to expend such a massive sum of money, it must be spent on American products and workers," said Mr. Visclosky, who noted that the U.S. steel industry is operating at 44 percent of capacity.
US-EU trade war looms as Barack Obama bill urges 'Buy American' The prospect of a trade war between the US and Europe is looming after "Buy American" provisions were added to President Barack Obama's $820 billion stimulus package. The EU trade commissioner vowed to fight back after the bill passed in the House of Representatives late on Wednesday included a ban on most purchases of foreign steel and iron used in infrastructure projects. The Senate's version of the legislation, which will be debated early next week, goes even further, requiring that any projects related to the stimulus use only American-made equipment and goods. The inclusion of protectionist measures has quickly raised hackles in Europe. Catherine Ashton, the EU trade commissioner, said: "We are looking at the situation. The one thing we can be absolutely certain about, is if a bill is passed which prohibits the sale or purchase of European goods on American territory, that is something we will not stand idly by and ignore."
US-China currency war eclipses Davos, and threatens the world Turning a corner in the labyrinthine corridors of the Davos nerve-centre, I ran smack into Chinese premier Wen Jiabao - followed by a regiment of retainers and senior offices in full regalia. They have not quite adapted to the "sport" dress code of capitalism in Alpine retreat. Jeroen van der Weer - a Davos stalwart - wears horrendous corduroy trousers (pink sometimes) with a 1950s-era Tyrolean woolly. I dread to think how they react to Swiss prices if they venture into the restaurants. Mr Jiabao smiled at me benignly, but he is not in a good mood. Indeed, he is fuming over the remarks by US Treasury Secretary Tim Geithner that China was "manipulating" its currency to gain market share. Reports were circulating this afternoon in Davos that Mr Jiabao erupted into a tirade after lunch at the mere mention of Mr Geithner's name.
Max Keiser : Tim Geithner's currency war with China Max Keiser gives his take on Timothy Geithner's ruffling feathers of China about the currency war.
Russian prime minister Vladimir Putin calls for end of dollar stranglehold Russian prime minister Vladimir Putin has called for concerted action to break the stranglehold of the US dollar and create a new global structure of regional powers. "The one reserve currency has become a danger to the world economy: that is now obvious to everybody," he said in a speech at the World Economic Forum. It is the first time that a Russian leader has set foot in the sanctum sanctorum of global capitalism at Davos. Mr Putin said the leading powers should ensure an "irreversible" move towards a system of multiple reserve currencies, questioning the "reliability" of the US dollar as a safe store of value. "The pride of Wall Street investment banks don't exist any more," he said.
Be afraid: US protectionist stance echoes 1930s disaster The US Congress has been busily adding knee-jerk, selfish provisions to Barack Obama's giant fiscal stimulus package to favour American iron and steel companies. This is the sort of shortsighted protectionism that led the world down its disastrous path in the 1930s. No wonder the European Commission is worried. We all should be. Restrictions on trade such as the raising of tariffs and other barriers to imports are held to be responsible for making the depression of the 1930s worse. The worse the depression got, the more the peoples of the world suffered. In some countries extremist politicians became more popular. We are already seeing a wave of social unrest across Europe including Thursday's big strike in France.
Stimulus Package: There Is No Free Lunch As the House passes its version of the $819 billion dollar "stimulus package" and the Senate readies their nearly $900 billion dollar response, investors are going to have their hands full deciding exactly how to navigate the ramifications. Let me start by saying that I am optimistic for America, the global economy, and our investment approach. Dynamic markets always provide opportunity that can be exploited by savvy traders. Government investment in renewable energy programs, infrastructure repair and expansion, and health care initiatives will certainly benefit some growth companies that operate in these sectors. It is my job to uncover these opportunities for investment returns. However, I would be less than honest if I didn't voice concerns over the power we are giving the federal government over what I would consider to be the "private sector economy." My mother used to tell me "there is no such thing as a free lunch" and that is certainly true in politics and economics.
An $800 Billion Mistake As a conservative economist, I might be expected to oppose a stimulus plan. In fact, on this page in October, I declared my support for a stimulus. But the fiscal package now before Congress needs to be thoroughly revised. In its current form, it does too little to raise national spending and employment. It would be better for the Senate to delay legislation for a month, or even two, if that's what it takes to produce a much better bill. We cannot afford an $800 billion mistake. Start with the tax side. The plan is to give a tax cut of $500 a year for two years to each employed person. That's not a good way to increase consumer spending. Experience shows that the money from such temporary, lump-sum tax cuts is largely saved or used to pay down debt. Only about 15 percent of last year's tax rebates led to additional spending.
Gerald Celente Global Economic Meltdown Pt 1/2 We're going into the collapse of '09; commercial real estate collapse is next.
Gerald Celente Global Economic Meltdown Pt 2/2
White House shows tilt to $1 trillion 'bad bank' Crucial lenders would be helped The Obama administration is leaning toward setting up a "bad bank" that would buy toxic loan assets from large troubled banks such as Citigroup in a major new program that would be run by the Federal Deposit Insurance Corp. and is likely to cost at least $1 trillion. The program could be announced as early as Monday as part of a comprehensive plan to address burgeoning housing foreclosures and credit problems, said banking and federal officials familiar with the administration's deliberations. Senate Banking, Housing and Urban Affairs Committee Chairman Christopher J. Dodd, Connecticut Democrat, told reporters Thursday that the "bad bank" would be part of a "combination of ideas" to deal with the twin crises in the banking and housing markets, adding that he "wouldn't be surprised" if the Obama administration initially funded it out of the $700 billion Wall Street bailout program.
Does any Know Where the Economy is Going? The U.S. economy has been in a recession for more than a year now. The current administration is now debating an additional stimulus package to help turn the economy around. Lead by followers of John Maynard Keynes, the father of deficit spending, the U.S. government is bent on spending its way out of the recession. Do these programs have a chance to help the economy recover and start a new long-term economic expansion? This is the first of a three part series on the prospects for the economy. Without a road map, the current leaders of our economy are following the theory without any guideposts or road maps based on historical experience. They are taking a significant risk. First, we will look at the mess we are in. Then their answer followed by two other possible outcomes.
Economic Signs Turn From Grim To Worse Another Wave of Evidence Of a Deepening Recession On the eve of what is expected to be the clearest evidence yet of the nation's deepening recession, bad news rolled in from across the economy and the world. Sales of new homes in December plummeted, corporations announced plans to cut another 13,000 U.S. jobs, unemployment claims jumped and a troubled icon of U.S. manufacturing, Ford Motor Co., yesterday announced a massive loss. Early this morning in Japan, the government there announced that factory output had fallen by 9.6 percent and joblessness in the world's second-largest economy jumped to 4.4 percent, the largest increase in 41 years.
Economy likely shrank at fastest clip since '82 Economy's fourth-quarter performance probably worst in quarter-century; outlook remains dim The country tumbled deeper into recession and probably logged its worst economic performance in a quarter-century during the final three months of last year as battered consumers and businesses throttled back spending. The U.S. economy is deteriorating at an alarming clip as the housing, credit and financial crises -- the worst since the 1930s -- feed on each other in a vicious cycle that has proven difficult for Washington policymakers to break.
Opec pledges to push oil above $50 Opec members need an oil price above $50 a barrel to make exports worthwhile, the head of the cartel said today, adding that more production cuts were possible this year. "We are not happy with $40 even $50 a barrel," Abdalla Salem El-Badri, Opec Secretary-General, told a panel discussing energy security at the World Economic Forum in Davos. Even $50 did not guarantee a "decent income for our countries", he said, adding: "I hope that the price will pick up ... a $50 price will not permit us to invest." Asked about further cuts by the cartel, he said: "If we still have some downward problems [on prices], Opec will not hesitate to take some quantity out of the market.
The Real Long-Run Value of Gold, Part I "Gold must hit $2,200 an ounce to match its real peak of Jan. 1980. Or so almost everyone thinks..." WHAT'S IN A NUMBER...? Ignoring the day-to-day noise, more than a handful of gold dealers and analysts reckon gold will hit $2,200 an ounce before this bull market is done. Why? Because that's the peak of 1980 revisited and re-priced in today's US dollars. Simple, right? Too simple by half, in fact. First, betwixt spreadsheet and napkin, there's often a slip. Several targets you'll find out here on the net put the old 1980 top nearer $2,000 in today's money. One Gold Coin dealer puts the figure way up at $2,400 an ounce.
Silver investigation: Stakes are enormous If the US regulator's current investigation into the silver futures market is looking at allegations of ongoing price manipulation it is the first of its kind - according to a former CFTC director of enforcement. Previous Commodity Futures Trading Commission (CFTC) investigations have been into market manipulations that have already taken place. The potential for the current silver investigation to halt an ongoing manipulation could have significant implications for the price of silver.
How realistic is a North American currency? Uniting U.S., Canada, Mexico money could result from crisis "World, hold on. Instead of messing with our future, open up inside." -- Bob Sinclair Thomas Jefferson once said: "When you reach the end of your rope, tie a knot in it and hang on." As the global financial system pushes on a string, investors are desperately trying to hold tight. The New World Order is upon us, full of hope, promise and a fair amount of fear. In our recent discussion regarding the direction of our country, we noted the risks of catering to conventional wisdom and the implications for the U.S. dollar. See MarketWatch column on New World Order. The Minyanville mantra is to provide financial news you need to know before you know you need it. That's a fine line to walk, as foresight often flies in the face of mainstream acceptance.
A Response to My Critics by Peter Schiff, Euro Pacific Capital My popularity on television and the internet has led a very small money manager to use his popular financial blog to promote his fledgling business by attacking the recent poor performance of my long-term investment strategy. The post is causing quite a stir and compels me to provide some badly needed context. To achieve his ends, this individual has distorted much of what I have been saying and writing, and has twisted the facts to support his own preconceived conclusion. In essence, his piece is nothing more than an overt advertisement (and a highly deceptive one at that) to use my popularity to advance his career. In so doing he has given my critics, particularly some who have been embarrassed by their roles in the "Peter Schiff was Right" video, their moments of retribution. In addition, some members of the press who have never been among my greatest fans are seizing the opportunity to discredit me as well. The crux of the blogger's arguments are that my beliefs in "decoupling, hyperinflation, and that the dollar is going to zero" have been completely discredited by the events of 2008, and that the resulting investment losses suffered by my clients last year confirms the fatal flaws in my approach.
Chinese Premier Blames Recession on U.S. Actions - $$ Beijing Rethinks Some of Its American Investments Chinese Premier Wen Jiabao squarely blamed the U.S.-led financial system for the world's deepening economic slump, in the most public indication yet of discord between the U.S. government and its largest creditor. Leaders in China, the world's third-largest economy, have been surprised and upset over how much the problems of the U.S. financial sector have hurt China's holdings. In response, Beijing is re-examining its U.S. investments, say people familiar with the government's thinking. Mr. Wen, the first Chinese premier to visit the annual global gathering of economic and political leaders in Davos, Switzerland, delivered a strongly worded indictment of the causes of the crisis, clearly aimed largely at the United States though he didn't name it. Mr. Wen blamed an "excessive expansion of financial institutions in blind pursuit of profit," a failure of government supervision of the financial sector, and an "unsustainable model of development, characterized by prolonged low savings and high consumption."
New bank bailout could cost up to $2 trillion Government officials seeking to revamp the financial bailout have discussed spending another $1 trillion to $2 trillion to help restore banks to health, the Wall Street Journal said, citing people familiar with the matter. The paper said the Barack Obama administration could announce its plans within days but has not yet determined the final shape of its new proposal, and the exact details could change. The administration is also seeking more effective ways to pump money into banks, and is considering buying common shares in the banks, according to the paper.
Don't forget those toxic assets Until banks get the bad stuff off their balance sheets, they stand no chance of returning to normal lending. It is hard to ignore the reality that the banking crisis is experiencing another significant flare-up. Headlines are becoming scary again, with questions now raised about the future of institutions (see Bank of America) that had been somewhat shielded from the brunt of the initial storm that broke out last September. At the core of the latest disturbing twist of events is the fact that banks, while in the midst of a severe recession, continue to be weighed down by an enormous amount of toxic assets on their balance sheets that policymakers somehow never got around to address.
William Seidman on 'bad banks' William Seidman, the former chairman of the Resolution Trust Corp., discusses his opinion of the "bad bank" remedy for the financial crisis. Seidman joins Reuters' Carrie Lee and Dan Burns.
Cost of shoring up U.S. banks may be in trillions The cost of restoring confidence in U.S. financial firms may reach $4 trillion if President Barack Obama moves ahead with a "bad bank" that buys up souring assets. The figure far exceeds even the most pessimistic estimates of how great the loan losses might be because there is so much uncertainty about default rates, which means the government may need to take on a bigger chunk of bank debt to ease concerns. Goldman Sachs economists said ideally the public sector would step in to remove the hardest-to-value assets, which would alleviate nagging worries about future losses and hopefully help get lending going again.
The real cost of TARP Kristen Roberts, Reuters Economics Specialist Editor joins Carrie Lee to discuss how the government's Troubled Asset Relief Program might ultimately cost taxpayers less than some might expect.
Americans receiving jobless benefits hits record Labor Department says number of Americans receiving unemployment benefits at all-time record The number of people receiving unemployment benefits has reached an all-time record, the government said Thursday, and more layoffs are spreading throughout the economy. The Labor Department reported that the number of Americans continuing to claim unemployment insurance for the week ending Jan. 17 was a seasonally adjusted 4.78 million, the highest on records dating back to 1967. That's an increase of 159,000 from the previous week and worse than economists' expectations of 4.65 million. As a proportion of the work force, the tally of unemployment benefit recipients is the highest since August 1983, a department analyst said.
Kodak posts 4Q loss, plans up to 4,500 job cuts Eastman Kodak loses $137 million in 4th-quarter, plans to cut up to 4,500 jobs Eastman Kodak Co. said Thursday it is cutting 3,500 to 4,500 jobs, or 14 percent to 18 percent of its work force, as it posted a $137 million fourth-quarter loss on plunging sales of both digital and film-based photography products. The photography products pioneer said its loss in the October-December period amounted to 51 cents a share. That compares with a year-ago profit of $215 million, or 75 cents a share.
Economic stimulus? Feds want your medical records Electronic database to include lawsuit, mental health, abortion, sexual details A little-discussed provision in President Obama's economic stimulus plan would demand that every American submit to a government program for electronic medical records without a choice to opt out, and it has privacy advocates more than a little alarmed. Patients might be alarmed, too, privacy advocates said, if they realized information such as documentation on abortions, mental health problems, impotence, being labeled as a non-compliant patient, lawsuits against doctors and sexual problems could be shared electronically with, perhaps, millions of people.
Senate Passes Health Insurance Bill for Children Immigrant Clause Opens Rift The Senate overwhelmingly approved legislation yesterday to provide health insurance to 11 million low-income children, a bill that would for the first time open the program to legal immigrant children and pregnant women. The State Children's Health Insurance Program, which is aimed at families earning too much money to qualify for Medicaid but not enough to afford private insurance, currently covers close to 7 million youngsters at a cost of $25 billion.
Jobless claims jump to record, durable orders slide The number of Americans claiming jobless benefits hit a record high in mid-January, while orders for long-lasting factory goods fell for a fifth month in December, according to data on Thursday that showed the economy in steep decline. Piling on the gloom for an economy mired in recession for more than a year, sales of newly built single-family homes slumped to their lowest levels since records started in 1963. The batch of bleak data cast doubt on whether the economy would begin to recover in the second half of the year, since stability in the housing market, the root of the worst financial crisis in more than 70 years, may be a prerequisite.
Ford reports $5.9 billion loss The U.S. automaker says that, despite increasing losses, it doesn't expect to have to ask the government for an emergency loan. Ford Motor reported that its ongoing losses soared in the fourth quarter, but the company reiterated it still does not need the federal bailout already received by its two U.S. rivals. Ford reported a net loss of $5.9 billion, or $2.46 a share, up from a loss of $2.8 billion in the same quarter a year ago. For the full year, Ford lost $14.6 billion, and the company has now lost nearly $30 billion over the past three years.
Eddie Bauer cutting jobs in Bellevue Struggling retailer Eddie Bauer said today it has eliminated 193 jobs, including 71 at its downtown Bellevue headquarters. The layoffs also include Eddie Bauer's information technology operations in the Chicago area, a distribution center in Columbus, Ohio, and a call center in New Brunswick, Canada. Together, they represent a 15 percent reduction in the company's non-store staff. Eddie Bauer now employs about 390 people at its headquarters. President and Chief Executive Officer Neil Fiske said the layoffs are part of a previously announced plan to cut up to $15 million from the company's operating cost structure this year. Eddie Bauer cut as much as $50 million last year. Calling the fourth-quarter retail environment "brutal," Eddie Bauer also announced recently that it will reduce the size of its board from 10 to seven members and freeze salaries.
LA man upset over job kills wife, 5 kids, himself A man who fatally shot his wife, five young children and himself Tuesday had earlier faxed a note to a TV station claiming the couple had just been fired from their hospital jobs and together planned the killings as a final escape for the whole family. "Why leave the children to a stranger?" Ervin Lupoe wrote, according to KABC-TV. The station called police after receiving the fax, and a police dispatch center also received a call from a man who stated, "'I just returned home and my whole family's been shot." Officers rushed to the home in Wilmington, a small community between the ports of Los Angeles and Long Beach, about 8:30 a.m., apparently within minutes of the killings. Officers could still smell the gunshot residue in the air.
Starbucks cutting 6,700 jobs, closing 300 cafes The Seattle-based coffee company is closing stores again and slashing significantly more jobs than expected to stem eroding profits. It's business as usual at a Starbucks in Ballard. But business overall is down for the coffee giant, which announced layoffs and store closures. All that penny-pinching advice about cutting back on your $3-a-day latte habit finally got through to the caffeine-addicted masses, who have pulled back so dramatically that they sent Starbucks into a tailspin. The Seattle-based coffee company is closing stores again and slashing significantly more jobs than expected to stem eroding profits. Starbucks surprised workers and Wall Street on Wednesday with plans to close 300 more stores, eliminating 6,000 store positions by fall. The firm will lay off 700 more workers in the next couple of weeks, including 350 people or about 11 percent of its Seattle headquarters.
NYC: 23,000 city jobs in danger of being cut More spending cuts loom on the horizon for New York City, which could see a $4 billion deficit in the new budget that starts July 1. New York City dwellers will have to cope with billions of dollars more in spending cuts and thousands of city workers could lose their jobs, under a plan the mayor is due to unveil Friday, according to a source familiar with the proposal. More than 23,000 city workers might lose their jobs through layoffs or attrition unless Mayor Michael Bloomberg convinces the state and U.S. governments and the city's approximately 300,000 workers to let him curb benefits, from Medicaid to pensions, said the source, who requested anonymity.
Florida beans and corn destroyed, potatoes delayed BELLE GLADE, Fla. - Cold weather damaged most of Belle Glade's winter green beans and sweet corn. As growers assessed damage from a series of freezes that struck south Florida growing regions during the overnight hours of Jan. 20-23, buyers should expect far fewer south Florida beans and corn. "All of our beans were wiped out," said Bryan Biederman, assistant sales manager for Pioneer Growers Co-op, one of the region's largest growers of beans and corn. "Any corn we had planted for the month of March has been wiped out. It was truly a setback for our winter program."
Global Worries Over U.S. Stimulus Spending DAVOS, Switzerland - Even as Congress looks for ways to expand President Obama's $819 billion stimulus package, the rest of the world is wondering how Washington will pay for it all. Few people attending the World Economic Forum question the need to kick-start America's economy, the world's largest, with a package that could reach $1 trillion over two years. But the long-term fallout from increased borrowing by the United Stated government, and its potential to drive up inflation and interest rates around the world, seems to getting more attention here than in Washington. "The U.S. needs to show some proof they have a plan to get out of the fiscal problem," said Ernesto Zedillo, the former Mexican president who helped steer his country through a financial crisis in 1994. "We, as developing countries, need to know we won't be crowded out of the capital markets, which is already happening." Mr. Zedillo said that Washington, unlike most other countries, had the option of simply printing more money, because the dollar was a reserve currency for the rest of the world. Over the long run, that could force long-term interest rates higher and drive down the value of the dollar, undermining the benefits that come with its special status.
Grim Japan and U.S. figures show world crisis deepening Japan sank deeper into recession with industrial output tumbling and inflation slipping to almost zero, while key U.S. data later on Friday were also expected to mirror the worsening global financial crisis. Japan's industrial production fell a record 9.6 percent in December, while annual core inflation slowed to a mere 0.2 percent. Rising unemployment, slowing household spending and no improvement in the industrial outlook added to fears that Japan was flirting with deflation and would post a horror GDP figure in February if exports do not bail it out.
Davos . . . .
by Ambrose Evans-Pritchard WEF 2009:I will never come back to Davos Damn, we are all sitting here in open-mouthed astonishment. Turkish premier Tayyip Erdogan has just stormed off the rostrum after calling Israel's president Shimon Peres a "killer" to his face. Mr Peres in turn has been thundering and fulminating at the top of his voice for 25 minutes -- while the UN Secretary-General Ban Ki-moon sat in embarrased silence next to him, mostly looking at his shoes. The incensed leaders then walked out passed packed ranks of trembling Davos enthusiasts - all believers in civilized comity, and all horrified by this display of raw and visceral feeling - into a hall where a light-hearted Strauss Waltz being played with shocking insouciance. If we journalists missed our deadlines - and leaving a big gap in our newspapers tomorrow - you must forgive us, because we none could concentrate on anything as this extraordinary spectacle of Mid-East passion unfolded before our eyes. Mr Peres -- winner of the 1994 Nobel Peace prize -- had reason to be angry. The Turkish leader called today for the Obama administration to list Israel as a terrorist state for alleged atrocities against civilians in Gaza.
Turkish Prime Minister walks off stage over Gaza Turkish Prime Minister Recep Tayyip Erdogan had enough of Israeli President Peres' lies and walked off the stage in Davos saying he will never come back. Peres basically tried to say that there had been no siege and there has been no starvation in Gaza during the massacre. When does he give back that Nobel prize? If only others had the integrity of Erdogan.
Protectionist fear grips world forum Threatens trade, leaders say DAVOS, Switzerland | Business and political leaders attending the annual World Economic Forum expressed fears Thursday that growing protectionist pressures could undermine international trade - one of the few fully functioning pillars of the global economy. "Everybody here is talking about protectionism. There's not a prime minister present not talking about protectionism," said Peter Sutherland, chairman of BP and Goldman Sachs International. Those fears were aggravated by Wednesday's addition of a "Buy American" steel provision to an $819 billion economic stimulus package to help the U.S. economy navigate out of recession. The European Union was quick to put Washington on notice. "We are looking at this very carefully. If European goods are to be excluded from the U.S., we would not stand idly by," Peter Power, spokesman for EU Trade Commissioner Catherine Ashton, told The Washington Times.
Leaders of Turkey and Israel clash at Davos panel DAVOS, Switzerland: Prime Minister Recep Tayyip Erdogan of Turkey walked off the stage after an angry exchange with the Israeli president, Shimon Peres, during a panel discussion on Gaza at the World Economic Forum on Thursday, and vowed never to return to the annual gathering. Erdogan apparently became incensed after he was prevented by the moderator from responding to remarks by Peres on the recent Israeli attack. The panel was running late and Peres was to have had the last word, participants said. Panel discussions at Davos are strictly restricted to one hour, but Erdogan insisted on responding to Peres. Red faced, and with one hand grasping the arm of the moderator, David Ignatius of the Washington Post, Erdogan turned to the Israeli president. "Peres, you are older than me," he said. "Your voice comes out in a very high tone. And the high tone of your voice has to do with a guilty conscience. My voice, however, will not come out in the same tone."
At Davos, an upside-down world Business leaders are arguing for more regulation, while politicians are appealing for a hands-off approach. At last year's gathering of the world's elite at this Alpine ski resort, the tone was one of unbridled optimism. CEOs, government leaders and heads of NGOs had the luxury to discuss the rapid growth in new technologies, innovation in the financial industry (oops), and ways to combat hunger, disease and global warming. This year's World Economic Forum conjures a radically different zeitgeist. At first glance, some things about Davos haven't changed. Attendance is still strong, with at least 2,500 movers and shakers wandering the halls and standing-room-only crowds at many of the events -- although one session on how business could help make the world better was sparsely attended.
Rupert Murdock warns that government may not work
Davos 2009: Sour CEO survey More than fourteen hundred business leaders are here in Davos - and unsurprisingly - their mood is more than a little subdued, according to a survey. Consultants PwC, have been asking why in a new poll released in Davos this week. Only one in five expect growth this year, while only a third are very confidant their business will grow in the next three years.
Russia's S7 cancels Boeing 787 order Russia's S7 has become the first airline to cancel a major contract for Boeing Co's 787 Dreamliner, as the country's airlines face their worst-ever financial crisis. The order for 15 787s, due to be delivered in 2014, was worth about $2.4 billion at list prices. The cancellation is a blow for Boeing, whose new, lightweight jetliner has not yet left the ground and is about two years behind schedule. S7, the main domestic rival to Russia's flag carrier Aeroflot , will seek to lease the planes instead, the company said on Thursday.
Davos 2009: Pakistan PM interview Prime Minister Yousaf Raza Gilani discusses terrorism, plus relations with India and the new Obama administration. Pakistan faces the world's most intractable problems every day. Instability at home, instability on its borders and instability in its economy. Last year it went through a political revolution after Benazir Bhutto was assassinated and army chief Pervez Musharraf stood down as head of state. Now a new government headed by Prime Minister Yousaf Raza Gilani has to face these problems.
Davos 2009: Economies too fragile Steps need to be taken to make market economies more resilient, said European Central Bank President Jean-Claude Trichet The financial crisis has shown that market economies are too fragile and steps need to be taken to make them more resilient, said European Central Bank President Jean-Claude Trichet in an interview on the 'Davos Today' programme. He added that all options for solving the crisis should be explored and that vested interests should not be allowed to get in the way Trichet said that while granting the European Central Bank responsibility for banking supervision was one option being explored, the Bank's governing council had not reached a position on the idea.
Davos 2009: Soros on bank rescues (George Soros voiced concerns about the details of current bank rescue plans in an interview on the 'Davos Today' TV programme. The model of placing 'toxic assets' in a 'bad bank' in order to get banks lending again requires more thought, said George Soros, who believes that changes to the approach will be needed if banks are to gain the confidence to lend again. Soros also reiterated his belief that the credit crunch has proved that unregulated financial markets are unstable describing the system as 'broken'.
IMPORTANT! Here's something you CAN do to help someone else; watch a video. . . . Help Support Victims of Domestic Violence Few consider the wealthy to be included among victims of domestic violence. Please watch this video to the end, at YouTube, so one dollar will be donated to help curb domestic violence in America. It's an eye opener, where you would never expect to find it.
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