By Kuthula Matshazi
Posted to the web: 18/02/2009 23:24:11 NewZimbabwe.com
FINANCE Minister Tendai Biti was recently quoted in the media apportioning blame to the Reserve Bank of Zimbabwe for the country’s economic problems. He vowed that he would reduce its role to a minimum.
At a time when Biti’s MDC party has joined an inclusive government, it wants to make a mark by announcing policies that would seem to be different from those of Zanu PF. Many, including Biti who subscribe to the lasseiz faire economic doctrine, argue that Zanu PF’s “big government” and the RBZ’s quasi-fiscal operations were responsible for leading the country to an economic depression. More...
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Monday, February 23, 2009
'Nationalize' the Banks
Dr. Doom says a takeover and resale is the market-friendly solution.
The kind of government interference in the economy that we saw in the last year of Bush was unprecedented. The central bank -- supposed to be the lender of the last resort -- became the lender of first and only resort! With our recapitalizing of financial institutions, and massive government intervention in the markets, we've already crossed a significant bridge."
By TUNKU VARADARAJAN, Wall Street Journal
21 February 2009
Yet another reason why bank nationalization is a good idea, Mr. Roubini continues, is that "we started with banks that were too big to fail, but what has happened, in the process, is that these banks have become even-bigger-to-fail. J.P. Morgan took over Bear Stearns and WaMu. BofA took over Countrywide and then Merrill. Wells Fargo took over Wachovia. It doesn't work! You can't take two zombie banks, put them together, and make a strong bank. It's like having two drunks trying to keep each other standing.
"So if you took over a big bank, and you split the assets in three or four pieces, maybe you create three or four regional or national banks, and they're stronger! Nationalization -- or 'temporary receivership,' if you like, if the N-word is a political liability -- is an occasion to undo the sort of consolidation that has created an even bigger systemic problem. And the only way to do it is by essentially taking them over and breaking them up." More...
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The Problem With 'Nationalization'
The kind of government interference in the economy that we saw in the last year of Bush was unprecedented. The central bank -- supposed to be the lender of the last resort -- became the lender of first and only resort! With our recapitalizing of financial institutions, and massive government intervention in the markets, we've already crossed a significant bridge."
By TUNKU VARADARAJAN, Wall Street Journal
21 February 2009
Yet another reason why bank nationalization is a good idea, Mr. Roubini continues, is that "we started with banks that were too big to fail, but what has happened, in the process, is that these banks have become even-bigger-to-fail. J.P. Morgan took over Bear Stearns and WaMu. BofA took over Countrywide and then Merrill. Wells Fargo took over Wachovia. It doesn't work! You can't take two zombie banks, put them together, and make a strong bank. It's like having two drunks trying to keep each other standing.
"So if you took over a big bank, and you split the assets in three or four pieces, maybe you create three or four regional or national banks, and they're stronger! Nationalization -- or 'temporary receivership,' if you like, if the N-word is a political liability -- is an occasion to undo the sort of consolidation that has created an even bigger systemic problem. And the only way to do it is by essentially taking them over and breaking them up." More...
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The Problem With 'Nationalization'
U.S. Eyes Large Stake in Citi
By DAVID ENRICH and MONICA LANGLEY, Wall Street Journal
Citigroup Inc. is in talks with federal officials that could result in the U.S. government substantially expanding its ownership of the struggling bank, according to people familiar with the situation.
While the discussions could fall apart, the government could wind up holding as much as 40% of Citigroup's common stock. Bank executives hope the stake will be closer to 25%, these people said.
Any such move would give federal officials far greater influence over one of the world's largest financial institutions. Citigroup has proposed the plan to its regulators. The Obama administration hasn't indicated if it supports the plan, according to people with knowledge of the talks. More...
Citigroup Inc. is in talks with federal officials that could result in the U.S. government substantially expanding its ownership of the struggling bank, according to people familiar with the situation.
While the discussions could fall apart, the government could wind up holding as much as 40% of Citigroup's common stock. Bank executives hope the stake will be closer to 25%, these people said.
Any such move would give federal officials far greater influence over one of the world's largest financial institutions. Citigroup has proposed the plan to its regulators. The Obama administration hasn't indicated if it supports the plan, according to people with knowledge of the talks. More...
Saturday, February 21, 2009
US, China to ‘to help lead the world recovery’
"Ahead of her arrival in Beijing, Mrs Clinton said that disagreements with China over Tibet and human rights should not be allowed to dominate the agenda".
By Geoff Dyer in Beijing
Published: February 21 2009 14:00 Last updated: February 21 2009 16:13
The US and China pledged to step up a high-level dialogue between the two countries which will address the global financial crisis, climate change and security issues.
Hillary Clinton, US secretary of state, said the two governments would work together “to help lead the world recovery” and that she appreciated China’s continued purchases of US Treasury bonds.
Hillary Clinton, US secretary of state, said the two governments would work together “to help lead the world recovery” and that she appreciated China’s continued purchases of US Treasury bonds.
Speaking on her first visit to Beijing since taking over at the State department, Mrs Clinton said that human rights issues would take a back seat to the discussions about the economy, North Korea and global warming. More...
By Geoff Dyer in Beijing
Published: February 21 2009 14:00 Last updated: February 21 2009 16:13
The US and China pledged to step up a high-level dialogue between the two countries which will address the global financial crisis, climate change and security issues.
Hillary Clinton, US secretary of state, said the two governments would work together “to help lead the world recovery” and that she appreciated China’s continued purchases of US Treasury bonds.
Hillary Clinton, US secretary of state, said the two governments would work together “to help lead the world recovery” and that she appreciated China’s continued purchases of US Treasury bonds.
Speaking on her first visit to Beijing since taking over at the State department, Mrs Clinton said that human rights issues would take a back seat to the discussions about the economy, North Korea and global warming. More...
Monday, February 2, 2009
Obama’s “Buy American” a threat to international trade
By Kuthula Matshazi
While the world has been preoccupied dealing with the fallout of the global financial crisis in order to rescue the global economy, another danger looms. That danger is trade protectionism, which is being practiced by many countries but is now epitomized by the huge United States US$825 billion stimulus package.
The Bill, that has won the support of the US House of Representatives, contains a provision called “Buy American” that mandates all public works projects to procure iron and steel made in the US only. A similar Bill emanating from the Senate is reported to be considering the “Buy American” provision for all manufactured goods bought with stimulus funds. More...
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How to tame this WTO monster
While the world has been preoccupied dealing with the fallout of the global financial crisis in order to rescue the global economy, another danger looms. That danger is trade protectionism, which is being practiced by many countries but is now epitomized by the huge United States US$825 billion stimulus package.
The Bill, that has won the support of the US House of Representatives, contains a provision called “Buy American” that mandates all public works projects to procure iron and steel made in the US only. A similar Bill emanating from the Senate is reported to be considering the “Buy American” provision for all manufactured goods bought with stimulus funds. More...
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How to tame this WTO monster
Sunday, February 1, 2009
The humbling of Davos Man
By John Gapper
Published: January 28 2009 19:04 Last updated: January 28 2009 19:04
Having journeyed this week up a Swiss mountain valley to the World Economic Forum’s annual meeting in Davos, I find myself in select company. Several members of the global business elite discovered at the last minute that they had pressing business elsewhere.
Where is John Thain, the former chief executive of Merrill Lynch? Back in New York trying to rescue his good name after being pushed out by Bank of America and having details of his $1.2m (€907,000, £839,000) office refurbishment leaked. And where is Sam DiPiazza, chief executive of PwC? In India, where two PwC auditors have been held by police over their role in the alleged $1bn fraud at Satyam Computers. More...
Published: January 28 2009 19:04 Last updated: January 28 2009 19:04
Having journeyed this week up a Swiss mountain valley to the World Economic Forum’s annual meeting in Davos, I find myself in select company. Several members of the global business elite discovered at the last minute that they had pressing business elsewhere.
Where is John Thain, the former chief executive of Merrill Lynch? Back in New York trying to rescue his good name after being pushed out by Bank of America and having details of his $1.2m (€907,000, £839,000) office refurbishment leaked. And where is Sam DiPiazza, chief executive of PwC? In India, where two PwC auditors have been held by police over their role in the alleged $1bn fraud at Satyam Computers. More...
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