PROLOGUE: LE METROPOLE CAFE/INTERNATIONAL FORECASTER
"Recently, the stock market has had a quick spectacular
burst to the upside; we do not expect that to continue.
Now that 1% of Americans hold 40% of the wealth we'd
expect that concentration to become a detriment. In
the sense that this is not money to feed the economy.
These people don't go to the mall everyday; in fact
most tend to be thrifty. This kind of wealth breeds
arrogance. Incidentally, the concentration of wealth
in 1929 was only 36%. These are the same elitists who
were part of JP Morgan Chase, Citicorp, Goldman Sachs,
Enron, WorldCom and Tyco, etc. What they are doing
is disgracing themselves through greed and the public
has lost confidence in them."
Looks like they are goint to send one of these elitists
to take over the vacant position at the US Treasury.
=================================================================
Retail banking
Citi slickers
Dec 5th 2002 | DüSSELDORF AND TOKYO
From The Economist print edition
Local banks are struggling, so what is Citigroup doing right?
SIMILARITIES between the ailing economies of Germany and Japan are a hot topic, particularly in banking and insurance. Japan's banks are undeniably in worse shape than Germany's: some of their balance sheets are propped up by little more than regulatory indulgence. German banks are desperate to cut costs, perhaps by merging—this week a union of two of the biggest, HypoVereinsbank and Commerzbank, was rumoured.
Both banking industries have to cope with a distorted retail market. So why are the retail arms of America's Citigroup doing well in both countries? At Citigroup Japan—which celebrated its 100th birthday this year—the retail division pulled in profits of $928m in the financial year to March, twice what it made two years before. In Germany, Citibank Privatkunden boasted a cost-income ratio of just 44% in the first nine months of 2002, 40-50% below those of big private banks' retail operations.
http://www.economist.com/finance/displayStory.cfm?story_id=1483180
and [pay per view] on the front page
Crédit Lyonnais faces indictment
American prosecutors have empanelled a grand jury to indict Crédit Lyonnais
Dec 5th 2002
=================================================================
NEW INDEX A TOOL FOR VANGUARD RIP-OFF
By BETH PISKORA
December 8, 2002 --
VANGUARD Investments, the mutual fund company that is most synonymous with index investing, just introduced a new and innovative way to scam its loyal shareholders.
Instead of tracking the well-established and well-known S&P 500 index, Vanguard is going to change its index benchmark for eight of its funds to a brand new index to be launched next year by Morgan Stanley.
It is impossible to know how these new stock market averages will perform, since they haven't even been started yet.
But Vanguard didn't really talk much about performance when it told shareholders it would be making this change.
Vanguard did not mention the legal troubles it has had with S&P over the years, but it is reasonable to think that's the real reason for the change.
.............
http://www.nypost.com/business/63955.htm
AND
STOCKING STUFFERS
By JEANNE BURKE
Shoppers may be crowding into department stores to buy holiday gifts, but when it comes to purchasing the stocks of retailers, their pocketbooks are slammed shut.
http://www.nypost.com/business/63957.htm
A HOME INSURANCE PREMIUM HIKE IS NEXT
By DORI PERUCCI
Property owners just getting used to the idea of Mayor Bloomberg's 18.5 percent property-tax hike should brace themselves for another financial shock - a double-digit increase in homeowner's insurance premiums.
http://www.nypost.com/business/63958.htm
================================================================
Confiscatory Deflation: The Case of Argentina
by Joseph T. Salerno
[Posted February 13, 2002]
While assorted financial journalists, market pundits, policy wonks, Fed governors and even mainstream macroeconomists have been thrown into a panic by the slight whiff of price deflation they detected in the last few months in the U.S. economy, they have almost completely ignored the wrenching confiscatory deflation that is now going on in Argentina.
Confiscatory deflation is a particular category of deflation. It is inflicted on the economy by the political authorities as a means of obstructing an ongoing bank credit deflation that threatens to liquidate an unsound financial system built on fractional reserve banking. Its essence is an abrogation of bank depositors' property titles to their cash stored in immediately redeemable checking and savings deposits.
A glaring example of confiscatory deflation is the current situation in Argentina. In 1992, after yet another bout of hyperinflation, Argentina pegged its new currency, the peso, to the U.S. dollar at the rate of 1 to 1. In order to maintain this fixed peso/dollar peg, the Argentine central bank pledged to freely exchange dollars for pesos on demand and to back its own liabilities, consisting of peso notes and commercial bank reserve deposits denominated in pesos, almost 100 percent by dollars.
Unfortunately this arrangement--which inspired confidence in international lenders because it was approved by the IMF and therefore carried its implicit bailout guarantee--did not prevent a massive and inflationary bank credit expansion
MORE
http://www.mises.org/fullstory.asp?control=890
AND
12/07 13:10
IMF's Koehler Says Lender Worried About Brazil Prices (Update1)
By James Craig
Sao Paulo, Dec. 7 (Bloomberg) -- The International Monetary Fund's Managing Director Horst Koehler said the lending agency is worried about a surge in Brazil's inflation and urged the new government to grant the central bank autonomy to fight it.
http://quote.bloomberg.com/fgcgi.cgi?touch=1&btitle=Top%20News&T=sa_content.ht&s=APfI5kRXASU1GJ3Mg
=================================================================
US slide prompts Bush purge
Treasury chief axed amid gloom
Suzanne Goldenberg in Washington, David Teather in New York and Charlotte Denny
Saturday December 7, 2002
The Guardian
George Bush performed a night of the long knives on his economic team yesterday as the White House took fright at the deteriorating state of the US and world economy.
http://www.guardian.co.uk/business/story/0,3604,855648,00.html
================================================================
Thursday, 5 December, 2002, 13:45 GMT
HK banks worried by subversion bill
Hong Kong's leader listens closely to Beijing
Several foreign banks in Hong Kong are deliberating whether to scale down their presence in the territory if its government enacts proposed new treason laws.
The legislation is highly controversial and there are widespread fears in Hong Kong that it will harm civil liberties.
http://news.bbc.co.uk/2/hi/business/2545211.stm
AND
Friday, 6 December, 2002, 11:05 GMT
Manufacturing slump continues
Manufacturers are still suffering falling demand
http://news.bbc.co.uk/2/hi/business/2549103.stm
AND
Friday, 6 December, 2002, 16:54 GMT
Angolan finance minister sacked
President dos Santos appoints a former IMF employee to the finance ministry following allegations of widespread corruption.
http://news.bbc.co.uk/2/hi/africa/2550565.stm
================================================================
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