This legislation would require the Secretary of the Treasury to identify and break up institutions that are deemed too big to fail. This is the third time Congressman Sherman has introduced similar legislation in the House, and the third time Senator Sanders has introduced such legislation in the Senate. The only thing that has changed is the biggest banks have gotten even bigger – 38% bigger than 2008.
“Too big to fail should be too big to exist,” said Congressman Sherman who has advocated this position since 2009. “Never again should a financial institution be able to demand a federal bailout. Today they can claim: ‘if we go down, the economy is going down with us.’ By breaking up these institutions long before they face a crisis, we ensure a healthy financial system where medium-sized institutions can compete in the free market.”
“These medium-sized and smaller banks will be more inclined to make loans to small- and medium-sized businesses – which are the backbone of our economy. The legislation is endorsed by the Independent Community Bankers of America (ICBA), which represents over 6,000 of our nation’s 6,589 banks.”
Sherman continued, “Every financial institution should compete for funds based on the soundness of its balance sheet, and no financial institution should be able to claim that there is a special federal safety net available to its investors because of the institution’s sheer size.”
“In my view, no single financial institution should have holdings so extensive that its failure could send the world economy into crisis,” Senator Sanders said. “At the very least, no institution, no CEO in America should be above the law. If an institution is too big to fail, it is too big to exist.”
Richard Fisher, former President of the Federal Reserve Bank of Dallas, argued that when markets presume a systemically important institution has implicit government backing, access to capital is easier. A study by International Monetary Fund researchers showed a potential advantage of these firms as high as 80 basis points (.8%). Building on that estimation, Bloomberg News calculates taxpayers could be creating a subsidy of $83 billion dollars annually, roughly equal to the bank’s annual profits.
This legislation would require the Secretary of the Treasury to submit to Congress a list of all banks and other financial institutions that the Secretary believes have become too big to fail. Those entities deemed too large would then be broken up in a managed process of reorganization, so a single failure would no longer cause a catastrophic effect on the United States or global economy without a taxpayer bailout.
“Too Big to Fail” refers to any entity that has grown so large that its failure would have a catastrophic effect on the stability of either the financial system or the United States economy without substantial government assistance.
News courtesy: Congressman Sherman
Read more » http://sherman.house.gov/media-center/press-releases/congressman-sherman-and-senator-sanders-stand-together-to-reintroduce
bots aren’t just for corporate Goliaths — now even the little guy on Main Street is adopting them. The goal: to boost sales and productivity. But at what cost?
Take Sam Kraus, a Hungarian immigrant who founded what became Skyline Windows in 1921. In the early days, the tinsmith traveled around with a small cart to do his roofing and waterproofing work by hand.
Fast-forward to today, and the fourth-generation business based in New York City’s South Bronx has left the pushcart era far behind. Skyline, which has evolved into a custom window manufacturer and installer, now relies on robots to do some of its work. In the factory in Woodridge, New Jersey, where it makes its windows, Skyline uses a $150,000 computer-operated machine to automate tasks like cutting holes in the metal and two $20,000 robots to install its windows, which sometimes weigh 600 pounds.
“It allows us to be more efficient—and our plan is to buy more of these robots when we can,” said senior vice president Matt Kraus, whose profitable firm brings in about $70 million in annual revenue and employs about 350 people.
Kraus is one of many entrepreneurs who are discovering that robots can be a powerful tool for growing a small company—even one with its roots in an old-line business. In the manufacturing industry, a recent study by Boston Consulting Group found that by 2025 robots will do about 25 percent of all industrial tasks—and that inexpensive robots are becoming increasingly available to smaller companies. Robotics are also making it possible for more individuals to start businesses in industries where the need for a substantial labor force once posed a big barrier to entry.
“Automation is having a big impact,” said Martin Ford, author of “Rise of the Robots: Technology and the Threat of a Jobless Future,” due to be published May 5. “It’s both positive and negative.”
3-D printing is one example. Some tiny firms are already using 3-D printers to make prototypes and even manufacturing products on their own, Ford said. Others are sending their prototypes to China, where they make the products. That makes it easier for business owners to fatten their bottom line, but the flip side will be a decline in traditional jobs.
The future of jobs
“Businesses will need to hire no people or fewer people,” he said. “You can literally have one person start a manufacturing business.”
A decline in traditional jobs could lead to shrinking markets for small businesses, said Ford. “We need consumers out there who will buy what is created by the economy,” he said.
Courtesy: NBC News
Read more » http://www.nbcnews.com/tech/innovation/even-small-businesses-are-jumping-robot-bandwagon-n352186
Russian President Vladimir Putin has ratified a deal to establish a $100 billion foreign currency reserve pool for the BRICS group. The pool’s purpose is to protect national currencies from volatility in global markets.
The document was “to ratify the treaty on the establishment of a pool of foreign exchange reserves of the BRICS.”
On Wednesday the deal was ratified by Russia’s upper house of Parliament, the Federation Council. According to the deputy head of the Federal Council Committee for Budget and Financial Markets, Sergey Ivanov, the currency pool will primarily support the balance of payments of the BRICS member states.
“Realization of the agreement will also contribute to the effective protection of the national currencies against the volatility in the world currency markets,” Ivanov said.
The goal of the pool is so that BRICS member states can urgently replenish their liquidity from it in different proportions to resolve problems with their balance of payments.
China will make the biggest contribution to the pool – $41 billion. Russia, Brazil and India will donate $18 billion each, while South Africa’s investment will be $5 billion.
The fund is expected to be maintained by a managing council, a permanent committee and a coordinator who will be from the country of the current president.
In July Russia, Brazil, India, China and South Africa signed the document to a reserve currency pool worth over $100bn as well as $100bn BRICS Development Bank
BRICS represents 42 percent of the world’s population and roughly 20 percent of the world’s economy based on GDP, and 30 percent of the world’s GDP based on PPP, a more accurate reading of the real economy. Total trade between the countries is $6.14 trillion, or nearly 17 percent of the world’s total.
News courtesy: http://rt.com/business/255141-putin-brics-pool-currency/
THOSE in search of a thriving stockmarket, a stable currency and low inflation would not normally pitch up in Pakistan. It is more readily thought of as a pit of instability than as a source of opportunity. Yet Pakistan is enjoying a rare period of optimism about its economy.
The IMF reckons that the economy will grow by 4.7% next year, the fastest rate in eight years. Consumer prices rose by 2.5% in the year to March, the smallest increase for more than a decade. Twice already this year the central bank has lowered its benchmark interest rate. Some indicators are pointing to an upturn in spending. Compared with a year earlier, cement sales, which are a guide to how much construction is taking place, rose by 5.5% from July to March. Car sales rose by 22% over the same period.
A fall of two-fifths in the oil price is a huge slice of luck for a country such as Pakistan. It relies on imported fuel oil for two-fifths of its power supply and is prone to periodic balance-of-payments crises (see chart). The country’s import bill can easily overwhelm the foreign-exchange earnings from textile exports and the remittances that Pakistanis working in the Middle East and Europe send home. In 2013-14 Pakistan’s net import bill for oil came to $12.6 billion, or around 5% of GDP. But if oil prices stay low, Pakistan could save a total of $12 billion in the next three years, says the IMF. The money could be spent on things with more local content and give the economy a lift.
Dr Jim Penman believes Britons no longer have the genetic temperament that sparked the Industrial Revolution
By Sarah Knapton, Science Editor
Britain is experiencing the same decline as Rome in 100BC, with the collapse of civilisation inevitable, a scientist has warned.
Dr Jim Penman, of the RMIT University in Melbourne, believes Britons no longer have the genetic temperament to advance because of decades of peace and a high standard of living.
He claims that the huge success of the Victorian era will not be repeated because people in the UK have lost the biological drive for innovation.
Instead, Britain is existing in a period similar to the decades before the fall of the Roman Republic where social tensions were rife, the gap between the rich and poor was increasing and extremism was growing.
And when added to a growing distaste for military action, which has seen huge cuts the armed forces, by the end of the century the UK will no longer have the power, or will, to protect itself against a serious invading force, he predicts.
“There are certainly parallels between 100BC in the Roman Republic where things are starting to get pretty dodgy,” he said.
“It was a time when democracy was moving towards despotism, and in Britain we now see that politics is becoming much more about individuals rather than political parties. It’s about personalities. The two party system has started to break down.
“We live in a golden age where there have been no major wars in Europe for three quarters of a century. But the economy is stagnating and we’re having fewer children.
Read more » The Telegraph
See more » http://www.telegraph.co.uk/news/science/science-news/11562374/Britain-is-experiencing-same-decline-as-Rome-in-100BC.html
Tax breaks for the wealthy were meant to trickle through society to benefit all. It didn’t work and inequality just got worse, says an economist
ADVOCATES of trickle-down economics argue that, when the rich get extra income, they invest it and create more jobs – and a higher income – for others. Those people, in turn, spend their extra money. Eventually the effect trickles down the whole system, making everyone better off, in absolute terms.
So, what seems like a moral outrage – giving more to people who already have more – is in theory a socially benign action.
The trouble is it hasn’t worked. In the past three decades, states with pro-rich policies have seen economic growth slow, except in countries like China and Vietnam that needed to jump-start socialist economies.
In the UK, upward income redistribution since 1980 has seen the share of the top 1 per cent rise from 5 per cent of national income to over 10 per cent. Yet the annual growth rate of income per person has fallen from 2.5 per cent between 1960 and 1980 to 1.8 per cent between 1980 and 2013.
One reason is that the rich have not kept their end of the bargain – they didn’t invest more; and inequality, linked to poorer health and societal damage, worsened. Investment as a share of GDP used to be 18 to 22 per cent in the 1960s and 1970s but since then has been 14 to 18 per cent, except for a few years at the end of the 1980s.
Moreover, concentration of income at the top has boosted the political influence of the super-rich, allowing them to push for policies that benefit themselves but create harm in the long run. For example, the UK financial sector successfully lobbied for “light-touch regulation”, which enabled it to earn a lot but led to the 2008 financial crisis.
It is well established that a less equal society has lower social mobility. When talented people from less privileged backgrounds cannot move up the social ladder, the economy’s long-term dynamism suffers. An increasing number of studies show that, above a certain level, higher inequality harms growth. Some are by the International Monetary Fund and Organization for Economic Cooperation and Development, which didn’t use to be concerned about inequality.
Despite these failings, some politicians still back measures that benefit the wealthy, often citing trickle-down economics. In the UK, the Conservatives cut taxes for the top earners while in government. They want to slash inheritance tax for wealthier estates and cut the numbers paying higher-rate tax. The UK Independence Party has a similar stance on higher-rate tax and wants zero inheritance tax.
The 35-year experiment with trickle down economics has failed for most people. Unfortunately, there is too much money and power at stake for its true beneficiaries to accept this reality and end this approach.
This article appeared in print under the headline “Defying gravity”
Ha-Joon Chang is an economist at the University of Cambridge. His latest book is Economics: The user’s guide (Pelican)
Read more » http://www.newscientist.com/article/mg22630182.500-tax-cuts-for-top-earners-fail-because-the-theory-is-broken.html?utm_source=NSNS&utm_medium=SOC&utm_campaign=hoot&cmpid=SOC%257CNSNS%257C2015-GLOBAL-hoot#.VTwzliFVhHw
The unemployment rate in regional Australia has risen to 7.3 per cent, a 12-year high, as job demand shifts increasingly to major cities with the winding down of the mining construction boom.
Regional Australia has not experienced unemployment rates this high since March 2003, with regional NSW recording the largest increase in jobless rates in the past three months, particularly in the Hunter Valley and Newcastle – big coal-producing regions.
Regional Australia Institute (RAI) says analysis of this week’s Bureau of Statistics quarterly employment data shows the unemployment rate in regional Australia, in non-seasonally adjusted terms, remains structurally higher than in capital cities.
Read more » The Age
See more » http://www.theage.com.au/federal-politics/political-news/regional-unemployment-hits-12year-high-20150424-1msjaq.html
Australians’ living standards face the greatest threat in a generation, with no signs of strong wage growth, longer unpaid commuting times and a rise in workforce casualisation putting more pressure on middle- and lower-income households than they have faced in 20 years.
A new report from Per Capita, an independent think tank, also shows the split of national income between labour and capital is continuing to worsen in Australia, with wages’ share of national income dropping from 65.5 per cent at the turn of the century to 59.7 per cent in 2012.
It says this has occurred at the same time as the bulk of productivity improvements have come from labour rather than capital in recent years.
The report, “Paradise Lost? The race to maintain Australian living standards”, says Australians’ living standards are under threat due to slowing productivity, rising unemployment and slowing wages growth.
It warns Australians face an “inevitable correction” in their income and wages levels – with real wages set to fall markedly to reflect the country’s changed economic circumstances and lack of reform over the last decade – if nothing is done about it.
David Hetherington, Per Capita’s director, warned Australian governments they must re-start the reform process now to arrest the worrying trends, saying the benefit of the economic reforms of the 1980s and ’90s had run their course.
“Australia must either reform once again or face a dramatic downwards adjustment in wage levels and living standards,” Mr Hetherington said.
“To continue to lift labour productivity, we must lift our investment in hard infrastructure like transport and broadband, as well as soft infrastructure like skills and education.
Courtesy: The Age
Read more » http://www.theage.com.au/federal-politics/political-news/australians-living-standards-face-the-greatest-threat-in-a-generation-report-20150423-1mrppz.html
I work 70 hours a week doing two jobs but cannot make ends meet. Presidential hopefuls must make profitable federal contractors pay living wages
Every day, I serve food to some of the most powerful people on earth, including many of the senators who are running for president: I’m a cook for the federal contractor that runs the US Senate cafeteria. But today, they’ll have to get their meals from someone else’s hands, because I’m on strike.
I am walking off my job because I want the presidential hopefuls to know that I live in poverty. Many senators canvas the country giving speeches about creating “opportunity” for workers and helping our kids achieve the “American dream” – most don’t seem to notice or care that workers in their own building are struggling to survive.
I’m a single father and I only make $12 an hour; I had to take a second job at a grocery store to make ends meet. But even though I work seven days a week – putting in 70 hours between my two jobs – I can’t manage to pay the rent, buy school supplies for my kids or even put food on the table. I hate to admit it, but I have to use food stamps so that my kids don’t go to bed hungry.
I’ve done everything that politicians say you need to do to get ahead and stay ahead: I work hard and play by the rules; I even graduated from college and worked as a substitute teacher for five years. But I got laid-off and I now I’m stuck trying to make ends meet with dead-end service jobs.
Spurred by Chinese investment, the smart money is taking notice of Pakistan as an attractive investment destination. The investors are looking at the fact that Pakistani stocks have been outperforming both emerging and frontier markets for several years. The benchmark index of the Karachi Stock Exchange (KSE100) is up more than 20% in the last 12 months, according to NASDAQ.com.
Pakistani Shares in 2015: After a dismal March, MSCI Pakistan rebounded strongly this month, returning 9.1% so far. In April, the iShares MSCI Frontier 100 ETF (FM) rose 4.3%, the WisdomTree India Earnings Fund (EPI) dropped 1.2%, the iShares MSCI India ETF (INDA) fell 1.9%, according to Barron’s Asia.
KSE-100 Performance: In 2014, the KSE-100 Index gained 6,870 points thereby generating a handsome return of 27% (31% return in US$ terms), making Pakistan’s KSE world’s third best performing market. Total offerings in the year 2014 reached 9 as compared to 3 in the year 2013. After a gap of seven years, Rs 73 billion were raised through offerings in 2014 as compared to a meager Rs 4 billion raised in 2013. Foreign investors, that hold US$ 6.1 billion worth of Pakistani shares -which is 33% of the free-float (9% of market capitalization)-remained net buyers in 2014.
By Shahram Haq
ISLAMABAD: Chinese businessmen have said investments they are putting in Pakistan are safe as both the countries enjoy excellent relations at government and public level.
“The global investments we make in any country depend on the nature of relationships between China and the particular country,” said Orient Evertrust Capital Group’s Chairman Jiang Xue Ming, while talking with The Express Tribune.
“Since Pakistan and China have excellent relationships, so we feel our investments in this country are completely safe,” he added.
A group of Chinese investors is currently in Islamabad as the Chinese president is arriving in Pakistan today (Monday) to sign some 50 different accords worth $46 billion, majority of which are energy based.
Read more » The Express Tribune
See more » http://tribune.com.pk/story/872766/investing-with-confidence-chinese-say-their-money-is-safe-in-pakistan/
Beijing plans to pour $46 billion into infrastructure projects, open new trade routes
Chinese President Xi Jinping is set to unveil a $46 billion infrastructure spending plan in Pakistan that is a centerpiece of Beijing’s ambitions to open new trade and transport routes across Asia and challenge the U.S. as the dominant regional power.
The plan, known as the China Pakistan Economic Corridor, draws on a newly expansive Chinese foreign policy and pressing economic and security concerns at home for Mr. Xi, who is expected to arrive in Pakistan on Monday. Many details had yet to be announced publicly.
“This is going to be a game-changer for Pakistan,” said Ahsan Iqbal, Pakistan’s planning minister, who said his country could link China with markets in Central Asia and South Asia.
“If we become the bridge between these three engines of growth, we will be able to carve out a large economic bloc of about 3 billion living in this part of the world…nearly half the planet.”
Read more » THE WALL STREET JOURNAL
See more » http://www.wsj.com/articles/china-to-unveil-billions-of-dollars-in-pakistan-investment-1429214705?mod=e2fb
Toyota to move Corolla production to Mexico to cut costs
(Reuters) – Toyota Motor Corp 7203.T, the world’s biggest automaker, plans to move production of its Corolla compact cars to a new factory in Mexico from Canada to benefit from lower costs, the Globe and Mail reported, citing sources familiar with the situation.
Costs at Toyota’s assembly plants at Cambridge and Woodstock in Ontario are higher than at its U.S. factories and it makes sense to produce the more expensive vehicles in Canada, the newspaper quoted sources familiar with the matter as saying.
Sources told Reuters that Toyota will spend $1 billion to build a car factory in Mexico, which is expected to begin functioning from the summer of 2019, ending a self-imposed three-year freeze on new investments. Toyota also plans to announce a new car factory in Guangzhou, China, this week.
Has formed JV with Delhi businessman and held meeting with UP, AP CMs
By BS Reporter
The government may be inviting the Americans, Chinese and Japanese to invest in India, but just one person is ready to put in Rs 1 lakh crore over the next five years.
Enthused with the new government’s spirited approach towards new investment, a prince of Qatar, Hamad Bin Nasser A A Al-Thani, member of the ruling family, is looking at investing the sum in at least 10 smart cities.
The 51-year-old Qatari prince has already tied up with a 31-year-old Delhi-based businessman, Mitesh Sharma, for taking the investment forward through projects in real estate, sea ports and airports, besides smart cities. According to a person working for Hamad, the two recently registered a company, NRS Enterprise Pvt Ltd, in India through which the investment would be routed.
“Prime Minister Narendra Modi’s ambitious ‘smart cities’ project has caught the attention of the prince. The investment will be made over the next five years,” said the person.
The investment announcement came after the two partners met Uttar Pradesh chief minister Akhilesh Yadav on November 20 and his Andhra Pradesh counterpart, Chandrababu Naidu, on November 22.
The focus of this huge investment is on 10 smart-city projects in a first phase, besides power, solar energy, infrastructure development, health care and education. They are aiming for the first project to take off by February-March 2015.
The Union government has decided to support the development of 100 smart cities in the country. According to the high power expert committee (HPEC) on investment estimates in urban infrastructure has assessed a per capita investment cost of Rs 43,386 for a 20-year period. Their estimates cover water supply, sewerage, sanitation and transportation.
ISLAMABAD: Chinese President Xi Jinping will launch energy and infrastructure projects worth $46 billion on a visit to Pakistan next week as China cements links with its old ally and generates opportunities for firms hit by slack growth at home.
Also being finalised is a long-discussed plan to sell Pakistan eight Chinese submarines. The deal, worth between $4 billion and $5 billion, according to media reports, may be among those signed on the trip.
Know more: Pakistan to buy eight submarines from China.
Xi will visit next Monday and Tuesday, Pakistan’s foreign office said.
“China treats us as a friend, an ally, a partner and above all an equal – not how the Americans and others do,” said Mushahid Hussain Syed, chairman of the parliament’s defence committee.
Pakistan and China often boast of being “iron brothers” and two-way trade grew to $10 billion last year from $4 billion in 2007, Pakistani data shows.
Xi’s trip is expected to focus on a Pakistan-China Economic Corridor, a planned $46-billion network of roads, railways and energy projects linking Pakistan’s deepwater Gwadar port on the Arabian Sea with China’s far-western Xinjiang region.
It would shorten the route for China’s energy imports, bypassing the Straits of Malacca between Malaysia and Indonesia, a bottleneck at risk of blockade in wartime.
If the submarine deal is signed, China may also offer Pakistan concessions on building a refuelling and mechanical station in Gwadar, a defence analyst said.
China’s own submarines could use the station to extend their range in the Indian Ocean.
“China is thinking in terms of a maritime silk road now, something to connect the Indian Ocean and Pacific Ocean,” said a Pakistani defence official, who declined to be identified.
For Pakistan, the corridor is a cheap way to develop its violence-plagued and poverty-stricken Balochistan province, home to Gwadar.
China has promised to invest about $34 billion in energy projects and nearly $12 billion in infrastructure.
Xi is also likely to raise fears that Muslim separatists from Xinjiang are linking up with Pakistani militants, and he could also push for closer efforts for a more stable Afghanistan.
Earlier, the Foreign Office (FO) on Thursday announced that Chinese President Xi Jinping will be visiting Pakistan from April 20 to April 21 on a two-day state visit.
“I can confirm that the Chinese president will be visiting Pakistan from April 20 to 21,” FO spokesperson Tasneem Aslam said during a weekly media briefing in Pakistan.
At least five killed in Durban since last week in violence that has left hundreds stranded, unable to return home.
Violence against immigrants in South Africa has killed at least five people since last week in one of the worst outbreak of violence against foreigners in years.
Hundreds of migrants mostly from other African countries had been forced out of their homes, authorities told the Associated Press news agency on Tuesday.
Khadija Patel, a South African journalist, told Al Jazeera there have been previous instances of violence against foreigners.
“Hundreds of foreign nationals were displaced in Isipingo [20km south of Durban] late last month, when a group of South Africans attacked foreigners living and working in the area. The victims of that continue to reside in a makeshift camp at a sports ground in Isipingo,” Patel said.
OTTAWA — Bank of Canada Governor Stephen Poloz says there’s a brighter future ahead if people can look beyond an economy that’s teetering on the brink of outright contraction.
The central bank kept its key overnight lending rate unchanged Wednesday at 0.75 per cent, even as it released a new forecast showing Canada’s oil-dependent economy stalled and likely didn’t grow at all in the first three months of the year.
The no-growth forecast is a sharp downgrade from the 1.5-per-cent annual growth rate the bank predicted just three months ago, when Mr. Poloz rattled financial markets with a surprise quarter-percentage-point rate cut.
But Mr. Poloz insisted the economy would snap back in the second half of the year as the shock of the oil price collapse fades – optimism that suggests more interest rate relief likely won’t be needed.
“By the middle of the year we should be seeing only the good stuff,” Mr. Poloz told reporters in Ottawa.
The Canadian dollar rebounded, gaining 1.2 cents to 81.30 cents (U.S.), as investors bet that Mr. Poloz’s upbeat tone makes another rate cut this year less likely.
Some analysts aren’t convinced Mr. Poloz is right. He got the first quarter wrong and now he’s overoptimistic about what the rest of the year will bring, said Ben Homsy, a fixed-income analyst at Leith Wheeler Investment Counsel in Vancouver.
“The impact from low oil prices on the Canadian economy is not a one-quarter event,” Mr. Homsy said. “We’ll see that reverberate through the second and third quarters.”
He pointed out that dismal factory sales, which fell for a second consecutive month in February, suggest the lower Canadian dollar isn’t yet helping non-energy exporters.
Read more » The Globe and Mail
See more » http://www.theglobeandmail.com/report-on-business/economy/bank-of-canada-cuts-outlook/article23965431/
The unemployment rate in Saudi Arabia is 12 percent, but many of those men are unemployed by choice. Arabs tend to have a very high opinion of themselves, and most jobs available, even to poorly educated young men, do not satisfy. Thus most Saudis prefer a government job, where the work is easy, the pay is good, the title is flattering, and life is boring. In the non-government sector of the economy, 90 percent of the Saudi jobs are taken by foreigners. These foreigners comprise 27 percent of the Saudi population, mostly to staff all the non-government jobs. This means most young Saudi men have few challenges. One might say that many of them are desperate for some test of their worth, and a job in the competitive civilian economy does not do it, nor does the military.
The Saudi employment situation is not unique. The UAE (United Arab Emirates) has foreigners occupying 99 percent of the non-government jobs. The unemployment rate is 23 percent, but only a tenth of those are actually looking for a job. A survey indicated that most of the unemployed are idle by choice. Kuwait is more entrepreneurial, with only 80 percent of the non-government jobs taken by foreigners. The other Gulf Arab states (which have less oil) have a similar situation.
While the thousands of aircraft, helicopters, armored vehicles and other high-tech systems Saudi Arabia has bought in the last decade look impressive, the actual impact of all this lethal hardware depends a lot on the skill of those using it. In this department, the Saudis have some serious problems. And it is generally very difficult to get Saudis to even discuss the situation.
Update on 12 April 2015
QUETTA: Balochistan Chief Secretary Saifullah Chattha has said several mega projects, including the Gwadar Economic Free Zone, West Bay Expressway and Gwadar airport, would be inaugurated during the Chinese president’s visit to Pakistan on 20-21 April.
Update on 11 March 2015
KARACHI: Prime Minister Nawaz Sharif arrived in Karachi on Wednesday to inaugurate the first phase of the Karachi-Lahore (M-9) Motorway, which will cost Rs. 36 billion. M-9 will facilitate people commuting between Karachi and major cities including Sukkur, Badin, Ghotki, Rohri, Dadu, Pannu Aqil, Abro, Sadiqabad, Rahim Yar Khan, Zahir Pir, Jalalpur Peerwala, Abdul Hakim, Mamu Kanjan and Nankana Sahib.
Industrial parks and special economic zones are part of the China-Pakistan Economic Corridor (CPEC) memoranda of understanding recently agreed between the leaders of the two countries.
The key pre-requisite for the establishment of these zones are resolution of the energy crisis and building of a competitive infrastructure in Pakistan.
Energy and infrastructure
The first phase of the economic corridor is focused on $45.6 billion worth of energy and infrastructure projects. China’s state-owned banks will finance Chinese companies to fund, build and operate $45.6 billion worth of energy and infrastructure projects in Pakistan over the next six years, according to Reuters.
Thomas Piketty, the French economist whose 2013 book on wealth inequality became an international bestseller, said he sees a risk of politicians in the European Union forcing Greece out of the euro area.
“The attitude of a number of people in Brussels and Berlin looks like: push Greece out,” Piketty said in an interview with Bloomberg Television in Paris.
Greece, Europe’s most-indebted state, is negotiating with euro-area countries and the International Monetary Fund on the terms of its 240 billion-euro ($259 billion) rescue. The standoff, which has left Greece dependent upon European Central BANK LOANS, risks leading to a default within weeks and its potential exit from the euro area.
Read more » Bloomberg
See more » http://www.bloomberg.com/news/articles/2015-04-08/piketty-says-eu-politics-risks-driving-greece-out-of-euro
TD Bank trims first-quarter outlook for Canadian economy
TORONTO — Growth in the Canadian economy will be slower than expected in the first quarter as low oil prices take their toll, but it will pick up in the second half of the year, TD Bank predicts.
The bank cut its growth forecast for the first quarter on Tuesday to an annual pace of 0.5 per cent compared with TD’s January estimate of 1.0 per cent growth for the first quarter.
The forecast falls well short of the 1.5 per cent pace that the Bank of Canada has predicted for the first quarter.
Read more » CTV News
See more » http://www.ctvnews.ca/business/td-bank-trims-first-quarter-outlook-for-canadian-economy-1.2294473
By Ana Swanson
China used more cement between 2011 and 2013 than the U.S. used in the entire 20th Century.
It’s a statistic so mind-blowing that it stunned Bill Gates and inspired haiku. But can it be true, and, if so, how? Yes, China’s economy has grown at an extraordinary rate, and it has more than four times as many people as the United States. But the 1900s were America’s great period of expansion, the century in which the U.S. built almost all of its roads and bridges, the Interstate system, the Hoover Dam, and many of the world’s tallest skyscrapers. And China and the U.S. are roughly the same size in terms of geographic area, ranking third and fourth in the world, respectively.
Read more » The Washington Post
See more » http://www.washingtonpost.com/blogs/wonkblog/wp/2015/03/24/how-china-used-more-cement-in-3-years-than-the-u-s-did-in-the-entire-20th-century/
Direct exchange hub could smooth way for businessess doing deals in China
After stock markets closed on Monday, Toronto became the first trading hub in North America for China’s currency, known as the renminbi or yuan.
Chinese government dignitaries, Federal Finance Minister Joe Oliver and his Ontario compatriot Charles Sousa attended a ceremony in Toronto Monday evening to formally announce the first conversion from yuan to Canadian dollars.
The announcement makes Toronto the first such trading hub in the Americas that has permission to be a clearinghouse for Chinese renminbi (which means “people’s money” in Chinese). There are currently only a handful of such hubs outside China, including Paris, London, Moscow, Singapore, Tokyo, Seoul and Sydney, Australia.
In practical terms, such hubs make it easier to do business with China because without one, Chinese money has to first be converted into a currency like the U.S. dollar before being again converted into loonies to make investments here, or even pay for supplies.
“What the hub does is it provides the potential to get a good price,” says David Watt, the chief economist of HSBC. “It sets up a way for Canadian businesses to call their local banker and say “we’ve got a deal to import Chinese material and we’d like to pay for it in RMB not U.S. dollars.”
The hub eventually will allow people on both sides to take out that middle man and convert renminbi directly into Canadian dollars and vice versa. “It should give Canadian businesses the confidence to increase trade.”
Read more » CBC
See more » http://www.cbc.ca/news/business/toronto-becomes-first-renminbi-trading-hub-in-north-america-1.3005726
I recently introduced an amendment at the Senate Budget Committee. It was pretty simple. It asked my Senate colleagues to begin the process of overturning the disastrous Supreme Court ruling on Citizens United, and to bring transparency and disclosure to the political process. The link to that debate on the amendment is here.
Here’s what I asked my Senate colleagues to consider:
Are we comfortable with an American political system which is being dominated by a handful of billionaires?
Are we a nation that prides ourselves on one-person, one-vote, or do we tell ordinary Americans you’ve got one vote but the Koch brothers can spend hundreds of millions of dollars?
Do we want a political system in which a handful of billionaires can buy members of the United States Congress?
Who are those members of Congress elected with the help of billionaires going to be representing? Do you think they’re going to be representing the middle class and working families?
The answers seem clear to me. Unless the campaign financing system is reformed, the U.S. Congress will become paid employees of the people who pay for their campaigns — the billionaire class. Needless to say, not everyone on the Committee agreed.
It was an interesting and informative debate. Not one Republican supported the amendment and it lost by a 12-10 vote. I intend to offer it again this week on the floor of the Senate.
Read more » The Huffington Post
See more » http://www.huffingtonpost.com/rep-bernie-sanders/sanders-to-senate-if-we-dont-overturn-citizens-united-the-congress-will-become-paid-employees-of-the-billionaire-class_b_6918468.html
Paris-based think-tank of wealthy nations says economy will expand by 2.2% this year
The OECD has reduced its 2015 and 2016 economic growth forecasts for Canada, citing the drag caused by a significant drop in prices for oil and other commodities since its previous outlook in November.
The Paris-based organization is now estimating Canada’s economy will grow by to 2.2 per cent this year, 0.4 less than previously thought. Next year’s forecast has been trimmed to 2.1 per cent, down 0.3.
The OECD says Canada is among the countries that has been affected by the sharp decline in oil and commodity prices while others, particularly in Europe and Asia, will benefit from sharp drop in oil prices to six-year lows.
Read more » CBC
See more » http://www.cbc.ca/news/business/oecd-cuts-growth-forecast-for-canada-in-2015-and-2016-1.2999555
By Holly Yan, CNN
(CNN) A massive anti-austerity rally in Germany turned violent Wednesday when protesters clashed with police at the opening of the new European Central Bank headquarters.
Frankfurt police said they used water cannons to disperse protesters after attacks on officers, firefighters, a police station and the Old Opera House.
At least 88 officers have been wounded, police said. Eight suffered head injuries after stones were thrown at them, and 80 were hurt when an unknown substance was poured over them.
The damage included at least seven police cars that were set on fire.
Officers arrested five people for violent acts against police and detained another 500 people for questioning, Frankfurt police spokeswoman Tessa Koschig said.
The protest movement, dubbed “Blockupy,” comes amid criticism of austerity measures from the Greek finance minister, who said his country is suffering under the ECB’s policies.
“We want the European Central Bank to stop the austerity (policies) in Europe that is responsible for mass joblessness … people don’t have enough to eat,” Blockupy spokeswoman Songa Winter said. The European Central Bank is tasked with ensuring price stability in the eurozone, and it targets inflation levels just below 2%. The region has been suffering from depressed economic activity, and unemployment remains near record highs.
“What we’re seeing, I think, in Frankfurt is a reaction you see across the eurozone for many people who have said it’s just been too painful, too much, and it’s been going for too long,” CNN’s Jim Boulden said.
Read more » CNN
See more » http://www.cnn.com/2015/03/18/europe/germany-european-central-bank-protest/
ISLAMABAD: China intends to invest as many as $50 billion by 2017 in various sectors of Pakistan’s economy, particularly in energy sector to help the country overcome power crisis and help sustainable economic growth, President Pak-China Joint Chamber of Commerce and Industry Shah Faisal Afridi said.
“China has planned to replicate the model of Shanghai Free Trade Zone (SFTZ) by investing $50 billion into a number of projects including coal, solar and wind energy till 2017 under Early Harvest Programme,” Faisal said.
These projects would enable Gawadar to create a nexus between Pakistan, Iran, China and Central Asian States that would ultimately generate billions of dollars in revenues along with huge job opportunities in the region.
Afridi said that SFTZ is a perfect model to be implemented at Gwadar, asserting, the SFTZ was first used as a testing ground for a number of economic sectors.
The zone, he said, incorporated numerous relaxations in different sectors, under the FTZ’s new capital registration system, foreign investors were no longer required to contribute 15 percent capital within three months and full capital within two years of the establishment of a foreign invested enterprise (FIE).
Meanwhile, official sources said that in addition to invest in power projects, China was also interested in already working in various projects of motorways and railways.
On energy front, Pakistan has been already working to generate about 10400 megawatt electricity with the help of Chinese investment and several projects were already underway to overcome energy crisis.
Beijing has designated three banks including Exim Bank that will provide loans to Chinese companies for investment in power, railway and transport sectors in Pakistan.
Britain’s divided decade: the rich are 64% richer than before the recession, while the poor are 57% poorer
The gap between richest and poorest has dramatically widened in the past decade as wealthy households paid off their debts and piled up savings following the financial crisis, a report warns today.
By contrast, the worst-off families are far less financially secure than before the recession triggered by the near- collapse of several major banks. They have an average of less than a week’s pay set aside and are more often in the red.
Younger workers have fallen behind older people while homeowners – particularly those who have paid off their mortgages – have become increasingly affluent compared with their neighbours who are paying rent.
Evidence of Britain’s rapidly growing wealth gap was revealed by the Social Market Foundation (SMF), which analysed the changing incomes and savings of thousands of people. Its findings will be seized on by Labour as evidence that any recovery from the downturn is uneven and not shared across all income groups. However, the trends uncovered by the SMF began before the Coalition came to power, underlining the huge impact of the credit crunch on levels of affluence.
It found that the average wealth of the best-off one-fifth of families rose by 64 per cent between 2005 and 2012-13 as they put more money aside as a buffer against future shocks. They have average savings and investments of around £10,000 compared with £6,000 seven years earlier.
The proportion of people in this group with debts (apart from mortgages) dropped from 43 per cent to less than one-third. However, the SMF found the poorest 20 per cent are less financially secure than they were in 2005, with their net wealth falling by 57 per cent and levels of debt and use of overdrafts increasing.
Read more » The Independent
See more » http://www.independent.co.uk/news/uk/home-news/britains-divided-decade-the-rich-are-64-richer-than-before-the-recessionwhile-the-poor-are-57-poorer-10097038.html
A seaport in southwest Pakistan may hold the key to China’s energy supremacy. At least, that’s what China hopes. The Gwadar port, which China has built and will operate in the province of Balochistan, is situated near the Strait of Hormuz, a major oil-shipping lane that can serve as an energy corridor from western China through Pakistan to the Persian Gulf.
Beijing’s pivot to Pakistan is a substantial one. The story goes back to 2008, when Pakistani President Pervez Musharraf proposed a railroad and an oil pipeline to link Gwadar to the Kashi port in Xinjiang—allowing China to take advantage of the shortest possible route to the Middle East. In exchange, Pakistan would get an influx of Chinese investment. Indeed, in 2014, the Chinese government committed to spending $45.6 billion over the next six years to build the China–Pakistan Economic Corridor, which will include the construction of highways, railways, and natural gas and oil pipelines connecting China to the Middle East. China’s stake in Gwadar will also allow it to expand its influence in the Indian Ocean, a vital route for oil transportation between the Atlantic and the Pacific.
Another advantage to China is that it will be able to bypass the Strait of Malacca. As of now, 60 percent of China’s imported oil comes from the Middle East, and 80 percent of that is transported to China through this strait, the dangerous, piracy-rife maritime route through the South China, East China, and Yellow Seas.
The United States fears that China will come out of its dealings with Pakistan with more power. But it need not be worried: China’s involvement in Balochistan, a restive area prone to insurgencies, will not end well. Many believe Quetta, Balochistan’s capital, is hiding wanted leaders from the Afghan Taliban. Meanwhile, small towns in Balochistan are the breeding grounds for a decades-old separatist movement targeting federal agencies. Increasingly, China has been caught up in the violence. In 2004, three Chinese engineers were killed and nine wounded when separatists attacked their van in Gwadar. In 2009, China shelved its $12 billion plans to build an oil refinery and an oil city in Gwadar due to security concerns.
China’s involvement in the region’s politics can only be bad news. In 2012, U.S. Congressman Dana Rohrabacher introduced a resolution that asked the United States to support Baloch separatists as freedom fighters. The resolution was tabled, but if the United States ever does decide to involve itself in the conflict, China’s strategic interests will be at risk.
Read more » Foreign Affairs
See more » http://www.foreignaffairs.com/articles/143227/syed-fazl-e-haider/a-strategic-seaport
Read more » Twitter »» Howard Zinn
New York: ONLY pop music and pornography embraced globalisation more keenly than banks did. Since the 1990s three kinds of international firm have emerged. Investment banks such as Goldman Sachs deal in securities and cater to the rich from a handful of financial hubs such as Hong Kong and Singapore. A few banks, such as Spain’s Santander, have “gone native”, establishing a deep retail-banking presence in multiple countries. But the most popular approach is the “global network bank”: a jack of all trades, lending to and shifting money for multinationals in scores of countries, and in some places acting like a universal bank doing everything from bond-trading to car loans. The names of the biggest half-dozen such firms adorn skyscrapers all over the world.
This model of the global bank had a reasonable crisis in 2008-09: only Citigroup required a full-scale bail out. Yet it is now in deep trouble. In recent weeks Jamie Dimon, the boss of JPMorgan Chase, has been forced to field questions about breaking up his bank. Stuart Gulliver, the head of HSBC, has abandoned the financial targets that he set upon taking the job in 2011. Citigroup is awaiting the results of its annual exam from the Federal Reserve. If it fails, calls for a mercy killing will be deafening (see next story). Deutsche Bank is likely to shrink further. Standard Chartered, which operates in Asia, Africa and the Middle East, is parting company with its longstanding boss, Peter Sands.
Read more » The Economist
See more » http://www.economist.com/news/finance-and-economics/21645807-giants-global-finance-are-trouble-world-pain
Only 39% of investor immigrants paid any income tax 5 years after arriving
By CBC News
Refugees who have come to Canada over the past 30 years have paid more income tax in this country than immigrant investors admitted under the now defunct immigrant investor program, critics say.
Ian Young, a South China Morning Post journalist based in Vancouver, crunched the numbers with data from Citizenship and Immigration Canada.
Only a small proportion of the immigrant investors who have come to Canada under the program since 1980 end up staying here, Young said, again relying on numbers from the federal government.
“After five years, only 39 per cent of investor immigrants declared any income. Not only that, those who did, their average incomes were very low,” he said in an interview with CBC Radio’s The Current on Friday.
Not much Canadian income
They may have been millionaires, but they were earning very little money here in Canada. Immigrant investors declared about $18,000 to $25,000 of income annually, he said.
“Why? Either because they were living off existing wealth, or they weren’t declaring their [global] incomes,” Young said.
Read more » CBC
See more » http://www.cbc.ca/news/business/refugees-pay-more-income-tax-than-millionaire-investor-immigrants-1.2984982?cmp=rss