Philippines threatens rice hoarders with life imprisonment

Filipinos face life in prison if they’re caught hoarding rice.

“The Department of Justice is preparing economic sabotage or plunder charges that carry a life sentence against traders found to be hoarding rice, the price of which has risen sharply amid a tight global supply,” The Inquirer reports. “Although the country has yet to experience a shortage, Justice Secretary Raul Gonzalez Thursday vowed to hale to court hoarders and other unscrupulous rice traders for acts ‘inimical to the public interest.'”

President Gloria Macapagal-Arroyo reiterated the warnings during a speech today, but also pledged to increase imports of the staple.

“Those who seek to take advantage of our people must be stopped,” she says, according to The Inquirer. “I am leading the charge to crack down on any form of corruption by public or private officials who would divert supplies or pervert the price of this essential commodity in any way.”

“Anyone caught stealing rice from the people will be thrown in jail,” she adds.

Bloomberg News
reports that the price of rice, a key staple in the global food supply, keeps hitting record highs. It’s now twice as expensive as it was at this time in 2007.

“We’re in for a tough time,” Roland Jansen, CEO of Mother Earth Investments AG, tells the financial news service, adding: “you will have huge problems of daily nutrition for half the planet.”

(Photo of workers in Manila taken March 28 by Romeo Ranoco, Reuters.)

Source: USA Today

IMF says US crisis is ‘largest financial shock since Great Depression’


A foreclosure sign in Florida. Photograph: Joe Raedle/Getty Images

America’s mortgage crisis has spiralled into “the largest financial shock since the Great Depression” and there is now a one-in-four chance of a full-blown global recession over the next 12 months, the International Monetary Fund warned today.

Read moreIMF says US crisis is ‘largest financial shock since Great Depression’

Fed: Severe Downturn Possible

WASHINGTON (Reuters) – Members of the Federal Reserve’s policy-setting committee worried at their most recent meeting that housing and financial market stress could trigger a nasty slide in the economy, even as inflation pushed higher, minutes of the meeting released on Tuesday show.

“Some believed that a prolonged and severe economic downturn could not be ruled out given the further restriction of credit availability and ongoing weakness in the housing market,” minutes of the March 18 meeting said.

Fed economists presented a somber picture of short-term prospects — central bank staff now fully expect negative growth over the first six months of the year — but held out the possibility of a modest rebound later.

“The staff projection showed a contraction of real GDP in the first half of 2008 followed by a slow rise in the second half,” the report said, referring to gross domestic product, a broad measure of a country’s output of goods and services.

At the same time, Fed officials found recent inflation reports “disappointing,” noting also with concern that some indicators of inflation expectations were edging higher.

Read moreFed: Severe Downturn Possible

USA 2008: The Great Depression

Food stamps are the symbol of poverty in the US. In the era of the credit crunch, a record 28 million Americans are now relying on them to survive – a sure sign the world’s richest country faces economic crisis

We knew things were bad on Wall Street, but on Main Street it may be worse. Startling official statistics show that as a new economic recession stalks the United States, a record number of Americans will shortly be depending on food stamps just to feed themselves and their families.

Dismal projections by the Congressional Budget Office in Washington suggest that in the fiscal year starting in October, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance programme was introduced in the 1960s.


Disadvantaged Americans queue for aid in New York

Read moreUSA 2008: The Great Depression

IMF Approves Selling 400 Tons Of Gold

Washington (AHN) – The executive board of the International Monetary Fund has approved the sale of some 440.3 tons of its gold supplies in a wide-ranging financial overhaul and to replenish its depleting coffers.

Dominique Strauss-Kahn, IMF managing director, welcomed the board’s move on Monday, the action seen as a buffer to the expected $400 million budget deficit the Washington-based lending institution could experience in the next few years.

The board is projecting to generate at least $11 billion from the sale of at least 12 percent of its gold reserve. The money to be generated from the sales would fund the reorganization of the IMF and finance lending to needing countries.

Read moreIMF Approves Selling 400 Tons Of Gold

Feed the world? We are fighting a losing battle, UN admits

Huge budget deficit means millions more face starvation.

Ears of wheat growing in a field. Photograph: Steve Satushek/Getty images

The United Nations warned yesterday that it no longer has enough money to keep global malnutrition at bay this year in the face of a dramatic upward surge in world commodity prices, which have created a “new face of hunger”.

Read moreFeed the world? We are fighting a losing battle, UN admits

IMF: mortgage crisis may cost $945bn worldwide

The International Monetary Fund released its semiannual Global Financial Stability Report, predicting that the economic crisis “is spreading beyond the US subprime market.” The report comes ahead of the IMF and World Bank spring meetings.

The International Monetary Fund said Tuesday the worldwide losses stemming from the US subprime mortgage crisis could hit 945 billion dollars as the impact spreads in the global economy.

Read moreIMF: mortgage crisis may cost $945bn worldwide

Fed’s interest rate games could destroy the dollar

Federal Reserve Chairman Ben Bernanke has reduced the key federal funds rate six times in as many months — reducing the cost for major borrowers significantly. This combines with providing $270 million in funding, plus $30 billion in additional guarantees, for JP Morgan Chase to buy Bear Stearns Cos.

“Helicopter Ben” is living up to the nickname he earned after he remarked in a 2002 speech that he would stave off a recession even if he had to drop money from helicopters to do it.

The results of these policies have been destructive. The dollar is collapsing not only against foreign currencies — we’re now at par with the Canadian dollar and rocketing toward a 2-1 deficit against the Euro — but also against commodities. Gold was passing the $1,000-an-ounce landmark, silver $20. Even industrial metals like copper and zinc are fetching record prices.

Now, a spike in a particular commodity — say, for instance, $100-per-barrel oil — can be attributed to a shortage. But when they all move dramatically and simultaneously, it’s the purchasing power of our money that has gone down.

In fact, the increasing cost of even the base metals recently prompted Edmund Moy, director of the United States Mint, to propose further debasing the copper and nickel-plated, zinc slugs we call coins by substituting color-coated steel.

Read moreFed’s interest rate games could destroy the dollar

World Bank Expects More High Food Prices

Rising food prices, which have caused social unrest in several countries, are not a temporary phenomenon, but are likely to persist for several years, World Bank President Robert Zoellick says.

Strong demand, change in diet and the use of biofuels as an alternative source of energy have reduced world food stocks to a level bordering on an emergency, he says.

Speaking to reporters Monday before the bank’s spring meeting this coming weekend, Zoellick said the 185-member World Bank would work with other organizations to deal with the crisis by seeking ways to help farmers, especially in Africa, to increase productivity and improve access to food through schools or workplaces.

“This is not a this-year phenomenon,” he said, referring to the price spike. “I think it is going to continue for some time.”

Read moreWorld Bank Expects More High Food Prices

Food prices to rise for years, biofuel firms say

LONDON – Staple food prices will rise for some years, but should eventually fall to historical averages as harvests increase, biofuel company executives said on Thursday.

Soaring demand for better quality food from rapidly industrializing emerging markets such as China, supply shortages, increased demand for biofuels, and a surging appetite for food commodities by investment funds, have combined to push prices of basic foods higher and higher in recent months.

Stephane Delodder, managing partner of Netherlands-based consultancy iFuel Corporate Advisory, told a conference the problem of rising food prices would persist for some years.

Market forces should eventually help rebalance supply and demand, especially in markets which are not highly regulated, but this could take some time.

“(It could be) a few years at most before the situation returns to normal,” Delodder said.

He said grains and oilseed futures markets, which have corrected down recently after meteoric rises, may already be signaling that supply will rise as farmers raise plantings.

Read moreFood prices to rise for years, biofuel firms say

Lawmakers Heavily Invested in Defense

WASHINGTON (AP) – Members of Congress have as much as $196 million collectively invested in companies doing business with the Defense Department, earning millions since the onset of the Iraq war, according to a study by a nonpartisan research group.

Read moreLawmakers Heavily Invested in Defense

We spied on 36,000 customers using the internet, admits BT

BT tested secret “spyware” on tens of thousands of its broadband customers without their knowledge, it admitted yesterday.

It carried out covert trials of a system which monitors every internet page a user visits.

Companies can exploit such data to target users with tailored online advertisements.

An investigation into the affair has been started by the Information Commissioner, the personal data watchdog.

Privacy campaigners reacted with horror, accusing BT of illegal interception on a huge scale. Yesterday, the company was forced to admit that it had monitored the web browsing habits of 36,000 customers.

The scandal came to light only after some customers stumbled across tell-tale signs of spying. At first, they were wrongly told a software virus was to blame.


BT carried out undercover trials of a system which records every website a customer visits (below)

Executives insisted they had not broken the law and said no “personally identifiable information” had been shared or divulged.

BT said it randomly chose 36,000 broadband users for a “small-scale technical trial” in 2006 and 2007.

The monitoring system, developed by U.S. software company Phorm, accesses information from a computer.

It then scans every website a customer visits, silently checking for keywords and building up a unique picture of their interests.

If a user searches online to buy a holiday or expensive TV, for example, or looks for internet dating services or advice on weight loss, the Phorm system will add all the information to their file.

One BT customer who spotted unexplained problems with his computer was told repeatedly by BT helpdesk staff that a virus was to blame.

Read moreWe spied on 36,000 customers using the internet, admits BT

Rush to restrict trade in basic foods

Governments across the developing world are scrambling to boost farm imports and restrict exports in an attempt to forestall rising food prices and social unrest.

Saudi Arabia cut import taxes across a range of food products on Tuesday, slashing its wheat tariff from 25 per cent to zero and reducing tariffs on poultry, dairy produce and vegetable oils.

On Monday, India scrapped tariffs on edible oil and maize and banned exports of all rice except the high-value basmati variety, while Vietnam, the world’s third biggest rice exporter, said it would cut rice exports by 11 per cent this year.

The moves mark a rapid shift away from protecting farmers, who are generally the beneficiaries of food import tariffs, towards cushioning consumers from food shortages and rising prices.

Read moreRush to restrict trade in basic foods

Neuromarketing could make mind reading the ad-man’s ultimate tool

Neuroscience and marketing had a love child a few years back. Its name – big surprise – is neuromarketing, and the ugly little fellow is growing up. Corporate pitchmen have always wanted to get inside our skulls. The more accurately they can predict how we’ll react to stimuli in the marketplace, from prices to packages to adverts, the more money they can pull from our pockets and transfer to their employers’ coffers.

But picking the brains of consumers hasn’t been easy. Marketers have had to rely on indirect methods to read our thoughts and feelings. They’ve watched what we do in stores or tracked how purchases rise or fall in response to promotional campaigns or changes in pricing. And they’ve carried out endless surveys and focus groups, asking us what we buy and why.

The results have been mixed at best. People, for one thing, don’t always know what they’re thinking, and even when they do, they’re not always honest in reporting it. Traditional market research is fraught with bias and imprecision, which forces companies to fall back on hunches and rules of thumb.

But thanks to recent breakthroughs in brain science, companies can now actually see what goes on inside our minds when we shop. Teams of academic and corporate neuromarketers have begun to hook people up to functional magnetic resonance imaging (fMRI) machines to map how their neurons respond to products and pitches.

Read moreNeuromarketing could make mind reading the ad-man’s ultimate tool

81% of Americans think country on ‘wrong track’

WASHINGTON – FOUR out of five Americans believe things are ‘on the wrong track’ in the United States, the gloomiest outlook in about 20 years, according to a New York Times/CBS News poll.

The poll, released on Thursday, found that 81 per cent of respondents felt ‘things have pretty seriously gotten off on the wrong track’. That was up from 69 per cent last year and 35 per cent in early 2003.

Only 4 per cent of survey respondents said the country was better off than it was five years ago, while 78 per cent said it was worse, the newspaper said.

Read more81% of Americans think country on ‘wrong track’

Federal Reserve staff move into offices of investment banks to monitor activities

The US Federal Reserve has sent staff into some of Wall Street’s biggest firms and its New York branch is gathering evidence on key traders’ activities as America’s central bank raises its scrutiny of risk to an unprecedented level.

Fed staff have set up shop in Goldman Sachs, Morgan Stanley, Lehman Brothers, Merrill Lynch, and Bear Stearns to monitor their financial condition just days after Henry Paulson, the US Treasury Secretary, proposed that the Fed become the financial industry’s “risk czar”.

This is the first time in more than a decade that the Fed has put staff in securities firms and is a response, in part, to its decision to extend to investment banks the “discount window” of cheap loans traditionally offered only to the commercial banks. The Fed argues that if it is to act as lender of last resort to the securities firms, it should keep a closer eye on their activities.

The move comes as the central bank’s New York branch separately compiles a list of names and numbers of key traders in specific, esoteric securities such as auction rate preferred securities. These obscure instruments can be traded only at auctions and demand for them has virtually evaporated in recent weeks.

A senior US mutual fund executive, whom the Fed has approached, said: “They are looking in every corner to understand every esoteric financial product – who its traders are, who holds the most, whether its market is liquid and how great the losses could be. They are approaching people like me to find the key players in particular securities and then contacting them to find out the details. I have never heard of that being done before.”

Read moreFederal Reserve staff move into offices of investment banks to monitor activities

Individual bankruptcy filings up 27%

American Bankruptcy Institute says first-quarter filings rose as households creak under heavy debt load.

NEW YORK – The number of individuals filing for bankruptcy surged during the first-quarter as American households struggled to stay on top of debt, according to a report released Wednesday.

The American Bankruptcy Institute said that consumer bankruptcy filings increased 27% nationwide in the first three months of the year, compared with the same period last year. In March alone, 86,165 individuals filed for consumer bankruptcy – a 13% increase over the 76,120 cases filed in February.

“Bankruptcies are rising due to the heavy burden of household debt and growing mortgage problems,” said ABI Executive Director Samuel J. Gerdano. “We expect this trend to continue through 2008.”

The ABI found that nearly 32% of all consumer bankruptcy cases were Chapter 13 filings, which is available to individuals with regular income and calls for budgeting some of the debtor’s future earnings to pay off creditors.

April 2, 2008: 12:15 PM EDT

Source: CNN Money

Bernanke Warns of Possible Recession

WASHINGTON (AP) – Federal Reserve Chairman Ben Bernanke said Wednesday a recession is possible and policymakers are “fighting against the wind” in trying to steady a shaky economy. He would not say if further interest rate cuts are planned.

Bernanke’s testimony before the Joint Economic Committee of Congress was a more pessimistic assessment of the economy’s immediate prospects than a report he delivered earlier this year. His appearance on Capitol Hill came amid a trio of economic slumps in the housing, credit and financial areas.

“It now appears likely that gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke told lawmakers. GDP measures the value of all goods and services produced within the United States and is the best barometer of the United States’ economic health. Under one rule, six straight months of declining GDP, would constitute a recession.


Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill in Washington,
Wednesday, April 2, 2008, before the Joint Economic Committee.
(AP Photos/Susan Walsh)

Read moreBernanke Warns of Possible Recession

USA 2008: The Great Depression

Food stamps are the symbol of poverty in the US. In the era of the credit crunch, a record 28 million Americans are now relying on them to survive – a sure sign the world’s richest country faces economic crisis

We knew things were bad on Wall Street, but on Main Street it may be worse. Startling official statistics show that as a new economic recession stalks the United States, a record number of Americans will shortly be depending on food stamps just to feed themselves and their families.


Disadvantaged Americans queue for aid in New York

Dismal projections by the Congressional Budget Office in Washington suggest that in the fiscal year starting in October, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance programme was introduced in the 1960s.

Read moreUSA 2008: The Great Depression

A $43 Trillion Dollar Market That Most People Have Never Heard Of

According to Bill Gross, a fixed income market guru, the size of the credit default swap market is “$43 trillion, more that half the size of the entire asset base of the global banking system.” If that is not scary enough he goes on to tell is that “total derivatives amount to over $500 trillion, many of them finding their way”………………….well, everywhere.

You are going to be hearing a lot more about these markets in coming weeks and months, which begs the question, why don’t most people even know what they are? And more importantly, why should we care?

Read moreA $43 Trillion Dollar Market That Most People Have Never Heard Of

Companies use scans to track employees

Some workers are doing it at Dunkin’ Donuts, Hilton hotels, even at Marine Corps bases. Employees at a growing number of businesses around the nation are starting and ending their days by pressing a hand or finger to a scanner that logs the precise time of their arrival and departure – information that is automatically reflected in payroll records.

Manufacturers say these biometric scanners improve efficiency and streamline payroll operations. Employers big and small buy them with the dual goals of curtailing fraud and automating outdated record keeping systems that rely on paper time sheets.

The new systems, however, have raised complaints from some workers who see the efforts to track their movements as excessive or even creepy.

“They don’t even have to hire someone to harass you anymore. The machine can do it for them,” said Ed Ott, executive director of the New York City Central Labor Council of the AFL-CIO. “The palm print thing really grabs people as a step too far.”

Read moreCompanies use scans to track employees

The Subprime Crisis is Just Starting

(Excerpt: “For these reasons, there is a powerful, powerful case for moving a substantial portion of your assets into tangible assets. Good examples of tangible assets include gold, silver, commodities, real estate, farmland and energy.”)

Financial Sense

by Daniel R. Amerman, CFA | March 20, 2008

Print

Overview

As the author of three books on mortgage finance and related derivative securities, and speaking as someone who first turned mortgages into rated securities in 1983, Iā€™m going to let you in on an unfortunate little secret ā€“ the real subprime mortgage securitization crisis may not have even started yet. But, there is a good chance the real crisis will arrive soon.

This assertion that the crisis could just be getting started may seem absurd and extraordinarily out of touch. What about the approximately 45,000 homeowners losing their homes to foreclosure in the United States every month? What about the 8.9% plunge in nominal housing prices in 2007, the largest decline in over 20 years? What about Bear Stearns losing 94% of the value of its stock in 2 days, with even the remaining 6% in value being based on an unprecedented loan from the Fed before JP Morgan would agree to the acquisition? How much worse could it get?

Read moreThe Subprime Crisis is Just Starting

Chaos on Wall Street


THE BAILOUT BOYS: S.E.C. Chairman Christopher Cox (left) with Paulson, President Bush and Bernanke.

The big banks’ fear of big losses is threatening to bring down the entire system, with dire consequences for all of us. Here’s what’s going on, and what we can do about it.

(Fortune Magazine) — What in the world is going on here? Why is Washington spending billions to bail out Wall Street titans while leaving struggling homeowners to fend for themselves? Why are the Federal Reserve and the Treasury acting as if they’re afraid the world may come to an end, while the stock market seems much less concerned? And finally, what does all this mean to those of us who aren’t financial professionals?

Okay, take a few breaths, pour yourself a beverage of your choice, and I’ll tell you what’s happening – and what I think is going to happen. Although I expect these problems will resolve themselves without a catastrophic meltdown, I’ll also tell you why I’m more nervous about the world financial system now than I’ve ever been in my 40 years of covering business and markets.

Read moreChaos on Wall Street