Things are looking up in the world economy. That’s what we’re told.
In Davos they certainly are. According to the Bloomberg article entitled, “Wall Street Partying in Davos as Bankers Overcome Crisis“, JP Morgan made its highest ever profits last year Citi has returned to profit. The year of ‘mea culpa’ is apparently over as bankers return to beating their chests and sneering at the very idea that the little people should have imagined they could really interfere.
As the same article notes,
Governments have so far opted against breaking up or levying extra taxes on banks deemed too big to fail, and the Basel Committee on Banking Supervision, which sets global financial-regulatory guidelines, isn’t requiring lenders to meet new capital standards until 2015.
What does this mean? For the banking world it means off with the Armani hair-shirt look-alike and back to spending on their parties at Davos. This year,
JPMorgan upgraded its cocktail reception to the Kirchner Museum from last year’s event at the Tonic Piano Bar at Hotel Europe Davos. Bank of America’s Moynihan and the firm’s other top executives will meet clients for drinks on Jan. 27 at the Steigenberger Grandhotel Belvedere — the same night Morgan Stanley’s Mack is hosting a private dinner at restaurant Gasthaus in den Islen. Standard Chartered Plc and Deutsche Bank AG are both hosting events at the Belvedere the following night.
Rioting continued in Maputo, Mozambique’s capital city, for a third day on Friday in response to increased bread prices and the general rise in the cost of living. At least 10 people are dead, including a six-year-old girl and a 12-year-old boy, and more than 400 wounded as police have opened fired on angry demonstrators.
But don’t worry because this year it’s Davos week again!
The world’s super rich and the banking elite are there to put their heads together to consider what they should instruct our leaders to do for them and to us, next. Another injection of tax payer’s cash with your lobster sir? A side salad of fresh QE on a bed of seasoned unemployment garnished with a coulee of speculation of food stuffs? Or an Irish stew of craven politicians and insolvent banks boiled together in a thick stock of domestic corruption and foreign threats? Ah, the choices. But they’re doing it all for the best you know. Noblesse oblige, N’est ce pas?
And such noblesse doesn’t come free. According to an article from the New York Times it costs about $156k to get a good invite to Davos. And that’s just to get your foot in the door. If you want to party like a banker it costs a hole lot more.
At the Posthotel, for example, the restaurant is charging a minimum of $210 a head. A cocktail party for 60 to 80 people for just one hour? That costs about $8,000. Two hours? $16,000.
Make it 4 hours and it’ll cost you more than the average American High School Mathematics teacher earns in a year.
The bigger parties, like one that will be given by Google on Friday night for several hundred people, can run more than $250,000 for the evening. (In years past, Google has flown in the band and bartenders; one year, the company had an oxygen bar.)
“This is a wake-up call,” said Robert Zeigler, who heads the International Rice Research Institute. He might have been speaking about the vulgar excesses of the bankers at Davos but he wasn’t, he was talking about food shortages in an article in The Times in 2008.
The spectre of food shortages is casting a shadow across the globe, causing riots in Africa, consumer protests in Europe and panic in food-importing countries. In a world of increasing affluence, the hoarding of rice and wheat has begun.
And who do you suppose had a hand in the sudden rise in food prices in 2008 and again now? Could it be the very same people who are stuffing themselves in Davos?
And who is paying for it all, the luxury and the misery? We are. We bailed these people out. We are still bailing them out. It is your money and mine, that allows these people to gorge themselves on the world’s wealth and then belch in the face of those they are helping to starve.
True!
But one world government is coming and may help to stop this playing of one country against another.
The disinfo sites all pretend that world gov is bad. Ever ask yourself why?
Today's New-York Times reads:
This contrast is on display in Davos, where the annual World Economic Forum has brought together a confident group of representatives from emerging economies and the exceptionally comfortable but increasingly worried members of the Western world’s elite.
“Between debts and pensions, everyone should realize that this can’t go on forever,” said Kenneth S. Rogoff, an economics professor at Harvard University in Massachusetts and a former chief economist of the International Monetary Fund. “‘We’ll be lucky if it can go on another five to 10 more years.”’
Until recently, debt was hardly a dirty word, especially in Western countries that borrowed to finance economic growth. But few of them managed to shrink their debt when times were good, and instead promised richer pensions and welfare benefits.
In the case of the United States, the surpluses built during President Bill Clinton’s tenure turned into huge deficits during the administration of President George W. Bush.
Now, after bailouts in Greece and Ireland, the unthinkable is becoming more probable. As a result, investors are scrutinizing nearly every country with high debt — with potentially bewildering consequences.
…This month, two ratings agencies warned that the triple-A rating for the United States could be reviewed in a couple of years if the country’s national debt kept growing.
…At the same time, several states, particularly Illinois, are feared to be on the brink of insolvency, possibly requiring a bailout. The burden has mushroomed so quickly that some policy makers are asking Congress to consider the once-unthinkable possibility of allowing states to file for bankruptcy. That may be the only way, advocates of this approach argue, to alleviate overwhelming debts, including huge pension obligations that are siphoning money from education and other state services.
The risk is that the mere talk of such measures could destabilize investors’ faith in United States municipal bond markets.
…Japan is more of a question mark. The Japanese prime minister, Naoto Kan, has warned that the nation faces a financial crisis of Greek proportions if it does not tackle a debt that is expected to rise to 210 percent of the country’s gross domestic product next year.
…“Japan is a debt time bomb that is waiting to explode,” said Paul De Grauwe, a professor of international economics at the Catholic University of Leuven in Belgium.
http://dealbook.nytimes.com/2011/01/26/as-europe-toils-on-debt-u-s-and-japan-watch-nervously/
And according to the World Economic Forum, to support all this future growth they are celebrating in Davos, the world needs to create over the next decade and additional $100 trillion of credit. 'This doubling of existing credit levels could be achieved without increasing the risk of a major crisis, said the report from the WEF ahead of its high-profile annual meeting in Davos.'
See
http://theautomaticearth.blogspot.com/2011/01/january-20-2011-limbo-loans-we-need.html
Can't help noticing that Davos is one letter away from Davros.
Municipal debt is the big time bomb in the US, as Whistleblower points out. But downgrading US debt? Is that federal debt? Because that's a red herring, a familiar trope used by congress to scare people.
The US federal govt can spend what it wants, with the only brake being inflation, which is hardly a concern right now. The federal govt could bail out every state right now if it wanted to, but that would interfere with the drive toward privatization by (cash) starvation.
Countries that control their own currencies can take care of themselves, if they wanted to. Unfortunately they don't, preferring to play the "we have too much debt" game.
The eurozone countries cannot take care of themselves, absent a proactive central bank, and will be screwed w/o restructuring. If it weren't for the fact that so much misery would result, I'd cheer for the demise of the euro, and the sooner the better.