Why Wall Street CEO’s Must Go To Jail And Pay back Billions In Bonuses

“The truth is, through criminal neglect and competence, the people at the
top of these firms chose to look away, to take more risk, to enrich themselves
and to put shareholders and indeed, the country itself and the country’s
economy at risk. It is truly not only a shame, it is a crime” - 60 Minutes

Forget the blame game, forget the justified rants of anger. US taxpayers were asked to risk $700 Billion for a Wall Street bailout that may not even work - but do they really know why?

The rest of the world has been swept up in this crisis, with citizens all over the world afraid their banks are going to shut down - but do they really know why?

I’ll get to the why in a second.

In the meantime, as the world sweats, CEO’s at Lehman, Bear Stearns, AIG, Fannie, Freddie, etc., etc. each walked away with tens and even hundreds of millions of dollars in cash and stock. Lehman CEO, Richard Fuld, himself walked away with $480,000,000 (yes, 480 million) since 2000. That equates to $60,000,000 per year for a guy that drove Lehman into bankruptcy and significan
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Preparing to float

Ukraine moves towards a free exchange rate

Exchange-rate moves by Ukraine's central bank in the past month signal that the country is moving towards a floating exchange rate that unifies the official and interbank rates--and so helps to check inflation, which is running at over 30% year on year. Seemingly, the bank's management has fought off political pressure from exporters to make the change; and by acting now, it has a chance to hone its use of monetary levers before the country faces potentially serious economic and financial turbulence next year.

Ukraine's inflationary problems--growth in consumer prices averaged 22% year on year in the first quarter and is likely to exceed 30% in the second quarter--helped propel its central bank into action in late May, acceding finally to the recommendations of the IMF amongst others to change its exchange-rate policy. In the previous three years the country had maintained a de facto peg to the dollar, at HRN5.05:US$1. As the US currency declined against other major currencies, however, this helped to stoke import-price inflation in Ukraine and encouraged rapid growth in foreign-currency lending. On May 21st the board of the National Bank of Ukraine (NBU) announced a new official hryvnya exchange rate of HRN4.85:US$1. The NBU had already refrained for several weeks from interventions in the interbank market that had previously kept the rate there within a tight informal corridor of HRN5.0‑5.06:US$1. The NBU governor, Volodymyr Stelmakh, said that the appreciation could help reduce inflation by 3 percentage points in 2008. ...

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Upbeat in Syria

Why President Bashar Assad is feeling cock-a-hoop

Syria's president, Bashar al-Assad, is reaping substantial benefits, both economic and political, from the Lebanese political deal agreed in Doha last month, for which he has modestly claimed much of the credit. The ruler of Qatar visited him in Damascus to thank him for his role in the Doha agreement, and Mr Assad followed this up with visits to the UAE and Kuwait, from which he obtained generous promises of aid, including 500,000 tonnes of wheat to be purchased on Syria's behalf by Abu Dhabi. The rehabilitation of his political reputation--which had been tarnished by association with brutal events in Lebanon and repression at home--is set to be completed by an appearance at the Mediterranean summit to be hosted by France's president Nicolas Sarkozy on July 13th.

What has Mr Assad done to deserve this unaccustomed adulation? By his own account, he has done no more than to remain consistent, waiting patiently for others to see sense. At a forum in Dubai Mr Assad said that when the Doha talks seemed to be on the brink of collapse, the ruler of Qatar called on Syria to provide some suggestions. "The ideas we provided were the exact same ideas we provided the French last year when they were mediating", Mr Assad said, according to a transcript provided on the Syria Comment blog. "However, the French then did not comprehend or did not implement the ideas correctly." He attributed this failing on the part of the French government to the mistaken assumption that Syria could speak and act on behalf of its allies in Lebanon, whereas in fact Syria was merely interested in furnishing practical solutions. ...

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South Africa's economy

Power cuts and lower consumer demand will mean less growth

South African growth is already being affected by electricity shortages and a slowdown in consumer demand. The annual figure may fall below 4% for the first time in five years.

Power shortages and continued interest rate rises are beginning to affect economic growth. According to the latest figures from Statistics South Africa the economy grew by just 2.1% in the first three months of 2008--less than half the rate of the previous quarter (5.3%) and the lowest quarterly rate in six years. Power cuts had a substantial impact, unsurprisingly given that they are estimated to have cost the economy some R50bn (US$6.5bn) between November 2007 and January 2008 alone. The mining industry has been particularly hard-hit: following late-January blackouts, state energy utility Eskom cut supplies to 90% of normal levels. However, this is insufficient to maintain output, as the bulk of power used by mines is to keep pits functioning (including ventilation and drainage) rather than producing. Although power supplies to mines were subsequently raised to 95% of normal levels, mining production fell by 22.1% in January-March, declining to its lowest level in 40 years. ...

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Boom to bust

China's property bubble is about to burst

The sizzle is off China's property markets, and that's potentially bad news for the country's social stability.

In the past two years China's property market has enjoyed a spectacular rise, with average prices in some cities doubling. But that raised a red flag with Chinese economic policymakers, and in late 2007 the central government made controlling the rise of asset prices a policy priority. Since then, the State Council has rolled out a series of regulations--from credit ceilings to a 40% down-payment requirement for second mortgages--in order to combat property speculation. ...

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Bashing business

Slovakia's strong economy may be hurt by anti-business policies

Slovakia continues to enjoy stellar economic growth, but local businesses are increasingly unhappy at the anti-enterprise policies of Prime Minister Robert Fico's populist administration. It has sought to unravel its predecessor's lauded health and pension reforms, and to put more restrictions on retailers. In an effort to cap inflation, it has leaned on utility companies to cap prices and is now considering legislation that would make "unjustified" price increases a criminal offence. It is an open question how long Slovakia's government can continue in this vein without damaging the economy.

The Slovak Business Alliance (PAS) announced on June 26th that the business environment had deteriorated over the two years that Mr Fico has been prime minister, pointing to a 6.5-point decline in its business environment index to 120. The PAS poll surveyed nearly 200 companies. ...

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