Where Is Google Parking Its $40 billion Cash?

Published on Aug 7, 2012 by WSJDigitalNetwork : Tech giant Google has found a new place to park some of its $40 billion cash hoard: bonds backed by car loans. Katy Burne reports.

         

FITCH DOWNGRADES 5 EUROZONE COUNTRIES.

Uploaded by cctvnewschannel on 27 Jan 2012 - U.S ratings agency Fitch has cut the credit ratings of Italy, Spain and three other euro zone nations as the region's debt crisis deepened. Fitch cut Italy by two notches to A- from A+, while Spain was lowered to A from AA-. Belgium, Slovenia and Cyprus were also downgraded.

Meanwhile, Fitch put all five nations' credit outlooks as "negative". However, investors were still optimistic over the Greek debt swap deal with its private creditors and the Euro rose against the US dollar for a fifth straight day.

Part 4: Irresponsible packaging & selling of Investments.

A history of the Meltdown - The Secret History of the Global Financial Collapse 2010:
The Men Who Crashed The World : 30 Dec 2010

Part 3: Irresponsible packaging & selling of Investments.

A history of the Meltdown - The Secret History of the Global Financial Collapse 2010:
The Men Who Crashed The World : 28 Dec 2010

Part 2: Irresponsible packaging & selling of Investments

A history of the Meltdown - The Secret History of the Global Financial Collapse 2010: The Men Who Crashed The World : 29 Dec 2010

Part 1: Irresponsible packaging & selling of Investments.

A history of the Meltdown - The Secret History of the Global Financial Collapse 2010:
The Men Who Crashed The World : 28 Dec 2010

Global Financial Crisis Explained

Uploaded by worldinformant on 23 Aug 2010 - The Short and Simple Story of the Credit Crisis.By Jonathan Jarvis | Crisisofcredit.com 

 The goal of giving form to a complex situation like the credit crisis is to quickly supply the essence of the situation to those unfamiliar and uninitiated. This project was completed as part of my thesis work in the Media Design Program, a graduate studio at the Art Center College of Design in Pasadena, California.

Trader on the BBC says Eurozone Market will crash

Uploaded by nsotd4 on Sep 26, 2011 - In a scary and painfully frank interview a freaked out BBC interviewer is visibly shaken when market trader Alessio Rastani predicts that the "Market is Toast." Apparently there is nothing Euro governments can do.

Who Benefits From Deflation?

TheRealNews | November 19, 2010 | - Pollin: Deflation is dangerous to overall economy, but Fed policy is no solution.

U.S. Bond Bubble Ready to Burst:

While the World Focuses Attention Elsewhere.

Najib The Ponzi scheme master

Malaysia is close to bankruptcy.

The government has no more money. 2009 must have been a horrible year with little corporate taxes collected (and expected to be collected) due to the economic slowdown. Foreign investments have also slowed to a halt.

And yet Najib's government is trying to spend their way out of the economy. Honestly, if carried out well, government spending is a key component in driving the economy up. But not in Malaysia. The leakages are too large. As a result, the expected multiplier effects do not maximise. The money disbursed end up in the pockets of those who least deserve it instead.

2009 must go on record as the year with the largest amount of government bonds issued. Amanah Saham this and Amanah Saham that. I don't have the statistics but I doubt 2009 will be too far off the numero uno spot even if it does not take the top spot. All sorts of bond were raised and for the first time, take-up quotas drawn along the usual racial lines have been removed.

What does that mean? The government is simply desperate for money. The amount that they could raise from the protected and preferred Malay race have simply maxed up. That left Najib with no choice but to loan from the desperate Chinese and Indians on the pretext of equality and sharing of wealth with all in the country. And at lower rates of returns too.

Malaysians are not well read people. And I bet you that most people do not understand what a bond is apart from it being an investment opportunity that generates interest income higher than that offered by FDs. Bonds are actually IOUs. It is a loan. When you buy a bond, you are actually lending money to the bond issuer and you get paid back upon maturity.

Upon maturity, paying back of bond money is an issue should the bond issuer (in this case the government of Malaysia) has no money to pay. But as the government, this can be solved via a few simple strategies at the expense of the rakyat.

The government may raise new bonds to pay-off the earlier bonds. And this can be done over and over again. The bet by the government is that the government's income will improve in the future and one day, these loans from the public can be paid off. Theoretically, this sounds ideal. But do you genuinely accept that from the government of a nation whose corruption index ranking have been consistently falling to an embarrassing 57 now? Regardless of how much of the nations resources are depleted (our oil is running out by the way; palm oil isn't that popular in the world market unless you are a sucker who believes in Utusan Malaysia; we do not have much rubber; we ran out of tin decades ago), the profit do not go back to the rakyat but the Swiss private bank accounts of our politicians.

So, the bonds will never get to be paid from the ideal profits. New bonds will be issued to pay off earlier bonds. And this will go on and on and on. Over time, with larger amount of bonds raised every time to cover for additional 'nation building and development', government debts will only continue to rise. This is what we call a Ponzi scheme. Read Bernie Madoff. Read cheat. Read con.

The present government is passing it's current problem to the future generation. An irresponsible government indeed. In developed nations, the people are able to appreciate this problem. Parliaments debate after debate on bond issuances. In Malaysia, the Prime Minister approves new bonds while he gobbles down his nasi lemak with ayam rendang and sotong sambal. The future is not his problem anyways. He has his hot seat to protect; lose it or he will get nagged to his death by the thing who sleeps next to him.

Has anyone actually thought that Najib knows that his days are numbered and he is maximising his personal dough collection? Think about it. Whatever he takes from the bonds will have to be paid back by the next government. If he is not going to be the next government, paying back will not be his problem.

But whatever he does now will still be a problem for the rakyat in the future. If BN continues, it will be BN's repayment problem. If PR takes over, it will be PR who is faced with the same repayment headache. The only permanent fixture is that the rakyat is at the losing end.

Some may argue that all the government has to do is to print more money. Yes, that is true. A learned friend of mine once said that the government will never run out of money because it can just print more. That is a brilliant statement. But of course it has it consequences. The amount of paper money in circulation must correspond to the amount of gold held in reserves. If paper money exceeds the value of gold - which is what the US is facing right now - then the said currency's value falls. Purchasing power declines. Inflation rises. And a whole lot of other negative economic terminologies.

So you see, printing money to repay government loans solves the loan issue but it brings the country to a whole new level of economic problems.

And yes, you got the message, the rakyat loses.

If you are lucky to live short enough, the problem will not be yours. But your kids? You better leave them enough money to buy bananas at RM1 million per comb.

Additional note by author: Najib has pledged more and more spending. But with limited funds available, other government disbursements will have to be reduced. Hence, the proposed (rumoured) removal of subsidies for petrol, sugar and flour are very real. Expect electricity tariffs to go up too. Rakyat will suffer like never before. Is he not interested in getting re-elected? Does sound like Najib is taking all he can and abandoning ship.

 Warga Marhaen   | harakahdaily

Could a Spike in Bond Yields Cause the Economy to Stumble in the New Year?

In normal times, at their most basic level, bond prices follow some very simple laws of financial physics: When interest rates rise, bond prices fall and bond yields rise; when rates fall, bond prices rise, and bond yields drop.

However, bonds could break those laws of financial physics in the New Year - and in a big way. That could inflict some real financial pain on the U.S. recovery, the dollar, the shuddering housing market - and could even ignite a major stock-market reversal.