Political courage the missing link
The global economic and financial crisis is not a work of nature but the predictable result of overly expansionary monetary and fiscal policies and a deregulated and disorderly financial industry. Political courage is needed to implement the most appropriate, perhaps the least popular, policies.- Hossein Askari and Noureddine Krichene (Oct 7, '08)

THE BEAR'S LAIR
Market-place gods had it right
The folly of treating traditional market truths as outdated and irrelevant in the modern world is now all too apparent. Economists, financiers and regulators must return to such fundamentals as they view the wreckage their hubris has encouraged. - Martin Hutchinson (Oct 7, '08)

THE MOGAMBO GURU
Government spending spree
Banks are the focus of US Treasury Secretary Henry Paulson's vast bailout plan but it is the government that needs the cash because it employs half the workers in the country - and the Federal Reserve prints the money the government wants. (Oct 7, '08)

SPENGLER
Hockey moms and
capital markets
Alaska governor and vice presidential candidate Sarah Palin, derided outside the United States as a mere country bumpkin unfit for higher office, personifies why Asian investors continue to pour money into the US, even as its financial sector nears breakdown. (Oct 6, '08)

THE MOGAMBO GURU
'Hoarding' is out
As folk with retirement cash stuck in stock markets see their pension hopes fade, knocking Germany as a gold "hoarder" shows a deep media misunderstanding of the world's economic realities. This is smart investing, and more folk than ever are waking up to it. (Oct 6, '08)

The mother of all golden parachutes
As US politicians reconsider Treasury Secretary Henry Paulson's financial bailout plan they should recognize it will do little to disperse the financial and economic clouds hanging over the world. It will instead allow banks to make huge riskless profits, while for others it is now impossible to make any sound investment decision in an environment propitious only for speculation. - Hossein Askari and Noureddine Krichene (Oct 3, '08)

THE MOGAMBO GURU
Fed up with Fed credit
The latest utterly astronomical jump in the amount of Fed-created credit in the US financial system is raising awareness of the "danger" our financial overlords are igniting of a great inflation in consumer prices to stave off a great depression. Danger? There is no danger!! There is total certainty!!! (Oct 3, '08)

CHAN AKYA
Dismal math
Simple math helps to debunk the mumbo-jumbo carelessly thrown around by central banks and the media with respect to the present financial crisis. The exercise proves among other things that the US Treasury will certainly buy assets above fair value, while European efforts to save their banking systems are doomed. (Oct 3, '08)

Crisis control fit for the TV age
As the world awaits the next vote on the US bank bailout plan, and fantasy numbers become an important balance-sheet entry, the real crisis remains untouched - that Americans think they can adjust economic policies simply on the basis of what they like. They face a rude awakening. - Julian Delasantellis (Oct 2, '08)

THE MOGAMBO GURU
The $200 million house of bread
Outrageous claims to the contrary by supposedly clever folk who should know better, there is No Freaking Way that the US taxpayer will show a real, inflation-adjusted profit from the bailout of the financial sector. Their time would be better spent buying gold. (Oct 2, '08)

CHINA'S DOLLAR MILLSTONE
Gold, manipulation and domination
For China, the world's biggest creditor nation, to allow successful national development it must cease having its currency a derivative of the US dollar and stop relying on a US-dollar denominated trade surplus to finance domestic development. The historic role of gold and its manipulation tells it as much. - Henry C K Liu
(Oct 1, '08)
This is the fourth part of a continuing series.
Part 1: Breaking free from dollar hegemony
Part 2: Developing China with sovereign credit
Part 3: History of monetary imperialism

SPENGLER
Truth, lies and ticker tape
The world will not end if the US Congress refuses to pass a redrawn financial sector bailout plan. Unfortunately, nor will it be the end of America's financier caste, which will live to fleece another day. But when you hear that there is no choice but a bailout, remember: it just ain't so. (Oct 1, '08)

THE MOGAMBO GURU
Inflation in stereo
Thanks to the ceaseless creation of ever-more money and credit, inflation is seeping into every aspect of US life, and it doesn't just affect price labels. Just try getting a product warranty honored. All thanks to former Fed head Alan Greenspan. (Oct 1, '08)

Danger - Ben and Henry at work
One thing is clear. United States Fed chairman Ben Bernanke and Treasury Secretary Henry Paulson have failed to cope with the financial crisis that broke out in August 2007. They have prevented orderly adjustments from bursting speculative bubbles and refused to foster long-term banking stability. Their bailout plan was inequitable, morally unacceptable, in total contradiction to sound banking principles, dangerously inflationary and potentially highly disruptive for the long-term health of the US economy. - Hossein Askari and Noureddine Krichene (Sep 30, '08)

The cost of 'no government'
Americans for six successive congressional elections voted into power the anti-government Republican Party. The bills for "getting the government off our backs" - including its crucial regulatory function - are now coming in. - Julian Delasantellis (Sep 30, '08)

THE BEAR'S LAIR
Creating a great depression
A re-run of the Great Depression, with or without hyperinflation, is still by no means inevitable. Yet we are a lot closer than we were a month ago, and the outlook only looks bleaker when considering the likely actions of the next White House occupant. - Martin Hutchinson (Sep 30, '08)

CHAN AKYA
Deaf frogs and the Pied Piper
The United States financial crisis is being hailed as the death of market capitalism and has resurrected enthusiasm for socialism, notably as practiced in various parts of Asia. Choose that route, and Asian governments can yet manage to heap misery on their unsuspecting populations for years to come. (Sep 29, '08)

SPENGLER
US wealth in shrink mode
Leverage is the secret of American wealth, helping to triple over the past 40 years the proportion of wealth held by the average US family compared with its annual income. With leveraging now broken, the bottom could be a long way down. (Sep 29, '08)

Glaring gaps in the financial system
Proposals to rescue the US financial system deal only with the supply of finance, not with re-regulating finance, jump-starting the economy or other central issues. Whatever else, Congress should not hand over a blank check to the George W Bush administration in its waning days. - Thomas I Palley (Sep 26, '08)

CHINA'S DOLLAR MILLSTONE, Part 3
History of monetary imperialism
Given US dollar hegenomy, China and Japan have little choice but to invest their export earnings in US Treasuries or other dollar-denominated assets. In consequence, China now lends to the US more than double the vast sums Washington lent to war-torn Europe in 1947 under the Marshall Plan. And the US is anything but war-torn. - Henry C K Liu (Sep 25, '08)
This is the third part of a continuing series.
Part 1: Breaking free from dollar hegemony
Part 2: Developing China with sovereign credit

Too little, too late
US Treasury Secretary Henry Paulson's request for $1 trillion to support his financial sector rescue plan is the equivalent of a teaser mortgage rate. The true figure will kick in later - and even then it will be too little, too late. - John Browne (Sep 25, '08)

Global investment takes crisis hit
Foreign direct investment, taking a hit from the spreading US financial crisis, is set to tumble as much as 10% in 2008 from last year's record level, warns Supachai Panitchpakdi, secretary general of the United Nations Trade and Development Conference.(Sep 25, '08)

Gazprom, navy in American knight's move
As the United States mocked Russia's display of its deep-sea capabilities, the visit of Russian warships to South America and the Caribbean coinciding with energy giant Gazprom's deals in the area mark a growing presence on the US backyard. - John Helmer (Sep 24, '08)

SPEAKING FREELY
US on reverse socialism path
US Treasury Secretary Henry Paulson's proposed US$700 billion financial rescue plan leaves more questions than answers - not least, whether that sum is sufficient. Certainly, by using taxes on the middle class to bail out the rich, corrupt and incompetent on Wall Street, his plan marks a gross erosion of the social contract. - Ronald Solberg (Sep 24, '08)

Paulson plan throws oil on fire
US Treasury Secretary Henry Paulson has made the unfolding financial crisis even more dangerous with his plan to create a trust to take on the liabilities of failing institutions. It could ignite the worst inflation in US and reverse globalization to levels not seen since the Great Depression. - Hossein Askari and Noureddine Krichene (Sep 23, '08)

THE BEAR'S LAIR
The wrong rescues
The US and UK governments have displayed an unerring talent for ignoring history with their most recent bailouts of financial companies. The wrong institutions have been saved and basically solid ones allowed to go to the wall. The consequences include high and unecessary bills for the taxpayer and, further ahead, the movement of financial activity to more competently run locations. - Martin Hutchinson (Sep 23, '08)

Too big to fail versus moral hazard
Alan Greenspan, when Federal Reserve chairman, noted that the US economy, "with its wide financial safety net, fiat money, and highly leveraged financial institutions, has been a conscious choice of the American people since the 1930s". The costs of that choice are coming headlong like a runaway freight train. - Henry C K Liu (Sep 22, '08)

CHAN AKYA
Terminal velocity
Bailouts in the United States and elsewhere in the West bring fast forward the decline of the Group of Eight industrialized countries, and mark another key moment in the rise of Asia as the world's sole economically viable region. These trends will only accelerate if existing G-8 governments are voted back to power - and if Asia's central bankers display intelligence. (Sep 22, '08)

SPENGLER
E pluribus hokum , or
When the gamblers bail out the casino
Americans are taxing themselves, hugely, to keep the US financial casino running, even though it will not profit them. Why does the government not, instead, let the Chinese, or the Saudis, take control of failed US banks? Where, in fact, is the leader who will drive out the American oligarchs who have stolen the country's treasure?  (Sep 22, '08) 

Rules, leverage and the fall of man
As the whispering axe of reality terminates this era of the capitalist world, with a bill possibly higher than it cost to defeat Nazism and fascism in World War II, the politicians have a few days to calculate how they can benefit most as the entrails still steam. The rest of us can ask how and when it was allowed that markets alone of human activity were so pure as to require no regulation. - Julian Delasantellis (Sep 22, '08)

CAMPAIGN OUTSIDER
It's the economy, McCain!
The Wall Street crisis demonstrates Republican presidential candidate Senator John McCain either truly doesn't know what he's talking about on the US economy, or he's utterly hypocritical. Or both. - Muhammad Cohen (Sep 22, '08)

The end of a gilded age
The United States government is staring into an abyss as the financial system collapses. Instead of dithering, it must direct investment capital out of speculative paper deals into productive channels matching society's material needs. For now, the rest of us have ringside seats, far too close to the action for comfort, as a gilded age ends.- Steve Fraser (Sep 19, '08)

COMMENT
US at a turning point
The United States is in the middle of a national disaster that has moved well beyond a subprime crisis to one in which the position of the economy is in jeopardy and its way of economic life - tied fundamentally to the availability of cheap credit - is imperiled. - Max Fraad Wolff (Sep 19, '08)

The liquidation trap
A cocktail of forces fostered the exuberance that led the US financial system to its present impasse - a liquidation trap in which falling asset prices compel asset sales and hence further declines. Politicians and commentators on both left and right urge that the "sins" of key actors require punishment. Both views risk unnecessary economic suffering. - Thomas I Palley (Sep 18, '08)

SPEAKING FREELY
Oil market collapse waiting to happen
An estimated US$260 billion was recently invested in oil markets, superimposed as an inverted pyramid of risk on a relatively tiny base, worth about $4 billion, of physical crude oil. The risk of market failure is considerable, and there is little that regulators can do. - Chris Cook (Sep 18, '08)

China's imploding US ally
AIG, one of the few US companies to be founded in China, grew there under the pathfinding leadership of Maurice R Greenberg, who came to be a key player in developing personal and political ties between the two countries. Now Greenberg looks on from the sidelines and scared Chinese AIG customers dump their personal policies. - Richard Komaiko and Chris Stewart (Sep 17, '08)

CHAN AKYA
Waiter, there's a banker in my soup
The Fed's timely courage at avoiding a Lehman bailout and pushing through an AIG takeover, allied with a decision to hold interest rates steady, may yet be seen as the steps that helped to stem the US's financial crisis. It certainly doesn't feel like a turning point, but that is the way emotions differ from fundamentals. (Sep 17, '08)

Crisis curdles China's booming dairy market
The biggest names in China's newly born dairy sector are reeling from a national crisis over chemically tainted baby milk that has left three infants dead and thousands hospitalized. The US$19 billion sector's biggest player, the partially New Zealand-owned Sanlu Group, is scrambling to recall products and fend off allegations that it covered up the scandal for months. - Kent Ewing (Sep 17, '08)

Ben first, economy last
United States Federal Reserve chairman Ben Bernanke's decision to hold interest rates steady helped him re-establish control over the Fed board. But if the choice was between the health of the US economy and the restoration of his authority, it seems the economy received the nasty end of the stick. - Julian Delasantellis (Sep 17, '08)

Dust off the Chicago Plan
An easily implementable plan drawn up in the wake of the Great Depression had the potential to contribute to lasting financial stability and would have precluded the high leverage and monetization of credit instruments that have helped create the present crisis. It is time to dust off the Chicago Plan, and this time act on it. - Hossein Askari and Noureddine Krichene (Sep 16, '08)

THE BEAR'S LAIR
Fed's misplaced fulcrum
The pathological US attitudes to borrowing expose the Federal Reserve as the true culprit behind the present and coming financial troubles. Absent a chairman since Paul Volcker with the requisite moral courage, the Fed's statutes must be revised to force his future all-too slippery successors to pursue Volckerian policies.- Martin Hutchinson (Sep 16, '08)

Silences say it all
Lehman Brothers' death throes demonstrated that here, at last, was one US financial institution that, though big, was not "too big to fail", one that at last would pay for its promiscuous and profligate ways. If we should say nothing but good of the dead, then there's nothing else to say. Next up for the measuring tape is Bank of America/Merrill. - Julian Delasantellis (Sep 15, '08)

SPENGLER
Lehman and the end of the era of leverage
The failure of Lehman Brothers and Bear Stearns does not reflect the breakdown of a particular kind of corporate culture. What took both firms down, rather, is a sudden break in the chain of expectations between the present and the future. Today’s savers no longer have any confidence that they will earn enough to fund their retirements by putting money at risk. And so the Great Crash of 2008 enters a new phase. (Sep 15, '08)

CHAN AKYA
Pareto's bazooka
The roots of Lehman's precipitous decline this week can be traced to the US government's policy actions in the rescues of Bear Stearns, Fannie and Freddie; all of which sufficiently changed the motivation of major market players to essentially invalidate core principles. The resulting food fight is lethal for the chances of a meaningful economic recovery. (Sep 12, '08)

The Chicago School's long descent
Economist Milton Friedman famously said, "There is no such thing as a free lunch." But this is what today's American economy is all about. Therefore, it is against the true long-term interests of business to support a Friedman Center that degrades economic thought into ideological rhetoric, not real analysis. - Michael Hudson (Sep 11, '08)

Russian equity flight accelerates
Russia's stock markets, hit hard by declines in world energy and commodity prices and done no favors by the Kremlin's decision to invade Georgia last month, are now declining at an even faster pace. It is time for surviving investors to buckle their seatbelts. - R M Cutler (Sep 10,'08)

Food trade's fatal price pendulum
Five years on, the "conspiracy of silence" over collapsing commodity prices lamented by French president Jacques Chirac has been replaced by a global concern over soaring prices hitting hard the same group of countries. More than price swings are amiss. (Sep 10,'08)

Curbs on oil speculators a diversion
The US Congress decision to consider curbs on oil-market speculators may indicate a lack of understanding of their role and influence. Restrictions would certainly play into the hands of Venezuela's Hugo Chavez and his OPEC colleagues, not to mention American oil marketers. - Andrea Corcoran and Tom Corcoran (Sep 10,'08)

The ABCs of GSEs and SOEs
The failure and nationalization of Fannie Mae and Freddie Mac is an object lesson to finger-pointers in the US who decry the role in the Chinese economy of state-owned enterprises. Officials in Beijing can also learn from the collapse of the US mortgage guarantors. - Richard Komaiko (Sep 9,'08)

Paulson placates China, Russia - for now
US Treasury Secretary Henry Paulson had little choice but to bail out Fannie Mae and Freddie Mac, with China and Russia holding large amounts of their debt. Doing nothing would have left no further reason for other countries to invest in US government-guaranteed obligations. That day of reckoning has now merely been delayed. - Julian Delasantellis (Sep 9,'08)

THE BEAR'S LAIR
Resurrection of the charlatan
That most economically counterproductive of activities, the Keynesian boost in government spending, is making a horrid comeback - witness the departure of Japanese Prime Minister Yasuo Fukuda. Politicians in Britain and the US are also finding it increasingly convenient to spend public money. - Martin Hutchinson (Sep 9,'08)

Asia in a concertina squeeze
Hopes that the Asian economies have achieved a degree of independence from that of the US are proving unfounded. Rather than being decoupled, they are still all too firmly attached, as in a squeezed concertina.  - Thomas I Palley (Sep 8,'08)

BP's Russian defeat a market victory
BP's agreement with its Russian partners over the running of its TNK-BP joint venture marks more than a defeat for the British company and its political chums in Westminster. A footnote to the deal may tell more about BP's tactics and intentions than the company should have allowed to be known. - John Helmer (Sep 5, '08)

COMMENT
Friedman's misplaced monument
The University of Chicago's plans to establish a research institute commemorating economist Milton Friedman, whose now increasingly discredited influence shaped the world, are inappropriate. Opposition can help expose Friedmanite market fundamentalism as a device that rationalizes the exploitation of the many by a few the world over. More than money matters. - Henry C K Liu (Sep 4, '08)

Dry times for hedge funds
Making money - gazillions and gazillions - isn't hard for hedge funds if the time is right. It is just about the easiest thing one can do in the markets. The problem is that now is not the right time. - Julian Delasantellis (Sep 4, '08)

THE BEAR'S LAIR
Blind to overshooting
Present optimism at US data, such as the latest house-price declines, displays a blindness to the business cycle. Summer four years hence might be a better time to start investing. The year 2013 would be safer. - Martin Hutchinson (Sep 3, '08)

COMMENT
Obama shouldn't cave on trade
Democratic presidential candidate Senator Barack Obama should withstand pressure from free-traders and remain firm on his pledges to impose strong labor and environmental standards in existing and future trade deals. Opponent John McCain's fervent embrace of "free trade" is one reason. Voters' lost jobs is another.(Sep 2, '08)

CHAN AKYA
Bear-faced bluff
Bluffing to buy time is the latest must-do pastime from China to the US, South Korea to Singapore. Political leaders, central bankers and now their commercial counterparts are at it - accompanied by the sound of Asian cash gurgling down the US drain. - Chan Akya (Aug 29, '08)

And the prudent shall survive
Many regions will suffer if the US enters a severe recession and as the government increasingly resorts to printing money to meet its promises. Nations that make still-needed goods and with prudent economic policies will be hurt the least. - John Browne (Aug 28, '08)

Central banks need a Basel lll
Central banks show they have learned very little from history, with their interest rate manipulations and attendant inefficiencies and distortions. They need a Basel lll, setting appropriate guidelines, or inflation and instability will become the permanent landscape. - Hossein Askari and Noureddine Krichene (Aug 28, '08)

Leviathan's return
The current global economic crisis will mark the end of the state's retreat initiated by Margaret Thatcher and Ronald Reagan. Deeper government interventions in society are here to stay, and the hunting ground for financial heists, fictions and bubbles by capitalists making a fast buck at the expense of lay persons will narrow. - Sreeram Chaulia (Aug 27, '08)

Foreign spigot off for US consumers
Foreign investors, faced with a falling US dollar and the plunging value of Fannie Mae and Freddie Mac, are unlikely to repeat the recent scale of lending to the US, a borrower of more than 50% of internationally available savings. The diminishing role of Fannie and Freddie will impact more people for far longer than presidential running mate selections. - Max Fraad Wolff (Aug 27, '08)

Tough love's fatal attraction
After numerous market interventions, the US Federal Reserve and Treasury may be close to the point, like a drug-abuser's supportive family, where it says "shape up, or you're on your own". It would be a catastrophe for most of us, yet such a free-market stance might be a tempting vote-grabber. For the next 70 days, don't assume any firm is too big to fail. - Julian Delasantellis (Aug 26, '08)

THE BEAR'S LAIR
Here we go again
Parallels between the 1929-32 economic downturn and current US and global difficulties are now alarmingly apparent. A repetition of the errors that deepened the Great Depression is also increasingly likely, whoever runs the White House, with damage to economies and civil liberties. - Martin Hutchinson (Aug 26, '08)

SPEAKING FREELY
Playing nice with Russia has failed
The US and European Union, believing their policies would promote democracy in Russia, have given Moscow nearly a free ride on the Western economic system in the face of high Russian barriers on imports and increasing exclusion of Western investors. The Georgia invasion indicates that a new realism should guide US and European policy. - Peter Morici (Aug 25, '08)

Sportswear firms fail Olympics test
Sportswear companies pay costly sponsorship and licensing sums to associate their brands with the Olympic Games. Yet their products, even after years of bad publicity, are too often still made by underpaid, overworked men, women and children. (Aug 22, '08)

Predator state calls the shots
The all-too-visible predatory nature of contemporary US governance is quintessentially linked to corporations. Yet attempts to change this uniquely American phenomenon may push voters to a closer embrace of the predators. - Thomas I Palley (Aug 21, '08)

Don't cry for Doha
The recent collapse of the Doha Round of trade talks raised misplaced cries that an opportunity was being lost to lift millions of people out of poverty. The round was based on a myth. Reforms happen because countries find greater openness to be in their best interest. (Aug 21, '08)

THE BEAR'S LAIR
The new cold war era
The redrawing of the political map with Russia's invasion of Georgia signals the onset of a new cold war. The economic consequences that will follow are extensive. They also mean that, with will and competence, victory for the West should be much quicker and easier this time round.- Martin Hutchinson (Aug 19, '08)

The US economy is in a funk
Domestic woes in the US economy are exacerbated by trade deficits on oil and with Asia on consumer goods. Regulatory and personal changes of habit are needed to get back on track. A tax on yuan-dollar transactions proportional to Chinese currency intervention would also help. - Peter Morici (Aug 18, '08)

Empty drums
The US Republican Party of presidential candidate John McCain has stumbled across a genuine domestic policy issue it feels can work to its advantage, but attempts to link gas price declines with the lifting of curbs on oil drilling along America's coasts are bogus. - Julian Delasantellis (Aug 15, '08)

Food aid left off the table
Hunger isn't inevitable, and in the 21st century the world grows enough food. Change is required not just where hunger is prevalent, but also in rich countries, particularly in the US, whose food aid practices, such as slow delivery and monetization of what it offers, act against resolving the problem. (Aug 14, '08)

Set to soar - or swoon
The apparent recent strength of the US stock market and dollar, in spite of worrying news items, might be read as indicating a floor has been reached. Yet if the past decade is any guide, the future remains bleak. - John Browne
(Aug 14, '08)