Posts tagged Economy
Posts tagged Economy
The southeastern Michigan city of Milan, a 40-minute or so commute to Toledo or Detroit industrial centers, might become the new home for a 200-acre or larger “China City” that would house Chinese business people.
Milan, a city of 6,000 surrounded by farm fields, is the locale for an unusual deal in the industrial heartland as the rocky relationship continues between the People’s Republic of China and the United States.
A group of mainland Chinese known as Sino-Michigan Properties LLC paid $1.9 million for 200 acres of farmland on Milan city limits in purchases this year and in 2011, according to local officials and property records.
Milan (pronounced MY-lan) is located on U.S. 23 a half-hour from the Ohio border and a short drive from the University of Michigan in Ann Arbor — a destination favored by Chinese students.
The city straddles the border of Wastenaw and Monroe counties and is best known regionally for the Milan Dragway race track and a federal prison that can be seen from the highway.
The investors intend to build a 415-unit housing complex complete with artificial lakes and up to 6,000-square-foot homes, as well as a cultural center, Michigan officials briefed on the project said.
As yet, the project hasn’t been formally reviewed by two townships that must approve it, and questions abound.
A presentation last month to the Milan City Council by the city administrator said the project “would be marketed to Chinese business people who want to start companies in the United States,” reported the Milan News Leader newspaper.
Attorney Arthur Dudley II, of the Detroit firm Butzel Long, the registered agent for Sino, declined comment.
He also declined to put a reporter in touch with the investors. “I can’t comment on anything about that,” said the attorney, who in 2008 was selected by Crain’s Detroit Business as a top-three finalist for “Deal Maker of the Year.”
But Doug Smith, senior vice president for business and community development for the Michigan Economic Development Corp., met with the investors.
“It’s a group that wants to build a China city, starting with housing over there in Milan,” Smith said.
A veteran of efforts to attract Chinese investment who led a trip to China last year with Michigan Gov. Rick Snyder, Smith said proximity to the auto industry is a potential plus for the group, as is closeness to the University of Michigan. “One of the big reasons they come here is to put kids in school,” he said.
Smith also noted an uptick in interest by China to locate factories in the U.S. to avoid tariffs and transportation costs.
“If they want to be in the American market, they have to have manufacturing here. They want to get out ahead of that,” Smith said. Local Michigan township approval awaits action and will require much more information if it is to happen, said township and Milan city elected officials.
Phil Heath, 57, Milan Twp.’s supervisor since 2008, said he has more questions than answers at this point, such as how local schools could handle the influx.
“People got questions, people want answers. It will be an interesting topic for the next six months. I hope somebody comes up with some answers and facts. All I know is they want to propose this development. There is a pretty little map and that is where it ends,” Heath said.
Milan Mayor Kym Muckler, who said she has not met with the project principals, said she understands the deal to be from “a conglomerate” of Chinese businessmen who paid cash.
Muckler, a former reporter at the local newspaper, said approving the project requires extending water and sewer from the city to the township.
How natural wetlands on the property are handled could also be an issue.
“Township residents have many concerns with this project,” Muckler said. “I have my concerns and many are the same that the folks in the township have. The political climate is sensitive — we are the city and have services, but townships are where the land resides.”
Analyst Thilo Hanemann of the research analysis firm Rhodium Group, a close tracker of Chinese business activity, said he’s never heard of anything similar to the Milan proposal.
“I have not seen a project of this large scale targeting Chinese businessmen,” he said. Real estate inflation in China is pushing investors to low-cost places to place money, he added. “You can be sure the price of property in Shanghai is a multiple of what it is in Michigan.”
There have been no meetings, or hearings, or any other official action scheduled on the project, London Twp. Supervisor Barb Henley said Wednesday. “My only question is, ‘Why Milan?’ ”
Concluded township supervisor Heath: “In this economy, it’s unusual for anybody to say they want to build something.”
Believing in the classic American Dream that hard work will deliver prosperity is like believing that buying super lottery tickets is a smart way to become wealthy. Both are delusional beliefs because both are bets on incredible long shots that will disappoint nearly everyone who believes this garbage. The American Dream has been destroyed by a revolution from the top.
Americans have been watching authentic bottom-up revolutions in other countries but remain oblivious to a very different kind of revolution by elites that has been in progress for over three decades in the US. It has not destroyed the government or Constitution, merely bought control of both. Our government was not overthrown in a bloody revolution. It was purchased to win the class war against the 99 percent.
Call it the frog revolution. It is best understood by the parable of the frog in water that stays in it as the temperature is raised, ultimately to the boiling point, killing the frog. The key indicator of the US frog revolution is a mountain of data showing the rise in economic inequality, the loss of upward economic mobility, and the killing of the middle class. The vast majority of Americans, the 99 percent of frogs, remain ignorant of how they are being destroyed by that infamous rich and powerful one percent.
Note that in a poll released by Pew, 19 percent of Americans agreed with the statement that “success in life is pretty much determined by forces outside of our control,” the highest number since 1994. It would be much higher if there was not an epidemic of delusional thinking. But more on target, 40 percent of Americans — also the highest number since 1994 — agreed with the statement that “hard work and determination are no guarantee of success for most people.” For the counter-revolution we need that number must get much higher.
Charlie McGrath of Wide Awake News offers an insightful and succint breakdown of what’s really going on behind the scenes of government and finance, and says that the people have had enough. The push-back has been growing for quite some time, starting first with Tea Party protests in 2009 and then with widespread Occupy protests in 2011.
With the system already in the midst of collapse and slowly destabilizing, many have not yet realized what’s happening.
Excerpted from Charlie McGrath (video follows excerpt):
You’re going to see what’s happening in the rest of the world come to this country. It Is Inevitable. It Is Going To Happen.
Do you think for one second Department of Homeland Security is ordering 450 [million] man shredder rounds so that they can sit back and plink at gofers on the weekend? Absolutely not.
Do you think this one internet bill after another, this trying to clamp down on the sharing and free ideas on the internet because it’s not good for people? No. The control grid is being put into place to handle what they know is coming. They already know this is coming. A kinder gentler government is on its way out the door. Par tyranny is what’s on the menu.
Two days ago we have an elderly pharmacist go before parliament [in Greece], put a gun to his head, and blow his head off. In his suicide note he writes “I would rather die than rummage through the garbage. This is sparking a new onslaught of riots inside of Greece.
But it’s not going to stop with Greece. Just like the Greek debt deal did not fix the problem.
The problem is people are being abused and thrown away like trash; they’re being treated like serfs. At some point they’re going to push back.
So, isn’t it fortunate that we have all these pieces of legislation waiting in the wings? Isn’t it fortunate for the government that we have the security industrial complex squarely aiming 450 million forty caliber human shredder rounds at the people that might want to push back.
Washington - Financial speculators are gambling on oil the same way they gambled on the housing market a few years ago — a frightening prospect for the fragile economy, a Democratic congressional committee was told Wednesday.
"It is similar to the gambling Wall Street did on whether or not people would pay their subprime (below-market rate) mortgages in the mortgage meltdown," said Michael Greenberger, a law professor at the University of Maryland and a former federal regulator of financial markets. "Now they are betting on the upward direction of the price of oil."
The housing industry collapse helped trigger the deep recession that began in late 2007 and whose effects are still felt today.
The economy is slowly recovering, Greenberger said, but it could come to a halt unless oil prices come down. Gene Guilford, president of the Independent Connecticut Petroleum Association, told lawmakers that the recent oil price run-up has cost consumers an additional $10 billion a month since mid-December.
The House of Representatives’ Democratic Steering and Policy Committee, which consists of party leaders, called the hearing to spotlight Democratic efforts to promote lower oil and gasoline prices. No Republicans were present.
Today’s routine $4-and-higher prices for a gallon of gasoline have nothing to do with conventional supply-and-demand forces, Greenberger said. He formerly directed regulation of market trading in futures contracts and derivatives for the Commodities Futures Trading Commission.
"It is excessive speculation, which is a fancy word for saying that gamblers wearing Wall Street suits have taken these markets over," he said.
Financial speculators such as investment banks and hedge funds account for at least 65 percent of purchases of contracts for future oil deliveries, more than twice their traditional share, while buyers who intend to actually take delivery of the oil and use it, such as airlines, make up only about one-third of demand. The speculators bid up contract prices, sending oil and gasoline prices higher and reaping them huge profits. The bidding is stoked by fear of possible violence in oil-producing countries, notably Iran.
Congress has tried to pressure the Commodity Futures Trading Commission to put limits on how many contracts anyone can buy, but financial interests have stymied CFTC efforts in federal court.
Greenberger suggested several remedies, including a strong Justice Department probe. He said the threat of a serious investigation can be enough to intimidate speculators.
"If there is a real investigation, just the appearance of it will cause these cockroaches to scatter," he said, "because the light will be turned on."
The Energy Information Administration said Wednesday that U.S. crude oil inventories “are above the upper limit of the average range for this time of year.” Total motor gasoline inventories also remain in the upper limit of the average range. Both were as of March 30. That means supplies are plentiful; there’s no shortage pressure driving prices up.
The EIA, the statistical arm of the Energy Department, also said that total products supplied over the last four-week period have averaged about 18.2 million barrels per day, down by 4.7 percent compared with the similar period last year. Similarly, over the last four weeks, motor gasoline product supplied has averaged nearly 8.6 million barrels per day, down by 3.8 percent from the same period last year.
That inventories are up and products supplied are down suggests that producers are stockpiling supplies on concern that prices could go even higher, when they could earn a premium, even as demand for oil and its derivative products such as gasoline is actually down. Inventories are often built up ahead of the summer driving season.
The benchmark U.S. oil price fell Wednesday to $101.47 in New York, its lowest level since mid-February, but still well above where analysts believe it should be with supplies up and demand down.
Imagine a country in which the very richest people get all the economic gains. They eventually accumulate so much of the nation’s total income and wealth that the middle class no longer has the purchasing power to keep the economy going full speed. Most of the middle class’s wages keep falling and their major asset – their home – keeps shrinking in value.
Imagine that the richest people in this country use some of their vast wealth to routinely bribe politicians. They get the politicians to cut their taxes so low there’s no money to finance important public investments that the middle class depends on – such as schools and roads, or safety nets such as health care for the elderly and poor.
Imagine further that among the richest of these rich are financiers. These financiers have so much power over the rest of the economy they get average taxpayers to bail them out when their bets in the casino called the stock market go bad. They have so much power they even shred regulations intended to limit their power.
These financiers have so much power they force businesses to lay off millions of workers and to reduce the wages and benefits of millions of others, in order to maximize profits and raise share prices – all of which make the financiers even richer, because they own so many of shares of stock and run the casino.
Now, imagine that among the richest of these financiers are people called private-equity managers who buy up companies in order to squeeze even more money out of them by loading them up with debt and firing even more of their employees, and then selling the companies for a fat profit.
Although these private-equity managers don’t even risk their own money – they round up investors to buy the target companies – they nonetheless pocket 20 percent of those fat profits.
Elderly man takes life outside Athens parliament after saying in note that he did not want to pass debts on to his child
An elderly man who took his life outside the Greek parliament in Athens , in apparent desperation over his debts, has highlighted the human cost of an economic crisis that has not only brought the country to the brink financially, but also seen suicides soar.
As Greeks digested the news, with politicians clearly as shocked as society at large, mourners made their way to Syntagma square, where the retired pharmacist shot himself with a handgun.
The 77-year-old pensioner pulled the trigger as people were emerging from a nearby metro station in the morning rush hour. One witness told state TV that before shooting himself he had shouted, “I’m leaving because I don’t want to pass on my debts.”
In a handwritten note, the unidentified man, who was described as an “upstanding and decent” father of one, said he had decided to end his life because he did not want to be reduced to foraging through rubbish bins to survive.
"The Tsolakoglou occupation government has nullified any chance of my survival which was based on a decent salary that for 35 years I alone (without state support) paid for, " said the note, likening the Athens government to that run by Giorgos Tsolakoglou who headed a collaborationist administration when the Nazis invaded and occupiedGreece during the second world war.
"Because I am of an age that does not allow me to forcefully react (without of course excluding that if some Greek took a Kalashnikov first, I would be the second) I see no other solution than a decent ending before I start looking in the garbage to feed myself. I believe that youth who have no future will one day take up arms and hang the national traitors upside-down in Syntagma square just as the Italians did in 1945 to Mussolini."
Within hours, dozens of handwritten notes and flowers had been pinned to the tree under which he had stood. A rally “to ensure that we don’t get used to such deaths” was organised in Greece’s northern capital, Thessaloniki. Despite the stigma attached to suicide in a country whose official church refuses to bury those who take their own lives, Wednesday’s death quickly acquired a very different significance, with priests being among those who rushed to express their regrets.
For many, the suicide encapsulated the desperation of Greece’s older generation whose pensions and benefits have been cut by up to 25% as government officials desperately try to rein in runaway public finances.
Athens is under intense pressure from international creditors now keeping its economy afloat to make further radical reforms and cutbacks.
Police data show a 20% increase in suicide rates in the two years since the outbreak of Europe's debt crisis in Greece in late 2009, although the health ministry estimated the figure was almost double that in the first five months of 2011 compared to the first five months of 2010. Suicide hotlines have been deluged with appeals for help.
"Calls have doubled in the last year," said Eleni Bekiari, a psychiatrist who runs a suicide helpline at Klimaka, a refuge set up to provide psycho-social support for the needy and homeless.
"Economic reasons are invariably cited as the main cause," she said.
The symbolism of the suicide outside parliament was not lost on politicians. “It’s such a shocking event that any political comment is inappropriate and cheap,” said Evangelos Venizelos, leader of the centre-left Pasok party.
A University of Zurich study reports that a small group of companies – mainly banks – wields huge power over the global economy. The study was completed by Stefania Vitali, James B. Glattfelder, Stefano Battiston at the Swiss Federal Institute in Zurich
The study is the first to look at all 43,060 transnational corporations and the web of ownership between them – and created a ‘map’ of 1,318 companies at the heart of the global economy. The study found that 147 companies formed a ‘super entity’ within this, controlling 40 per cent of its wealth.
All own part or all of one another. Most are banks – the top 20 includes Barclays and Goldman Sachs. But the close connections mean that the network could be vulnerable to collapse. In effect, less than one per cent of the companies were able to control 40 per cent of the entire network.
Economists such as John Driffil of the University of London, a macroeconomics expert, stated that the value of its study wasn’t to see WHO controlled the global economy, but the tight connections between the world’s largest companies.
The collapse of 2008 showed that such tightly-knit networks can be unstable, Some of the assumptions underlying the study have come in for criticism – such as the idea that ownership equates to control. But the Swiss researchers have simply applied mathematical models usually used to model natural systems to the world economy, using data from Orbis 2007, a database listing 37 million companies and investors.
1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
9. UBS AG
10. Merrill Lynch & Co Inc
11. Wellington Management Co LLP
12. Deutsche Bank AG
13. Franklin Resources Inc
14. Credit Suisse Group
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
18. Goldman Sachs Group Inc
19. T Rowe Price Group Inc
20. Legg Mason Inc
21. Morgan Stanley
22. Mitsubishi UFJ Financial Group Inc
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation
Title: Does One “Super Corporation” Runs the Global Economy: Study claims it could be terrifyingly unstable
Publication: Mail-On Line, 10/20/11
Author: Rob Waugh.
Title: The Network of Global Corporate Control
Authors: Stefania Vitali, James B. Glattfelder, Stefano Battiston
Publication: Public Library of Science
Date of Publication: 26 October 2011
Student Researcher: Sean Lawrence, Sonoma State University
Faculty Advisor: Peter Phillips, Sonoma State University