Globalization’s Achilles’ Heel

Countries are becoming more interdependent and nationalistic. This combustible combination could lead to instability.

By Robert J. Samuelson | NEWSWEEK

Published Jul 12, 2008

From the magazine issue dated Jul 21, 2008

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Posted By: Jack999 @ 07/24/2008 2:23:19 AM

Comment: Us economic looks bleak ahead,this why americans must realise their American Dreams slipping away day by day since depression days.The troubles of mortgage finance giants are pushing up home loan rates to their higest levels in five years.While the us inflation is up since 17 years.the average interest rate.

The average rate for very big,so called 'Jumbo Loans' which cannot be sold to Fannie Mae and Freddie Mac was 7.8%,the highest since December 2000.
Loan rates are rising because of concerns in the financial markets about the future of Fannie Mac and Freddie Mac,which own the guarantee nearly half of the nation's US$12 Trillion mortgage markets to foreign bond investor.
The Washington can only try to stablise the Market by adding the cost is being passed on to comsumers via mortagage markets when,the the time US have the highest inflation ,unemployments,when personel income become flactuate.The rate hike is the greatest concern to home owners,whose mortgages required them to pay only the interest on thier lons for the few years.If such borrowers are unable to refinance into lower-cost loans,many of them will face the propects of having to pay both interest and principle at higher,adjustable rates.

Let's me show you example for borrowers with a US$400,000 loan,such a jump could send their monthly payments to US$2,338 from US$1,417 that estimate the mortage payment .Im wondering how on earth the americans going to face this reality of future.

US economy not going to be looks bleak but the Confidence level with foreign fund manager is sinking day to day by removing out billion Fund out from US soil.

Only Obama policy looks much more brighter future for US to bring the confidence back in America compares to any John McCain policy.
Posted By: Jack999 @ 07/24/2008 2:13:32 AM

Comment: Us economic looks bleak ahead,this why americans must realise their American Dreams slipping away day by day since depression days.The troubles of mortgage finance giants are pushing up home loan rates to their higest levels in five years.While the us inflation is up since 17 years.the average interest rate.

The average rate for very big,so called 'Jumbo Loans' which cannot be sold to Fannie Mae and Freddie Mac was 7.8%,the highest since December 2000.
Loan rates are rising because of concerns in the financial markets about the future of Fannie Mac and Freddie Mac,which own the guarantee nearly half of the nation's US$12 billion mortgage markets to foreign bond investor.
The Washington can only try to stablise the Market by adding the cost is being passed on to comsumers via mortagage markets when,the the time US have the highest inflation ,unemployments,when personel income become flactuate.The rate hike is the greatest concern to home owners,whose mortgages required them to pay only the interest on thier lons for the few years.If such borrowers are unable to refinance into lower-cost loans,many of them will face the propects of having to pay both interest and principle at higher,adjustable rates.

Let's me show you example for borrowers with a US$400,000 loan,such a jump could send their monthly payments to US$2,338 from US$1,417 that estimate the mortage payment .Im wondering how on earth the americans going to face this reality of future.

US economy not going to be looks bleak but the Confidence level with foreign fund manager is sinking day to day by removing out billion Fund out from US soil.

Only Obama policy looks much more brighter future for US to bring the confidence back in America compares to any John McCain policy.
- Posted By: Jack999 @ 07/24/2008 2:20:24 AM
  
  Comment: typo US$ '12 TRILLION' morrtage market.
Posted By: randymiller @ 07/23/2008 12:40:10 PM

Comment: After years of reading and watching media economics columnists lecture us on "this is what is really going on, you just have to go back to Econ 101", it is refreshing to hear Samuelson say most economists and bankers are somewhat in a fog. So, in such situations move slowly, and carefully gather facts. And ask a lot of questions. Has the concentration of money in retirement funds, and the concentration of wealth in the hands of the rich, created this scenario of too many investment dollars chasing too few opportunities? Are the gurus at Morgan Stanley and Goldman Sachs putting out intentionally misleading information about commodity prices? Can we get enough transparency in the OTC markets and so called dark markets, for futures, so that we can make informed investment decisions? The Gramm stuff does not surprise me. The Republican party has created a Dodge City mentality in their economic views, where everything goes, and the belief that wealth indicates virtue.
Posted By: thehappyamerican @ 07/18/2008 7:48:04 PM

Comment: Great article! The most globalized time in world history may have been just before WW I,and nobody saw it as dangerous. Globalization ,as a trend, is not new upon the globe. Right up to the finual months befor the World War began the conventional wizdom was that global trade and commerce made war impossible. thereby making it entirely inevitable. From peace, pease and more peace to come to appauling casualties and stupifying rates in just a few months time!And each side convinced it would be over very soon!
One assisination , and the whole world turned upside down!
Posted By: msoliman @ 07/16/2008 1:36:05 AM

Comment: Goldman Sachs study. said If present economic trends continue (a big "if"), the worldwide middle class will expand by an additional 2 billion by 2030, (Goldman Sachs study). WRONG! Not if their past endeavors in mortgage securities has anything to say. I work to settle wrongful and negligent lender claims with borrower in the aftermath of the mortgage PattiMelt-down. What a joke. Algorithmic quantitative layered risk analytics. I've seen more lower income applicants making it into million dollar mortgages with no reasoning behind the acceptance. Wall Street had these delegated underwriters that electronically evaluated a loan, scored and approved the loan for sale and delivery to foreign investors (suckerrrrrrrr's) Thankfully companies like Indy Mac were there to originate and service the loans Who goofed as Howard said Who goofed! Anyway, jump out of the middle class today and into the upper classes with a Wall Street sub prime loan. In America the Street measures crass (i mean class) using variables such as consumption and debt. And leave it to WallStreet to give us a new sub prime program that for the right Hi-cost (new word) it lets you jump right to the top of the class. If folks only knew how bad things to come really are for candidates McCain and the McCain Alternative (who I do like). Especially regarding banking www.borrowerhotline.com / Let's Fight wrongul forecolsures / Housing Analyst.
Posted By: olderwiser @ 07/15/2008 8:48:49 PM

Comment: Nins is right. And right. And right. And right.And right.And right.And right.And right.And right.And right.And right.And right.And right.And right.And right.And right.And right.
But, I repeat myself. And so does Nins. For crap's sake, Nins, write a new post. We all know that Gramm is a buffoon, but there is no need for us to post it 500 times. Give us a break.
Posted By: orcasmom @ 07/15/2008 5:14:37 PM

Comment:
Posted By: orcasmom @ 07/15/2008 5:11:54 PM

Comment: Re: Phil Gramm 's involvement in the undoing of sound banking regulations. Advice to columnists: Use your journalistic skills and follow the money - it will usually always lead to a corrupt politician maneuvering at the behest of his or her own gain. This is why I have hope for Obama. So far, he seems above that fray.
Posted By: Dollared @ 07/15/2008 2:46:17 PM

Comment: Samuelson is either dishonest or blind. I'll go with the latter, although it means he should not be an economics columnist for a national newsweekly, because he cannot see his hand in front of his face.

Why does this feel like a recession? Because the majority of Americans are experiencing terrible economic conditions! Is this so hard to understand? The median income has dropped $1300 since 2000. The average American worker makes $1000 less than 30 years ago!!

30 years ago, we were the world's largest creditor nation. Now, we're the world's largest debtor!

And best of all, the last time workers got such a small share of GDP as their income as after the crash in 1929. But since corporate profits are still rising, Samuelson doesn't see a recession. Well, anybody in the middle class can see it.

Globalization has a role in this - it lowered the wages of the average worker, and substituted easy credit and cheap crap from China for real wages and quality of life. Now, the debt train has stopped and many people can't find a seat to sit down.

Samuelson always wants us to go into global competition unarmed. No secure borders, and no insistence that our competitiion 1) be open to our goods and services, 2) have minimal environmental standards and 3) have AND ENFORCE minimal labor rights.

So his friends and neighbors are rich and getting richer. Why should the rest of us complain! Samuelson, why don't you ask yourself what's best for the average American worker, and then report on that!!!
- Posted By: tc125231 @ 07/16/2008 10:34:08 PM
  
  Comment: Blind is kind.
Posted By: Nins @ 07/13/2008 12:55:05 AM

Comment: Know why McCain wants to distance himself from former Senator Phil Gramm? It's not because of Gramm's obnoxious remarks calling Americans "a nation of whiners" who are in "a mental recession." Those remarks were so ascerbic that they may've been made just to give McCain an excuse to distance himself from Gramm. This issue is a lot deeper than it looks on the surface.

When Gramm was a Senator he was Chairman of the Banking Committee. He pushed through the legislation known as the "Enron Loophole." This loophole allowed US investment banks to bypass Federal regulations governing futures trading, and is the reason why investment banks were able to falsely inflate the prices of oil, wheat, corn and other commodities through massive futures trading, causing your costs of gas, heating oil and food to go through the roof.

Gramm also created the Gramm-Leach-Biley Act, which got rid of the laws that seperate banking, insurance and brokerage activities in America. The Gramm Act was touted as a new way to protect consumer privacy, but the real meat on the Act's bones was banking deregulation. Essentially, this Act did away with laws written after the Great Depression to protect us from another Wall Street/Banking Industry collapse. That's right, Gramm stripped the system of it's safe guards nine years ago, and guess what? The value of the dollar has nose-dived, four major economic institutions have failed, Wall Street is unstable, and we are in a worsening recession.

Notably, the US investment banks that gained the most from the Enron Loophole and from the Gramm Act contributed more than a million dollars to Gramm's campaign.

Currently Gramm is Vice Chairman of UBS, the Swiss Bank that came up with the idea of "death bonds." Worse, though, UBS is involved in a scam where they sold auction rate securities to American customers. Auction rate securities are supposed to be as safe as cash, but the way UBS did it, the fees garnished by their in-house investment bankers were intentionally higher than the return on the securities, ripping off their American customers. The Massachusetts Attorney General has already filed charges against UBS, and private brokers world-wide have dropped UBS stock. UBS is forecasted to lose 82.91% of it's value in 2008. We are talking about the corporate bank where Gramm is Vice Chairman. Looking at his track record there and at the havoc he has wrought on the US economy through the Senate Banking Committee, it's clear that Gramm is a either criminal or grossly incompetent.

Now McCain wants nothing to do with Gramm, wants us to forget Gramm has been a key player on McCain's team. Gramm was McCain's campaign CO-CHAIR and LEADING ECONOMIC ADVISOR. Previously, McCain had said that he planned to appoint Gramm as SECRETARY OF THE TREASURY.

With Gramm as McCain's leading economic advisor, now you know why economists and analysts say that McCain's economic policy plans are untenable.
Posted By: HolyRoller @ 07/12/2008 9:42:37 PM

Comment: Brand new website............. http://formerobamasupporters.com .........................................

Very first video, is Hussein advocating sex ed, FOR KINDERGARTEN. The fool is a, uh, well ....FOOL.

NOBAMA!!!