Economist


Online Dating; You're Smart, Date Smart ... www.iSmartdate.com

Online Dating; You're Smart, Date Smart ... http://www.iSmartdate.com

Choose Your Language Of Preference Below  

 

 

French Version German Version Russian Version Spanish Version 

 

By ZamChro

It is very scary to see  Kwacha depreciating at a very fast rate. It is costing almost K6 000/per $1. The Jump from Nov’08 to February is just too enormous. This is what we predicated way back here at Zambian Chronicle, the collapse of the world economy is evidently has a lot of impact on the Zambian economy .

That is what happens when you are so dependent on the outside funding. Something is really wrong. This is what happened to Zimbabwe.

In America the economy is souring twice as much, although unlike Kwacha, the $ is appreciating. People are losing homes like crazy and job losses are sky rocketing.

US bank shares hit 17-year low yesterday on rising fears the government will have to nationalize troubled institutions such as Citigroup and Bank of America wiping out investors’ confidence as they feared government controlling of large portion of the financial sector.

According to the Financial Times report, Bank of America shares slid 14% to $3.93 their lowest point since 1984. Share in Citi were down 13.8%, closing at $2.51, their lowest since 1991.

There some options for the banks being discussed. One option, at least for Citi- would be to convert some or all of the government’s $45bn holding of preferred shares, as well as the $35bn in preferred shares held by sovereign wealth funds and other investors into common stock.

There is some refreshing news though from at least one country.

Canada has shown itself to be a pretty  good manager of the financial system in ways that haven’t always been in the United States. This is due to stricter regulation and their conservative culture, one that depends heavily on a vast and stable retail branch network, and clubby working relationship,.

Canada‘s banks have remained the strongest in the G7 and according to the October report by the world Economic Forum, the soundest in the world.

According to a Finance professor at the University of Toronto,  “… in Canada they do it the old fashioned way, where you need money you go to the bank and they will lend you no more than 75% of the value of your house. Canada is a more conservative place and as much as it limits growth in good times, that approach pays off when others begin a race to the bottom.”

It even gets better to know that there is a country like Canada in this world with reliable banks. Instead of our consulting Nigerians, it may be beneficial if President Banda would surround himself with world leaders like the Prime Minister of Canada.

In Canada, five banks the Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Bank of Montreal , Largely control the market through thousands of branches across the country, forcing geographic diversification and efficiencies of scale generally not found in US or other countries.

Canadian investment banks, as part of commercial banks, are more tightly regulated and kept in check by main institutions, which would pay a price for unwise investing.

The Financial Times reported that after President Obama’s first visit to Canada, he has decided on taking a path that other presidents have not taken in the past putting banks his agenda and staying open minded to new ideas.

More drama on the souring economy.

On another note, UBS has been sued on account of 52,000 Account holders. The Department of Justice sued the Swiss bank giant for records on thousands of U.S customers. The DOJ says UBS agreed to pay a $780Million fine and reveal information on 250 US customers to avoid prosecution but vowed to fight the broader disclosure. Though some think the end of secret Swiss banking is nigh.

Copyrights © 2009 Zambian Chronicle. All rights reserved. Zambian Chronicle content may not be stored except for personal, non-commercial use. Republication and redissemination of Zambian Chronicle content is expressly prohibited without the prior written consent of Zambian Chronicle. Zambian Chronicle shall not be liable for any errors, omissions, interruptions or delays in connection with the Zambian Chronicle content or from any damages arising therefrom. 

Zambian Chronicle is a wholly owned subsidiary of Microplus Holdings International, Inc.

Copyrights © 2009 Microplus Holdings Int., Inc.

Advertisements

 Choose Your Language Of Preference Below 

French Version German Version Russian Version Spanish Version 

President elect  Barack Obama picks Hillary Clinton as Secretary of State.  Priceless
Great minds, are never Insecure. Barack  surrounds himself with big brains. The entire cabinet is a combination of brain powers.                                                                                                                                              

BARACKY II

Baracky 3!

This would have not been possible if there was no freedom of speech. Americans were given the power to elect and vet their leaders.

Each and every candidate’s laundry basket was visited by every American with the help of media and bloggers, without fear that they will be arrested.

In the end America elected the candidate they thought sold more to them,

and yes supporters created all this without fear: Videos like one below shows freedom of speech

I wonder if we do have that kind of freedom of speech in Zambia to be able to vet our leaders before they get elected.

Just looking at the polls tells a lot. Freedom of speech and the process in place in vetting our leaders should be implemented.

 WHAT HAPPENED TO THE ELECTIONS ON OCTOBER 30 2008?

Can you imagine if one of us created Videos that smacked our candidates left, right and center? Guess what would have happened ? Arrested, and possibly jailed for visiting the incoming leader’ s laundry baskets.

Copyrights © 2008 Zambian Chronicle. All rights reserved. Zambian Chronicle content may not be stored except for personal, non-commercial use. Republication and dissemination of Zambian Chronicle content is expressly prohibited without the prior written consent of Zambian Chronicle. Zambian Chronicle shall not be liable for any errors, omissions, interruptions or delays in connection with the Zambian Chronicle content or from any damages arising therefrom. 

Zambian Chronicle is a wholly owned subsidiary of Microplus Holdings International, Inc.

Copyrights © 2008 Microplus Holdings Int., Inc.

Choose Your Language Of Preference Below 

French Version German Version Russian Version Spanish Version 

The stakes are high and oh, yes they are … the world economy is in shambles and there is very little time for the Banda Administration to honey moon. With the Kwacha depreciating against hard currencies, commodities prices going down and our purchasing parity dwindling, the next few years will call for extraordinary paradigm shifts.

 

The Zambian government has already cut this year’s economic growth forecast to 6% from 7% following a 58% drop in copper prices in London in the last six months. For a country whose 63% of all government revenues depend on the exports from copper and cobalt to the outside world, we don’t envy the Banda Administration taking over the Zambian Enterprise at a time such as this.

 

Even though fiscal year 2007 only gave us a 5.4% GDP growth, government was optimistic the projected 7% was feasible but with the global financial crisis, reduction in foreign investment will impact growth forecasts for a country that relays heavily on FDI.

 

Further, the imposition of a 25% profit windfall tax and an increase to 3% from 0.6% on mining royalties is another factor that may be a huge cause for concern in this economic downturn because technically corporations don’t pay taxes they simply pass them on to consumers.

 

Such higher taxes lead to mining companies imposing wage freezes until such a time that they would increase their operating revenues above the taxable threshold, the resultant being less consumer spending coupled with less factory orders due to stagnant income and or liquidity that lead to other effects.

 

On top of that the global financial squeeze has the capacity to force institutional investors to withdraw foreign exchange in government securities. This has already hurt the kwacha and government has to do double time to stabilize the local currency using other fiscal measures that would curb inflation as well.

 

As the local currency depreciates a lower purchasing parity making goods imported into the Zambian Enterprise more expensive than usual kicks in due to balance of payments in our current accounts. The spiral is long winding and thus the call for more focus from us at the Zambian Chronicle.

 

Fortunately for President Rupiah B Banda, he is an economist who would have a good grasp of the economic issues at hand but what will work against him is what we call the “Expectations Game” from the electorate.

 

With Levy having enjoyed relative growth during a time the world economy was growing, the average Jim and Jack will not buy Rupiah’s story of the world undergoing a recession, in fact every Jim and Jack thinks RB should do better … and who on God’s earth would blame them?

 

We don’t even care how good a team RB may assemble, if such a team misses the crux of the matter, there might be very little the Banda Administration may be able to achieve if it does not use the right mix to turn this global economic malaise to its advantage.

 

Different economic theories apply to different scenarios to leverage and mitigate prevailing circumstances. It’s more like different medicines being used for different diseases and what worked there and then may not in the here and now.

 

Having analyzed all scenarios involved we at the Zambian Chronicle see the normative approaches that are great at offering prescriptions and recommendations on what should be done to not only help lower “expectations” but also help reach the targeted growth and forecast.

 

Neo-Keynesianism might be the best route here. This is because this theory looks more at what government involvement would be in terms of the General Theory of Employment. The Japanese used this theory after World War II captioned it and called it “Total or Full Employment”.

 

By mandating that every Japanese be employed they created revenue through taxation of their able-bodied working citizenry. The Japanese government deliberately embarked on construction of airports, highways, bridges and other infra-structures using borrowed money until they had enough reserves of their own.

 

The Zambian Enterprise has enough reserves to start with and can do with what we have on hand to seriously begin applying Neo-Keynesianism. While this economic theory has other variations like effect(s) of interest rates and money supply, the main impetus though is on total employment deliberately commissioned by government and or using government incentives.

 

Upon completion, government can start levying toll charges on these roads, bridges, airports, etc. to recover construction costs and meanwhile as more people enter the work force, consumer spending increases, government revenue goes up with taxation kicking in a multiplier effect and the rest is history.

 

This will not be easy to achieve though because it will require changing the way we think and operate. Every one has to have a sense of urgency and move in the right direction all pulling for mother Zambia knowing our time is now.

 

These are serious times; the Banda Administration is at the bleak of making it or breaking. Levy’s shoes are way too big for any one to fill and times have changed, what worked for us then may not now and we all owe it to ourselves to move the nation forward.

 

We wish the new administration God’s Speed as the honey moon dies down but time is of the essence otherwise there will never be another MMD administration (not that we are rooting for the MMD) if the right economic mix is not adopted, it is now or never.

 

Live Long & Prosper; that’s this week’s memo from us at the Zambian Chronicle … thanks a trillion.

 

Brainwave R Mumba, Sr.

CEO  & President – Zambian Chronicle 

 

Copyrights © 2008 Zambian Chronicle. All rights reserved. Zambian Chronicle content may not be stored except for personal, non-commercial use. Republication and redissemination of Zambian Chronicle content is expressly prohibited without the prior written consent of Zambian Chronicle. Zambian Chronicle shall not be liable for any errors, omissions, interruptions or delays in connection with the Zambian Chronicle content or from any damages arising therefrom. 

Zambian Chronicle is a wholly owned subsidiary of Microplus Holdings International, Inc.

Copyrights © 2008 Microplus Holdings Int., Inc.

Choose Your Language Of Preference Below 

French Version German Version Russian Version Spanish Version 

NEW YORK — In the end, congressional approval of the government’s $700 billion financial rescue plan Friday did little to lift the financial markets from their growing dejection over the obstacles still facing the economy. Wall Street ended an intensely volatile week with the Dow Jones industrials falling 157 points and the major indexes all suffering big losses.

The credit markets remained stagnant, with no immediate signs of when lending and borrowing would return to levels even approaching normalcy.

Investors dumped stocks late in the session after a big intraday rally, repeating a defensive move seen throughout the yearlong market pullback. As lawmakers voted on the plan, which President Bush quickly signed into law, the Dow advanced more than 300 points. After it passed, the blue chips moved in and out of positive territory.

Investors had been anxious for resolution on the government’s plan to buy up bad assets from banks and other institutions to shore up the financial industry and help resuscitate credit markets. Trading across markets was turbulent throughout the week as investors tried to determine whether the plan would win approval and what effect it might have if implemented. On Monday, the House’s rejection took Wall Street and Capitol Hill by surprise and handed stocks their biggest losses in years.

The Senate subsequently passed a sweetened version of the plan that added tax breaks and raised the limit on federal deposit insurance from $100,000 to $250,000.

But Wall Street has come to realize passage of the plan is not a quick fix.

“We’re three weeks into a severe credit crunch and it’s causing untold economic damage to the country,” said Hank Smith, chief investment officer at Haverford Investments. He said while the bill’s passage will help Wall Street, the broader effects of the paralysis in the credit markets have yet to emerge.

“It’s fairly reasonable to assume that this should help unfreeze the credit markets but what we don’t know is what’s happened so far. How much of a dent has it put into the economy?”

Read More Story on http://www.huffingtonpost.com/2008/10/03/post_168_n_131527.html

Choose Your Language Of Preference Below 

French Version German Version Russian Version Spanish Version 

I have been inundated with a lot of questions about the global economy this week; a lot of these questions are to do with the impact of the US economical woes on our global franchise, the Zambian Enterprise included.

 

So, I decided to put on my financial consultant hat and delve into as many econometrical variables as possible to try and explain what a layman may not be told are actually the causes of the economic impasse in the United States.

 

We at the Zambian Chronicle saw this coming as early as last year and in January we published David Frazier’s Global Economic Briefing in US Recession Could Affect Our Global Enterprise, The Zambian Enterprise Included …. This was followed by the Bush Administration’s rebuttal in Bush Sees No Recession Yet the very next month.

 

The argument from the administration has always been that economic fundamental have been sound and therefore much of the attention has been on monetary policy as the Federal Reserve Board has been trying to work on efficacy by reducing Fed Funds Rates. By the way, the Federal Reserve Act of 1913 gave the Fed more power than even the President of the United States when it comes to fiscal policy …

 

The problem with the reduction(s) of the funds rates though was that it created an illusion that by lowering the rates, the cost of borrowing would be lower thereby encouraging market participation by increased credit derivatives (lending and borrowing) in the market.

 

So new buyers were introduced into the system; mortgagee(s) rushed in and started refinancing already existing loans at the new lower interest rates at times cashing in on existing equity and business was booming as finance companies managed to make tones of money from loan origination fees, increased their asset holdings at much higher appraised values while turning around to sell mortgaged backed securities on the secondary market.

 

This illusion missed one point though; liquidity, liquidity, liquidity … the US unemployment rate has steadily been increasing from a “One State Recession” in Michigan at about 12% to the national average of about 6%. This meant that more and more people were getting out of work and despite their new lower mortgage rates and cashed out equity, they had no “ability to pay”.

 

Meanwhile the Federal Reserve kept on lowering the funds rates which eventually became a stimulus that would only encourage further mischief as lenders abrogated their fiduciary duties extending credit to unworthy borrowers and cut corners to close on deals.

 

The Fed regime was an accomplice to that reckless behavior. A fed funds rate of around 3.5% was a detriment particularly with commodities prices soaring and incipient inflation coming to US shores from demand-pull pressures and rising labor costs.

 

A real palliative came in as home owners started defaulting due to their lack of liquidity, leading to foreclosures and short sells. As homes foreclosed and or are short sold, their values declined thereby creating negative equity.

 

But that’s not all, what added salt to the injury is what is called “securitization”. This particularly in the US market comes in the form of Mortgage Backed Securities – MBS. These are asset backed securities sold on the secondary market whose cash flow is backed by collateralized mortgages.

 

Any one with an understanding of basic finance knows that if you borrowed $100,000.00 for 30 years you would probably pay back $300,000.00 on that same mortgage, $200,000.00 of which would be interest income for the lender.

 

These MBSs are backed by that interest income, sold as bonds and or other financial derivatives on the secondary market with a guaranteed yield. Insurance companies, retirement funds and other ultra-virus thrifts like to invest into these marketable securities because of their guaranteed revenues.

 

Well, the problem is if people have no work and thereby are defaulting, then the MBSs are not in actuality guaranteed for the loan term(s) because of foreclosures and or short sells in a downturn economy or prepaids in a vibrant one.

 

These marketable securities (MBSs) are a prerogative of the Securities and Exchange Commission (SEC) and they are regulated by them but they were asleep at the switch. The Federal Reserve Board is in charge of monetary policy and just kept on lowering funds rates and was asleep at the switch.

 

The Department of Treasury has a stake in checking on the yields from MBSs because they affect yields on Treasury Bills but was asleep at the switch; the Bush Administration was busy chasing Bin Laden and was asleep at the switch while the US Congress are supposed to be the watchdog for the tax payers but were busy fighting partisan politics, sleeping at the swath.

 

As of the first quarter of 2006, the total market value of all outstanding MBSs was approximately USD 6.1 trillion, according to The Bond Market Association. These are paper assets in which tax payers’ retirement security has been vested and is likely to be lost if no one takes the right steps going forward.

 

There two schools of thought going on this weekend in Congress, one that says a Government bailout means socializing the markets. Another school of thought wants to lend money to Fannie Mae and Freddie Mac so they can pay back with interest using market forces.

 

We at the Zambian Chronicle see an opportunity for the Federal Government so good to be passed on. The best route would be an outright bailout that places Fannie Mae and Freddie Mac under receivership.

 

This route would not only make the American tax payers shareholders in the $700 billion bailout  enterprise but as these non-performing loans are turned around into performing assets all future interest income can be turned around to be invested into the Social Security and Medicaid/Medicare Trust Funds which are scheduled to go bankrupt by 2045.

 

… problem is I am not running for President of the United States of America; can’t run – not a US born citizen and so they probably would not listen …

 

In closing, this is a dire lesson for all emerging markets, the Zambian Enterprise included. What we have learnt is that greed is bad; using securitization, fund managers increased their income as they lowered their own risks.

 

By cutting corners, greedy loan officers and finance companies made a short term killing and by sleeping at the switch, the SEC, the Feds, the Bush Administration and the US Congress almost crushed the world’s beacon for capitalism.

 

Sometimes, it’s good to know that no one is actually looking out for you after all, you are on your own and you better watch your own back …

 

Live Long & Prosper; that’s this week’s memo from us at the Zambian Chronicle … thanks a trillion.

 

Brainwave R Mumba, Sr.

CEO  & President – Zambian Chronicle 

 

Copyrights © 2008 Zambian Chronicle. All rights reserved. Zambian Chronicle content may not be stored except for personal, non-commercial use. Republication and redissemination of Zambian Chronicle content is expressly prohibited without the prior written consent of Zambian Chronicle. Zambian Chronicle shall not be liable for any errors, omissions, interruptions or delays in connection with the Zambian Chronicle content or from any damages arising therefrom. 

Zambian Chronicle is a wholly owned subsidiary of Microplus Holdings International, Inc.

Copyrights © 2008 Microplus Holdings Int., Inc.

 

Choose Your Language Of Preference Below

French Version German Version Russian Version Spanish Version 

We have inscribed in detail profiles of some of the world’s wealthiest people as in Billionaire’s Corner: Warren Buffet Takes The Lead, Carlos Slim Dropped To Second Place And Bill Gates Takes Third … or Billionaires For Africa and others.

 

In fact one of the most read articles here; Just Who Is Carlos Slim – The World’s Latest Richest Man?, still generates one of the most traffic as the world reflects on Carlos who held the lead as the world’s richest man for four months replacing Bill Gates for the first time in 13 years.

 

There has just been one problem though … we have always seemed to omit one dude. He is from the big black book – He owns a villa called heaven. His streets are made of gold, not because He wants to show off but because He has way too much of it.

 

The villa is a gated community with His wall fence made of sapphires, emeralds and amethysts, its foundation is made of diamonds while the gates are made of pearls. He lacks nothing and wants nothing because if He ever wanted it and it did not exist, all He has to say is let there be and that will be …

 

The cattle on a thousand hills are His. Strength and wealth are in His hands; with Him there is no real measure of wealth because the dude is loaded and can’t be capitalized in terms of what we use as a measure this side of galaxies at all.

 

But over here, wealth is measured in monetary terms and so one’s net worth ends up being denominated in currency. Therefore, the ultimate explanation for wealth is money; but money can mean a lot of things to a lot of people.

 

When it comes to it (money) really, every one wants it; even those who pretend not to – I have never heard of any one who refused a million dollar check when presented as a gift … but what is money?

 

Many people long for it but they can’t even define it, many people die for it and yet they don’t even know what it is really they long or die for … it’s just money, it’s good for nothing until you put it good use.

 

The sad reality is that, money is one of those things that seem to run away if you chase after it and just comes along when your basics are right. Bill Gates was once asked that question and he said “money was an idea”.

 

Therefore, if you can think it, you can create it … others work for money and for some it works for them, I would rather in the last category whereby I don’t work for money; it rather works for me …

 

Ed Louis Cole used to say, money follows vocation – if you work, you will earn and the bigger the problems you solve the bigger your paycheck. This means that you can always give yourself a pay raise by simply finding things to do that solve bigger problems for others.

 

In a nutshell, it (money) is a good that is used in transactions and it acts as a unit of account, a store of value, and a medium of exchange. As a unit of account, we can get into monetarisms, as a store of value we can measure it and as a medium of exchange we can trade with it.

 

Lack of money is a symptom for something larger having gone wrong in one’s life. The symptom can be anything to do with a lot of things. It could be a precursor to wrong vocation(s) or wrong association(s) or even wrong cause(s); it could mean a whole lot of other things too …

 

If one is engaged in doing what is right, with the right attitude(s), value(s), priorities  and perspective(s), money is a derivative and as a resource will always be available for those cause(s).

 

But overall it’s just money, it’s good for nothing until you put it good use, my dad once said … “son, always make a little bit more money if you can and always save a little bit more of it if you can”.

 

Take a look at yourself today, are you in lack of it? Is your vocation right? Do you have a clear perspective about it? It’s just money, it’s good for nothing until you put it good use …

 

Don’t worry about it; it’s just money, it’s good for nothing until you put it good use … just do what is right and it will follow you.

 

Money is good, it does a lot of good things; always have more of it if you can … but like a lot of things in life, it can be a double-edged sword capable of producing a whole lot of calamities if not properly handled.

 

Live Long & Prosper; that’s this week’s memo from us at the Zambian Chronicle … thanks a trillion. 

Choose Your Language Of Preference Below

French Version German Version Russian Version Spanish Version 

 Dear Mr Mumba,

I am writing to you to ensure that you are one of the first to hear about the latest news from British Airways. Today we have reached agreement with American Airlines and Iberia to form a joint business, which if approved, will enable us to co-operate on flights from the UK and Continental Europe to the US, Canada and Mexico.

We plan to file for worldwide anti-trust immunity from the US Department of Transportation.

 

The European Commission will also review the deal. If successful, we will be able to form a closer working relationship providing significant benefits for customers. All three airlines will continue to operate under our separate brands.

Closer working will create opportunities to enhance customer benefits. It will enable us to better align schedules giving more access to destinations and improving connections through key airports. Other benefits for customers include greater opportunities to earn and use frequent flyer miles on the other airlines’ transatlantic network along with enhanced frequent flyer tier features. Our Executive Club members will continue to be able to enjoy lounge access with British Airways and its oneworld partners as they do today.

Our overall aim is to continue to deliver an upgraded travel experience to you. Financial efficiencies that the joint business agreement will give British Airways will help us to continue to invest further in our products and services, despite the demanding economic environment that the airline industry faces.

It is both a challenging and exciting time for British Airways and I will ensure that you are updated on developments as the proposed venture nears completion.

Warm regards,

Woody Harford
Senior Vice President, Commercial, Americas

Next Page »