Global Economic News
German Machine-Builders Fear Worst Is Yet To Come
Sept. 24, (EIRNS)As the German government and parliament go into emergency sessions, today and tomorrow, over the acute worsening of the global meltdown, the German machine-builders have voiced their deep concern over the future: The machine-building industry association VDMA is very alarmed about the developments in the U.S., which is the main importer of German machines. VDMA chief economist Olaf Wortmann warned that the downfall of the U.S. economy means economic collapse for Germany.
For months, Wortmann has been a staunch critic of the dollar fall, and the Fed policy of a cheap dollar, because that ruins German exports. It comes as no surprise, therefore, that the business climate index of the IFO institute in Munich reports for September, the fourth monthly decline in a row, the worst data in 15 years.
Japan's Finance Firms Induced To Feed on U.S. Leftovers
Sept. 24 (EIRNS)Japan's financial firms have been induced to pick off some of the remnants and debris from Wall Street's crisis. Nomura, Japan's largest brokerage firm, has picked up the Lehman Brothers operations and staff for Asia, the Middle East, and Europe, but none of Lehman's assets or liabilities.
Mitsubishi UFJ Financial group, Japan's biggest bank, plans to buy 20% of Morgan Stanley for a reported $8.5 billion.
Meanwhile, Sumitomo Mitsui Financial Group Inc., Japan's third-largest bank, is reported to be considering investing several hundred billion yen in Goldman Sachs.
Israelis Withdraw $1.2 Billion from Private Pension Funds
Sept. 24 (EIRNS)In the past week alone, Israeli savers have cashed in their private pensions and provident funds to the tune of 5 billion shekelsover $1.2 billionan enormous sum for a country as small as Israel. It is a clear sign that Israelis do not believe Central Bank governor Stanley Fischer, when he claims that Israel will weather the financial storm. But, Fisher added, he "can't give advice" on what people should do with their investments.
Meanwhile, Knesset member and chairman of the Knesset Finance Committee Avishay Braverman, held a hearing on the current financial crisis. According to Ha'aretz, some analysts described Treasury Secretary Hank Paulson's mega bailout plan as "cash for trash." Israeli local banks are all exposed to the American market to one degree or another. Bank Hapoalim is exposed to exotic derivatives, while Bank Leumi and Discount Bank are exposed heavily to Fannie Mae and Freddie Mac bonds.
Eli Yones, chief executive of Mizrahi Tefahot Bank, predicted the crisis will hit Israel, saying, "I fear it will migrate to our district...."
IRRI: The World Faces a Long-Term Food Crisis
Sept.26 (EIRNS)Meeting in Los Banos, Philippines, Elizabeth Woods, an agronomist and chairwoman of the Board of Trustees of the International Rice Research Institute (IRRI), warned governments around the world that "their failure to act through a wholesale reinvestment in agricultureincluding research into improved technologies, infrastructure development, and training and education of agricultural scientistscould lead to a long-term food crisis that would make the price spikes of 2008 seem a mere blip." The price of rice, one of the world's staple grains, spiked at more than $1,000 a ton in May before settling at around $700 a tonstill double the price of a year ago, Woods pointed out.
Urging authorities to re-invest in agriculture now, Woods said: "Growth in agricultural productivity is the only way to ensure that people have access to enough affordable food.... Achieving this is a long-term effort. A year or two of extra funding for agricultural research is not enough."