India has been importing U.S. jobs for some time. It appears they imported another American corporate problem, fraud.
Indian offshore outsourcer, Satyam Computer Services, admits to falsifying books:
The chairman of India’s Satyam Computer Services resigned on Wednesday after confessing to fixing the IT outsourcing company’s books for the past “several” years, the country’s first major fraud case to emerge following the global financial crisis.
In a letter to Satyam’s board, B Ramalinga Raju admitted wildly inflating Satyam’s margins to paint a picture of good performance and retain his management position, in one of the worst scams to have hit India’s outsourcing sector.
How bad is it? Looks like a reported 24% profit margin is actually 3%.
In Part I of this series, Bonddad and I looked at the years 1929 - 1933. These years saw a decline of 25% in the chained GDP figures; a failure of 20% of commercial banks, a drop in personal income from $90 billion to $50 billion and a drop in the level of industrial production from 60 to 30. The contraction was the most severe of the last 100 years. Let's take a look at years 1934 - 1940 to see how the economy performed.
''At the end of February, we were a con-geries of disorderly panicstricken mobs and factions. In the hundred days from March to June we became again an organized nation confident of our power to provide for our own security and to control our own destiny.'' - Walter Lippmann, 1933
The Hundred Days were only the start of a process that ended by transforming American society.
I'm gonna go on a limb here. I'm going to make a call I may end up regretting. So here goes....
The 30 Year Bond will return as the new benchmark, dethroning the current "king", the 10-year (which incidentally did the same to the 30 year about a decade back).
It's the start of the new calendar year, the start of a new Presidential administration (well on the 20th actually), and of course the start of the first business quarter. We got in some disturbing, ok that's putting it mildly, some crappy manufacturing news from the gang at ISM. The steel industry, in hopes of restoring some business, initiates a new campaign. Arizona & Michigan are starting a green jobs plans. All this, but first...
The Numbers!
This week's Numbers section actually will also be one our leader story. The latest from the Institute of Supply Management's Manufacturing Survey came in at below what folks were figuring. Now to those new to all this, the ISM Manufacturing Survey is a study of 300 manufacturing firms; the numbers are registered as an index, anything above 50 means expansion in manufacturing, below 50 the opposite.
This article is the first in a series on the Great Depression. I am collaborating on this series with Bonddad. The purpose of this series is simply to talk about the Great Depression. The reason for writing this article is the emergence of the "FDR made the Depression worse" talking point from the Right Wing Noise Machine -- econ division. While none of the stories using this line have an facts to back them up -- no charts, no graphs no data -- they continue to spew this talking point. So, let's get some data -- as in facts -- to see that actually happened.
The Associated Press had an article a few days ago about how Companies, including Hospitals are requiring month long furloughs for workers. Yes these are unpaid. One worker interviewed astutely noted:
Trinh Nguyen, 23, was called into a conference room with four other workers in late December at the 50-person Baltimore architecture and design firm where he works. The group was told that they were on a 30-day furlough, starting Dec. 10. "They tried to lighten (it) up as not a termination," said Nguyen, who asked that the company not be named.
More oh gee, how did this happen? stuff on capital hill.
The New York Times did a live blog on the hearing and it's basically a true waste of time, oh, more audits, obviously a $50 Billion dollar Ponzi scheme just fell through the cracks
The SEC was warned on several occasions by Boston investment professional Harry Markopolos that Madoff's firm probably represented the world's largest Ponzi scheme. In such a scheme, some investors are paid with other investors' money. Allegedly using such a technique, Madoff was able to produce double-digit returns to investors year after year.
Where have we heard this before? Wasn't it Bush II who claimed tax cuts stimulate the economy? Yet splashed all over the headlines are more tax cuts.
President-elect Barack Obama, commencing face to face consultations with congressional leaders Monday, is embracing an unexpectedly large tax cut of up to $300 billion. Obama said the country faces an "extraordinary economic challenge." Besides $500 tax cuts for most workers and $1,000 for couples, the Obama proposal includes more than $100 billion for businesses, an Obama transition official said. The total value of the tax cuts would be significantly higher than had been signaled earlier
A grand total of $300 Billion in cuts and the New York Times nails it:
Bill Richardson has withdrawn his bid to be commerce secretary.
Bill Richardson on Sunday announced that he was withdrawing his nomination to be President-elect Barack Obama's commerce secretary amid a grand jury investigation into how some of his political donors won a lucrative state contract
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