News: Wall Street investors retreating to Zimbabwe?
2007-520-stock-market-roller-coaster[i-2007-520-stock-market-roller-coaster]
The title might be funny, but the reality is: the Zimbabwe benchmark Industrial Index soared 257 percent Tuesday, besting a one-day record of 241 percent set Monday, with share prices of some companies rising by up to 3,500 percent.
Reason? The stock market seems to be the only place Zimbabweans can get 'some' return from their cash, as - some experts say - the local economy runs at an inflation of 20 trillion percent. That is 20 t-r-i-l-l-i-o-n. (Full)
[Ed: So what is Wall Street complaining about? Opportunities! All Opportunities!]
More on The Road about inflation and the economy
Cartoon courtesy Inkcinct Cartoons
News: Economic crisis - beginning of global socialism?
An overview of the interventions governments have made to "rescue" banks up today:
| Bank | Date | Status | |
| Fannie Mae | 07 Sep | Nationalised | |
| Freddie Mac | 07 Sep | Nationalised | |
| Lehman Bros | 15 Sep | Collapsed | |
| Merrill Lynch | 15 Sep | Taken over | |
| AIG | 16 Sep | Part-nationalised | |
| HBOS | 17 Sep | Taken over | |
| WaMu | 25 Sep | Collapsed and sold | |
| Fortis | 28 Sep | Nationalised | |
| Bradford & Bingley | 29 Sep | Nationalised | |
| Wachovia | 29 Sep | Taken over | |
| Glitnir | 29 Sep | Nationalised | |
| Hypo Real Estate | 06 Oct | Rescue package | |
| RBS | 13 Oct | Part-nationalised | |
| Lloyds TSB | 13 Oct | Part-nationalised | |
What is this? Beginning of global socialism? Of global anarchy?
Source: BBC Read the full post...
News: After the global financial crisis comes the global humanitarian crisis?
Financial crisis causing a humanitarian crisis?[i-Financial crisis causing a humanitarian crisis?]
public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt.”
Cicero, 55 BC
What is the plural of "crisis"?
It seems like 2008 is becoming the year of global crisis. First we were faced with the worldwide food crisis, swiftly followed by, what now seems to be, a collapse of major financial institutions.
But it might not stop here. As FAO, the UN Food and Agriculture Organisation, calculated the cost to deal with the current food crisis at US$30 billion per year, donors stepped up their financial support.
But that was before the current financial crisis. At this moment, the governments worldwide concentrate their financial resources in keeping their banks and financial institutions afloat:
- The Belgian, French and Luxembourg governments put in US$9 billion to keep Dexia afloat. (Full)
- Previously Netherlands, Belgium and Luxembourg put up US$16.1 billion to save the Fortis bank. (Full)
- Britain is working on a US$87.7 billion bank recapitalization concentrating on Barclays, HSBC and the Bank of Scotland (Full)
- Spain announced a US$40.9 billion fund to buy up bank assets and maintain liquidity (Full)
- Sweden is given Iceland's biggest bank, Kaupthing, an emergency loan worth up US$702 million) to help keep it afloat. (Full)
- Germany has thrown a US$50 billion lifeline to struggling lender Hypo Real Estate. (Full)
- Italy is about to set up a rescue fund close to US$30 billion for the banking industry. (Full)
- Canada gave a US$25 billion "backstop" for there banks. (Full)
- Russia pledged to boost liquidity by more than US$100bn (Full), on top of a US$5.4 billion loan to Iceland (Full)
- And of course we all know about the $700 billion monster US bailout (Full)
Any money left for international aid?
The end balance? During the food crisis, donor countries already stepped up their extra-budgetary funds to come to the rescue of aid organisations "on the occasion of the raising food prices", but now are faced with the massive cash drain bailing out their own financial institutions.
At the same time, poor countries in Africa, Asia and Latin America, which are already dealing with a surge in food and energy prices, are now finding it harder to sell goods abroad and encourage investment in their own economies. (Full)
The question now is: how much money will be left for international aid?
This week, amidst the financial turmoil, world leaders met to review the progress of the UN Millennium Development Goals (MDGs). These are intended to reduce extreme global poverty and, improve health and education.
It was stressed that development aid needed to increase by $18 billion each year towards fulfilling the goals. At the end of the event, UN Secretary General Ban Ki-moon announced that an additional US$16 billion had been pledged by governments to meet the targets of the MDGs. British Prime Minister Gordon Brown in his address to the UN, went on to say that the financial crisis should not be an excuse to cut aid. (Full)
The "Humanitarian Doomsday scenario" - the first signs
Many of us, in the aid organisations, are not that optimistic as UN Secretary General Ban Ki-Moon:
Journalist Andrew Stroehlein, the Director of Media and Information for the International Crisis Group, states it bluntly: "I might as well just pack up and go on holiday for a few months. With the global financial crisis continuing, no one wants to hear about violent conflict and mass atrocities around the world". (Full)
UNHCR, the UN Refugee Agency, just wrapped up its annual refugee conference and it is concerned its needs may not be met because of the global financial crisis. (Full)
"The financial turmoil rippling across the globe will set back efforts to fight climate change, drying up capital that could help poorer countries upgrade to clean energy technology", said Yvo de Boer, the executive secretary of the U.N. climate secretariat, adding: "You can't pick an empty pocket". (Full)
Will the global financial crisis also cause a global humanitarian crisis? Time will tell, but it looks like it. As history showed, the poorest of the world always pick the shortest straw.
Update Oct 15: Aid agencies say world's poorest will be biggest victims of world's financial crisis
More posts on The Road about the food crisis, poverty, development, the UN and the economy.
Original picture courtesy Susan Manuel (WFP) Read the full post...
Rumble: Millions, Billions and Trillions: Zimbabwean Confusion.
Welcome to Zimbabwe's inflation[i-Welcome to Zimbabwe's inflation]A few weeks ago, the Zimbabwe National Bank dropped 10 zero's from the Zimbabwe Dollar (ZWD).
Blogger "This is Zimbabwe" is in despair and describes some of the confusion between old and new currency.
Yesterday I had a balance in my account of ZWD$2,000 (that is ZWD$20 trillion in the old value). This account is dormant, untouched for months.
This morning I find I owe the bank ZWD$500,000 in service fees for one month’s bank charges to hold my $2,000.
The daily cash limit per person per day is ZWD$20,000, but the cost of a personal cheque book is ZWD$2,000,000 or ZWD$33,333 per page.
A friend of mine got to the bank at 3am this morning and was handed a number – number 94 in line. At 5pm he finally got to the front of the queue.
We are facing one of the worst famines in our country’s history. And yet there is still food available in the towns, but it is spoiling on the shop's shelves as no-one can afford to buy it. (Full)
More posts on The Road about Zimbabwe
Picture courtesy guardian.co.uk Read the full post...
Picture of the day: A one hundred billion dollar bill
Zimbabwe one hundred billion dollar bill[i-Zimbabwe one hundred billion dollar bill]
Zimbabwe is suffering from an acute economic crisis. The country has the world's highest rate of inflation and just one in five has an official job.
Esther (a pseudonym) wrote on the BBC site, in August: "At midnight, my bank stripped me of my trillionaire status - the Z$5 trillion sitting in my account became Z$500."
The Central bank had stripped a string of ten zero's from the currency.
So no more talk of trillionaires, quandrillionaires and quintillionaires. "At least, not for another six months or so", writes Esther. (Full)
More posts on The Road about Zimbabwe.
More Pictures of the day.
Picture courtesy BBC.
News: Poor Billionaires
link[i-link]Zimbabwe's 100,000 percent inflation rate is the world's highest. While officially, one U.S dollar is worth about 30,000 Zimbabwean dollars. As of last week the real price on the black market was about 35 million dollars, or 1,166 times the official rate.
The average wage for a farm worker is 30 million dollars per month. A domestic worker makes about five times that amount, and a laborer in one of Zimbabwe's decrepit factories can expect to earn as much as 300 million per month.
It sounds good until you consider how much things cost. Four Coca-Colas cost about 20 million. A one-way bus ticket around town will set you back one of those 10 million dollar notes (and that price may go up even as you're on the bus). Ten kilograms (22 pounds) of corn meal, which might last a family of four two or three days, goes for 45 million. It's 7 million for less than a quarter pound of low-grade beef. A loaf of bread is 10 million.
If you're a government worker you'll earn a monthly pension of 60,000 (yes, thousand) a month. But an empty potato sack alone costs 2 million, or 33 times your monthly pension. (Full)
Picture courtesy BBC/AP (Thanks to "E"). Source: The Road Daily
News: Zimbabwe flies in plane loads of money
link[i-link]With inflation topping 100,000% and the highest value 10 million Zimbabwe dollar note worth just US$0.50, planeloads of banknotes are flying into Harare almost every day to keep up with the demand. The Munich company Giesecke & Devrient is receiving more than €500,000 (£382,000) a week for delivering bank notes at the rate of Z$170 trillion a week.
“The regime is surviving by printing money,” said Martin Rupiya, professor of war and security studies at the University of Zimbabwe. “At this stage there is no other way.” (full)
Picture courtesy goeasymoney.com (how appropriate!)
