Pacificus

~도 그러하다

2011-10-09T15:48:00.001-07:00

긍정문 : so + 조동사/be동사/do + 주어
부정문 : neither[nor] + 조동사/be동사/do + 주어

1. 밑줄 친 부분과 바꾸어 쓸 수 있는 것은?
A: How do you like the band?
B: I don't understand what they're trying to express.
A: I don't understand, either.
1) So do I
2) Neither do I
3) So am I
4) Neither understand I
5) So understand I

2.다음 본문에서 밑줄친부분을 영어로 바르게 옮긴것?
Music can make an exciting story more exciting, a sad one sadder, and a happy one even happier. Nature itself is filled with
music. Birds, rain, and wind make a kind of music. 바다도 그렇다. In the city, bus tires hum on the street.
1) So is the sea.
2) So does the sea.
3) So can the sea.
4) So the sea is.
5) So the sea does.

3.다음 두 문장의 뜻이 같게 쓰시오
Susan studies at the library, and John studies at the library, too.
-> Susan studies at the library, and __________________________________ John.

[4-5]다음에서 밑줄친 구문을 문두로 보내 도치구문으로 다시 쓰시오.
4. I'm not, either. -> __________________________________________

5. I have not received the mail, either.
-> __________________________________

[6-8]옳은것을 고르시오
6. If Mary waits in such a long line, ___________________.
1) I also wait
2) so will I
3) so could I
4) I can either

7. Man cannot live by bread alone, and so can he live without bread.
1) 2) 3) 4)

8. A: I'd met Philip several times before.
B: _________________________.
1) So did I
2) So had I
3) I did, either
4) I met, also

[9-10] 어법상 잘못된 부분을 고치시오.
9. I passed the exam, and so was Mary.

10. Tim doesn't have a bicycle, and Nancy does either.

Answer
긍정문 : so + 조동사/be동사/do + 주어
부정문 : neither[nor] + 조동사/be동사/do + 주어

1. 답은 2번입니다. 이해하지 못한다 이므로 부정문이죠? 그러므로 Neither로 받아야 하구요
understand를 바꾸는 것이므로 be동사가 아닌 do가 오겠죠
그 다음에 주어인 I를 붙여 주면 되므로 결국 Neither do I가 정답이 됩니다.

2. 답은 2번입니다. 바다도 그렇다라는 것은 바다도 음악을 만든다는 뜻이죠
앞부분에 make a kind of music이라는 동사가 나왔으므로 do로 받아야 합니다
긍정문이므로 So가 맨 앞에 오고 그 뒤에 do, 그 다음 주어인 the sea가 오므로
So does the sea가 되겠죠

3. so does John.
study라는 동사가 나왔으므로 do로 받고 John이라는 3인칭 단수이므로 es를 붙여줍니다

4. Neither am I.
문두에서는 either가 아닌 neither을 사용해야 하고 I'm not에서 'm을 am으로 넣어 주고 주어인 I가 마지막으로 옵니다

5. Neither have I received the mail.

6. 매리가 그렇게 긴 줄에 서서 기다린다면, (나도 그러할 것이다).
불확실하거나 일어날 수 있는 일에 대한 상상에 사용되는 가정법 현재이므로
2번이 답이 됩니다.

7. cannot으로 부정문이므로 3) so를 neither로 바꿔야 합니다. either가 안 되는 이유는 도치구문이기 때문입니다.

8. I had met Philip이므로 동일한 동사로 받아주어야 합니다. 답은 2번입니다.

9. pass동사를 받는 것이므로 be동사 was가 아닌 do로 받아야 합니다. 시제는 과거입니다.
즉 답은 so did Mary가 됩니다.

10. 부정문이므로 Nancy doesn't either라고 하거나 도치해서 neither does Nancy라고 해야 정확합니다.
2009-01-08 22:30 | 출처 : 본인작성 , [카페] 인터넷번역 - 영어 일본어 중국어 번역 스크랩 | 신고

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새벽에 일어나서

2010-12-23T12:28:00.000-08:00

더 열심히 살아야 한다. 난 죽도록 하지않았다.

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푸념과 반성

2010-09-18T23:52:00.001-07:00

공부하기전에는 자주 있지도 않던 저녁식사자리가 공부를 시작하고 나니 일주일에 세번씩 잡힌다. 안가면 사수가 싫어하니 가긴 가야한다. 주말에 공부할라 치면 잠이 쏟아진다. 책을 펴고 자리에 앉아도 십분을 견디기 어렵다. 이래 저래 공부할 시간은 줄어들어 간다. 어짜피 남들도 같은 처지에서 하고 있다는 걸 알지만 자꾸 힘들어서 손을 떼고 싶어진다.

꿈을 이루려면 공부를 해야한다. 성공한 사람은 전부 어려워도 공부했다. 지금 내가 사고 싶은 크로켓 존스 구두를 신고 있는 사람들도 입에 인수저를 물고 태어나지 않았다면 공부하고 돈벌어서 구두를 산거다. 해외에서 새로운 사업을 해보려면 더 공부해야 한다. 지금 영어수준으로는 내 몸 하나 간수하기 힘들다. 내 지식으로는 외국애들과 협상할 수 없다. 하고 싶은 거 하고, 입고 싶은 거 입고, 먹고 싶은 거 먹으려면 정말 공부해야 한다.

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토플학원 열흘째

2010-09-10T17:37:00.001-07:00

토플학원을 다니면서 매일 내 영어 실력의 바닥을 보고 있다. 학원에서는 요령을 몇가지 알려준다. 자주 나오는 단어, 듣기에 나오는 유형들, 말을 할때 사용할 구조 등 처음 듣는 나에게는 매우 유용한 정보들이다. 선생님들은 요령을 강조하면서 기본의 중요성도 놓치지 않는다. 잔기술은 말그대로 잔기술일 따름이다. 기본이 없다면 원하는 점수는 얻지 못한다.

기본기를 늘리는 몇가지 방법이다.

쉐도잉: 우선 듣고 따라한다. 열번은 해야한다. 하고 난 뒤에는 한글로 해석된 지문을 보고 영작한다.

글쓰기: 하루에 한가지 주제로 글을 쓴다. 글을 쓸 때는 정해진 구조를 따른다.

읽기: 수준있는 기사나 글들을 꾸준히 읽는다.

해야할 일들을 보면 영어 잘한다는 사람들은 누구나 했던 방법들이다. 또 모든 방법들은 연결되어 있다. 쉐도윙하면 말하기 듣기 공부된다. 영작은 말하기에 도움이된다. 말하기도 결국 내 의견을 정리해야하기 때문이다. 읽기는 배경지식을 늘리고 단어를 공부해야하므로 듣기, 말하기, 쓰기 모두에 도움이 된다.

앞으로 아침에 간단히 저널을 하나 쓸것이다.
영어기사는 틈틈이 읽는다.
저녁에는 쉐도잉을 한다.
크게 읽고 녹음하는 것을 리뷰한다.
한글 번역본을 영작한다.

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MBA를 가고 싶다

2010-09-04T21:08:00.000-07:00

회사를 들어올 때부터 회사를 나가고 싶었다. 내가 일하는 곳은 옷을 만드는 회사인데 애초에 내가 원한 분야는 금융회사였기 때문이다. 회사에 들어와서보니 일하는 방식이나 복지정책 등이 한참 기대에 못 미쳤다. 다만 재무관리 분야는 한번쯤 경험하고 싶었기에 그간 회사를 그만두지 않았다.

이년차가 되어가는 시점에서 더 배울게 있나 생각하니 몇가지는 있을거 같다. 대략 두 해 정도면 내가 하고 싶은 일을 해 볼 수 있을테다. 마침 법인도 규모가 큰 곳으로 옮겨서 일복은 터질거다.

이년 뒤가 문제다. 여기에서 대리달면 그게 내 욕구를 채워 줄 수 있을까? 더 성장한 게 확실할까? 단연코 아니다. 이년 뒤에는 새로운 길을 준비해야 한다. 내가 선택한 새로운 길은 신흥국가에서 사업하는 것이다. 준비단계로 우선 MBA를 가고 다국적기업에 해외지사로 파견나가고자 한다.

첫 출발은 MBA이다. 오늘 이 글을 쓰는 건 앞으로 내 MBA준비 과정을 모두 기록하기 위해서다. 시작은 토플과 지맷이다. 앞으로 토플 지맷 준비과정을 쓰고, 합격하는 날까지 하루하루를 기록할 것이다. 부디 내게 새로운 길이 나타나기를 기도한다.

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2010-09-04T20:52:00.000-07:00

트랙킹 주식
사업부주식
사업부 대상으로 주식발행
국내 상표권 아님 계약권 담보로 채권발행할 수 있나
의무 적립조항있다면
해당사업부의 매출채권을 담보로 수익률 배당에 참여하게 하는 것은 어떤가
심플한 구조로 만들 수 있겠나

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2010-05-23T07:56:00.001-07:00

The euro-area rescue plan

유로화 지역 살리기 계획

The price of pragmatism
실용주의의 댓가

May 11th 2010
From Economist.com

The euro zone’s rescue scheme is big and bold but leaves the ECB looking compromised

유로존의 회생 계획은 거대하고 단단하지만 협상을 원하는 ECB를 남겨두었다.

FOR weeks there have been calls for the euro zone's policymakers to get ahead of the sovereign-debt crisis, which started in Greece and was in danger of engulfing other countries with big budget deficits and poor growth prospects. In the early hours of May 10th, such a plan finally emerged. After a lengthy summit in Brussels, European finance ministers agreed on a “stabilisation fund” worth up to ?500 billion ($640 billion) over three years. That sum would be supplemented by a further ?220 billion or more from the IMF. In addition, the European Central Bank (ECB) said it would purchase government bonds to restore calm to “dysfunctional” markets.

여러 주 동안 유로존의 정책입안자들에게 그리스에서 시작하여 다른 나라들을 거대한 재정적자와 저성장의 위험으로 몰고간 국가부채에 대해 진전을 보여주라는 요청이 있었다. 마침내 5월 10일 이른 시각에 계획이 나왔다. 브뤼쉘에서 긴 회의 후에 유럽의 재무장관들은 3년간 5천억 유로(6천400억 달러)에 달하는 안정화 펀드를 조성하기로 동의했다. 총 합계에 2천200억 유로 또는 그 이상을 IMF에서 추가지원 할 것이다. 또한 유럽중앙은행(ECB)는 "비정상적"시장에 안정을 더하기 위해 국가채권을 매입할 것이다.

The market response was euphoric. Germany’s stockmarket had risen by more than 5% when it closed on May 10th. The CAC 40, the main index in France, was up by almost 10%: big French banks are heavily exposed to Greece, so they stand to benefit from a cast-iron rescue package. The yield on ten-year Greek government bonds plunged from more than 12% to less than 8%. The yields on comparable bonds for Portugal, Spain, Italy and Ireland also fell sharply. The euro rose a bit against the dollar.

시장의 반응은 환상적이었다. 독일의 증권시장은 5월 10일 종가보다 5%이상 올랐다. 프랑스의 대표지수인 CAC 40은 거의 10%나 상승했다. 거대 프랑스 은행들은 그리스에 막대한 채무를 가지고 있기 때문에 그들은 단단한 회생전략들로 이득을 얻게 되었다. 그리스 정무 10년물 채권의 수익률은 12%를 넘던 것이 8% 밑으로 떨어졌다. 포르투갈, 스페인, 이태리, 이일랜드의 동급채권들 역시 수익률이 급격히 떨어졌다. 유로화는 달러대비 약간 상승했다.

Markets had become sceptical that Europe could respond with enough scale and speed

The response is a sign of how sceptical markets had previously been that Europe could respond to the deepening crisis with enough scale and speed. Even so, the rescue plan has a patched-together feel to it. One part is based on an existing ?50 billion fund for non-euro countries with balance-of-payments problems, which is financed by European Union bonds that can be sold fairly quickly. The EU is to create a similar, ?60 billion fund for euro member countries—as much money as could be raised without breaching its budget ceiling. This proposal had to be signed off by countries, like Britain, which do not use the euro, because their taxpayers would also be on the hook were the money not paid back in full.

이번 반응은 이전에는 논쟁있는 시장이었던 유럽이 극심한 위기에 충분한 양과 속도로 반응 할 수 있다는 것을 보여준 것에 대한 상징이다. 그렇더라도 이번 회생방안은 짜맞추기 였다는 느낌이 든다. 기금 중 한부분은 매우 신속히 판매 될 유럽연합 채권으로 조성되는 자금인 국제수지문제를 겪고 있는 비유로 국가들을 위한 500억 유로이다. EU는 유로화국가들을 위해 비슷한 600억 유로 자금을 조성했다.

The mainstay of the rescue fund, an additional ?440 billion if needed, will come from a new vehicle to be set up by the 16 euro-zone countries, which will control the money disbursed by it and guarantee its financing. Details on how this would work are sketchy but an EU official said the scheme could be enacted in a week or two. The IMF is expected to chip in with funding worth at least half as much again.

The ECB's participation was vital

These elements of the rescue plan satisfy the need for a big response but would take a while to be fully operational—too long, perhaps, for jittery financial markets. That is what made the ECB’s participation so necessary: it is the only institution that can react rapidly enough. Market chatter suggests that much of the fall in European bond yields on May 10th was down to the ECB, already in the market, buying bonds. Doing this has the effect of pumping cash into the economy but the bank says it will "sterilise" this by other means (such as selling instruments of its own, to soak up the cash), so that monetary policy will not be loosened.

Jean-Claude Trichet, the central bank’s head, denied that the bank had been pressured into buying bonds, even though it is only a few days since he said publicly that the ECB's governing council had not even discussed buying bonds at its regular monthly meeting. He insisted that the ECB was “fiercely and totally independent.”

The ECB looks a different animal to when the fiscal crisis began

However, for all his protestations, the ECB looks a different animal to when the fiscal crisis began. Having balked at buying government bonds last year when other central banks were doing so as part of their monetary policy, the bank now finds itself involved in an explicit support operation to European governments' fiscal policies—which is a far bigger threat to its self-image. This is not the only sharp U-turn Mr Trichet has had to perform in recent weeks. He opposed IMF involvement in the Greek rescue, then welcomed it. And he said the rules would not be changed to suit one country, only to change them to ensure that Greek bonds could be exchanged by banks for ECB cash. The central bank's credibility relies in part on a reputation for living up to its pledges and partly on its disdain for political expediency. On both counts, then, it has lost something.

Even so, it is wrong to conclude that, in trying to get ahead of the crisis, the euro zone's policymakers have gone too far. The threat that Portugal and Spain might be cut off from credit markets, triggering a meltdown in Europe’s financial system, was all too real. The rescue effort will dent the ECB’s reputation as a single-minded inflation-slayer. The insurance provided by the rescue scheme may leave countries that benefit from it a bit less minded to cut deficits and reform their economies. But those faults, real as they are, must be set against the potential costs of doing nothing.

무급인턴문제

2010-04-03T23:23:00.001-07:00

http://www.nytimes.com/2010/04/03/business/03intern.html?WT.mc_id=BU-SM-E-FB-SM-LIN-GOU-040310-NYT-NA&WT.mc_ev=click

학생들이 이력서에 들어갈 경력때문에 고생하는 건 한국이나 미국이나 마찬가지다. 무급인턴임에도 군소리 못한 미국학생들이 안쓰럽다.

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첨삭 후 수정(원본: 100321작성)

2010-03-28T06:02:00.000-07:00

논제1. 제시문 (가)의 견해를 제시문 (나)의 주장의 논거를 근거로 하여 비판하시오.(500~600자)

제시문 (가)는 성리학을 공부하는 선비라면 탐구만 할 것이 아니라 실천하는 삶을 살아야 한다고 주장한다. (가)에 따르면 성리학은 앎을 아는데 그치지 않고 실현하는 학문이기 때문이다. 따라서 (가)는 성리학을 공부하면서도 앎을 실천하지 않는 사람들을 은사라고 비판한다.
제시문 (가)와 같이 은사들의 삶을 비판하는 것은 타당하지 않다. (가)에서 비판하는 은사들은 (나)에서 말하는 관조적 탐구를 행하는 사람들과 같다. 관조적 탐구는 지성과 지혜를 기반으로 한다. 지성과 지혜는 가능성이나 능력면에서 가장 숭고하며 사유의 대상도 최고의 것이다. 또한 지속적이고 순수한 최고의 즐거움과 자기충족은 탐구하는 삶을 살아가야 온전히 가능하다. (가)에서 강조한 실천적 덕을 갖춘 사람은 자기충족이 불가능하지만 탐구하는 사람은 혼자서도 지혜롭게 임무를 수행할 수 있기 때문이다. 따라서 탐구보다 실천이 중요하다는 제시문 (가)의 주장은 관조적 탐구를 행하며 훌룡하게 살아가는 방법을 간과했다는 문제를 안고 있다. (506자)

논제2. 글 (다)의 관점에서 글 (라)의 ‘살비아티’의 주장을 평가하라.(300~500자)

살비아티는 우주의 운동현상을 지구만 운동하는 것이라고 주장한다. 운동은 움직이는 것과 움직이지 않는 것 사이에서만 의미가 있고 자연은 효율적으로 운동하므로 우주에서 지구만 운동한다는 것이다.
살비아티의 우주운동이론은 (다)에서 마흐가 말한 복잡함의 단순화라는 자연과학이론의 형성방식을 따른다. 그러나 그의 이론은 현상을 주관적으로 단순화했다는 문제가 있다. 살비아티는 다양한 우주의 현상을 설명하는 과정에서 설명을 경제적으로 하기 위해 자연이 효율적으로 운동한다는 주관적인 판단을 끌어들였다. 그는 자연의 효율성 법칙이 상식이라고 하였지만 이는 주관적으로 내린 판단일 뿐 객관적인 근거가 있는지는 명확하지 않다. 따라서 살비아티의 주장은 객관적인 논리성을 결여하였으므로 타당하지 않다. (382자)

흉악범죄 용의자의 신상공개에 찬성하는가? 반대하는가?

2010-03-21T01:11:00.001-07:00

흉악범죄 용의자의 신상을 함부로 공개해서는 안 된다. 살인, 성폭행과 같은 범죄의 용의자는 아직 범죄자로 판결을 받지 않았기 때문이다. 수사기간 동안에는 죄가 의심되는 사람도 범죄자가 아니므로 일반시민과 똑 같은 대우를 받아야 한다. 그들의 신상을 공개하면 수사를 받는다는 이유만으로 온갖 모욕과 수모를 겪어야 한다. 만약 최종심에서 무죄로 판결이 나더라도 용의자는 신상공개로 직업을 유지할 수 없을 것이다. 부녀살인사건으로 용의자가 되었던 치과의사는 대법원으로 간 판결 끝에 무죄를 선고 받았다. 수사기간 동안 TV, 신문을 통해 그의 얼굴이 알려졌다면 그는 한국에서 삶을 이어갈 수 있었을까? 무고한 사람에게 고통을 안겨주는 신상공개는 새로운 피해자를 만들 수 있다는 점에서 하지 말아야 한다.

렉스칼럼

2010-03-12T18:08:00.001-08:00

일본 증권 시장에 등록된 외국기업은 이제 12개로 줄었다.
기업들이 외국증권시장에 상징하는 이유는 전략적 기대와 투자자의 편의를 위해서다. 독일 보험사인 아에곤은 십이년만에 도쿄시장에서 등록을 해지했다. 지난 금요일에 도쿄시장에서 거래된 아에곤주식은 단 20주 였으며 한해동안 아에곤이 등록비로 낸 돈은 10,600불이었다.

아시아에서 백만장자의 수가 급격히 늘고 있다. 부자들이 벌어들인 돈이 영광이 되려면 빈부격차를 줄여야 한다.

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시간관리

2010-03-12T17:44:00.001-08:00

여유로울 때 시간을 아꼈야한다. 그 때 창조적인 일을 하거나 지식을 얻을 수 있다.

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중국, 책

2010-02-21T02:07:00.001-08:00

중국을 이해하고자 하는 사람이 읽을만한 책
100년 후, 조지 프리드먼
제국의 슬픔, 이중텐
중국철학사, 풍유란

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김영익의 생각

2010-02-21T01:31:00.001-08:00

2010년 내수는 투자증가와 소비증가로 다소 회복
유럽과 미국 수출은 내부 위기로 감소
중국은 투자가 아니라 소비가 성장을 이끌 것
금리인상은 투자중심에서 소비중심으로 패러다임을 변경
위안화절상으로 수입물가가 하락
소득증가, 사회보장제발달
우리의 미래는 미국과 유로존의 침체를 중국이 얼마나 메워주느냐에 달려있다.

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윤종용의 생각

2010-02-21T01:23:00.001-08:00

아날로그시대 경쟁력은 풍부한 기술과 경험, 부지런함이다. 그러나 디지털시대에는 두뇌와 스피드가 경쟁력이다.
부가가치를 얻으려면 브랜드이미지와 마케팅전략을 향상해야한다.
상황이 바뀌면 전에 쓰던 전략을 포기해야 한다.
삼성전자의 장점은 권력이양과 인재, 공급망관리시스템이다.

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일요일의 짜증

2010-02-20T21:32:00.001-08:00

옆방에서 연인들의 웃음소리가 들려온다. 일요일 오전부터 부모가 없는틈을 타 들어온 남자녀석이 집주인 딸래미와 즐거운 휴일을 보내나보다. 일주일 중 오일을 회사에서 일과 씨름하고도 일요일에 회사로 가야하는 내 처지때문에 그들의 웃음소리가 싫다. 아침도 못먹어 배가 고프니 짜증은 배로 늘었다. 어서 방구석을 뛰쳐 나가 밥도 먹고 내 처지도 바꿔야겠다.

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Lex column

2010-02-20T03:28:00.000-08:00

Nestle
매출목표 미달
원료가격 하락(상품시장 소강)
광고단가 하락(경기하락시 광고시장은 얼어붙는다)
노바티스에게 투자자산을 매각하여 차익거둠
이익증가

EV/EBITDA=9.1
동종업계 평균은 10-12이므로 매력있다.

중국 차이나텔레콤이 나이지리아 텔레콤 매각에 최고가로 입찰했으나 나이지리아 정부가 시간을 끄는 중이다.

앵글로아메리카는 광물투자로 이년간 배당을 하지 않았다. 경영진은 추가투자안을 계획하고 있으나 주주들의 반발이 거세다.

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플라톤 국가

2010-02-11T22:20:00.001-08:00

사물의 기본구조는 감각적 대상이 아니라 지성의 대상이다 30

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개인과 국가

2010-02-06T20:43:00.001-08:00

낙태, 자유로운 정치발언. 모두 개인과 국가의 문제가 아닐까?
선택할 수 있는 권리는 어디까지 허용해야 하나?

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Apple invites press to see `our latest creation`

2010-01-27T15:53:00.000-08:00

Apple invites press to see `our latest creation`

애플, 최신품 공개에 언론초청

(CNN) -- It's official: Apple Inc. will host a much-anticipated press event January 27 in San Francisco, California.
애플이 공식적으로 1월 27일 캘리포니아, 샌프란시스코에서 열리는 언론 초청회를 개최한다.

Invitations went out Monday.
초대장은 월요일에 발송됐다.

Tech insiders expect the company to unveil a touch-screen "slate" computer, which would look something like a giant iPhone.
기술 전문가들은 애플이 거대한 아이폰 같은 터치스크린 컴퓨터인 슬레이트를 공개할 거라고 기대한다.

Buzz about such an announcement, and the possible press event, has been dominant news in the tech blogosphere for months.
이번 공개에 대한 소문들은 블로거들 사이에서 여러 달 동안 중심 주제였다.

The invitation to Apple's event gives only a cryptic message about what news will come, however.
하지만 애플의 초대장은 앞으로 벌어질 일에 대해 불가사리한 메세지만 준다.

"Come see our latest creation," says the invite, which was sent Monday by e-mail.
우리의 최신품을 보러 오세요. 월요일 초대 메일에 적혀있던 문구다.

The e-mail invitation shows an image of bright colors splashed around an Apple logo. It does not show photos of products or specify what products Apple will discuss at the event.
이메일 초대장은 반짝이는 애플로고만 보여준다. 제품사진이나 구체적인 설명은 없다.

The press event will be held at San Francisco's Yerba Buena Center for the Arts at 10 a.m. PT on January 27, according to the announcement.
발표에 따르면 기자 간담회는 샌프란시스코 ...에서 열린다.

The amorphous "slate" and "tablet" computer categories have drawn much attention from technology writers and the public in recent months.
최근 전자 블로거들과 대중 사이에서 슬레이트와 타블렛은 상당한 주의를 끌었다.

Some companies say the devices -- which fall in size and function somewhere between smartphones and laptop computers -- are good for reading books, sorting through photos and browsing Web sites.
일부 회사는 크기와 기능이 스마트폰과 컴퓨터의 중간정도이며 책과 사진정렬, 웹서핑에 편리할 거라고 말한다.

Others have criticized these emerging computer categories as overhyped.
다른 이들은 떠오르는 상품이 과대포장되었다고 비판했다.

Apple has a history of game-changing product announcements. The Cupertino, California-based company also has a reputation for being tight-lipped about its plans. The company has not commented on the frenzy of rumors about its supposedly upcoming tablet computer.
애플은 판도를 바꾸는 제품을 발표한 역사를 가지고 있다. 캘리포니아에 있는 쿠페리노사 또한 그들의 계획을 절대 발표하지 않는다. 곧 발표될 타블렛 컴퓨터에 여러 소문이 돌아도 회사는 어떤 코멘트도 하지 않는다.

Has Twitter peaked?

2010-01-27T04:31:00.000-08:00

Has Twitter peaked?
트위터 성장율, 한계에 부딪혔나?

(CNN) -- It was the upstart rock star of the Internet in early 2009, roaring out of relative obscurity to become one of the most exposed -- some would say overexposed -- services on the Web.
~~트위터는~~ 2009년 인터넷에 떠오르는 락스타가 있다.였다. 비교적 유명하지 않던 사이트가~~세상에 알려지지 않은 은둔자에서~~ 가장 널리 알려진 인터넷 서비스로 떠올랐다.

But since the middle of last year, the number of Twitter users has flatlined.
그러나 작년 중반 ~~이 후~~ 부터, 트위터 사용자는 늘지 않고 있다.

Compete, a Web analytics firm, says the microblogging site's number of visitors hasn't changed much since June and that its roughly 22 million visitors in December was about 770,000 fewer than its highest number, which was in August.
웹분석회사인 컴피트는 마이크로블로깅 사이트의 방문자 수가 지난 6월 이 후 바뀌지 않고 있으며 12월 방문객 수는 2천 2백만명으로 작년 최고치였던 8월보다 77만명 가량 적다고 말했다.

Multiple other analysts paint the same picture, raising the question: Has Twitter peaked?
다수의 분석가들은 같은 구상을 하며, 질문을 한다.: 트위터는 한계에 다달았나?

"Maybe Twitter was a victim of its own success," said Andrew Lipsman, an analyst at comScore, another company that tracks traffic on Internet sites. "It grew so quickly that it isn't meeting its own expectations."
"아마 트위터는 성공의 희생자일 거다." 인터넷 트래픽 측정 회사인 컴스코어의 앤드류 립스맨은 말했다. "트위터는 너무 빨리 성장해서 기대에 못 미칠거다."

But the company and some analysts say that this leveling of popularity shouldn't be viewed as a failure, because the people who use Twitter are using it more than ever.
그러나 회사와 일부 분석가들은 지금 수준의 인기도를 바탕으로 실패라고 해서는 안된다고 말한다. 트위터를 사용하는 사람들은 어느 때보다 더 많이 쓰고 있기 때문이다.

ComScore's usage numbers for Twitter are similar to Compete's. They show the site peak with about 21.2 million visitors in July 2009 and dip to 19.9 million in December. By contrast, during the same period Facebook grew from about 250 million users to more than 350 million.
컴스코어의 트위터 사용빈도는 컴피트의 자료와 비슷하다. 자료에서는 방문객 수가 7월에 2천 1백만명으로 최고점을 찍었고, 겨울에는 1천 9백만명으로 떨어졌다. 반면 동기간 페이스북은 사용자가 2억 5천만명에서 3억 5천만명으로 늘었다.

Lipsman suggests Twitter's recent stagnant numbers look anemic largely because its growth in early 2009 was so astronomical.
립스맨은 트위터의 최근 정체가 심각한 빈혈에 걸린 듯이 보일거라고 했다. 2009년 초반의 성장세가 매우 거대했기 때문이다.

According to Web analysts HubSpot, average users now have more followers (300, compared to about 70 in July) follow more feeds (170, compared to 45 in July) and have sent more tweets (420 during the life of their account, compared to 120 in July).
허브스팟의 분석가에 따르면 유저들은 평균적으로 더 많은 팔로워를 가지고(300, 7월에는 70이었음) 더욱 팔로우를 하며(170, 7월에는 45) 트윗을 보내는 수도 많아졌다.( 420-접속중에, 7월에는 120)

The site also is becoming more international. Less than 51 percent of Twitter users were from the United States in December, compared to more than 61 percent in June.
또한 트위터는 세계로 뻗어나가고 있다. 51% 미만의 사용자만이 미국 국적이다. 지난 6월에는 61%였다.

Others have suggested that Twitter's user base only appears to have flattened because more people are using mobile devices and third-party programs like TweetDeck to post to the site. But Lipsman believes most of those people still visit the site at least once a month, which should register in site-traffic analysis.
다른 이들은 트위터유저들의 근거지가 무너졌다고 설명했다. 사람들이 모바일 장비와 트윗덱같은 제 3의 경로를 사용해서 글을 올리기 때문이다. 그러나 립스맨은 대부분 사람들이 한달에 적어도 한 번은 사이트를 방문하므로 이를 분석에 반영해야 한다고 생각한다.

Lipsman said he expects Twitter's growth to kick back up, if at a much slower rate than before. He said he'd only be alarmed if the site's user numbers stayed flat for several more months.
립스맨은 트위터의 성장세가 이전보다 느려지더라도 다시 성작할 것으로 기대했다. 그는 만약 사용자 수가 여러 달 동안 머물러 있다면 조심해야 한다고 주장했다.

일정관리 프로그램 만들기 1일째

2010-01-16T06:03:00.001-08:00

C언어를 공부하기 시작했다. 참고 사이트는 아이티문화원이다.(www.dal.kr) C언어를 쉽게 설명한다. 프로그래밍은 천재들만 하는게 아니라 컴퓨터를 가진 사람이면 모두 할 수 있다는 생각이 든다.

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2010-01-13T06:25:00.001-08:00

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Jan 13, 8:07 AM EST

UN headquarters in Haiti collapsed in quake

By EDITH M. LEDERER
Associated Press Writer

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UNITED NATIONS (AP) -- The headquarters for the U.N. peacekeeping mission in Haiti collapsed in the massive earthquake, and France's foreign minister said Wednesday that everyone inside appears to have been killed, including the head of the country's U.N. mission.

At least seven peacekeepers were reported dead, and scores of others were injured or missing.

French Foreign Minister Bernard Kouchner told two French radio stations that everyone in the U.N. building, including mission head Hedi Annabi, appears to have died in the earthquake. He said his information had come from the French ambassador in Haiti.

Kouchner said on RFI radio Wednesday that the ambassador had visited the devastated U.N. headquarters building in Port-au-Prince and said "everyone who was in the building is apparently dead," including Annabi, a Tunisian diplomat.

U.N. peacekeeping chief Alain Le Roy earlier confirmed that Annabi was in the building at the time of the 7.0-magnitude quake.

U.N. troops, mostly from Brazil, were trying to rescue people from the wreckage of the five-story building, Le Roy told reporters, but "as we speak no one has been rescued from this main headquarters."

"There will be casualties, but we cannot give figures for the time being," Le Roy said.

Between 200 and 250 people normally work at the peacekeeping headquarters, located on the road from the city to the hillside district of Petionville, but it is unclear how many were in the building when the quake hit a little after 5 p.m. local time, deputy peacekeeping chief Edmond Mulet said.

At least four Brazilian soldiers were killed and five injured, Brazil's army said. Jordan's official news agency said three of its peacekeepers were killed and 21 were injured. A state newspaper in China said eight Chinese peacekeepers were known dead and 10 were missing - though officials later said the information was not confirmed.

Mulet, who was Annabi's predecessor in the Haiti post, said the U.N. headquarters building had been constructed in the 1960s with reinforced concrete, and was previously the Christopher Hotel.

Other U.N. installations in Haiti were also seriously damaged, Le Roy said, including the headquarters of the U.N. Development Program, where many people were wounded.

The U.N.'s entire Haitian mission includes 7,000 peacekeeping troops, 2,000 international police, 490 international civilian staffers, 1,200 local civilian staffers and 200 U.N. Volunteers, Le Roy said.

The force was brought in after a bloody 2004 rebellion following decades of violence and poverty in the nation.

---

Associated Press Writer Perrine Latrasse contributed to this story from Paris.

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아메바 경영

2010-01-03T07:51:00.001-08:00

독립채산제는 거대조직을 위임가능하세 한다
대조직 밑에 있는 소조직의 장이 자기 집단을 효율적으로 관리하면 대조직의 장은 소장들만 관리해도 된다
49

노동자에게 경영자마인드를 심어주려면 경영상황을 공개해라
59

아메바경영을 하기위한 조건
1.수입과 경비를 수치로 드러낼 수 있을 것
2. 최소 단위가 사업을 완결할 것
3. 회사의 목적을 벗어나지 않는 범위레서 쪼갤것

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Go for the jugular

2009-12-27T03:57:00.000-08:00

Go for the jugular

재판의 결과는 엄정한 법이론에 좌우되는 것이 아니고 법의 내용도 이에 따라 결정되는 것이 아니라는 주장이다.
'지혜의 아홉기둥' 87p

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아이폰으로 블로깅하기

2009-12-26T23:46:00.001-08:00

아이폰으로 블로깅할 수 있는 툴을 발견 했다. 이 글이 아이폰을 사용해서 내 블로그에 올리는 첫글이다. 사용법이 간편해서 앞으로 자주 글을 쓸 수 있을 것 같다.

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[FT]How we can restore trust in financial institutions

2009-11-08T16:12:00.001-08:00

How we can restore trust in financial institutions
금융기관의 신뢰를 회복할 수 있는 방안은 무엇인가?
By Gordon Brown
고든 브라운(영국 총리)
Published: November 8 2009 19:30 | Last updated: November 8 2009 19:30

There has always been an implicit economic and social contract between our financial institutions and the society they serve.
금융기관과 사회사이에는 암묵적인 경제적, 사회적 계약이 있습니다.

Over centuries the guarantee of responsible stewardship of people’s money has been the foundation of the most precious asset a financial institution can ever have – trust.
지난 세기동안 사람들의 돈에 대한 책임감있는 봉사정신을 보장하는 것은 금융기관이 가질 수 있었던 가장 소중한 자산인 믿음의 기초였습니다.

Two years into the financial crisis, it is clear that the old contract has to be rethought and now made explicit for new times.
금융위기가 두 해째로 접어들면서 오래된 계약을 다시 고려해보고, 새로운 시대에는 명백하게 만들어야 한 다는 것이 명확해 졌습니다.

In recent years, our global financial system has achieved extraordinary successes; creating jobs, funding businesses, driving down costs and lifting people out of poverty.
근래 우리의 세계적인 금융시스템은 괄목할만한 성과를 거두었습니다. 직업을 만들어냈고, 기업들에게 자금을 지원했으며, 비용을 절감하고, 사람들을 가난에서 벗어나게 했습니다.

But the scale of the failings in recent months cannot be disguised.
그러나 최근 몇달동안 벌어진 실패의 크기는 감출수 없습니다.

The new contract must recognise the two new characteristics of modern financial institutions – their global scope and their interconnectedness.

As we now know, a failure in one large bank anywhere can affect all banks, large and small, everywhere.

Since the potential damage to the wider economy was so great, taxpayers have had no choice but to keep the system afloat.

So while our regulatory changes are designed to reduce moral hazard, any new contract between our financial institutions and our society now needs to reflect the wider costs to the economy and society of potential failure.

At its heart, the contract must answer another issue raised by the crisis: that the distribution of risks and rewards between the banks, citizens and taxpayers is balanced fairly.

Our first response has been to reduce risks by agreeing reforms to the national and global supervisory system – in capital requirements, liquidity, leverage, governance and transparency.

When fully implemented, I believe these will represent a transformation of the sector.

But, as the discussions of the Group of 20 nations this weekend reflected, these changes alone may not be sufficient to protect against future risk and to compensate for wider costs to the general public.

The world has moved on since some of the earlier ideas to address the responsibilities of the financial sector to the economy and society. There are now broader areas that have been the subject of the recent debate amongst policy makers, commentators, economists and bankers. These include insurance fees to reflect systemic risk; collective or individual resolution funds; contingent capital arrangements; and global financial levies.

In Pittsburgh and at St Andrews, leaders and finance ministers asked the International Monetary Fund to look afresh at this issue and at the range of options available.

I believe any measures we consider should be assessed against four core principles.

First, in a global economy and with a global financial sector, any such measures could work only if applied globally.

Second, any measures must not create distortions or incentivise avoidance.

Third, any measures must complement regulatory measures already being adopted or discussed.

And fourth, any costs to the financial sector must be fair and measured to enable institutions to do their job for our economy.

A new contract requires a wide public debate, one in which banks themselves should be leading participants. It will not always be a comfortable discussion, but it is in my view an essential one.

Banks cannot assume that trust will return without significant change. So it is in the interests of all banks and financial institutions to participate in this debate and I am happy to play my part in bringing banks and governments together. As this crisis has also shown, some financial institutions have managed their risks and maintained trust. And one of our tasks now is to ensure that all rise to the standards of the best

While I do not doubt there are practical and technical issues that will need to be overcome, the gravity of the recent crisis makes this discussion urgent. The restoration of trust depends on a resolution of these issues. Failure to do so will put at risk the confidence of millions of people in globalisation, setting back economic and social progress. We must all rise to the challenge.

Cash and carry

2009-07-19T15:49:00.000-07:00

Cash and carry
By Andrea Felsted and Patrick Jenkins

Published: July 19 2009 20:14 | Last updated: July 19 2009 20:14

In a kiosk in the English Midlands, a revolution in banking is under way.
은행업에서 혁명이 일어나고 있다.

A stone’s throw from the Coventry City soccer ground, in a 450 sq ft unit beside the 44th check-out in a giant Tesco hypermarket, the supermarket chain is pioneering in-store banking.
테스코가 점포내 은행업을 하고 있다.

The new branch in Coventry is one of 30 that Britain’s biggest retailer will open this year in an aggressive assault on the financial services industry. But this is just scratching the surface of the presence Tesco could build in the sector. Within the next two years, it plans to offer a current account and mortgages.
테스코는 코벤트리에서 금융업에 중점을 둔 점포를 개설한다. 이는 시작일 뿐이다. 2년안에 테스코는 계좌개설과 모기지 상품을 제공하겠다는 계획을 발표했다.

The reputations, and ability to lend, of traditional banks have been hit hard by the financial crisis, opening up big opportunities for retailers with strong brands and financial clout.

Some banks are dismissive of the group’s chance of playing anything more than a niche role – but, if it is successful, the retailer will hurt them just as they are getting back on their feet.

Likhit Wagle of IBM Global Business Services warns: “Tesco’s skill at customer analytics is better than anyone in financial services. That ought to keep a number of the retail banks awake at night.”

Bain & Co estimates that, within a decade, retailers could have won 10-20 per cent of the European mass banking market. “It will be quite a battle for the banks. The value at stake is very high,” says Philippe De Backer of Bain’s European financial services practice.

Current accounts and mortgages are at the heart of most customers’ relationships with their banks – but they are not usually found alongside soup and soap powder. With Tesco pushing the boundaries of retailers’ banking businesses, shopkeepers around the world are watching its progress closely.

“If there ever was a time that is favourable for retailers to get into banking it is now,” says Michael Lafferty of Lafferty Group, a retail banking research house. “And we are not just talking about limited financial services such as credit cards, but retailers actually getting into a broader range of financial services including the current account, the main relationship account. That is the big one.”

Retailers have long dabbled in financial services – from the Co-operative Group and Harrods in the UK to Migros in Switzerland. Tesco entered a joint venture 12 years ago with Royal Bank of Scotland to offer insurance, credit and savings.

The idea of applying retailing skills – brand, supply chain efficiency, competitive pricing – to banking found its poster boy in Andy Hornby, a senior manager at Wal-Mart’s UK unit, Asda.

Mr Hornby went on to deploy the pile-them-high-sell-them-cheap philosophy of supermarkets at Halifax Bank of Scotland, the major mortgage lender he headed until its rescue by Lloyds TSB. He has now retreated to retail as chief executive of pharmacy chain Alliance Boots.

Now it seems that it is retailers’ turn to make the symbiosis work. While bank brands are bloodied by blame for the financial crisis and multibillion-pound bail-outs, retailers have emerged largely unscathed.

This represents a once-in-a-lifetime opportunity to move from being sellers of food and fashion to the friendly face of finance.

Robert Jones of brand specialist Wolff Olins says retailers have the mass-market appeal that banks have lost.

“They are down to earth. They are more convenient. They are much more price conscious and, yes, they are more trustworthy,” he says. “All of that means an opportunity to go into financial services in a much more serious way than they have done.”

Sir Terry Leahy, chief executive of Tesco, has pledged to transform the supermarket into the “people’s bank”, to capitalise on public anger.

He is not the only one harbouring such ambitions. Retailers including John Lewis, Marks and Spencer, Asda and Alliance Boots are all looking to exploit Britons’ greater trust in them by expanding their involvement in financial services.

For Tesco, there is another reason for its assault on banking. With its core UK grocery market – in which it has a more than 30 per cent share – maturing, it must look elsewhere for expansion opportunities.

Additional services – from banking and insurance to mobile phones – as well as moves into overseas markets, offer valuable engines of future growth.

Tesco’s expansion has been progressing like a juggernaut for the past decade – it has moved from its roots in food into clothing, telecommunications, property and garden centres.

“If you define yourself as a UK grocer that is all you will ever be,” says Andrew Higginson, chief executive of the group’s retailing services arm, which includes Tesco Personal Finance.

Now, having bought out RBS’s 50 per cent share in its financial services arm for £950m ($1.6bn, €1.1bn) last year, Tesco is preparing to offer a current account. This would give it “a reason to interact with [customers], and that creates a bit of friction, or stickiness”, says Mr Higginson.

Officially, the retailer is still evaluating whether to enter the mortgage market but the product is clearly in its sights.

“It does look like being an area where we feel we can add a bit of value to customers,” says Mr Higginson. But, he acknowledges: “It is not something you can rush into.”

Tesco has pledged to increase its profits from all the services that it provides to customers – including banking and insurance, online shopping and mobile phones – from just under £400m in the year to February 2008, to £1bn within a decade.

Although it has offered a savings account for several years, it has recently enjoyed a spike in applications. Deposits almost doubled from £2.5bn in mid-October, when trust in the banks was shattered, to about £4.5bn today.

But selling banking services is not as simple as putting sausages, or even sweaters, on shelves. Indeed, the record of retailers in financial services up to now has been mixed. Some industry observers question whether they will have the financial clout to compete effectively in banking.

Tesco had overall assets of £46bn at the end of February, of which the financial services arm, which has its own balance sheet, accounts for £6.2bn. But this is still dwarfed by the mainstream banks – even some of the high-profile casualties of the credit crunch. RBS, for example, has assets of £2,400bn.

Mr Higginson insists that Tesco does have the requisite strength. As the business moves into new areas, such as mortgages, the balance sheet will swell.

However, he says, the group will not let the desire to expand drive the sort of behaviour that contributed to the banking crisis. Mr Higginson is hopeful that the retailer will be able to fund a “good chunk” of mortgage lending from customer deposits.

But he acknowledges that, “realistically, if you are going to build a sizeable [mortgage] book, you have got to start thinking about wholesale funding”.

It is possible the company’s financial services arm could seek its own rating from the credit ratings agencies, which would enable the subsidiary to use so-called wholesale funding. Today, however, such funding – borrowing directly from the market – is very hard to come by.

“We will take the lessons learnt by some others, most notably Northern Rock, in the way we think of wholesale funding, but I do see it as part of the funding mix required,” says Mr Higginson. The British lender collapsed and was taken into government ownership after its strategy of borrowing heavily in short-term funding markets fell apart.

Tesco Personal Finance has been hiring industry veterans, including Benny Higgins, the former RBS and HBOS executive, to beef up its team. Still, some analysts and observers question whether there is enough banking expertise at board level.

Although the group has tinkered with financial services for more than a decade, taking on the high-street banks will expose it to significant new risks, such as the management of capital and liquidity – not the natural skills of a boardroom comprised predominantly of consumer product specialists.

Mr Higginson plays this down, stressing that Tesco Personal Finance is regulated by the UK’s Financial Services Authority and its board is stocked with experts from the sector. As well as expanding the executive and senior management team, the financial services business has hired four heavy-weight non-executive directors.

It is also possible that Tesco’s main board could beef up its financial services competence.

Tesco has had a banking licence since 1997, and the FSA has given it the go-ahead to expand its finance operations. However the regulator will keep a close eye on developments – stress-testing the business model and checking it can operate profitably while treating customers fairly.

It will also want the business to comply with strict new rules governing minimum levels of capital and liquid assets, even though those rules have yet to be implemented for incumbents.

Mr Higginson says that there are three people responsible for his business at the regulator, “which keeps us on our toes”.

The financial services arm will soon be having its first so-called Arrow visit – a full assessment of its riskiness by the regulator.

If the group wants to make acquisitions – some observers suggest Northern Rock is the most obvious candidate – Tesco will need the regulator on its side.

Mr Higginson is tight lipped on whether the group is interested in the bank. Big acquisitions, he says, are “not the Tesco way”.

Perhaps the biggest question, however, is whether retailers will be able to retain the trust of consumers.

There is probably a limited window of opportunity to capitalise on anger at bankers’ bonuses and bail-outs – and to fill a gap in the market for products that traditional banks have pulled away from, such as mortgages.

This creates an inherent tension for retailers. Although they have ready-made distribution, building the right information systems is time-consuming and costly.

“For the very biggest [retailers], they may be trusted, but I’m not sure – I’m thinking of Tesco in particular – they are liked,” notes Mr Jones of Wolff Olins. “They are seen as big and ubiquitous and probably slightly alarming in their scale.”

There is also a danger that if retailers start behaving like banks – repossessing houses at the most extreme – they will be equally reviled.

“There is a very subtle and very important difference,” says Olann Kerrison, head of research at Lafferty Group. “The retailer gives you what you want, and the bank is the one that makes you pay for it. If the retailer makes you pay for it, will you like the retailer as much?” The old adage that the customer is always right does not work in banking, where businesses sometimes have to take a tough line.

Mr Higginson says that, while Tesco will treat its banking customers fairly, it will be no pushover. “If people turn up at a check-out and don’t have any money, we don’t just give them the food on the basis we want to be their friend. You have to pay. That is the contract. That will be the way for financial services,” he says.

If retailers can surmount these difficulties, the opportunities offered by moving into the banking sector could be immense – and the consequences for the finance industry far reaching.

Back in Coventry, Tesco’s banking customers do not seem unduly concerned by the potential pitfalls of the supermarket’s move into banking.

One, Helen Ashby, has recently opened a savings account with the company.

For the mother of three, convenience – she can pay in her money at the check-out – and the security of the brand are the main attractions.

With the supermarket giant, she says, banking is simply “better than anywhere else”.

Pioneers who sell banking services alongside the groceries :

Tesco might be dominating the debate over retailers’ expansion into banking but it is far from the first to make such a move, write Patrick Jenkins and Andrea Felsted.

Latin America has been the crucible of such activity in recent decades, as an aspiring population has found itself able to afford credit, but unable to secure it from the traditional banks.

Groups such as Elektra – the Mexican retailer of everything from computers to cars – saw a gap in the market. Elektra’s banking subsidiary, Banco Azteca, set
up less than 10 years ago, now boasts close to 10m borrowers, though recent credit defaults
have weakened its position.

US supermarket giant Wal-Mart has also expanded into Mexico, with 38 in-store banking outlets and plans for up to 150 more this year alone. Wal-Mart has long harboured ambitions to offer banking services in the US but has yet to secure a licence in its home market, restricting its US operation to services such as money transfer, cheque cashing, bill payments and the pre-paid cards used to purchase goods.

Earlier moves by retailers into banking were pioneered in Europe. Harrods, the upmarket department store owned by Mohamed Fayed, has had a bank, serving business and private customers, for the past 100 years. Britain’s Co-operative Group has been selling banking services as well as groceries since 1915, while in Switzerland, Migros Bank, part of a broad co-operative group that includes a retailer, has been in business since 1958.

All three of those groups have benefited from customer nervousness about mainstream banks in recent months. Migros, for example, says it attracted net new money last year of SFr2.6bn ($2.4bn, €1.7bn, £1.5bn), up 147 per cent on the year before.

The Swiss group has one
message for retailers with banking ambitions – the notion of cost synergies from creating in-store branches is misplaced.
“Consultation rooms . . . cannot be created within a supermarket,” it says. “Therefore Migros Bank has its own chain of 55 branches [across] Switzerland.”

Compared with them, Tesco is a newcomer – it struck a partnership deal in the UK with Royal Bank of Scotland to offer credit, savings and insurance 12 years ago but only now is it going it alone with opportunistic plans to expand and steal market share from the troubled traditional banks.
Copyright The Financial Times Limited 2009

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2009-06-14T15:31:00.000-07:00

US bond yields spark concern

By Michael Mackenzie and Kiran Stacey in New York and David Oakley in London

Published: June 10 2009 20:23 | Last updated: June 11 2009 14:57

US long-term interest rates continued to test important levels on Thursday as investors worried about the level of national debt and whether the Federal Reserve might have to raise interest rates to combat inflation.
투자자들은 국가채무와 인플레이션 때문에 미국장기채권의 이자율을 걱정하고 있다.

The yield on the 10-year Treasury note, the benchmark rate for US mortgages, briefly traded above 4 per cent, only to attract buyers once more after weekly jobless claims and retail sales data were published in line with expectations.
10년물은 4% 이상으로 거래된다. 실업률과 소매판매율이 기대에 맞게 나왔다.

The 10-year note was recently trading at 3.97 per cent, up 3 basis points, having hit 4 per cent during Wednesday after an auction of $19bn in 10-year government debt came at higher than expected yields.
10년 국채는 3.97에 거래 되었다.

The next test of the US Treasury’s issuance programme looms later on Thursday with the sale of $11bn in 30-year bonds. An auction of 30-year bonds last month went badly as investors signalled their concerns about the budget deficit.

“That did not go well last time, so there is also some additional concern,” said Dominic Konstam, head of interest rate strategy at Credit Suisse.

The yield on the 30-year bond was up 6 basis points at 4.81 per cent early Thursday. Last week, the yield was trading below 4.50 per cent.

“Once the 30-year is out of the way, the market should have a window to rally,” said analysts at MF Global. “The bull story rests in higher mortgage rates slowing the recovery.”

On Thursday, the 30-year mortgage coupon rose to a peak of 5.12 per cent, having surged from 3.90 per cent over the past month. This week, the latest survey from the Mortgage Bankers Association showed that its mortgage refinancing application index fell 12 per cent to its lowest weekly level since mid-November. That was prior to the Federal Reserve’s announcement of its plan to buy mortgages.

Concerns about the growth of government borrowing on Wednesday forced the US Treasury to give investors in an auction of $19bn in 10-year notes a yield of 3.99 per cent – 4 basis points higher than the yield available before the auction. That constituted the biggest yield markup since a 10-year auction in May 2003, said Morgan Stanley.

Traders said the good news of the day was that buyers entered the market when yields reached 4 per cent. “There should be natural support for the 10-year note around 4 per cent,” said Mr Konstam.

“We are seeing traders draw a line in the sand at 4 per cent” on 10-year notes, said Tom di Galoma, head of US rates trading at Guggenheim Capital Markets.

In recent months, auctions have often been awarded at higher-than-expected yields, with dealers and investors being asked to buy higher amounts of debt as the US Treasury seeks to fund a growing budget deficit.

Copyright The Financial Times Limited 2009

2009-06-02T16:23:00.000-07:00

Rising government bond rates prove policy works
By Martin Wolf

Published: June 2 2009 20:24 | Last updated: June 2 2009 20:24

EDITOR’S CHOICE
Martin Wolf: This crisis is a moment, but may not be a defining one - May-19Martin Wolf: Why Obama’s conservatism may not prove good enough - May-12Economists’ forum - Oct-01Martin Wolf: Tackling Britain’s fiscal debacle - May-07Is the US (and a number of other high-income countries) on the road to fiscal Armageddon? Are recent jumps in government bond rates proof that investors are worried about fiscal prospects? My answers to these questions are: No and No. This does not mean there is no reason for worry. It is rather that there are powerful arguments against fiscal retrenchment right now and strong reasons for welcoming recent moves in the bond markets.

Last week, the Financial Times carried two columns arguing that the US fiscal path was unsustainable, one by Stanford University’s John Taylor and the other by the Harvard historian Niall Ferguson. The latter, in turn, was a comment on a debate with, among others, the New York Times columnist and Nobel laureate Paul Krugman at the end of April.

On one point all serious analysts agree: public debt cannot rise, relative to gross domestic product, without limit. To embark on fiscal stimulus in the short run, one must be credible in the long run.

So what is the disagreement? Prof Ferguson made three propositions: first, the recent rise in US government bond rates shows that the bond market is “quailing” before the government’s huge issuance; second, huge fiscal deficits are both unnecessary and counterproductive; and, finally, there is reason to fear an inflationary outcome. These are widely held views. Are they right?

The first point is, on the evidence, wrong. The jump in bond rates is a desirable normalisation after a panic. Investors rushed into the dollar and government bonds. Now they are rushing out again. Welcome to the giddy world of financial markets.

At the end of December 2008, US 10-year Treasury yields fell to the frighteningly low level of 2.1 per cent from close to 4 per cent in October (see chart). Partly as a result of this fall and partly because of a surprising rise in the yield on inflation-protected bonds (Tips), implied expected inflation reached a low of close to zero. The deflation scare had become all too real.

What has happened is a sudden return to normality: after some turmoil, the yield on conventional US government bonds closed at 3.5 per cent last week, while the yield on Tips fell to 1.9 per cent. So expected inflation went to a level in keeping with Federal Reserve objectives, at close to 1.6 per cent. Much the same has happened in the UK, with a rise in expected inflation from a low of 1.3 per cent in March to 2.3 per cent. Fear of deflationary meltdown has gone. Hurrah!

It is true that spreads between conventional US bonds and bonds issued by Germany and the UK have narrowed (see chart). But US yields were extraordinarily depressed during the panic. Normality returns.

If inflation expectations are not worth worrying about, so far, what about the other concern caused by huge bond issuance: crowding out of private borrowers? This would show itself in rising real interest rates. Again, the evidence is overwhelmingly to the contrary.

The most recent yield on Tips is below 2 per cent, while that on UK index-linked securities is close to 1 per cent. Meanwhile, as confidence has grown, spreads between corporate bonds and Treasuries have fallen (see chart). One can also use estimates of expected inflation derived from government bonds to estimate real rates of interest on corporate bonds. These have also fallen sharply (see chart). While riskier bonds are yielding more than they were two years ago, they are yielding far less than in late 2008. This, too, is very good news indeed.

Now turn to the fiscal policy. The argument advanced by opponents is either that fiscal policy is always unnecessary and ineffective or, as Prof Ferguson suggests, redundant, because this is not a “Great Depression”. Monetarists argue fiscal policy is always unnecessary, since monetary expansion does the trick. Economists who believe in “Ricardian equivalence” – after the early-19th-century economist David Ricardo – argue fiscal policy is ineffective, because households will offset any government dis-saving with their own higher savings.

Economists disagree fiercely on these points. My approach is “Keynesian”: in extreme moments, the excess of desired savings over investment soars. Again, monetary policy, while important, becomes less effective when interest rates are zero. It is then wise to wear both monetary belt and fiscal braces.

A deep recession proves there is a huge rise in excess desired savings at full employment, as Prof Krugman argues. At present, therefore, fiscal deficits are not crowding the private sector out. They are crowding it in, instead, by supporting demand, which sustains jobs and profits.

Prof Ferguson argues that fiscal expansion was unnecessary because this is only a mild recession. The question, however, is why it is only a mild recession, since precursors of a depression were surely present.

The answer, in part, is the aggressive monetary policies of central banks and the rescue of the financial system. But is that all? What would have happened if governments had decided to cut spending and raise taxes? One might disagree on how much deliberate fiscal loosening was needed. But one of the most important reasons this is not the Great Depression is that we have learnt a lesson from experience then, and in Japan in the 1990s: do not tighten fiscal policy too soon. Moreover, historically well-run economies are certainly able to support higher levels of public indebtedness very comfortably.

This, then, brings us to the last concern: the fear of inflation. This is essentially the question of how to exit from current extreme policies. People need to believe that the extraordinarily aggressive monetary and fiscal policies of today will be reversed. If they do not believe this, there could well be a big upsurge in inflationary expectations long before the world economy has recovered. If that were to happen, policymakers would be caught in a painful squeeze and the world might indeed end up in 1970s-style stagflation.

The exceptional policies used to deal with extreme circumstances are working. Now, as a result, policymakers are walking a tightrope: on one side are premature withdrawal and a return to deep recession; on the other side are soaring inflationary expectations and stagflation. It is irresponsible to insist either on immediate tightening or on persistently loose policies. Both the US and the UK now risk the latter. But their critics risk making an equal and opposite mistake. The answer is both clear and tricky: choose sharp tightening, but not yet.

martin.wolf@ft.com

2009-06-01T15:50:00.001-07:00

Robust output data boost markets
활발한 생산성 지표가 시장을 부양하고 있다.
By Daniel Pimlott in London and Krishna Guha in Washington

Published: June 1 2009 20:21 | Last updated: June 1 2009 22:48

Stock markets round the world surged on Monday as robust manufacturing data raised hopes that the global economy could soon be past the worst of the recession.
세계의 주식시장이 월요일에 되살아났다. 활발한 생산성지표가 세계경제를 최악의 경기침체에서 벗어나게 할 거란 믿음때문이다.

The FTSE Eurofirst 300 index of leading European shares rose 2.8 per cent to a five-month high. In New York, the S&P 500 index was up 2.9 per cent by late afternoon, also at a five-month high, following a surge in Asian stock prices. The price of crude oil jumped to more than $68 a barrel to a seven-month high.
유럽주식지수는 5개월 최고치인 2.8%로 올랐다. 뉴욕에서도 S&P 500지수가 2.9% 올르면서 5개월 최고치를 경신했다. 아시아 주식가격도 상승을 뒤따랐다. 원유가격은 7개월 최고치인 배럴당 68$까지 올랐다.

The improvement in risk appetite undermined the dollar’s appeal as a haven and the currency touched its lowest level of the year against the euro.
위험을 감수하려하면서 안전자산인 달러의 매력은 줄었고 유로대비 환율은 연중 최저치까지 떨어졌다.

Government bonds also resumed their downward path as investors flocked to equities. The yield on the 10-year US Treasury bond soared to within a whisker of last week’s six-month high of 3.75 per cent.
투자자들이 주식시장에 몰리면서 국채는 하락세를 이어갔다. 10년물의 수익률은 지난주 6개월 최고치인 3.75에서 약간 올랐다.

China’s manufacturing sector expanded for the third straight month in May, according to the country’s official purchasing managers’ index.
중국의 생산부분은 3개월 연속으로 증가했다.

The US ISM survey of manufacturing activity came in higher than expected, showing strong new orders – though consumer spending for April came in down 0.1 per cent.
미국 산업생산지수는 4월 소비지출이 0.1% 감소했지만 신규주문량의 증가로 기대보다 높게 나타났다.

In the UK, the purchasing managers’ index hit its highest level in a year .
영국에서는 구매지수가 연중 최고치를 기록했다.

In the eurozone, the manufacturing recession also appeared to be easing, with indices rising at a record rate.
유로존에서는 생산지수가 상승세로 전환하면서 생산침체가 완화되었다.

A survey of manufacturing activity in India showed an increase for a second month, while in Australia the performance in manufacturing index rose to a eight-month high.
인도의 생산성지수는 이번해 들어 두번째로 상승했고, 호주의 생산성지수도 8개월 최고치를 기록했다.

Analysts said the improvement round the world suggested that the recessionary forces buffeting the global economy were starting to abate.
애널리스트들은 세계경제가 침체압력에서 벗어나기 시작했다고 말했다.

One composite measure of factory activity in the US, Japan, Germany, France, UK, China and Russia showed that manufacturing declined at its slowest pace for nine months in May. The global index, produced by JPMorgan with research and supply management organisations, rose to 45.3 in May from 41.8 in April, where any level below 50 points to contraction.
세계주요국의 공장활동성지표는 5월 들어 하락세가 점차 감소하기 시작했다. JPMorgan생산자지수는 45.3을 기록하며 41.8을 기록했던 지난달 보다 올랐다.

The slowing decline in global manufacturing in recent months comes after businesses sought to save their cash in the wake of the collapse of Lehman Brothers last September by slashing inventories rather than making new orders for goods.
리만브로더스 파산 이후 기업들이 새로운 주문을 하지 않고 재고를 팔아치워 현금을 확보하면서 생산량이 감축했었다.

As they held off from new orders production lines round the world ground to a halt, prompting a precipitous decline in manufacturing output.
그들이 새로운 생산라인을 구축하고도 생산하지 않으면서 생산성은 급속하게 줄어들었다.

But now companies are beginning to run low on stocks, forcing them to make fresh orders once again.
그러나 지금은 기업들이 저장상품을 줄이고 새로운 주문을 하고 있다.

Monday’s US reports confirmed that consumption was on a weak trajectory, with spending 1.2 per cent lower in April than on average in the first three months of the year. The personal savings rate rose to 5.7 per cent on stimulus tax cuts.
월요일 미국은 소비가 1.2%하락했다. 개인저축률은 5.7%까지 올랐다.

But while the rebound in manufacturing has been growing for several months in many economies, economists remain concerned that it merely reflects restocking and will peter out as struggling consumers and businesses around the world struggle to resume spending.
그러나 생산성이 재상승하더라도 전문가들은 재고가 다시 증가하고 지출이 점차 줄어드는 것을 걱정하고 있다.

“The critical next phase of the crisis is whether we will see an improvement in end demand,” said Mr Jeffrey. “I doubt the progress we’ve seen [in manufacturing] will be sustained.”
"이번 위기의 다음은 년말에 수요가 살아나느냐에 달려있다. 나는 생산성의 증가가 계속될 걸로 생각한다."

Additional reporting by Kathrin Hille and Amy Kazmin
Copyright The Financial Times Limited 2009

-생산성증가->실업율감소->소비증가->생산증가 의 선순환은 일어나지 않음
-소비성지표는 여전히 하락.
-생산력 증가가 소비증가로 파급되기까지는 시간이 걸림
-설사 실업율이 하락하더라도 소비증가는 급격히 늘어나지 않을 듯
-저축률 증가로 이전과 같이 빚내서 소비하는 행태는 사라졌기 때문.
-다른 기사에서 보면 모기지 부실은 점차 커지고 있기 때문에 금융불안이 실물위기를 가져올 위험은 여전히 존재함.

2009-06-01T02:44:00.000-07:00

Overhauling financial regulation
경제제제를 분해한다.

The regulatory rumble begins
제제가 몰려오기 시작했다.
May 28th 2009 | BERLIN AND NEW YORK
From The Economist print edition

In America and Europe, new rules are running into stiff resistance—from regulators themselves
미국과 유럽에서 새로운 규칙이 규제주의자들 스스로에게서 반대자들에게도 적용되기 시작했다.

“YOU want to move at the point where people still have the memory of the trauma,” Tim Geithner explained recently when asked about financial regulation. Aware that the crisis is moving into a new phase, with the emphasis shifting from firefighting to working out how supervision should be restructured, America’s treasury secretary wants to seize the moment. He plans to unveil a comprehensive regulatory overhaul by mid-June. Barack Obama has said he wants to sign the changes into law by the year’s end.

"당신은 사람들이 트라우마를 가지고 있는 시점에서 벗어나고 싶죠."
팀가이트너는 금융규제에 관해 질문 받았을 때 이렇게 대답했다. 충격이 새로운 단계로 이동하고 있음을 일깨우는 것이었다. 진화작업에서 감독체계를 어떻게 재설계해야 하는 지로 중심은 변하고 있었다. 그는 6월 중순까지 포괄적인 규제분해의 베일을 벗기겠다고 설명했다. 오바마는 년말까지 법을 개정하겠다고 선언했다.

In Europe, too, the pressure is on. “There’s no room for more delays,” José Manuel Barroso, president of the European Commission, said on May 27th when he unveiled a blueprint for reform of financial supervision. He announced plans to form two new grandly named institutions: a European Systemic Risk Council, which is supposed to provide early warning of possible risks, and a European System of Financial Supervisors, which would be a super-committee of regulators from across the European Union.

유럽에서도 마찬가지로 압박이 시작됐다. "더이상 지체할 수 없다." 유럽위훤회 위원장인 바로쏘는 5월 27일 금융관리감독에 대한 개혁을 공개하며 말했다. 그는 두개의 새로운 거대기관을 설립하겠다고 밝혔다. 조기에 위험을 알리는 기능을 할 유럽시스템위험위원회와 유럽연합의 감독당국을 관장할 유럽금융시스템관리국이 그것이다.

The goals of the two new institutions are admirable. Both are intended to correct a fundamental flaw in European bank regulation and supervision; namely, that although banks are free to operate across borders, they are supervised only by their home countries. Slack oversight by one country can, as the crisis has revealed, spread chaos across many. Yet it is not at all clear that the proposals have been thought through properly. “The European Commission is confusing speed with haste,” says Nicolas Véron of Bruegel, a think-tank in Brussels. “The governance, mandate and funding of these new authorities is not really addressed.” Britain, which has the biggest banking centre, is particularly concerned about the proposed rules, which may cede aspects of the City of London’s banking supervision to Brussels.

새로운 두 기관의 목표는 칭찬할만 하다. 두기관 모두 금이 간 유럽은행규제와 감독을 바로잡고자 만들어졌다. 이름에서도 알 수 있듯이 은행들은 두 기관의 감독을 받지는 않고 해당국가의 관리만 받으면 된다. 한국가라도 감시가 느슨해지면 이번 위기처럼 수많은 나라들이 혼란에 빠질 수 있다. 그러나 제안을 모두 좋게 받아들이지는 않는다. 유럽위원회는 지나치게 빠르다. 브뤼셀의 씽크탱그에 브뤼겔은 말했다. "새로운 기구의 구조와 인력, 근원은 명확하지 않다." 유럽의 금융중심지인 영국은 자국은행의 감독권이 런던에서 브뤼쉘로 가게될까봐 규제제안에 대해 걱정하고 있다.

In America, meanwhile, the plans taking shape face resistance, partly from the bankers they will shackle but even more from regulators and lawmakers. Bankers accept they will be forced to build up bigger capital buffers, which will crimp profitability, and that the liquidity of their balance-sheets will be policed more intensively. The regulatory net will be cast over the “shadow” banking network of hedge funds, money-market funds and the like, to which much financial activity gravitated during the boom.

반면 미국에서는

Big banks, however, still have enough lobbying power to ensure that not every decision goes against them. True, they are still licking their wounds after the recent passage of draconian credit-card reforms. But they are happier with the government’s proposals on derivatives, under which dealers will be able to continue peddling customised swap contracts away from exchanges, albeit with a higher capital charge.

As the crisis has deepened, American bankers have tempered their opposition to the idea of new rules that reduce the chances of another blow-up. “Would I accept regulation that slows innovation a bit and knocks three percentage points off my returns if it promised greater stability? Absolutely,” says the head of one large bank.

For some, more stringent regulation even has a silver lining. With tougher mortgage rules, banks will no longer have to lower their standards to compete with the industry’s unregulated parts. The survivors could also benefit from higher barriers to entry.

On the whole, Wall Street sees a welcome disconnect between the Obama administration’s rhetoric and its actions. The Treasury is “gradually learning” how to square the circle of showing that it understands the public’s anger on the one hand, and maintaining a dynamic financial sector on the other, says one bank lobbyist. Another test of its capacity to resist pitchfork-wielding urges will come in the next few weeks, when it is expected to issue guidelines on executive pay.

The stiffest resistance to change is coming not from Wall Street but from Washington, DC, where government officials, regulators and congressional leaders are locked in turf wars and ideological battles. “Opinion has splintered. Everyone is fighting everyone,” says Bert Ely, a consultant on regulatory issues.

Even the main banking agencies are at odds with each other. Sheila Bair of the Federal Deposit Insurance Corporation (FDIC) and John Dugan, the Comptroller of the Currency, have fallen out over Ms Bair’s deposit-insurance reforms. Mr Dugan also opposes the FDIC’s push for sole authority to liquidate failing non-banks, as it already does with banks.

Worse, there is no consensus on the proposed systemic-risk regulator, which would identify and act on emerging “macro-prudential” dangers. The administration wants the Fed to assume the role, but many in Congress oppose this. Dick Shelby, an influential senator, has accused Mr Geithner of using the crisis to hand the Fed unacceptable levels of power. Meanwhile, Ms Bair has suggested that systemic regulation be done (or at least overseen) by a multi-agency council, an idea that is gaining traction even if others (including, again, Mr Dugan) worry that such supervision-by-committee is a recipe for inaction.

An even bigger battle is brewing over the shake-up of existing regulators. No one doubts that the archaic, overlapping patchwork of agencies needs modernising, with regulation refocused on a firm’s activities rather than its legal form. Reportedly, the White House is considering rolling the four banking-supervision agencies into one, though the idea is still in flux.

But an embryonic plan to create a super-regulator for consumer products, such as mortgages, credit cards and mutual funds, is already encountering stiff opposition. The Securities and Exchange Commission (SEC), which would lose out in such a shuffle, has powerful friends on Capitol Hill, especially on the Senate banking committee that oversees the agency—and any overhaul would require congressional approval. Public pension funds have also joined together to lobby against a reduction in the SEC’s power.

Moreover, the economically rational may not be politically feasible. Though it would make sense to merge the SEC with the Commodity Futures Trading Commission, which regulates derivatives, Congress’s powerful agriculture committee would probably block the move.

Debate about other thorny issues, such as what restrictions to place on, or whether to dismantle, banks that are too big to fail has barely begun. Congressional leaders cannot even agree on whether to pass new rules in pieces or roll them up into one mega-bill.

All of which explains why pundits now expect to see few, if any, further financial reforms passed in 2009. Delay could play into the financial industry’s hands, to the extent that it reduces the likelihood of heat-of-the-moment laws like Sarbanes-Oxley, rushed through after the Enron scandal. But if measures that would increase stability fall victim to politics, everyone will be worse off.

2009-05-17T04:47:00.000-07:00

Asian economies
Crouching tigers, stirring dragons

May 14th 2009 | HONG KONG
From The Economist print edition
The Asian economies are likely to be the first to pull out of the global recession

Illustration by S. Kambayashi

ASIA’S tiger economies have suffered some of the sharpest declines in output during the global recession, and some fear that, because of their dependence on exports, they will not see a sustained recovery until demand rebounds in America and Europe. However, their doughty resilience should not be underestimated. They came roaring back unexpectedly fast after the Asian crisis of the late 1990s. They could surprise again.

Across the region as a whole, the slump has been as bad as it was in 1998. China and India have continued to grow, but in the rest of emerging Asia GDP plunged by an annualised 15% in the fourth quarter of 2008. Only three economies have published first-quarter figures. China’s GDP growth accelerated to an annualised rate of over 6%, up from around 1% in the previous quarter. South Korea’s GDP expanded by 0.2%, after plunging 19% in the previous three months. But Singapore’s GDP fell by 20%, even more than in the fourth quarter.

More timely export figures suggest that the worst may be over. Although the headline numbers show that South Korea’s exports fell by 19% in the year to April, they rose by a seasonally adjusted annualised rate of 53% in the three months to April compared with the previous three months, Goldman Sachs estimates; Taiwan’s grew by an annualised 29% over the same period. China’s exports over the past few months have managed only to stabilise, but its industrial production jumped by an annualised 25% in the past three months.

Economists are revising up their forecasts for China’s GDP growth this year: 8% may now be possible even if American consumers remain frugal. There is a myth that China’s growth depends on American consumers. In fact, if measured on a value-added basis (to exclude the cost of imported components), China’s exports to America account for less than 5% of its GDP.

There is more argument, however, over the smaller, more export-driven economies, such as Hong Kong, South Korea, Singapore and Taiwan. Robert Subbaraman, an economist at Nomura, offers several reasons why they are likely to remain sluggish for the time being. The recent rise in exports and production, he argues, largely reflects the fact that firms are no longer running down stocks. This will provide only a temporary boost unless global demand picks up. Firms’ spare capacity also means that investment will continue to fall, while rising unemployment threatens to dent consumer spending. Nor is China’s stronger growth likely to save the region. Over 60% of China’s imports come from the rest of Asia, but about half of these are components that are assembled in China and then sold to the rich world.

In its latest economic outlook on Asia, the IMF forecast that the region excluding China and India would grow by only 1.6% in 2010, largely because it expects the American economy to be flat. However, Peter Redward of Barclays Capital argues that Asia can recover earlier and more strongly than elsewhere. In 2010, he reckons, the smaller Asian economies could grow by almost 4%, or close to 7% once China and India are added in.

One reason for his optimism is his explanation for why the Asian economies were hit so hard in the first place. Asians are often blamed for saving too much and spending too little, but Mr Redward argues that the main reason for their plight was that manufacturing accounts for a much larger share of GDP than elsewhere. Industries such as cars, electronic goods and capital machinery are highly cyclical. In rich and emerging economies, GDP fell furthest last year in countries with the largest share of manufacturing. This, in turn, could imply a sharp recovery.

A second reason for expecting a stronger bounce is that fiscal stimulus in Asia is bigger than in other regions (see chart). China, Japan, Singapore, South Korea, Taiwan and Malaysia have all announced fiscal packages of more than 4% of GDP for 2009, twice as large as America’s stimulus this year. The pump-priming should also work better in Asia than in America or Europe, because modest corporate and household debts mean that tax cuts or cash handouts are more likely to be spent than saved. Banks, moreover, are in much better shape and so have more freedom to support an increase in domestic spending.

As the world’s largest importers of oil and other commodities, the tiger economies have also benefited hugely from the fall in prices over the past year. This has acted like a tax cut, boosting real incomes and profits. Asia has enjoyed a gain from cheaper oil of almost 3% of GDP this year. Add in lower prices for food and raw materials and the total gain could match the governments’ stimulus (though the danger remains of a renewed spike in oil prices).

Pessimists maintain that Asia has always been pulled out from previous recessions, such as the 1998 financial crisis, by strong exports to the West. However, a recent analysis by Frederic Neumann and Robert Prior-Wandesforde, both of HSBC, finds that, contrary to received wisdom, Asia’s recovery from its 1998 slump was led not by exports, but by consumer spending. Exports to the West did not surge until 2000. The region’s current-account surplus actually shrank between 1998 and 2001.

Thanks to a large fiscal stimulus and the healthier state of private-sector balance-sheets in most economies, domestic spending (consumption and investment) should revive earlier in emerging Asia than elsewhere, rising by perhaps 7% next year, up from 4-5% this year. America’s domestic demand is expected to remain weak in 2010 after falling sharply this year. Indeed, add in Japan and total Asian domestic spending (at market exchange rates) looks set to overtake America’s next year.

But what of emerging Asia’s longer-term prospects? Much of the increase in Asian domestic demand this year and next will come from government investment. Unlike rich countries, emerging Asia has room to keep investing in infrastructure for several years but governments need to encourage more consumption to fill the gap after the infrastructure projects are completed. Asian households’ low rate of consumption and borrowing means that they have huge scope to spend more. Better social safety-nets might encourage Asians to save less. Governments also need to lift households’ share of national income by reducing their bias towards capital-intensive manufacturing and encouraging more labour-intensive growth.

Ultimately, relatively robust expansion in domestic spending should help most Asian economies to keep growing faster than the rest of the world. But the tigers are unlikely to return to their heady growth rates of recent years. Nor would that be desirable given the impact on inflation and the environment.

Suppose that net exports contribute nothing to growth, and that domestic demand grows at roughly the same pace as it has in the past five years. Then emerging Asia could see annual growth of almost 7% over the next five years (around 8% in China, a more modest 5% in the smaller economies). That might sound disappointing for economies that enjoyed average growth of 9% in the three years to 2007. But it would still be around three times as fast as in the rich economies.

기사에 달린 댓글 중 날카로운 지적이 있어서 남긴다.

중국의 GDP에서 수출이 차지하는 비중이 5%밖에 안된다는 점을 들어 중국의 경기회복은 미국, 유럽의 경기와 관련없을 거라는 주장은 거짓이다. 수출비중이 낮게 된 것은 최근들어 미국과 유럽의 경기가 나빠졌기 때문이다. 중국이 9% 성장할 때는 당연히 수출비중도 높았을 거다.

-------------------------------------------------------
아시아가 지속적으로 성장할 거라는 주장

근거

1. 저축률이 높다. 정부가 사회보장제도를 확충하면 저축률이 낮아져서 더 많이 소비할거다.

2. 정부가 인프라스트럭처에 투자하고 있다. 정부지출이 수요를 이끌거다.

2009-04-28T16:33:00.000-07:00

Fed study puts ideal US interest rate at -5%
By Krishna Guha in Washington

Published: April 27 2009 03:06 | Last updated: April 27 2009 03:06

The ideal interest rate for the US economy in current conditions would be minus 5 per cent, according to internal analysis prepared for the Federal Reserve’s last policy meeting.

The analysis was based on a so-called Taylor-rule approach that estimates an appropriate interest rate based on unemployment and inflation.

A central bank cannot cut interest rates below zero. However, the staff research suggests the Fed should maintain unconventional policies that provide stimulus roughly equivalent to an interest rate of minus 5 per cent.

Fed staff separately estimated what size and type of unconventional operations, including asset purchases, might provide this level of stimulus. They suggested that the Fed should expand its asset purchases by even more than the $1,150bn (€885bn, £788bn) increase policymakers authorised at the last meeting, which included $300bn of Treasury purchases.

The assessment that the US central bank needs to provide stimulus equivalent to a substantially negative interest rate is unlikely to have changed ahead of this week’s policy meeting.

The Fed is not likely to embark on any substantial new programmes at this meeting, in large part because it will not have downgraded its economic forecasts since the last meeting. Indeed, Fed officials may see the risks to the economy as a little more balanced than they were in March, though policymakers probably still see these risks as overall weighted to the downside.

This could set the stage for a more detailed discussion of the framework that will ultimately govern the Fed’s exit strategy.

There is, though, a small but intriguing possibility that the Fed could follow the Bank of Canada in setting out an explicit timeframe over which it expects to keep short-term rates at virtually zero.

While this novel strategy is likely to at least provoke debate within the US central bank, which has shown itself willing to adopt measures first deployed elsewhere, many policymakers would probably be wary of adopting the Canadian approach, following their own unsatisfactory experience in providing guidance on interest rates after the dotcom bubble burst.

Others may feel the Canadian approach would be ineffective as it may not be seen as credibly binding the central bank’s future decisions.

Still, many Fed officials expect they may well keep rates near zero for another 18 months to two years and some might see value in making this more explicit.

Ben Bernanke, chairman, sees the massive expansion of bank reserves caused by the Fed’s unconventional operations as already providing a way to assure the market that the Fed will not be in a position to raise rates for quite some time to come.

The last meeting saw the Fed buy long-term treasuries for the first time in decades. The large initial impact of the move on markets is no longer visible, but officials think the policy was reasonably successful.

Previous staff analysis suggested the $300bn purchase would reduce the yield on 10-year treasuries by 25-35 basis points, and officials think the rate today is about this much lower than it would have been if they had not started buying.

Further purchases are possible, particularly if the Fed again downgrades its economic forecasts. The staff analysis comparing unconventional operations to interest rate cuts suggests more might be needed anyway.

However, policymakers are likely to watch how financial conditions respond to the already-authorised interventions before deciding whether to step up much further.
Copyright The Financial Times Limited 2009

2009-04-27T16:23:00.001-07:00

Borrowing costs hit fresh low
By Aline van Duyn in New York

Published: April 27 2009 20:02 | Last updated: April 27 2009 20:02

The cost of borrowing for the riskiest companies has fallen to its lowest level in more than six months and prompted a surge in new debt issues, increasing hopes that the worst stage of the financial crisis may be over.

The ability of a growing number of companies – including those seen as having a higher risk of default and whose debt is classified as “junk” or “high yield” – to raise money signals an increased willingness by investors to lend money.

EDITOR’S CHOICE
‘Fallen angels’ total highest since 1997 - Apr-16High-yield bonds feel thaw - Apr-27US plan raises the pressure on junk bonds - Apr-02For many months, private investors have shied away from lending money to risky companies and banks amid concerns that financial markets might again revert to crisis mode and that the value of investments would fall sharply.

But in recent weeks the stabilisation of parts of the banking sector, following huge injections of government funds, has allowed parts of the capital markets to thaw.

Companies with high credit ratings and low risks of default have been able to borrow in the debt markets for most of this year, but riskier companies have only returned in recent weeks.

The rally in the equity markets has been further fuelled by this development, as access to funding is an important factor in potential future growth.

The amount of new debt borrowed in the US junk bond market has risen to more than $7bn so far in April, its highest level since July last year, according to Dealogic data. However, analysts said the improvements did not yet signal a complete turnround in the credit markets, which will still be affected by the economic environment and the probable further deterioration in economic fundamentals.

Default rates are also expected to keep rising for much of 2009.

“Economic growth is still deeply negative, which translates into very negative cash flows,” said analysts at Goldman Sachs.

“And despite improvements in the high-yield, new-issue market on the back of this rally, funding prospects remain very challenging,” the Goldman Sachs analysts continued.

Specifically, it remains very difficult for the riskiest companies – those whose credit ratings signal a very high chance of default – to borrow money from investors.

Until there is a shift in the ability of these companies to raise money needed to avoid defaulting on their debts, or to complete debt exchanges which can be vital for their survival, it is too early for the credit markets to be given the “all clear”.

“The ability for more levered credits in high yield to access the markets will be a clear signal that credit rationing has waned,” said Greg Peters, global head of fixed income research. “While we have seen a meaningful rally in the lower quality credits, there are clear signs of credit differentiation that we expect to persist.”
Copyright The Financial Times Limited 2009

2009-04-27T02:30:00.000-07:00

IMF and World Bank meetings

Springing into action
Apr 25th 2009
From Economist.com

Finance ministers gather for unusually significant spring meetings of the World Bank and IMF

LESS than a month after leaders of the biggest economies met in London, the action shifts this weekend to Washington, DC, where many finance ministers and central bank governors attend joint meetings of the World Bank and the IMF. These gatherings occur twice a year (in the spring and autumn) but this one probably matters more than most.
경제장관들이 자주 만나고 있다.

The global economic crisis has helped to give more relevance to the institutions—in particular the IMF—after many years of decline. The G20 meeting boosted the IMF, promising it an extra $500 billion in cash and the permission to print $250 billion-worth of its quasi-currency, the SDR. Another $100 billion of lending to developing and emerging countries (battered by the speedy exit of foreign capital after years of capital inflows) is supposed to come from the multilateral banks, led by the World Bank.
경제장관들이 만난 후로 IMF에서는 현금을 확보할 수 있었다. IMF를 지원하기 위해 3개국 이상이 힘을 합쳤다.
SDR:특별인출권

But it is still not entirely clear where all this money will come from, nor how it will be deployed quickly. Finance ministers may try to provide some answers this weekend.
그러나 돈을 어디서 확충할 지, 어떻게 쓸지는 정해지지 않았다.

Where, for example, will the full $500 billion in extra money for the IMF be found? Before the G20 meeting Japan and the European Union had each promised $100 billion and the summit ended with a promise from China of another $40 billion. In the weeks since Canada and Switzerland have each pledged $10 billion and Norway has pitched in with about $4.5 billion. The Indian press reports that the country might contribute $11 billion to the fund, and Brazil has offered $4.5 billion. All together that still leaves the IMF about $220 billion short of the G20’s target.
세계 각국이 돈을 내놓겠다고 했으나 여전이 2,200억 달러가 부족하다.

America may have to provide a big chunk of the remainder. Barack Obama has proposed a loan of $100 billion to the fund in a letter to Congress, which must approve an American contribution. France is likely to press EU countries to raise their contribution by $60 billion. The fund will also pass the hat to other possible contributors (perhaps including Saudi Arabia) with formal announcements of contributions possible over the weekend, along with confirmations of tentative offers (such as those from India or Brazil).
세계 각국이 돈을 내놓으라는 압박에 시달리고 있다.

Next is the question of what donors might expect in return. Brazil has already said that it wants reforms to how the IMF is run. All the big emerging economies want to see more detailed proposals on changes to voting power within the IMF, and they want the reform process speeded up. (The G20 encouraged the fund to implement the last round of changes, which were agreed in October last year, but did not set a date, which emerging economies will be keen to see announced). A recent suggestion from an IMF reform committee was for a larger role for finance ministers in the daily running of the fund, to give it greater political legitimacy. The idea may be discussed this weekend.

The IMF will also be keen to announce more emerging-economy interest in its Flexible Credit Line, which has now found three takers: Mexico, Poland and Colombia. Another country or two signing up will boost the fund’s claim that it is emerging as a credible source of insurance against crises, which is the purpose of its new “no-strings-attached” facility.

For the World Bank, too, much is at stake. It has not been showered with extra funds, but officials say that it has raised lending in response to the crisis, yet is in no danger of running out of money. But some in the institution argue that it should have pushed more aggressively for extra money to fund projects. Some poor countries’ finance ministers are expected to raise this issue at the meetings, and call for more capital for the bank. They may point to the IMF's announcement on Thursday April 23rd that it is doubling the upper limits on amounts that very poor countries can borrow on concessional terms, something that it is only possible because of all the extra money it has received.

Pressure may also increase on the bank to push for an early replenishment of the pot of money for the International Development Association, which is then used to fund zero-interest loans and grants to the world’s poorest countries. The current pot of $41 billion is supposed to last until 2011, but some argue that an early replenishment will enable more lending to the poorest countries, which the bank has argued are being hit badly by the decline in trade and slowing remittances.

2009-04-23T16:37:00.000-07:00

Consumer psychology

From buy, buy to bye-bye
Apr 2nd 2009 | NEW YORK AND SAN FRANCISCO
From The Economist print edition

The recession will have a lasting impact on the way people shop

“WANT IT!” screamed the words plastered on the walls, counters and shopping bags in the flagship emporium of Saks, a big American retailer, on Fifth Avenue in New York. The same exhortation was emblazoned in huge letters on a giant red and white ball that revolved slowly in the middle of the main sales floor. Saks’s spring marketing campaign, which came to an end on April 1st, made its brazen appeal to greed in a bid to drum up sales in a dire market. But the exclamation mark in its “Want It!” tagline should perhaps have been a question mark instead.

Asked whether they want more stuff, consumers in rich countries have responded with an emphatic “No”. The breathtaking speed with which retail sales have plummeted in both America and Europe (see chart) has caught retailers and manufacturers by surprise. In response, companies have tried desperately to prop up revenues using a variety of promotions, advertising and other marketing ploys, often to no avail.

But as they battle with these immediate problems, marketers are also pondering what longer-term changes in consumer behaviour have been triggered by the recession. It is tempting to conclude that, once economies rebound, customers will start spending again as they did before. Yet there are good reasons to think that what promises to be the worst downturn since the Depression will spark profound shifts in shoppers’ psychology.

The biggest changes will take place in America and parts of Europe, where housing and stockmarket bubbles have imploded and unemployment has soared. As well as seeing their incomes fall as employers cut wages and jobs, households have also seen the value of their homes and retirement savings shrink dramatically. Although the threat to wages will fade as growth picks up, the damage done to housing and other assets will linger.

This has already led to a swift tightening of purse strings by shoppers and a wave of discounting by companies. Inmar, an American firm that processes discount coupons, says that redemptions in America were 17% higher in the first quarter of 2009 than in the same period last year, as consumers hunted for bargains. Many companies have launched lower-priced products in order to avoid losing customers as they trade down. Danone, a French food group, has created a line of low-cost yogurts in Europe, called “€co Packs”, that come in smaller tubs and fewer flavours than its standard products.

The trend towards thrift will not disappear when the economy picks up. For one thing, those banks left standing after the bust will be far more parsimonious with consumer credit. For another, many people will still be intent on rebuilding their nest-eggs, which is reflected in sharply rising rates of saving. Sociologists also detect a distinct change in people’s behaviour. Until the downturn, folk had come to assume that “affluence” was the norm, even if they had to go deeply into debt to pay for gadgets and baubles. Now many people no longer seem consumed by the desire to consume; instead, they are planning to live within their means, and there has been a backlash against bling.

So for years to come, many more households will be firmly focused on saving, splashing out only occasionally on a big-ticket item. Some firms are already trying to capitalise on this new mood. Sears, another American retailer, recently revived a savings plan it used many years ago, known as the “Layaway programme”, under which a consumer can make a down payment on an item that is then held for him for a fixed period while he saves the rest of the cash needed to buy it.

A second shift in consumer psychology has been prompted by fallout from the global banking crisis and the furore over huge bonuses paid by firms rescued with public money; by a wave of financial scandals, such as the Madoff affair in America; and by multibillion-dollar bail-outs of carmakers in many countries. All this seems to be denting trust in business more generally. The Boston Consulting Group recently completed a global survey of consumer sentiment involving 15,000 consumers. The results, to be published this month, show that over half of respondents from America and Europe say the crisis has intensified their distrust of big business.

Past downturns have also stoked anti-business feeling, which dissipated as growth returned. But the sheer scale of the failings that have come to light recently mean that suspicion and wariness will not vanish so easily this time around. In response, firms will need to be even more transparent in their dealings with customers, who will punish them severely if they fail to keep their promises. Bain, another consulting firm, says it has seen several firms appoint executives recently with a specific brief to ensure that price adjustments and service cuts do not damage loyal customers’ experience of brands.

Companies will also need to show they empathise with consumers’ new concerns. “There will need to be a move from passion to compassion in marketing,” reckons John Gerzema of Young & Rubicam, a marketing-services firm. Hyundai, a South Korean carmaker, has taken the hint. In January it said that for a 12-month period it would allow car buyers to return vehicles without incurring a penalty if they lose their jobs. On March 31st Ford and General Motors followed Hyundai’s example, saying they would make payments on car loans and leases for a limited period on behalf of buyers who are laid off.

Both the shift towards greater thrift and greater scepticism about brands will influence other consumer trends, too. Interest in things such as green products and healthy foods will continue to grow in a post-crisis world, but customers will be less willing to pay a premium for them, and will demand more value for money when they do.

The downturn will also accelerate the use of social media, such as blogs and social-networking sites, by consumers looking for intelligence on firms and their products. As trust in brands is eroded, people will place more value on recommendations from friends. Social media make it harder for brands to pull the wool over consumers’ eyes, but they also offer canny companies a powerful new channel through which to promote their wares and test new products and pricing strategies.

Marketers ignore the messages that emanate from these groups at their peril. For one thing is clear: this recession has triggered a wholesale reappraisal by shoppers of the value that their habitual brands deliver. The winners will be those that adapt intelligently to the new reality. The losers will be those who think they can win simply by telling consumers to “Want It!”

2009-04-23T16:32:00.000-07:00

2009-04-22T19:46:00.000-07:00

China's economy

Bamboo shoots of recovery
회복의 죽순

Apr 16th 2009 | HONG KONG
From The Economist print edition

Signs that a giant fiscal stimulus is starting to work

THE Chinese consider eight to be a lucky number because it sounds like the word meaning “prosperity”. And luck, combined with a massive fiscal stimulus, may yet help the government to achieve its growth target of 8% in 2009. Earlier this year, most economists thought such growth was impossible at a time of deep global recession, but some are now nudging up their forecasts.
prosperity: 재무적으로 건전함.
중국은 연초만 해도 8%성장하기 어려울 것으로 보였으나 현재는 가능할 것 같다.

At first sight, the GDP figures published on April 16th were disappointing. China’s growth rate fell to 6.1% in the year to the first quarter, less than half its pace in mid-2007. On closer inspection, however, the economy is starting to perk up. Comparing the first quarter with the previous three months, GDP rose at an estimated annualised rate of around 6%, after nearly stalling in the fourth quarter (see chart). By March the economy was gaining more speed, with the year-on-year increase in industrial production rising to 8.3% from an average of 3.8% in the previous two months. Retail sales were 16% higher in real terms than a year ago, and fixed investment has soared by 30%, signalling that the government’s infrastructure-led stimulus is starting to work.

Exports, on the other hand, tumbled by 17% in the year to March and global demand is widely expected to remain weak this year. This is the main reason why some economists expect GDP growth of “only” 5% for 2009 as a whole. But the gloomier forecasts tend both to overstate the importance of exports and to understate the size of the government’s stimulus.

Contrary to conventional wisdom, China’s sharp economic slowdown was not triggered by a collapse in exports to America. Its growth began to slow in 2007, well before exports stumbled, driven by a collapse in the property market and construction. This was the result of tight credit policies aimed at preventing the economy from overheating. The global slump dealt a second blow late last year, but China is less dependent on exports than is commonly believed. Exports account for nearly 40% of GDP but they use a lot of imported components, and only make up about 18% of domestic value-added. Less than 10% of jobs are in the export sector.

If a collapse in domestic demand led China’s economy down, it can also help lead it up again. Not only is China’s fiscal stimulus one of the biggest in the world this year, but the government’s ability to “ask” state-owned firms to spend and state banks to lend means that the government’s measures are being implemented more rapidly than elsewhere. To take one example, railway investment has tripled over the past year.

Only about 30% of the government’s 4 trillion yuan ($585 billion) infrastructure package is being funded by the government. Most of the rest will be financed by bank lending, which had already soared by 30% in the 12 months to March, twice its pace last summer. JPMorgan thinks that this credit and investment boom could lift GDP growth to an annualised pace of over 10% in each of the next three quarters.

Jonathan Anderson, an economist at UBS, argues that the property market could be as important as the fiscal stimulus in determining China’s fate. After falling sharply last year, housing sales rose by 36% in value in the year to March. Housing starts are still down, but if sales continue to strengthen, construction could pick up in the second half of 2009. That would also help to support consumption: about half of China’s job losses among migrant workers have been in the building industry.

If construction does recover and infrastructure spending continues to rise, then even if exports remain weak, China could see growth of close to 8% this year—impressive stuff when rich economies are expected to contract by 4-5%. There are growing concerns about the quality of that growth, however. The World Bank estimates that government-influenced spending will account for three-quarters of China’s GDP growth this year. The clear risk is that politically directed lending creates more overcapacity, poor rates of return and future bad loans for banks.

These are valid concerns. But Andy Rothman, an economist at CLSA, a brokerage, reckons that state-owned firms mainly plan to increase their spending on upgrading existing production facilities, rather than expanding capacity. Also, about half of the increase in investment is on public infrastructure. This will inevitably include some white elephants but, in a poor country, the return on infrastructure investment is generally high. There is no need to build “bridges to nowhere” when two-fifths of villages lack a paved road to the nearest market town.

Reuters

Bridge urgently neededWhat about the risks to banks? The last time they were forced to support the government’s stimulus policy, during Asia’s financial crisis in 1998, Chinese banks were left with large non-performing loans. Bad loans will rise again this time, but Tao Wang, also at UBS, argues that banks are in a stronger position than in 1998. China is one of the few countries in the world where bank credit has fallen relative to GDP over the past five years. Banks have an average loan-to-deposit ratio of only 67%, low by international standards, and less than 5% of banks’ loans are non-performing, down from 40% in 1998.

The biggest task for China is to find a new engine for future growth. It cannot rely on exports, nor can the investment stimulus be sustained for long. Without stronger consumer spending, China’s growth will be much slower than in recent years. Reforms to improve health care and the social safety net will take many years to encourage people to save less.

Andy Xie, an independent economist based in Shanghai, suggests that the quickest way to boost consumption would be for the government to distribute the shares that it holds in state-owned enterprises to households, and to force those firms to pay larger dividends. But the authorities in Beijing are unlikely to take his advice. How else could they lean on big firms to support the economy in times like these?

2009-04-22T16:42:00.000-07:00

A chancellor flying on a wing and a prayer
By Martin Wolf

Published: April 22 2009 14:37 | Last updated: April 22 2009 14:37

Only Alistair Darling, most emollient of politicians, could manage to make this Budget boring. He is telling his country that its prosperity was as fraudulent as a collateralised debt obligation, that Gordon Brown’s boasts of “no more Tory boom and bust” are a joke, that the forecasts he gave only last November were nonsense, that the public finances are deteriorating at a rate never seen in peacetime and that, to cover these failures, he is indulging in populist attacks on the highly paid. To make this feel boring is an achievement.

Yet is the government at last being realistic about the scale of this disaster? Can Labour hope to get away with it, economically or politically? Does it deserve to do so? These are the questions for markets and analysts now, and for voters at some point in the next 12 months. My answers are, briefly: No, No and No.

In terms of the overall picture, the salient figures were already well known: instead of an economic contraction of 1 per cent this year forecast in the pre-Budget report, the Treasury now forecasts a decline of 3.5 per cent; instead of public sector net borrowing of 8 per cent of gross domestic product this financial year and 6.8 per cent next year, falling to 2.9 per cent in 2013-14, we now have 12.4 per cent this year, followed by 11.9 per cent next year and 5.5 per cent in 2013-14; and instead of net debt at 57 per cent of GDP in 2013-14, we now have net debt at 79 per cent.

This is a horror story. But it could, of course, be worse: the economy may not recover as hoped; losses on support for the banks could, as the International Monetary Fund suggests, be far bigger than the 3.5 per cent of GDP now expected; and, above all, the creditworthiness of the British government could come into question, with devastating consequences. The government is flying on a wing and a prayer. Can it – or its successor – land the aircraft? As a British citizen, I do hope so. But nobody can now be sure of this. Can a government that made large claims for the quality of its stewardship survive such a debacle?

Perhaps the most striking single figure in the Budget is that the Treasury now believes cyclically adjusted net borrowing will be 9.8 per cent of gross domestic product this financial year (see chart). In other words, virtually all of the overall net borrowing requirement of 12.4 per cent of GDP is structural.

The Treasury’s implicit view is that this is a sudden and unexpected event, consequent on the collapse of corporate profitability, particularly in the financial sector, and of the housing market: it shows the structural net borrowing requirement at only 2.7 per cent in 2007-08 and 5.7 per cent in 2008-09. But this view is highly implausible. More realistic is that, as happened in the boom of the late 1980s, but on a bigger scale, the Treasury confused a super-boom with a sustainable economic position. Now, after the collapse, the Treasury admits that the structural fiscal position is far worse than it thought. If it – and, we must admit, many others – had realised how fragile the economic and fiscal position was, they would have recognised that deficits and net public debt were far too high.

So the big question is how – and how quickly – the Treasury expects this appalling structural position to improve. The answer is: very slowly. By 2013-14, structural net borrowing is still expected to be 4.5 per cent of GDP and the structural current budget (supposed to be in balance “over the cycle” under now discarded fiscal rules) will still run a deficit of 3.2 per cent of GDP. In this Budget, the cyclically adjusted current budget returns to balance only in 2017-18, instead of 2015-16, the date chosen in the November pre-Budget report.

Yet any notion of the structural as opposed to the cyclical position is heroic guesswork. It may be sensible, therefore, to ignore the distinction and focus on the plausibility of actual numbers. In essence, the Budget forecasts that, as a result of the collapse in GDP and the recession, particularly the huge rise in spending on benefits, total spending will peak at 48.1 per cent of GDP next year, but then fall to 39 per cent by 2017-18. Meanwhile, receipts make a modest recovery, from a crisis-hit 35.1 per cent of GDP this financial year and 36.2 per cent next year, to 38 per cent in 2013-14 and, presumably, thereafter.

Behind this forecast is a promise and a hope: the promise is that real public spending will remain roughly constant between 2010-11 and 2013-14 and then rise at only about 0.5 per cent a year over the rest of that parliament and, implicitly, well into the next; the hope is that the economy will recover vigorously, with GDP already growing at 3.5 per cent in 2011, after 1.25 per cent next year. These are not impossible forecasts. But they imply a resolution that can hardly be expected of any UK elected government, a vigour that can no longer be assumed of the storm-tossed British economy and an amount of luck, on the world economy and losses in the raddled banking system, that cannot be taken for granted. The horrible truth is that the government’s forecasts are still very far from the worst imaginable.

I have no idea whether the government can both get away with this optimism and postpone the moment of truth at least until after the general election. Markets have been forgiving. The difficulty with assuming that this will continue is that this is how markets tend to behave – until they cease to do so. Should investors decide that a return to fiscal stability has become a remote prospect, they may turn against the UK suddenly and brutally. The populism of the Budget, with its fiscally futile attack on relatively high earners, makes this even more likely.

Finally, does the government deserve to get away with it? It is true that this is a global crisis in which many economies have been as hard hit as the UK. But, according to the Organisation for Economic Co-operation and Development, no other big member has suffered as large a deterioration in its structural fiscal position as the UK. In retrospect, the government was far too optimistic about the structural solidity of the UK economy and its finances. While many others were equally blind, it is hard for a government to escape responsibility for so huge a mistake.

I have sympathy for the decision not to tighten fiscal policy during the worst of a recession. But I would also want to see determination to take the measures needed to return the fiscal position to health by the end of the next parliament. This will require action on both revenue and spending. Understandably, perhaps, the chancellor failed to spell out the scale of the challenges that lie ahead even if the economy were to recover robustly. Yet what is in prospect is year after miserable year of austerity.

The challenge for both government and the opposition is to show how they will bring the budget back under control. Neither side is being honest about what this means. If this failure leads to a collapse of confidence, that will prove the worst mistake of all.

Copyright The Financial Times Limited 2009

2009-04-21T16:22:00.000-07:00

Tesco annual profits top £3bn
By Adam Jones

Published: April 21 2009 07:50 | Last updated: April 21 2009 15:05

Tesco on Tuesday reported a 10 per cent rise in underlying annual pre-tax profits to £3.13bn, as strong growth from Asia supported its more mature British operations.

However, Britain’s biggest retailer also said that its net debt had increased to £9.6bn – about £1.6bn more than it had predicted last September.

In addition, Tesco said it would conditionally allocate £500m of property to its pension fund to bolster the security of the scheme, whose post-tax accounting deficit almost doubled to £1.1bn in the year to February 2009.

Investors welcomed the results, sending Tesco shares 4.85 per cent higher to 348.2p in afternoon London trading, though still below the 373.2p they reached in February.

The record underlying profit — which strips out volatile non-cash charges — was better than the £3.02bn mean expectation of analysts polled by Reuters. The statutory pre-tax profit rose 6 per cent to £2.95bn, less than the £3.06bn consensus forecast.

A final dividend of 8.39p has been proposed, making a total of 11.96p for the year, an increase of 10 per cent.

In the UK, Tesco’s biggest market by far, like-for-like sales rose 2.7 per cent in the fourth quarter of its financial year, up from 2 per cent in the third quarter and making 3 per cent for the year.

Laurie McIlwee, finance director, said it was very hard to tell whether the UK market would improve.

“On a week by week basis, it is very volatile... I couldn’t say that it has definitely bottomed out. We are planning for a tough year.”

He acknowledged the renewed prowess of some of Tesco’s domestic competitors, but added: “We are still growing faster than the market. We are not losing [market] share.”

Overall, Tesco said it had made a good start to the new financial year. In the UK, like-for-like sales growth, excluding petrol, improved to 3.4 per cent in the first six weeks of March and April.

Sales for the 53 weeks to February 28 were £59.4bn including VAT, an increase of 15 per cent on the prior 52-week period, or 11 per cent when favourable currency movements were stripped out.

During the year, international sales rose 14 per cent at constant exchange rates, reflecting an acceleration of sales growth in Asia that was aided by recently-acquired stores in South Korea.

However, losses from its Fresh & Easy grocery chain in the US were £142m, rather than the predicted £100m, mainly because of adverse currency movements. Tesco said it would hold off from a planned acceleration in Fresh & Easy store openings.

The increase in net debt to £9.6bn — which had been anticipated by analysts — partly resulted from higher capital expenditure, including Chinese shopping centre investments.

It was also affected by adverse currency movements and property market weakness, which made sale-and-leasebacks and other capital-raising measures more difficult.

Mr McIlwee said: “We are looking to bring [net debt] down to about £8.5bn but that will be dependent on property prices and a more stable currency outlook.” Tesco also pledged to rein in capital spending substantially this year.

The pension scheme’s accounting deficit was marginally higher than the figure reported at the retailer’s interim results. The transfer of property assets would only take place if Tesco ceased to be a going concern.

Copyright The Financial Times Limited 2009

2009-04-20T16:51:00.000-07:00

Patience will help to grease M&A wheels
M&A할려면 인내력이 필요하다
By Lina Saigol

Published: April 19 2009 19:32 | Last updated: April 19 2009 19:32

Eight months ago, investment bankers were geared for a flood of asset disposals from distressed companies struggling to meet their short-term capital needs.
8달 전만해도 기업들이 단기자금 조달하기 위해 힘들었다.

Banks beefed up their sell-side operations, bringing together M&A and restructuring specialists, to double the chances of winning mandates to sell businesses. The thinking was that rather than tap investors for cash, chief executives would try to raise capital by divesting anything non-core.

But so far, companies have favoured rights issues and selling corporate bonds over the sale of even underperforming divisions.

This is mainly due to the vast gulf that still exists between buyers and sellers over how much an asset is worth. Both Royal Bank of Scotland and AIG pulled the sale of their insurance assets after balking at the prices bidders were offering.

But if the last downturn provides any clues, the disconnect between bidders and targets should start to narrow soon.

It was two years after the collapse of the dotcom boom in late 2000 before companies started selling assets to reduce debt accumulated from expensive acquisitions. Asset disposals accounted for half of all M&A activity in the European technology, media and telecoms sector in 2003.

That level of activity was due largely to private equity groups’ willingness to buy big assets such as Yell, BT’s yellow pages business that Apax and Hicks, Muse, Tate & Furst acquired in 2001.

This time around, private equity has stayed on the sidelines as it writes down many investments acquired at the height of debt boom in 2006/07 and struggles to find the leverage to make acquisitions work.

But at some stage private equity groups will spend the cash they are sitting on and take the plunge – as CVC Capital Partners recently demonstrated when it bought Barclays’ iShares exchange-traded fund unit for $4.4bn (£3bn).

The UK bank’s shares rose 7 per cent on the sale and that should encourage other companies to look at the structure of their businesses and dispose of anything they will not miss when the upturn comes.

lina.saigol@ft.com

US prices drop for first time since 1955

2009-04-15T15:06:00.001-07:00

US prices drop for first time since 1955
By Alan Rappeport in New York

Published: April 15 2009 14:19 | Last updated: April 15 2009 14:47

Prices in the US declined in the year to March for the first time since 1955, the labour department said on Wednesday, easing fears that aggressive government stimulus measures could kick-start inflation.

The 0.1 per cent monthly decline in March was largely due to falling energy prices and was the first fall after two months of increases. Consumer prices were down by 0.4 per cent year-on-year.

The monthly figure trailed the 0.1 per cent rise that economists had forecast and compared with a 0.4 per cent increase in February.

The drop in prices could renew fears of a deflationary trap that were stoked after prices were flat or declined during the final five months of 2008. As the economic recession deepened in the second half of last year companies slashed prices to clear stocks.

However, core prices, which exclude food and energy and is the measure by which economists judge the risk of general deflation, rose by 0.2 per cent and were 1.8 per cent higher than in March 2008. Core prices also rose by 0.2 per cent in February.

“The economy is suffering from disinflation but not outright deflation pressures in the goods and services sectors,” said Alan Ruskin, strategist at RBS Greenwich Capital.

Energy prices fell by 3 per cent last month after climbing by 3.3 per cent in February. Prices of energy were pulled back by falling petrol prices which were off by 4 per cent in March after rising by 8.3 during the previous month.

Prices fell across most sectors last month, while the cost of medical care, education and communication rose in March.

The slide in consumer prices follows a report on Tuesday that US wholesale prices fell in March after two months of gains due to falling energy prices. The producer price index for finished goods fell by 1.1 per cent last month, trailing economists forecasts that prices would be flat.

Compared with March 2008, wholesale prices were down by 3.5 per cent.

The decline was due to a 13.1 per cent drop in petrol prices. Excluding food and energy, core producer prices were flat last month. Weak capital spending also blunted any inflation as business investment has stalled amid diminished demand.

Separately on Wednesday the Federal Reserve said that US industrial production fell for the fifth month running in March, dropping by 1.5 per cent on weak factory and manufacturing output as global demand has continued to erode.

The monthly decline was worse than economists expected and was driven by falling production of business equipment and construction supplies. Industrial output was off by 12.8 per cent compared with the same month in the prior year.

Economists expected industrial production would fall by 0.9 per cent last month after a 1.4 per cent decline in February. Output has declined in 11 out of the last 13 months.

Utility output rose by 1.8 per cent in February after a 7.7 per cent drop the prior month, as cold temperatures replaced unseasonably mild weather. Mining output was off by 3.2 per cent.

Meanwhile, the capacity utilisation rate, a measure of the proportion of plants in use, across all industries, fell to 69.3 from a revised 70.3 per cent. The figure was lowest since 1967, when the Federal Reserve began keeping such records.
Copyright The Financial Times Limited 2009

[FT]Cutting back financial capitalism is America’s big test

2009-04-14T15:13:00.001-07:00

Cutting back financial capitalism is America’s big test
By Martin Wolf

Published: April 14 2009 21:47 | Last updated: April 14 2009 21:47

Is the US Russia? The question seems provocative, if not outrageous. Yet the person asking it is Simon Johnson, former chief economist at the International Monetary Fund and a professor at the Sloan School of Management at the Massachusetts Institute of Technology. In an article in the May issue of the Atlantic Monthly, Prof Johnson compares the hold of the “financial oligarchy” over US policy with that of business elites in emerging countries. Do such comparisons make sense? The answer is Yes, but only up to a point.
미국이 러시아인가? 조롱하는 질문은 아니다. 이렇게 질문한 사람은 MIT 슬론의 존슨교수다. 그는 금융과두제를 신흥국가의 엘리트경영과 비교했다. 슬론이 그 둘을 비교하는 게 상식적인가? 답은 그렇다이다. 그러나 포인트만 집어냈을 뿐이다.

“In its depth and suddenness,” argues Prof Johnson, “the US economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets.” The similarity is evident: large inflows of foreign capital; torrid credit growth; excessive leverage; bubbles in asset prices, particularly property; and, finally, asset-price collapses and financial catastrophe.
미국의 행보는 신흥국가와 매우 유사하다. 막대한 외국자본의 유입, 신용상승, 레버리지증가, 자산가격거품, 특정한 재산, 마지막으로 자산가격몰락과 금융대참사.

“But,” adds Prof Johnson, “there’s a deeper and more disturbing similarity: elite business interests – financiers, in the case of the US – played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse.” Moreover, “the great wealth that the financial sector created and concentrated gave bankers enormous political weight.”
그러나 그보다 더 유사한점이 있다. 엘리트들이 금융업에 종사하면서 위기를 유발했다는 것이다. 막대한 자금으로 도박을 하고, 정부는 이를 뒷받침한다. 결국 모두가 파멸한다. 금융부분이 창출한 막대한 부는 은행가들에게 거대한 정치적 힘을 주었다.

Now, argues Prof Johnson, the weight of the financial sector is preventing resolution of the crisis. Banks “do not want to recognise the full extent of their losses, because that would likely expose them as insolvent ... This behaviour is corrosive: unhealthy banks either do not lend (hoarding money to shore up reserves) or they make desperate gambles on high-risk loans and investments that could pay off big, but probably won’t pay off at all. In either case, the economy suffers further, and, as it does, bank assets themselves continue to deteriorate – creating a highly destructive cycle.”

Does such an analysis make sense? This is a question I thought about during my recent three-month stay in New York and visits to Washington, DC, now capital of global finance. They are why Prof Johnson’s analysis is so important.

Unquestionably, we have witnessed a massive rise in the significance of the financial sector. In 2002, the sector generated an astonishing 41 per cent of US domestic corporate profits (see chart). In 2008, US private indebtedness reached 295 per cent of gross domestic product, a record, up from 112 per cent in 1976, while financial sector debt reached 121 per cent of GDP in 2008. Average pay in the sector rose from close to the average for all industries between 1948 and 1982 to 181 per cent of it in 2007.

In recent research, Thomas Philippon of New York University’s Stern School of Business and Ariell Reshef of the University of Virginia conclude that the financial sector was a high-skill, high-wage industry between 1909 and 1933. It then went into relative decline until 1980, whereupon it again started to be a high-skill, high-wage sector.* They conclude that the prime cause was deregulation, which “unleashes creativity and innovation and increases demand for skilled workers”.

Deregulation also generates growth of credit, the raw stuff the financial sector creates and on which it feeds. Transmutation of credit into income is why the profitability of the financial system can be illusory. Equally, the expansion of the financial sector will reverse, at least within the US: credit growth and leverage masked low or even non-existent profitability of much activity, which will disappear, and part of the debt must also be liquidated. The golden age of Wall Street is over: the return of regulation is cause and consequence of this shift.

Yet Prof Johnson makes a stronger point than this. He argues that the refusal of powerful institutions to admit losses – aided and abetted by a government in thrall to the “money-changers” – may make it impossible to escape from the crisis. Moreover, since the US enjoys the privilege of being able to borrow in its own currency it is far easier for it than for mere emerging economies to paper over cracks, turning crisis into long-term economic malaise. So we have witnessed a series of improvisations or “deals” whose underlying aim is to rescue as much of the financial system as possible in as generous a way as policymakers think they can get away with.

I agree with the critique of the policies adopted so far. In the debate on the Financial Times’s economists’ forum on Treasury secretary Tim Geithner’s “public/private investment partnership”, the critics are right: if it works, it is because it is a non-transparent way of transferring taxpayer wealth to banks. But it is unlikely to fill the capital hole that the markets are, at present, ignoring, as Michael Pomerleano argues. Nor am I persuaded that the “stress tests” of bank capital under way will lead to action that fills the capital hole.

Yet do these weaknesses make the US into Russia? No. In many emerging economies corruption is egregious and overt. In the US, influence comes as much from a system of beliefs as from lobbying (although the latter was not absent). What was good for Wall Street was deemed good for the world. The result was a bipartisan programme of ill-designed deregulation for the US and, given its influence, the world.

Moreover, the belief that Wall Street needs to be preserved largely as it is now is mainly a consequence of fear. The view that large and complex financial institutions are too big to fail may be wrong. But it is easy to understand why intelligent policymakers shrink from testing it. At the same time, politicians fear a public backlash against large infusions of public capital. So, like Japan, the US is caught between the elite’s fear of bankruptcy and the public’s loathing of bail-outs. This is a more complex phenomenon than the “quiet coup” Prof Johnson describes.

Yet decisive restructuring is indeed necessary. This is not because returning the economy to the debt-fuelled growth of recent years is either feasible or desirable. But two things must be achieved: first, the core financial institutions must become credibly solvent; and, second, no profit-seeking private institution can remain too big to fail. That is not capitalism, but socialism. That is one of the points on which the right and the left agree. They are right. Bankruptcy – and so losses for unsecured creditors – must be a part of any durable solution. Without that change, the resolution of this crisis can only be the harbinger of the next.

*Wages and Human Capital in the US Financial Industry 1909-2006, January 2009, www.nber.org

2009-04-13T16:52:00.000-07:00

Goldman push to repay $10bn
By Greg Farrell and Francesco Guerrera in New York

Published: April 13 2009 23:39 | Last updated: April 13 2009 23:39

Goldman Sachs signalled its determination to be the first major bank to emerge from the financial crisis, revealing plans late on Monday to raise $5bn to pay back government funds and reporting stronger-than-expected first-quarter earnings of $1.81bn.

The bank said that, pending government approval, it would use the $5bn raised through the sale of common stock to help pay back the $10bn allocated to it last year as part of the Troubled Asset Relief Programme.

If it succeeds, Goldman would be the first major US bank to pay back Tarp funds and would free itself from restraints on compensation and business activities imposed by regulators.

The early repayment would also raise the stakes for other big US banks, which would find themselves torn between the need to maintain strong capital levels and the desire not to be seen as “weaker” than Goldman.

Adding a touch of drama to its earnings announcement, Goldman released its figures late on Monday, after markets closed, rather than on Tuesday as originally scheduled. The announcement of the capital raising, dilutive to existing shareholders, sent the bank’s shares down slightly in after-hours trading following a day in which Goldman stock jumped $5.82 to $130.15.

The firm’s $1.81bn of net profits marked a 20 per cent increase from a year ago, and a sharp reversal from the $2.1bn loss in the fourth quarter of 2008.

The performance was driven by a record showing in fixed income, commodities and currencies activities, which generated $6.56bn in revenues, more than double the total from a year ago.

Revenues in Goldman’s equities business were $2bn, a 20 per cent decline from a year ago. Investment banking revenues, at $823m, were also off from levels of a year ago and late 2008.

Goldman’s principal investments generated a net loss of $1.41bn for the quarter, evidence of the continuing decline in real estate assets, as well as a loss of $151m related to the firm’s holdings in the Industrial and Commercial Bank of China.

Goldman benefited from a quirk in its reporting schedule. Its fourth quarter ended in November 2008, but after converting to a bank holding company last year, Goldman adopted a calendar-year earnings period starting in 2009. As a result, the company did not have to include December in its first quarter earnings, a month in which it sustained $1.3bn in pre-tax losses.

In a statement regarding the Tarp repayment, Goldman said that “after the completion of the stress assessment, if permitted by our supervisors and if supported by the results of the stress assessment, Goldman Sachs would like to use the capital raised plus additional resources to redeem all of the Tarp capital”.
Copyright The Financial Times Limited 2009

골드만이 자본을 확충해서 정부로부터 빌린 자금을 갚겠다고 함.
골드만은 1분기에 18억달러 순이익을 올림
주로 채권분야였음

[FT]Lessons from the 1997 Asian economic crisis

2009-04-13T03:49:00.000-07:00

Lessons from the 1997 Asian economic crisis
By Paul Beamish

Published: January 22 2009 19:29 | Last updated: January 22 2009 19:29

In the midst of an economic downturn, there is a tendency by some to think that things have never been so bad and that extraordinary new approaches are needed. But is this true? The current downturn is neither the only economic crisis that most managers will face during their careers. Nor is it the first downturn that business school scholars have studied.

Together with Chris Chung from Florida International University and Jane Lu from National University of Singapore, I have investigated whether there are any lessons from the 1997 Asian economic crisis for the managers of multinational corporations. We conducted a series of studies using a longitudinal database on Japanese subsidiaries worldwide, and report here on the managerial implications of two of them.

First, a quick recap. In 1997, the Asian economic crisis broke out in Thailand and abruptly spread to the rest of the region. The crisis resulted in rapid contractions in which real output was severely damaged. Coming after more than two decades of high growth and frequent claims of an impending Asian economic boom, the 1997 crisis was a major shock to foreign companies operating in south-east and east Asian countries. A number of observers suggested that the extent of the damage created by the crisis was comparable only to that of the Great Depression.

In our analyses of the impact of the crisis, we considered two distinctive time periods. The first was the crisis time period (1997-99), during which Asian countries underwent more than four consecutive quarterly declines in real gross domestic product. The second was the stable time period (1993-96), during which they maintained consistent real GDP growth.

The first study compared the subsidiary performance implications of being part of a multinational network during times of economic crisis versus times of stability. The aim was to assess the value of being part of a parent-subsidiaries network, to determine whether there were conditions under which organisational links matter most.

The multinational network model conceptualises a foreign subsidiary as an equal, rather than a subordinate, of a company’s headquarters  that is, an active agent that becomes integrated with its parent business and other subsidiaries via organisational links that give it access to network-based resources to address dynamic environmental demands.

A multinational network model highlig¬¬hts the fact that multinational networks are able to provide their subsidiaries with a range of operating options that allow them to avoid downside risks and take advantage of upside opportunities by shifting value chain activities across networks. Can the greater flexibility inherent in a multinational network allow subsidiaries to modify and reconfigure operating routines in the pursuit of effectiveness and survival? If one geographic area is hit by economic crisis, can affected subsidiaries tap into their multinational networks and respond to adverse environmental changes by modifying their operations?

We found that strategic drivers such as multinational organisation links allow foreign subsidiaries to capitalise on the flexibility inherent in a multinational network. When local markets collapse, such strategic and operational flexibility holds the greatest positive implication for foreign subsidiary performance. Managers should, therefore, invest in the development of such networks, especially when they make investments in emerging economies whose dominant characteristic is uncertainty. Furthermore, managers should be aware of performance implications for different types of multinational networks, and configure their networks to meet specific strategic objectives.

Subsidiary profitability is more likely to benefit from a tightly linked intra-company network (ie subsidiary network) than from a distant inter-company network (ie keiretsu affiliation), since it is easier for a subsidiary to have common skills and knowledge to link various parts of value chains with sister subsidiaries within the business than with keiretsu-affiliated subsidiaries outside of it. Intra-company trade allows subsidiaries to adjust more quickly to abrupt changes than inter-business trade. This is important given that intra-company trade currently accounts for one-third of all world trade.

With respect to how performance ought to be measured during a crisis, many would argue that what really matters during times of economic crisis in host countries is survival rather than profitability. But facing unanticipated economic turmoil, subsidiaries in crisis-stricken countries have to secure their survival first before moving towards profitability.

In sum, foreign subsidiaries in multinational networks have access to resources in heterogeneous institutional environments. By taking advantage of these links, they can capitalise on the latent flexibility that resides in being part of a multinational network.

Investment mode strategy versus expatriate strategy

The second study examined the performance implications of investment mode strategy and expatriate strategy during the Asian economic crisis. We considered how these strategies, as alternatives in implementing and exercising control on the operation of subsidiaries, complemented and interacted with each other to bring about improved subsidiary performance.

In an investment mode strategy, a company can choose from a range of organisational modes: exporting, licensing, franchising, joint venture, or wholly owned subsidiary. In particular, foreign direct investment (FDI) is an important way for companies to compete internationally. FDI can occur in various mutually exclusive forms: greenfield or newly-established; wholly owned subsidiary (a greenfield operation in which 95 per cent or more of the equity is possessed by one foreign firm); greenfield joint venture (a greenfield operation in which two or more firms each possess at least 5 per cent of the subsidiary’s equity); and acquired wholly owned subsidiary (the purchase of a controlling interest in an existing domestic enterprise). The choice of FDI mode strategy is likely to affect the survival of subsidiaries because each strategy differs both in expected risk level and in the importance of various co-ordination costs and resources.

Expatriate strategy refers to the utilisation of a multinational’s expatriate staffing practices to achieve learning, innovation, flexibility, and corporate integration in foreign subsidiaries. The higher level of expatriate staffing in a foreign subsidiary is a means of exerting more influence on the implementation of strategy and daily operations.

Organisations tend to learn from experience and behave in a path-dependent manner. Even if acquired wholly owned subsidiaries and greenfield joint ventures attempt to integrate themselves into the multinational networks once their local markets begin to collapse, they will still fall short in terms of timing because of their structural and knowledge distance from the multinational networks. When local markets collapse, acquired wholly owned subsidiaries and greenfield joint ventures are less capable than greenfield wholly owned subsidiaries of capitalising on multinational flexibility to reap the benefits of integration through multinational networks.

Similarly, the more distant the operational structures of foreign subsidiaries are from the parent networks, the more the integration benefit could be realised by the greater utilisation of expatriates. Since the operational structure of greenfield wholly owned subsidiaries is already close to that of the parent network, the impact of an additional number of expatriates may be marginal.

By staffing acquired wholly owned subsidiaries and greenfield joint ventures with more expatriates, foreign companies can ensure those subsidiaries conform to parent goals or targets through the exercise of power, authority, or indoctrination of corporate values and norms. By doing so, they can exert more control over the implantation of strategy and daily operations.

Conclusion

We first observed that in the crisis period, both joint ventures and acquisitions were significantly more likely to fail than wholly owned subsidiaries. Overall, acquisitions were most likely to fail, followed by joint ventures and wholly owned subsidiaries in that order.

Second, the presence of a greater number of expatriates was positively related to subsidiary survival during times of crisis.

Third, a greater number of expatriates increased the survival likelihood of acquisitions the most, followed by joint ventures, then by wholly owned subsidiaries, in that order.

Our study suggests that managers of multinationals can adjust and change subsidiary staffing at each phase of a crisis to influence the typical evolutionary path of investment modes. When local markets collapse, the presence of a greater number of expatriates is more likely to enhance the performance of foreign subsidiaries that have been structured to integrate into the local markets but are distant from the multinational networks. As a parallel but more fluid strategy in exercising control over the operations of foreign subsidiaries, expatriate strategy can complement the deficiency of investment mode strategy in capitalising on multinational flexibility when local markets crash. Some managers of multinationals have paid little attention to the interaction effect of expatriate strategy and investment mode strategy on subsidiary performance to date.

Based on the results of our study, we suggest that managers of multinationals consider investment mode and expatriate strategies in a more holistic manner in order to promote value creation from the operations of foreign subsidiaries.

Paul W. Beamish is director of the Asian Management Institute at Ivey Business School, University of Western Ontario
Copyright The Financial Times Limited 2009

[FT] Brands look east as western wallets close

2009-04-08T17:36:00.000-07:00

Brands look east as western wallets close

By Jamil Anderlini in Beijing

Published: April 8 2009 19:46 | Last updated: April 8 2009 19:46

On Shanghai’s trendiest shopping street a glittering pink monument to the west’s faith in the Chinese consumer has just opened.
서양브랜드들이 중국으로 눈을 돌리고 있다.

Inside the six-story Barbie flagship store an escalator carries curious Shanghainese up a long, pink illuminated tunnel echoing with recordings of giggling children and disgorges them into a plastic wonderland of frills and accessories. “100per cent plastic beauty” reads a sign on the wall of the Barbie spa and beauty salon on the second floor.
럭셔리한 바비샵들도 생겼다.

With much of the world expected to remain in recession this year, big consumer brands are pinning their hopes on China’s billion customers to prop up sales amid the global downturn.
세계경기가 침체기에 들어가면서 10억인구가 있는 중국이 새로운 시장으로 떠오르고 있다.

Beijing’s confident predictions that gross domestic product will grow 8 per cent in 2009 are convincing global companies open stores conceived in the boom days of 2007.
베이징이 8%성장할 것이라는 예상때문에 각국의 기업들이 지점을 열고 있다.

The optimism is backed with figures that show retail sales grew 15.2 per cent in the first two months of this year from the same period a year earlier – down from 20 per cent growth recorded every month last year but still very strong in the current environment. “What’s amazing is that Chinese consumption has held up so well,” says Frank Gong, chief China economist at JPMorgan. “China is the only place in the world where retail sales are growing.”
올 해 2달간 소비성장률이 작년대비 15.2%성장.
작년에 20%씩 성장했던 것에 비하면 낮지만 불황인 요즘을 생각해 본다면 높은 수치
중국은 세계에서 유일하게 소비가 늘어나고 있는 국가

There are questions about the accuracy of consumption statistics in a country as vast as China. The World Bank predicts GDP growth will hit just 6.5 per cent this year but the government is intent on boosting private consumption, which made up 38 per cent of GDP last year, compared with about 70 per cent in developed economies such as the US.
중국이 내놓는 통계치는 의심간다.
세계은행은 중국성장률이 6.5%라고 예상
정부는 경기부양책을 내놓아 소비를 늘릴생각
작년에는 전체 GDP중 정부지출이 38%차지

As part of efforts to avoid the worst of the economic downturn Beijing has promised to spend huge sums on improving the country’s woeful health, education and social welfare safety nets. This is intended to convince anxious citizens to spend more of their historically high savings rates to rebalance economic growth away from investment to a more consumption-led model.
정부는 사회보장제도를 확충해서 역사상 가장 높은 저축률을 보이고 있는 소비자들의 소비를 늘리려고 함
이로인해 소비는 늘어나더라도 투자는 줄어들 것

Ben Simpfendorfer, an RBS economist based in Hong Kong, says the resilience of retail growth figures masks the fact many retailers have begun slashing prices, which they would not do unless they were worried about falling sales.
많은 유통업체들이 가격을 낮추고있다. 이는 매출이 줄고 있기 때문이다.

In an upscale mall not far from the Shanghai Barbie headquarters, Giorgio Armani opened a store two weeks ago, bringing the number of Armani-branded shops in the city to six. An hour after a ribbon-cutting ceremony it was deserted.
알마니 개장

The Barbie emporium appears to be suffering from a different problem, with crowds of sightseers but very few people making big purchases. “Attracting large numbers of people to your store in China is not hard but getting them to walk out with a bag with your name on it is a different story,” according to Paul French, founder of Access Asia, a market research company.
매장에 오는 사람은 많아도 사는 사람은 적다.
소비자들을 매장에 끌어올 수는 있지만 물건을 사게 하기는 어렵다.

The glitz of Shanghai belies the fact that China is still a poor country, where the average urban disposable income rose 8 per cent last year to Rmb15,781 ($2,310, €1,740, £1,575). China’s 750m rural citizens survive on a total average income of Rmb4761. That means they can afford to buy 19 Barbie dolls a year each, as long as they do not buy anything else.
중국은 여전히 빈국이다.
도시생활자의 가처분소득은 작년대비 8%올라서 2,310달러이다.
7억 5천만명 되는 중국의 농민들은 800달러로 생활하고 있다.
그들은 바비인형을 19개 사면 1년 내내 아무것도 못산다.

Copyright The Financial Times Limited 2009

[Economist]The incredible shrinking economy

2009-04-07T15:29:00.000-07:00

The incredible shrinking economy
Apr 2nd 2009 | TOKYO
From The Economist print edition

Japan is in danger of suffering not one but two lost decades

Illustration by S. Kambayashi
TO LOSE one decade may be regarded as a misfortune; to lose two looks like carelessness. Japan’s economy stagnated in the 1990s after its stockmarket and property bubbles burst, but its more recent economic performance looks even more troubling. Industrial production plunged by 38% in the year to February, to its lowest level since 1983. Real GDP fell at an annualised rate of 12% in the fourth quarter of 2008, and may have declined even faster in the first three months of this year. The OECD forecasts that Japan’s GDP will shrink by 6.6% in 2009 as a whole, wiping out all the gains from the previous five years of recovery.

If that turns out to be true, Japan’s economy will have grown at an average of 0.6% a year since it first stumbled in 1991 (see top chart). Thanks to deflation as well, the value of GDP in nominal terms in the first quarter of this year probably fell back to where it was in 1993. For 16 years the economy has, in effect, gone nowhere.

Was Japan’s seemingly strong recovery of 2003-07 an illusion? And why has the global crisis hit Japan much harder than other rich economies? Popular wisdom has it that Japan is overly dependent on exports, but the truth is a little more complicated. The share of exports in Japan’s GDP is much smaller than in Germany or China and until recently was on a par with that in America. During the ten years to 2001, net exports contributed nothing to Japan’s GDP growth. Then exports did surge, from 11% of GDP to 17% last year. If exporters’ capital spending is included, net exports accounted for almost half of Japan’s total GDP growth in the five years to 2007.

Exports boomed on the back of a super-cheap yen and America’s consumer binge. Japan did not have housing or credit bubbles, but the undervalued yen encouraged a bubble of a different sort. Japanese exporters expanded capacity in the belief that the yen would stay low and global demand remain strong, resulting in a huge misallocation of resources.

As foreign demand collapsed and the yen soared last year, Japan’s export “bubble” burst. Total exports have fallen by almost half in the past year. Japan’s high-value products, such as cars and consumer electronics, are the first things people stop buying when the economy sours.

Richard Jerram, an economist at Macquarie Securities, argues that the worst may soon be over for industrial production. This year, output and exports have fallen by much more than the drop in demand, because firms have temporarily closed plants in order to slash excess stocks. For instance, Japan’s vehicle production in the first two months of 2009 was 50% lower than a year before, but global car sales fell by only 25%.

Mr Jerram reckons that the inventory rundown is coming to an end, which will lead to a short-term bounce in output as factories reopen. If so, car output in June could be around 50% higher than in March (but still down by 25% on a year earlier). This means that GDP growth might turn positive in the second quarter even if foreign demand remains weak.

Unfortunately, the economy is likely to totter again as the second-round effects of tumbling profits and rising unemployment squeeze investment and consumer spending. According to the latest Tankan survey of the Bank of Japan (BOJ), in March business sentiment among big manufacturing firms was the gloomiest since the poll began in 1974. Manufacturers say they plan to cut investment by 20% this year. They are also trimming jobs and wages. The seemingly modest unemployment rate of 4.4% in February understates the pain. The ratio of job offers to applicants has declined to only 0.59, from around one at the start of 2008, and average hours worked have also fallen sharply. Average wages (including bonuses and overtime pay) went down by 2.7% in the 12 months to February. Household spending fell by 3.5% in real terms over the same period; department store sales plunged by 11.5%.

The weakening domestic economy has prompted the government to man the fiscal pumps. A stimulus of 1.4% of GDP is already in the pipeline for 2009, and a further boost of perhaps 2% of GDP is expected to be unveiled in mid-April. The package is likely to include measures to strengthen the safety net for the unemployed and so ease concerns about job security. There will also be new infrastructure spending. Much of the expenditure on public works in the 1990s is now considered wasteful, so this time the focus is meant to be on projects that boost productivity, such as an expansion of Tokyo’s Haneda airport. Better crafted stimulus measures which raise long-run growth are also less likely to spook bond markets concerned about the government’s vast debt.

So long as the extra measures are not delayed by an early election (which must be called by September), Japan’s total fiscal stimulus in 2009 could be the largest among the G7 economies. But it would not be enough to prevent a sharp widening of the output gap (the difference between actual GDP and what the economy could produce at full capacity). This had already risen to 4% of GDP in the fourth quarter of 2008, and it is likely to approach 10% by the end of 2009, twice as much as in the 1990s downturn (see bottom chart, above).

This gaping economic hole is again putting downward pressure on prices. By late summer consumer prices could be more than 2% lower than a year before—a faster decline than during Japan’s previous bout of deflation. The risk is that deflation will squeeze profits and hence jobs, thereby further depressing demand and prices. The BOJ cut interest rates to 0.1% in December and it has introduced several measures to keep credit flowing, such as buying commercial paper and corporate bonds, as well as shares held by banks, which boosts their capital ratios. In contrast to the 1990s, bank lending is still growing.

The BOJ has also stepped up its purchases of government bonds, but after its experience in 2001-06, the bank remains sceptical that such “quantitative easing” can lift inflationary expectations and spur demand. One big difference is that the previous episode of quantitative easing coincided with stringent budget-tightening under Junichiro Koizumi, the then prime minister. The budget deficit was reduced from 8% of GDP in 2002 to 1.4% in 2006 (which partly explains why domestic demand was weak). The combination of fiscal expansion and government-bond purchases by the BOJ should work better.

The OECD predicts that public-sector debt will approach 200% of GDP in 2010, so the scope for further fiscal stimulus will be limited. Nor can Japan rely on exports for future growth; to the extent that it had enjoyed an export bubble, foreign demand will not return to its previous level. Japan needs to spur domestic spending.

One possible option, which the government is exploring, is to unlock the vast financial assets of the elderly. Japanese households’ stash of savings is equivalent to more than five times their disposable income, the highest of any G7 economy, and three-fifths of it is held by people over 60 years old. Gifts to children are taxed like ordinary income, but if this tax were reduced, increased transfers could boost consumption and housing investment since the young have a much higher propensity to consume. In theory, this could give a much bigger boost to the economy than any likely fiscal stimulus.

Of course, one reason why the elderly are cautious about running down their assets is concern about the mismanaged pension system and future nursing care. Services for the elderly should be among Japan’s fastest growing industries and create lots of new jobs, but they are held back by regulations which restrict competition and supply. Deregulation of services would not only help to improve the living standards of an ageing population, but by helping to unlock savings might also drag the economy out of deep recession.

Japan’s second lost decade holds worrying lessons for other rich economies. Its large fiscal stimulus succeeded in preventing a depression in the 1990s after its bubble burst—and others are surely correct to follow today. But Japan’s failure to spur a strong domestic recovery a decade later suggests that America and Europe may also have a long, hard journey ahead.

요약: 일본경제가 곤두박질 치고있다. 여타 국가보다 심각하다. 엔화강세와 외국수요하락으로 인한 수출부진이 원인이라는 주장도 있으나 사실은 더욱 복잡하다.
일본은 10년간의 부진을 벗어나기 위해 경기부양책을 시행했다. 이자율을 낮추고 돈을 찍어낸 결과 엔화는 약세로 돌아섰고 2001-2006년 세계경제호황기에 수출로 돈을 벌 수 있었다. 당시 수출업자들은 앞으로도 호황기가 계속 될 것으로 보고 생산시설을 늘렸다. 불황기가 다가오자 재고는 쌓여갔고, GDP는 급격히 떨어지고 있다.
유휴생산시설이 늘어나면서 실업률 또한 늘어나고 있다. 디플레이션으로 실물투자도 부실하다. 투자, 소비가 발생하지 않으니 정부는 경기부양책을 쏟아내고 있다. 1조엔에 달하는 자금은 비정규직지원, 사회안전망확충에 쓰일 것이다. 수출이 안되니 내수를 살리겠다는 생각이다.
경제전문가들은 일본의 경기부양책이 경기하락을 늦출수는 있어도 죽어가는 경제를 살리지는 못할 것이라고 한다. GDP의 2배에 달하는 정부 빛도 미래세대에 부담으로 돌아온다. 이코노미스트지의 기자는 새로운 전략을 내놓았다. 저축을 쥐고 있는 60세 이상 노인들이 돈을 쓰게 만들자는 것이다. 실질적인 정책도 제시한다. 노인들이 손자들에게 선물을 살 때 세금을 없에는 방안이다. 거시적으로는 노인복지시설에 대한 규제를 없에 복지산업을 미래성장동력으로 만들자고 주장한다.

[FT]Japan to launch $99bn fiscal stimulus

2009-04-06T16:02:00.000-07:00

Japan to launch $99bn fiscal stimulus
By Michiyo Nakamoto in Tokyo

Published: April 6 2009 09:00 | Last updated: April 6 2009 19:17

Japan’s prime minister on Monday told his government to prepare a record Y10,000bn ($99bn) fiscal stimulus to lift the world’s second-biggest economy from its deepening gloom.
일본이 10조엔의 경기부양책을 내놨다.

Taro Aso said that the stimulus must focus on healthcare and medical services, subsidies to local governments, a new social safety net for non-regular workers, more use of government financial institutions to ease the credit crunch and solar energy.
지원대상은 의료, 지방정부지원, 비정규직지원, 금융기관 유동성지원, 태양에너지이다.

The government plans to unveil details of the package on Friday, and aims to submit legislation to the Diet before the Golden Week holidays in late April to early May.
정부는 황금연휴기간 이전에 구체적인 내용을 발표할 예정이다.

Japan has already implemented a range of stimulus measures totalling Y12,000bn, or 2 per cent of gross domestic product, as recommended by the International Monetary Fund.
일본은 이전에 IMF의 권고대로 12조엔의 부양책을 내놓았다

However, the Japanese economy has remained under severe stress, with exports plunging over the past few months. GDP fell by 3.3 per cent quarter-on-quarter in the last three months of 2008, and the most recent business sentiment survey by the Bank of Japan, released last week, showed optimism had deteriorated to a record low.
그러나 일본경제는 수출부진으로 어려움을 겪고 있다. GDP는 3.3%감소했고, 부정적인식이 팽배해졌다.

The measures come amid mounting suggestions that Mr Aso may be preparing for a general election.
이번 부양책은 아소가 총선을 대비해야 한다는 제안에 따라 나왔다.

The prime minister must call an election for the powerful lower house of parliament by the end of September, but popular discontent with his ruling Liberal Democratic party has complicated the timing.
총리는 하원을 강력하게 하기 위해 선거를 요청해야 하지만 자민당에 대한 대중의 불신때문에 상황이 복잡하다.

The stimulus package “stops things from getting worse . . . [but] it doesn’t necessarily make things better”, said John Richards, head of research at Royal Bank of Scotland in Tokyo.
경기부양책은 상황이 악화되는 것을 막을 것이나 나아지게 할 수는 없다.

Masaaki Kanno, chief economist at JPMorgan in Tokyo, said: “Japan has been doing the same things since the 1990s.”
일본은 90년대 부터 똑같은 일을 반복하고 있다.

Copyright The Financial Times Limited 2009

2009-03-16T15:38:00.000-07:00

South Korea’s debt
SIR – Your article about “emerging-market contagion” ranked countries according to their vulnerability to the global credit-crunch (Economics focus, February 28th). But you did not reflect the actual situation of the Korean economy. The article portrayed South Korea as the joint third-riskiest among the countries surveyed, citing “large short-term foreign debts and highly leveraged banks”. This is simply not the case.

Let me provide you with accurate figures. South Korea’s short-term external debt is 75% of its foreign-exchange reserves and it continues to decline. The South Korean banks’ average loan-to-deposit ratio stood at 118% as of the end of 2008 and has been on the decrease since last June.

Thus, the overall risk assessment for the Korean economy, as described in your article, relies upon incorrect information and estimates.

Cheol-kyu Park
Spokesperson
Korean Ministry of Strategy and Finance
Seoul

Editor’s note: Our figure for short-term debt as a percentage of foreign-exchange reserves included all debt due within the next 12 months, the definition favoured by the IMF. At the end of December this was 96%. The figure of 75% includes only liabilities with an original maturity of up to one year; it excludes maturing long-term debt. Our loan-to-deposit ratio covered all commercial and specialised banks and excluded certificates of deposits, the same definition used for all the countries we surveyed. The Bank of Korea’s latest figures show this to be 136% at the end of December.

이걸 보고 나라망신이라고 한다. 박철규씨 같은 사람이 재정경제부에 있으니 외국인이 환투기를 하는 거다. 이코노미스트가 예전에 발표한 자료를 보고 당신들이 제신한 수치는 잘 못되었다고 했으나 이코노미스트는 공신력있는 기관인 IMF기준에 따랐으며 일부자료는 한국은행에서 발표한 것을 인용했다고 밝혔다. 또한 이코노미스트가 사용한 기준은 모든 국가에 동일하게 적용했다고 답변했다. 재경부에서 지면에 대놓고 무식함을 드러내기 전에 이코노미스트의 자료를 다시 한번 분석했다면 저런 망신은 당하지 않았을 것이다.

2009-03-16T14:53:00.000-07:00

Hitachi to spin off units amid reshuffle
By Robin Harding in Tokyo

Published: March 16 2009 07:57 | Last updated: March 16 2009 19:13

Hitachi, the Japanese industrial group, on Monday announced a sweeping restructuring of its operations and top-level management changes as it sought to tackle expected losses of Y700bn ($7.1bn) in the year to March.

Two of Hitachi’s largest operating divisions – the consumer business that makes electronic goods such as televisions and its automotive components business – will become independent, but 100 per cent-owned, subsidiaries. The goal is to speed decision-making and contribute to Y500bn in cost cuts during Hitachi’s next financial year.

Hitachi’s chairman and president will both stand down, to be replaced by Takashi Kawamura, who will come out of semi-retirement to take on both top jobs. He is currently chairman of two Hitachi subsidiaries that make batteries and industrial machinery.

The changes reflect concern within Hitachi about the scale of this year’s expected losses – equivalent to almost a third of shareholders’ equity as of March 2008 – but analysts were sceptical that the move would lead to radical change at the sprawling group.

Hitachi is Japan’s largest electrical group, with Y11,227bn in sales last year and 880 consolidated subsidiaries that make everything from nuclear power stations to hard disk drives.

The business was struggling for profitability even before the global downturn and this year will mark the company’s third consecutive net loss.

The group has been hit especially hard by the collapse in car sales and losses at Renesas Technology, its 55 per cent-owned semiconductor business.

After January’s announcement that Hitachi expected a Y700bn net loss in the year to March, Moody’s cut its credit rating by one notch to A2 and placed Hitachi on review for a further downgrade.

In response, Hitachi promised on Monday to cut costs by Y500bn, equivalent to 4.6 per cent of last year’s operating expenses. Of that, Y200bn will be cuts to fixed costs and Y300bn will come from a lower procurement bill, which is falling anyway because of raw material price declines.

Hitachi said much of the Y200bn in fixed-cost cuts would come from the automotive and consumer businesses, and named two Japanese car component plants that will close.

Etsuhiko Shoyama, outgoing chairman and former president, will remain on the board and is likely to wield influence, as will outgoing president Kazuo Furukawa, who will also stay on the board as deputy chairman.
Copyright The Financial Times Limited 2009

3분기 연속적자를 내고 있는 히타치가 사장교체와 사업부문을 분리하겠다고 발표했다. 신용등급이 한단계 떨어진 뒤 내놓은 방안이다. 사장을 교체해도 대표이사는 그대로 남아있다고 한다. 실질적인 의사결정권자는 그대로이다. 의사결정속도를 빠르게 하기위해 사업부문을 자회사형태로 분사 사업부문을 분리한 것도 재무재표를 깔끔하게 하기 위한 조치는 아닌지 의심된다. 한국기업들과 구조가 유사한 일본기업들도 체제를 변화하는데는 너무 느리다.

Short View: Cheaper currency

2009-03-12T16:13:00.000-07:00

Short View: Cheaper currency
By John Authers, Investment Editor

Published: March 12 2009 18:05 | Last updated: March 12 2009 18:05

If the world is really following the script of the 1930s, then we are due for competitive devaluations, as nations attempt to make themselves more competitive at the expense of everyone else.

So the Swiss National Bank’s announcement that it is intervening to push down the Swiss franc sounds alarming. The speed with which the franc responded, dropping 3 per cent against the euro in a matter of minutes, also shows that if a central bank wants its currency to fall, it can deliver.

The problem is that not everyone can devalue at once – someone has to be left with an overvalued currency.

The SNB’s action does not necessarily herald such an outcome. The Swiss franc, like the Japanese yen, has been a “safe haven” currency, and thus had a perverse gain last year.

With inflation virtually zero already, an overvalued franc created a severe risk of outright deflation – something the SNB reasonably wants to avert. As it also cut rates and said it would buy bonds, this move has more to do with attacking deflation than with boosting Swiss trade.

Indeed, a cheaper franc is good news for eastern Europe. Their consumers had indulged in the Swiss franc carry trade, taking out mortgages denominated in Swiss francs. Since last July, the franc gained more than 50 per cent against the Hungarian forint, making those mortgages unbearable.

Thus, if anyone can pull off a deliberate devaluation without sparking ugly consequences elsewhere it may be the Swiss.

But the precedent of a central bank attacking its own currency is disquieting. The falls in industrial production and world trade suggest that everyone on the planet would like a cheaper currency.

This even includes China, which has allowed its currency to gain 26 per cent on a trade-weighted basis over the past four years, and seen its exports suddenly tumble.

john.authers@ft.com

(뉴욕=연합인포맥스) 김홍규특파원 = 금가격은 스위스중앙은행의 외환시장 개입으로 상승했다.

12일 뉴욕상업거래소에서 4월물 금가격은 전날보다 온스당 13.30달러(1.5%) 높아진 924.00달러에 마감됐다.

이날 스위스중앙은행인 스위스내셔널뱅크(SNB)는 스위스프랑화의 추가 평가절상을 막기 위해 스위스프랑을 매도하고 유로화는 매입하는 직접 개입을 시작했다고 밝혔다.

이는 세계 최고의 안전통화인 스위스프랑화의 가치 하락을 부추겼으며 이 같은 움직임은 일본 등 여타 국들에서도 나타날 것이라는 예상에 힘을 실었다.

뉴욕 애널리스트들은 모든 통화가 서로 평가절하되는 현상이 나타난다면 금이 최고의 통화자리를 차지할 가능성이 크다고 말했다.

이들은 SNB가 경기 부양을 위해 자국 통화 평가절상을 제한하는 첫 번째 G10 중앙은행이 됐으며 이는 일본 등 여타국들의 본격적인 외환시장 개입을 부추길 수도 있다고 우려했다.

kisme@yna.co.kr

(끝)

<저작권자(C)연합인포맥스뉴스. 무단 전재-재배포 금지.>

EU growth prospects ‘highly uncertain’

2009-03-09T15:13:00.000-07:00

EU growth prospects ‘highly uncertain’
유럽 성장률 전망-매우 불안정하다.
By Tony Barber in Brussels

Published: March 9 2009 21:58 | Last updated: March 9 2009 21:58

The European Union’s prospects of returning to economic growth next year are “highly uncertain”, according to a policy paper to be approved on Tuesday by EU finance ministers.

EU 재무부 보고서에 의하면 내년 유럽의 성장률은 매우 불안정한 것으로 드러났다.

In a frank assessment of the depth of Europe’s recession, the document obtained by the Financial Times states that unemployment will rise sharply this year and in 2010, and the 16-nation eurozone will have to tackle persistent gaps in business competitiveness among its member states.

FT가 입수한 프랭크보고서에 따르면 유럽의 실업률은 2009년과 2010년에 급격히 늘어날 것으로 전망했다. 또한 유로존의 국가들은 국가별로 산업경쟁력의 차이가 커지는 것을 막아하 한다고 했다.

The policy paper paints a darker picture of the EU’s outlook than forecasts published in January by the European Commission, which spoke of a gradual economic recovery in the course of next year.

이번에 발표한 정책보고서는 내년에는 점차 나아질 것으로 전망했던 지난 1월 보고서보다 유럽의 미래를 암울하게 전망하고 있다.

The Commission said gross domestic product was expected to fall by 1.8 per cent in the 27-nation bloc this year but would expand by 0.5 per cent in 2010.

위원회는 이번년도 성장률이 1.8% 감소할 것이며 내년에는 0.5% 소폭 증가할 것으로 예측했다.

In further evidence that the economic mood has worsened since January, the European Central Bank last week revised downwards its 2010 growth forecast for the eurozone countries from 1 per cent to zero growth.

경제상황이 더욱 악화되고 있다는 증거는 또 있다. 유럽중앙은행은 내년 성장률 전망치를 1%에서 0%로 하향조정했다.

The policy paper, prepared for the EU finance ministers’ meeting, also says ministers agree that the International Monetary Fund “requires a substantial increase in its resources to assist countries particularly affected by the financial crisis”.

정책보고서에서 재무장관은 금융위기에 처한 나라에 상당한 지원을 해줘야 한다는 점에 동의했다.

European governments represented in the G20 group of advanced and emerging economies agreed in Berlin last month to support an increase in the IMF’s resources for crisis management to $500bn.

유럽정부는 G20회의에서 IMF를 통해 500bn$를 지원하는데 앞장섰다.

The document does not contain precise forecasts but says: “The outlook for 2010 is highly uncertain.
보고서는 정확히 경제를 전망하고 있지는 않지만 2010년은 불안하다고 말한다.

“Feedback loops between the real economy and the financial markets are aggravating the situation. Financial markets remain volatile and credit channels are not yet functioning properly. Unemployment rates are expected to rise sharply in most member-states in 2009 and 2010.”
실물경제와 금융시장 간 악순환의 고리가 이어지면서 상황을 악화시키고 있다. 금융시장은 변동이 심하며 신용시장은 제대로 작동하지 않고 있다. 실업률은 전 EU국가에서 2009년과 2010년 사이에 급격히 오를 것이다.

The Commission estimated in January that the EU’s jobless rate would rise to 8.7 per cent of the workforce this year from 7 per cent in 2008 and would climb still further to 9.5 per cent in 2010.
위원회는 1월에 EU실업률이 2008년 7%를 기록했던 것에 비해 2009년에는 8.7%, 2010년에는 9.5%까지 상승할 것으로 예측했다.

EU governments fear that the combination of rising unemployment and Europe’s worst recession since 1945 may spark more social unrest and labour protests of the kind seen in recent weeks in Bulgaria, France, Greece, Ireland, Latvia and Lithuania.
EU정부는 실업률상승과 경기침체의 조합이 노동자계층을 자극하는 것에 두려움을 가지고 있다.

Since the world financial crisis exploded in September, three European governments have fallen – in Belgium, Latvia and Iceland, which is not a EU member but may soon apply to join.
지난 9월 세계금융위기가 발생한 뒤, 세 유럽정부는 EU에 가입하지 못했다.

The EU policy paper says the euro area “has to address persistent divergence in competitiveness and current accounts . . . In particular, responsiveness of wages to prices and productivity development is a critical driver for the competitiveness of an economy”.
정책보고서는 회원국들간 격차가 벌어지고 있다고 주장했다. 특히 물가대비 임금률이나 생산성향상은 경제의 경쟁력에 있어 중요한 지표라고 말했다.

The competitiveness of Mediterranean countries such as Italy has steadily declined in comparison with Germany since the euro’s launch in 1999, prompting Peer Steinbrück, Germany’s finance minister, to warn that some countries could face “serious difficulties”.
이태리 같은 중견국가들은 경쟁력이 떨어지고 있다. 독일은 이같은 상황을 주의해야 한다고 경고했다.

The EU is fighting fires on another front in eastern Europe, where some countries are struggling to contain the damage from falling exchange rates, large current account deficits and over-borrowing in foreign currencies.

유럽연합은 동유럽이 금융위기로 어려움을 격고 있는 것과 싸우고 있다. 동유럽은 환율이 하락하면서 위기를 맞았다. 이는 대규모 재정적자와 무리한 외환차입에 의한 것이다.

The World Bank, the European Bank for Reconstruction and Development and the European Investment Bank put together an aid package last month for EU and non-EU countries in eastern Europe worth almost €25bn ($31.6bn, £22.9bn). But Josef Pröll, Austria’s finance minister, said that this amount might not be enough.

세계은행, 유럽은행은 $31.6bn을 긴급투입했다. 그러나 오스트리아 재무장관은 충분하지 않다고 말했다.

Copyright The Financial Times Limited 2009

2009-03-03T14:12:00.000-08:00

To nationalise or not – that is the question
By Martin Wolf
국유화이거나 아니거나. 저게 궁금하다.
Published: March 3 2009 19:52 | Last updated: March 3 2009 19:52

Lindsey Graham, the Republican senator, Alan Greenspan, the former chairman of the US Federal Reserve, and James Baker, Ronald Reagan’s second Treasury secretary, are in favour. Ben Bernanke, current Fed chairman, and an administration of liberal Democrats are against. What is dividing them? “Nationalisation” is the answer.
앨런그린스펀과 버냉키는 확연히 구분할 수 있다. 무엇을 기준으로? 국유화다.

In 1978, Alfred Kahn, an adviser on inflation to President Jimmy Carter, used the word “depression”. So angry was the president that Mr Kahn started to call it “banana” instead. But the recession Mr Kahn foretold happened all the same. The same may well happen with nationalisation. Indeed, it already has: how else is one to describe the actions of the federal government in relation to Fannie Mae, Freddie Mac, AIG and increasingly Citigroup? Is nationalisation not already the big financial banana?
불황이 국유화와 함께 나타나고 있다. 페니매 프레디맥 에이아이쥐 시티그룹까지 정부가 그렇게 하지 않았나? 국유화는 거대한 금융위기를 보여주는게 아닌가?

Much of the debate is semantic. But underneath it are at least two big issues. Who bears losses? How does one best restructure banks?
누가 손실을 부담할 건가? 구조조정은행은 어떻게 해야 최상의 모습을 갖출건가?

Banks are us. Often the debate is conducted as if they can be punished at no cost to ordinary people. But if they have made losses, someone has to bear them. In effect, the decision has been to make taxpayers bear losses that should fall on creditors. Some argue that shareholders should be rescued, too. But, rightly, this has not happened: share prices have indeed collapsed. That is what shareholders are for.
비용은 국민이 댄다. 주주들이 책임을 져야한다고 하지만 이미 주가가 바닥이기 때문에 그들은 더이상 책임질 게 없다.

Yet the overwhelming bulk of banking assets are financed through borrowing, not equity. Thus the decision to keep creditors whole has huge implications. If we accept Mr Bernanke’s definition of “nationalisation” as a decision to “wipe out private shareholders”, we can call this activity “socialisation”.
반면 엄청난 양의 은행자산이 자본이 아니라 부채로 조달되었다. 따라서 채권자들을 지키는 것은 큰 의미를 갖는다. 만약 버냉키의 말대로 사적인 주주들을 싹쓸이 하는 것을 국유화라고 한다면 이것은 사회주의와 다를바가 없다.

What are its pros and cons?
장점과 단점은 무엇인가?

The biggest cons are two. First, loss-socialisation lowers the funding costs of mega-banks, thereby selectively subsidising their balance sheets. This, in turn, exacerbates the “too big to fail” problem. Second, it leaves shareholders with an option on the upside and, at current market values, next to no risk on the downside. That will motivate “going for broke”. So loss-socialisation increases the need to control management. The four biggest US commercial banks – JPMorgan Chase, Citigroup, Bank of America and Wells Fargo – possess 64 per cent of the assets of US commercial banks (see chart). If creditors of these businesses cannot suffer significant losses, this is not much of a market economy.
단점은 크게 두가지다. 첫째, 손실사회주의는 거대은행들의 자금조달비용을 낮춘다. 따라서 그들은 재무제표를 유리하게 만들 수 있다. 이것은 대마불사라는 문제를 악화시킨다. 둘째, 주주는 주가가 올라가기만을 기대할 것이고 떨어지는 위험은 부담하지 않는다. 파산을 향해 돌진하는 거다. 따라서 손실사회주의를 하려면 잘 관리해야 한다. 4대상업은행들이 미국상업은행의 자산을 64%나 소유하고 있다. 만약 채권자들이 손실에 고통받지 않는다면 이는 더이상 시장경제가 아니다.

The “pro” of partial socialisation is that it eliminates the risk of another panic among creditors or spillovers on to investors in the liabilities of banks, such as insurance and pension funds. Since bank bonds are a quarter of US investment-grade corporate bonds, the risk of panic is real. In the aftermath of the Lehman debacle, the decision appears to be that the only alternative to disorderly bankruptcy is none at all. This is frightening.
장점은 보험이나 연금같은 유사산업의 투자자들이 패닉에 빠지는 것을 막을 수 있다는 점이다. 미국투자등급채권의 25%가 은행채였던 이 후로 패닉은 현실이 되었다. 리만파산 이 후 국유화만이 파산을 막을 수 있다고 믿게되었다. 이는 공포다.

The second big issue is how to restructure banks. One point is clear: once one has decided to rescue creditors, recapitalisation can no longer come from the debt-into-equity swaps normal in bankruptcies.
두번째 이슈는 어떻게 구조조정은행을 만들거냐 이다. 한가지는 확실하다. 신용제공자로서 은행을 살리기로 했다면 더이상 채무를 자본이로 이전하는 방식은 안된다.

This leaves one with government capital or private capital. In practice, both possibilities are at least partially blocked in the US: the former by political anger; the latter by a wide range of uncertainties – over the valuation of bad assets, future treatment of shareholders and the likely path of the economy. This makes the “zombie bank” alternative, condemned by Mr Baker in the FT on March 2, a likely outcome. Alas, such undercapitalised banking zombies also find it hard to recognise losses or expand their lending.
???좀비뱅크를 만들자는 건가? 좀비뱅크가 된다는 건가????

The US Treasury’s response is its “stress-testing” exercise. All 19 banks with assets of more than $100bn are included. They are asked to estimate losses under two scenarios, the worse of which assumes, quite optimistically, that the biggest fall in gross domestic product will be a 4 per cent year-on-year decline in the second and third quarters of 2009 (see chart). Supervisors will decide whether additional capital is needed. Institutions needing more capital will issue a convertible preferred security to the Treasury in a sufficient amount and will have up to six months to raise private capital. If they fail, convertible securities will be turned into equity on an “as-needed basis”.
미국정부는 스트레스테스트를 실시할 거다. 19개 은행이 대상이다. GDP가 -4%일 경우를 가정해서 필요한 자금을 측정한다. 그 양만큼 정부는 전환우선채를 발행한다. 정부는 이를 6개월간 가지고 있는다. 만약 자금을 긴급하게 조달해야 할 경우 전환우선채를 필요한 금리를 받고 주식으로 전환해서 자금을 조달하는 방식이다.
This, then, is loss-socialisation in action – it guarantees a public buffer to protect creditors. This could end up giving the government a controlling shareholding in some institutions: Citigroup, for example. But, say the quibblers, this is not nationalisation.
이는 정부가 주주들을 통제하는 방법이 될거다.

What then are the pros and cons of this approach, compared with taking institutions over outright? Douglas Elliott of the Brookings Institution analyses this question in an intriguing paper. Part of the answer, he suggests, is that it is unclear whether banks are insolvent. If Nouriel Roubini of the Stern School in New York were to be right (as he has been hitherto), they are. If not, then they are not (see chart). Professor Roubini has suggested, for this reason, that it would be best to wait six months by when, in his view, the difficulty of distinguishing between solvent and insolvent institutions will have gone; they will all be seen to be grossly undercapitalised.

In those circumstances, the idea of “nationalisation” should be seen as a synonym for “restructuring”. Few believe banks would be best managed by the government indefinitely (though recent performance gives some pause). The advantage of nationalisation, then, is that it would allow restructuring of assets and liabilities into “good” and “bad” banks. The big disadvantages are inherent in organising the takeover and then the restructuring of such complex institutions.

If it is impossible to impose losses on creditors, the state could well own huge banks for a long time before it is able to return them to the market. The largest bank restructuring undertaken by the US, before last year, was that of Continental Illinois, seized in 1984. It was then the seventh largest bank and yet it took a decade. How long might the restructuring and sale of Citigroup take, with its huge global entanglements? What damage to its franchise and operations might be done in the process?

We are painfully learning that the world’s mega-banks are too complex to manage, too big to fail and too hard to restructure. Nobody would wish to start from here. But, as worries in the stock market show, banks must be fixed, in an orderly and systematic way. The stress tests should be tougher than now planned. Recapitalisation must then occur. Call it a banana if you want. But bank restructuring itself must begin.

martin.wolf@ft.com

2009-03-02T14:23:00.000-08:00

Emerging market finance: a gap to fill
By Alan Beattie in Washington

Published: March 1 2009 19:22 | Last updated: March 1 2009 19:22

Crisis call: a metal worker protests during a recent demonstration in the financial centre of São Paulo against job cuts (사진설명)
상파울루에서 해직당한 철강노동자들이 시위를 하고 있다.

Two years ago, nearly a trillion dollars flowed into emerging markets as investors in rich countries toured the globe in the hunt for yield. Now there is a melancholy long, withdrawing roar as private capital flees to safer havens.
2년전 약 1조달러가 이머징마켓으로 들어왔다. 부자나라의 투자자들이 야생에서 사냥하듯 투자여행을 했다. 지금 그곳에는 취소하라는 외침만 있다. 사모캐피탈들이 안전한 천국으로 도망치고 있기 때문이다.

In the past, when the money stopped flowing in, it precipitated financial meltdowns – across Asia and in Russia in the 1990s and in Latin America a decade earlier. This time, it is increasingly clear, the official institutions set up to cushion the impact are too small for the task.
과거에, 돈이 흘러들지 않을 때는 아시아와 러시아 남미의 금융업이 녹아버렸다. 이번에는 확실히 정부기관들이 파급효과가 심하지 않도록 방어하고 있다.

Net capital flows to emerging markets will drop to just $165bn (£115bn, €130bn) this year, down from $929bn as recently as 2007, according to estimates by the Institute of International Finance, which represents the world’s leading financial companies. Net lending from commercial banks, the IIF says, is likely to go into reverse.
IIF에 따르면 이번 년도에 이머징마켓으로 흘러들어간 자금은 1650억 달러이다. 2007년 9290억이 유입됐던 것에 비해 줄었다. 상업은행들은 순대출금이 마이너스로 돌아섰다.

The reasons for this are not altogether straightforward. Some accuse rich governments, particularly the US, of “crowding out” emerging markets, sucking up all the available capital to finance their stimulus packages. But Brad Setser, a former International Monetary Fund and US Treasury official, notes that as the private sector retrenches, the US current account deficit – and hence its need for outside financing – has actually been declining.
이런 현상이 발생한 이유는 간단하지 않다. 어떤이는 미국이 경기부양하느라 돈을 모두 써버려서 그렇다고 한다. 그러나 브래드셋서는 미국의 재정적자는 줄고 있다고 말한다.

More likely, he says, is that emerging markets are being hit by a general decline in demand for riskier assets, as banks and investors haul money back home to shore up balance sheets and reduce borrowings. Similarly, the global shortage of the trade credit that finances cross-border commerce reflects a general desire of banks to reduce leverage, not the rich countries hogging all the available loans.
그는 남미사람들이 위험자산에서 돈을 빼서 집에 돈을 쌓아 놓기 때문에 돈을 빌리지 않는다고 말한다. 비슷하게 대외무역시 신용보증이 줄어든것은 은행들이 레버리지를 줄여서지 부국들이 대출을 모두 먹어치웠기 때문은 아니다.

Enter, in theory, the official sector. In the same way that the rich world’s governments are proving to be the consumers and lenders of last resort, movements in international private capital flows can be offset by the IMF and its sister, the World Bank – along with smaller cousins including the regional development banks for Asia, Africa and Latin America. “At a time when the other financial institutions in the world are in turmoil, we can lean forward to help,” says Robert Zoellick, World Bank president.

But they cannot lean forward very far without overbalancing. “There was a very large run-up in the private sector’s exposure to the emerging world during the boom years, and no equivalent increase in the official sector’s lending potential,” Mr Setser says. “It is just not big enough to fill the gap.”

For example, Mr Zoellick says the International Bank for Reconstruction and Development, the arm of the World Bank that lends to middle-income countries, can increase its lending to about $35bn a year. That is two or three times its level in recent years, but it is not enough to fill a hole that could total hundreds of billions of dollars. Its limited capital constrains it from going too much further.

Last Friday the World Bank, along with the European Investment Bank and the European Bank for Reconstruction and Development, announced a €24.5bn ($31bn, £21.7bn) plan to shore up banking systems in central and eastern Europe. But markets were unimpressed, judging it too small.

Similarly the World Bank, together with national export credit agencies and other institutions, is trying to put together a package of $25bn to ease trade finance. But as Mr Zoellick admits: “Frankly, given the need out there, I’m not sure it’s going to be enough.” Private sector participants at a World Trade Organisation trade credit conference last year said there was a $25bn shortage that needed to be filled right now.

Even more pressing, given its role as a short-term lender to countries in crisis, is the size of the IMF. The fund in effect cycles money among its member governments like a credit union. The “quotas” that each government contributes determine how many votes it has on the executive board. The IMF currently has $142bn in easily available resources, plus another $50bn or so it can borrow from its richer governments if necessary. On top of that, Japan recently finalised an ad hoc loan of $100bn outside the quota system.

Déjà vu, but with a difference

Often buffeted by financial crises, Brazil is an emerging market now facing a novel set of problems because of the credit crunch, writes Jonathan Wheatley.

Earlier this decade, problems in attracting capital to fund current account and fiscal deficits threatened a classic debt and currency crisis. In 2002 Brazil was forced to take the largest rescue loan in the history of the International Monetary Fund. Now, having run surpluses for years, it has built up some $200bn (£140bn, €158bn) in foreign exchange reserves and is regarded as sufficiently stable to be allowed to borrow via special swap arrangements with the Federal Reserve.

Still, fears of recession have made banks reluctant to lend and, as in 2002, Brazilian companies have been hurt by a sudden shortage of trade finance. With foreign capital in short supply, Brazil has had to fill some of the gap itself. Since September the central bank has made available R$100bn ($42bn, £29bn, €33bn) from reserve requirements – the share of their deposits banks are obliged to park at the central bank – in an attempt to stimulate lending.

Last October it said it would sell up to $50bn in derivatives to help companies caught up in the liquidity shortage. About $16bn has so far been disbursed. Last month it said it would lend up to $36bn from its international reserves to companies with foreign debt falling due by the end of 2009.

Multilateral organisations have again helped out. The World Bank’s International Finance Corporation is providing a $60m credit line to Unibanco, one of Brazil’s biggest banks, to boost trade finance.

But a flurry of lending to small and medium-sized countries in trouble – Iceland, Ukraine, Hungary – has already started to deplete its resources. Crises involving a string of bigger countries such as Turkey – already in talks with the fund – could threaten to exhaust its supply.

Dominique Strauss-Kahn, IMF head, wants to double its lending capacity to $500bn: last month he won European Union leaders’ backing for the boost. But Simon Johnson, a former IMF chief economist, reckons the fund might need $2,000bn to be a serious global player. As in Hungary and Iceland, the IMF can encourage institutions such as the European Commission or individual governments to supplement its rescue programmes with bilateral money.

But private investors are more likely to be reassured by a multilateral lender arriving on the scene with a big war chest than one passing round the hat each time. Other options include borrowing direct from the markets, or issuing special drawing rights – the IMF’s own “currency” – to members, but officials say these are complex and time-consuming. So it is hard to imagine the fundraising that kind of money without tapping countries with huge reserves, such as China, Korea and Saudi Arabia.

But unlike Japan, emerging markets such as China seem reluctant to recycle more of their surpluses to deficit countries through the IMF without a bigger say over how the fund is run. Asked about increasing IMF contributions in a recent interview with the FT, Wen Jiabao, the Chinese premier, said that first “we should increase the voting share, the representation, and the say of developing countries”.

European and some IMF officials say the longer-term question of voting power is separate from the campaign to raise ad hoc contributions. But emerging market governments have been pushing the issue ahead of the Group of 20 summit of industrialised and developing nations in London in April.

After its latest bruising review of quotas, the IMF last year reached a fragile compromise that gave a little more power to those emerging markets, particularly in Asia, currently under-represented relative to their weight in the global economy and trade. But the deal still overweights the smaller European countries.

In the past, voluntary increases in contributions have proved an effective way for countries including Saudi Arabia to lay the groundwork for an increase in official quotas later. But Europeans may have to make prior commitments to a shift in voting power – at the very least accelerating the next discussion of IMF quotas from its planned date of 2013 to 2010 or 2011 – if they want to attract contributions.

Some question the whole obsession with recycling the official reserves of the surplus emerging markets to deficit countries’ governments. Jerome Booth, head of research at Ashmore Investment Management, notes that emerging markets requiring traditional balance of payments support are mainly confined to eastern Europe. Other emerging markets have used inflows to build up their reserves rather than running current account deficits. Some, such as Mexico, have been able to keep borrowing in the capital markets. East Asian governments recently upgraded the so-called Chiang Mai currency swap arrangements to create a common pool of foreign exchange reserves.

“Much of Asia and Latin America haven’t got the same credit crunch and deleveraging issues because they didn’t leverage up in the first place,” Mr Booth says. Fixing trade finance, he adds, should be tackled not by recycling money from government to government but by encouraging private lending, perhaps by relaxing regulatory constraints on banks lending to emerging market governments.

But with eastern Europe in particular being swept by confused alarms of struggle and flight, there seems little doubt that official institutions will have a big part to play in preventing capital market dramas turning into economic crises. And the gradual shrinking of those institutions over the years relative to the global markets is now becoming all too obvious.
Copyright The Financial Times Limited 2009

2009-03-01T14:38:00.000-08:00

Asia trade suffers as Chinese imports fall
중국의 수입이 줄어드르면서 아시아의 무역이 어려워지고 있다.
By Raphael Minder in Hong Kong and Christian Oliver in Seoul

Published: March 1 2009 19:01 | Last updated: March 1 2009 19:05

Asia, whose economic resilience was in part meant to be guaranteed by booming regional trade, is confronting growing signs that such trade remains much more dependent on western demand than previously hoped.
지역무역이 붐을 일으켜 경제가 회복할 것으로 여겨지던 아시아는 무역이 여전히 서구의 수요에 의존하면서 성장징표가 한계에 부딪혔다.

Michael Buchanan, Asia chief economist at Goldman Sachs, says the dramatic fall in Chinese imports from other Asian countries in January shows that Chinese consumers have not replaced their US and European counterparts. Instead, he says a lot of intra-Asian trade still “smells a lot of just supply-chain dynamics” feeding exports to other regions.
중국의 대아시아 수입이 급격하게 줄어드는 것은 중국소비자가 아직 미국과 유럽을 대체하지 못하는 것을 보여준다. 대신 많은 아시아내 무역은 여전히 공급...

In January, exports from Taiwan and South Korea to China fell by 50 per cent and 33 per cent year-on-year respectively. South Korea said on Sunday its overall exports fell less rapidly in February than in January. But it will release only on Monday a breakdown of shipments to China and elsewhere.
1월에, 대만과 한국에서 중국으로의 수출은 각각 50%, 30%씩 감소했다. 일요일 한국은 2월달 수출량이 1월에 비해 덜 급격히 감소했다고 발표했다. 그러나 월요일에 중국과 기타국으로 가는 물류가 줄어들면 드러날 것이다.

More bad news is expected to follow, at least until the second quarter, as most export-focused Asian companies cut jobs and manufacturing capacity because of anaemic western consumer demand. Government stimulus packages, heavily geared towards infrastructure spending, will only gradually help Asia recover, rather than act as an overnight cure.
더욱 안좋은 뉴스가 있다. 적어도 2분기까지는 아시아의 수출기업들이 일자리를 줄이고 생산량을 감소한다는 것이다. 이는 서구소비의 감소때문이다. 정부의 경기부양책은
Asia’s most open economies – Japan, South Korea, Taiwan, Hong Kong and Singapore – are suffering the most. Each of them is set to see their economies contract this year. In Hong Kong and Singapore, the problems are compounded by a furious race to expand a financial sector that is now bleeding jobs and triggering a tumble in high-end property prices.

Among Asian nations, only the Philippines and Indonesia have a lower ratio of exports to gross domestic product now than in 2001. Some economists are warning that other Asian nations should stop counting on intervention from Beijing to lift the region out of its economic quagmire.

“There is a sense in Asia that as long as China continues to grow relatively quickly, then the rest of Asia will benefit . . . China is now the most important market for many Asian export-oriented economies, but it appears to us that China’s economic stimulus plan will support domestic investment, which is not necessarily import-intensive,” says James McCormack, Fitch’s head of Asian sovereign ratings.

Nevertheless, many economists are still expecting a regional rebound in the second half. Some of the optimism stems from a belief that the recent slowdown was in part self-induced.

A year ago, authorities were facing surging oil and food prices, which convinced them to review their traditional bias towards growth and worry more about inflation. But having raised interest rates aggressively, they were confronted with a worldwide credit meltdown, so that “at a time when they should have been infusing liquidity to strengthen financial sector fragility, they actually constrained it,” says Subir Gokarn, Asia chief economist at Standard & Poor’s.

The good news, Mr Gokarn and others note, is that central banks, other than Japan’s, have room to cut rates further and feed into an Asian banking system that still has plenty of liquidity and has not suffered anything like the subprime-induced losses of western banks.

Furthermore, Asia will reap great long-term benefits from additional infrastructure spending, because of years of under-spending and a booming urban population.

Despite some concerns about how efficiently the money will now be spent, “Asia is one of the very few regions of the world where there is a really valid case for expanding infrastructure,” says Glenn Maguire, Asia chief economist at Société Générale.
Copyright The Financial Times Limited 2009

2009-02-25T16:25:00.000-08:00

Downturn drives expat exodus from Shanghai's Little Korea
By Patti Waldmeir in Shanghai and Kathrin Hille in,Beijing

Published: February 25 2009 02:00 | Last updated: February 25 2009 02:00

Until recently, half the 100,000 Koreans who had made Shanghai their home lived clusteredon the outskirts in "Little Korea", a district where the street signs are in Korean and the shops sell LG kimchi, pickled cabbage, and other products catering to their tastes.

But with the economic -crisis hitting the South Korean economy and currency hard, Little Korea is being rapidly vacated.

Korean companies are shipping workers home, cutting off school fees and repatriating wives and children without their menfolk to cut costs.

They are the first large wave of expatriates to have begun leaving China's financial capital as a result of the global economic crisis. But their departure raises the prospect of a broader exodus of foreigners who may take investment, skills and job creation opportunities with them.

The press officer of the South Korean consulate in Shanghai could not answer questions about the exodus of her compatriots - because her post had just been abolished and she was being sent back to Korea.

Kim Hee-won, president of Seoul Plaza, Little Korea's central shopping complex, estimates that 20 per cent of Shanghai's Korean population has returned home - many of them in the past few weeks.

"Almost no one comes in any more," says a clerk in Seoul Plaza's golf boutique. Throughout Ms Kim's 4,000 sq m department store, Korean-speaking staff loiter next to Korean-branded toys, clothing and furniture, with no customers in sight.

Japanese relocation companies, meanwhile, report a marked rise in families returning home to Japan from Shanghai compared with last year. They expect the pace to pick up further during the traditional peak relocation months of March and April.

Each of the Japanese housewives minding toddlers at the vast Mandarin City housing complex, where an estimated 70 per cent of residents are Korean or Japanese, say they know at least one family that has been sent home while the breadwinner remains in China.

The Japanese consulate estimates there were 48,000 nationals in Shanghai 18 months ago, but says it has no figures for the number that might have left since.

The pain has not been limited to Shanghai. A parent with children enrolled in an expensive Beijing international school says most of her daughters' Korean classmates have left the school almost overnight.

A labour activist in the northern province of Shandong, where Korean investment has totalled $23.4bn (€18.4bn, £16.2bn) since 1988 and has accounted for 40 per cent of total foreign inflows, says the owner of a Korean-invested furniture factory left before the Chinese lunar new year in January and it has yet to reopen.

Korean groups invested $99m last year in Chengyang, a district of Qingdao, Shandong's biggest city. While that still made Koreans the largest source of foreign direct investment in the area, their share was down almost 10 percentage points to 29 per cent.

Some Korean factory owners in Qingdao have left without paying workers or suppliers. The entire Korean management of Yantai Shigang Fibre vanished last year, leaving debt and thousands of workers jobless.

"I would guess that even more have been closing since then, given the worsening macroeconomic environment," says Prof Yuan Xiaoli, of Qingdao science and technology university.

Back in Little Korea, Ms Kim says the flow of Koreans is not one way. "Workers are going home, but entrepreneurs are coming here from Korea," she says. "Our Korean people think [that since] China is bigger than Korea, there must be more opportunities here than in Korea. There is no dream in Korea, but our Korean people think there is still a dream in China."

Ms Kim is putting her money where her mouth is. She is planning to open a big golf goods store in Seoul Plaza early next month.

Additional reporting by Yan Jin in Shanghai
Copyright The Financial Times Limited 2009

한국인들이 상하이에서 탈출하고 있다. 중국에 진출한 기업들이 위원화 상승에 대한 압박을 견디지 못하는 듯 하다. 이는 비단 한국만의 문제는 아닐 것이다. 중국의 외국자본이 빠져나가고, 현지법인이 철수하면 중국내수도 줄어들게 분명하다. 중국은 미래의 희망이지만 지금은 중국에 투자해서는 안된다고 했던 그의 말이 맞았다.

2009-02-25T15:38:00.001-08:00

Korea fund encourages banks to lend more
By Christian Oliver in Seoul

Published: February 25 2009 07:34 | Last updated: February 25 2009 17:13

South Korean banks, whose shares have fallen heavily in recent weeks amid worries about souring loan books, have to the end of the week to apply for funds from a Won20,000bn recapitalisation fund, according to the country’s financial regulator.

The fund, which is due to be launched next month, is intended to catalyse lending to cash-starved small and medium-sized businesses, according to the financial services commission.

Some Won12,000bn ($7.9bn, €6.2bn, £5.5bn) from the fund will be available as soon as it begins running.

“We want our banks to take legitimate risk,” said Rhee Chang-yong, vice-chairman of Korea’s main regulator. “We want our banks not to be so risk-averse.”

Asia’s fourth-biggest economy has been felled by a plunge in demand for its exports and is expected to contract 2 per cent or more during 2009.

Korea’s small and medium-sized companies are vulnerable in an economy dominated by mighty conglomerates, but they account for almost 90 per cent of jobs.

Half of the Won20,000bn fund comes from the central bank. The state-run Korea Development Bank will lend Won2,000bn and public financial institutions such as the national pension fund will put in Won8,000bn.

Woori Bank has confirmed that it plans to seek Won2,000bn. The regulator said other major banks were also sympathetic to the idea. Kookmin Bank and Shinhan Bank would be eligible for Won2,000bn, while the smaller Hana Bank would be able to raise Won1,500bn.

The banks would access the fund by selling preferred stock, hybrid bonds and subordinated bonds to it.

Korea has been at pains to insist that its banking system remains robust by international standards.

Use of the fund is voluntary, restricted only by an injunction that the financing should not be used for mergers and acquisitions.

The regulator and central bank have rejected reports that Korean lenders are headed for crisis in March as a result of an inability to service debts. They insist that the banks can meet all obligations even in extreme circumstances thanks to foreign reserves of about $200bn, the world’s sixth largest.

Tackling the Achilles heel of Korea’s economy, the new finance minister, Yoon Jeung-hyun, said the weak Won could help exports.

“If we manage it well, it could help us overcome the troubles,” he said of the battered currency, which plummeted 25 per cent last year and has slumped a further 16 per cent this year.

His predecessor, Kang Man-soo, tried to pursue a weak Won policy but became the focus of severe criticism when the currency crashed. He spent much of his time in office battling to prop up the currency and Seoul burned through its reserves at an alarming rate.
Copyright The Financial Times Limited 2009

정부가 중소기업에 대출을 하기 위해 공적자금을 조성해서 펀드를 만들었다. 정부기관과 은행권들이 모은 자금이 20조에 달한다. 과연 20조가 중소기업에 전부 들어갈 수 있을지 궁금하다.

현재 한국경제는 수출이 급격히 감소하면서 침체에 빠졌다. 경기침체로 자금이 빠져나가면서 환율은 오르고 있다. 윤증현 장관은 원화가 하락하면 수출이 늘어날 거라고 하는데 과연 그런가? 엔화도 다시 하락하는 추세에서 우리 기업이 일본기업에 맞설 수 있을까?

[FT] Japan’s exports down 45%

2009-02-25T14:23:00.001-08:00

Japan’s exports down 45%
By Michiyo Nakamoto in Tokyo

Published: February 25 2009 04:42 | Last updated: February 25 2009 19:20

Japanese exports fell at their fastest rate in more than 40 years last month, as a rapid deterioration in global demand pushed the country’s trade balance to a record deficit.
일본의 수출량이 40년 이래 최저치를 기록했다. 글로벌 경제위기로 제품수요가 급속도로 줄고 있다.

The gloomy economic data on Wednesday fuelled fears that the recession in the world’s second largest economy would be longer and deeper than expected.
우울한 경제전망으로 세계에서 두번째인 일본경제의 침체가 더욱 길어지고 깊어질 것이다.

In the rest of Asia, there was fresh evidence of weakening economic activity. Hong Kong saw a 2.5 per cent year-on-year contraction in its economy for the final quarter of last year. Thailand cut its benchmark interest rate by half a percentage point.
아시아의 여타국가에서도 상황은 마찬가지다. 홍콩은 2.5%감소했고, 태국은 이자율은 0.5% 낮췄다.

Japanese exports fell 45.7 per cent in January, eclipsing a 35 per cent drop in December and big declines last month for Taiwan and South Korea.
일본의 수출량은 1월에 45.7%감소하면서 대만과 한국이 급격하게 줄었던 것과 자국이 12월달에 35%감소했던것을 무색하게 했다.

The slide in exports was the steepest since 1957 and highlighted the severe impact of the global slowdown on demand for Japanese products ranging from cars to heavy machinery and electronics. Exports to the US fell 52.9 per cent and those to China were down 45.1 per cent .
1957년 이래로 가장 급격한 하락이다. 자동차부터 전자제품까지 모든 영역에서 수출이 감소했다. 대미수출량은 52.9%, 대중수출량은 45.1% 감소했다.

Falling demand has forced manufacturers such as Toyota and Sony to cut production and jobs. It has reinforced concerns the economy will suffer another quarter of falling output. Gross domestic product shrank 3.3 per cent in the last three months of 2008, the largest fall in 35 years.
소니나 토요타같은 제조기업들은 수요가 하락하기 때문에 생산량과 일자리를 줄이고 있다. 이때문에 다음 분기에도 경제는 어려울 것이라는 걱정이 있다. 2008년 4/4분기 동안 국내총생산량은 3.3%나 하락하면서 지난 35년동안 가장 크게 하락했다.

“The speed and extent of the decline in exports have increased. Exports are declining across a wider variety of products and a broader range of geographic regions,” said Kyohei Morita, an economist at Barclays Capital in Tokyo.
지역과 제품에 구분없이 수출량은 빠르고 넓게 감소하고 있다.

Japan’s stock market shrugged off the gloomy figures, with the benchmark Nikkei average rising 2.7 per cent to close at 7,461.22.
경제에 대한 우울한 전망으로 니케이지수는 2.7% 하락했다.

The yen touched a three-month low of Y97 against the dollar. Some analysts said the yen was likely to fall further against other currencies as the Japanese downturn accelerated, but added that the decline was unlikely to help exporters in the short term.
경기침체에 대한 우려로 엔화가치가 3개월래 최저치인 97엔을 기록했다. 엔저가 단기간내에 일본의 수출에 도움을 주지는 않을 것이다.

Automotive exports – about 20 per cent of the total – suffered a particularly large decline, falling 66 per cent year on year. The trade deficit widened to a record Y952.6bn.
전체 수출량 중 20%를 차지하는 자동차는 전년대비 66% 감소했다.

A slump in imports underscored the weakness of domestic demand, which has been hit by rising unemployment. Imports fell 31.7 per cent in January, the steepest drop in over 50 years.
실업이 증가하면서 국내수요도 줄어 수입은 31.7% 감소했다.

Pascal Lamy, secretary-general of the World Trade Organisation, called on global leaders to increase their efforts to resuscitate global trade by concluding the Doha round of trade talks.
WTO의장은 세계무역을 증대시키기 위한 노력을 하고 있다고 했다.

“A successful completion of the Doha round based on what is currently on the table [would result in] $150bn in global tax cuts on imports, a global stimulus that could help jump-start our economies,” Mr Lamy said in Tokyo.
관세를 줄여서 세계무역을 촉진하면 국제경기부양을 할 수 있다.

Copyright The Financial Times Limited 2009

우선, 최대 수입국인 미국의 소비가 급속히 감소하는 상황에서 관세를 줄인다고 생산량이 얼마나 늘어나겠는가. 게다가 미국은 원래 관세가 낮은 국가라서 관세효과도 없다. 금융위기를 빨리 털고 과도하게 투자한 부문을 구조조정하는 게 급선무다.

[Economist] Japan's currency Up and away

2009-02-08T08:01:00.000-08:00

Japan's currency
Up and away

Feb 5th 2009 | TOKYO
From The Economist print edition
Suddenly, talk is back of intervention to stem the yen’s rise

SINCE the summer, the yen has shot up against all major currencies. It is now 23.2% higher than last year’s low-point against the dollar, 46.7% higher against the euro, and 65% up against the tumbling pound. Manufacturers are screaming. Japanese exports are down by over a third compared with a year ago, and carmakers and electronics firms are slashing production and jobs. On February 2nd the Keidanren, a big-business club, declared the value of the yen, at under ¥90 to the dollar, to be manufacturers’ most critical problem. They were, it said, “crying out” for the government to weaken the yen, either alone or in league with other countries.

They may cry in vain. In trade-weighted terms the currency is not overvalued by historical standards (see chart). A long undervaluation has merely corrected itself. The exporters driving Japan’s recovery from 2002-07 made two false assumptions as they built new capacity: that American consumers would always buy Asian exports, and that ¥100-120 to the dollar was the sustainable long-term rate. Both were chimeras.

The yen’s undervaluation was what Eisuke Sakakibara, a former vice-minister of finance, calls a “cheap-yen bubble”. Exceptionally low global financial-market volatility in the middle of the decade helped spur the famous yen carry trade. Foreign banks and hedge funds borrowed yen at low interest rates which they then sold, swapping the yen into higher-yielding currencies and profiting from the yield difference. Japanese retail investors followed a similar ploy, buying quantities of foreign-currency bonds for their higher yield. Some of what they bought were structured products sold by banks that protected investors against currency losses.

Since the summer, foreigners have unwound the yen carry trade with a vengeance, driving the yen up. Not only are retail investors (and writers of structured products) sitting on capital losses; overseas yields have also plummeted. Households’ holdings of overseas securities, says Tohru Sasaki of JPMorgan Chase, remain huge—¥13.9 trillion at the end of September, the latest figures available, double the amount of a year earlier. He says that with unemployment set to jump and the economy set to shrink by, say, 5.7% this year, households will bring yen home. Mr Sakakibara predicts that a climb to ¥85 against the dollar will trigger a wave of stop-loss orders, sending the exchange rate quickly to ¥80 or even ¥75. The government would then face huge pressure to intervene for the first time since March 2004.

It will not want to dive in alone. In government a decade ago, Mr Sakakibara moved markets with his utterances. But in 1995-96, he points out, American and Japanese interests were perfectly aligned. This time, the support of Timothy Geithner, America’s new treasury secretary, is not assured. None of the industrial countries is keen to risk a round of competitive devaluations. Japan’s finance ministry may, some believe, have pulled out its swimsuit, but it remains reluctant to take the plunge.

[Economist] India's urban environment

2009-02-05T05:32:00.000-08:00

India's urban environment

Heavy baggage
Jan 29th 2009 | DELHI
From The Economist print edition

India’s capital tries to ban plastic bags and much else besides

A CITY of 16m people, Delhi struggles to provide its residents with adequate water, decent sewers and steady electricity. But in a kind of urban leapfrogging, its failure to provide basic amenities has not discouraged it from pursuing modish causes. In recent months the city has revived its efforts to curb honking, smoking and the pestilence of plastic bags.

January 1st was declared “No honking day” by an NGO backed by the Delhi traffic police, which threatened to fine any driver blowing his horn without good reason. The day passed without any discernible drop in noise. The state government has shown more zeal in enforcing a national ban on smoking in public places. Its “mobile squads” have fined over 4,000 smokers (many of them on buses) since the law came into effect in October. It has also approved a plan to “decentralise enforcement”, by allowing hoteliers, shopkeepers and restaurateurs to impose fines on the city’s behalf.

The ban on plastic bags, introduced in January, is equally ambitious. Bags litter the roadside and decorate the city’s trees with a polythene blossom. Cattle ingest them and drains are clogged with them. J. K. Dadoo, the most senior bureaucrat in Delhi’s environment department, blames them for the 2005 floods that killed hundreds in Mumbai. Thinner bags are a particular menace, because they are of little value to Delhi’s “rag-pickers”, who sift rubbish for anything they can sell or recycle. “By touching the bag and feeling it, the rag-picker knows its value,” says a scientist.

The government has tried to curb plastic bags before. But its regulations were recently found wanting by the Delhi High Court, which then banned bags in markets and shops, as well as hotels, hospitals and malls. It also banned thin bags (less than 0.04 millimetres thick) outright. This should make enforcement easier. Plastics manufacturers complained to Mr Dadoo, who could say his hands were tied by the court.

Recalcitrant baggers could, in principle, face fines of up to 100,000 rupees ($2,000) or up to five years in jail. The penalties have to be stiff, says Mr Dadoo, since “the desire to pay the penalty is sometimes greater than the desire to change your mindset.” But the government plans to act against manufacturers before shopkeepers or their customers. First restrict availability, then the habit may change, they argue.

It may be an uphill struggle. In Delhi, “Civic sense leaves a little to be desired,” says Mr Dadoo. It is sometimes described as “nobody’s city”, inhabited by refugees from India’s 1947 Partition or by job-seeking migrants. One of the department’s campaigns declares, “Delhi is my home. My city. And I am proud of it.” Delhi’s honking, smoking, littering residents perhaps need this gentle reminder.

2009-02-03T05:25:00.001-08:00

IMF almost halves Asia’s growth prospects

By Raphael Minder in Hong Kong

Published: February 3 2009 05:37 | Last updated: February 3 2009 10:12

The International Monetary Fund on Tuesday forecast Asia would grow by just 2.7 per cent this year, a sharp cut from the 4.9 per cent that it had predicted for Asian growth as recently as November.

However, the region will rebound to twice that rate of growth next year if the rest of the world economy also posts a clear improvement, according to the head of the International Monetary Fund.

Among individual Asian countries, the IMF issued its most worrying prognosis for South Korea, predicting that its economy would contract by 4 per cent this year, compared with the 2 per cent growth forecast by the Korean central bank.

Dominique Strauss-Kahn, the IMF’s managing director, also warned that the continent’s economy could slow even further than the latest forecast.

“It’s very uncertain,” he told journalists in Washington on Tuesday morning, Asia time. “A worse outcome can not be ruled out. There’s some upside risk but there’s a lot of downside risk.”

In South Korea, meanwhile, the IMF sees growth rebounding to 4.2 per cent in 2010.

For China, the IMF maintained its forecast for 2009 economic growth of 6.7 per cent. Mr Strauss-Kahn suggested, however, that an additional stimulus package could help Beijing reach its own 8 per cent target.

”In China, we see some scope for even more fiscal stimulus,” he said.

His comments came after Wen Jiabao, the Chinese premier, said in an interview with the FT published on Monday that Beijing was considering further measures, beyond the fiscal stimulus plan of Rmb4,000bn announced in November, which will target funding of infrastructure and other projects.

Mr Wen told the FT that “we may take further new, timely and decisive measures.”

The IMF’s latest Asian forecast comes after several countries recently downgraded sharply their own predictions, notably Japan and Singapore, which said last month that the city-state’s economy could contract by as much as 5 per cent this year.

While calling on Asian governments to take adequate steps to boost their economies and reduce their reliance on exports, Mr Strauss-Kahn acknowledged that Asia would not rebound without a worldwide recovery.

“It’s impossible for Asia to have a recovery while the rest of the world is in bad shape,” he said.

Copyright The Financial Times Limited 2009

Outlook for Japan’s economy worsens

2009-02-01T12:12:00.000-08:00

Outlook for Japan’s economy worsens

By Mure Dickie in Tokyo

Published: January 30 2009 03:13 | Last updated: January 30 2009 19:23

A grim picture of Japan’s deepening recession emerged on Friday when official data showed a record fall in industrial output, a big rise in joblessness and sharply slowing inflation.
일본의 경기침체에 대한 잔인한 그림이 정부가 발표한 산업생산량 하락과 실업율 상승, 물가상승률 하락으로 드러났다.

As some of Japan’s biggest corporate names unveiled heavy losses, Kaoru Yosano, minister for economics and fiscal policy, admitted it was impossible to say when the world’s second-biggest economy would bottom out. Economists warned the country was heading for its worst postwar recession.
일본의 거대 기업들이 잇따라 큰 손실을 입었다고 발표하면서 재정경제상인 카오루 요사노는 세계에서 두번째로 큰 경제가 아직 바닥을 벗어났다고 말할 수는 없다고 확인했다. 경제전문가들은 일본이 전후 최악의 경기침체로 가고 있다고 경고했다.(가고 있다는 데 주목!)

Japan’s benchmark Nikkei 225 share index tumbled 3.1 per cent to 7,994.05, leaving it down 9.8 per cent over January as a whole, its second-worst start to a year on record. The 9.6 per cent month-on-month slide in industrial production in December was Japan’s second record fall in a row. A government survey of manufacturers’ expectations pointed to continued contraction, with a further 9.1 per cent decline forecast for this month.
니케이지수 3.1%하락, 1월동안 9.8%하락. 이는 역대 연초기록 중 2번째로 나쁜기록이다. 산업생산이 전달대비 9.6% 하락한 것도 역대 2번째로 나쁜 기록이다. 정부가 조사한 생산자기대지수는 9.1%하락하면서 경기위축이 지속될 것으로 나타났다.

Neighbouring South Korea, Asia’s fourth-largest economy, matched the Japanese gloom by announcing its own record 9.6 per cent month-on-month decline in industrial output for last month. In Thailand, the central bank reported that manufacturing output had fallen nearly a fifth year-on-year in December.
아시아에서 4번째로 큰 경제규모를 가진 이웃나라 한국은 산업생산량이 9.6% 감소했다고 발표하면서 일본과 우울한 전망을 함께 했다. 태국에서는 중앙은행이 5분의 1정도로 생산량이 줄었다고 발표했다.

Japan’s unemployment rate jumped from 3.9 per cent in November to 4.4 per cent last month. Rising job insecurity is likely to add to downward pressure on spending.
일본의 실업률은 11월달 3.9%였던 것이 지난 달에는 4.4%로 뛰었다. 일자리 불안이 늘어나면서 지출에 대한 압박도 늘어났다.

Core consumer price inflation fell to an annual rate of 0.2 per cent in December, down sharply from November’s 1 per cent.
알짜 소비자 물가 상승율은 11월에 기록했던 1%에서 0.2%로 급격히 하락했다.

Copyright The Financial Times Limited 2009

일본의 하락은 진행중이고, 끝이 보이지 않는다. 물론 한국도 마찬가지다.

세계경제가 모두 불안한 가운데 한국 원은 가치가 떨어지고 있다. 한국경제를 특히 불안하게 생각하는 이들이 많다는 증거다.

New Zealand slashes rates to record low

2009-01-29T05:40:00.000-08:00

New Zealand slashes rates to record low
뉴질랜드가 금리를 최저치로 낮췄다.
By Peter Smith in Sydney

Published: January 29 2009 02:38 | Last updated: January 29 2009 02:38

New Zealand’s central bank cut its official rate by a larger than expected 1.5 percentage points on Thursday when it warned the country was likely to remain in recession for much of 2009.
뉴질랜드가 경기침체때문에 예상치를 훨씬 웃도는 1.5%를 낮췄다.

The aggressive move, which matched a similar sized reduction in December, came less than a day after international organisations warned the world economy in 2009 would suffer its worst performance for more than 60 years.
2009년이 최악일 것이라는 예상 후에 나온 강력한 조치다.

In reducing the official cash rate from 5 to 3.5 per cent, Alan Bollard, Reserve Bank of New Zealand governor, highlighted the “very negative” news that had come recently from the country’s leading trading partners.
5%에서 3.5%로 낮춘 가운데 은행관계자는 매우 부정적인 소식이라고 말했다.

“The global economy is now in recession and the outlook for international growth has been marked down considerably since our December Monetary Policy Statement,” he said, adding there was “huge uncertainty about the timing and strength of a recovery”.
세계경제가 침체상황에 있으며 세계성장율은 하락하고 있다. 언제 얼마나 회복할 수 있을지도 불확실하다.

Mr Bollard also forecast that New Zealand was likely to stay in recession “for the first half of this year”.
이번년도 전반기 동안은 침체기가 지속 될것

New Zealand’s economy began contracting at the beginning of 2008 and many economists expect it to remain depressed in 2009.
경제전문가들도 2009년에 침체가 계속될 것으로 예상했다.

The central bank has embarked on successive rounds of rate cuts since the official cash rate peaked at 8.25 per cent in the middle of last year.
작년 중반기 8.25%금리를 찍은 뒤 중앙은행은 금리를 성공적으로 내렸다.

However, Thursday’s move surprised the market which had forecast a one percentage point reduction.
그러나 목요일의 조치는 1%하락을 예상한 시장을 놀라게 했다.

Mr Bollard suggest that additional cuts were likely.
총재는 추가인하가 있을 것이라고 말했다.

“We would expect any further reductions to be smaller than those seen recently,” he said, adding that future decisions would be based on “emerging developments in the global and domestic economies and the response to policy changes already in place”.
신흥시장과 국내경제 정책에 대한 반응을 보고 추가인하여부를 결정할 것이며 그 수치는 이전보다는 작을 것.

The deterioration in New Zealand’s economy comes only months after John Key was elected as the country’s new prime minister.
존 키가 총리로 선출된지 한달만에 뉴질랜드 경제가 붕괴되었다.

Since the National party’s victory, New Zealand’s economy has continued to shrink. September quarter gross domestic product contracted by 0.4 per cent, the third successive quarterly fall in the country’s GDP.
국민당정권이 들어선 이후 경제는 나락에 떨어졌다. 2008년 3/4분기는 0.4%상승했고, 이 후에는 GDP가 감소했다.

New Zealand has also suffered from rising unemployment and a deterioration in government finances.
또한 뉴질랜드는 실업율상승과 정부재정파탄으로 고생을 겪고 있다.

Copyright The Financial Times Limited 2009

[FT]Global crisis ‘could cost 50m jobs’

2009-01-28T05:23:00.000-08:00

Global crisis ‘could cost 50m jobs’
국제금융위기로 5천만개 일자리를 잃을 수 있다.
By Frances Williams in Geneva

Published: January 28 2009 12:39 | Last updated: January 28 2009 12:39

Global unemployment and poverty are set for a “dramatic increase” in the coming year as the world economic crisis deepens, according to a new report.
새로운 보고서에 따르면 세계경제위기가 심화되어 세계적으로 실업과 빈곤이 이번 년도에 극적으로 상승할 것이라고 한다.

Projections by the International Labour Organization, a UN agency, on global employment trends predict that on a worst-case scenario, recorded unemployment could rise by more than 50m from baseline 2007 levels to 230m or 7.1 per cent of the world’s labour force by the end of 2009.
유엔산하 세계노동기구가 국제취업현황예측을 최악의 상황으로 가정하여 조사한 결과 연말까지 실업은 5천만에서 2억 3천만 사이이거나 7.1퍼센트일 것으로 나타났다.

In the same scenario the number of people in “working poverty”, earning less than $2 a day, could rise to 1.4bn or 45 per cent of all workers, from 1.2bn in 2007.
똑같은 추정에서 하루에 2달러 이하를 버는 노동빈곤층의 수는 14억명 혹은 전체 노동자의 45%일 것이며 2007년에는 12억명이었다.

This would leave as many people below the poverty line as there were in 1997, wiping out all the gains over the past decade and marking “a return to a situation in which more than half of the global labour force would be unemployed or counted as working poor.”
이는 1997년 만큼 많은 사람들이 빈곤수준 이하로 남겨지는 것, 지난 십년간 벌어들인 것을 모두 날려버리는 것이며 전체 노동자 중 절반 이상이 실업자나 빈곤노동자가 되는 상황으로 돌아가는 것이다.

Juan Somavia, ILO director-general, said its message was “realistic, not alarmist”. “We are now facing a global jobs crisis…Progress in poverty reduction is unravelling and middle classes worldwide are weakening. The political and security implications are daunting.”
ILO의 관리자인 후안 소마비아는 이것이 뜻하는 바가 현실이지 경고가 아니라고 말했다. "우리는 지금 세계일자리위기에 처했다. 부의 감소가 진행되고 있으며 중간계층이 세계적으로 약해지고 있다. 정치적 안보적인 분규가 위압적이 되고 있다.

The ILO projections are based on an estimate of 2.2 per cent global economic growth for 2009 issued by the International Monetary Fund in November. The IMF is due to release revised more pessimistic forecasts later on Wednesday but ILO economists said this would not alter their middling to worst-case scenarios for a rise in unemployment of 30m to 50m.
ILO의 연구는 IMF가 지난 11월에 발표한 성장률 예측치인 2.2%에 기반을 두고 가정한 것이다. IMF는 더욱 부정적인 예측을 수요일날 수정해서 내놓았지만 ILO의 경제전문가들은 최악의 상황에 대한 그들의 실업율 예상치를 수정하지 않았다고 말했다.

Published in a week that saw job-loss announcements totalling more than 80,000, the ILO report says the crisis has affected most sectors of the economy and resulted in an unusually sharp increase in layoffs.
일주일 뒤 발간된 자료에서는 일자리 감소가 8만건 이상이었으며 ILO 발간물에서는 위기가 경제 대부분의 영역에 영향을 미치고 있으며 이것이 이례적인 급격한 증가로 드러났다고 말했다.

ILO economists attribute this partly to the depth and scope of the global economic downturn. However, another reason is the much higher proportion of people in temporary and other “non-standard” jobs, who have little or no protection against redundancy, than was the case in previous recessions in industrialised countries.
ILO 경제전문가들은 이것이 부분적으로 국제경제침체의 깊이와 넓이 탓이라고 말했다. 그러나 또다른 이유는 산업화된 나라들의 지난 침체와 같이 임시직의 높은 비율과 상대적으로 보호를 받지 못하는 비정규직때문이다.

Mr Somavia called on the Group of 20 leaders meeting in London at the beginning of April to agree priority measures to promote investment, jobs and improved social protection.
소마비아는 4월초에 런던에서 20명의 리더들과 만나 투자를 촉진하고 일자리를 창출하며 사회적 보호를 늘리기로 합의했다.

He said governments should be putting in place a “basic socio-economic floor” of income support, access to health services and so on that would cushion the impact of the crisis for ordinary workers and their families.
그는 정부가 임금보조나 건강보험 등과 같은 사회경제적인 기초에서 역활을 하여 일반노동자들과 그들의 가족들에게 돌아가는 위기의 충격을 완화해야 한다고 말했다.

Copyright The Financial Times Limited 2009

정부가 노력해야 할 부분이 많다.

2009-01-26T17:31:00.000-08:00

Mapping decline and recovery across sectors
Different sectors enter and emerge from downturns at different times. A look at past recessions suggests how some industries may fare.

JANUARY 2009 • Bin Jiang, Timothy M. Koller, and Zane D. Williams
In This Article

* Exhibit 1: All four of the most recent recessions began with falling sales and EBITA in the consumer-discretionary sector.
* Exhibit 2: The extent of the contraction of EBITA during recessions varies across sectors.
* Exhibit 3: During a recession, the share price performance of different sectors tends to be more similar the than financial performance.

* About the authors
* Letters to the editor

In an ideal world, every company would enter a recession led by a team of grizzled executives who could draw on their experiences of past downturns to guide it through the current one. Many companies don’t, however, and even for those that do, it can be difficult to rise above the crisis to ponder the lessons of history. Yet in a recession, developing accurate strategic plans is usually a high-stakes effort. False assumptions about the pace, scale, and timing of growth may slow progress in good times but could be fatal now.

Executives in an industry that lags behind the economy, for example, may imagine that they can avoid a downturn because at first the industry doesn’t slow down when the economy does. Other executives, failing to realize that their industries tend to revive before the overall economy, may plan too conservatively for the upturn. Decisions about acquisitions, divestitures, and even recruiting or retaining talent often hang in the balance.

To help executives sharpen their perspective, we looked at the financial performance of US companies during the four most recent recessions.1 Then we analyzed sector-level2 total returns to shareholders (TRS), revenue growth, and growth in earnings before interest, taxes, and amortization (EBITA) around the times of these downturns. Although such analyses can’t provide definitive parallels from one recession to the next (for obvious reasons, such as size, geographical reach, or origins), the general trends can prove invaluable in helping executives examine their assumptions about the future performance of an industry. We found that, so far at least, the current recession—despite claims of its being “unprecedented”—seems to be following many of the patterns that previous ones did.

* Similar beginnings. The timing of contractions in sector-level sales and EBITA indicates that the four most recent recessions began with a core underlying shock that then spread through the economy in a fairly predictable way. All four began with falling sales and EBITA in the consumer discretionary sector, and three began with similar declines in the IT sector as well (Exhibit 1). By contrast, in three of the four, the energy sector was among the last to be hit. Some sectors have been fairly resistant to recessions: consumer staples wasn’t affected significantly in the last three, and the last two didn’t significantly affect health care.
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* Variable magnitude. The size of the contraction in EBITA varies across sectors (Exhibit 2). Generally, consumer discretionary, materials, energy, and industrials post the sharpest drops. The information technology sector has been more variable, with large drops during the past two recessions but smaller ones in 1973–75 and 1980–82. The most resilient sectors have been health care and consumer staples, whose revenues and EBITA fell relatively little in the majority of the previous recessions.
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* The speed of decline and recovery. In almost every recession we studied, sectors contracted much more quickly than they recovered.3 Typically, it takes six to eight quarters for a sector’s EBITA to bottom out—fewer in 1973–75 and more in 1980–82. The time needed to get back to peak EBITA levels generally is not only much longer but also highly variable. It took the better part of a decade for many sectors to recover from the recession of the early 1980s. After the recession of 2001, however, it took just over two years for most sectors to recover their peak EBITA levels once they reached bottom. Some industries, such as telecommunications in 2001, never hit their peak levels again.
* Similarities in share price performance. Share prices tend to decline either before or just as a recession starts; rarely does a sector’s TRS begin to decline much later. As a result, the share price performance of different sectors during a recession tends to be more similar than their financial performance (Exhibit 3). Share prices also tend to rise in step near the end of a recession, in marked contrast to revenues and EBITA, which often lag behind significantly.
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Overall, the impact of recessions on share prices has varied. During the 1973–75 downturn (and to a lesser extent, the 2001 one), share prices fell steeply, with many sectors suffering large losses; in 1973–75, for instance, all sectors but materials (which was down by 26 percent) lost more than a third of their value. In the 2001 recession, seven out of ten sectors lost more than 20 percent of their value. Sectors affected by “shocks” can fare even worse: IT and telecommunications each lost more than 75 percent of their value in the recession of 2001.

The 1980–82 and 1990–91 recessions affected valuations less severely. Only one sector lost more than a third of its value in either downturn (energy in 1980–82 and financials in 1990–91), and most sectors suffered losses of 5 to 15 percent.

The current recession seems to be following many patterns we observed in its predecessors. The consumer discretionary sector, which is sensitive to economic decline, has led in all of the past four recessions. It is also leading the current downturn, having posted the sector’s largest post-2001 drop in EBITA—almost 5 percent—during the second quarter of 2007, five months before the recession’s official start.4

In 2008, TRS fell significantly in nearly every sector, with all but consumer staples losing more than 20 percent of their value and seven losing more than a third of it.5 Given the historical patterns (and current headlines), revenues and EBITA can be expected to fall in most other sectors as the recession continues. These similarities give executives some idea of what to expect as they plan their next steps.

History also suggests some possible indicators of the beginning of a recovery. In three of the four most recent recessions, higher consumer discretionary and IT spending led the way. When real EBITA growth resumes in these sectors, it may be a useful indication that the economy is turning around. Also, TRS generally stops declining near the end of a recession, so resumed growth in broad stock market indices might also herald the end of the current one. Q logo
About the Authors

Tim Koller is a partner in McKinsey’s New York office, where Bin Jiang and Zane Williams are consultants.
Notes

1The recessions we studied were those of November 1973–March 1975, January 1980–November 1982, July 1990–March 1991, and March 2001–November 2001. Technically, the 1980–82 downturn was two recessions: January 1980–July 1980 and July 1981–November 1982. For this analysis, we have combined the two.

2We grouped the companies in our sample into ten Global Industry Classification Standards (GICS) sectors.

3Of the 27 instances when we documented a decline in earnings before interest, taxes, and amortization (EBITA) due to a recession, 24 showed a drop in EBITA that was faster than the recovery.

4The National Bureau of Economic Research has dated the start of the current US recession as December 2007.

5The 2008 total returns to shareholders (TRS) measured as of November 30, 2008.

2009-01-26T16:41:00.000-08:00

Nations turn to barter deals to secure food
나라들이 식품안보를 위해 교환무역을 하는 방향으로 바꿨다.

By Javier Blas in London

Published: January 26 2009 23:32 | Last updated: January 26 2009 23:32

Countries struggling to secure credit have resorted to barter and secretive government-to-government deals to buy food, with some contracts worth hundreds of millions of dollars.
여러 나라들이 정부간 거래 및 교역을 하여 식품안보에 대한 믿음을 얻는데 어려움을 겪고 있다. 교역거래 중 어떤 것은 1억달러 정도의 가치가 있다.

In a striking example of how the global financial crisis and high food prices have strained the finances of poor and middle-income nations, countries including Russia, Malaysia, Vietnam and Morocco say they have signed or are discussing inter-government and barter deals to import commodities from rice to vegetable oil.
세계 금융 위기와 식품가격상승이 빈국과 중간정도 국가의 재정을 어떻게 악화시키는지에 대한 예를 보자. 러시아, 말레이시아, 베트남, 모로코는 그들이 쌀부터 식물성 기름을 수입하는 교역계약을 논의하거나 맺었다고 말한다.

The revival of these trade practices, used rarely in the last 20 years and usually by nations subject to international embargoes and the old communist bloc, is a result of the countries’ failure to secure trade financing as bank lending has dried up.
지난 20년간 좀처럼 시행되지 않았지만 무역금지조치와 과거 공산국가지역에 속했던 나라들에 의한 이러한 무역행위의 재현은 해당 국가들의 은행돈줄이 마르면서 자금조달의 실패의 결과이다.(???)

The countries have not disclosed the value of any deals, and some have refused even to confirm their existence. Officials estimated that they ranged from $5m for smaller contracts to more than $500m for the biggest.
위 나라들은 어떤 계약도 공개하지 않고 있다. 일부는 공개가 승인되었음에도 거절되었다. 관계자들은 작은계약의 경우 5백만달러, 큰 계약의 경우에는 5억달러에 이를 것으로 예상한다.

Josette Sheeran, head of the United Nations’ World Food Programme, said senior government officials, including heads of state, had told the WFP they were facing “difficulties” obtaining credit to purchase food. “This could be a big problem,” she told the Financial Times.
유엔 세계식량프로그램의 책임자는 그들이 식량을 구매하는 데 믿음을 갖기 어려운 상황에 직면했다고 말했다. "이것은 큰 문제가 될 수 있어요." 그녀는 FT에 말했다.

Last week, Malaysia’s commodities minister, Datuk Peter Chin Fah Kui, said Kuala Lumpur had already signed a barter deal swapping palm oil for fertilizer and machinery with North Korea, Cuba and Russia. He said Malaysia was talking to Morocco, Jordan, Syria and Iran about other barter deals.
지난 주, 말레이시아의 상품장관인 다툭 피터 친 파 쿠이는 이미 북한, 쿠바, 러시아 등의 국가들과 팜오일을 화학비료, 기계와 교환하기로 했다고 말했다. 그는 말레이시아가 교환무역을 하기 위해 모로코, 요르단, 시리아, 이란과 협상중이라고 전했다.

“[Bartering] could be used for contracts with other countries that do not have the cash,” Mr Chin told the local press. “We can set the conditions for them to supply us with the raw materials that we need.”
"교환무역으로 돈이 없는 나라들과 교역할 수 있습니다." 친은 지방신문과 인터뷰에서 이렇게 말했다. "우리는 우리가 필요한 천연자원을 공급할 수 있도록 조건을 설정할 수 있어요."

Thailand, the world’s largest exporter of rice, is discussing barter deals with Middle Eastern countries, including Iran. The Philippines, the world’s largest importer of rice, has secured rice needs for this year through a diplomatic agreement with Hanoi.
세계에서 가장 많은량의 쌀을 수출하는 태국은 이란을 포함한 중동국가들과 교환무역을 하기 위해 협상하고 있다. 세계최대 쌀 수입국인 필리핀은 베트남과 외교협정을 맺으면서 이번 년도에 필요한 쌀을 공급하는 데 안정을 기할 수 있게 되었다.

The countries’ struggle to obtain credit to import food is boosting the price of domestic crops. Ms Sheeran said that prices of crops in some African countries were rising sharply even as international food commodities prices had fallen from last summer.
식량수입시 신용획득에 어려움을 겪는 국가들은 자국의 식량가격을 끌어올리고 있다. 쉬란은 일부 아프리카국가에서 식량가격은 국제 식량상품가격이 지난 여름부터 떨어지고 있음에도 급격히 올랐다고 말했다.

The move to barter shows the global food crisis that started last year is far from over.
교환무역으로의 이동은 지난해부터 시작된 세계식량위기가 끝나지 않았다는 것을 보여준다.
Copyright The Financial Times Limited 2009

[Reuters] S Korean GDP growth seen slowing to 0.7%

2009-01-21T05:53:00.001-08:00

S Korean GDP growth seen slowing to 0.7%
SEOUL, Jan 21 - South Korea’s economy will grow just 0.7 per cent this year, the slowest since the Asian financial crisis a decade ago, hit by the deepening global downturn, the country’s top government research agency said on Wednesday.

The Korea Development Institute’s (KDI) latest forecast, the lowest among the big government agencies, was a sharp downgrade from its previous projection for 3.3 per cent growth set in November and stood below the central bank’s 2 per cent growth forecast made in December.

Separate data showed exports shrank about 30 per cent in the first 20 days of January, more evidence that the worldwide downturn is battering the country.

The forecast and the export indicator deepened fears Asia’s fourth-largest economy was heading for its first contraction since the 1997/98 Asian financial crisis, analysts said.

”The KDI’s figures seem too optimistic as the economy definitely appeared to contract in the fourth quarter, and given other economic data,” said Park Sang-hyun, chief economist at HI Investment & Securities.

”Stimulus packages at home and abroad may take effect from the second half, but they are expected to be a just short-term pain killer, not a fundamental solution,” he added.

A rising number of private-sector experts expect South Korea’s economy to contract by as much as 3 per cent this year, with ratings agency Standard & Poor’s on Wednesday setting its growth forecast at zero.

The government has introduced fiscal stimulus and tax cuts worth around a combined $100bn, some 15 per cent of the country’s annual gross domestic product. The central bank has also cut the policy interest rate to a record-low 2.5 per cent from 5.25 per cent where it was at the beginning of October.

The Bank of Korea is expected to lower rates further, probably to as low as 1.5 per cent in the first quarter, and it may cut them more in the second half, analysts said.

After the KDI forecasts, the March treasury bond futures rose as much as 30 ticks.

”The economy is seen entering a recession phase on weaker domestic demand and as the impact of a sharp slowdown in the global economy bites into exports,” the KDI said in a statement.

The slowing economy, along with corporate restructuring, is expected to hit the job market hard as the economy needs to grow about 5 per cent to prevent further job loss, economists said.

”The employment environment will get much worse until next year as job markets usually lag the overall economy. We may see a jobs recovery in 2011 at the earliest,” said Oh Suk-tae, an economist at Citigroup.

South Korea’s economy was estimated to grow 3.7 per cent in 2008, the central bank said in December, after expanding an average of 4.4 per cent a year between 1998 and 2007.

The economy has expanded for the past 10 successive years after shrinking a some 7 per cent in 1998 in the aftermath of the Asian financial crisis, which had pushed the country to the brink of economic collapse.

Underscoring the impact of global recession in Asia, Singapore’s government slashed its economic growth forecast for 2009 to as low as minus 5 per cent on Wednesday from the previous projection for as low as minus 2 per cent.

The KDI’s revised forecasts came a day before the Bank of Korea is due to release its first official GDP growth estimate for the fourth quarter of 2008 on Thursday.

Economists polled by Reuters estimated South Korea’s GDP to have contracted a seasonally adjusted 2.7 per cent in the October-December period from the third quarter, which would mark the biggest quarterly loss since early 1998.

[FT]Singapore recession deeper than expected

2009-01-21T05:35:00.000-08:00

Singapore recession deeper than expected

SINGAPORE, Jan 21 - Singapore’s economy shrank more than expected in the fourth quarter, prompting the government to declare the nation was in its worst ever recession and fanning expectations that the central bank will let its currency weaken.
4/4분기동안 싱가폴 경제상황이 예상보다 나빠졌으며, 이에 따라 싱가폴중앙은행은 자국통화의 가치를 더욱 낮출것으로 예상한다.

The Singapore economy shrank in the fourth quarter at a seasonally adjusted, annualised pace of 16.9 per cent, deeper than advance estimates of a 12.5 per cent contraction, detailed government data showed on Wednesday.
경기침체정도는 16.9%로 예상치인 12.5%보다 좋지 않다.

The government said it now expected Singapore’s economy to contract between two and five percent this year, slashing its forecast further from an already downgraded outlook of a range of minus 2 per cent to plus 1 per cent published just three weeks ago.
싱가폴정부는 올해 싱가폴의 성장율이 -2~-5%에 그칠 것으로 발표했다.

”The Singapore economy is going through its sharpest, deepest and most protracted recession,” the Trade Ministry’s second permanent secretary Ravi Menon said at a media briefing.
싱가폴경제는 올해 가장 깊고, 장기간의 침체를 겪을 것이다고 무역장관차관보가 말했다.

Singapore’s central bank said on Wednesday that its monetary policy stance of zero appreciation in the Singapore dollar announced last October was intact and it had no plans to review monetary policy ahead of a scheduled policy meeting in April.
싱가폴달러의 가치를 그대로 유지하겠다고 공언했다.

But analysts said the gloomy economic forecasts and grim fourth quarter data increased the likelihood the central bank will loosen policy and let the Singapore dollar slide.
그러나 경제가 예상보다 나빠지면서 자국통화의 가치를 낮출 가능성이 높아졌다.

”I’m bearish for the Singapore dollar. It’s worse than I expected,” said Irene Cheung, currency strategist at Royal Bank of Scotland in Singapore.
싱가폴 달러는 약세를 보일듯 하다고 통화전략가가 말했다.

”I expect monetary policy to remain accommodative -- they should have recentered the band earlier, but they might still do it -- the sooner the better.”
통화의 상하한선을 일찍 조절할 수록 더욱 좋다.

Singapore manages monetary policy by adjusting the value of its currency relative to those of its main trading partners in an undisclosed band. The Singapore dollar stood at 1.5037 against the U.S. dollar by 0050 GMT, compared with 1.51 before the data.
싱가폴 달러의 가치는 1.51에서 1.5037로 하락했다.

The government expects key non-oil domestic exports will shrink 9-11 per cent this year, while total trade, which includes entreport activities, may plunge 17-19 per cent.
싱가폴정부는 비석유부문 수출량이 9-11퍼센트 하락할 것이며 중계무역을 포함한 전체무역량은 17~19퍼센트 하락할 것이라고 예상했다.

From a year ago, fourth quarter gross domestic product, or the value of all goods and services produced in Singapore, fell 3.7 per cent following a drop of 0.2 per cent in the third quarter.
싱가폴의 4/4분기 국내생산량은 3.7%하락했으며 3분기에는 0.2%하락했었다.

Singapore last reported three straight quarters of economic contraction in 2001 after the dotcom bubble burst in the United States, badly hurting the city-state’s key electronics sector.
2001년 닷컴버블이 무너졌을 때 싱가폴의 전자부문은 상당한 충격을 받은바 있다.

The economy grew 1.2 per cent for all of 2008, slowing sharply from 7.7 per cent expansion in 2007.
2007년 7.7%성장했던 것에 비해 2008년은 1.2% 성장하는데 그쳤다.

The government said manufacturing output in the fourth quarter shrank 10.7 per cent from a year earlier, while services contracted 0.1 per cent.
정부는 4/4분기 제조업 생산량이 10.7%하락했으며 서비스부문은 0.1%떨어졌다고 밝혔다.
© Reuters Limited

[Economist] The great dilution

2009-01-20T05:03:00.000-08:00

Corporate finance
The great dilution

Jan 15th 2009 | NEW YORK
From The Economist print edition
Companies may be forced to follow banks’ lead and tap their shareholders

IN 2008 battered banks scurried to raise fresh capital. As the recession bites, they will have to come back for more. Jostling with them for limited funds will be a fast-growing number of cash-strapped non-financial firms. Pain is spreading fast across the corporate world: analysts estimate that fourth-quarter profits across the S&P 500 fell by 15% year-on-year, the sixth decline in a row—the worst run on record. Days after laying off 13,500 and cutting production, Alcoa, a bellwether for earnings, announced a crushing $1.2 billion loss. Even traditionally defensive industries, such as pharmaceuticals, are suffering: Pfizer plans to lay off up to 8% of its researchers.
경기침체로 경영환경이 나뻐지고 있다. 4분기에는 S&P지수가 15% 떨어질 걸로 예상된다. 알코아는 감원 및 감산을 했고, 화이저 같은 경기방어 업체들도 감원하겠다고 말했다.

With banks loth to lend and credit markets still in turmoil, a tsunami of defaults seems imminent, despite the fact that credit has thawed a little in recent weeks: junk-bond spreads have fallen from their dizzying peak of 22 percentage points over government debt, and firms are paying less to issue commercial paper, widely used to finance working capital. But they will still struggle to roll over much of the $518 billion of corporate bonds and more than $1 trillion in loan facilities that, according to Citigroup, must be refinanced this year—especially given increased competition from sovereign borrowers seeking to plug deficits. Worse, a growing band of investors is using a mix of short-selling and credit-default swaps (CDSs) to bet against firms with heavy refinancing exposures. As their CDS spreads widen, those companies find it ever harder to sell fresh debt.
채권거래시장에서 기업들의 부도위험은 줄어들고 있다. 하지만 여전히 발행시장의 상황은 암울하다. 기업들은 년말까지 5180억 달러를 롤오버해야 한다. CDS의 금리차가 늘어나면서 국부펀드들은 사채에 투자하기를 꺼려하고 있다.

This could leave a lot of companies having to cough up big chunks of principal on top of their regular interest payments when bonds mature, just as revenues plummet. The debt-service coverage ratios (free cashflow divided by repayment obligations) of highly geared firms are falling below the critical level of one at a pace that seems to be unprecedented, says Barrie Wilkinson of Oliver Wyman, a consultancy. Cutting interest rates to the bone does little for firms that suddenly find themselves having to repay principal.

CDS spreads imply that around 10% of American firms will be forced into default. To avoid this, those that have trouble rolling over their debt have two main options. The first is to sell assets and use the proceeds to pay down debt. But losses booked from selling at fire-sale prices could quickly wipe through thin layers of equity. The second route is to raise capital, either through a debt-for-equity swap—as GMAC, a troubled vehicle-finance and mortgage lender, has done—or a discounted offering, such as a rights issue.

Some have already taken this last route to get lenders off their backs. Britain’s Premier Foods, for instance, is planning a rights issue in exchange for banks loosening the terms of its debt covenants. Others are likely to follow. Andrew Smithers of Smithers & Co, a research firm, expects American companies to swing from being net buyers of their own equity (through buybacks) to net sellers. Mr Wilkinson predicts a “great dilution” of existing shareholders in 2009. This could drive another round of selling in stockmarkets, he argues, which have hitherto focused only on falling profits. Fear over the need for further capital-raising contributed to the decline of banks’ shares.

Cash-poor firms would do well to move quickly. Banks that needed equity but dithered last year discovered to their cost that the pool of available capital was not limitless; they had to pay far more for it later, if they could get it at all. And stronger firms are drinking at the pool, too: Scottish & Southern, a British energy group, has just raised £479m ($704m), in part to bolster its ammunition for opportunistic deals.

As the problem grows, governments in America, Britain and Germany are starting to step in. But all this woe has a silver lining—at least for the investment bankers who have already been through it. The wave of corporate capital-raising will bring in underwriting fees that will help offset the slump in mergers and flotations. If they can find willing takers, that is.

2009-01-10T18:14:00.000-08:00

Financial blogger arrested in South Korea
금융에 대해 글을 쓰던 한국의 블로거가 체포되었다.
By Christian Oliver in Seoul

Published: January 8 2009 17:54 | Last updated: January 8 2009 17:54

South Korea said on Thursday it had arrested an elusive blogger accused of undermining the country’s financial markets with his doom-mongering, ending a case that has illustrated government unease with the growing influence of online gossip in the world’s most-wired economy.
자국 경제에 대해 비관적인 게시물을 올리던 블로거가 체포되었다.

The case comes amid government efforts to combat negative comments on South Korea’s ailing economy in the media and from private sector economists. The export-dependent economy has been among the hardest hit in Asia by the global financial crisis.
이번 사건은 정부가 취약한 경제를 비판하는 의견들과 전쟁을 벌이겠다는 의지를 드러낸 것이다.

The arrest and possible imprisonment of a web commentator will raise profound questions about freedom of speech in Korea, where bills that would crack down on civil rights are stirring tensions between lawmakers.
정부가 그를 체포하면서 언론의 자유를 놓고 논쟁이 벌어질 것이다.

“Minerva”, who was arrested on Wednesday, has become a celebrated online guru in South Korea during the crisis. He gained instant kudos for what were seen as uncannily accurate utterances on the fall of Lehman Brothers and the crash of the Korean won, which plunged 26 per cent against the dollar last year.
미네르바는 리만의 추락과 한국 원화의 가치하락을 예측하면서 인터넷 상의 선지자로 떠올랐다.

Although some had speculated he might be a civil servant or even a market insider, authorities said Minerva was an unemployed university graduate without any substantial expertise in economics. Prosecutors declined to disclose his name, saying only that his surname was Park, the Korean equivalent of “Jones”.
그가 시장전문가일 것이다는 예측이 있었으나 조사결과 무직인 것으로 드러났다.

Government officials were incensed by an incorrect article Minerva wrote claiming they had ordered financial institutions to stop buying dollars. Authorities have said they are considering charging him with spreading false information.
정부는 미네르바가 거짓정보를 흘렸다고 보고 체포했다.

The court will decide on Friday what formal charges he could face. If found guilty of contravening Korea’s communications law, which bans the spreading of false information online, he could face seven years in jail.
법원의 판결에 따라 그는 최대 7년을 감옥에서 보내야 할 수도 있다.

The Korean government’s panic over Minerva and other web-based rumour-mongers reflects a greater concern about the political role of the internet in South Korea, the country with the world’s greatest per capita access to cyberspace.
인터넷이 가장 널리 퍼진 한국에서 인터넷상 정치의사표현은 어려워 질 수 있다.

An adviser to President Lee Myung-bak, a conservative former businessman, admitted to the Financial Times last month the government was trying to determine how to counter the influence of internet chat-rooms in Korean society, famed for its fiery temper.
이명박대통령의 측근은 인터넷의 영향력을 제한하기 위해 노력하고 있다고 말했다.

Mr Lee was shaken last year by street protests over imports of US beef. The government had been unprepared for the degree to which passions could be inflamed in chat-rooms and mass demonstrations orchestrated online within hours.
지난 광우병사건으로 위기를 맞았던 이명박정부는 이전까지 인터넷의 파급효과에 충분히 대비하지 못했다.
Additional reporting by Song Jung-a

Copyright The Financial Times Limited 2009

미네르바 열풍은 정부의 실정이 만들어낸 현상이다. 정부를 신뢰하지 못하는 국민들은 인터넷의 영웅에게서 안정을 찾고자 했다. 미네르바의 의견은 정부가 하는 말보다 현실을 정확히 파악했고, 미래를 똑바로 바라보았다. 정부가 좀 더 정직했다면 미네르바 열풍은 있지도 않았을 것이다. 이명박 정부가 계속 실정을 하는 한 또다른 미네르바가 나타날 수 밖에 없다.

베트남에서 경험한 사회주의

2009-01-04T04:31:00.000-08:00

12일 간 베트남여행을 마치고 한국에 도착했습니다. 생애 첫 해외여행임에도 준비라고는 론리플래닛과 배낭만 산것이 전부라 무진장 고생했네요. 몸고생, 돈고생이야 물론이고 마음고생도 좀 했습니다. 사회주의국가에서 사회주의의 적나라한 현장앞에 한 쪽 무릎을 꿇었거든요.

베트남으로 향하는 비행기에서 한국에서 3년간 일하다가 돌아가는 베트남인을 만났습니다. 비행기 안에서 친해지자 평소 궁금했던 질문을 던졌어요. " 호치민, 어떻게 생각해요?" , "...." , "대단한 사람아닌 가요?", 그의 표정이 굳어집니다. " 그가 아니었다면 베트남은 한국처럼 잘 사는 나라가 됐을 거에요." 잠시 머리가 멍해졌습니다. 잔혹한 스탈린도 아니고, 문혁을 일으킨 마오쩌둥도 아니고, 평생을 독신으로 살며 조국독립에 온 몸을 바쳤다는 그를 싫어하는 베트남인을 여행초기에 만난겁니다.

그 후로도 호치민을 싫어하는 사람을 여럿 만났습니다. 대략 50:50 이었어요. 호치민에 대한 호불호는 지역에 따라 다릅니다. 저는 주로 남부지역을 다녔는데 그 곳에서 호치민의 인기는 바닥이었습니다. 특히 호시민시에서는 그를 좋아하는 사람을 만나지 못했습니다. 물론 기껏해야 세네명에게 말을 건게 전부지만요.

달 랏에서 그를 싫어한다는 한 늙은 모토바이크 기사와 깊은 이야기를 나눌 수 있었습니다. 똑같은 질문을 던졌는데 대답은 비행기에서 만났던 베트남인과 비슷합니다. 호치민의 북베트남이 전쟁에서 이겼기 때문에 모두가 못 살게 되었다는 거지요. 반문하고 싶었지만 더 깊이 묻지는 않기로 했습니다. 저는 이야기를 들으러 온거니까요. 대신 지금은 어떠냐고 물었습니다. 아직 베트남은 멀었답니다. "왜요?, 도이모이로 개혁개방을 해서 외국인도 들어오고 인터넷도 사용하잖아요.", "그거 알아? 우린, 새장안에 갖힌 새야.", "정부는 우릴 감시하고 있어. 자유롭지 못해. 자유? 정치적인 자유는 없어. 공산당과 다른 의사를 표명하면 잡혀 간다고." 두번째 충격입니다. 공산주의, 비밀경찰에 대한 이야기는 들었지만 실제 그러한 일이 있다고 하니 약간 충격에 휩싸입니다. 과연 이게 우리가 지향해야할 목표의 실체일까요. 아니면 이들만 기형적인 것일까요.

베트남에서 공산당의 권력을 유지하기 위한 자유는 무한대로 허용되는 것 같습니다. 여자가 몸을 파는 것 마저도 국가는 방조하고 있습니다. 달러를 벌면 정부에게 도움이 되니까요. 정부는 외국자본을 끌어들이고 있으며, 벌어지는 빈부격차를 해결하지 못하고 있습니다. 관료들은 부패했습니다. 제가 미니버스를 타고 부온마톱으로 가는 길에 실제로 버스기사가 공안의 단속에 걸리자 뇌물을 쥐어주는 장면을 목격했습니다. 하지만 베트남인민은 일당독재인 공산당을 비판하지 못합니다. 모든 미디어는 정부의 목소리만 대변하고 있습니다. 국영방송들은 뉴스보다는 드라마, 쇼프로그램을 틀며 인민들을 바보로 만들고 있어요.

제가 베트남에 있던 기간 중에 베트남이 스즈키컵에서 우승했습니다. 베트남 전역이 들썩이고 티비는 온종일 같은 경기를 반복해서 틀어주었죠. 그 때 저는 한적한 항구도시인 뀌뇽에 있었습니다. 평소같으면 7시 이후부터는 거리가 한산한데 그 날은 10시가 넘도록 도로가 오토바이로 가득 찾죠. 그들은 자신의 몸에 국기를 묶고 거리를 질주했습니다. 저와 같은 숙소에 있던 한 외국인은 이를 보고 지금 이곳에는 자유가 넘쳐난다고 했지만 제 생각은 달랐습니다. 앞서 모토바이크기사가 말한 것 처럼 이는 새장속의 자유일 뿐인거지요. 정부는 그들에게 도움이 되는 한도까지만 인민에게 자유를 허용하는 거에요.

사회주의국가들은 민주주의를 택하고 있다고 말하고, 국가이름에도 이를 적시합니다. 하지만 그들의 민주주의가 진정한 민주주의인가요? 젊은이는 정치에 무관심하고, 정부가 가르치는 역사만 배우는 상황에서 베트남의 민주주의는 성장할 수 있을까요? 거리에 널린 낡은 호치민 포스터만큼 베트남의 공산당은 낡았고, 이제 베트남에는 SALE이란 화려한 플랜카드만 날리고 있습니다. 사회주의는 민주주의의 반대가 아니라는 말, 사회주의는 자본주의 대안이라는 말이 왜 이렇게 멀게 느껴지는 걸까요.

[Reuters] S Korea vows cooperation with China, Japan on financial crisis

2008-12-13T11:29:00.000-08:00

S Korea vows cooperation with China, Japan on financial crisis
FUKUOKA, Japan, (Reuters) - South Korea vowed on Saturday to beef up cooperation with Japan and China to tackle the fallout from a global financial crisis battering the economies of the North Asian neighbours.

South Korean President Lee Myung-bak met Japanese Prime Minister Taro Aso and Chinese Premier Wen Jiabao in southern Japan in separate bilateral meetings ahead of a rare trilateral summit between the three countries, which have a long history of animosity towards each other.

”The two leaders agreed to closely cooperate in having follow-up efforts implemented to those made under the (recent) G20 financial summit meeting,” the South Korean presidential office said in a statement after the two-way talks with Japan’s Mr Aso.

Japan’s Mr Aso called for an early resumption of talks on a bilateral free trade agreement with South Korea during the talks, a Japanese official told reporters.

Mr Lee agreed on the need to expand trade between the two countries, but on the trade talks said only that continued working level dialogue would be beneficial.

Mr Wen and Mr Lee would ”closely cooperate in improving the international financial regime” to prevent a repeat of the crisis, Mr Lee’s office said following the meeting with the Chinese premier.

The summit among the leaders of the three North Asian countries, which account for 75 per cent of the region’s economy and two-thirds of its trade, follows the collapse of a bailout for US auto makers that sparked sell-offs in global stock markets and sent the dollar to a 13-year low against the yen.

The White House on Friday was considering emergency aid for the teetering auto firms after Congress failed to approve a $14bn bailout plan.

Japan’s ties with its neighbours have long been plagued by their bitter memories of Tokyo’s past military aggression and two-way feuds still rankle. But the financial crisis means the focus is likely to be on cooperation rather than rivalry.

On Friday, Seoul -- whose economy has been the worst-hit among the three countries -- agreed new currency swap deals with Tokyo and Beijing worth the equivalent of nearly $50bn, the latest effort to stabilise an economy the central bank says is set for its slowest growth in over a decade.

Seoul is keen to boost a regional web of bilateral currency swap deals known as the Chiang Mai Initiative (CMI), and the three leaders are likely to back efforts to speed up those discussions, which experts say have been too slow.

The three leaders will issue a statement on the international financial and economic situation and are likely to commit to stimulating their stumbling economies, but are not likely to unveil new stimulus plans, a Japanese official said earlier.

Japan announced on Friday that it would expand its stimulus plans and bolster a war chest for bank rescues to $131 billion, but kept markets guessing on whether Tokyo would intervene to stop a surging yen from pushing the economy deeper into recession.

China, threatened with a slowdown in its dynamic economy, launched a 4 trillion yuan ($586bn) stimulus plan on Nov. 9 and on Wednesday pledged to boost public spending and cut taxes.

China is targeting growth of about 8 per cent next year but will have to contend with a host of potential challenges from deflation to capital outflows, the country’s banking regulator said on Saturday.

South Korea has this year offered $130bn in measures to shore up its banking system and another $25bn in fiscal spending and tax cut plans to try to prevent a recession in its export-driven economy.

Its central bank has slashed interest rates to a record low, while promising to do more if needed.

Despite the expected show of unity, bilateral feuds can still flare up. As the summit got under way, a small group of Japanese right-wing activists gathered near Fukuoka City Hall to protest the meeting and demand the return of disputed territory.

Japanese media said Mr Aso would protest again to Beijing over an incident in which two Chinese survey ships entered waters near disputed islands in the East China Sea which are thought to lie near potential oil and gas reserves.

South Korea and Japan have a running dispute of their own over another remote crop of islets which lie near fertile fishing grounds and possible maritime deposits of natural gas hydrate that could be worth billions of dollars.
© Reuters Limited

한국, 중국, 일본이 통화스왑을 통해 금융위기에 공동대처하기로 했다는 내용이다. 이미 한국은행에서 발표한 내용이기에 큰 의미가 있지는 않다. 다만 3개국 정상회담을 정기적으로 개최하기로 했다는 점이눈길을 끈다. 과거에 한국과 중국을 침략했던 일본과 피해국들이 협력을 다져나갈 개기이기 때문이다.

문제는 남아있다. 중국과 일본은 동중국해에서 영토분쟁을 하고 있으며, 한국과 일본은 독도를 두고 다투고 있다. 영토분쟁이 이뤄지고 있는 곳들은 모두 천연자원이 매장되있는 돈되는 땅이다. 3개국은 그 동안 이 문제를 해결하지 못했다.

작은 섬문제를 해결하지 못하고 있는 3개국이 금융위기에 함께 맞서기로 한것은 의미가 있다. 하지만 섬하나 때문에 몇십년을 다퉈온 그들이 미래를 향한 협력에 최선을 다할것인지 의문이다.

[Reuters] E-Land plans to raise up to $369 mln in HK IPO

2008-12-01T02:12:00.000-08:00

UPDATE 1-E-Land plans to raise up to $369 mln in HK IPO
Wed Apr 23, 2008 10:34am IST

(Adds details)

By Kennix Chim

HONG KONG, April 23 (Reuters) - Retailer E-Land Fashion China Holdings Ltd, a spin-off from South Korea's E-Land World Ltd, plans to raise as much as $369 million in a Hong Kong initial public offering as the stock market rebounds.

The women's apparel retailer, which kicks off a marketing roadshow on Wednesday, is Hong Kong's second IPO since March and will be closely watched after the poor trading performance of this year's market newcomers. For a related story, click [ID:nHKG285789]

The company is selling 496.3 million shares, or 25 percent of its enlarged share capital at HK$3.80-HK$5.80 each, according to a document obtained by Reuters that details the terms of the deal. Of the shares on offer, 60 percent are new shares and 40 percent are existing shares.

E-land focuses on managing a portfolio of seven women's apparel brands including E-Land, Scofield and Teenie Weenie, which are operated under a licence from its parent. The company plans to increase the number of brands under its portfolio to 10 by the end of 2010.

E-Land has an overallotment option to issue 74.4 million shares, or up to 15 percent of the offering, all of which would be secondary shares, the document said.

The price range represents a price-to-earnings multiple of 15 to 22.8 times UBS's earnings forecast for 2008.

By comparison, high-end luxury apparel retailer Ports Design (0589.HK: Quote, Profile, Research) trades at 26.4 times 2008 forecast earnings. Other peers include Esprit (0330.HK: Quote, Profile, Research) and Giordano (0709.HK: Quote, Profile, Research), which trade at 18 times and 15 times, respectively, 2008 forecast earnings.

E-Land will start its Hong Kong public offering on May 2, with a trading debut scheduled for May 16.

Its IPO comes as Hong Kong's benchmark index .HSI rebounds after losing 18 percent in the first quarter of the year. The index was up nearly 1 percent on Wednesday.

The company has 1,084 outlets in 428 department stores in 125 cities across China. It plans to add 1,200 retail outlets within three years, UBS (UBSN.VX: Quote, Profile, Research), which is one of its sponsors, said in a research report.

The firm outsources nearly all of its manufacturing to independent third parties in China.

UBS estimates the firm could post 452 million yuan ($64.66 million) in net profit in 2008, a 56 percent increase over last year.

Goldman Sachs (GS.N: Quote, Profile, Research), UBS and Citigroup (C.N: Quote, Profile, Research) are sponsoring the deal.

(US$1=HK$7.8=6.99 yuan)

(Reporting by Kennix Chim; Editing by Anne Marie Roantree)

The opposition's opening remarks by Professor Joseph E. Stiglitz

2008-11-25T23:56:00.000-08:00

The current crisis is caused, in part, by inadequate regulation. Unless we have an adequate regulatory system—regulations and a regulatory structure that ensures their implementation—we are bound to have another crisis.
현재 위기는 부분적으로 불충분한 규제에서 비롯되었다. 만약 우리가 적당한 규제시스템-완벽한 규제와 규제구조-을 갖추지 않는다면 우리는 또다른 위기를 맞게 돼있다.

This is not the first such crisis in the financial system that we have had in recent decades. Indeed, around the world, it is more unusual for a country not to have had a financial crisis than to have had one. They have occurred in societies with “good institutions”—like those in Scandinavia—and in societies without such institutions. They have occurred in developed and in developing countries. The only countries to have been spared so far are those with strong regulatory frameworks.
이번 사건은 십여년 사이에 갖추어진 금융시스템상에서 처음 있는 위기가 아니다. 게다가 세계를 둘러보아도 위기를 겪은 나라가 겪지 않은 나라보다 많은 편이다. 스칸디나비아처럼 좋은 기관들이 있는 나라에서도 위기는 발생했다. 강력한 규제정책을 가진 나라만 이번 위기에서 벗어 날 수 있었다.

In each case, the crisis has affected not just the lenders and borrowers, but also innocent bystanders. Workers have been thrown out of jobs as the economy plummets into a downturn, a recession or depression. Governments inevitably intervene, whether there is explicit deposit insurance or not. No democratic government can sit idly by while there is such suffering. There are, to use the economists’ jargon, externalities, and whenever there are externalities, there is a need for government intervention. There is, to some extent, some government insurance. Private insurance companies take actions to prevent the insured against losses occurring—for example, fire insurance companies insist on sprinklers in commercial buildings. The government has a responsibility to protect taxpayers, workers and others in our society and to do what it can to make sure that such crises are less frequent, and when they occur, less severe.

Wall Street has asked for a massive bail-out—some $1.6 trillion so far, but most believe that this is just a down payment. The American taxpayer has bailed out Wall Street repeatedly—the S & L bailout, Mexico, Indonesia, Korea, Thailand, Argentina, Russia, Brazil and now this, the largest ever. One cannot keep asking for bigger hospitals and argue that nothing should be done to prevent hospitalisation in the first place.

Regulations (including those relating to corporate governance, incentive structures, speed limits, lending practices) are necessary to restore confidence. When, a hundred years ago, Upton Sinclair depicted graphically America’s stockyards and there was a revulsion against consuming meat, the industry turned to the government for regulation, to assure consumers that meat was safe for consumption. Regulatory reform would help restore confidence in our financial markets. We have seen how badly the banks have behaved; we have yet to reform the regulatory structure or change the regulators. Why, with the extra cushion of taxpayer money, of the kind proposed in the British bail-out, without such reforms, should we expect them to behave much better in the future than in the past?

Indeed, anyone who has seen America’s political processes at work knows that after Wall Street gets its money, it will begin fighting the regulations. It will say: Government must be careful not to overreact; we have to maintain the financial markets’ creativity. The fact of the matter is that most of that creativity was directed to circumventing regulations and regulatory arbitrage, creative accounting so no one, not even the banks, knew their financial position, and tax arbitrage. Meanwhile, the financial system didn’t create the innovations which would have addressed the real risks people face—for instance, enabling ordinary Americans to stay in their home when interest rates change—and indeed, has resisted many of the innovations which would have increased the efficiency of our economy. In some places, there has been real innovation—the Danish mortgage market (though it’s hardly new) is an excellent example, with low transactions costs and much greater security. But elsewhere in Europe, there has been resistance to adopting this model.

Markets have failed, but so too has our regulatory system. No one would suggest that because our tax system is imperfect, with evasion and avoidance, we should abandon taxation. No one is suggesting that because our markets have failed, and failed miserably, we should abandon a market-based economy. And no one should suggest that because our regulatory system is imperfect, it should be abandoned. As Paul Volcker once put it in the middle of the East Asia crisis, even a leaky umbrella can be helpful in a rainstorm. To be sure, both markets and our regulatory structures need to be improved upon.

Not only new regulations are required, but also new regulatory structures. The Fed and other regulators didn’t do everything they could have done with the regulations at their disposal. This is the not surprising consequence of appointing as regulators people who don’t believe in regulation.

A regulatory structure that worked after the Great Depression, before the invention of derivatives, is not one appropriate for the 21st century. We need to make sure that not just the voice and interest of Wall Street is heard, but so too the rest of the country, and we need to reduce the chance of regulatory capture. There was a party going on, and no one linked with Wall Street wanted to be a party pooper. As the old saw has it, the job of a good regulator is to take away the punch bowl when the party gets too raucous. But the Fed kept refilling the punch bowl, and now, we the taxpayer are asked to pay for the clean-up.

Those entrusted with looking after retirement funds, those who realise what an economic downturn can mean for workers, those without a vested interest in keeping Wall Street’s parties going have to have a large voice in a reformed regulatory system.

A good regulatory system has to take account of the asymmetries of information and other asymmetries between financial markets and government regulators. Those testing whether drugs are safe and effective may not have the creativity of those coming up with new drugs, but their tasks are different. Few would propose abandoning government oversight of drugs, simply because government salaries will be uncompetitive with those for testing the drugs in the private sector.

Part of a new regulatory system must be a financial products safety commission, to make sure that no products bought or sold by commercial banks or pension funds are “unsafe for human consumption”. Ideally, such a commission would try to encourage the kind of innovation that would protect homeowners and make our economy more efficient.

The question, more generally, is not so much too little or too much regulation, but the right regulation and a regulatory system that enforces the regulations we have. The risk we face is not that we will have too much regulation in the aftermath of the crisis but too little. After the crisis is over, the financiers who have done very well by themselves in recent years will use some of that money to distort the political process—campaign contributions have proven in the past to be high return investments.

The system we had didn’t serve the country well. Financial systems are supposed to allocate capital and manage risks. However, risks were not managed, they were created, and capital was massively misallocated. But it did serve those in the financial system well. Many of these would like the old system to continue, with as little modification as possible. To do so would be a mistake.

이코노미스트에 스티글리츠가 올린 글.

[FT]Darling plans tax hit to fund £20bn fiscal stimulus

2008-11-24T10:51:00.000-08:00

Darling plans tax hit to fund £20bn fiscal stimulus
By Jamie Chisholm

Published: November 24 2008 15:37 | Last updated: November 24 2008 18:02

Alistair Darling said Britain faced an unprecedented global crisis as he delivered his pre-Budget report on Monday.

“These are extraordinarily challenging times for the global economy,” the chancellor of the exchequer told the House of Commons.

To jeers from the opposition benches, Mr Darling said the UK economy had entered the downturn in good health. But he accepted that the importance of the financial services sector in the UK meant the economy would be hit hard by the worldwide financial crisis.

Mr Darling downgraded the government’s 2008 forecast for growth to 0.75 per cent, while in 2009 gross domestic product would fall by between 0.75 per cent and 1.25 per cent, he said. Growth in 2010 would be between 1.5 per cent to 2 per cent.

To combat this slowdown, the government would introduce “a substantial fiscal loosening”, totalling £20bn or 1 per cent of GDP, he said.

Borrowing would rise to £78bn this year and then £118bn in 2009-10, and would only fall to the level of net investment by 2015-16. Public sector net debt would surge above the current limit of 40 per cent of national income this year, reaching 57 per cent by 2013-14.

His pre-Budget report was condemned by George Osborne, shadow chancellor, as “a huge unexploded tax bombshell, timed to go off at the time of the next economic recovery”.

The headline proposal was for a reduction in value-added tax from December 1 from 17.5 per cent to 15 per cent until the end of 2009. Mr Darling said the measure was intended “to help everyone and deliver a much need injection into the economy.”

In the short term, there would also be extra spending on infrastructure and social housing, the chancellor said, with £775m being spent this year and next on new homes and renovation projects in social housing.

To help multinational companies, he announced he would exempt foreign dividends from corporation tax. Small businesses would be able to spread over time payment of all their tax bills, including corporation tax, national insurance and VAT.

To help fund the big expansion in spending, Mr Darling said the government would find £5bn in efficiency savings in 2010-11. Public spending would be squeezed after 2011, while the growth rate after inflation would be cut from 1.9 per cent a year to 1.2 per cent a year.

He confirmed that from April 2011 he would introduce a 45 per cent rate of income tax to those earning £150,000 a year, and would cut the value of personal income tax allowance for those with incomes above £100,000.

Addressing homeowners in difficulty in the wake of the credit squeeze, Mr Darling said lenders had agreed to wait for three months before initiating repossession proceedings.

The chancellor was also at pains to give a green tinge to his statement. A raft of energy efficiency measures included providing £100m for home insulation.

He increased petrol duty to help offset the effect of the VAT cut on fuel consumption. Mr Darling said the government would also force energy companies to cut prices if their charges to consumers did not reflect the fall in wholesale prices.

The chancellor said he wanted the UK to be well-positioned to benefit from the return to growth of the world economy. He insisted, however, that the global financial crisis had originated in the US, and this had exacerbated an economic slowdown that was already under way.

영국정부는 부가가치세는 줄이는 대신 소득세율을 높히고, 과세구간도 낮추기로 했다. 경기부양을 위해 부채비율을 늘려 공공주택개선작업을 시행할 것이다. 중소기업들에게는 법인세도 면제해 주기로 했다. 과연 과거와 달라진 고든브라운이 세계 경기회복기에 영국을 떠오르는 해로 만들 것인가?

[FT]The government takes a huge gamble on investor confidence

2008-11-24T10:19:00.000-08:00

The government takes a huge gamble on investor confidence
By Martin Wolf

Published: November 24 2008 17:47 | Last updated: November 24 2008 17:47

Stuff happens. Stuff has certainly happened to both the UK economy and the government’s fiscal position. What Alistair Darling delivered on Monday was a crisis budget. He scrapped the hallowed rules of his predecessor and boss, Gordon Brown. Profligacy has replaced prudence as the chancellor’s watchword.
어리석은 일이다. 영국경제와 정부의 재정정책에서 정말 대책없는 일이 일어났다. 알리스테어 달링이 월요일 발표한 내용은 충격적인 예산안이다. 그는 전임자이자 현재 그의 상사인 고든 브라운의 좋은 규칙들을 폐기해 버렸다. 장관의 말때문에 낭비가 성실의 자리를 차지하게 되었다.

The government is taking a huge gamble on its ability to sustain the confidence of investors in the UK. I believe it is right to do so. But nobody knows. The risk that these monstrous fiscal deficits – with public sector net borrowing of 8 per cent in 2008-09, forecast to fall to 2.9 per cent in 2013-14 – will trigger a sterling crisis and a massive sell-off of UK government debt is not a small one. The decision to raise the top rate of tax to 45 per cent, after more than two decades, however popular with the backbenches, is symbolic. If 45 per cent today, why not 50 or 60 per cent tomorrow? Expectations are no longer firmly anchored.
정부는 영국의 투자자들의 확신을 유지할 수 있는가에 대한 거대한 도박을 시작했다. 나는 그렇게 하는게 맞다고 믿는다. 그러나 아무도 모른다. 영국화폐의 위험과 영국국채 매도사태가 발생할 끔찍한 재정적자-공공부문의 순부채는 2008-9년 사이 8%였다. 2013-14년에는 2.9%로 떨어질 것이다.-의 위험은 작지 않다. 20년 뒤 까지 최고세율을 45%로 높이겠다는 정부의 결정은 초선의원들의 환영에도 불구하고 상징적이다. 만약 오늘날 45%를 허용한다면 50%,60%까지 오르지 말란 법은 없지 않나? 예상은 더이상 고정되어 있지 않는다.

What is certain is that this statement failed to admit either that the crisis has domestic roots or how far the past policies of this government explain the enormity of the current fiscal position: the UK did not have to have a huge housing boom financed, in large part, by the wholesale financial markets; and the UK did not have to go into the downturn with sizeable fiscal deficits.

Also serious, I believe, is the failure to admit that a fundamental structural change must now be under way – from soaring household borrowing, a booming housing market, a bloated financial sector and rapidly growing public spending, towards higher savings and current account surpluses. The economy has to become far better balanced in the years ahead. The UK has enjoyed the fat years. Now come the lean ones. It is unclear from the chancellor’s speech that the government recognises the scale of the structural challenge.

It is evident that its forecasts are not worth the paper they are written on. Nobody’s now are. The Treasury forecasts recovery from the third quarter of next year, as lower commodity prices, lower interest rates and the fiscal boost start to work. The economy is expected to contract at between -¾ per cent and -1¼ next year and then to grow at 1½ -2 per cent in 2010.

If so, this would be a mild recession. Anything is possible. But I do not believe it, given the scale of the shocks. The frightening possibility is that the chancellor is still understating the fiscal deficits ahead. Net borrowing for 2009-10 is already supposed to be 5.5 percentage points higher than was forecast in the Budget. It could well end up higher still.

[WSJ]Memories of the Depression Still Sear

2008-11-19T04:51:00.000-08:00

Memories of the Depression Still Sear
As hard times return, witnesses to the 1930s recall lessons they learned

When the Great Depression hit, people came to the front porch of William Hague's home near Pittsburgh pleading for food. One well-dressed young woman asked Mr. Hague's mother if she would hire her for $2 a week. Why would she work for so little? his mother asked. "We have nothing to eat at home," she replied.

Dorothy Womble and William Hague survived the Great Depression. They share their stories of living during that time as children. (Nov. 14)
Mr. Hague, 89, was just 10 years old during the Crash of 1929. His father was a prosperous small-town lawyer and the family led a relatively privileged life during the Depression years. Yet even as Mr. Hague found success as an editor and author he says he remained careful about food and money. He monitors the news intently, on the lookout for signs of "trouble." Now that trouble has come, he says he wonders if younger generations have the mettle to survive tough times.
"We had unlimited prosperity for more than 60 years," says Mr. Hague, who lives in an independent senior residence on Manhattan's East Side. "I don't know if people are ready for hard times."
There are 11.5 million Americans who are 80 and older, according to the U.S. Census Bureau. The period from the Crash of 1929 to the start of World War II shaped their lives, affected how they raised their children, and influences their reactions to today's economic turmoil.
The memories aren't all negative. For many, President Franklin D. Roosevelt "was like a god," recalls Mr. Hague, and there was hopefulness amid the desperation. "People had confidence in the American way -- which I am not sure they have now."
Ethan Hill for The Wall Street Journal
James Dickinson
James Dickinson, 87, is Mr. Hague's friend and neighbor at the James Lenox House. Mr. Dickinson once worked on Wall Street, and for him the recent stream of economic calamities has been like watching a "horror movie," he says. "The horror is the people being pushed into unemployment," he says. "Bank managers, mutual-fund managers, hedge-fund operators, technical support people -- the horror is there are no jobs for these people."
Mr. Dickinson also grew up near Pittsburgh, but in an impoverished household where his widowed mother had to scrape by with help from relief. As a boy, he would accompany his mother as she stood on lines to get government food relief. The supplies were barely enough to live on: powdered milk, dried fruits, margarine, raisins, he recalls. Often, he found himself with men who had lost jobs in the steel mills and were devastated at being dependent on handouts.
Mr. Dickinson went on to work in Wall Street brokerage houses, he says, and retired as a manager of human resources. He says during the last five years, he annoyed his friends with repeated warnings that a day of reckoning was coming.
'This recession is like a picnic compared to what we had back then," says Dorothy Womble.
Mrs. Womble, 89, lives at a residence for low-income seniors and the disabled in New York's Harlem neighborhood. She grew up in a small house on a dirt road in Winston-Salem, N.C. People around her were so poor, she says, "They couldn't even get money to get seeds" to plant vegetables.
She can still picture the strangers who wandered through with nothing but a bundle on their backs. Her family also struggled, though her dad was able to hold onto his job on the railroads. Even so, says Mrs. Womble, no matter how little people had, they shared it with one another -- and that is one of her defining memories of the period, as much as the dire poverty. Her mother, for instance, used to share precious supplies of flour.
When FDR was elected in 1932, there was a "big jubilee" in the neighborhood, Mrs. Womble says. "It wasn't a big celebration like it was on 42nd Street" in New York this year, she says. But when people heard Roosevelt became president, "everybody came out and they were laughing and clapping their hands."
Ethan Hill for The Wall Street Journal
Gloria O'Loughlin
Her neighbor at Logan Gardens, Gloria O'Loughlin, 88, was a girl in Harlem during the Great Depression but has the same memory of people giving each other what they could. "If you were sick, they helped you. If you were hungry, they'd feed you. That was the Harlem I knew," she says.
Ms. O'Loughlin, one of the first women to drive a yellow cab in New York City, was born in Harlem and says she plans to die there. The Depression hit the neighborhood hard. While unemployment in the U.S. was about 25%, it was closer to 50% in Harlem. All over the streets, she saw men selling apples for five cents each.
At home, there was barely enough to eat. Her mother baked "Johnny Cakes," a kind of pancake made with flour and yeast and served with butter. It was a way to fill an empty stomach and stave off hunger. "You got used to eating what you got," Ms. O'Loughlin says starkly.
To survive, her family received a form of welfare that entailed standing on lines for supplies. Simply being on the line was embarrassing, and she and her sister used to argue about whose turn it was to go.
Marion Leonard, 99, was shielded from the worst of the Great Depression. Still, in 1931, she took a sailing trip around Puget Sound on a yacht belonging to her husband's uncle. From the boat, she could see hordes of unemployed men standing at the dock staring and staring at her. Ms. Leonard recalls she ran and hid in a stateroom out of embarrassment. She also witnessed great poverty as she drove across the country with her new husband in a $100 Ford.
Ms. Leonard still recalls how kind people were as she and her husband drove from town to town -- people were anxious to rent rooms for a couple of dollars, both because they needed the money and because they wanted to help. The experiences helped compel her to devote her life to social change and environmental activism.
Now, living in Vermont, she thinks only someone in Roosevelt's mold can rescue America from its slump. "I keep thinking, why doesn't someone do what Roosevelt did -- shut down and start from scratch and give everyone jobs," she says. "He put a lot of people -- young people, older people -- immediately in jobs. There were artists painting murals inside post offices and young kids out in the woods clearing away the brush."
Farmer Richard G. Hendrickson, 96, has been predicting another Great Depression for years, even decades. He warned family members and friends that America's profligate ways would bring back the hard times he had experienced in the 1930s when he watched his father almost lose the family farm.
He repeated the dire prediction so frequently, says his wife, Lillian, 90, his own children thought he was "getting old."
Mr. Hendrickson lives today on a farm in Bridgehampton, N.Y., a short walk from the one his family nearly lost. He can easily conjure up the day seven decades ago his dad faced financial ruin because of debt he had incurred on the farm. Three men in fancy "business suits and vests" descended on his family's property: The president of the local bank, the president of the lumber company, and the head of the feed company.
With his father in the room, the men sat silently in the living room for what "seemed like an eternity," Mr. Hendrickson says. Though shy, he decided to make a bold personal appeal. "If it makes any difference, I like outside work," he remembers saying. "And I think if we are given some more time, I believe we can keep our head above water and make the farm pay." He then stood up and walked out.
His father later got a loan from a bank in Springfield, Mass., he remembers, and the farm stayed with the family.
Bridgehampton, Mr. Hendrickson says, was a farming community so breadlines weren't an issue. Even so, there were signs of widespread misery. At one point, he recalls, the government set up a Civilian Conservation Corps encampment about a mile and a half from the farm. Men of varying ages lived in communal housing and were given jobs as part of Roosevelt's efforts to get the country working again. The men, who typically wore overalls, were a moving sight, and stood out in the small farming community.
Ethan Hill for The Wall Street Journal
Dorothy Womble
One Sunday, he and his first wife picked up one of the CCC workers and drove him to church. He told them he had come all the way from Michigan.
Long after the Depression, Mr. Hendrickson worked as if he were about to lose the farm. For years, he worked seven days a week, his only son, Richard H. Hendrickson, 68, says. The elder Mr. Hendrickson worked day, evening and night.
Mrs. Womble's son, Larry Womble, believes that his mom's Depression-era experiences, as well as those of his grandparents, deeply influenced the way he was brought up. Being frugal was a cardinal value, as was avoiding excess. But so was sharing with those who had even less.
"As a little boy I used to hear them in the room talking about how they were able to survive the Depression," says Mr. Womble, a Democratic state representative in Winston-Salem. "We shared whatever we had. When people didn't have rent money, we took up donations and helped them pay the rent, when someone died without a burial, we took up a collection."
His grandparents and mom would often cite a favorite proverb: "They used to say, 'Even in good times, a squirrel will hide his nuts because wintertime is coming.' "
Write to Lucette Lagnado at lucette.lagnado@wsj.com

[FT]Land leased to secure crops for South Korea

2008-11-18T17:33:00.000-08:00

Land leased to secure crops for South Korea
한국의 식량안보를 위해 땅을 빌리다.
By Javier Blas in London
Published: November 18 2008 18:45 Last updated: November 18 2008 18:45

Daewoo Logistics of South Korea has secured farmland in Madagascar to grow food crops for Seoul, in a deal that diplomats and consultants said was the largest of its kind.
대우로지스틱스는 한국에 조달할 식량재배를 위해 마다가스카르의 농지를 확보했다. 컨설턴트와 외교관에 따르면 이번 계약은 농지임대건중 가장 규모가 크다.

The company said it had leased 1.3m hectares of farmland – about half the size of Belgium – from Madagascar’s government for 99 years. It plans to ship the maize and palm oil harvests back to South Korea. Terms of the deal were not disclosed.
회사는 130만핵타르규모의 농지-벨기에영토의 절반에 이른다-를 마다가스카르 정부로부터 99년동안 빌린다고 밝혔다. 옥수수와 야자기름을 한국으로 운송하는 계획이다. 계약조건은 공개하지 않았다.

The pursuit of foreign farm investments is a clear sign of how countries are seeking food security following this year’s crisis – which saw record prices for commodities such as wheat and rice and food riots in countries from Egypt to Haiti.
외국 농장투자건은 많은 나라들이 이번 년도에 발생한 식량위기를 보며 식량안보를 걱정하고 있다는 것을 보여준다. 식량위기로 밀이나 쌀같은 식량상품가격이 폭등하여 이집트, 아이티에서는 폭동이 일어나기도 했다.

Prices for agricultural commodities have tumbled by about half from such levels but countries remain concerned about long-term supplies.
농작물상품가격은 절반이하로 떨어졌지만 여러 나라들은 여전히 장기적인 공급에대해 걱정하고 있다.

The United Nations’ Food and Agriculture Organisation warned this year that the race by some countries to secure farmland overseas risked creating a “neo-colonial” system. Those fears could be increased by the fact that Daewoo’s farm in Madagascar represents about half the African country’s arable land, according to estimates by the US government.
유엔 식품농업 사무국은 이번 년도에 일부 국가에서 농장을 사들이면서 신제국주의가 발생할 수 있다고 경고하기도 했다. 미국정부에 따르면 대우의 마다가스카르농장 매수로 아프리카 나라에 소재한 경지들 중 절반에 대해 이러한 걱정이 늘어다고 있다 .

Shin Dong-hyun, a senior manager at Daewoo Logistics in Seoul, said the company would develop the arable land for farming over the next 15 years, using labour from South Africa, and intended to replace about half South Korea’s maize imports.
대우 로지스틱스의 관리자인 신동현씨는 남아프리카 노동력을 활용하여 향후 15년 동안 경지를 개발할 것이고, 이는 한국의 옥수수수입량 중 절반을 대체할 것이라고 말했다.

South Korea, a heavily populated but resource-poor nation, is the fourth-largest importer of maize and among the 10 largest buyers of soyabeans.
한국은 인구는 많으나 자원이 부족한 국가이다. 전세계 옥수수 수입국가 중 4위를 차지하며 10대 콩수입국가이기도 하다.

Carl Atkins, of consultants Bidwells Agribusiness, said Daewoo Logistics’ investment in Madagascar was the largest it had seen. “The project does not surprise me, as countries are looking to improve food security, but its size – it does surprise me.”
비드웰 아그리비지니스의 컨설턴트인 칼 아트킨스는 대우로지스틱스의 투자가 역대 최대건이라고 했다. "이번 계약은 그리 놀라운 것이 아니다. 여러 국가들이 식량안보에 노력하고 있기 때문이다. 하지만 계약규모는 놀라울 정도로 크다."

Concepción Calpe, a senior economist at the FAO in Rome, said the investment came after this year’s food crisis. “Countries are looking to buy or lease farmland to improve their food security,” she said.
FAO의 선임연구원인 콘텝시온 칼페는 이번 투자는 올 해 식량위기때문에 체결된 것이라고 말했다. "여러 나라들은 자신들의 식량안보를 위해 경지를 임대하거나 사려고 하고 있다."고 그녀는 말했다.

Al-Qudra Holding, an investment company based in Abu Dhabi, said in August it planned to buy 400,000 hectares of arable land in countries in Africa and Asia by the end of the first quarter of 2009.
아부다비에 위치한 투자회사인 알쿠드라 홀딩은 8월에 아프리카와 아시아에 위치한 400,000헥타르의 경지를 2009년 1분기까지 사들이겠다고 발표했다.

Meles Zenawi, prime minister of Ethiopia, said this year its government was “very eager” to provide hundreds of thousands of hectares of agricultural land to Middle Eastern countries for investment.
이디오피아의 수상인 멜레스 즈나위는 이디오피아 정부의 수십만헥타르에 달하는 경작지가 중동국가들 투자에 "매우 목말라 있다"고 말했다.
Copyright The Financial Times Limited 2008

[FT]Interest rate cut may further weaken won

2008-11-10T02:39:00.000-08:00

Interest rate cut may further weaken won
금리인하가 원화약세로 이어질 것이다.

By Andrew Wood in Hong Kong
Published: November 6 2008 18:16 Last updated: November 6 2008 18:16

The South Korean won fell 4.9 per cent in value to Won1,330.70 to the dollar in Seoul on Thursday as foreign investors worried that the export-led economy would suffer badly during a global slowdown and sought the safety of dollars.
원화는 수출부진과 달러부족에 대한 우려로 가치가 떨어졌다.

Since the start of the year the won has depreciated by 30 per cent, making it Asia’s worst performing major currency.
원화는 연초대비 30%나 떨어졌다. 아시아 주요국 통화 중 하락세가 가장 크다.

The Bank of Korea meets on Friday and is widely expected to cut interest rates to help promote economic growth, which may weaken the won further.
한국은행은 경기부양을 위해 이자를 내렸지만 이로인해 원화의 가치는 더욱 떨어질 것이다.

The Korean currency has been exceptionally volatile in recent weeks. On October 28 it fell to Won1,467 to the dollar for the first time since early 1998. Two days later it jumped 14.2 per cent in value on news of a $30bn currency swap deal between the Bank of Korea and the US Federal Reserve. The government has intervened aggressively to support the won, draining $27.4bn, or 11 per cent, of the country’s foreign exchange reserves last month.
최근 원화는 변동이 심했다. 10월 28일에는 1998년 이후 처음으로 1,467원까지 떨어졌다. 이틀 후에는 정부가 달러스왑계약을 발표하자 14.2%나 올랐다. 정부는 274억달러를 시장에 풀어서 원화의 하락을 막았다.

Lee Myung-bak, the president, came to power this year saying he would promote business and help the economy. But the former Hyundai executive has struggled to maintain confidence in the country’s ability to withstand a worldwide recession and deliver on his promise of 7 per cent annual growth.
이명박대통령은 경제와 기업을 살리겠다는 공약으로 당선되었다. 그러나 세계경기침체로 7%성장을 이루겠다는 그의 공약은 점점 지키기 힘들어지고 있다.

Last month the government announced a $130bn package to help banks, which needed to roll over short-term, foreign-denominated debt, and a plan to spend Won5,000bn to support construction and housing.
지난 달 정부는 은행이 단기외채를 상환할 수 있도록 1300억달러를 지원하겠다고 했다. 또한 건설사에 5조원을 사용하겠다고 했다.

“Given that [savings] rates are lower than inflation, you are actually losing money on deposits in the bank,” said Hank Morris, director of corporate financial advisory services at the consultants IRC in Seoul. “The smart money people, whether they are Korean or foreigners, are converting their won and sending it overseas.
금리를 물가상승률보다 낫게 책정한다면 외국인이든 한국인이든 똑똑한 사람은 돈을 해외로 보낼 것이다.

“The government has put emphasis on building strength into the economy. That’s a good story, and it’s fortunate that we are generally in a deflationary environment, with commodity prices coming down. But it’s hard to get around the fact that Korean exports are going to be shrinking and not expanding.”
정부는 건설업을 지원하겠다고 했다. 경기침체국면에서 이는 좋은 방안이다. 그러나 해외경기침체로 수출이 어려워지는 상황을 바꾸기는 어렵다.

Foreigners were net sellers of Won282.6bn ($212m) of Korean shares on Thursday, bringing their total net liquidation this year to more than Won33,500bn, according to Korea Exchange figures.
외국인들은 목요일에 주식을2826억원이나 팔았다. 연초부터 지금까지 외국인들이 판 주식은 모두 33조 5000억원이다.

The Kospi, the main index, closed 7.6 per cent lower at 1,092.22, in spite of news that Korea’s stock exchange would launch a $395m fund to invest in domestic shares. The Kospi has lost more than 40 per cent in value so far this year.
증권거래소가 3억 9500만 달러로 국내 주식에 투자하는 펀드를 만들겠다고 발표했지만 코스피는 전날보다 7.6%하락한 1092.22포인트로 마감했다. 코스피는 연초보다 40%나 하락했다.
Copyright The Financial Times Limited 2008

[FT]China authorises ‘massive’ stimulus package

2008-11-10T02:13:00.000-08:00

China authorises ‘massive’ stimulus package
By Geoff Dyer in Beijing
중국당국의 강력한 경기부약대책
Published: November 9 2008 19:14 Last updated: November 10 2008 02:00

China announced on Sunday a “massive infrastructure spending programme” as part of a new fiscal stimulus plan aimed at boosting the country’s rapidly slowing economy.
둔화하는 경기를 살리기 위해 강력한 경기부양책을 사용하겠다.

The State Council, China’s cabinet, authorised Rmb4,000bn ($586bn) of investment on infrastructure and social welfare over the next two years, although it did not say how much of the spending would be on new projects not already in the budget.
사회간접자본과 복지에 2년 동안 4조위안을 투자할 것이다.

The government said the spending plan reflected a decision to adopt an “active” fiscal policy to deal with the global financial crisis, while monetary policy would be “moderately active”.
이번 경기부양책은 세계 금융위기에 적극적으로 대처하겠다는 의지를 드러낸 것이다.

The announcement reflects mounting anxiety in Beijing that China’s economy is cooling much more quickly than was initially expected in the face of weaker international demand and a slowdown in the local property market.
예상보다 급격하게 나빠지고 있는 세계수요와 국내자산시장의 침체가 반영되었다.

Two recent surveys of manufacturers showed a slump in activity in October, confirming anecdotal evidence that the slowdown has accelerated in recent weeks. Some economists believe that growth, which was nearly 12 per cent last year, could fall to as low as 6 per cent next year without a substantial fiscal stimulus.
10월 생산자지수가 떨어지고, 일부 이코노미스트들은 중국이 내년도에는 6%만 성장할 것이라고 한 것도 영향을 미쳤다.

Beijing has also been under growing international pressure to take fiscal measures to boost its economy in the hope that continued strong growth can provide some counter-balance to recession in the developed world.
중국에 영향을 받는 다른 나라들의 기대도 반영되었다.

The government has already cut interest rates three times, scrapped quotas for bank lending and unveiled measures to help housebuyers and some exporters. However, economists said those measures had not been enough to overcome growing gloominess among companies and consumers.
중국은 이미 이자율을 세차례나 내렸고, 은행대출을 늘려 주택소유자와 수출업자를 도왔지만 전문가들은 세계경기침체를 이겨내기에는 부족하다고 말했다.

According to the official Xinhua news agency, the State Council decided on Friday to “map out more forceful measures to expand domestic demand”, which would include “massive” infrastructure spending.
신화통신에 따르면 중국당국은 지난 금요일 더욱 강력한 대책을 내놓겠다고 결정했고, 그것이 사회간접자본 투자이다.

The investments will focus on low-income housing, water, electricity, disaster relief and transport, with railways expected to see a big increase. Spending in the fourth quarter of this year would be boosted by Rmb120bn beyond what was planned.
투자대상은 저소득층 주택건설, 수도 및 전기시설 건설, 재난지역 복구, 철도부설 이다. 이번 4분기에만 1200억 위안을 사용할 것이다.

The government said it would introduce a long-awaited reform of value added tax which would cut costs for Chinese companies by Rmb120bn, Xinhua said.
부가가치세를 재정비하여 기업들이 내는 세액을 1200억 위안 깎을 것이다.

In China’s 2006-10 Five Year Plan, the government said it would spend Rmb5,100bn on infrastructure projects.
중국의 2006-10년 계획에는 중국정부가 5조1천억 위안을 사회간접자본투자에 사용하기로 되어있었다.
Copyright The Financial Times Limited 2008
중공업측에 호재, 중서부 개발착수-> 중산층 증가?, 부의 분배로 신소득층 유발? 파생효과를 생각해 봐야 한다.

[FT]Wall St rallies on election day

2008-11-04T18:39:00.001-08:00

선거일 현재 주가는 오르고 있다.
Wall St rallies on election day
By Alistair Gray in New York
Published: November 4 2008 14:08 Last updated: November 4 2008 21:55
Wall Street stocks enjoyed their strongest election day rally since the New York Stock Exchange first opened for trading on presidential polling day.
The prospect of a clear winner helped lift the market to its highest level in three weeks as investors looked forward to strong political leadership to deal with the financial and economic crisis, ending months of uncertainty.
“The last time you had an election with this level of focus in the market was on the eve of World War Two,” said Doug Roberts, strategist at Channel Capital Research.
Most observers agreed that equities did not prefer one candidate over another, although futures markets continued to indicate the strong likelihood of a Barack Obama presidency.
Investors hoped that with the election out of the way authorities would be freer to take decisive action without partisan interference.
Stocks shrugged off glum economic news for a third consecutive session – data showed new factory orders fell more than expected – and all 10 sectors were firmly in positive territory.
The S&P 500 closed back above the psychologically significant 1,000-point level, up 4.1 per cent at 1,005.74.
The Dow Jones Industrial Average was up 3.3 per cent at 9,625.28 points while the Nasdaq Composite Index was up 3.1 per cent at 1,780.12 points, giving it six successive sessions of gains. The gains were comfortably the greatest of all presidential election days since 1984. In the years before then, markets had been closed on the day of the ballot.
The Chicago Board Options Exchange Volatility Index, Wall Street’s fear gauge, shed 11.2 per cent to 47.69 points.
Upbeat corporate earnings, further easing of strain in money markets, and the prospect of more policy measures to help prevent a global recession also gave a boost.
A diverse range of companies, such as MasterCard, Emerson Electric and Viacom reported better-than-expected quarterly figures. Shares in the three companies roose 18.3 per cent to $170.24, 10.1 per cent to $35.86 and 7.5 per cent to $22.65, respectively.
Energy led the gains, up 6.4 per cent as oil settled above $70 a barrel. Materials, industrials and financials followed closely behind.
Archer Daniels Midland leapt 15.3 per cent to $24.33 after the food processor comfortably beat forecasts that had been lowered after rival Bunge’s failure to meet expectations. The later rose 8.6 per cent to $45.31.
Elsewhere, CIT Group and General Electric jumped 36.1 per cent to $6.15 and 7.6 per cent to $20.77 respectively, on reports the Treasury might buy stakes in a wide range of financial companies, not only banks and insurers, under its $700bn rescue package.
In technology, Google and Yahoo edged up 5.9 per cent to $366.94 and 4.7 per cent to $13.35, respectively, on reports the companies scaled back their proposed web advertising deal to win over antitrust officials.
VMware shed 3.9 per cent to $30.56 on news that Intel was in the process of halving its stake in business software maker. The chipmaker gained 4 per cent to $16.26.
Dell rallied 5.6 per cent but fell back to stand 2.5 per cent higher at $12.93 after reports emerged that the computer group had instituted a hiring freeze and asked employees to consider taking up to five days of unpaid leave.
On the downside, Dean Foods dropped 17.6 per cent to $18.25 after the food group’s results fell short of expectations. The figures failed to drag down either peer Kraft Foods or the wider consumer staples sector, which were higher by 4.1 per cent at $30.51 and 2.3 per cent, respectively.
An interest rate cut in Australia sparked hopes of further policy measures around the world. Tueday’s rally, coupled with the muted trading of the previous session, comes after the wild volatility that characterised October.
“You may be asking yourself what exactly has changed in the last few days to stage this dramatic turn of events. Good question,” said Randy Frederick, director of trading and derivatives at Charles Schwab.
Analysts remained divided on whether the market would extend its rally.
Quincy Krosby, strategist at The Hartford, wrote in a note: “Given the oversold condition in the market, it is quite clear that we can build on this rally toward the year-end.”
Copyright The Financial Times Limited 2008

[NYT]Buy American. I Am. By WARREN E. BUFFETT

2008-11-04T18:15:00.000-08:00

Op-Ed Contributor
Buy American. I Am.
By WARREN E. BUFFETT
Omaha
THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.
금융위기가 실물위기로 이어진다.(실업률 상승, 기업의 투자감소)

So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.
그래서 주식을 사겠다. 주가가 계속 떨어져도 사겠다. 전부를 사모을 때까지 사겠다.

Why?
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.
공포에 사라! 단기전망을 할 수는 없다. 하지만 길게보면 오를거다. 특히 공포때문에 우량기업의 주가마저도 빠지고 있는 상황이라면 장기적 안목을 가지고 주식을 사는게 당연하다.

A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.
역사적으로 봐도 주식을 사는게 옳다. 대공황때 주가는 바닥을 쳤지만 강력한 리더쉽을 가진 루즈벨트가 취임하고나서 30%나 올랐다. 1980년대에도 경기는 바닥이었지만 그 때 주식을 산 사람들이 이득을 얻었다. 투자자에게 나쁜 소식은 가장 좋은 친구이다.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.
20세기 동안 미국은 대공황, 세계대전, 또 다른 두번의 전쟁, 냉전, 금융위기를 겪었다. 그 동안 다우지수는 66포인트에서 11,497포인트까지 올랐다.

You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.
지난 세기동안 돈을 번 사람이 없을거라고? 천만에, 일부는 돈을 벌었다. 불행히도 남들이 살 때 사고 안좋은 소식에 판사람들은 손해를 보긴 했다.

Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.
Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”
많은 사람들이 현금을 가지고 있다. 그래서는 안된다. 정부는 돈을 풀어서 경기를 되살리려고 하기 때문에 인플레이션이 올테고, 현금성자산의 가치는 떨어질 것이 분명하다. 주식은 현금보다 수익률이 좋을 것이다. 현명한 투자자라면 웨인 그레츠기가 말했던 것을 따라야 한다. 그는 공이 있는 곳이 아니라 공이 있을 곳에 간다고 말했다.
I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.
나는 단기전망을 할 수 없다. 하지만 나는 내 돈으로 주식을 살거고 샀다고 말할거다.
Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company.

오바마와 절친한 친구라는 버펫이 10월 중순경에 쓴 글이다. 그는 장기적 안목을 가지고 주식을 사야 한다고 주장한다. 장기적으로 보면 위기는 기회라는 것이다. 물론 10년 뒤에 주식은 오를 것이다. 그렇다고 해서 돈을 버는 사람이 있을지는 모르겠다. 여전히 시장은 불안하기 때문이다.

글 중간에 강력한 리더쉽을 갖춘 루즈벨트가 대통령이 되고서부터 주가가 42%나 올랐다는 내용이 있다. FT를 보면 오바마를 미국을 아우르는 카리스마를 가진 사람이라고 쓴 글을 볼 수 있다. 또한 상하원 모두 민주당이 장악하고 있는 상황에서 오바마는 행정부와 의회간 협조를 이끌어 낼 수 있는 인물이다. 오바마가 당선되면 주식을 살지 말지 고민해 볼만 하다. (어쩌면 버펫이 은근히 오바마를 지지하기 위해 이글을 쓴것 같기도 하다. 특히 NYT에 이 글을 썼다는 것도 그렇다.)

[Economist] Will we see a "Bernanke put"?

2008-11-04T03:33:00.000-08:00

Market.view

The long and short of it

Nov 2nd 2008From Economist.com

Will we see a "Bernanke put"?

우린 버냉키 풋을 보게 될까?
THE “Greenspan put” was a term devised to describe the habit of the former Federal Reserve chairman, who would cut interest rates whenever the stockmarket seemed in crisis. The idea was that equity investors had insurance in the form of a put option, with Alan Greenspan agreeing to limit their losses.

그린스펀은 주식시장에 위기가 오면 금리를 내렸다. 그래서 주식투자자들은 그린스펀이 손해를 막아주는 풋옵션 같은 사람이라고 생각했다.

Now David Rosenberg, a well-respected economist at Merrill Lynch, thinks the current Fed chairman, Ben Bernanke, may introduce a “Bernanke put”, this time for the bond market. The topic arises because of the Fed’s recent cut in interest rates to 1%, posing the question of what the central bank can do if rates drop down to zero.

메릴린치의 로젠버그는 이제 버냉키를 버냉키풋이라고 생각한다. 하지만 이번에는 채권시장이다. 연준이 금리를 1%까지 내리면서 제로금리가 되면 이제 무얼할지가 논란거리로 떠 올랐다.

After all, interest rates cannot be cut below zero. But as Mr Bernanke pointed out in a November 2002 speech, the central bank would have other options, notably targeting short-term bond yields. “The Fed could enforce these interest-rate ceilings by committing to make unlimited purchasers of securities up to two years from maturity at prices consistent with targeted yields”, Mr Bernanke said. If necessary, the Fed could target bonds at even longer maturities.

금리는 0밑으로 떨어질 수 없다. 하지만 버냉키는 2002년 11월에 중앙은행이 또다른 방안을 쓸 수 있다고 말했다. 단기채 수익률을 조정하는 것이다. "연준은 이자상한선을 정해서 정해진 수익률에 따라 2년간 빌려줄 수 있다." 필요하다면, 장기채에도 이를 적용할 수 있다.

The idea behind such a strategy would be to keep longer-term borrowing rates low, thus encouraging companies (whose loan costs are priced in relation to Treasury-bond yields) to invest in new production. That would help stimulate the economy.

버냉키의 전략뒤에 담긴 생각은 장기대출이자율을 낮춰서 기업들이 투자하도록 촉진하는 것이다. 그렇게 되면 경기는 점차 살아날 수 있다.

For bond investors, this would be a one-way bet. They would know that yields could not rise above the targeted level, so the scope for capital losses on their bond portfolios would be limited (yields move in an inverse relationship to prices).

채권투자자에게는 이것이 one-way bet일 수 있다. 그들은 채권수익률이 상한선 이상으로 오를 수 없다는 것을 알고 있다. 따라서 그들이 투자한 채권들의 손실은 제한될 것이다. (수익률은 가격과 반대로 움직인다.)*채권은 만기상환액이 정해져있기 때문에 가격이 떨어지면 수익률이 오른다.

The tricky question is whether such an approach would conflict with another well-worn Fed strategy for reviving the economy—creating an upward-sloping yield curve. To explain, the yield curve comprises the range of interest rates at different maturities, from overnight to 30-year bonds. Traditionally, long-term rates have been higher than short-term ones because investors have to be paid more to make them willing to lock away their money. Occasionally, however, the yield becomes inverted (short-term rates are above long). That is normally seen as a sign that recession is on the way.

The basic business of banks is to borrow short and lend long. Thus an upward-sloping yield curve is good news for them. After the savings-and-loan debacle of the late 1980s and early 1990s, the Fed deliberately kept short rates low in order to generate an upward-sloping curve and boost the profits of the banking sector. The banks could do with a similar boost today, and sure enough short rates are well below 10-year yields (see chart).

If the crisis were sufficiently stark, the Fed would, of course, try to keep both short and long-term rates low; if the former were zero, the latter could be 2% or so. The obvious example is Japan, where 10-year yields are still just 1.5%.

It all makes for a tricky gamble for bond investors. Some are clearly worried that the cost of bailing out the banking sector will ultimately prove inflationary, especially as the spending-happy Democrats are set to increase their hold on Congress. That would suggest much higher bond yields in the medium term. But investors who place that bet could lose heavily if the Bernanke put swings into action.

[FT]VW vies for title of world’s biggest company

2008-10-28T05:21:00.000-07:00

VW vies for title of world’s biggest company
By Richard Milne in London
Published: October 28 2008 09:34 Last updated: October 28 2008 11:02
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Volkswagen briefly became the world’s largest company by market capitalisation on Tuesday as panic-buying by hedge funds desperate to cover losses caused its value to shoot up by up to €150bn.
Shares in Europe’s largest carmaker soared as high as €1,005 in early trading, having closed at about €210 on Friday. That gave it a market capitalisation of around €296bn ($369bn), higher than that of ExxonMobil, the oil company that closed on Monday with a value of $343bn.
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EDITOR’S CHOICE
Daily View: VW briefly the world’s largest company - Oct-17
Lex: Japanese carmakers - Oct-28
In depth: Auto crunch - Oct-24
Hedge funds hit as Porsche moves on VW - Oct-27
Porsche accelerates towards VW control - Oct-27
Porsche plans to raise VW stake to 75% - Oct-26
VW’s share price was highly volatile on Tuesday morning and was up 50 per cent in late morning trade at €788, giving it a market capitalisation of €237bn ($296bn), still bigger than that of Wal-Mart, Microsoft and General Electric – the second, third and fourth-largest companies in the US.
“I have hedge fund managers literally in tears on the phone,” said one London-based auto analyst. Hedge funds had bet that VW’s share price would fall but after Porsche disclosed it held 74 per cent of the carmaker rather than the previously assumed 35 per cent there was a huge scramble to cover positions.
Analysts and investors said some hedge fund failures were likely because of the size of the losses, which reached about €20bn-€30bn on Tuesday. They also called for a full investigation by Bafin, Germany’s financial regulator, into whether there was market manipulation.
Porsche has denied that it lent its shares out to hedge funds. It said that it revealed it held 74 per cent directly and indirectly to allow hedge funds to unwind their short positions in “an orderly manner”.
Bafin on Monday repeated its comments from last week that it was looking at, but not formally investigating, the share price movements.
But analysts, investors and corporate governance experts said the share price movements were bringing Germany’s capital markets into disrepute.
Max Warburton, analyst at Sanford Bernstein, said: “It is a huge question for regulators and arguably an embarrassment for all European capital markets.”
Christian Strenger, a board member at Germany’s largest fund manager, DWS, and a leading corporate governance expert, said: “It should get the politicians and supervisory authorities to think again about allowing this untransparent situation.”

[Economist] Second time around

2008-10-25T17:24:00.000-07:00

한국에 다시 외환위기가 올 것인가? 외국 애널리스트들은 그렇다고 생각하고, 한국정부는 그렇지 않다고 주장한다. 누가 맞는 말을 하는건가?

정부는 1300억달러를 시장에 풀겠다고 발표했다. 1000억달러는 지급보증을 위해 쓸 것이다. 나머지 300억 달러는 은행에 지원할 돈이다. 정부는 이틀전에 92억달러를 건설회사에 지원하겠다고 말했다. 정부관료들은 에너지절약, 국산품사용, 해외여행자제 등 국민들의 애국심에 호소하고 있다.

이명박 대통령은 1997년과 지금은 다르다고 주장한다. 경제적 기초가 튼튼해 졌다는 것이다. 은행의 자기자본비율은 높아졌고, 대기업들의 부채비율은 낮아졌으며 외환보유액은 세계 6위에 이를 정도다. 외환위기 속에서도 한국은 이번년도에는 4%정도를 내년에는 2.5-3.5%대로 성장할 것이다. 이는 이명박 대통령이 약속한 7%에는 못 미치지만 위기상황에서는 긍적적인 전망치이다.

이렇게 긍적적인 전망치가 나오는 이유는 조선업이 호황을 누리고 있기 때문이다. 그러나 조선업은 금융압박의 원인이기도 하다. 조선업계에 외채비율이 급속히 늘어났기 때문이다. 이 중 10분의 1은 선수금이다. 또한 절반정도는 헷지거래 때문에 발생한 외환평가손실액이다.

한국이 금융위기를 겪고 있는 것처럼 보이는 것은 이러한 미실현 손실때문이다. 무디스는 한국의 은행들이 자산 중 12%정도를 외채에 의존하고 있는 것으로 추정했다. 은행간 거래는 국제금융위기 때문에 침체되어 있다. S&P는 한국의 은행들 중 7개를 위험대상으로 설정하고 관찰하고 있다고 말했다.

원화는 외인들이 주식과 채권을 팔고 떠나면서 가치가 떨어졌다. 또한 연초 유가급등과 상품가격상승으로 경상수지적자가 발생했기 때문에 달러수요가 많았다. 정부가 내놓은 구제대책은 원화와 주가의 하락을 잠깐 동안만 막았을 뿐이다.

어떤 이들은 금융위기가 비껴나갈 것이라고 말하고 있다. 하지만 거래자들은 세계경제의 주변국가들에게 금융위기는 이제 시작일 뿐이라는 것을 알고 있다.

South Korea

Second time around
Oct 23rd 2008 SEOUL
From The Economist print edition

Shock, denial, anger and a massive bail-out for good measure

OF ALL the Asian countries worst ravaged by the regional financial turmoil of 1997-98, South Korea has come closest in recent weeks to seeing history repeat itself—not as farce, but as renewed financial tragedy. As its stockmarket has slid downhill and the currency, the won, has fallen by nearly 30% this year, the government has been telling all-comers that the economy is sound and the banks liquid and solvent. Its officials have blamed their troubles on the ignorant or malicious refusal of foreign analysts to believe them.

Yet on October 19th the government announced a $130 billion rescue for Asia’s fourth-largest economy. Of this, $100 billion is in the form of guarantees for foreign-currency debts. Another $30 billion—about one-eighth of the country’s foreign-exchange reserves—was to be available to banks suffering a drought of dollars. It followed this up two days later with a promise to spend 12 trillion won ($9.2 billion) to help the building industry—for example by refinancing debts and buying unsold houses. The president, Lee Myung-bak, described the overall economic situations as “more serious” than in 1997, because of the global sweep of the crisis. The government had already appealed to the grass-roots patriotism that helped South Korea through the late 1990s: cutting back on energy bills; buying local products; and surrendering any dollars left over from overseas jaunts.

Mr Lee and his officials, however, are quite right that the economy is on a much sounder footing than in 1997. Banks are better capitalised, big companies less indebted and reserves of foreign exchange bigger than all but five other countries’. The economy has been growing solidly for a decade. Even after the recent buffeting, analysts still expect GDP to grow by more than 4% this year, and by 2.5-3.5% in 2009. That is nowhere near the 7% growth President Lee promised at his inauguration in February, but in the current doom-laden climate it looks positively robust.

One reason for this relative optimism is the shipbuilding industry, one of South Korea’s great success stories. Yet it is also one cause of the financial stresses. There has been a sharp rise in foreign debt. More than one-tenth of the rise is in down-payments for ships still being built, which appear in the accounts as trade credits. And around half of the increase in short-term debt comes from banks hedging their exposure to purchases of shipbuilders’ dollar receivables in the forward market.

That helps explain the way in which the global credit crunch first made itself felt in South Korea—in a shortage of dollars for the banks. Moody’s, a credit-rating agency, estimates that South Korea’s banks rely on foreign sources for 12% of their funding. As inter-bank markets worldwide clammed up, they began to look vulnerable. Standard & Poor’s, another rating agency, this month put seven of them on a “watch-list”, because of the pressure they faced.

The won itself has been battered as foreign investors have fled Korean shares and bonds. Its decline also reflects the current account’s fall into deficit as the cost of South Korea’s oil and other commodity imports soared earlier this year. The government rescue stemmed the tumble in the won and the stockmarket only briefly. As elsewhere, financial catastrophe seemed to have been averted. But also as elsewhere, traders knew that the impact of the market turmoil on the rest of the economy was only beginning to be felt.