TORONTO, ON -- A little truth can go a long way. But a new study being conducted by the Bank of Canada--Canada's central bank and monetary policy regulator--suggests that a white lie can go a much longer way. It appears that Mark Carney, Governor of the Bank of Canada, was trying to stimulate positive thinking among investors, businesses, and consumers earlier this month when he announced that Canada's economy was recovering.
Analysts at the World Trade Foundation (WTF) discovered the white lie recently after comparing the Governor's statements with factual data. With significant negative growth in real GDP and an ever-rising unemployment rate, the economy looks far from ready to recover. The huge decline in commodity prices also does little to justify Mr. Carney's optimism.
Nonetheless, the Governor's efforts are not in vain. His calming words are being reflected in investor and consumer optimism, in turn reflected in better performance among the banks, now better adjusted to the recessionary economy.
The WTF congratulates Mr. Carney on his excellent implementation of monetary policy and supports his vision of a better world--powered by a few white lies.
Related reading: http://www.cbc.ca/money/story/2009/07/24/f-second-quarter-earnings-picture.html
Thursday, July 30, 2009
Monday, July 27, 2009
Collective Bargaining
TONGHUA -- Trade unions have come a long way since their humble beginnings in the late 19th century. These essential institutions in the labour market have been and continue to be vital in ensuring employees' working conditions and rights. In particular, the World Trade Foundation (WTF) salutes the efforts and achievements of a group of steel workers here in Tonghua, north-eastern China.
After reports of Tonghua Steel and Iron Group being taken over by private firm Jianlong Group, many steel workers feared for their jobs. Realizing the ineffectiveness of already common-place collective bargaining tactics such as strikes and walkouts, the labourers staged a riot in the factory and around the city in Tonghua.
Albeit the 200 or so injured during the confrontation, the workers were able to quickly beat the newly-appointed general manager Chen Guojun to death, effectively putting an end to any possibility of a takeover, a feat which the regional government confirmed shortly afterwards.
The WTF proudly recognizes the innovative and efficient collective bargaining methods that the Chinese workers enacted and congratulates them on their job-saving efforts against the destructive merger plan.
Friday, July 24, 2009
Government Greed
BRUSSELS -- At a time when the financial system needs its government the most, the government lets it down. To the dismay of the World Trade Foundation (WTF), the European Commission has decided to withhold from government assistance for banks, leaving them to foot their own restructuring and acquisitions.
Earlier on, Europe's financial sector had witnessed very promising government assistance, with approval for 70 bank rescues during this crisis. However, the sudden change of heart is leaving many banks questioning their viability in the future.
Arguing that they need to "re-invigorate competition", the commission now insists that aided banks have to pay their own restructuring costs, even at the expense of assets and cancelled acquisitions. Yet it is common knowledge that direct subsidization is the most effective form of boosting competition.
With the extra assets and capital to take over and buy out their competitors, a nation's banks could greatly increase their relative competitiveness and overall market control. Thus, the WTF calls on the European Commission to set aside its greedy nature and shelve its plans for "banks viable without state support" in favour of more aggressive and effective money management.
After all, the best use of taxpayers' money is not towards lowering the cost of medication for patients or a textbook in school, but towards solid and promising expansion of the nation's economy and financial sector. Only then can it truly develop a competitive edge over other banks, both domestically and abroad.
Thursday, July 16, 2009
Old-School Bartering
NEW YORK, NY -- Financial crisis mayhem once again spurs business reorganization. This time, it appears to be a full-out bid on Bank of America (BoA) by the ex-secretary of the US Treasury, Mr. Hank Paulson. The action followed talks of Bank of America's CEO Kenneth Lewis potentially reneging on prior plans to purchase the failing Merrill Lynch in September 2008.
Merrill Lynch, one of the largest holders of the "toxic" debt produced as a result of the housing and credit crisis, was quite likely to crash if Bank of America had not rescued it. The US Treasury predicted further financial instability if another investment banking giant like Merrill Lynch were to collapse.
But rather than striving for a bailout package for the firm, the then-secretary of the US Treasury appeared to have turned to a more traditional negotiation settlement tactic: bartering. Disagreeing with BoA's CEO and Board of Directors in their consideration of retracting their offer, Mr. Paulson appeared to have exchanged numerous job threats with BoA CEO Kenneth Lewis in return for a controlling stake in the takeover decision.
With the backing of the World Trade Foundation (WTF), Mr. Paulson justified his heroic actions by revealing that they were in the best interests of the US and both banks. This is especially evident from the about $45 billion in bail-out fund injections that Bank of America needed in the subsequent months after the takeover.
Related reading: http://news.bbc.co.uk/2/hi/business/8152858.stm
Tuesday, July 14, 2009
Reviving the Economy
NEW YORK, NY -- Amidst the turmoil of investor fear and bankruptcy protection filings, Goldman Sachs stands strong as the knight in shining armour of the world's economic crisis--in the only important economy, at least. This champion of investment banks has just reported a very promising $3.44 billion in profits, from total net revenues of $13.8bln, of which a notable $6.65 billion went towards pay and bonuses for employees.
The WTF welcomes this move from Goldman Sachs and the altruistic intentions behind it. Having successfully paid off its last instalment of a $10-billion bail-out loan from the US government, Goldman Sachs has every right to reward its employees by distributing half of all of its revenue among its employees' salaries.
After all, it would be bad news for the competitiveness of its rival banks if Goldman Sachs retained a larger portion of its earnings towards its coffers and investment initiatives, to be used for potential further profits and gain. This holds especially true in the present sluggish retail markets: no point in investing in upstart firms and other new job opportunities when all those businesses are going to fail in the coming months anyways because people are losing jobs and spending less. Instead, it is a much more financially sound investment to distribute that money among the managers and investors at Goldman Sachs so they can purchase more luxury goods such as motorboats and new cars, which are almost guaranteed to last at least 10 years.
In the end, it is consumer spending that will revive the economy and the WTF proudly applauds Goldman Sachs for taking a big step in the right direction.
Related reading: http://news.bbc.co.uk/2/hi/business/8149762.stm
The WTF welcomes this move from Goldman Sachs and the altruistic intentions behind it. Having successfully paid off its last instalment of a $10-billion bail-out loan from the US government, Goldman Sachs has every right to reward its employees by distributing half of all of its revenue among its employees' salaries.
After all, it would be bad news for the competitiveness of its rival banks if Goldman Sachs retained a larger portion of its earnings towards its coffers and investment initiatives, to be used for potential further profits and gain. This holds especially true in the present sluggish retail markets: no point in investing in upstart firms and other new job opportunities when all those businesses are going to fail in the coming months anyways because people are losing jobs and spending less. Instead, it is a much more financially sound investment to distribute that money among the managers and investors at Goldman Sachs so they can purchase more luxury goods such as motorboats and new cars, which are almost guaranteed to last at least 10 years.
In the end, it is consumer spending that will revive the economy and the WTF proudly applauds Goldman Sachs for taking a big step in the right direction.
Related reading: http://news.bbc.co.uk/2/hi/business/8149762.stm
Sunday, July 12, 2009
Contraband from Africa
LONDON, UK -- We see them every day in the streets of London. Their prevalence in the past few decades here in the United Kingdom has transformed Britain and has very much de-stabilized British society. Like illegal and unwanted contraband from anywhere else, illegal immigrants from Sub-Saharan Africa should be prevented from crossing the border.
The WTF applauds British National Party (BNP) leader Nick Griffin for his initiatives towards this crisis. "What needs to be done as an example is to sink a couple of boats near the shores of Libya" explains Mr. Griffin. "Throw them lifebelts so they can paddle back, so they understand they will never get to Europe".
It is about time that the UK and the rest of Europe made their stance on illegal immigrants crystal clear. Firing a couple of warning shots at boats carrying this kind of contraband would teach them a strong lesson.
The entire world is divided into regions with different social and economic characteristics. This disparity in wealth is what facilitates international trade. But if the richer regions allow their poorer counterparts to export their poor people to them, then the income disparity which is so critical to trade and business will shrink significantly. In the words of Mr. Griffin: "the alternative is accepting that Britain eventually is going to end up like Africa."
Related reading: http://news.bbc.co.uk/2/hi/uk_news/politics/8146585.stm
The WTF applauds British National Party (BNP) leader Nick Griffin for his initiatives towards this crisis. "What needs to be done as an example is to sink a couple of boats near the shores of Libya" explains Mr. Griffin. "Throw them lifebelts so they can paddle back, so they understand they will never get to Europe".
It is about time that the UK and the rest of Europe made their stance on illegal immigrants crystal clear. Firing a couple of warning shots at boats carrying this kind of contraband would teach them a strong lesson.
The entire world is divided into regions with different social and economic characteristics. This disparity in wealth is what facilitates international trade. But if the richer regions allow their poorer counterparts to export their poor people to them, then the income disparity which is so critical to trade and business will shrink significantly. In the words of Mr. Griffin: "the alternative is accepting that Britain eventually is going to end up like Africa."
Related reading: http://news.bbc.co.uk/2/hi/uk_news/politics/8146585.stm
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