3/9/2009 News Radar

by JASON | 2:22 PM in |

Falls in the value of financial assets worldwide might have reached more than $50,000bn, equivalent to a year’s global economic output, the Asian Development Bank will warn on Monday.

Asia has been hit disproportionately hard, the bank will say, in a report that warns of many Asian stimulus plans lagging behind those of the leading global economies.

March 9 (Bloomberg) -- The U.S. economy’s vital signs may not confirm a diagnosis of depression. The symptoms increasingly point to one.

As in the Great Depression, world trade is collapsing, wealth is evaporating and the banking system is broken. Deflation is a growing threat as companies slash production, pay and prices. And leaders worldwide are having difficulty making headway in halting the self-perpetuating decline.

“We are tracking 1929-1930,” says Barry Eichengreen, a professor of economics and political science at the University of California, Berkeley.

March 9 (Bloomberg) -- The global economy is likely to shrink for the first time since World War II, and trade will decline by the most in 80 years, the World Bank said.

The World Bank’s assessment is more pessimistic than an International Monetary Fund report in January predicting 0.5 percent global growth this year. The Washington-based World Bank didn’t provide a specific estimate in its report yesterday.

World growth will be 5 percent below its potential, the bank said. Developing nations will bear the brunt of the contraction. They will face a shortfall of between $270 billion and $700 billion to pay for imports and service debts, the bank said.

“We need to react in real time to a growing crisis that is hurting people in developing countries,” said World Bank President Robert Zoellick in a statement. Action is needed by governments and multilateral lenders “to avoid social and political unrest.”

East Asia will be hit the hardest by the decline in global commerce, the bank said. Global industrial production is expected to be as much as 15 percent lower than in 2008.

March 9 (Bloomberg) -- New York City revenue will decline 7 percent this year, opening a $4.8 billion budget deficit in 2010, even after the city increased real estate and hotel room taxes, the Independent Budget Office said.

The IBO, a public financial monitor, said the deficit will be $1.6 billion more than Mayor Michael Bloomberg estimated when he presented a $59 billion preliminary budget in January. City revenue will decline by $2.6 billion to $34.7 billion this year, and another $1.3 billion in fiscal 2010, the office reported.

The office’s prediction was consistent with a message that city Budget Director Mark Page gave the City Council today in which he warned that the national and local economies have worsened since the mayor presented his January preliminary budget and financial plan.

“The economic forecast we used for the January plan expected a maximum national job loss of about 5 million,” Page told the council’s finance committee today. “Recent job loss experience indicates the loss is likely to be worse.”

“It seems almost certain that the next time we reforecast the city economy and tax revenues for the Executive Budget, we will be facing a further decline in tax revenues,” he said.

The world is falling into the first global recession since World War II as the crisis that started in the United States engulfs once-booming developing nations, confronting them with massive financial shortfalls that could turn back the clock on poverty reduction by years, the World Bank warned yesterday.

WASHINGTON - Five Chinese vessels "shadowed and aggressively maneuvered'' towards a US Navy ship in the South China Sea -- at one point closing to within 25 feet of the boat, the Pentagon said today.

The Chinese vessels "shadowed and aggressively maneuvered in dangerously close proximity" to the USS Impeccable, which was conducting routine operations Sunday in international waters, the Defense Department said.

Two Chinese vessels surrounded the Impeccable, while two closed to within 50 feet waving Chinese flags and telling the US Navy ship to leave at once. The Navy ship responded by spraying one of the vessels with its fire hoses, but the Chinese ship responded by closing in further to within 25 feet.

US officials said the Impeccable informed the Chinese ships by radio that it was leaving the area and requested a safe path to navigate. That's when two of the Chinese vessels stopped directly in front of the American ship and dropped pieces of wood in its path, according to the Defense Department.

The US ship was eventually allowed to leave.


Probably a NSA spy boat...

PYONGYANG/BEIJING, March 9 (AP) - (Kyodo)—North Korea warned Monday that any move to intercept what it calls a satellite launch and what other countries suspect may be a missile test-firing would result in a counterstrike against the countries trying to stop it.

"We will retaliate (over) any act of intercepting our satellite for peaceful purposes with prompt counterstrikes by the most powerful military means," the official Korean Central News Agency quoted a spokesman of the General Staff of the Korean People's Army as saying.

If countries such as the United States, Japan or South Korea try to intercept the launch, the North Korean military will carry out "a just retaliatory strike operation not only against all the interceptor means involved but against the strongholds" of the countries, it said.

"Shooting our satellite for peaceful purposes will precisely mean a war," it added.

The USA and South Korea launched their large-scale joint military exercise on the south of the Korean Peninsula. North Korea qualified the event as war preparations and set its army on full alert.

Over 26,000 US military men participate in the Key Resolve and Foal Eagle military drills. Over 12,000 of them were assigned from the US military contingent in the south of the Korean Peninsula; the rest arrived from abroad. South Korea provided several tens of thousands of servicemen for the drill. Nuclear-powered aircraft John C. Stennis and other navy ships will participate in the exercise.

The allied command informed North Korea about the time of the maneuvers that would end on March 20, as well as about the defensive nature of the drills that were held to strengthen the combat readiness of the troops.

In the meantime, North Korean officials described the drills between the United States and South Korea as a disguised events the goal of which was to prepare for an aggression.

As China makes major investments in Latin America to acquire strategic materials, it is extending its military capability into the backyard of the United States.

China's military also has linked up with elements of Chinese organized crime elements as well as various terrorist organizations in Latin America.

"China's military planners have long advocated the dirty business of utilizing narcotics traffickers, international organized crime networks and terrorist organizations - such as the shadowy al-Qaida network - that could sap a great superpower of its financial strength, military confidence and national morale," according to Albert Santoli, president and director of Asia America Initiative. "Latin America, and particularly Cuba's proximity to the United States and its radical leftist networks throughout the region, have provided Beijing theopportunity to utilize its strategic plan of 'unrestricted warfare' where the weak can defeat the powerful through unconventional means," he said.

With the Chinese military linked with Chinese organized crime, the Library of Congress in its report "Terrorist and Organized Crime Groups in the Tri-Border Area (TBA) of South America" echoed concerns of increased Chinese mafia activities in Latin America.

March 9 (Bloomberg) -- If you want to know what’s going to happen to commercial real estate across the U.S., look no further than Cleveland and Detroit.

Those two metropolitan areas lead the U.S. in mortgage delinquencies for owners of office buildings, apartments, malls and warehouses, a sign that cities hurt by the housing crisis will see their commercial markets dragged down next.

Commercial properties with mortgage payments 60 days late or more rose to 3.93 percent as of March in the Cleveland area and to 3.75 percent in the Detroit area, according to data compiled by Bloomberg. The North American commercial property delinquency rate is 1.1 percent, according to Standard & Poor’s.

With U.S. forces fighting two wars abroad, the nation's top military officer made an important visit last week to forestall a third.

He went to Mexico.

Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, made the trip to confer with Mexican leaders about the Merida Initiative, a three-year plan signed into law last June to flood the U.S.-Mexican border region with $1.4 billion in U.S. assistance for law-enforcement training and equipment, as well as technical advice and training to bolster Mexico’s judicial system.

Mexican businessman Jorge Hernandez abruptly relocated his family to Houston last year, terrified that family members would be abducted by kidnappers.

He had ample reason to be afraid. He left in August, days after a father was kidnapped for ransom as he dropped his child off at the same school Hernandez’s children attended in a north Mexico city.

“One night, I told my wife ‘Pack the bags — we’re leaving,’" Hernandez said. “The fear we felt caused us to get in the car and drive for 12 hours to get to Houston.”

The 43-year-old businessman joined a growing number of affluent and middle-class Mexicans fleeing comfortable lives in Mexico for the comparative safety of Houston and other major Texas cities. They are desperate to escape an unprecedented wave of lawlessness in their home country where warring drug cartels — whose fighting claimed more than 6,000 victims last year — have also taken up kidnapping as a lucrative business.

ATLANTA — In a city where Coca-Cola, United Parcel Service and Home Depot are the titans of industry, there are new powerful forces on the block: Mexican drug cartels.

Their presence and ruthless tactics are largely unknown to most here. Yet, of the 195 U.S. cities where Mexican drug-trafficking organizations are operating, federal law enforcement officials say Atlanta has emerged as the new gateway to the troubled Southwest border.

Rival drug cartels, the same violent groups warring in Mexico for control of routes to lucrative U.S. markets, have established Atlanta as the principal distribution center for the entire eastern U.S., according to the Justice Department's National Drug Intelligence Center.

Cocaine production has surged across Latin America and unleashed a wave of violence, population displacements and corruption, prompting urgent calls to rethink the drug war.

More than 750 tonnes of cocaine are shipped annually from the Andes in a multi-billion pound industry which has forced peasants off land, triggered gang wars and perverted state institutions.

A Guardian investigation based on dozens of interviews with law enforcement officials, coca farmers, refugees and policymakers has yielded a bleak picture of the "war" on the eve of a crucial United Nations drug summit.

Almost 6,000 people died in drug-related violence in Mexico last year alone, an unprecedented level of mayhem that is showing signs of spilling northwards into the United States. More than 1,000 have been killed already this year in Mexico.

A new trafficking route between South America and west Africa has grown so quickly that the 10th latitude corridor connecting the continents has been dubbed Interstate 10.