Discussion:
Goans in the Middle East in pain !
(too old to reply)
Bosco D'Mello
2008-03-26 03:47:20 UTC
Permalink
Gabe Menezes initiated this thread in mid-March with an analysis of the US
Dollar:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070563.html

Mario Goveia responded with his typical defensive response vis-a-vis
business cycles:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070642.html

Mervyn Lobo chipped in with a piece on incompetent money managers:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070721.html

Marlon Menezes re-directed this thread to "Goans in pain! (specially in
America!)". He did indicate this was the first part of the bad news:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070902.html


Yesterday I ran into:

http://www.time.com/time/magazine/article/0,9171,1725094,00.html

This article purports to educate what Goans saddled with stacks of
greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do
well by being astute 'Goans at the Garage Sale".

The USD is causing a lot of pain, the world over!!

- Bosco
Still holding Canadian Pesos
Mario Goveia
2008-03-26 15:22:21 UTC
Permalink
Date: Tue, 25 Mar 2008 23:47:20 -0400
From: "Bosco D'Mello" <bospam at canada.com>
Mario Goveia responded with his typical defensive response vis-a-vis business cycles:
http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070642.html
Mario responds:
Hey, Bosco,
Pardon me for being "defensive" by pointing out the simple fact that the US goes through business cycles every few years and that the last two have been about double the period of previous cycles because of the success in controlling US inflation. This well known fact seems to have mostly escaped the attention of the other "experts" you have cited, who tend to think that "this time" everything will be different, yadda, yadda, yadda. Maybe. Maybe not. I have seen "this time it will be different" come and go numerous times in the almost four decades I have lived here.
US economic policy depends on certain basic principles which generally fall towards the capitalist end of the spectrum of policy options, modified from time to time by the politics of which party has the votes in government.
At the risk of being "defensive", here are some observations on certain excerpts from the TIME magazine article, which is a great article to explain why the US economy is different from that of most other countries.
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
Excerpt: It also means that those mounds of dollars held by central banks and investors from Tokyo to Kuwait City are also deteriorating in value by the day. Yet the world can't just dump its dollars. Not only would that be incredibly destabilizing to the global economy, but it also would be effectively impossible. The dollar has been the reserve currency for decades and there are just too darn many of them out there to be converted into something else. Bankers in Beijing, Hong Kong and Dubai are stuck with the rotting stacks of greenbacks.
Mario responds:
These comments may sound clever, but there are no "rotting stacks of greenbacks". These funds are all in bank accounts, earning interest, mostly invested in US Treasury securities and other short term US dollar investments.
Schuman is correct about the difficulty of "dumping" dollars without destabilizing the global economy. This would include destroying the demand for the goods and services of China, India and other foreign supplier countries. The US imports more than it exports, has done so for decades, and the last time I checked, that has hugely benefited the economies of those countries and created this situation in the first place. Just imagine India's economy, or China's, today without purchases by US buyers.
If most Americans start saving like people in other countries, rather than spending like they always have done, the global economy will have to endure an economic slowdown and adapt to the loss of its primary economic engine. Fortunately, that is unlikely to happen. Even immigrants from countries with savings cultures become spenders in the US. That's the American way, whether the rest of the world likes it or not. Actually, the rest of the world loves it, because what would happen to their economies without American spending?
Schuman continues:
Excerpt: So the outcome is inevitable. As the financial crisis in the U.S. persists, the combination of decreasing asset prices and a weakening dollar will make the U.S. cheaper and cheaper to foreign investors. Irresistibly cheap. The U.S. is, after all, still a highly desirable place to own property, companies and securities. Foreign investors will see the crisis as a golden opportunity to buy prime pieces of Americana at bargain-basement prices. So all those dollars in banks around the world will flood back into the U.S. to buy stocks, bonds and property. Debt-burdened Americans, desperate for fresh cash, will be only too happy to sell ? or be forced to sell. The U.S. will become one giant garage sale, where the buyers are Japanese banks, Chinese state-run investment funds and oil-rich Arab sheikdoms.
Of course, we've heard all of this before. For the past two decades, pundits have warned of the dangers of the trade deficit, while the U.S. has powered on. The big difference these days is that far more countries are awash in dollars today than there were in the 1980s. Even back then, if you remember, Japan recycled its surplus into U.S. assets when the dollar weakened in the late 1980s.
The upside to greater foreign investment in the U.S. will be the strengthening of the dollar and the resurrection of stock and property prices. The downside is that the foreign business community ? especially in Asia ? will own larger swaths of the U.S. economy. And it is these foreign buyers who will benefit from the increases in the value of assets and the dollar.
Mario responds:
Schuman is right, but this is nothing new. Foreign holders of US dollars have always bought US assets, whether they be financial assets or companies or farms or commercial property. 80% of commercial property in Honolulu, for example, belongs to Japanese owners. Europeans own and manage huge farms and commercial property across the US. The US has never shied away from foreign ownership of US assets. It wants foreigners to buy US assets, which benefits US sellers, than assets anywhere else. That way the foreign owners develop a vested interest in the US and its economy creating a win-win situation for everyone.
Unlike the paranoid discussions on Goa and its identity being taken over by "foreigners", in the US this is considered a good thing, because, unlike most other countries, the US has always belonged to "foreigners".
Almost every American has descended from "foreigners" - like my kids and grandkids - or was a "foreigner" not too long ago - like me.
The US has become the world's only surviving superpower by using other people's brains and other people's money - always has, always will. Most of the American Nobel Laureates in medicine and the sciences were foreign born - but had to come to the US to maximize their intellects.
I hope this helps Bosco to sleep better with those Canadian pesos burning a hole in his pocket:-))
Hey, Bosco, drive down to Buffalo, New York, why don't you, and shop at the local malls there. We love your money, ...er, business, baby!
Mervyn Lobo
2008-03-27 01:38:35 UTC
Permalink
Post by Bosco D'Mello
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
This article purports to educate what Goans saddled with stacks of
greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do
well by being astute 'Goans at the Garage Sale".
Bosco,
The link you provided above leads to an article that only re-hashes whats been known for some years. The US has weathered storms like this before. What is different this time, is that the US is printing money like there is no tomorrow, effectively debauching its own currency. The author of the article cannot tell you this as the current US administration stopped publishing the numbers on how much money it is printing.

Money, like everything else, is only valuable when it is in short supply. If anyone is holding or getting paid in US dollars, s/he had better do some research on whether s/he still wants to hold a currency that is increasing in supply. The dollar is depreciating so rapidly that even oil rich nations are abandoning the US dollar and are starting to hold their reserves in other currencies. I hope the Goan saver takes note of what is happening and makes the appropriate move.


Mervyn3.0
PS. As for me, I am polishing my knowledge on US foreclosure laws. There is going to be a lot of bargains coming up in the next year to eighteen months. With foreclosure properties, you can often pay a few cents for something that costs a dollar.




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Bosco D'Mello
2008-03-27 05:00:11 UTC
Permalink
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
CORNEL DACOSTA
2008-03-27 11:26:50 UTC
Permalink
Hi Bosco
As per at least one Goanet 'dictum', is the content below about Goa or things Goan in any way whatsoever, or linked in any way whatsoever to the subject line? Goanet moderators have invariably rejected posts over these simple pedantic issues but I suppose exceptions exist for moderators themselves! However, please note that I am making a point about obvious inconsistency in rule application and not seeking an answer that will in all likelihood be entirely "inappropriate".
Cornel DaCosta
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
Mario Goveia
2008-03-27 01:50:18 UTC
Permalink
From, Bosco D'Mello bospam at canada.com
Tue Mar 25 20:47:20 PDT 2008
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
This article purports to educate what Goans saddled with stacks of greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do well by being astute 'Goans at the Garage Sale".
The USD is causing a lot of pain, the world over!!
Mario responds:
The article above discusses the likely purchase of US assets by foreign holders of US dollars. The US has always welcomed such purchases by foreigners, unlike the current hand-wringing going on by Goans about foreigners buying assets in Goa.
The link below is to another article on the US economy by respected financial journalist, Robert J. Samuelson, that should be educational for Goans in the middle-east with ties to the falling US dollar, because it adds some FACTS and much needed context and perspective to what is happening:
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032502298.html?hpid=opinionsbox1
An excerpt:
Regarding the economy, it's hard not to notice this stark contrast: The "real economy" of spending, production and jobs -- though weakening -- is hardly in a state of collapse, but much of today's semi-hysterical commentary suggests that it is. Financial markets for stocks and bonds are described as being "in turmoil." People talk about a recession as if it were the second coming of Genghis Khan. Some whisper the dreaded word "depression." Meanwhile, Americans are expected to buy about 15 million vehicles in 2008; though down from 16.5 million in 2006, that's still a lot.
There's a disconnect between what people see around them and what they're told is happening. The first is upsetting (rising gas prices, falling home prices, fewer jobs) but reflects the normal reverses of a $14 trillion economy. The second ("panic," "financial meltdown") suggests the onset of something catastrophic and totally outside the experience of ordinary people. The economy, the New York Times said last week, may be on "the brink of the worst recession in a generation" -- an ominous warning.
Perhaps, but so far the concrete evidence is scant. A recession is a noticeable period of declining output. Since World War II, there have been 10. On average, they've lasted 10 months, involved a peak monthly unemployment rate of 7.6 percent and resulted in a decline in economic output (gross domestic product) of 1.8 percent, reports Mark Zandi of Moody's Economy.com. If the two worst recessions (those of 1981-82 and 1973-75, with peak unemployment of 10.8 percent and 9 percent) are excluded, the average peak jobless rate is about 7 percent.
[end of excerpt]
Mario Goveia
2008-03-27 12:37:11 UTC
Permalink
Date: Thu, 27 Mar 2008 01:00:11 -0400
From: "Bosco D'Mello" <bospam at canada.com>
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm, Bear Stearns, goes under and takes with it $19 billion market capitalization in a few weeks. That is the sum of economies of a few SE Asian countries and is only ONE example.
Mario responds:
Bosco, you are obviously unaware that Bear Stearns failed, and deservedly so, because they engaged in risky lending practices at the wrong time. Others with similar risky practices will also pay a price. This happens in every recession. Lenders with prudent lending practices are weathering the storm just fine.
Please read the article I posted by Paul J. Samuelson to get a better perspective beyond the current crisis, which, by human nature, always seems like its different from previous events.
Bosco writes:
......as long as you are not dishing out financial advise to good people. One would expect real good advice from somebody who has spent 4 decades in the US. I will not hold my breath...........
Mario responds:
I leave the financial advice to "good people" to others. The only financial advice I have given to "good people" here is to buy property in Goa before it's too late.
Speaking of financial advice, did you buy gold when it crossed $1,000 per ounce?
CORNEL DACOSTA
2008-03-28 13:44:22 UTC
Permalink
Hi Bosco
I really was most surprised that you published my critical point about inconsistency in the treatment of posts by the moderator of Goanet---good for you if you are indeed the Moderator!

I therefore also want to point out that when the Moderator recently rejected six of my posts as "Inappropriate" in fairly quick succession, and virtually instantaneously as illustrated on the recorded time on the screen, it suggests that my substantial and carefully crafted rejected posts could not have been read at all to be summarily dismissed as "inappropriate".

Further, try as I may, I could not find the word "inappropriate" as a criterion for the rejection of posts in the much hyped Goanet Rules when I diligently looked through them. Perhaps you can therefore throw some light on this intriguing enigma.

And even further still, while the moderator chose to provide nil explanation, despite requests, for some clues why my posts in rapid succession were deemed "inappropriate" the seemingly same moderator was clearly happy to provide, to other posters who also happen to privately trade info with me, clear reasons why their posts were rejected. Understandably, I have retained such evidence should you and anyone else on Goanet need it.

So my dear Bosco, the ball is firmly in your court to persuade me and other posters that you or some nameless person called the Moderator on Goanet, has the capacity or the wherewithal to implement consistency in rejecting posts. Sadly, the evidence above suggests that, there is much that is seriously lacking in the essential commodity of consistency relating to Goanet moderation.
Cornel DaCosta

CORNEL DACOSTA <cornel at btinternet.com> wrote:
Hi Bosco
As per at least one Goanet 'dictum', is the content below about Goa or things Goan in any way whatsoever, or linked in any way whatsoever to the subject line? Goanet moderators have invariably rejected posts over these simple pedantic issues but I suppose exceptions exist for moderators themselves! However, please note that I am making a point about obvious inconsistency in rule application and not seeking an answer that will in all likelihood be entirely "inappropriate".
Cornel DaCosta
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
Mervyn Lobo
2008-03-29 00:13:33 UTC
Permalink
Post by Mario Goveia
The link below is to another article on the US economy by respected financial journalist, Robert J. Samuelson,
that should be educational for Goans in the middle-east with ties to the falling US dollar, because it adds some
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032502298.html?hpid=opinionsbox1




Mario,
Anyone who holds US dollars in his savings account, while his expenses are in a different currency, is effectively imposing a tax on his savings. The US dollar will have a weaker purchasing power when the saver needs to use his savings.

Those of us who are lucky enough to live in N. America know that our savings accounts are guaranteed by Govt insurance. This is not the case in other countries. When a bank fails, you can lose all your savings. Rumours were going around this morning that a second US bank is on the verge of bankruptcy. In addition, Citibank will cut its dividend for a second time as it is discovering more financial problems. There are real problems in US financial institutions and this is only the beginning of the crises.


How does this effect Goans?
Let me tell you what happened to East African Goans some years ago. Some migrated to the UK. When they arrived there, they asked their friends which were the good banks. Some were advised to put their money in a bank called BCCI. The bank paid .5% more interest than competing banks. When the Goan opened his account, he was asked what he did prior to migrating. Those who answered, "I worked for a bank" were asked to collect a job application form on the way out. Some of the new immigrants did get jobs at the bank. After working there for ten years, they woke up one morning to find that the bank had failed. These unlucky people lost:
1) Their entire life's savings
2) The pension benefits from working at the bank for ten years.


I am mentioning the coming financial crises so that people become aware of:
1) the hazards of putting all ones eggs in one basket
2) the hazards of depending on one currency.
3) the hazards of using only one method to store wealth.

Mervyn3.0












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Mario Goveia
2008-03-29 17:16:39 UTC
Permalink
Date: Fri, 28 Mar 2008 17:13:33 -0700 (PDT)
From: Mervyn Lobo <mervynalobo at yahoo.ca>
Mario,
Anyone who holds US dollars in his savings account, while his expenses are in a different currency, is effectively imposing a tax on his savings. The US dollar will have a weaker purchasing power when the saver needs to use his savings.
I am mentioning the coming financial crises so that people become aware of:
1) the hazards of putting all ones eggs in one basket
2) the hazards of depending on one currency.
3) the hazards of using only one method to store wealth.
Mario responds:
You are right, and Goanetters would do well to heed your advice to the extent they can. However, perhaps you will agree that hedging one's bets is a longer term strategy, and people who panic during a recession, are likely to do things that may not be in their long term interest. There are times when one needs to simply batten down the hatches and ride out the storm.
I have lived in the US for 37 years, experienced all the business cycles during that period, and have accumulated assets in India and through mutual funds that invest in Asian countries, as a long term hedge. Currently, any value we are losing in the US is being partially or entirely offset by gains in India and elsewhere.
My only point was that free market economies have proven over time to be extremely resilient, and, as Samuelson has pointed out, the current downturn in the US economy, caused mostly by excess federal spending and easy liquidity compounded by risky lending policies by major institutions that should have know better, already includes the seeds of its own recovery. Some of this occurs when foreign countries increase their imports from the US which are now less expensive due to the falling dollar, and foreign owners of US currency purchase US fixed assets, which they are all welcome to do by US policy, and the smart money is doing so even as we speak in terms of farmland, commercial property, manufacturing plants and corporate acquisitions. Unlike India, the US welcomes such acquisitions.
Gabe Menezes
2008-03-30 07:56:15 UTC
Permalink
On 29/03/2008, Mario Goveia <mgoveia at sbcglobal.net> wrote:


............... and foreign owners of US currency purchase US fixed
assets, which they are all welcome to do by US policy, and the smart
money is doing so even as we speak in terms of farmland, commercial
property, manufacturing plants and corporate acquisitions. Unlike
India, the US welcomes such acquisitions.

RESPONSE: Really ? Being more than a tad disingenuous; check out the URL below.

http://www.nytimes.com/2006/03/10/politics/10ports.html
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Gabe Menezes
2008-03-30 07:56:15 UTC
Permalink
On 29/03/2008, Mario Goveia <mgoveia at sbcglobal.net> wrote:


............... and foreign owners of US currency purchase US fixed
assets, which they are all welcome to do by US policy, and the smart
money is doing so even as we speak in terms of farmland, commercial
property, manufacturing plants and corporate acquisitions. Unlike
India, the US welcomes such acquisitions.

RESPONSE: Really ? Being more than a tad disingenuous; check out the URL below.

http://www.nytimes.com/2006/03/10/politics/10ports.html
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Gabe Menezes
2008-03-30 07:56:15 UTC
Permalink
On 29/03/2008, Mario Goveia <mgoveia at sbcglobal.net> wrote:


............... and foreign owners of US currency purchase US fixed
assets, which they are all welcome to do by US policy, and the smart
money is doing so even as we speak in terms of farmland, commercial
property, manufacturing plants and corporate acquisitions. Unlike
India, the US welcomes such acquisitions.

RESPONSE: Really ? Being more than a tad disingenuous; check out the URL below.

http://www.nytimes.com/2006/03/10/politics/10ports.html
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Gabe Menezes
2008-03-30 07:56:15 UTC
Permalink
On 29/03/2008, Mario Goveia <mgoveia at sbcglobal.net> wrote:


............... and foreign owners of US currency purchase US fixed
assets, which they are all welcome to do by US policy, and the smart
money is doing so even as we speak in terms of farmland, commercial
property, manufacturing plants and corporate acquisitions. Unlike
India, the US welcomes such acquisitions.

RESPONSE: Really ? Being more than a tad disingenuous; check out the URL below.

http://www.nytimes.com/2006/03/10/politics/10ports.html
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Gabe Menezes
2008-03-30 07:56:15 UTC
Permalink
On 29/03/2008, Mario Goveia <mgoveia at sbcglobal.net> wrote:


............... and foreign owners of US currency purchase US fixed
assets, which they are all welcome to do by US policy, and the smart
money is doing so even as we speak in terms of farmland, commercial
property, manufacturing plants and corporate acquisitions. Unlike
India, the US welcomes such acquisitions.

RESPONSE: Really ? Being more than a tad disingenuous; check out the URL below.

http://www.nytimes.com/2006/03/10/politics/10ports.html
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Gabe Menezes
2008-03-30 07:56:15 UTC
Permalink
On 29/03/2008, Mario Goveia <mgoveia at sbcglobal.net> wrote:


............... and foreign owners of US currency purchase US fixed
assets, which they are all welcome to do by US policy, and the smart
money is doing so even as we speak in terms of farmland, commercial
property, manufacturing plants and corporate acquisitions. Unlike
India, the US welcomes such acquisitions.

RESPONSE: Really ? Being more than a tad disingenuous; check out the URL below.

http://www.nytimes.com/2006/03/10/politics/10ports.html
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Mario Goveia
2008-03-30 17:43:43 UTC
Permalink
On 29/03/2008, Mario Goveia <mgoveia at sbcglobal.net> wrote:
............... and foreign owners of US currency purchase US fixed assets, which they are all welcome to do by US policy, and the smart money is doing so even as we speak in terms of farmland, commercial property, manufacturing plants and corporate acquisitions. Unlike India, the US welcomes such acquisitions.
Date: Sun, 30 Mar 2008 08:56:15 +0100
From: "Gabe Menezes" <gabe.menezes at gmail.com>
Really ? Being more than a tad disingenuous; check out the URL below.
http://www.nytimes.com/2006/03/10/politics/10ports.html
Mario responds:
Yes, really. It is you who are being disingenuous by citing an exception rather than the rule. Either that or you are unfamiliar with the extent to which US assets of all kinds are owned by non-US investors, something that is common knowledge around the world. As I said above, the smart money is doing so even as we speak. Anyone really familiar with the US would know that the Dubai Ports deal was a rare instance that was opposed by politicians based on national security issues following 9/11 and the war on terrorism. In fact there are other major US ports that are owned and managed by non-US owners.
Goans in the middle east would do well to look towards the US as an alternative in the near future for their vacations and personal purchases during such vacations. Their money would go a longer way than in countries where the currency had appreciated significantly against the dollar.
Gabe Menezes
2008-03-30 23:21:32 UTC
Permalink
Post by Mario Goveia
Yes, really. It is you who are being disingenuous by citing an exception rather than the rule. Either that or you are unfamiliar with the extent to which US assets of all kinds are owned by non-US investors, something that is common knowledge around the world.
RESPONSE: You have not even finished reading the post in its entirety,
else you would have noted the Chinese failure in acquiring....the post
was not about an exception but two in less than two years and ones
that really mattered !

Since you need to be spoon fed here it is...

excerpt:

The collapse of the deal is the second time in less than a year in
which a foreign acquisition raised protests about the economic
security of the United States. Cnooc, a Chinese government-owned oil
company, dropped a bid to buy Unocal in July, after it was clear that
opposition would run high. Chevron took over the company instead, for
$18 billion.

Ends.

Have you no shame, no self respect to go on pandering falsehoods on this forum ?

The U.S. Govt only wants foreign entities, including Sovereign Wealth
Funds, to buy T Bills and to bail out doggy US financial institutions.

I have no issues with the US Govt policy, neither should you but to
blatantly and falsely give readers the impression that the US is an
open market is sheer balderdash.
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Gabe Menezes
2008-03-30 23:21:32 UTC
Permalink
Post by Mario Goveia
Yes, really. It is you who are being disingenuous by citing an exception rather than the rule. Either that or you are unfamiliar with the extent to which US assets of all kinds are owned by non-US investors, something that is common knowledge around the world.
RESPONSE: You have not even finished reading the post in its entirety,
else you would have noted the Chinese failure in acquiring....the post
was not about an exception but two in less than two years and ones
that really mattered !

Since you need to be spoon fed here it is...

excerpt:

The collapse of the deal is the second time in less than a year in
which a foreign acquisition raised protests about the economic
security of the United States. Cnooc, a Chinese government-owned oil
company, dropped a bid to buy Unocal in July, after it was clear that
opposition would run high. Chevron took over the company instead, for
$18 billion.

Ends.

Have you no shame, no self respect to go on pandering falsehoods on this forum ?

The U.S. Govt only wants foreign entities, including Sovereign Wealth
Funds, to buy T Bills and to bail out doggy US financial institutions.

I have no issues with the US Govt policy, neither should you but to
blatantly and falsely give readers the impression that the US is an
open market is sheer balderdash.
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Gabe Menezes
2008-03-30 23:21:32 UTC
Permalink
Post by Mario Goveia
Yes, really. It is you who are being disingenuous by citing an exception rather than the rule. Either that or you are unfamiliar with the extent to which US assets of all kinds are owned by non-US investors, something that is common knowledge around the world.
RESPONSE: You have not even finished reading the post in its entirety,
else you would have noted the Chinese failure in acquiring....the post
was not about an exception but two in less than two years and ones
that really mattered !

Since you need to be spoon fed here it is...

excerpt:

The collapse of the deal is the second time in less than a year in
which a foreign acquisition raised protests about the economic
security of the United States. Cnooc, a Chinese government-owned oil
company, dropped a bid to buy Unocal in July, after it was clear that
opposition would run high. Chevron took over the company instead, for
$18 billion.

Ends.

Have you no shame, no self respect to go on pandering falsehoods on this forum ?

The U.S. Govt only wants foreign entities, including Sovereign Wealth
Funds, to buy T Bills and to bail out doggy US financial institutions.

I have no issues with the US Govt policy, neither should you but to
blatantly and falsely give readers the impression that the US is an
open market is sheer balderdash.
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Gabe Menezes
2008-03-30 23:21:32 UTC
Permalink
Post by Mario Goveia
Yes, really. It is you who are being disingenuous by citing an exception rather than the rule. Either that or you are unfamiliar with the extent to which US assets of all kinds are owned by non-US investors, something that is common knowledge around the world.
RESPONSE: You have not even finished reading the post in its entirety,
else you would have noted the Chinese failure in acquiring....the post
was not about an exception but two in less than two years and ones
that really mattered !

Since you need to be spoon fed here it is...

excerpt:

The collapse of the deal is the second time in less than a year in
which a foreign acquisition raised protests about the economic
security of the United States. Cnooc, a Chinese government-owned oil
company, dropped a bid to buy Unocal in July, after it was clear that
opposition would run high. Chevron took over the company instead, for
$18 billion.

Ends.

Have you no shame, no self respect to go on pandering falsehoods on this forum ?

The U.S. Govt only wants foreign entities, including Sovereign Wealth
Funds, to buy T Bills and to bail out doggy US financial institutions.

I have no issues with the US Govt policy, neither should you but to
blatantly and falsely give readers the impression that the US is an
open market is sheer balderdash.
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Gabe Menezes
2008-03-30 23:21:32 UTC
Permalink
Post by Mario Goveia
Yes, really. It is you who are being disingenuous by citing an exception rather than the rule. Either that or you are unfamiliar with the extent to which US assets of all kinds are owned by non-US investors, something that is common knowledge around the world.
RESPONSE: You have not even finished reading the post in its entirety,
else you would have noted the Chinese failure in acquiring....the post
was not about an exception but two in less than two years and ones
that really mattered !

Since you need to be spoon fed here it is...

excerpt:

The collapse of the deal is the second time in less than a year in
which a foreign acquisition raised protests about the economic
security of the United States. Cnooc, a Chinese government-owned oil
company, dropped a bid to buy Unocal in July, after it was clear that
opposition would run high. Chevron took over the company instead, for
$18 billion.

Ends.

Have you no shame, no self respect to go on pandering falsehoods on this forum ?

The U.S. Govt only wants foreign entities, including Sovereign Wealth
Funds, to buy T Bills and to bail out doggy US financial institutions.

I have no issues with the US Govt policy, neither should you but to
blatantly and falsely give readers the impression that the US is an
open market is sheer balderdash.
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Gabe Menezes
2008-03-30 23:21:32 UTC
Permalink
Post by Mario Goveia
Yes, really. It is you who are being disingenuous by citing an exception rather than the rule. Either that or you are unfamiliar with the extent to which US assets of all kinds are owned by non-US investors, something that is common knowledge around the world.
RESPONSE: You have not even finished reading the post in its entirety,
else you would have noted the Chinese failure in acquiring....the post
was not about an exception but two in less than two years and ones
that really mattered !

Since you need to be spoon fed here it is...

excerpt:

The collapse of the deal is the second time in less than a year in
which a foreign acquisition raised protests about the economic
security of the United States. Cnooc, a Chinese government-owned oil
company, dropped a bid to buy Unocal in July, after it was clear that
opposition would run high. Chevron took over the company instead, for
$18 billion.

Ends.

Have you no shame, no self respect to go on pandering falsehoods on this forum ?

The U.S. Govt only wants foreign entities, including Sovereign Wealth
Funds, to buy T Bills and to bail out doggy US financial institutions.

I have no issues with the US Govt policy, neither should you but to
blatantly and falsely give readers the impression that the US is an
open market is sheer balderdash.
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Gabe Menezes
2008-03-13 10:47:56 UTC
Permalink
The USD is at fixed rates against many Middle East currencies, so as
the dollar depreciates, so also does their remittances back to Goa.


Excerpt:-

History further reveals how costly inflation reduction can be. To curb
price increases in the late 1970s and early 1980s, Paul Volcker's Fed
raised interest rates above 20 percent. These stratospheric rates
ultimately brought inflation down to earth, but only after
precipitating painful recessions in 1979-80 and 1981-82. Before
Volcker's anti-inflation policy kicked in, the unemployment rate in
America stood at 5.8 percent; by the end of the second recession,
unemployment was up to 10.7 percent. And joblessness did not drop back
below 6 percent (its historical average) until 1987. The total cost of
this abnormally high unemployment and the idle capacity it bred has
been estimated by most analysts at more than a trillion dollars.

http://www.pkarchive.org/economy/NoInflationBad.html

Yes USD interest rates touched 23 percent for one year money, during
that period. Credit was so tight, the FED turned down money Centre
banks from approaching the FED window for funds more than once a
month.

The Fed is now doing the exact opposite; very shortly it will own all
the mortgages which Financial Institutions will park at their door.

Houses in Detroit are on sale for USD100. yes no joke
USD100.00......check it out:-


http://www.realtor.com/search/searchresults.aspx?ctid=2959&mxp=2&typ=7

In Toledo Ohio they are giving them away, for free, Check it out :-
http://www.realtor.com/search/searchresults.aspx?ctid=4180&ml=3&mxp=29&typ=7&sid=b64c3b8d81624f8eb141b574a94bf7f9&pg=1


The USD is being tanked out, the credit crunch is getting worse
instead of better; hold on to your hats....for the first time George
Bush is admitting that 'it's not good news'
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Mario Goveia
2008-03-14 19:20:29 UTC
Permalink
Thu Mar 13 03:47:56 PDT 2008
Gabe Menezes gabe.menezes at gmail.com wrote:
Yes USD interest rates touched 23 percent for one year money, during that period.
Mario responds:
At first glance this looked like an excerpt from the article. Then I realized it was the poster's own editorial comment - it was hard to tell when the switch took place.
Though the article said that interest rates had gone over 20% I was unable to find any evidence that the interest rate in the US had gone as high as 23% for one year money. Maybe I did not look in the right place. I would appreciate it if someone could cite some source to support this claim.
By the way, anyone familiar with economics would know that a relatively free market economy like the US routinely experiences business cycles. They used to be every three to four years, but, ever since the Federal Reserve has figured out how to keep inflation low, the cycles have expanded to seven to eight years, which is what the last two business cycles in the US have been. The slowdowns have never lasted very long, even the last one in 2000 - 2001 which was exacerbated by the economic effect of the 9/11 attack.
Gabe Menezes wrote:
In Toledo Ohio they are giving them away, for free, Check it out :-
http://www.realtor.com/search/searchresults.aspx?ctid=4180&ml=3&mxp=29&typ=7&sid=b64c3b8d81624f8eb141b574a94bf7f9&pg=1
Mario responds:
I was really excited when I saw this information since I live near Toledo and thought I could add to my growing list of real-estate properties at no cost, so I ran out to capture the market for $0 price houses. The realtor I called thought I was nuts. I cited this thread and demanded they give me all those houses, immediately.
Unfortunately, what I found was that the Realtor.com website shows homes scheduled for auction as $0 because no specific asking price has been set. Some of these single-family houses with large yards in nice neighborhoods have minimum bid prices that sound like the ridiculous prices they pay for the walk-up tenements in London. People familiar with how Realtor.com operates knew this, whereas I did not. I need to be more careful what I believe in future.
I should have known there's no such thing as a free lunch, ...er, home!
Mario Goveia
2008-03-17 16:00:57 UTC
Permalink
Gabe Menezes wrote:
Yes USD interest rates touched 23 percent for one year money, during that period.
On 14/03/2008, Mario Goveia <mgoveia at sbcglobal.net> responded:
Though the article said that interest rates had gone over 20% I was unable to find any evidence that the interest rate in the US had gone as high as 23% for one year money. Maybe I did not look in the right place. I would appreciate it if someone could cite some source to support this claim.
Sat Mar 15 04:22:01 PDT 2008
Gabe Menezes wrote:
Short of actually pulling up the ticket with the name of the Bank that borrowed, I have no way of proving that.
Mario responds:
Thanks, Gabe. I rest my case.
Gabe Menezes wrote:
If one knows how the inter bank markets work then one would have surmised that it was perfectly possible, that interbank one year money actually traded at 23 percent, with prime being 21-1/2 percent.
Mario responds:
Not necessarily as we can see from the sources below.
http://www.bankrate.com/brm/ratewatch/leading-rates.asp
This source shows the US Prime rate is 6% per annum currently.
http://www.bankrate.com/brm/ratewatch/other-indices.asp
This shows the one-year LIBOR rate is 2.58% per annum currently, i.e. lower than the prime rate, not several points higher.
Gabe Menezes wrote:
Now I shall give a lesson in interbank dealings:
Mario responds:
Thanks for your "lesson", Gabe. I think you have already taught us a lot.:-))
Sat Mar 15 06:05:17 PDT 2008
In a related post with the same title
Gabe Menezes wrote:
May be true what the man says.
Mario responds:
Thanks, Gabe, but it is not "May be". It is so. When a property is to be auctioned, Realtor.com shows the asking price as $0 because there is no asking price for a house to be auctioned.
Gabe Menezes wrote:
He should further mop up the market in Goa...he has been advocating that the property market there is a steal.
Mario responds:
I already did that to the extent that I could BEFORE the market went up in Goa. Didn't you? BTW, I didn't say that property in Goa was a "steal" any more. But there are many properties that are still reasonably priced when compared to the west. My advice was to those Goan NRIs who complain of Goa being bought by non-Goans, but who are inclined to invest their own money overseas in properties that are expensive in comparison with prices in Goa.
Gabe Menezes wrote:
If the man could kindly provide any place in London, even a single bedroom that is on sale for the equivalent of USD100,000 then he would be doing many a London Goan a big, big favour
As to the walk up London tenement, it would be worth more than this nice looking property in Toledo Ohio.
Mario responds:
Let's leave aside for now the absurdity of comparing prices in a national capital city and international business center like London with a mid-sized mid-western industrial city like Toledo, Ohio. Shouldn't prices of homes in London be compared with prices of homes in cities like New York or Washington, DC? But, I digress.
Since this thread apparently started because of a tender concern for the financial transactions of middle-east Goans, I think they should also take note of Gabe's warning for those of them who may be thinking of moving to London - that they will have to pay more than USD100,000 even for a one bedroom walk-up tenement.
Bosco D'Mello
2008-03-26 03:47:20 UTC
Permalink
Gabe Menezes initiated this thread in mid-March with an analysis of the US
Dollar:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070563.html

Mario Goveia responded with his typical defensive response vis-a-vis
business cycles:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070642.html

Mervyn Lobo chipped in with a piece on incompetent money managers:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070721.html

Marlon Menezes re-directed this thread to "Goans in pain! (specially in
America!)". He did indicate this was the first part of the bad news:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070902.html


Yesterday I ran into:

http://www.time.com/time/magazine/article/0,9171,1725094,00.html

This article purports to educate what Goans saddled with stacks of
greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do
well by being astute 'Goans at the Garage Sale".

The USD is causing a lot of pain, the world over!!

- Bosco
Still holding Canadian Pesos
Mario Goveia
2008-03-26 15:22:21 UTC
Permalink
Date: Tue, 25 Mar 2008 23:47:20 -0400
From: "Bosco D'Mello" <bospam at canada.com>
Mario Goveia responded with his typical defensive response vis-a-vis business cycles:
http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070642.html
Mario responds:
Hey, Bosco,
Pardon me for being "defensive" by pointing out the simple fact that the US goes through business cycles every few years and that the last two have been about double the period of previous cycles because of the success in controlling US inflation. This well known fact seems to have mostly escaped the attention of the other "experts" you have cited, who tend to think that "this time" everything will be different, yadda, yadda, yadda. Maybe. Maybe not. I have seen "this time it will be different" come and go numerous times in the almost four decades I have lived here.
US economic policy depends on certain basic principles which generally fall towards the capitalist end of the spectrum of policy options, modified from time to time by the politics of which party has the votes in government.
At the risk of being "defensive", here are some observations on certain excerpts from the TIME magazine article, which is a great article to explain why the US economy is different from that of most other countries.
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
Excerpt: It also means that those mounds of dollars held by central banks and investors from Tokyo to Kuwait City are also deteriorating in value by the day. Yet the world can't just dump its dollars. Not only would that be incredibly destabilizing to the global economy, but it also would be effectively impossible. The dollar has been the reserve currency for decades and there are just too darn many of them out there to be converted into something else. Bankers in Beijing, Hong Kong and Dubai are stuck with the rotting stacks of greenbacks.
Mario responds:
These comments may sound clever, but there are no "rotting stacks of greenbacks". These funds are all in bank accounts, earning interest, mostly invested in US Treasury securities and other short term US dollar investments.
Schuman is correct about the difficulty of "dumping" dollars without destabilizing the global economy. This would include destroying the demand for the goods and services of China, India and other foreign supplier countries. The US imports more than it exports, has done so for decades, and the last time I checked, that has hugely benefited the economies of those countries and created this situation in the first place. Just imagine India's economy, or China's, today without purchases by US buyers.
If most Americans start saving like people in other countries, rather than spending like they always have done, the global economy will have to endure an economic slowdown and adapt to the loss of its primary economic engine. Fortunately, that is unlikely to happen. Even immigrants from countries with savings cultures become spenders in the US. That's the American way, whether the rest of the world likes it or not. Actually, the rest of the world loves it, because what would happen to their economies without American spending?
Schuman continues:
Excerpt: So the outcome is inevitable. As the financial crisis in the U.S. persists, the combination of decreasing asset prices and a weakening dollar will make the U.S. cheaper and cheaper to foreign investors. Irresistibly cheap. The U.S. is, after all, still a highly desirable place to own property, companies and securities. Foreign investors will see the crisis as a golden opportunity to buy prime pieces of Americana at bargain-basement prices. So all those dollars in banks around the world will flood back into the U.S. to buy stocks, bonds and property. Debt-burdened Americans, desperate for fresh cash, will be only too happy to sell ? or be forced to sell. The U.S. will become one giant garage sale, where the buyers are Japanese banks, Chinese state-run investment funds and oil-rich Arab sheikdoms.
Of course, we've heard all of this before. For the past two decades, pundits have warned of the dangers of the trade deficit, while the U.S. has powered on. The big difference these days is that far more countries are awash in dollars today than there were in the 1980s. Even back then, if you remember, Japan recycled its surplus into U.S. assets when the dollar weakened in the late 1980s.
The upside to greater foreign investment in the U.S. will be the strengthening of the dollar and the resurrection of stock and property prices. The downside is that the foreign business community ? especially in Asia ? will own larger swaths of the U.S. economy. And it is these foreign buyers who will benefit from the increases in the value of assets and the dollar.
Mario responds:
Schuman is right, but this is nothing new. Foreign holders of US dollars have always bought US assets, whether they be financial assets or companies or farms or commercial property. 80% of commercial property in Honolulu, for example, belongs to Japanese owners. Europeans own and manage huge farms and commercial property across the US. The US has never shied away from foreign ownership of US assets. It wants foreigners to buy US assets, which benefits US sellers, than assets anywhere else. That way the foreign owners develop a vested interest in the US and its economy creating a win-win situation for everyone.
Unlike the paranoid discussions on Goa and its identity being taken over by "foreigners", in the US this is considered a good thing, because, unlike most other countries, the US has always belonged to "foreigners".
Almost every American has descended from "foreigners" - like my kids and grandkids - or was a "foreigner" not too long ago - like me.
The US has become the world's only surviving superpower by using other people's brains and other people's money - always has, always will. Most of the American Nobel Laureates in medicine and the sciences were foreign born - but had to come to the US to maximize their intellects.
I hope this helps Bosco to sleep better with those Canadian pesos burning a hole in his pocket:-))
Hey, Bosco, drive down to Buffalo, New York, why don't you, and shop at the local malls there. We love your money, ...er, business, baby!
Mervyn Lobo
2008-03-27 01:38:35 UTC
Permalink
Post by Bosco D'Mello
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
This article purports to educate what Goans saddled with stacks of
greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do
well by being astute 'Goans at the Garage Sale".
Bosco,
The link you provided above leads to an article that only re-hashes whats been known for some years. The US has weathered storms like this before. What is different this time, is that the US is printing money like there is no tomorrow, effectively debauching its own currency. The author of the article cannot tell you this as the current US administration stopped publishing the numbers on how much money it is printing.

Money, like everything else, is only valuable when it is in short supply. If anyone is holding or getting paid in US dollars, s/he had better do some research on whether s/he still wants to hold a currency that is increasing in supply. The dollar is depreciating so rapidly that even oil rich nations are abandoning the US dollar and are starting to hold their reserves in other currencies. I hope the Goan saver takes note of what is happening and makes the appropriate move.


Mervyn3.0
PS. As for me, I am polishing my knowledge on US foreclosure laws. There is going to be a lot of bargains coming up in the next year to eighteen months. With foreclosure properties, you can often pay a few cents for something that costs a dollar.




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Bosco D'Mello
2008-03-27 05:00:11 UTC
Permalink
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
CORNEL DACOSTA
2008-03-27 11:26:50 UTC
Permalink
Hi Bosco
As per at least one Goanet 'dictum', is the content below about Goa or things Goan in any way whatsoever, or linked in any way whatsoever to the subject line? Goanet moderators have invariably rejected posts over these simple pedantic issues but I suppose exceptions exist for moderators themselves! However, please note that I am making a point about obvious inconsistency in rule application and not seeking an answer that will in all likelihood be entirely "inappropriate".
Cornel DaCosta
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
Mario Goveia
2008-03-27 01:50:18 UTC
Permalink
From, Bosco D'Mello bospam at canada.com
Tue Mar 25 20:47:20 PDT 2008
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
This article purports to educate what Goans saddled with stacks of greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do well by being astute 'Goans at the Garage Sale".
The USD is causing a lot of pain, the world over!!
Mario responds:
The article above discusses the likely purchase of US assets by foreign holders of US dollars. The US has always welcomed such purchases by foreigners, unlike the current hand-wringing going on by Goans about foreigners buying assets in Goa.
The link below is to another article on the US economy by respected financial journalist, Robert J. Samuelson, that should be educational for Goans in the middle-east with ties to the falling US dollar, because it adds some FACTS and much needed context and perspective to what is happening:
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032502298.html?hpid=opinionsbox1
An excerpt:
Regarding the economy, it's hard not to notice this stark contrast: The "real economy" of spending, production and jobs -- though weakening -- is hardly in a state of collapse, but much of today's semi-hysterical commentary suggests that it is. Financial markets for stocks and bonds are described as being "in turmoil." People talk about a recession as if it were the second coming of Genghis Khan. Some whisper the dreaded word "depression." Meanwhile, Americans are expected to buy about 15 million vehicles in 2008; though down from 16.5 million in 2006, that's still a lot.
There's a disconnect between what people see around them and what they're told is happening. The first is upsetting (rising gas prices, falling home prices, fewer jobs) but reflects the normal reverses of a $14 trillion economy. The second ("panic," "financial meltdown") suggests the onset of something catastrophic and totally outside the experience of ordinary people. The economy, the New York Times said last week, may be on "the brink of the worst recession in a generation" -- an ominous warning.
Perhaps, but so far the concrete evidence is scant. A recession is a noticeable period of declining output. Since World War II, there have been 10. On average, they've lasted 10 months, involved a peak monthly unemployment rate of 7.6 percent and resulted in a decline in economic output (gross domestic product) of 1.8 percent, reports Mark Zandi of Moody's Economy.com. If the two worst recessions (those of 1981-82 and 1973-75, with peak unemployment of 10.8 percent and 9 percent) are excluded, the average peak jobless rate is about 7 percent.
[end of excerpt]
Mario Goveia
2008-03-27 12:37:11 UTC
Permalink
Date: Thu, 27 Mar 2008 01:00:11 -0400
From: "Bosco D'Mello" <bospam at canada.com>
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm, Bear Stearns, goes under and takes with it $19 billion market capitalization in a few weeks. That is the sum of economies of a few SE Asian countries and is only ONE example.
Mario responds:
Bosco, you are obviously unaware that Bear Stearns failed, and deservedly so, because they engaged in risky lending practices at the wrong time. Others with similar risky practices will also pay a price. This happens in every recession. Lenders with prudent lending practices are weathering the storm just fine.
Please read the article I posted by Paul J. Samuelson to get a better perspective beyond the current crisis, which, by human nature, always seems like its different from previous events.
Bosco writes:
......as long as you are not dishing out financial advise to good people. One would expect real good advice from somebody who has spent 4 decades in the US. I will not hold my breath...........
Mario responds:
I leave the financial advice to "good people" to others. The only financial advice I have given to "good people" here is to buy property in Goa before it's too late.
Speaking of financial advice, did you buy gold when it crossed $1,000 per ounce?
CORNEL DACOSTA
2008-03-28 13:44:22 UTC
Permalink
Hi Bosco
I really was most surprised that you published my critical point about inconsistency in the treatment of posts by the moderator of Goanet---good for you if you are indeed the Moderator!

I therefore also want to point out that when the Moderator recently rejected six of my posts as "Inappropriate" in fairly quick succession, and virtually instantaneously as illustrated on the recorded time on the screen, it suggests that my substantial and carefully crafted rejected posts could not have been read at all to be summarily dismissed as "inappropriate".

Further, try as I may, I could not find the word "inappropriate" as a criterion for the rejection of posts in the much hyped Goanet Rules when I diligently looked through them. Perhaps you can therefore throw some light on this intriguing enigma.

And even further still, while the moderator chose to provide nil explanation, despite requests, for some clues why my posts in rapid succession were deemed "inappropriate" the seemingly same moderator was clearly happy to provide, to other posters who also happen to privately trade info with me, clear reasons why their posts were rejected. Understandably, I have retained such evidence should you and anyone else on Goanet need it.

So my dear Bosco, the ball is firmly in your court to persuade me and other posters that you or some nameless person called the Moderator on Goanet, has the capacity or the wherewithal to implement consistency in rejecting posts. Sadly, the evidence above suggests that, there is much that is seriously lacking in the essential commodity of consistency relating to Goanet moderation.
Cornel DaCosta

CORNEL DACOSTA <cornel at btinternet.com> wrote:
Hi Bosco
As per at least one Goanet 'dictum', is the content below about Goa or things Goan in any way whatsoever, or linked in any way whatsoever to the subject line? Goanet moderators have invariably rejected posts over these simple pedantic issues but I suppose exceptions exist for moderators themselves! However, please note that I am making a point about obvious inconsistency in rule application and not seeking an answer that will in all likelihood be entirely "inappropriate".
Cornel DaCosta
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
Mervyn Lobo
2008-03-29 00:13:33 UTC
Permalink
Post by Mario Goveia
The link below is to another article on the US economy by respected financial journalist, Robert J. Samuelson,
that should be educational for Goans in the middle-east with ties to the falling US dollar, because it adds some
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032502298.html?hpid=opinionsbox1




Mario,
Anyone who holds US dollars in his savings account, while his expenses are in a different currency, is effectively imposing a tax on his savings. The US dollar will have a weaker purchasing power when the saver needs to use his savings.

Those of us who are lucky enough to live in N. America know that our savings accounts are guaranteed by Govt insurance. This is not the case in other countries. When a bank fails, you can lose all your savings. Rumours were going around this morning that a second US bank is on the verge of bankruptcy. In addition, Citibank will cut its dividend for a second time as it is discovering more financial problems. There are real problems in US financial institutions and this is only the beginning of the crises.


How does this effect Goans?
Let me tell you what happened to East African Goans some years ago. Some migrated to the UK. When they arrived there, they asked their friends which were the good banks. Some were advised to put their money in a bank called BCCI. The bank paid .5% more interest than competing banks. When the Goan opened his account, he was asked what he did prior to migrating. Those who answered, "I worked for a bank" were asked to collect a job application form on the way out. Some of the new immigrants did get jobs at the bank. After working there for ten years, they woke up one morning to find that the bank had failed. These unlucky people lost:
1) Their entire life's savings
2) The pension benefits from working at the bank for ten years.


I am mentioning the coming financial crises so that people become aware of:
1) the hazards of putting all ones eggs in one basket
2) the hazards of depending on one currency.
3) the hazards of using only one method to store wealth.

Mervyn3.0












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Mario Goveia
2008-03-29 17:16:39 UTC
Permalink
Date: Fri, 28 Mar 2008 17:13:33 -0700 (PDT)
From: Mervyn Lobo <mervynalobo at yahoo.ca>
Mario,
Anyone who holds US dollars in his savings account, while his expenses are in a different currency, is effectively imposing a tax on his savings. The US dollar will have a weaker purchasing power when the saver needs to use his savings.
I am mentioning the coming financial crises so that people become aware of:
1) the hazards of putting all ones eggs in one basket
2) the hazards of depending on one currency.
3) the hazards of using only one method to store wealth.
Mario responds:
You are right, and Goanetters would do well to heed your advice to the extent they can. However, perhaps you will agree that hedging one's bets is a longer term strategy, and people who panic during a recession, are likely to do things that may not be in their long term interest. There are times when one needs to simply batten down the hatches and ride out the storm.
I have lived in the US for 37 years, experienced all the business cycles during that period, and have accumulated assets in India and through mutual funds that invest in Asian countries, as a long term hedge. Currently, any value we are losing in the US is being partially or entirely offset by gains in India and elsewhere.
My only point was that free market economies have proven over time to be extremely resilient, and, as Samuelson has pointed out, the current downturn in the US economy, caused mostly by excess federal spending and easy liquidity compounded by risky lending policies by major institutions that should have know better, already includes the seeds of its own recovery. Some of this occurs when foreign countries increase their imports from the US which are now less expensive due to the falling dollar, and foreign owners of US currency purchase US fixed assets, which they are all welcome to do by US policy, and the smart money is doing so even as we speak in terms of farmland, commercial property, manufacturing plants and corporate acquisitions. Unlike India, the US welcomes such acquisitions.
Mario Goveia
2008-03-30 17:43:43 UTC
Permalink
On 29/03/2008, Mario Goveia <mgoveia at sbcglobal.net> wrote:
............... and foreign owners of US currency purchase US fixed assets, which they are all welcome to do by US policy, and the smart money is doing so even as we speak in terms of farmland, commercial property, manufacturing plants and corporate acquisitions. Unlike India, the US welcomes such acquisitions.
Date: Sun, 30 Mar 2008 08:56:15 +0100
From: "Gabe Menezes" <gabe.menezes at gmail.com>
Really ? Being more than a tad disingenuous; check out the URL below.
http://www.nytimes.com/2006/03/10/politics/10ports.html
Mario responds:
Yes, really. It is you who are being disingenuous by citing an exception rather than the rule. Either that or you are unfamiliar with the extent to which US assets of all kinds are owned by non-US investors, something that is common knowledge around the world. As I said above, the smart money is doing so even as we speak. Anyone really familiar with the US would know that the Dubai Ports deal was a rare instance that was opposed by politicians based on national security issues following 9/11 and the war on terrorism. In fact there are other major US ports that are owned and managed by non-US owners.
Goans in the middle east would do well to look towards the US as an alternative in the near future for their vacations and personal purchases during such vacations. Their money would go a longer way than in countries where the currency had appreciated significantly against the dollar.
Gabe Menezes
2008-03-13 10:47:56 UTC
Permalink
The USD is at fixed rates against many Middle East currencies, so as
the dollar depreciates, so also does their remittances back to Goa.


Excerpt:-

History further reveals how costly inflation reduction can be. To curb
price increases in the late 1970s and early 1980s, Paul Volcker's Fed
raised interest rates above 20 percent. These stratospheric rates
ultimately brought inflation down to earth, but only after
precipitating painful recessions in 1979-80 and 1981-82. Before
Volcker's anti-inflation policy kicked in, the unemployment rate in
America stood at 5.8 percent; by the end of the second recession,
unemployment was up to 10.7 percent. And joblessness did not drop back
below 6 percent (its historical average) until 1987. The total cost of
this abnormally high unemployment and the idle capacity it bred has
been estimated by most analysts at more than a trillion dollars.

http://www.pkarchive.org/economy/NoInflationBad.html

Yes USD interest rates touched 23 percent for one year money, during
that period. Credit was so tight, the FED turned down money Centre
banks from approaching the FED window for funds more than once a
month.

The Fed is now doing the exact opposite; very shortly it will own all
the mortgages which Financial Institutions will park at their door.

Houses in Detroit are on sale for USD100. yes no joke
USD100.00......check it out:-


http://www.realtor.com/search/searchresults.aspx?ctid=2959&mxp=2&typ=7

In Toledo Ohio they are giving them away, for free, Check it out :-
http://www.realtor.com/search/searchresults.aspx?ctid=4180&ml=3&mxp=29&typ=7&sid=b64c3b8d81624f8eb141b574a94bf7f9&pg=1


The USD is being tanked out, the credit crunch is getting worse
instead of better; hold on to your hats....for the first time George
Bush is admitting that 'it's not good news'
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Mario Goveia
2008-03-14 19:20:29 UTC
Permalink
Thu Mar 13 03:47:56 PDT 2008
Gabe Menezes gabe.menezes at gmail.com wrote:
Yes USD interest rates touched 23 percent for one year money, during that period.
Mario responds:
At first glance this looked like an excerpt from the article. Then I realized it was the poster's own editorial comment - it was hard to tell when the switch took place.
Though the article said that interest rates had gone over 20% I was unable to find any evidence that the interest rate in the US had gone as high as 23% for one year money. Maybe I did not look in the right place. I would appreciate it if someone could cite some source to support this claim.
By the way, anyone familiar with economics would know that a relatively free market economy like the US routinely experiences business cycles. They used to be every three to four years, but, ever since the Federal Reserve has figured out how to keep inflation low, the cycles have expanded to seven to eight years, which is what the last two business cycles in the US have been. The slowdowns have never lasted very long, even the last one in 2000 - 2001 which was exacerbated by the economic effect of the 9/11 attack.
Gabe Menezes wrote:
In Toledo Ohio they are giving them away, for free, Check it out :-
http://www.realtor.com/search/searchresults.aspx?ctid=4180&ml=3&mxp=29&typ=7&sid=b64c3b8d81624f8eb141b574a94bf7f9&pg=1
Mario responds:
I was really excited when I saw this information since I live near Toledo and thought I could add to my growing list of real-estate properties at no cost, so I ran out to capture the market for $0 price houses. The realtor I called thought I was nuts. I cited this thread and demanded they give me all those houses, immediately.
Unfortunately, what I found was that the Realtor.com website shows homes scheduled for auction as $0 because no specific asking price has been set. Some of these single-family houses with large yards in nice neighborhoods have minimum bid prices that sound like the ridiculous prices they pay for the walk-up tenements in London. People familiar with how Realtor.com operates knew this, whereas I did not. I need to be more careful what I believe in future.
I should have known there's no such thing as a free lunch, ...er, home!
Mario Goveia
2008-03-17 16:00:57 UTC
Permalink
Gabe Menezes wrote:
Yes USD interest rates touched 23 percent for one year money, during that period.
On 14/03/2008, Mario Goveia <mgoveia at sbcglobal.net> responded:
Though the article said that interest rates had gone over 20% I was unable to find any evidence that the interest rate in the US had gone as high as 23% for one year money. Maybe I did not look in the right place. I would appreciate it if someone could cite some source to support this claim.
Sat Mar 15 04:22:01 PDT 2008
Gabe Menezes wrote:
Short of actually pulling up the ticket with the name of the Bank that borrowed, I have no way of proving that.
Mario responds:
Thanks, Gabe. I rest my case.
Gabe Menezes wrote:
If one knows how the inter bank markets work then one would have surmised that it was perfectly possible, that interbank one year money actually traded at 23 percent, with prime being 21-1/2 percent.
Mario responds:
Not necessarily as we can see from the sources below.
http://www.bankrate.com/brm/ratewatch/leading-rates.asp
This source shows the US Prime rate is 6% per annum currently.
http://www.bankrate.com/brm/ratewatch/other-indices.asp
This shows the one-year LIBOR rate is 2.58% per annum currently, i.e. lower than the prime rate, not several points higher.
Gabe Menezes wrote:
Now I shall give a lesson in interbank dealings:
Mario responds:
Thanks for your "lesson", Gabe. I think you have already taught us a lot.:-))
Sat Mar 15 06:05:17 PDT 2008
In a related post with the same title
Gabe Menezes wrote:
May be true what the man says.
Mario responds:
Thanks, Gabe, but it is not "May be". It is so. When a property is to be auctioned, Realtor.com shows the asking price as $0 because there is no asking price for a house to be auctioned.
Gabe Menezes wrote:
He should further mop up the market in Goa...he has been advocating that the property market there is a steal.
Mario responds:
I already did that to the extent that I could BEFORE the market went up in Goa. Didn't you? BTW, I didn't say that property in Goa was a "steal" any more. But there are many properties that are still reasonably priced when compared to the west. My advice was to those Goan NRIs who complain of Goa being bought by non-Goans, but who are inclined to invest their own money overseas in properties that are expensive in comparison with prices in Goa.
Gabe Menezes wrote:
If the man could kindly provide any place in London, even a single bedroom that is on sale for the equivalent of USD100,000 then he would be doing many a London Goan a big, big favour
As to the walk up London tenement, it would be worth more than this nice looking property in Toledo Ohio.
Mario responds:
Let's leave aside for now the absurdity of comparing prices in a national capital city and international business center like London with a mid-sized mid-western industrial city like Toledo, Ohio. Shouldn't prices of homes in London be compared with prices of homes in cities like New York or Washington, DC? But, I digress.
Since this thread apparently started because of a tender concern for the financial transactions of middle-east Goans, I think they should also take note of Gabe's warning for those of them who may be thinking of moving to London - that they will have to pay more than USD100,000 even for a one bedroom walk-up tenement.
Bosco D'Mello
2008-03-26 03:47:20 UTC
Permalink
Gabe Menezes initiated this thread in mid-March with an analysis of the US
Dollar:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070563.html

Mario Goveia responded with his typical defensive response vis-a-vis
business cycles:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070642.html

Mervyn Lobo chipped in with a piece on incompetent money managers:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070721.html

Marlon Menezes re-directed this thread to "Goans in pain! (specially in
America!)". He did indicate this was the first part of the bad news:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070902.html


Yesterday I ran into:

http://www.time.com/time/magazine/article/0,9171,1725094,00.html

This article purports to educate what Goans saddled with stacks of
greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do
well by being astute 'Goans at the Garage Sale".

The USD is causing a lot of pain, the world over!!

- Bosco
Still holding Canadian Pesos
Mario Goveia
2008-03-26 15:22:21 UTC
Permalink
Date: Tue, 25 Mar 2008 23:47:20 -0400
From: "Bosco D'Mello" <bospam at canada.com>
Mario Goveia responded with his typical defensive response vis-a-vis business cycles:
http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070642.html
Mario responds:
Hey, Bosco,
Pardon me for being "defensive" by pointing out the simple fact that the US goes through business cycles every few years and that the last two have been about double the period of previous cycles because of the success in controlling US inflation. This well known fact seems to have mostly escaped the attention of the other "experts" you have cited, who tend to think that "this time" everything will be different, yadda, yadda, yadda. Maybe. Maybe not. I have seen "this time it will be different" come and go numerous times in the almost four decades I have lived here.
US economic policy depends on certain basic principles which generally fall towards the capitalist end of the spectrum of policy options, modified from time to time by the politics of which party has the votes in government.
At the risk of being "defensive", here are some observations on certain excerpts from the TIME magazine article, which is a great article to explain why the US economy is different from that of most other countries.
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
Excerpt: It also means that those mounds of dollars held by central banks and investors from Tokyo to Kuwait City are also deteriorating in value by the day. Yet the world can't just dump its dollars. Not only would that be incredibly destabilizing to the global economy, but it also would be effectively impossible. The dollar has been the reserve currency for decades and there are just too darn many of them out there to be converted into something else. Bankers in Beijing, Hong Kong and Dubai are stuck with the rotting stacks of greenbacks.
Mario responds:
These comments may sound clever, but there are no "rotting stacks of greenbacks". These funds are all in bank accounts, earning interest, mostly invested in US Treasury securities and other short term US dollar investments.
Schuman is correct about the difficulty of "dumping" dollars without destabilizing the global economy. This would include destroying the demand for the goods and services of China, India and other foreign supplier countries. The US imports more than it exports, has done so for decades, and the last time I checked, that has hugely benefited the economies of those countries and created this situation in the first place. Just imagine India's economy, or China's, today without purchases by US buyers.
If most Americans start saving like people in other countries, rather than spending like they always have done, the global economy will have to endure an economic slowdown and adapt to the loss of its primary economic engine. Fortunately, that is unlikely to happen. Even immigrants from countries with savings cultures become spenders in the US. That's the American way, whether the rest of the world likes it or not. Actually, the rest of the world loves it, because what would happen to their economies without American spending?
Schuman continues:
Excerpt: So the outcome is inevitable. As the financial crisis in the U.S. persists, the combination of decreasing asset prices and a weakening dollar will make the U.S. cheaper and cheaper to foreign investors. Irresistibly cheap. The U.S. is, after all, still a highly desirable place to own property, companies and securities. Foreign investors will see the crisis as a golden opportunity to buy prime pieces of Americana at bargain-basement prices. So all those dollars in banks around the world will flood back into the U.S. to buy stocks, bonds and property. Debt-burdened Americans, desperate for fresh cash, will be only too happy to sell ? or be forced to sell. The U.S. will become one giant garage sale, where the buyers are Japanese banks, Chinese state-run investment funds and oil-rich Arab sheikdoms.
Of course, we've heard all of this before. For the past two decades, pundits have warned of the dangers of the trade deficit, while the U.S. has powered on. The big difference these days is that far more countries are awash in dollars today than there were in the 1980s. Even back then, if you remember, Japan recycled its surplus into U.S. assets when the dollar weakened in the late 1980s.
The upside to greater foreign investment in the U.S. will be the strengthening of the dollar and the resurrection of stock and property prices. The downside is that the foreign business community ? especially in Asia ? will own larger swaths of the U.S. economy. And it is these foreign buyers who will benefit from the increases in the value of assets and the dollar.
Mario responds:
Schuman is right, but this is nothing new. Foreign holders of US dollars have always bought US assets, whether they be financial assets or companies or farms or commercial property. 80% of commercial property in Honolulu, for example, belongs to Japanese owners. Europeans own and manage huge farms and commercial property across the US. The US has never shied away from foreign ownership of US assets. It wants foreigners to buy US assets, which benefits US sellers, than assets anywhere else. That way the foreign owners develop a vested interest in the US and its economy creating a win-win situation for everyone.
Unlike the paranoid discussions on Goa and its identity being taken over by "foreigners", in the US this is considered a good thing, because, unlike most other countries, the US has always belonged to "foreigners".
Almost every American has descended from "foreigners" - like my kids and grandkids - or was a "foreigner" not too long ago - like me.
The US has become the world's only surviving superpower by using other people's brains and other people's money - always has, always will. Most of the American Nobel Laureates in medicine and the sciences were foreign born - but had to come to the US to maximize their intellects.
I hope this helps Bosco to sleep better with those Canadian pesos burning a hole in his pocket:-))
Hey, Bosco, drive down to Buffalo, New York, why don't you, and shop at the local malls there. We love your money, ...er, business, baby!
Mervyn Lobo
2008-03-27 01:38:35 UTC
Permalink
Post by Bosco D'Mello
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
This article purports to educate what Goans saddled with stacks of
greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do
well by being astute 'Goans at the Garage Sale".
Bosco,
The link you provided above leads to an article that only re-hashes whats been known for some years. The US has weathered storms like this before. What is different this time, is that the US is printing money like there is no tomorrow, effectively debauching its own currency. The author of the article cannot tell you this as the current US administration stopped publishing the numbers on how much money it is printing.

Money, like everything else, is only valuable when it is in short supply. If anyone is holding or getting paid in US dollars, s/he had better do some research on whether s/he still wants to hold a currency that is increasing in supply. The dollar is depreciating so rapidly that even oil rich nations are abandoning the US dollar and are starting to hold their reserves in other currencies. I hope the Goan saver takes note of what is happening and makes the appropriate move.


Mervyn3.0
PS. As for me, I am polishing my knowledge on US foreclosure laws. There is going to be a lot of bargains coming up in the next year to eighteen months. With foreclosure properties, you can often pay a few cents for something that costs a dollar.




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Bosco D'Mello
2008-03-27 05:00:11 UTC
Permalink
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
CORNEL DACOSTA
2008-03-27 11:26:50 UTC
Permalink
Hi Bosco
As per at least one Goanet 'dictum', is the content below about Goa or things Goan in any way whatsoever, or linked in any way whatsoever to the subject line? Goanet moderators have invariably rejected posts over these simple pedantic issues but I suppose exceptions exist for moderators themselves! However, please note that I am making a point about obvious inconsistency in rule application and not seeking an answer that will in all likelihood be entirely "inappropriate".
Cornel DaCosta
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
Mario Goveia
2008-03-27 01:50:18 UTC
Permalink
From, Bosco D'Mello bospam at canada.com
Tue Mar 25 20:47:20 PDT 2008
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
This article purports to educate what Goans saddled with stacks of greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do well by being astute 'Goans at the Garage Sale".
The USD is causing a lot of pain, the world over!!
Mario responds:
The article above discusses the likely purchase of US assets by foreign holders of US dollars. The US has always welcomed such purchases by foreigners, unlike the current hand-wringing going on by Goans about foreigners buying assets in Goa.
The link below is to another article on the US economy by respected financial journalist, Robert J. Samuelson, that should be educational for Goans in the middle-east with ties to the falling US dollar, because it adds some FACTS and much needed context and perspective to what is happening:
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032502298.html?hpid=opinionsbox1
An excerpt:
Regarding the economy, it's hard not to notice this stark contrast: The "real economy" of spending, production and jobs -- though weakening -- is hardly in a state of collapse, but much of today's semi-hysterical commentary suggests that it is. Financial markets for stocks and bonds are described as being "in turmoil." People talk about a recession as if it were the second coming of Genghis Khan. Some whisper the dreaded word "depression." Meanwhile, Americans are expected to buy about 15 million vehicles in 2008; though down from 16.5 million in 2006, that's still a lot.
There's a disconnect between what people see around them and what they're told is happening. The first is upsetting (rising gas prices, falling home prices, fewer jobs) but reflects the normal reverses of a $14 trillion economy. The second ("panic," "financial meltdown") suggests the onset of something catastrophic and totally outside the experience of ordinary people. The economy, the New York Times said last week, may be on "the brink of the worst recession in a generation" -- an ominous warning.
Perhaps, but so far the concrete evidence is scant. A recession is a noticeable period of declining output. Since World War II, there have been 10. On average, they've lasted 10 months, involved a peak monthly unemployment rate of 7.6 percent and resulted in a decline in economic output (gross domestic product) of 1.8 percent, reports Mark Zandi of Moody's Economy.com. If the two worst recessions (those of 1981-82 and 1973-75, with peak unemployment of 10.8 percent and 9 percent) are excluded, the average peak jobless rate is about 7 percent.
[end of excerpt]
Mario Goveia
2008-03-27 12:37:11 UTC
Permalink
Date: Thu, 27 Mar 2008 01:00:11 -0400
From: "Bosco D'Mello" <bospam at canada.com>
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm, Bear Stearns, goes under and takes with it $19 billion market capitalization in a few weeks. That is the sum of economies of a few SE Asian countries and is only ONE example.
Mario responds:
Bosco, you are obviously unaware that Bear Stearns failed, and deservedly so, because they engaged in risky lending practices at the wrong time. Others with similar risky practices will also pay a price. This happens in every recession. Lenders with prudent lending practices are weathering the storm just fine.
Please read the article I posted by Paul J. Samuelson to get a better perspective beyond the current crisis, which, by human nature, always seems like its different from previous events.
Bosco writes:
......as long as you are not dishing out financial advise to good people. One would expect real good advice from somebody who has spent 4 decades in the US. I will not hold my breath...........
Mario responds:
I leave the financial advice to "good people" to others. The only financial advice I have given to "good people" here is to buy property in Goa before it's too late.
Speaking of financial advice, did you buy gold when it crossed $1,000 per ounce?
CORNEL DACOSTA
2008-03-28 13:44:22 UTC
Permalink
Hi Bosco
I really was most surprised that you published my critical point about inconsistency in the treatment of posts by the moderator of Goanet---good for you if you are indeed the Moderator!

I therefore also want to point out that when the Moderator recently rejected six of my posts as "Inappropriate" in fairly quick succession, and virtually instantaneously as illustrated on the recorded time on the screen, it suggests that my substantial and carefully crafted rejected posts could not have been read at all to be summarily dismissed as "inappropriate".

Further, try as I may, I could not find the word "inappropriate" as a criterion for the rejection of posts in the much hyped Goanet Rules when I diligently looked through them. Perhaps you can therefore throw some light on this intriguing enigma.

And even further still, while the moderator chose to provide nil explanation, despite requests, for some clues why my posts in rapid succession were deemed "inappropriate" the seemingly same moderator was clearly happy to provide, to other posters who also happen to privately trade info with me, clear reasons why their posts were rejected. Understandably, I have retained such evidence should you and anyone else on Goanet need it.

So my dear Bosco, the ball is firmly in your court to persuade me and other posters that you or some nameless person called the Moderator on Goanet, has the capacity or the wherewithal to implement consistency in rejecting posts. Sadly, the evidence above suggests that, there is much that is seriously lacking in the essential commodity of consistency relating to Goanet moderation.
Cornel DaCosta

CORNEL DACOSTA <cornel at btinternet.com> wrote:
Hi Bosco
As per at least one Goanet 'dictum', is the content below about Goa or things Goan in any way whatsoever, or linked in any way whatsoever to the subject line? Goanet moderators have invariably rejected posts over these simple pedantic issues but I suppose exceptions exist for moderators themselves! However, please note that I am making a point about obvious inconsistency in rule application and not seeking an answer that will in all likelihood be entirely "inappropriate".
Cornel DaCosta
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
Mervyn Lobo
2008-03-29 00:13:33 UTC
Permalink
Post by Mario Goveia
The link below is to another article on the US economy by respected financial journalist, Robert J. Samuelson,
that should be educational for Goans in the middle-east with ties to the falling US dollar, because it adds some
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032502298.html?hpid=opinionsbox1




Mario,
Anyone who holds US dollars in his savings account, while his expenses are in a different currency, is effectively imposing a tax on his savings. The US dollar will have a weaker purchasing power when the saver needs to use his savings.

Those of us who are lucky enough to live in N. America know that our savings accounts are guaranteed by Govt insurance. This is not the case in other countries. When a bank fails, you can lose all your savings. Rumours were going around this morning that a second US bank is on the verge of bankruptcy. In addition, Citibank will cut its dividend for a second time as it is discovering more financial problems. There are real problems in US financial institutions and this is only the beginning of the crises.


How does this effect Goans?
Let me tell you what happened to East African Goans some years ago. Some migrated to the UK. When they arrived there, they asked their friends which were the good banks. Some were advised to put their money in a bank called BCCI. The bank paid .5% more interest than competing banks. When the Goan opened his account, he was asked what he did prior to migrating. Those who answered, "I worked for a bank" were asked to collect a job application form on the way out. Some of the new immigrants did get jobs at the bank. After working there for ten years, they woke up one morning to find that the bank had failed. These unlucky people lost:
1) Their entire life's savings
2) The pension benefits from working at the bank for ten years.


I am mentioning the coming financial crises so that people become aware of:
1) the hazards of putting all ones eggs in one basket
2) the hazards of depending on one currency.
3) the hazards of using only one method to store wealth.

Mervyn3.0












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Mario Goveia
2008-03-29 17:16:39 UTC
Permalink
Date: Fri, 28 Mar 2008 17:13:33 -0700 (PDT)
From: Mervyn Lobo <mervynalobo at yahoo.ca>
Mario,
Anyone who holds US dollars in his savings account, while his expenses are in a different currency, is effectively imposing a tax on his savings. The US dollar will have a weaker purchasing power when the saver needs to use his savings.
I am mentioning the coming financial crises so that people become aware of:
1) the hazards of putting all ones eggs in one basket
2) the hazards of depending on one currency.
3) the hazards of using only one method to store wealth.
Mario responds:
You are right, and Goanetters would do well to heed your advice to the extent they can. However, perhaps you will agree that hedging one's bets is a longer term strategy, and people who panic during a recession, are likely to do things that may not be in their long term interest. There are times when one needs to simply batten down the hatches and ride out the storm.
I have lived in the US for 37 years, experienced all the business cycles during that period, and have accumulated assets in India and through mutual funds that invest in Asian countries, as a long term hedge. Currently, any value we are losing in the US is being partially or entirely offset by gains in India and elsewhere.
My only point was that free market economies have proven over time to be extremely resilient, and, as Samuelson has pointed out, the current downturn in the US economy, caused mostly by excess federal spending and easy liquidity compounded by risky lending policies by major institutions that should have know better, already includes the seeds of its own recovery. Some of this occurs when foreign countries increase their imports from the US which are now less expensive due to the falling dollar, and foreign owners of US currency purchase US fixed assets, which they are all welcome to do by US policy, and the smart money is doing so even as we speak in terms of farmland, commercial property, manufacturing plants and corporate acquisitions. Unlike India, the US welcomes such acquisitions.
Mario Goveia
2008-03-30 17:43:43 UTC
Permalink
On 29/03/2008, Mario Goveia <mgoveia at sbcglobal.net> wrote:
............... and foreign owners of US currency purchase US fixed assets, which they are all welcome to do by US policy, and the smart money is doing so even as we speak in terms of farmland, commercial property, manufacturing plants and corporate acquisitions. Unlike India, the US welcomes such acquisitions.
Date: Sun, 30 Mar 2008 08:56:15 +0100
From: "Gabe Menezes" <gabe.menezes at gmail.com>
Really ? Being more than a tad disingenuous; check out the URL below.
http://www.nytimes.com/2006/03/10/politics/10ports.html
Mario responds:
Yes, really. It is you who are being disingenuous by citing an exception rather than the rule. Either that or you are unfamiliar with the extent to which US assets of all kinds are owned by non-US investors, something that is common knowledge around the world. As I said above, the smart money is doing so even as we speak. Anyone really familiar with the US would know that the Dubai Ports deal was a rare instance that was opposed by politicians based on national security issues following 9/11 and the war on terrorism. In fact there are other major US ports that are owned and managed by non-US owners.
Goans in the middle east would do well to look towards the US as an alternative in the near future for their vacations and personal purchases during such vacations. Their money would go a longer way than in countries where the currency had appreciated significantly against the dollar.
Gabe Menezes
2008-03-13 10:47:56 UTC
Permalink
The USD is at fixed rates against many Middle East currencies, so as
the dollar depreciates, so also does their remittances back to Goa.


Excerpt:-

History further reveals how costly inflation reduction can be. To curb
price increases in the late 1970s and early 1980s, Paul Volcker's Fed
raised interest rates above 20 percent. These stratospheric rates
ultimately brought inflation down to earth, but only after
precipitating painful recessions in 1979-80 and 1981-82. Before
Volcker's anti-inflation policy kicked in, the unemployment rate in
America stood at 5.8 percent; by the end of the second recession,
unemployment was up to 10.7 percent. And joblessness did not drop back
below 6 percent (its historical average) until 1987. The total cost of
this abnormally high unemployment and the idle capacity it bred has
been estimated by most analysts at more than a trillion dollars.

http://www.pkarchive.org/economy/NoInflationBad.html

Yes USD interest rates touched 23 percent for one year money, during
that period. Credit was so tight, the FED turned down money Centre
banks from approaching the FED window for funds more than once a
month.

The Fed is now doing the exact opposite; very shortly it will own all
the mortgages which Financial Institutions will park at their door.

Houses in Detroit are on sale for USD100. yes no joke
USD100.00......check it out:-


http://www.realtor.com/search/searchresults.aspx?ctid=2959&mxp=2&typ=7

In Toledo Ohio they are giving them away, for free, Check it out :-
http://www.realtor.com/search/searchresults.aspx?ctid=4180&ml=3&mxp=29&typ=7&sid=b64c3b8d81624f8eb141b574a94bf7f9&pg=1


The USD is being tanked out, the credit crunch is getting worse
instead of better; hold on to your hats....for the first time George
Bush is admitting that 'it's not good news'
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Mario Goveia
2008-03-14 19:20:29 UTC
Permalink
Thu Mar 13 03:47:56 PDT 2008
Gabe Menezes gabe.menezes at gmail.com wrote:
Yes USD interest rates touched 23 percent for one year money, during that period.
Mario responds:
At first glance this looked like an excerpt from the article. Then I realized it was the poster's own editorial comment - it was hard to tell when the switch took place.
Though the article said that interest rates had gone over 20% I was unable to find any evidence that the interest rate in the US had gone as high as 23% for one year money. Maybe I did not look in the right place. I would appreciate it if someone could cite some source to support this claim.
By the way, anyone familiar with economics would know that a relatively free market economy like the US routinely experiences business cycles. They used to be every three to four years, but, ever since the Federal Reserve has figured out how to keep inflation low, the cycles have expanded to seven to eight years, which is what the last two business cycles in the US have been. The slowdowns have never lasted very long, even the last one in 2000 - 2001 which was exacerbated by the economic effect of the 9/11 attack.
Gabe Menezes wrote:
In Toledo Ohio they are giving them away, for free, Check it out :-
http://www.realtor.com/search/searchresults.aspx?ctid=4180&ml=3&mxp=29&typ=7&sid=b64c3b8d81624f8eb141b574a94bf7f9&pg=1
Mario responds:
I was really excited when I saw this information since I live near Toledo and thought I could add to my growing list of real-estate properties at no cost, so I ran out to capture the market for $0 price houses. The realtor I called thought I was nuts. I cited this thread and demanded they give me all those houses, immediately.
Unfortunately, what I found was that the Realtor.com website shows homes scheduled for auction as $0 because no specific asking price has been set. Some of these single-family houses with large yards in nice neighborhoods have minimum bid prices that sound like the ridiculous prices they pay for the walk-up tenements in London. People familiar with how Realtor.com operates knew this, whereas I did not. I need to be more careful what I believe in future.
I should have known there's no such thing as a free lunch, ...er, home!
Mario Goveia
2008-03-17 16:00:57 UTC
Permalink
Gabe Menezes wrote:
Yes USD interest rates touched 23 percent for one year money, during that period.
On 14/03/2008, Mario Goveia <mgoveia at sbcglobal.net> responded:
Though the article said that interest rates had gone over 20% I was unable to find any evidence that the interest rate in the US had gone as high as 23% for one year money. Maybe I did not look in the right place. I would appreciate it if someone could cite some source to support this claim.
Sat Mar 15 04:22:01 PDT 2008
Gabe Menezes wrote:
Short of actually pulling up the ticket with the name of the Bank that borrowed, I have no way of proving that.
Mario responds:
Thanks, Gabe. I rest my case.
Gabe Menezes wrote:
If one knows how the inter bank markets work then one would have surmised that it was perfectly possible, that interbank one year money actually traded at 23 percent, with prime being 21-1/2 percent.
Mario responds:
Not necessarily as we can see from the sources below.
http://www.bankrate.com/brm/ratewatch/leading-rates.asp
This source shows the US Prime rate is 6% per annum currently.
http://www.bankrate.com/brm/ratewatch/other-indices.asp
This shows the one-year LIBOR rate is 2.58% per annum currently, i.e. lower than the prime rate, not several points higher.
Gabe Menezes wrote:
Now I shall give a lesson in interbank dealings:
Mario responds:
Thanks for your "lesson", Gabe. I think you have already taught us a lot.:-))
Sat Mar 15 06:05:17 PDT 2008
In a related post with the same title
Gabe Menezes wrote:
May be true what the man says.
Mario responds:
Thanks, Gabe, but it is not "May be". It is so. When a property is to be auctioned, Realtor.com shows the asking price as $0 because there is no asking price for a house to be auctioned.
Gabe Menezes wrote:
He should further mop up the market in Goa...he has been advocating that the property market there is a steal.
Mario responds:
I already did that to the extent that I could BEFORE the market went up in Goa. Didn't you? BTW, I didn't say that property in Goa was a "steal" any more. But there are many properties that are still reasonably priced when compared to the west. My advice was to those Goan NRIs who complain of Goa being bought by non-Goans, but who are inclined to invest their own money overseas in properties that are expensive in comparison with prices in Goa.
Gabe Menezes wrote:
If the man could kindly provide any place in London, even a single bedroom that is on sale for the equivalent of USD100,000 then he would be doing many a London Goan a big, big favour
As to the walk up London tenement, it would be worth more than this nice looking property in Toledo Ohio.
Mario responds:
Let's leave aside for now the absurdity of comparing prices in a national capital city and international business center like London with a mid-sized mid-western industrial city like Toledo, Ohio. Shouldn't prices of homes in London be compared with prices of homes in cities like New York or Washington, DC? But, I digress.
Since this thread apparently started because of a tender concern for the financial transactions of middle-east Goans, I think they should also take note of Gabe's warning for those of them who may be thinking of moving to London - that they will have to pay more than USD100,000 even for a one bedroom walk-up tenement.
Bosco D'Mello
2008-03-26 03:47:20 UTC
Permalink
Gabe Menezes initiated this thread in mid-March with an analysis of the US
Dollar:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070563.html

Mario Goveia responded with his typical defensive response vis-a-vis
business cycles:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070642.html

Mervyn Lobo chipped in with a piece on incompetent money managers:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070721.html

Marlon Menezes re-directed this thread to "Goans in pain! (specially in
America!)". He did indicate this was the first part of the bad news:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070902.html


Yesterday I ran into:

http://www.time.com/time/magazine/article/0,9171,1725094,00.html

This article purports to educate what Goans saddled with stacks of
greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do
well by being astute 'Goans at the Garage Sale".

The USD is causing a lot of pain, the world over!!

- Bosco
Still holding Canadian Pesos
Mario Goveia
2008-03-26 15:22:21 UTC
Permalink
Date: Tue, 25 Mar 2008 23:47:20 -0400
From: "Bosco D'Mello" <bospam at canada.com>
Mario Goveia responded with his typical defensive response vis-a-vis business cycles:
http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070642.html
Mario responds:
Hey, Bosco,
Pardon me for being "defensive" by pointing out the simple fact that the US goes through business cycles every few years and that the last two have been about double the period of previous cycles because of the success in controlling US inflation. This well known fact seems to have mostly escaped the attention of the other "experts" you have cited, who tend to think that "this time" everything will be different, yadda, yadda, yadda. Maybe. Maybe not. I have seen "this time it will be different" come and go numerous times in the almost four decades I have lived here.
US economic policy depends on certain basic principles which generally fall towards the capitalist end of the spectrum of policy options, modified from time to time by the politics of which party has the votes in government.
At the risk of being "defensive", here are some observations on certain excerpts from the TIME magazine article, which is a great article to explain why the US economy is different from that of most other countries.
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
Excerpt: It also means that those mounds of dollars held by central banks and investors from Tokyo to Kuwait City are also deteriorating in value by the day. Yet the world can't just dump its dollars. Not only would that be incredibly destabilizing to the global economy, but it also would be effectively impossible. The dollar has been the reserve currency for decades and there are just too darn many of them out there to be converted into something else. Bankers in Beijing, Hong Kong and Dubai are stuck with the rotting stacks of greenbacks.
Mario responds:
These comments may sound clever, but there are no "rotting stacks of greenbacks". These funds are all in bank accounts, earning interest, mostly invested in US Treasury securities and other short term US dollar investments.
Schuman is correct about the difficulty of "dumping" dollars without destabilizing the global economy. This would include destroying the demand for the goods and services of China, India and other foreign supplier countries. The US imports more than it exports, has done so for decades, and the last time I checked, that has hugely benefited the economies of those countries and created this situation in the first place. Just imagine India's economy, or China's, today without purchases by US buyers.
If most Americans start saving like people in other countries, rather than spending like they always have done, the global economy will have to endure an economic slowdown and adapt to the loss of its primary economic engine. Fortunately, that is unlikely to happen. Even immigrants from countries with savings cultures become spenders in the US. That's the American way, whether the rest of the world likes it or not. Actually, the rest of the world loves it, because what would happen to their economies without American spending?
Schuman continues:
Excerpt: So the outcome is inevitable. As the financial crisis in the U.S. persists, the combination of decreasing asset prices and a weakening dollar will make the U.S. cheaper and cheaper to foreign investors. Irresistibly cheap. The U.S. is, after all, still a highly desirable place to own property, companies and securities. Foreign investors will see the crisis as a golden opportunity to buy prime pieces of Americana at bargain-basement prices. So all those dollars in banks around the world will flood back into the U.S. to buy stocks, bonds and property. Debt-burdened Americans, desperate for fresh cash, will be only too happy to sell ? or be forced to sell. The U.S. will become one giant garage sale, where the buyers are Japanese banks, Chinese state-run investment funds and oil-rich Arab sheikdoms.
Of course, we've heard all of this before. For the past two decades, pundits have warned of the dangers of the trade deficit, while the U.S. has powered on. The big difference these days is that far more countries are awash in dollars today than there were in the 1980s. Even back then, if you remember, Japan recycled its surplus into U.S. assets when the dollar weakened in the late 1980s.
The upside to greater foreign investment in the U.S. will be the strengthening of the dollar and the resurrection of stock and property prices. The downside is that the foreign business community ? especially in Asia ? will own larger swaths of the U.S. economy. And it is these foreign buyers who will benefit from the increases in the value of assets and the dollar.
Mario responds:
Schuman is right, but this is nothing new. Foreign holders of US dollars have always bought US assets, whether they be financial assets or companies or farms or commercial property. 80% of commercial property in Honolulu, for example, belongs to Japanese owners. Europeans own and manage huge farms and commercial property across the US. The US has never shied away from foreign ownership of US assets. It wants foreigners to buy US assets, which benefits US sellers, than assets anywhere else. That way the foreign owners develop a vested interest in the US and its economy creating a win-win situation for everyone.
Unlike the paranoid discussions on Goa and its identity being taken over by "foreigners", in the US this is considered a good thing, because, unlike most other countries, the US has always belonged to "foreigners".
Almost every American has descended from "foreigners" - like my kids and grandkids - or was a "foreigner" not too long ago - like me.
The US has become the world's only surviving superpower by using other people's brains and other people's money - always has, always will. Most of the American Nobel Laureates in medicine and the sciences were foreign born - but had to come to the US to maximize their intellects.
I hope this helps Bosco to sleep better with those Canadian pesos burning a hole in his pocket:-))
Hey, Bosco, drive down to Buffalo, New York, why don't you, and shop at the local malls there. We love your money, ...er, business, baby!
Mervyn Lobo
2008-03-27 01:38:35 UTC
Permalink
Post by Bosco D'Mello
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
This article purports to educate what Goans saddled with stacks of
greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do
well by being astute 'Goans at the Garage Sale".
Bosco,
The link you provided above leads to an article that only re-hashes whats been known for some years. The US has weathered storms like this before. What is different this time, is that the US is printing money like there is no tomorrow, effectively debauching its own currency. The author of the article cannot tell you this as the current US administration stopped publishing the numbers on how much money it is printing.

Money, like everything else, is only valuable when it is in short supply. If anyone is holding or getting paid in US dollars, s/he had better do some research on whether s/he still wants to hold a currency that is increasing in supply. The dollar is depreciating so rapidly that even oil rich nations are abandoning the US dollar and are starting to hold their reserves in other currencies. I hope the Goan saver takes note of what is happening and makes the appropriate move.


Mervyn3.0
PS. As for me, I am polishing my knowledge on US foreclosure laws. There is going to be a lot of bargains coming up in the next year to eighteen months. With foreclosure properties, you can often pay a few cents for something that costs a dollar.




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Bosco D'Mello
2008-03-27 05:00:11 UTC
Permalink
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
CORNEL DACOSTA
2008-03-27 11:26:50 UTC
Permalink
Hi Bosco
As per at least one Goanet 'dictum', is the content below about Goa or things Goan in any way whatsoever, or linked in any way whatsoever to the subject line? Goanet moderators have invariably rejected posts over these simple pedantic issues but I suppose exceptions exist for moderators themselves! However, please note that I am making a point about obvious inconsistency in rule application and not seeking an answer that will in all likelihood be entirely "inappropriate".
Cornel DaCosta
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
Mario Goveia
2008-03-27 01:50:18 UTC
Permalink
From, Bosco D'Mello bospam at canada.com
Tue Mar 25 20:47:20 PDT 2008
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
This article purports to educate what Goans saddled with stacks of greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do well by being astute 'Goans at the Garage Sale".
The USD is causing a lot of pain, the world over!!
Mario responds:
The article above discusses the likely purchase of US assets by foreign holders of US dollars. The US has always welcomed such purchases by foreigners, unlike the current hand-wringing going on by Goans about foreigners buying assets in Goa.
The link below is to another article on the US economy by respected financial journalist, Robert J. Samuelson, that should be educational for Goans in the middle-east with ties to the falling US dollar, because it adds some FACTS and much needed context and perspective to what is happening:
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032502298.html?hpid=opinionsbox1
An excerpt:
Regarding the economy, it's hard not to notice this stark contrast: The "real economy" of spending, production and jobs -- though weakening -- is hardly in a state of collapse, but much of today's semi-hysterical commentary suggests that it is. Financial markets for stocks and bonds are described as being "in turmoil." People talk about a recession as if it were the second coming of Genghis Khan. Some whisper the dreaded word "depression." Meanwhile, Americans are expected to buy about 15 million vehicles in 2008; though down from 16.5 million in 2006, that's still a lot.
There's a disconnect between what people see around them and what they're told is happening. The first is upsetting (rising gas prices, falling home prices, fewer jobs) but reflects the normal reverses of a $14 trillion economy. The second ("panic," "financial meltdown") suggests the onset of something catastrophic and totally outside the experience of ordinary people. The economy, the New York Times said last week, may be on "the brink of the worst recession in a generation" -- an ominous warning.
Perhaps, but so far the concrete evidence is scant. A recession is a noticeable period of declining output. Since World War II, there have been 10. On average, they've lasted 10 months, involved a peak monthly unemployment rate of 7.6 percent and resulted in a decline in economic output (gross domestic product) of 1.8 percent, reports Mark Zandi of Moody's Economy.com. If the two worst recessions (those of 1981-82 and 1973-75, with peak unemployment of 10.8 percent and 9 percent) are excluded, the average peak jobless rate is about 7 percent.
[end of excerpt]
Mario Goveia
2008-03-27 12:37:11 UTC
Permalink
Date: Thu, 27 Mar 2008 01:00:11 -0400
From: "Bosco D'Mello" <bospam at canada.com>
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm, Bear Stearns, goes under and takes with it $19 billion market capitalization in a few weeks. That is the sum of economies of a few SE Asian countries and is only ONE example.
Mario responds:
Bosco, you are obviously unaware that Bear Stearns failed, and deservedly so, because they engaged in risky lending practices at the wrong time. Others with similar risky practices will also pay a price. This happens in every recession. Lenders with prudent lending practices are weathering the storm just fine.
Please read the article I posted by Paul J. Samuelson to get a better perspective beyond the current crisis, which, by human nature, always seems like its different from previous events.
Bosco writes:
......as long as you are not dishing out financial advise to good people. One would expect real good advice from somebody who has spent 4 decades in the US. I will not hold my breath...........
Mario responds:
I leave the financial advice to "good people" to others. The only financial advice I have given to "good people" here is to buy property in Goa before it's too late.
Speaking of financial advice, did you buy gold when it crossed $1,000 per ounce?
CORNEL DACOSTA
2008-03-28 13:44:22 UTC
Permalink
Hi Bosco
I really was most surprised that you published my critical point about inconsistency in the treatment of posts by the moderator of Goanet---good for you if you are indeed the Moderator!

I therefore also want to point out that when the Moderator recently rejected six of my posts as "Inappropriate" in fairly quick succession, and virtually instantaneously as illustrated on the recorded time on the screen, it suggests that my substantial and carefully crafted rejected posts could not have been read at all to be summarily dismissed as "inappropriate".

Further, try as I may, I could not find the word "inappropriate" as a criterion for the rejection of posts in the much hyped Goanet Rules when I diligently looked through them. Perhaps you can therefore throw some light on this intriguing enigma.

And even further still, while the moderator chose to provide nil explanation, despite requests, for some clues why my posts in rapid succession were deemed "inappropriate" the seemingly same moderator was clearly happy to provide, to other posters who also happen to privately trade info with me, clear reasons why their posts were rejected. Understandably, I have retained such evidence should you and anyone else on Goanet need it.

So my dear Bosco, the ball is firmly in your court to persuade me and other posters that you or some nameless person called the Moderator on Goanet, has the capacity or the wherewithal to implement consistency in rejecting posts. Sadly, the evidence above suggests that, there is much that is seriously lacking in the essential commodity of consistency relating to Goanet moderation.
Cornel DaCosta

CORNEL DACOSTA <cornel at btinternet.com> wrote:
Hi Bosco
As per at least one Goanet 'dictum', is the content below about Goa or things Goan in any way whatsoever, or linked in any way whatsoever to the subject line? Goanet moderators have invariably rejected posts over these simple pedantic issues but I suppose exceptions exist for moderators themselves! However, please note that I am making a point about obvious inconsistency in rule application and not seeking an answer that will in all likelihood be entirely "inappropriate".
Cornel DaCosta
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
Mervyn Lobo
2008-03-29 00:13:33 UTC
Permalink
Post by Mario Goveia
The link below is to another article on the US economy by respected financial journalist, Robert J. Samuelson,
that should be educational for Goans in the middle-east with ties to the falling US dollar, because it adds some
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032502298.html?hpid=opinionsbox1




Mario,
Anyone who holds US dollars in his savings account, while his expenses are in a different currency, is effectively imposing a tax on his savings. The US dollar will have a weaker purchasing power when the saver needs to use his savings.

Those of us who are lucky enough to live in N. America know that our savings accounts are guaranteed by Govt insurance. This is not the case in other countries. When a bank fails, you can lose all your savings. Rumours were going around this morning that a second US bank is on the verge of bankruptcy. In addition, Citibank will cut its dividend for a second time as it is discovering more financial problems. There are real problems in US financial institutions and this is only the beginning of the crises.


How does this effect Goans?
Let me tell you what happened to East African Goans some years ago. Some migrated to the UK. When they arrived there, they asked their friends which were the good banks. Some were advised to put their money in a bank called BCCI. The bank paid .5% more interest than competing banks. When the Goan opened his account, he was asked what he did prior to migrating. Those who answered, "I worked for a bank" were asked to collect a job application form on the way out. Some of the new immigrants did get jobs at the bank. After working there for ten years, they woke up one morning to find that the bank had failed. These unlucky people lost:
1) Their entire life's savings
2) The pension benefits from working at the bank for ten years.


I am mentioning the coming financial crises so that people become aware of:
1) the hazards of putting all ones eggs in one basket
2) the hazards of depending on one currency.
3) the hazards of using only one method to store wealth.

Mervyn3.0












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Mario Goveia
2008-03-29 17:16:39 UTC
Permalink
Date: Fri, 28 Mar 2008 17:13:33 -0700 (PDT)
From: Mervyn Lobo <mervynalobo at yahoo.ca>
Mario,
Anyone who holds US dollars in his savings account, while his expenses are in a different currency, is effectively imposing a tax on his savings. The US dollar will have a weaker purchasing power when the saver needs to use his savings.
I am mentioning the coming financial crises so that people become aware of:
1) the hazards of putting all ones eggs in one basket
2) the hazards of depending on one currency.
3) the hazards of using only one method to store wealth.
Mario responds:
You are right, and Goanetters would do well to heed your advice to the extent they can. However, perhaps you will agree that hedging one's bets is a longer term strategy, and people who panic during a recession, are likely to do things that may not be in their long term interest. There are times when one needs to simply batten down the hatches and ride out the storm.
I have lived in the US for 37 years, experienced all the business cycles during that period, and have accumulated assets in India and through mutual funds that invest in Asian countries, as a long term hedge. Currently, any value we are losing in the US is being partially or entirely offset by gains in India and elsewhere.
My only point was that free market economies have proven over time to be extremely resilient, and, as Samuelson has pointed out, the current downturn in the US economy, caused mostly by excess federal spending and easy liquidity compounded by risky lending policies by major institutions that should have know better, already includes the seeds of its own recovery. Some of this occurs when foreign countries increase their imports from the US which are now less expensive due to the falling dollar, and foreign owners of US currency purchase US fixed assets, which they are all welcome to do by US policy, and the smart money is doing so even as we speak in terms of farmland, commercial property, manufacturing plants and corporate acquisitions. Unlike India, the US welcomes such acquisitions.
Mario Goveia
2008-03-30 17:43:43 UTC
Permalink
On 29/03/2008, Mario Goveia <mgoveia at sbcglobal.net> wrote:
............... and foreign owners of US currency purchase US fixed assets, which they are all welcome to do by US policy, and the smart money is doing so even as we speak in terms of farmland, commercial property, manufacturing plants and corporate acquisitions. Unlike India, the US welcomes such acquisitions.
Date: Sun, 30 Mar 2008 08:56:15 +0100
From: "Gabe Menezes" <gabe.menezes at gmail.com>
Really ? Being more than a tad disingenuous; check out the URL below.
http://www.nytimes.com/2006/03/10/politics/10ports.html
Mario responds:
Yes, really. It is you who are being disingenuous by citing an exception rather than the rule. Either that or you are unfamiliar with the extent to which US assets of all kinds are owned by non-US investors, something that is common knowledge around the world. As I said above, the smart money is doing so even as we speak. Anyone really familiar with the US would know that the Dubai Ports deal was a rare instance that was opposed by politicians based on national security issues following 9/11 and the war on terrorism. In fact there are other major US ports that are owned and managed by non-US owners.
Goans in the middle east would do well to look towards the US as an alternative in the near future for their vacations and personal purchases during such vacations. Their money would go a longer way than in countries where the currency had appreciated significantly against the dollar.
Gabe Menezes
2008-03-13 10:47:56 UTC
Permalink
The USD is at fixed rates against many Middle East currencies, so as
the dollar depreciates, so also does their remittances back to Goa.


Excerpt:-

History further reveals how costly inflation reduction can be. To curb
price increases in the late 1970s and early 1980s, Paul Volcker's Fed
raised interest rates above 20 percent. These stratospheric rates
ultimately brought inflation down to earth, but only after
precipitating painful recessions in 1979-80 and 1981-82. Before
Volcker's anti-inflation policy kicked in, the unemployment rate in
America stood at 5.8 percent; by the end of the second recession,
unemployment was up to 10.7 percent. And joblessness did not drop back
below 6 percent (its historical average) until 1987. The total cost of
this abnormally high unemployment and the idle capacity it bred has
been estimated by most analysts at more than a trillion dollars.

http://www.pkarchive.org/economy/NoInflationBad.html

Yes USD interest rates touched 23 percent for one year money, during
that period. Credit was so tight, the FED turned down money Centre
banks from approaching the FED window for funds more than once a
month.

The Fed is now doing the exact opposite; very shortly it will own all
the mortgages which Financial Institutions will park at their door.

Houses in Detroit are on sale for USD100. yes no joke
USD100.00......check it out:-


http://www.realtor.com/search/searchresults.aspx?ctid=2959&mxp=2&typ=7

In Toledo Ohio they are giving them away, for free, Check it out :-
http://www.realtor.com/search/searchresults.aspx?ctid=4180&ml=3&mxp=29&typ=7&sid=b64c3b8d81624f8eb141b574a94bf7f9&pg=1


The USD is being tanked out, the credit crunch is getting worse
instead of better; hold on to your hats....for the first time George
Bush is admitting that 'it's not good news'
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Mario Goveia
2008-03-14 19:20:29 UTC
Permalink
Thu Mar 13 03:47:56 PDT 2008
Gabe Menezes gabe.menezes at gmail.com wrote:
Yes USD interest rates touched 23 percent for one year money, during that period.
Mario responds:
At first glance this looked like an excerpt from the article. Then I realized it was the poster's own editorial comment - it was hard to tell when the switch took place.
Though the article said that interest rates had gone over 20% I was unable to find any evidence that the interest rate in the US had gone as high as 23% for one year money. Maybe I did not look in the right place. I would appreciate it if someone could cite some source to support this claim.
By the way, anyone familiar with economics would know that a relatively free market economy like the US routinely experiences business cycles. They used to be every three to four years, but, ever since the Federal Reserve has figured out how to keep inflation low, the cycles have expanded to seven to eight years, which is what the last two business cycles in the US have been. The slowdowns have never lasted very long, even the last one in 2000 - 2001 which was exacerbated by the economic effect of the 9/11 attack.
Gabe Menezes wrote:
In Toledo Ohio they are giving them away, for free, Check it out :-
http://www.realtor.com/search/searchresults.aspx?ctid=4180&ml=3&mxp=29&typ=7&sid=b64c3b8d81624f8eb141b574a94bf7f9&pg=1
Mario responds:
I was really excited when I saw this information since I live near Toledo and thought I could add to my growing list of real-estate properties at no cost, so I ran out to capture the market for $0 price houses. The realtor I called thought I was nuts. I cited this thread and demanded they give me all those houses, immediately.
Unfortunately, what I found was that the Realtor.com website shows homes scheduled for auction as $0 because no specific asking price has been set. Some of these single-family houses with large yards in nice neighborhoods have minimum bid prices that sound like the ridiculous prices they pay for the walk-up tenements in London. People familiar with how Realtor.com operates knew this, whereas I did not. I need to be more careful what I believe in future.
I should have known there's no such thing as a free lunch, ...er, home!
Mario Goveia
2008-03-17 16:00:57 UTC
Permalink
Gabe Menezes wrote:
Yes USD interest rates touched 23 percent for one year money, during that period.
On 14/03/2008, Mario Goveia <mgoveia at sbcglobal.net> responded:
Though the article said that interest rates had gone over 20% I was unable to find any evidence that the interest rate in the US had gone as high as 23% for one year money. Maybe I did not look in the right place. I would appreciate it if someone could cite some source to support this claim.
Sat Mar 15 04:22:01 PDT 2008
Gabe Menezes wrote:
Short of actually pulling up the ticket with the name of the Bank that borrowed, I have no way of proving that.
Mario responds:
Thanks, Gabe. I rest my case.
Gabe Menezes wrote:
If one knows how the inter bank markets work then one would have surmised that it was perfectly possible, that interbank one year money actually traded at 23 percent, with prime being 21-1/2 percent.
Mario responds:
Not necessarily as we can see from the sources below.
http://www.bankrate.com/brm/ratewatch/leading-rates.asp
This source shows the US Prime rate is 6% per annum currently.
http://www.bankrate.com/brm/ratewatch/other-indices.asp
This shows the one-year LIBOR rate is 2.58% per annum currently, i.e. lower than the prime rate, not several points higher.
Gabe Menezes wrote:
Now I shall give a lesson in interbank dealings:
Mario responds:
Thanks for your "lesson", Gabe. I think you have already taught us a lot.:-))
Sat Mar 15 06:05:17 PDT 2008
In a related post with the same title
Gabe Menezes wrote:
May be true what the man says.
Mario responds:
Thanks, Gabe, but it is not "May be". It is so. When a property is to be auctioned, Realtor.com shows the asking price as $0 because there is no asking price for a house to be auctioned.
Gabe Menezes wrote:
He should further mop up the market in Goa...he has been advocating that the property market there is a steal.
Mario responds:
I already did that to the extent that I could BEFORE the market went up in Goa. Didn't you? BTW, I didn't say that property in Goa was a "steal" any more. But there are many properties that are still reasonably priced when compared to the west. My advice was to those Goan NRIs who complain of Goa being bought by non-Goans, but who are inclined to invest their own money overseas in properties that are expensive in comparison with prices in Goa.
Gabe Menezes wrote:
If the man could kindly provide any place in London, even a single bedroom that is on sale for the equivalent of USD100,000 then he would be doing many a London Goan a big, big favour
As to the walk up London tenement, it would be worth more than this nice looking property in Toledo Ohio.
Mario responds:
Let's leave aside for now the absurdity of comparing prices in a national capital city and international business center like London with a mid-sized mid-western industrial city like Toledo, Ohio. Shouldn't prices of homes in London be compared with prices of homes in cities like New York or Washington, DC? But, I digress.
Since this thread apparently started because of a tender concern for the financial transactions of middle-east Goans, I think they should also take note of Gabe's warning for those of them who may be thinking of moving to London - that they will have to pay more than USD100,000 even for a one bedroom walk-up tenement.
Bosco D'Mello
2008-03-26 03:47:20 UTC
Permalink
Gabe Menezes initiated this thread in mid-March with an analysis of the US
Dollar:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070563.html

Mario Goveia responded with his typical defensive response vis-a-vis
business cycles:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070642.html

Mervyn Lobo chipped in with a piece on incompetent money managers:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070721.html

Marlon Menezes re-directed this thread to "Goans in pain! (specially in
America!)". He did indicate this was the first part of the bad news:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070902.html


Yesterday I ran into:

http://www.time.com/time/magazine/article/0,9171,1725094,00.html

This article purports to educate what Goans saddled with stacks of
greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do
well by being astute 'Goans at the Garage Sale".

The USD is causing a lot of pain, the world over!!

- Bosco
Still holding Canadian Pesos
Mario Goveia
2008-03-26 15:22:21 UTC
Permalink
Date: Tue, 25 Mar 2008 23:47:20 -0400
From: "Bosco D'Mello" <bospam at canada.com>
Mario Goveia responded with his typical defensive response vis-a-vis business cycles:
http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070642.html
Mario responds:
Hey, Bosco,
Pardon me for being "defensive" by pointing out the simple fact that the US goes through business cycles every few years and that the last two have been about double the period of previous cycles because of the success in controlling US inflation. This well known fact seems to have mostly escaped the attention of the other "experts" you have cited, who tend to think that "this time" everything will be different, yadda, yadda, yadda. Maybe. Maybe not. I have seen "this time it will be different" come and go numerous times in the almost four decades I have lived here.
US economic policy depends on certain basic principles which generally fall towards the capitalist end of the spectrum of policy options, modified from time to time by the politics of which party has the votes in government.
At the risk of being "defensive", here are some observations on certain excerpts from the TIME magazine article, which is a great article to explain why the US economy is different from that of most other countries.
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
Excerpt: It also means that those mounds of dollars held by central banks and investors from Tokyo to Kuwait City are also deteriorating in value by the day. Yet the world can't just dump its dollars. Not only would that be incredibly destabilizing to the global economy, but it also would be effectively impossible. The dollar has been the reserve currency for decades and there are just too darn many of them out there to be converted into something else. Bankers in Beijing, Hong Kong and Dubai are stuck with the rotting stacks of greenbacks.
Mario responds:
These comments may sound clever, but there are no "rotting stacks of greenbacks". These funds are all in bank accounts, earning interest, mostly invested in US Treasury securities and other short term US dollar investments.
Schuman is correct about the difficulty of "dumping" dollars without destabilizing the global economy. This would include destroying the demand for the goods and services of China, India and other foreign supplier countries. The US imports more than it exports, has done so for decades, and the last time I checked, that has hugely benefited the economies of those countries and created this situation in the first place. Just imagine India's economy, or China's, today without purchases by US buyers.
If most Americans start saving like people in other countries, rather than spending like they always have done, the global economy will have to endure an economic slowdown and adapt to the loss of its primary economic engine. Fortunately, that is unlikely to happen. Even immigrants from countries with savings cultures become spenders in the US. That's the American way, whether the rest of the world likes it or not. Actually, the rest of the world loves it, because what would happen to their economies without American spending?
Schuman continues:
Excerpt: So the outcome is inevitable. As the financial crisis in the U.S. persists, the combination of decreasing asset prices and a weakening dollar will make the U.S. cheaper and cheaper to foreign investors. Irresistibly cheap. The U.S. is, after all, still a highly desirable place to own property, companies and securities. Foreign investors will see the crisis as a golden opportunity to buy prime pieces of Americana at bargain-basement prices. So all those dollars in banks around the world will flood back into the U.S. to buy stocks, bonds and property. Debt-burdened Americans, desperate for fresh cash, will be only too happy to sell ? or be forced to sell. The U.S. will become one giant garage sale, where the buyers are Japanese banks, Chinese state-run investment funds and oil-rich Arab sheikdoms.
Of course, we've heard all of this before. For the past two decades, pundits have warned of the dangers of the trade deficit, while the U.S. has powered on. The big difference these days is that far more countries are awash in dollars today than there were in the 1980s. Even back then, if you remember, Japan recycled its surplus into U.S. assets when the dollar weakened in the late 1980s.
The upside to greater foreign investment in the U.S. will be the strengthening of the dollar and the resurrection of stock and property prices. The downside is that the foreign business community ? especially in Asia ? will own larger swaths of the U.S. economy. And it is these foreign buyers who will benefit from the increases in the value of assets and the dollar.
Mario responds:
Schuman is right, but this is nothing new. Foreign holders of US dollars have always bought US assets, whether they be financial assets or companies or farms or commercial property. 80% of commercial property in Honolulu, for example, belongs to Japanese owners. Europeans own and manage huge farms and commercial property across the US. The US has never shied away from foreign ownership of US assets. It wants foreigners to buy US assets, which benefits US sellers, than assets anywhere else. That way the foreign owners develop a vested interest in the US and its economy creating a win-win situation for everyone.
Unlike the paranoid discussions on Goa and its identity being taken over by "foreigners", in the US this is considered a good thing, because, unlike most other countries, the US has always belonged to "foreigners".
Almost every American has descended from "foreigners" - like my kids and grandkids - or was a "foreigner" not too long ago - like me.
The US has become the world's only surviving superpower by using other people's brains and other people's money - always has, always will. Most of the American Nobel Laureates in medicine and the sciences were foreign born - but had to come to the US to maximize their intellects.
I hope this helps Bosco to sleep better with those Canadian pesos burning a hole in his pocket:-))
Hey, Bosco, drive down to Buffalo, New York, why don't you, and shop at the local malls there. We love your money, ...er, business, baby!
Mervyn Lobo
2008-03-27 01:38:35 UTC
Permalink
Post by Bosco D'Mello
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
This article purports to educate what Goans saddled with stacks of
greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do
well by being astute 'Goans at the Garage Sale".
Bosco,
The link you provided above leads to an article that only re-hashes whats been known for some years. The US has weathered storms like this before. What is different this time, is that the US is printing money like there is no tomorrow, effectively debauching its own currency. The author of the article cannot tell you this as the current US administration stopped publishing the numbers on how much money it is printing.

Money, like everything else, is only valuable when it is in short supply. If anyone is holding or getting paid in US dollars, s/he had better do some research on whether s/he still wants to hold a currency that is increasing in supply. The dollar is depreciating so rapidly that even oil rich nations are abandoning the US dollar and are starting to hold their reserves in other currencies. I hope the Goan saver takes note of what is happening and makes the appropriate move.


Mervyn3.0
PS. As for me, I am polishing my knowledge on US foreclosure laws. There is going to be a lot of bargains coming up in the next year to eighteen months. With foreclosure properties, you can often pay a few cents for something that costs a dollar.




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Bosco D'Mello
2008-03-27 05:00:11 UTC
Permalink
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
CORNEL DACOSTA
2008-03-27 11:26:50 UTC
Permalink
Hi Bosco
As per at least one Goanet 'dictum', is the content below about Goa or things Goan in any way whatsoever, or linked in any way whatsoever to the subject line? Goanet moderators have invariably rejected posts over these simple pedantic issues but I suppose exceptions exist for moderators themselves! However, please note that I am making a point about obvious inconsistency in rule application and not seeking an answer that will in all likelihood be entirely "inappropriate".
Cornel DaCosta
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
Mario Goveia
2008-03-27 01:50:18 UTC
Permalink
From, Bosco D'Mello bospam at canada.com
Tue Mar 25 20:47:20 PDT 2008
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
This article purports to educate what Goans saddled with stacks of greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do well by being astute 'Goans at the Garage Sale".
The USD is causing a lot of pain, the world over!!
Mario responds:
The article above discusses the likely purchase of US assets by foreign holders of US dollars. The US has always welcomed such purchases by foreigners, unlike the current hand-wringing going on by Goans about foreigners buying assets in Goa.
The link below is to another article on the US economy by respected financial journalist, Robert J. Samuelson, that should be educational for Goans in the middle-east with ties to the falling US dollar, because it adds some FACTS and much needed context and perspective to what is happening:
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032502298.html?hpid=opinionsbox1
An excerpt:
Regarding the economy, it's hard not to notice this stark contrast: The "real economy" of spending, production and jobs -- though weakening -- is hardly in a state of collapse, but much of today's semi-hysterical commentary suggests that it is. Financial markets for stocks and bonds are described as being "in turmoil." People talk about a recession as if it were the second coming of Genghis Khan. Some whisper the dreaded word "depression." Meanwhile, Americans are expected to buy about 15 million vehicles in 2008; though down from 16.5 million in 2006, that's still a lot.
There's a disconnect between what people see around them and what they're told is happening. The first is upsetting (rising gas prices, falling home prices, fewer jobs) but reflects the normal reverses of a $14 trillion economy. The second ("panic," "financial meltdown") suggests the onset of something catastrophic and totally outside the experience of ordinary people. The economy, the New York Times said last week, may be on "the brink of the worst recession in a generation" -- an ominous warning.
Perhaps, but so far the concrete evidence is scant. A recession is a noticeable period of declining output. Since World War II, there have been 10. On average, they've lasted 10 months, involved a peak monthly unemployment rate of 7.6 percent and resulted in a decline in economic output (gross domestic product) of 1.8 percent, reports Mark Zandi of Moody's Economy.com. If the two worst recessions (those of 1981-82 and 1973-75, with peak unemployment of 10.8 percent and 9 percent) are excluded, the average peak jobless rate is about 7 percent.
[end of excerpt]
Mario Goveia
2008-03-27 12:37:11 UTC
Permalink
Date: Thu, 27 Mar 2008 01:00:11 -0400
From: "Bosco D'Mello" <bospam at canada.com>
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm, Bear Stearns, goes under and takes with it $19 billion market capitalization in a few weeks. That is the sum of economies of a few SE Asian countries and is only ONE example.
Mario responds:
Bosco, you are obviously unaware that Bear Stearns failed, and deservedly so, because they engaged in risky lending practices at the wrong time. Others with similar risky practices will also pay a price. This happens in every recession. Lenders with prudent lending practices are weathering the storm just fine.
Please read the article I posted by Paul J. Samuelson to get a better perspective beyond the current crisis, which, by human nature, always seems like its different from previous events.
Bosco writes:
......as long as you are not dishing out financial advise to good people. One would expect real good advice from somebody who has spent 4 decades in the US. I will not hold my breath...........
Mario responds:
I leave the financial advice to "good people" to others. The only financial advice I have given to "good people" here is to buy property in Goa before it's too late.
Speaking of financial advice, did you buy gold when it crossed $1,000 per ounce?
CORNEL DACOSTA
2008-03-28 13:44:22 UTC
Permalink
Hi Bosco
I really was most surprised that you published my critical point about inconsistency in the treatment of posts by the moderator of Goanet---good for you if you are indeed the Moderator!

I therefore also want to point out that when the Moderator recently rejected six of my posts as "Inappropriate" in fairly quick succession, and virtually instantaneously as illustrated on the recorded time on the screen, it suggests that my substantial and carefully crafted rejected posts could not have been read at all to be summarily dismissed as "inappropriate".

Further, try as I may, I could not find the word "inappropriate" as a criterion for the rejection of posts in the much hyped Goanet Rules when I diligently looked through them. Perhaps you can therefore throw some light on this intriguing enigma.

And even further still, while the moderator chose to provide nil explanation, despite requests, for some clues why my posts in rapid succession were deemed "inappropriate" the seemingly same moderator was clearly happy to provide, to other posters who also happen to privately trade info with me, clear reasons why their posts were rejected. Understandably, I have retained such evidence should you and anyone else on Goanet need it.

So my dear Bosco, the ball is firmly in your court to persuade me and other posters that you or some nameless person called the Moderator on Goanet, has the capacity or the wherewithal to implement consistency in rejecting posts. Sadly, the evidence above suggests that, there is much that is seriously lacking in the essential commodity of consistency relating to Goanet moderation.
Cornel DaCosta

CORNEL DACOSTA <cornel at btinternet.com> wrote:
Hi Bosco
As per at least one Goanet 'dictum', is the content below about Goa or things Goan in any way whatsoever, or linked in any way whatsoever to the subject line? Goanet moderators have invariably rejected posts over these simple pedantic issues but I suppose exceptions exist for moderators themselves! However, please note that I am making a point about obvious inconsistency in rule application and not seeking an answer that will in all likelihood be entirely "inappropriate".
Cornel DaCosta
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
Mervyn Lobo
2008-03-29 00:13:33 UTC
Permalink
Post by Mario Goveia
The link below is to another article on the US economy by respected financial journalist, Robert J. Samuelson,
that should be educational for Goans in the middle-east with ties to the falling US dollar, because it adds some
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032502298.html?hpid=opinionsbox1




Mario,
Anyone who holds US dollars in his savings account, while his expenses are in a different currency, is effectively imposing a tax on his savings. The US dollar will have a weaker purchasing power when the saver needs to use his savings.

Those of us who are lucky enough to live in N. America know that our savings accounts are guaranteed by Govt insurance. This is not the case in other countries. When a bank fails, you can lose all your savings. Rumours were going around this morning that a second US bank is on the verge of bankruptcy. In addition, Citibank will cut its dividend for a second time as it is discovering more financial problems. There are real problems in US financial institutions and this is only the beginning of the crises.


How does this effect Goans?
Let me tell you what happened to East African Goans some years ago. Some migrated to the UK. When they arrived there, they asked their friends which were the good banks. Some were advised to put their money in a bank called BCCI. The bank paid .5% more interest than competing banks. When the Goan opened his account, he was asked what he did prior to migrating. Those who answered, "I worked for a bank" were asked to collect a job application form on the way out. Some of the new immigrants did get jobs at the bank. After working there for ten years, they woke up one morning to find that the bank had failed. These unlucky people lost:
1) Their entire life's savings
2) The pension benefits from working at the bank for ten years.


I am mentioning the coming financial crises so that people become aware of:
1) the hazards of putting all ones eggs in one basket
2) the hazards of depending on one currency.
3) the hazards of using only one method to store wealth.

Mervyn3.0












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Mario Goveia
2008-03-29 17:16:39 UTC
Permalink
Date: Fri, 28 Mar 2008 17:13:33 -0700 (PDT)
From: Mervyn Lobo <mervynalobo at yahoo.ca>
Mario,
Anyone who holds US dollars in his savings account, while his expenses are in a different currency, is effectively imposing a tax on his savings. The US dollar will have a weaker purchasing power when the saver needs to use his savings.
I am mentioning the coming financial crises so that people become aware of:
1) the hazards of putting all ones eggs in one basket
2) the hazards of depending on one currency.
3) the hazards of using only one method to store wealth.
Mario responds:
You are right, and Goanetters would do well to heed your advice to the extent they can. However, perhaps you will agree that hedging one's bets is a longer term strategy, and people who panic during a recession, are likely to do things that may not be in their long term interest. There are times when one needs to simply batten down the hatches and ride out the storm.
I have lived in the US for 37 years, experienced all the business cycles during that period, and have accumulated assets in India and through mutual funds that invest in Asian countries, as a long term hedge. Currently, any value we are losing in the US is being partially or entirely offset by gains in India and elsewhere.
My only point was that free market economies have proven over time to be extremely resilient, and, as Samuelson has pointed out, the current downturn in the US economy, caused mostly by excess federal spending and easy liquidity compounded by risky lending policies by major institutions that should have know better, already includes the seeds of its own recovery. Some of this occurs when foreign countries increase their imports from the US which are now less expensive due to the falling dollar, and foreign owners of US currency purchase US fixed assets, which they are all welcome to do by US policy, and the smart money is doing so even as we speak in terms of farmland, commercial property, manufacturing plants and corporate acquisitions. Unlike India, the US welcomes such acquisitions.
Mario Goveia
2008-03-30 17:43:43 UTC
Permalink
On 29/03/2008, Mario Goveia <mgoveia at sbcglobal.net> wrote:
............... and foreign owners of US currency purchase US fixed assets, which they are all welcome to do by US policy, and the smart money is doing so even as we speak in terms of farmland, commercial property, manufacturing plants and corporate acquisitions. Unlike India, the US welcomes such acquisitions.
Date: Sun, 30 Mar 2008 08:56:15 +0100
From: "Gabe Menezes" <gabe.menezes at gmail.com>
Really ? Being more than a tad disingenuous; check out the URL below.
http://www.nytimes.com/2006/03/10/politics/10ports.html
Mario responds:
Yes, really. It is you who are being disingenuous by citing an exception rather than the rule. Either that or you are unfamiliar with the extent to which US assets of all kinds are owned by non-US investors, something that is common knowledge around the world. As I said above, the smart money is doing so even as we speak. Anyone really familiar with the US would know that the Dubai Ports deal was a rare instance that was opposed by politicians based on national security issues following 9/11 and the war on terrorism. In fact there are other major US ports that are owned and managed by non-US owners.
Goans in the middle east would do well to look towards the US as an alternative in the near future for their vacations and personal purchases during such vacations. Their money would go a longer way than in countries where the currency had appreciated significantly against the dollar.
Gabe Menezes
2008-03-13 10:47:56 UTC
Permalink
The USD is at fixed rates against many Middle East currencies, so as
the dollar depreciates, so also does their remittances back to Goa.


Excerpt:-

History further reveals how costly inflation reduction can be. To curb
price increases in the late 1970s and early 1980s, Paul Volcker's Fed
raised interest rates above 20 percent. These stratospheric rates
ultimately brought inflation down to earth, but only after
precipitating painful recessions in 1979-80 and 1981-82. Before
Volcker's anti-inflation policy kicked in, the unemployment rate in
America stood at 5.8 percent; by the end of the second recession,
unemployment was up to 10.7 percent. And joblessness did not drop back
below 6 percent (its historical average) until 1987. The total cost of
this abnormally high unemployment and the idle capacity it bred has
been estimated by most analysts at more than a trillion dollars.

http://www.pkarchive.org/economy/NoInflationBad.html

Yes USD interest rates touched 23 percent for one year money, during
that period. Credit was so tight, the FED turned down money Centre
banks from approaching the FED window for funds more than once a
month.

The Fed is now doing the exact opposite; very shortly it will own all
the mortgages which Financial Institutions will park at their door.

Houses in Detroit are on sale for USD100. yes no joke
USD100.00......check it out:-


http://www.realtor.com/search/searchresults.aspx?ctid=2959&mxp=2&typ=7

In Toledo Ohio they are giving them away, for free, Check it out :-
http://www.realtor.com/search/searchresults.aspx?ctid=4180&ml=3&mxp=29&typ=7&sid=b64c3b8d81624f8eb141b574a94bf7f9&pg=1


The USD is being tanked out, the credit crunch is getting worse
instead of better; hold on to your hats....for the first time George
Bush is admitting that 'it's not good news'
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Mario Goveia
2008-03-14 19:20:29 UTC
Permalink
Thu Mar 13 03:47:56 PDT 2008
Gabe Menezes gabe.menezes at gmail.com wrote:
Yes USD interest rates touched 23 percent for one year money, during that period.
Mario responds:
At first glance this looked like an excerpt from the article. Then I realized it was the poster's own editorial comment - it was hard to tell when the switch took place.
Though the article said that interest rates had gone over 20% I was unable to find any evidence that the interest rate in the US had gone as high as 23% for one year money. Maybe I did not look in the right place. I would appreciate it if someone could cite some source to support this claim.
By the way, anyone familiar with economics would know that a relatively free market economy like the US routinely experiences business cycles. They used to be every three to four years, but, ever since the Federal Reserve has figured out how to keep inflation low, the cycles have expanded to seven to eight years, which is what the last two business cycles in the US have been. The slowdowns have never lasted very long, even the last one in 2000 - 2001 which was exacerbated by the economic effect of the 9/11 attack.
Gabe Menezes wrote:
In Toledo Ohio they are giving them away, for free, Check it out :-
http://www.realtor.com/search/searchresults.aspx?ctid=4180&ml=3&mxp=29&typ=7&sid=b64c3b8d81624f8eb141b574a94bf7f9&pg=1
Mario responds:
I was really excited when I saw this information since I live near Toledo and thought I could add to my growing list of real-estate properties at no cost, so I ran out to capture the market for $0 price houses. The realtor I called thought I was nuts. I cited this thread and demanded they give me all those houses, immediately.
Unfortunately, what I found was that the Realtor.com website shows homes scheduled for auction as $0 because no specific asking price has been set. Some of these single-family houses with large yards in nice neighborhoods have minimum bid prices that sound like the ridiculous prices they pay for the walk-up tenements in London. People familiar with how Realtor.com operates knew this, whereas I did not. I need to be more careful what I believe in future.
I should have known there's no such thing as a free lunch, ...er, home!
Mario Goveia
2008-03-17 16:00:57 UTC
Permalink
Gabe Menezes wrote:
Yes USD interest rates touched 23 percent for one year money, during that period.
On 14/03/2008, Mario Goveia <mgoveia at sbcglobal.net> responded:
Though the article said that interest rates had gone over 20% I was unable to find any evidence that the interest rate in the US had gone as high as 23% for one year money. Maybe I did not look in the right place. I would appreciate it if someone could cite some source to support this claim.
Sat Mar 15 04:22:01 PDT 2008
Gabe Menezes wrote:
Short of actually pulling up the ticket with the name of the Bank that borrowed, I have no way of proving that.
Mario responds:
Thanks, Gabe. I rest my case.
Gabe Menezes wrote:
If one knows how the inter bank markets work then one would have surmised that it was perfectly possible, that interbank one year money actually traded at 23 percent, with prime being 21-1/2 percent.
Mario responds:
Not necessarily as we can see from the sources below.
http://www.bankrate.com/brm/ratewatch/leading-rates.asp
This source shows the US Prime rate is 6% per annum currently.
http://www.bankrate.com/brm/ratewatch/other-indices.asp
This shows the one-year LIBOR rate is 2.58% per annum currently, i.e. lower than the prime rate, not several points higher.
Gabe Menezes wrote:
Now I shall give a lesson in interbank dealings:
Mario responds:
Thanks for your "lesson", Gabe. I think you have already taught us a lot.:-))
Sat Mar 15 06:05:17 PDT 2008
In a related post with the same title
Gabe Menezes wrote:
May be true what the man says.
Mario responds:
Thanks, Gabe, but it is not "May be". It is so. When a property is to be auctioned, Realtor.com shows the asking price as $0 because there is no asking price for a house to be auctioned.
Gabe Menezes wrote:
He should further mop up the market in Goa...he has been advocating that the property market there is a steal.
Mario responds:
I already did that to the extent that I could BEFORE the market went up in Goa. Didn't you? BTW, I didn't say that property in Goa was a "steal" any more. But there are many properties that are still reasonably priced when compared to the west. My advice was to those Goan NRIs who complain of Goa being bought by non-Goans, but who are inclined to invest their own money overseas in properties that are expensive in comparison with prices in Goa.
Gabe Menezes wrote:
If the man could kindly provide any place in London, even a single bedroom that is on sale for the equivalent of USD100,000 then he would be doing many a London Goan a big, big favour
As to the walk up London tenement, it would be worth more than this nice looking property in Toledo Ohio.
Mario responds:
Let's leave aside for now the absurdity of comparing prices in a national capital city and international business center like London with a mid-sized mid-western industrial city like Toledo, Ohio. Shouldn't prices of homes in London be compared with prices of homes in cities like New York or Washington, DC? But, I digress.
Since this thread apparently started because of a tender concern for the financial transactions of middle-east Goans, I think they should also take note of Gabe's warning for those of them who may be thinking of moving to London - that they will have to pay more than USD100,000 even for a one bedroom walk-up tenement.
Bosco D'Mello
2008-03-26 03:47:20 UTC
Permalink
Gabe Menezes initiated this thread in mid-March with an analysis of the US
Dollar:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070563.html

Mario Goveia responded with his typical defensive response vis-a-vis
business cycles:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070642.html

Mervyn Lobo chipped in with a piece on incompetent money managers:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070721.html

Marlon Menezes re-directed this thread to "Goans in pain! (specially in
America!)". He did indicate this was the first part of the bad news:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070902.html


Yesterday I ran into:

http://www.time.com/time/magazine/article/0,9171,1725094,00.html

This article purports to educate what Goans saddled with stacks of
greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do
well by being astute 'Goans at the Garage Sale".

The USD is causing a lot of pain, the world over!!

- Bosco
Still holding Canadian Pesos
Mario Goveia
2008-03-26 15:22:21 UTC
Permalink
Date: Tue, 25 Mar 2008 23:47:20 -0400
From: "Bosco D'Mello" <bospam at canada.com>
Mario Goveia responded with his typical defensive response vis-a-vis business cycles:
http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070642.html
Mario responds:
Hey, Bosco,
Pardon me for being "defensive" by pointing out the simple fact that the US goes through business cycles every few years and that the last two have been about double the period of previous cycles because of the success in controlling US inflation. This well known fact seems to have mostly escaped the attention of the other "experts" you have cited, who tend to think that "this time" everything will be different, yadda, yadda, yadda. Maybe. Maybe not. I have seen "this time it will be different" come and go numerous times in the almost four decades I have lived here.
US economic policy depends on certain basic principles which generally fall towards the capitalist end of the spectrum of policy options, modified from time to time by the politics of which party has the votes in government.
At the risk of being "defensive", here are some observations on certain excerpts from the TIME magazine article, which is a great article to explain why the US economy is different from that of most other countries.
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
Excerpt: It also means that those mounds of dollars held by central banks and investors from Tokyo to Kuwait City are also deteriorating in value by the day. Yet the world can't just dump its dollars. Not only would that be incredibly destabilizing to the global economy, but it also would be effectively impossible. The dollar has been the reserve currency for decades and there are just too darn many of them out there to be converted into something else. Bankers in Beijing, Hong Kong and Dubai are stuck with the rotting stacks of greenbacks.
Mario responds:
These comments may sound clever, but there are no "rotting stacks of greenbacks". These funds are all in bank accounts, earning interest, mostly invested in US Treasury securities and other short term US dollar investments.
Schuman is correct about the difficulty of "dumping" dollars without destabilizing the global economy. This would include destroying the demand for the goods and services of China, India and other foreign supplier countries. The US imports more than it exports, has done so for decades, and the last time I checked, that has hugely benefited the economies of those countries and created this situation in the first place. Just imagine India's economy, or China's, today without purchases by US buyers.
If most Americans start saving like people in other countries, rather than spending like they always have done, the global economy will have to endure an economic slowdown and adapt to the loss of its primary economic engine. Fortunately, that is unlikely to happen. Even immigrants from countries with savings cultures become spenders in the US. That's the American way, whether the rest of the world likes it or not. Actually, the rest of the world loves it, because what would happen to their economies without American spending?
Schuman continues:
Excerpt: So the outcome is inevitable. As the financial crisis in the U.S. persists, the combination of decreasing asset prices and a weakening dollar will make the U.S. cheaper and cheaper to foreign investors. Irresistibly cheap. The U.S. is, after all, still a highly desirable place to own property, companies and securities. Foreign investors will see the crisis as a golden opportunity to buy prime pieces of Americana at bargain-basement prices. So all those dollars in banks around the world will flood back into the U.S. to buy stocks, bonds and property. Debt-burdened Americans, desperate for fresh cash, will be only too happy to sell ? or be forced to sell. The U.S. will become one giant garage sale, where the buyers are Japanese banks, Chinese state-run investment funds and oil-rich Arab sheikdoms.
Of course, we've heard all of this before. For the past two decades, pundits have warned of the dangers of the trade deficit, while the U.S. has powered on. The big difference these days is that far more countries are awash in dollars today than there were in the 1980s. Even back then, if you remember, Japan recycled its surplus into U.S. assets when the dollar weakened in the late 1980s.
The upside to greater foreign investment in the U.S. will be the strengthening of the dollar and the resurrection of stock and property prices. The downside is that the foreign business community ? especially in Asia ? will own larger swaths of the U.S. economy. And it is these foreign buyers who will benefit from the increases in the value of assets and the dollar.
Mario responds:
Schuman is right, but this is nothing new. Foreign holders of US dollars have always bought US assets, whether they be financial assets or companies or farms or commercial property. 80% of commercial property in Honolulu, for example, belongs to Japanese owners. Europeans own and manage huge farms and commercial property across the US. The US has never shied away from foreign ownership of US assets. It wants foreigners to buy US assets, which benefits US sellers, than assets anywhere else. That way the foreign owners develop a vested interest in the US and its economy creating a win-win situation for everyone.
Unlike the paranoid discussions on Goa and its identity being taken over by "foreigners", in the US this is considered a good thing, because, unlike most other countries, the US has always belonged to "foreigners".
Almost every American has descended from "foreigners" - like my kids and grandkids - or was a "foreigner" not too long ago - like me.
The US has become the world's only surviving superpower by using other people's brains and other people's money - always has, always will. Most of the American Nobel Laureates in medicine and the sciences were foreign born - but had to come to the US to maximize their intellects.
I hope this helps Bosco to sleep better with those Canadian pesos burning a hole in his pocket:-))
Hey, Bosco, drive down to Buffalo, New York, why don't you, and shop at the local malls there. We love your money, ...er, business, baby!
Mervyn Lobo
2008-03-27 01:38:35 UTC
Permalink
Post by Bosco D'Mello
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
This article purports to educate what Goans saddled with stacks of
greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do
well by being astute 'Goans at the Garage Sale".
Bosco,
The link you provided above leads to an article that only re-hashes whats been known for some years. The US has weathered storms like this before. What is different this time, is that the US is printing money like there is no tomorrow, effectively debauching its own currency. The author of the article cannot tell you this as the current US administration stopped publishing the numbers on how much money it is printing.

Money, like everything else, is only valuable when it is in short supply. If anyone is holding or getting paid in US dollars, s/he had better do some research on whether s/he still wants to hold a currency that is increasing in supply. The dollar is depreciating so rapidly that even oil rich nations are abandoning the US dollar and are starting to hold their reserves in other currencies. I hope the Goan saver takes note of what is happening and makes the appropriate move.


Mervyn3.0
PS. As for me, I am polishing my knowledge on US foreclosure laws. There is going to be a lot of bargains coming up in the next year to eighteen months. With foreclosure properties, you can often pay a few cents for something that costs a dollar.




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Bosco D'Mello
2008-03-27 05:00:11 UTC
Permalink
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
CORNEL DACOSTA
2008-03-27 11:26:50 UTC
Permalink
Hi Bosco
As per at least one Goanet 'dictum', is the content below about Goa or things Goan in any way whatsoever, or linked in any way whatsoever to the subject line? Goanet moderators have invariably rejected posts over these simple pedantic issues but I suppose exceptions exist for moderators themselves! However, please note that I am making a point about obvious inconsistency in rule application and not seeking an answer that will in all likelihood be entirely "inappropriate".
Cornel DaCosta
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
Mario Goveia
2008-03-27 01:50:18 UTC
Permalink
From, Bosco D'Mello bospam at canada.com
Tue Mar 25 20:47:20 PDT 2008
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
This article purports to educate what Goans saddled with stacks of greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do well by being astute 'Goans at the Garage Sale".
The USD is causing a lot of pain, the world over!!
Mario responds:
The article above discusses the likely purchase of US assets by foreign holders of US dollars. The US has always welcomed such purchases by foreigners, unlike the current hand-wringing going on by Goans about foreigners buying assets in Goa.
The link below is to another article on the US economy by respected financial journalist, Robert J. Samuelson, that should be educational for Goans in the middle-east with ties to the falling US dollar, because it adds some FACTS and much needed context and perspective to what is happening:
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032502298.html?hpid=opinionsbox1
An excerpt:
Regarding the economy, it's hard not to notice this stark contrast: The "real economy" of spending, production and jobs -- though weakening -- is hardly in a state of collapse, but much of today's semi-hysterical commentary suggests that it is. Financial markets for stocks and bonds are described as being "in turmoil." People talk about a recession as if it were the second coming of Genghis Khan. Some whisper the dreaded word "depression." Meanwhile, Americans are expected to buy about 15 million vehicles in 2008; though down from 16.5 million in 2006, that's still a lot.
There's a disconnect between what people see around them and what they're told is happening. The first is upsetting (rising gas prices, falling home prices, fewer jobs) but reflects the normal reverses of a $14 trillion economy. The second ("panic," "financial meltdown") suggests the onset of something catastrophic and totally outside the experience of ordinary people. The economy, the New York Times said last week, may be on "the brink of the worst recession in a generation" -- an ominous warning.
Perhaps, but so far the concrete evidence is scant. A recession is a noticeable period of declining output. Since World War II, there have been 10. On average, they've lasted 10 months, involved a peak monthly unemployment rate of 7.6 percent and resulted in a decline in economic output (gross domestic product) of 1.8 percent, reports Mark Zandi of Moody's Economy.com. If the two worst recessions (those of 1981-82 and 1973-75, with peak unemployment of 10.8 percent and 9 percent) are excluded, the average peak jobless rate is about 7 percent.
[end of excerpt]
Mario Goveia
2008-03-27 12:37:11 UTC
Permalink
Date: Thu, 27 Mar 2008 01:00:11 -0400
From: "Bosco D'Mello" <bospam at canada.com>
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm, Bear Stearns, goes under and takes with it $19 billion market capitalization in a few weeks. That is the sum of economies of a few SE Asian countries and is only ONE example.
Mario responds:
Bosco, you are obviously unaware that Bear Stearns failed, and deservedly so, because they engaged in risky lending practices at the wrong time. Others with similar risky practices will also pay a price. This happens in every recession. Lenders with prudent lending practices are weathering the storm just fine.
Please read the article I posted by Paul J. Samuelson to get a better perspective beyond the current crisis, which, by human nature, always seems like its different from previous events.
Bosco writes:
......as long as you are not dishing out financial advise to good people. One would expect real good advice from somebody who has spent 4 decades in the US. I will not hold my breath...........
Mario responds:
I leave the financial advice to "good people" to others. The only financial advice I have given to "good people" here is to buy property in Goa before it's too late.
Speaking of financial advice, did you buy gold when it crossed $1,000 per ounce?
CORNEL DACOSTA
2008-03-28 13:44:22 UTC
Permalink
Hi Bosco
I really was most surprised that you published my critical point about inconsistency in the treatment of posts by the moderator of Goanet---good for you if you are indeed the Moderator!

I therefore also want to point out that when the Moderator recently rejected six of my posts as "Inappropriate" in fairly quick succession, and virtually instantaneously as illustrated on the recorded time on the screen, it suggests that my substantial and carefully crafted rejected posts could not have been read at all to be summarily dismissed as "inappropriate".

Further, try as I may, I could not find the word "inappropriate" as a criterion for the rejection of posts in the much hyped Goanet Rules when I diligently looked through them. Perhaps you can therefore throw some light on this intriguing enigma.

And even further still, while the moderator chose to provide nil explanation, despite requests, for some clues why my posts in rapid succession were deemed "inappropriate" the seemingly same moderator was clearly happy to provide, to other posters who also happen to privately trade info with me, clear reasons why their posts were rejected. Understandably, I have retained such evidence should you and anyone else on Goanet need it.

So my dear Bosco, the ball is firmly in your court to persuade me and other posters that you or some nameless person called the Moderator on Goanet, has the capacity or the wherewithal to implement consistency in rejecting posts. Sadly, the evidence above suggests that, there is much that is seriously lacking in the essential commodity of consistency relating to Goanet moderation.
Cornel DaCosta

CORNEL DACOSTA <cornel at btinternet.com> wrote:
Hi Bosco
As per at least one Goanet 'dictum', is the content below about Goa or things Goan in any way whatsoever, or linked in any way whatsoever to the subject line? Goanet moderators have invariably rejected posts over these simple pedantic issues but I suppose exceptions exist for moderators themselves! However, please note that I am making a point about obvious inconsistency in rule application and not seeking an answer that will in all likelihood be entirely "inappropriate".
Cornel DaCosta
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco
Mervyn Lobo
2008-03-29 00:13:33 UTC
Permalink
Post by Mario Goveia
The link below is to another article on the US economy by respected financial journalist, Robert J. Samuelson,
that should be educational for Goans in the middle-east with ties to the falling US dollar, because it adds some
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032502298.html?hpid=opinionsbox1




Mario,
Anyone who holds US dollars in his savings account, while his expenses are in a different currency, is effectively imposing a tax on his savings. The US dollar will have a weaker purchasing power when the saver needs to use his savings.

Those of us who are lucky enough to live in N. America know that our savings accounts are guaranteed by Govt insurance. This is not the case in other countries. When a bank fails, you can lose all your savings. Rumours were going around this morning that a second US bank is on the verge of bankruptcy. In addition, Citibank will cut its dividend for a second time as it is discovering more financial problems. There are real problems in US financial institutions and this is only the beginning of the crises.


How does this effect Goans?
Let me tell you what happened to East African Goans some years ago. Some migrated to the UK. When they arrived there, they asked their friends which were the good banks. Some were advised to put their money in a bank called BCCI. The bank paid .5% more interest than competing banks. When the Goan opened his account, he was asked what he did prior to migrating. Those who answered, "I worked for a bank" were asked to collect a job application form on the way out. Some of the new immigrants did get jobs at the bank. After working there for ten years, they woke up one morning to find that the bank had failed. These unlucky people lost:
1) Their entire life's savings
2) The pension benefits from working at the bank for ten years.


I am mentioning the coming financial crises so that people become aware of:
1) the hazards of putting all ones eggs in one basket
2) the hazards of depending on one currency.
3) the hazards of using only one method to store wealth.

Mervyn3.0












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Mario Goveia
2008-03-29 17:16:39 UTC
Permalink
Date: Fri, 28 Mar 2008 17:13:33 -0700 (PDT)
From: Mervyn Lobo <mervynalobo at yahoo.ca>
Mario,
Anyone who holds US dollars in his savings account, while his expenses are in a different currency, is effectively imposing a tax on his savings. The US dollar will have a weaker purchasing power when the saver needs to use his savings.
I am mentioning the coming financial crises so that people become aware of:
1) the hazards of putting all ones eggs in one basket
2) the hazards of depending on one currency.
3) the hazards of using only one method to store wealth.
Mario responds:
You are right, and Goanetters would do well to heed your advice to the extent they can. However, perhaps you will agree that hedging one's bets is a longer term strategy, and people who panic during a recession, are likely to do things that may not be in their long term interest. There are times when one needs to simply batten down the hatches and ride out the storm.
I have lived in the US for 37 years, experienced all the business cycles during that period, and have accumulated assets in India and through mutual funds that invest in Asian countries, as a long term hedge. Currently, any value we are losing in the US is being partially or entirely offset by gains in India and elsewhere.
My only point was that free market economies have proven over time to be extremely resilient, and, as Samuelson has pointed out, the current downturn in the US economy, caused mostly by excess federal spending and easy liquidity compounded by risky lending policies by major institutions that should have know better, already includes the seeds of its own recovery. Some of this occurs when foreign countries increase their imports from the US which are now less expensive due to the falling dollar, and foreign owners of US currency purchase US fixed assets, which they are all welcome to do by US policy, and the smart money is doing so even as we speak in terms of farmland, commercial property, manufacturing plants and corporate acquisitions. Unlike India, the US welcomes such acquisitions.
Mario Goveia
2008-03-30 17:43:43 UTC
Permalink
On 29/03/2008, Mario Goveia <mgoveia at sbcglobal.net> wrote:
............... and foreign owners of US currency purchase US fixed assets, which they are all welcome to do by US policy, and the smart money is doing so even as we speak in terms of farmland, commercial property, manufacturing plants and corporate acquisitions. Unlike India, the US welcomes such acquisitions.
Date: Sun, 30 Mar 2008 08:56:15 +0100
From: "Gabe Menezes" <gabe.menezes at gmail.com>
Really ? Being more than a tad disingenuous; check out the URL below.
http://www.nytimes.com/2006/03/10/politics/10ports.html
Mario responds:
Yes, really. It is you who are being disingenuous by citing an exception rather than the rule. Either that or you are unfamiliar with the extent to which US assets of all kinds are owned by non-US investors, something that is common knowledge around the world. As I said above, the smart money is doing so even as we speak. Anyone really familiar with the US would know that the Dubai Ports deal was a rare instance that was opposed by politicians based on national security issues following 9/11 and the war on terrorism. In fact there are other major US ports that are owned and managed by non-US owners.
Goans in the middle east would do well to look towards the US as an alternative in the near future for their vacations and personal purchases during such vacations. Their money would go a longer way than in countries where the currency had appreciated significantly against the dollar.
Gabe Menezes
2008-03-13 10:47:56 UTC
Permalink
The USD is at fixed rates against many Middle East currencies, so as
the dollar depreciates, so also does their remittances back to Goa.


Excerpt:-

History further reveals how costly inflation reduction can be. To curb
price increases in the late 1970s and early 1980s, Paul Volcker's Fed
raised interest rates above 20 percent. These stratospheric rates
ultimately brought inflation down to earth, but only after
precipitating painful recessions in 1979-80 and 1981-82. Before
Volcker's anti-inflation policy kicked in, the unemployment rate in
America stood at 5.8 percent; by the end of the second recession,
unemployment was up to 10.7 percent. And joblessness did not drop back
below 6 percent (its historical average) until 1987. The total cost of
this abnormally high unemployment and the idle capacity it bred has
been estimated by most analysts at more than a trillion dollars.

http://www.pkarchive.org/economy/NoInflationBad.html

Yes USD interest rates touched 23 percent for one year money, during
that period. Credit was so tight, the FED turned down money Centre
banks from approaching the FED window for funds more than once a
month.

The Fed is now doing the exact opposite; very shortly it will own all
the mortgages which Financial Institutions will park at their door.

Houses in Detroit are on sale for USD100. yes no joke
USD100.00......check it out:-


http://www.realtor.com/search/searchresults.aspx?ctid=2959&mxp=2&typ=7

In Toledo Ohio they are giving them away, for free, Check it out :-
http://www.realtor.com/search/searchresults.aspx?ctid=4180&ml=3&mxp=29&typ=7&sid=b64c3b8d81624f8eb141b574a94bf7f9&pg=1


The USD is being tanked out, the credit crunch is getting worse
instead of better; hold on to your hats....for the first time George
Bush is admitting that 'it's not good news'
--
DEV BOREM KORUM.

Gabe Menezes.
London, England
Mario Goveia
2008-03-14 19:20:29 UTC
Permalink
Thu Mar 13 03:47:56 PDT 2008
Gabe Menezes gabe.menezes at gmail.com wrote:
Yes USD interest rates touched 23 percent for one year money, during that period.
Mario responds:
At first glance this looked like an excerpt from the article. Then I realized it was the poster's own editorial comment - it was hard to tell when the switch took place.
Though the article said that interest rates had gone over 20% I was unable to find any evidence that the interest rate in the US had gone as high as 23% for one year money. Maybe I did not look in the right place. I would appreciate it if someone could cite some source to support this claim.
By the way, anyone familiar with economics would know that a relatively free market economy like the US routinely experiences business cycles. They used to be every three to four years, but, ever since the Federal Reserve has figured out how to keep inflation low, the cycles have expanded to seven to eight years, which is what the last two business cycles in the US have been. The slowdowns have never lasted very long, even the last one in 2000 - 2001 which was exacerbated by the economic effect of the 9/11 attack.
Gabe Menezes wrote:
In Toledo Ohio they are giving them away, for free, Check it out :-
http://www.realtor.com/search/searchresults.aspx?ctid=4180&ml=3&mxp=29&typ=7&sid=b64c3b8d81624f8eb141b574a94bf7f9&pg=1
Mario responds:
I was really excited when I saw this information since I live near Toledo and thought I could add to my growing list of real-estate properties at no cost, so I ran out to capture the market for $0 price houses. The realtor I called thought I was nuts. I cited this thread and demanded they give me all those houses, immediately.
Unfortunately, what I found was that the Realtor.com website shows homes scheduled for auction as $0 because no specific asking price has been set. Some of these single-family houses with large yards in nice neighborhoods have minimum bid prices that sound like the ridiculous prices they pay for the walk-up tenements in London. People familiar with how Realtor.com operates knew this, whereas I did not. I need to be more careful what I believe in future.
I should have known there's no such thing as a free lunch, ...er, home!
Mario Goveia
2008-03-17 16:00:57 UTC
Permalink
Gabe Menezes wrote:
Yes USD interest rates touched 23 percent for one year money, during that period.
On 14/03/2008, Mario Goveia <mgoveia at sbcglobal.net> responded:
Though the article said that interest rates had gone over 20% I was unable to find any evidence that the interest rate in the US had gone as high as 23% for one year money. Maybe I did not look in the right place. I would appreciate it if someone could cite some source to support this claim.
Sat Mar 15 04:22:01 PDT 2008
Gabe Menezes wrote:
Short of actually pulling up the ticket with the name of the Bank that borrowed, I have no way of proving that.
Mario responds:
Thanks, Gabe. I rest my case.
Gabe Menezes wrote:
If one knows how the inter bank markets work then one would have surmised that it was perfectly possible, that interbank one year money actually traded at 23 percent, with prime being 21-1/2 percent.
Mario responds:
Not necessarily as we can see from the sources below.
http://www.bankrate.com/brm/ratewatch/leading-rates.asp
This source shows the US Prime rate is 6% per annum currently.
http://www.bankrate.com/brm/ratewatch/other-indices.asp
This shows the one-year LIBOR rate is 2.58% per annum currently, i.e. lower than the prime rate, not several points higher.
Gabe Menezes wrote:
Now I shall give a lesson in interbank dealings:
Mario responds:
Thanks for your "lesson", Gabe. I think you have already taught us a lot.:-))
Sat Mar 15 06:05:17 PDT 2008
In a related post with the same title
Gabe Menezes wrote:
May be true what the man says.
Mario responds:
Thanks, Gabe, but it is not "May be". It is so. When a property is to be auctioned, Realtor.com shows the asking price as $0 because there is no asking price for a house to be auctioned.
Gabe Menezes wrote:
He should further mop up the market in Goa...he has been advocating that the property market there is a steal.
Mario responds:
I already did that to the extent that I could BEFORE the market went up in Goa. Didn't you? BTW, I didn't say that property in Goa was a "steal" any more. But there are many properties that are still reasonably priced when compared to the west. My advice was to those Goan NRIs who complain of Goa being bought by non-Goans, but who are inclined to invest their own money overseas in properties that are expensive in comparison with prices in Goa.
Gabe Menezes wrote:
If the man could kindly provide any place in London, even a single bedroom that is on sale for the equivalent of USD100,000 then he would be doing many a London Goan a big, big favour
As to the walk up London tenement, it would be worth more than this nice looking property in Toledo Ohio.
Mario responds:
Let's leave aside for now the absurdity of comparing prices in a national capital city and international business center like London with a mid-sized mid-western industrial city like Toledo, Ohio. Shouldn't prices of homes in London be compared with prices of homes in cities like New York or Washington, DC? But, I digress.
Since this thread apparently started because of a tender concern for the financial transactions of middle-east Goans, I think they should also take note of Gabe's warning for those of them who may be thinking of moving to London - that they will have to pay more than USD100,000 even for a one bedroom walk-up tenement.
Bosco D'Mello
2008-03-26 03:47:20 UTC
Permalink
Gabe Menezes initiated this thread in mid-March with an analysis of the US
Dollar:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070563.html

Mario Goveia responded with his typical defensive response vis-a-vis
business cycles:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070642.html

Mervyn Lobo chipped in with a piece on incompetent money managers:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070721.html

Marlon Menezes re-directed this thread to "Goans in pain! (specially in
America!)". He did indicate this was the first part of the bad news:

http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070902.html


Yesterday I ran into:

http://www.time.com/time/magazine/article/0,9171,1725094,00.html

This article purports to educate what Goans saddled with stacks of
greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do
well by being astute 'Goans at the Garage Sale".

The USD is causing a lot of pain, the world over!!

- Bosco
Still holding Canadian Pesos
Mario Goveia
2008-03-26 15:22:21 UTC
Permalink
Date: Tue, 25 Mar 2008 23:47:20 -0400
From: "Bosco D'Mello" <bospam at canada.com>
Mario Goveia responded with his typical defensive response vis-a-vis business cycles:
http://lists.goanet.org/pipermail/goanet-goanet.org/2008-March/070642.html
Mario responds:
Hey, Bosco,
Pardon me for being "defensive" by pointing out the simple fact that the US goes through business cycles every few years and that the last two have been about double the period of previous cycles because of the success in controlling US inflation. This well known fact seems to have mostly escaped the attention of the other "experts" you have cited, who tend to think that "this time" everything will be different, yadda, yadda, yadda. Maybe. Maybe not. I have seen "this time it will be different" come and go numerous times in the almost four decades I have lived here.
US economic policy depends on certain basic principles which generally fall towards the capitalist end of the spectrum of policy options, modified from time to time by the politics of which party has the votes in government.
At the risk of being "defensive", here are some observations on certain excerpts from the TIME magazine article, which is a great article to explain why the US economy is different from that of most other countries.
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
Excerpt: It also means that those mounds of dollars held by central banks and investors from Tokyo to Kuwait City are also deteriorating in value by the day. Yet the world can't just dump its dollars. Not only would that be incredibly destabilizing to the global economy, but it also would be effectively impossible. The dollar has been the reserve currency for decades and there are just too darn many of them out there to be converted into something else. Bankers in Beijing, Hong Kong and Dubai are stuck with the rotting stacks of greenbacks.
Mario responds:
These comments may sound clever, but there are no "rotting stacks of greenbacks". These funds are all in bank accounts, earning interest, mostly invested in US Treasury securities and other short term US dollar investments.
Schuman is correct about the difficulty of "dumping" dollars without destabilizing the global economy. This would include destroying the demand for the goods and services of China, India and other foreign supplier countries. The US imports more than it exports, has done so for decades, and the last time I checked, that has hugely benefited the economies of those countries and created this situation in the first place. Just imagine India's economy, or China's, today without purchases by US buyers.
If most Americans start saving like people in other countries, rather than spending like they always have done, the global economy will have to endure an economic slowdown and adapt to the loss of its primary economic engine. Fortunately, that is unlikely to happen. Even immigrants from countries with savings cultures become spenders in the US. That's the American way, whether the rest of the world likes it or not. Actually, the rest of the world loves it, because what would happen to their economies without American spending?
Schuman continues:
Excerpt: So the outcome is inevitable. As the financial crisis in the U.S. persists, the combination of decreasing asset prices and a weakening dollar will make the U.S. cheaper and cheaper to foreign investors. Irresistibly cheap. The U.S. is, after all, still a highly desirable place to own property, companies and securities. Foreign investors will see the crisis as a golden opportunity to buy prime pieces of Americana at bargain-basement prices. So all those dollars in banks around the world will flood back into the U.S. to buy stocks, bonds and property. Debt-burdened Americans, desperate for fresh cash, will be only too happy to sell ? or be forced to sell. The U.S. will become one giant garage sale, where the buyers are Japanese banks, Chinese state-run investment funds and oil-rich Arab sheikdoms.
Of course, we've heard all of this before. For the past two decades, pundits have warned of the dangers of the trade deficit, while the U.S. has powered on. The big difference these days is that far more countries are awash in dollars today than there were in the 1980s. Even back then, if you remember, Japan recycled its surplus into U.S. assets when the dollar weakened in the late 1980s.
The upside to greater foreign investment in the U.S. will be the strengthening of the dollar and the resurrection of stock and property prices. The downside is that the foreign business community ? especially in Asia ? will own larger swaths of the U.S. economy. And it is these foreign buyers who will benefit from the increases in the value of assets and the dollar.
Mario responds:
Schuman is right, but this is nothing new. Foreign holders of US dollars have always bought US assets, whether they be financial assets or companies or farms or commercial property. 80% of commercial property in Honolulu, for example, belongs to Japanese owners. Europeans own and manage huge farms and commercial property across the US. The US has never shied away from foreign ownership of US assets. It wants foreigners to buy US assets, which benefits US sellers, than assets anywhere else. That way the foreign owners develop a vested interest in the US and its economy creating a win-win situation for everyone.
Unlike the paranoid discussions on Goa and its identity being taken over by "foreigners", in the US this is considered a good thing, because, unlike most other countries, the US has always belonged to "foreigners".
Almost every American has descended from "foreigners" - like my kids and grandkids - or was a "foreigner" not too long ago - like me.
The US has become the world's only surviving superpower by using other people's brains and other people's money - always has, always will. Most of the American Nobel Laureates in medicine and the sciences were foreign born - but had to come to the US to maximize their intellects.
I hope this helps Bosco to sleep better with those Canadian pesos burning a hole in his pocket:-))
Hey, Bosco, drive down to Buffalo, New York, why don't you, and shop at the local malls there. We love your money, ...er, business, baby!
Mervyn Lobo
2008-03-27 01:38:35 UTC
Permalink
Post by Bosco D'Mello
http://www.time.com/time/magazine/article/0,9171,1725094,00.html
This article purports to educate what Goans saddled with stacks of
greenbacks ought to do with their USDees!! 'Goans in pain' could possibly do
well by being astute 'Goans at the Garage Sale".
Bosco,
The link you provided above leads to an article that only re-hashes whats been known for some years. The US has weathered storms like this before. What is different this time, is that the US is printing money like there is no tomorrow, effectively debauching its own currency. The author of the article cannot tell you this as the current US administration stopped publishing the numbers on how much money it is printing.

Money, like everything else, is only valuable when it is in short supply. If anyone is holding or getting paid in US dollars, s/he had better do some research on whether s/he still wants to hold a currency that is increasing in supply. The dollar is depreciating so rapidly that even oil rich nations are abandoning the US dollar and are starting to hold their reserves in other currencies. I hope the Goan saver takes note of what is happening and makes the appropriate move.


Mervyn3.0
PS. As for me, I am polishing my knowledge on US foreclosure laws. There is going to be a lot of bargains coming up in the next year to eighteen months. With foreclosure properties, you can often pay a few cents for something that costs a dollar.




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Bosco D'Mello
2008-03-27 05:00:11 UTC
Permalink
Post by Mario Goveia
Pardon me for being "defensive" by pointing out the simple fact that the
US goes through business cycles every few years and that the last two have
been about double the period of previous cycles because of the success in
controlling US inflation.
RESPONSE: Yes Mario, in every such cycle the 5th largest securities firm,
Bear Stearns, goes under and takes with it $19 billion market capitalization
in a few weeks. That is the sum of economies of a few SE Asian countries and
is only ONE example.
Post by Mario Goveia
Maybe. Maybe not. I have seen "this time it will be different" come and
go numerous times in the almost four decades I have lived here.
RESPONSE: So, you are unsure too.......and want to cover all the bases with
your "Maybe. Maybe not."
In forty years you are allowed to be defensive......as long as you are not
dishing out financial advise to good people.
One would expect real good advice from somebody who has spent 4 decades in
the US. I will not hold my breath...........

- Bosco

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