Bollocks!

Irish bank the Anglo Irish Bank Corp became publicly owned today as the government took over the corruption-plagued firm in the midst of a loan scandal.

Read more about it here.

ECB Rate Cut

The Economist takes a look at the European Central Bank's recent rate cut and the state of the European economy (hint: it's dismal).

The Celtic Tiger of yesteryear seems to have its tail between its legs these days; the article notes that Ireland and Spain are seeing the fastest retreats in consumer spending. Germany has seen dramatic falls in its exports, a large source of the nation's GDP.

China

Despite falling exports, China has maintained it's trade surplus, reports the Economist. While exports have fallen, imports have fallen even quicker, they say. Most consumer spending in the country has held up "reasonably well," says the Economist, but with construction projects halted all over the country, raw building material imports -- one of China's biggest imported goods -- has fallen precipitously.

The Economist predicts that with big government stimulus investments planned for infrastructure building in the near future, which will reinvigorate the need for imported raw materials, the surplus may become a deficit in 2009.

China is probably the only country whose credit lending has increased this past year, and continues to do so. The Economist recommends they use this to stimulate domestic demand.

South Korea

South Korea saw in December its first rise in unemployment and subsequent shrink in job growth in five years, reports Yonhap News.

Some locals have lashed out in anger at what they call "young American hippie couples who come to teach English for big pay and easy work, stealing our jobs."

In a related news story, young American hippie couple Jared Acker and Jen Cooper, who moved to South Korea to teach English for big pay and easy work, have recently fled the country southwards to Thailand. South Korean officials believe Acker set fire to a school, tried to pass blame on to a small child, then fled.

You can follow the crazy antics of these two at Fudgepack--urr, I mean, BackpackerAcker.com
(Jared, sorry if your site is not prepared for the traffic you receive from Norman's International. I apologize in advance if it crashes, just trying to help.)

China Down

China's export numbers made their most precipitous decline in a decade in December, reports Market Watch

Like a Phoenix . . .

Chinese Premier Wen Jiabao announced today his nation is likely to be the first to emerge from the world's financial sinkhole and anticipated new measures to bolster the Chinese economy in the next few months, reports China Daily.  

Key policies include tax and credit incentives to keep auto sales continuing and, in turn, auto manufacturers working.  

Chinese exports dropped in November for the first time in seven years.  

C.R.E.A.M.

Disputes over the history of WWII have crippled relations between Japan and South Korea in the past.  South Korea has accused Japan of rewriting history in national textbooks to ignore atrocities committed by Japan during the war.  

But as the great 20th-century political thinker Method Man once observed, "cash rules everything around me."  The economy has proven a remedy in putting that dispute aside as the two nations leaders met today to forge new economic relations to overcome the worldwide downturn.  

The two leaders discussed the future of their financial structures and vowed to work closely together in dealing with trade negotiations, both agreeing to broaden foreign investments.  

They also discussed their mutual commitments to dissuading North Korea from continuing nuclear plans.  

The Future of Capitalism

French Prime Minister Nicolas Sarkozy and German Chancellor Angela Merkel welcomed financial experts in Paris to discuss "the future of capitalism," seeking to create a new system of international financial governance and institutions.  

Merkel suggested a "powerful new economic council at the UN," reports France24.com.  Both urged the US not to stand in the way of tighter financial regulation, which they blame the current crisis on -- a good sign for those of us eager to get past the Reagan-Thatcher era.  

The goal, said European leaders involved in the two-day event dubbed "New World, New Capitalism," was not to end capitalism or finance as we know it, but to foster the "return of the state" as a regulator.  

Tony Blair, chairing the event, told attendees -- Amartya Sen, Pascal Lamy and Joseph Stiglitz, among other notables -- that the current system of seven powerful economies making global financial decisions is an "absurdity" in these times, calling for the inclusion of a wide array of emerging economies and interested parties.  

"We have mid-20th century international institutions governing a 21st century world," he said, calling for the reformation of the IMF and the World Bank.  

China

Two of China's major economic hubs, Guangdong and Shanghai, are, like much of the world, facing severe market troubles. As a result, nearly a third of all migrant workers in southern China have returned to their homes throughout the country.   

"I Guess We're All Keynesians, Now."

In a move that seems to echo a global trend, the South Korean government has announced plans to invest $37.8 billion over the next four years in "eco-friendly" businesses -- an investment expected to create nearly one million jobs. This, following a five-year-low job creation rate in November and a generally slowing economy.

South Korea's "Green New Deal" is reflective of a much larger political-economic trend throughout the world. Many governments are planning big infrastructure investments and job creation projects to fight the sluggish world economy.

Obama's U.S. plan is close to $850 billion; $100 billion for state governments to cover Medicaid and other expenses; middle-class tax cuts; and further spending in five key areas -- traditional infrastructure, school construction, energy efficiency, broadband access and health IT.

China announced its largest ever stimulus package in November -- a $586 billion investment in ten key areas, among them low-income housing, electricity, water, rural infrastructure, environmental protection and technological innovation.

The EU announced a $260 billion plan around the same time. Many Latin American countries are following suit as well.

Here's a paper from Brookings on how to make these plans work.

And here's one from Heritage on why the best medicine is - you guessed it - less government spending.