Last posts on economy

Investments become the new savings

2009-10-28T19:59:29+01:00

The way people save has undergone a fundamental shift, but not a lot of people have noticed the change.

Traditionally, people would save into a high interest savings account, where the interest rate would be reasonably competitive, could vary from time to time, with higher rate accounts offering higher returns the less you touched your money (ie, notice accounts).

Those people with a lot of money to save would often look to save their money in multiple accounts with multiple savings providers, and those in the higher income bracket would probably focus more on putting their savings into an offshore bank account.

While there were additional savings options for tax-free interest, such as TESSA's, PEP's, then ISA's, and variations on savings such as the premium bonds, that was as complicated as it got.

Those who did not want to invest in stocks and shares, mutual funds or index funds, futures, bonds, or other investment vehicles as part of a portfolio, remained just savers.

What has happened since the financial crisis is now those savers have become investors, without realising it.

Savings rates have been slashed as the Bank of England dropped rates to record lows - with both current account and savings account rates following suit.

The result? Most current accounts now pay 0% interest, and savings accounts rarely offer more than 1.5% .

However, many savings providers are now offering higher rate savings through fixed rate bond accounts, where interest rates can be 4% or more above the Bank of England's base rate, so long as you lock you money in to the account for two, three, or five years.

The result is a major change in the savings landscape that few have even noticed, as savers are now finding themselves forced into putting their money into bonds for a fixed term. In effect, they are now investing in investment products, rather than saving in savings products.

The surprise is that only a few savings and investment brokers have noticed this change

While some commentators have suggested that 2009 saw the growth of green shoots in the economy, others remain adamant that we are looking at a W shaped recession.

Either way, it looks like the savings landscape is not going to change any time soon, and that fixed term plans will continue to force savers to become investors in all but name.

Problems increase for economy

2009-10-20T16:33:24+02:00

The more I read about the impact of the financial crisis in the UK, the more it feels that the UK is doomed economically, and that the best option now while you have cash in Great British Sterling is to cash out and move aborad to somewhere more financially sound - ie, not threatened with collapse by the weight of its own debt.

That may seem somewhat alarmist, but despite the claims of "green shoots" earlier in the year, we have not seen any signs that the economy is returning to normal. In fact, anything but, and that at best we're moving into a "lost decade" similar as to what happened to Japan.

Britain's debt to GDP is spiralling out of control, and even measures to reduce costs being mooted by Labour and the Conservatives are plain in their limitations - we are in far too much of a hole to be able to dig us out even within the next Parliament. It's going to take a full decade to even begin to expect to bring British debt to normality, and during this period, there is no reason to presume the economy will fare any better.

Repossessions continue to be high, insolvencies are expected to increase, and consumer debt is growing through credit cards and loans at a time when paying are supposedly paying off debt. Unemployment continues to increase in leaps and bounds (forget that's its slowing - double dip, people), and rather than help employers hire, the government is actually going to tax companies more for employing people.

In the meantime, ratings agencies expect at least a further 15% fall in house prices in the UK, and at a time when the market is limping forward, the FSA wants to bring in tougher rules on mortgages, while at the same time demanding banks hoard more cash.

And that's before we even get into the threats of deflation and unknown consequences of "Quantitive Easing".

The result of all these pieces in play can hardly be good for Britain - worsening debt, worsening access to credit, worsening consumer spending, falling asset prices, etc. The strategies in play may be different to Japan in the 90's, but the state of play is looking increasingly like it.

The problem, of course, is that while matters are exacerbated in the UK, these are afflictions across the world economy. So where is safe?

The answer is relative - the financial crisis is firmly rooted in the US and Europe, and while other areas have been impacted, their fundamantals have been far less knocked by comparison.

Asia remains strong and a bulwark so far against global financial collapse. While no doubt asset bubbles there are growing, they still don;t have the problem of being so invested in complex debt instruments that have so far crippled US and European banks.

Personally speaking, Thailand looks idyllic, but remains subject to Typhoons, as does much of East Asia. A good place to consider investing in, though.

South America is another emerging economy as well, not least in terms of investments, such as land for sale Brazil & property for sale Brazil. If South America itself seems a little rough, you could always consider moving towards central America, not least Panama, which remains under US control, and still offers a lot of decent property for sale Panama.

Australia or New Zealand could even be places worth considering moving to - close enough to Asia to feel the economic benefit, but heavily Anglicised.

In the meantime, now seems to be the moment to batten down the hatches or move on - economic power is clearly heading East, and to developing nations, and for those who remain, only the prophets of doom are left to comfort us.

Lowering Taxes II

2009-07-30T20:55:03+02:00

Remember this post?

Well, i've been trying to come for reasons why it didn't work out as planned.

The first thing that comes to mind is that even if you give the money to the govt in taxes, it'll still spend it on stuff, and sending it back into the economy. So it has the same effect.

But there must be more. As a progressive, I believe in the redistributional effect of taxes, it's a means of taking money from the affluent to less wealthy. Take away taxes and what happens? The rich make more and more while the poor have less and less money and government help at their service. The problem is, those rich people aren't just going to poor all that more money into the economy, they'd ship it overseas or invest it in the housing market which then busts at some time because there's too much capital in there and prices go through the roof. Whereas poorer and lower middle class incomes would still spend that money on stuff like food, holidays, clothes etc, all those commodities with "real" prices which keep the economy healthy for a great part.

Now one question has been nagging at me for a while. We all would like the perfect society, where we pay just enough taxes to ensure the government can take care of us all and keeps the economy healthy. Can't we just compare all those countries with different systems and just see which one has the best? Of course, not all are the same, for example Norway is a great country I guess, but it does get a lot of income from natural gas. Still, can it really be that hard?

The UK economy's bleak future

2009-07-30T13:08:44+02:00

This spring's green shoots are being increasing shown to have misplaced optimism, with economic conditions continuing to worsen within the UK - GDP continues to fall, and expectations of a recovery for next year remain muted.

While it's easy to just look at the UK in isolation, there are a couple of major economic pointers on the horizon that suggest the world's economy could suffer major set backs - even before a recovery has begun. And this is likely to bode ill for Britain, with existing downbeat expectations potentially proving to be optimistic if these factors play out.

The first is the credit bubble in China. So far, the Chinese economy has continued to grow strong - but it seems that rather than learn from the mistakes of the West, the Chinese are keen to repeat them. Yes, there's a credit bubble forming in the Chinese economy, as the government there encourages lending to such a degree that the IMF is already alarmed.

The second is the original engine of the credit crunch - the US real estate market. So far it has shown no real recovery, and what's worse, is that not only are repossessions (foreclosures) continuing to increase, they are not expected to peak until after August 2011, when the last big wave of ARMs - subprime mortgages - come up for renewal past their discount period.

These are not the only negative indicators - the IMF continues to warn that the world economy faces a deflationary spiral, that if borne out, could leave much of the West enduring an economic scenario equivalent to Japan's lost decades.

The UK has its own problems as well, not least due to the major debt bubble it's been sitting on for the past few years (it's not simply about house prices anymore). Lending in the UK is still suffering, with a mass withdrawal from the personal loans market, and such poor lending to business by the banks that Alaister Darling is now having to try and appear to be doing something about it. In the meantime, the IMF is warning that the UK's credit card debt could be crippling.

Any suggestion of an improving mortgage market should be taken in context of the fact that Spring and summer are traditionally the peak season - and what we've seen so far is still weak.

In short, economic conditions in the world remain fragile, but there are no positive indicators at present to suggest we're past the worst of it - anything but. There are still major dangers on the horizon, which leave little room for optimism for future economic conditions.

Why Should You Bother with a Business Credit Card?

2009-06-25T02:23:05+02:00

There are so many small companies out there that are going down due to the recession. The recession is especially targeting those small time businesses that have little capital base. Without the extra money needed for emergencies as well overhead costs. The recession is making it tough for small businesses. Since they are now just simply subsisting on their profit, an emergency such as a damaged machine could not only be costly, it could actually be fatal. This is why a business credit card is so very important in these dodgy economic times. But what kind of benefits can you actually get with this kind of plastic? Well, there are many. But the first and most important benefit is more transactional power. Imagine when there is a last minute deal that you make and you are in dire need of money to make it pull through. Without this kind of credit, the whole deal might fall through the floor. Imagine the amount of money you will lose in that wasted opportunity. You will appreciate the buying power of plastic when you encounter machine problems that, when left unfixed or unreleased, will cost you thousands or even millions in lost profit.After all, without business credit, you will still be forced to use your own personal plastic. And when you get forced to do that, your business accounts will get messed up. Book keeping is a vital part of any business, whether small time or big time. If you are not able to properly compute you profits and expenses, these slight miscalculations will lead to big problems and mistakes in estimations that can be very bad for business.The main difference of a Business credit card versus a regular one is the maximum amount of credit allowance. This is because a business operation will most likely have bigger expenses. With that amount of power the most likely problem you may have is self control. The temptation to use this big credit for your own personal use should be avoided by all means necessary. Just remember that, just like any other card, the business credit will have to be handled responsibly. If you are able to get pass that one hurdle, you may rest assured and secure in the knowledge that you can keep your business afloat despite unforeseen expenses due to the transaction power afforded to you by you business credit card.

Recession optimism is definitely misplaced

2009-06-11T18:33:51+02:00

A lot of interesting stories coming up today, showing the continuing turmoil in the financial world.

First up, Edmund Conway claims the recession is over, which is about as optimistic as you can get.

Much of this unfounded optimism seems focused on the fact that the property market has seen a positive bounce over this spring - mortgage lending is up, buyer enquiries are up, and the DCLG reported a 1.1% rise in house prices over April.

The problem is, spring has always been prime home buying time, so to extrapolate this into some form of economic recovery seems absurd. It really does look like a bounce, which means we should expect economic conditions to get a lot worse towards the winter - as the property market traditionally cools.

In the meantime, other economic indicators are looking increasingly adverse.

We've seen repeated claims that the European banks have not properly written down their losses. In the meantime, Eastern Europe looks like it could crash and drag a lot of Europe down with it through a chain reaction. Latvia is already in big trouble and could be the smoking gun to bring the rest of Eastern Europe down with it, and a number of central European banks with them. And that's before we address the issue of existing write-downs the ECB is already severely worried about.

In the meantime, here in the UK, the whole banking sector continues to reshuffle in order to try and adapt to what still remains a crisis.

RBS is looking to split off business deals it claims as "unprofitable" into a separate group - in the meantime, as if the market hadn't already got itself into trouble creating complex debt instruments, this is exactly what is being proposed to get the UK taxpayer money back from semi-nationalised banks such as the RBS and Lloyds Group.

Among the building societies, the government is looking to allow changes to how they fund themselves in mass markets, in order to stop a repeat of the Dunfermline Building society crash. This is not least because others, not least the West Bromwich Building Society and others are also believed to be on the brink of collapse.

The Nationwide Building Society has already raised its mortgage rates sharply this week, close on the heels of other increases in mortgage rates last month. While the Nationwide remained one of the cheapest mortgage loan providers around, it no longer appears to be trying to outcompete other mortgage lenders.

If anything, the entire financial world still seems to be on a downward spiral. While the potential collapse of the banking sector appears to have been averted - certainly for now - the global economic picture is anything but healthy.

Stay tuned.

The Effect of Environment on Economy

2009-06-07T19:24:00+02:00

When you look at the list of countries by income per capita, it becomes apparent that nature is apparently an important factor — though the list varies from year to year, countries such as Norway, Switzerland, Finland, Sweden, Liechtenstein, Luxembourg, Ireland, Iceland, Danmark and so on have often been among the list. Two other relationships appear to be a history of fossil fuel exploitation and a history of war, both of which indirectly stimulate productivity.
The causality of this relationship is probably dual. On the one hand, richer people may have been more inclined to seek out nature, and the children of wealthy people are generally relatively wealthy themselves. On the other hand, nature may make people happier and thereby more productive.
If the latter is more important than the former, then it is important to recognize this factor in economy; it must be known that nature is important in economy, and therefore there is all the more reason for the two to be in harmony. Environmentalism does not need to hamper economy, but may on the contrary promote it. Everything, including economy, is a question of balance, and so it must be approached in a holistic as well as a more analytic way. Economy that is out of balance will damage the environment, which will damage the well-being of the population, which will damage economy.

This remains, however, a hypothesis.

Mortgage rate change gains unfair coverage

2009-05-16T22:01:33+02:00

It's unfair to see the recent criticism of the Nationwide Building Society's changes to its mortgage rates.

Yes, it's unfortunate that the Nationwide will no longer be putting new borrowers on it's existing Base Mortgage Rate (BMR), currently at 2.5% - but let's face it, the Nationwide has been pushing harder than any other mortgage lender to continue to provide mortgages to the market.

And no other mortgage lender was even coming close to beating Nationwide's BMR.

Despite the fact that the Royal Bank of Scotland, Halifax, Bank of Scotlant, and Loyds TSB, all have direct government support through part-privatisation.

This is not least receiving government money with the aim of improving lending to to mortgage and loans market.

And yet RBS, HBOS, and Lloyds are still charging very uncompetitive rates, as if they are making a particular effort not to lend, and instead just hoard the government's funding.

So it's left to a mutual like the Nationwide Building Society to offer not just the cheapest rates on mortgages, but also the lowest rates on loans, and even the lowest fees on credit card use.

And then when the Nationwide finally decides it needs to move new customers onto a new higher mortgage rate - one more comparative to rates offered by Barclays and HSBC, and still cheaper than RBS, HBOS or Lloyds, some journalists think this worthy of strong criticism?

Perhaps I'm biased - I have my mortgage with Nationwide, I have a Flexaccount (current account)t with them, and also a credit card (though mostly for going on holiday with).

I used to be a financial advisor for a living so I like to think I can recognise a quality deal, and so far that is exactly what Nationwide have been delivering on - far more than any government-supported bank.

Nationwide have been leading the market in lendingoc, to try and allow responsible people to borrow responsibly.

If a small increase in rates on just one of their products for just new borrowers is deserving of such criticism, then I can only wonder why these journalists haven't been more condemning of the lousy rates being offered by traditional high street banks.

Film”Fast Food Nation” Who are to blame?

2009-03-01T08:24:42+01:00

The film was more like documentary than drama. The story is fiction but it should be based on the facts.

A hamburger store chain manager goes to the meat processing factories to know why the poisonous bacteria were detected on beef for hamburger. The search reveals the harsh reality of fast food chain business and severe conditions of the workers in the factories.

This is something I, myself could more un-USA. But the film was of course produced by Americans. One of the characters was played by a famous actor, Bruce Willis.

The people involved in the story represent the problems of America and the world. Illegal immigrants from Mexico who seek much higher income than their homeland and end up working in meat processing factory where working condition is very, very dangerous.

Farmers who are fighting against corrupt food industry, liberal students who learn stupid system of their country but don't know how to change it.

Well, it just didn't happen in the U.S. Food industry is in fact scary sector. Very profitable but at the same time very competitive and people involved are very greedy.

But the bottom line is this phenomenon was caused by consumers' greed. We are always seeking cheaper products and more convenient way of life.

Then what we see in the end is McDonalds everywhere, people eating cheap but very poisonous beef.

What if we are more knowledgeable and considerate, things might be better.

I've heard that in Europe, there is a movement called "Slow Food. Slow Life."

A generous banker

2009-02-27T19:51:00+01:00

MIAMI – At a time when bankers are being pilloried on Capitol Hill as heartless and greedy, Leonard Abess Jr. stands apart. After selling his bank for a fortune last fall, he quietly handed out $60 million in bonuses from his own pocket — and not just to top executives. In all, 471 employees and retirees, including tellers, clerks and secretaries, were rewarded, receiving an average of about $127,000 each."I think everybody was surprised. But knowing Leonard, the type of person he is, I can believe him giving it away," said retiree William Perry, who spent 43 years at City National Bank of Florida, rising from janitor to vice president. Perry, 78, got $50,000, which he is using to help his son pay for law school. For his generosity and humility, Abess was singled out for praise by President Barack Obama in his congressional address Tuesday. Abess attended as Obama's guest."He's a brilliant banker, which I think is obvious because of how well the bank has done all these years. And, obviously, a very generous man," said Ginger Nunn, a managing senior vice president. "He can not only set an example for other bankers but for any businessperson."More...

Savings accounts are dead?

2009-02-27T13:14:20+01:00

The Royal Bank of Scotland just announced a staggering £28 billion loss.While we’ve seen a number of banks declare billions in losses over the past year, and the process still continues, the RBS loss is going down as the biggest corporate loss in UK history.It’s unbelievable what’s happened to the banks, and what’s even more unfair is that it’s the tax payer who is paying for all the mistakes of the banks.We’re not just paying in terms of government funding and asset swaps with the Treasury, but also as customers. Interest rates on savings accounts are dead, but mortgage and loan interest rates remain a lot higher than the Bank of England’s base rate.Which means the banks are doing what they can to widen profit margins to recapitalise themselves, meaning that we’re ending up paying twice to save them from their own greed.I currently have a Nationwide bank account which is paying less than 1% interest. On the one hand, at least I know Nationwide is one of the stronger financial institutions and isn’t under any threat of being part-nationalised like RBS and Lloyds, and doesn’t look likely to be nationalised any time soon.Even still, as I’m saving for a deposit on a house, I don’t like the fact that my savings are no longer working as hard as they used to.Hopefully the banking crisis will soon be over, and perhaps for the sake of the financial system, banks need to widen profit margins in order to bring this to an end sooner, rather than later.But just don’t expect me to enjoy being part of the bail-out, when all I can see is the cost from it all, rather than the benefits.

Seeking employment with sandwich board advert

2009-02-23T18:00:43+01:00

An unemployed Salford man has secured a job by standing at the roadside in Manchester advertising for work on a sandwich board. Jason Fruen, 39, took the drastic action after being made redundant five months ago.The father-of-one spent several hours on two days last week standing at Junction 9 of the M60 near the Trafford Centre in Manchester, before receiving a job offer. The sandwich board he wore around his neck stated: "Mechanical maintenance engineer seeking employment" and also contained his phone number. Mr Fruen said: "I've actually had a company offer me a position. I've had to have an interview and they've offered me a position."He said he has to go and finalize the terms and conditions of his new job on Monday.

How we paid for the banks twice over

2009-02-08T22:15:44+01:00

This week’s move by the Bank of England to cut the interest rate to an all time low of 1% is a bad move for all of us, especially those trying to save money.It is an unfortunate double whammy, because while the tax payer is subsidising the banking system via RBS and Lloyds especially though part nationalisation, plus through government guarantees and debt swaps with its special liquidity scheme, the cut in interest rates especially benefits the banks by increasing their profit margins.A major way banks make their profit is through arbitrage between savings rates on loan rates. In other words, the bank offers a relatively low interest rate to savers, a relatively higher rate to borrowers, and the difference in between is profit.The problem is that while savings rates have come down a lot, especially as the Bank of England cuts interest rates, the actual borrowing rates remain comparatively high.For example, with mortgages, it used to be the case that tracker rates would follow the Bank of England’s rate up and down. If they still did this, then many people would be feeling the benefits.However, lenders have now instituted a “mortgage tracker rate” which means the tracker rate they offer is a few full percentiles about the Bank of England’s interest rate, but does not necessarily comes down if the Bank of England’s interest rate is cut.Many previous tracker mortgages also came with a mortgage floor which effectively means that the tracker mortgage will not come down below a certain rate, even if the Bank of England interest rate continues to fall.Coupling the constant cutting of interest rates on savings, with the artificially high mortgage repayment rates, means that the UK’s banks are cashing in at the detriment to the very consumer’s whose taxes are keeping such banks afloat.We as a nation are therefore hit by a double whammy of subsidising the UK banks directly through billions in government support, and additionally by the banks ensuring that interest rate cuts actually boost their own profit margins.Not many people are aware of just how depressingly manipulated we are being used to help support the very institutions, whose greed and maladministration brought us into what appears to be a deep recession, and yet it will be the banks who end up profiting most from it.

Economy is rational allocation of wealth

2009-02-06T13:24:00+01:00

As Obama said in his inauguration speech, "we ask today is not whether our government is too big or too small, but whether it works," good economical system does not mean capitalist economy.

As I recall my macro-economy course in U.S., definition of economy is "rational economy of wealth."

If only small number of people get most of the wealth, they would save most of what they earn, not using for consumption because they cannot do that even though they like jet-set life style. If the same amount of wealth was allocated to millions of workers, it will be all used up and circulated in the market and rejuvenate the whole economy.

Free economy, trickle down theory are old fashion ideas. Neo-liberalist economy resulted in today's financial crisis.

That doesn't mean socialist economy is better, it leads shortage of the goods like what happened in former Soviet Union.

Let's think about third way to create better system.

Almost homeless

2008-12-09T03:49:00+01:00

Paul Nawrocki says he's beyond the point where he cares about humiliation. That's why he weekly takes a 90-minute train ride to New York, where he walks the streets wearing a sandwich board that advertises his plight: The former toy-industry executive needs a job. "Almost homeless," reads the sign. "Looking for employment. Very experienced operations and administration manager."Wearing a suit and tie under the sign, Nawrocki -- who was in the toy industry 36 years before being laid off in February -- stands on Manhattan corners for hours, hoping to pass resumes to interested passers-by. "When you're out of work and you face having nothing -- I mean, having no income -- pride doesn't mean anything," Nawrocki said. "You need to find work. I have to take care of my family." more...

What's the U.S. Economic Bailout Costing?

2008-11-29T16:50:00+01:00

At the conservative estimate of $4.6165 trillion, so far (including the Citi bailout) (Bloomberg estimates the bailout even higher, at over $7 trillion already, which is $24,000 for every person in the country), the bailout would cost more in inflation-adjusted costs than:

the Marshall Plan,

the Louisiana Purchase,

the Race to the Moon,

the 1980s S&L Crisis,

the Korean War,

The New Deal,

the Invasion of Iraq,

the Vietnam War,

and NASA [hope that doesn't include The Race to the Moon ...],

which together total $3.92 trillion.

"The only single American event in history that even comes close to matching the cost of the credit crisis is World War II: Original Cost [to U.S.]: $288 billion, Inflation-Adjusted Cost: $3.6 trillion."

More scary details here, courtesy Barry Ritholtz at The Big Picture

Yes, taxpayers could get some of the money back (the Chrysler 1.5 billion bailout loan in the early 1980s was repaid in full with interest) (maybe), but even if taxpayers are on the hook for only $1-2 trillion, that's still between $3,200 and $6,500 per every man, woman, and child in the country.

Others suggest we should look at the cost of the bailout in terms of GDP, or in terms of national net worth. (And Nobel-prize-winning economist Paul Krugman, in his recent 'What To Do' essay, talks about the viability of solutions in terms of GDP.)

Doing the latter, one commenters says that the $4.6 trillion "is still quite modest. As a percent of total national net worth (government and non-governmental assets minus liabilities) it's less than 4 percent." (No idea where those figures come from.)

Another commenter crunches more numbers (with caveats, and sources, listed) to determine government expenditures inflation-adjusted as a percentage of time-relative annual GDPs:

the Marshall Plan (1947): $115.3 billion/$1,574.5 billion GDP in 1947 = 7.3% of 1947's GDP

the Race to the Moon (1961-69): $237 billion/$3,191.1 billion GDP in 1965 = 7.4% of 1965's GDP

S&L Crisis (1986-91): $256 billion/$6,742.7 billion GDP in 1988 = 3.8% of 1988's GDP

Korean War (1950-53): $454 billion/$1,915.0 billion GDP in 1951 = 23.7% of 1951's GDP

The New Deal (1933-36): $500 billion (Est)/$704.2 billion GDP in 1934 = 71% of 1934's GDP

Invasion of Iraq (2003-08): $597 billion/$10,989.5 billion GDP in 2005 = 5.4% of 2005's GDP

Vietnam War (1965-75): $698 billion/$3,771.9 billion GDP in 1970 = 18.5% of 1970's GDP

NASA (1958-2008): $851.2 billion/$5,423.8 billion GDP in 1983 = 15.7% of 1983's GDP

which total 153% of annual GDP relative to year of expenditure

In terms of GDP, the current bailouts (2008) -- estimated, conservatively, to cost $4,616.5 billion (or $11,523.9 billion GDP in 2007) -- would be 40.1% of 2007's GDP, a little less than the Korean and Vietnam Wars combined, but quite a bit less than the New Deal.

I wish my calculator went up to a billion, much less a trillion ....

Asia Weekly Focus

2008-10-10T18:23:00+02:00

This week has been all about the markets starting to factor in the prospect of a global recession, it's not just the banking crisis in the northern hemisphere, which has been driving a lot of volatility in the markets in the past year or so but now the prospect is very real of a global downturn. Australian Prime Minister Kevin Rudd says he's more concerned about the stability of Australia's banks than its competitiveness. The Commonwealth Bank has launched a bid to buy Bankwest, while Westpac is trying to takeover St George Bank. Australia's opposition says the global economic crisis is an opportunity for the big banks, and will reduce competition in the market.

But Mr Rudd has brushed aside those concerns. "Competition questions can be resolved over time," he said. "The stability of the system is of fundamental importance, not just to businesses, but to every working family in the country, every pensioner and carer wants to know the banking system is stable, that's our first responsibility and I don't back away from it." Australian shares closed down 8.3 percent as the global financial crisis drove a fresh round of losses on world stock markets. The Japanese Nikkei index is still down by more than 10 per cent after shedding a massive 11-point-four per cent earlier in the day. The selling frenzy has been repeated all around Asiatic continent, although not with the same intensity. Share prices in Hong Kong, Singapore and South Korea have all dropped by about seven per cent. In the meanwhyle Singapore's government has released figures showing the economy has slipped into recession. The ASX 200 has dropped 297-points to four-thousand-and-24. The Australian dollar has also been hit hard, falling more than six cents from its overnight peak to 65-point-six-six US cents.

China's top negotiator on Taiwan will meet the island's president for the first time, a Taipei official said on Thursday, in what would be a further sign of improved relations between the diplomatic rivals. Ma's Nationalist Party (KMT) ruled all of China until Mao Zedong's Communists won the Chinese civil war and Chiang Kai-shek fled with the KMT to Taiwan. Taiwan is recognised by just 23 countries around the world compared to about 170 that recognise China. China has claimed sovereignty over democratic, self-ruled Taiwan since the end of the Chinese civil war in 1949 and has vowed to bring the island under its rule, by force if necessary. But relations have improved since Ma came to office in May with pledges to boost the local economy by forging new trade and transit links with Beijing.

The two sides will also sign deals on regular flights and direct cargo shipments, PK Chiang, Taiwan's top negotiator on China policy. Chen Yunlin, head of China's Association for Relations Across the Taiwan Strait, would meet President Ma Ying-jeou in Taiwan at the end of October or at the beginning of November. At a landmark meeting in Beijing in June, China and Taiwan agreed to begin direct charter flights Friday through Monday and let as many as 3,000 Chinese tourists visit the island per day. Before direct flights, previously banned for security reasons, travellers would make time-consuming plane changes in Hong Kong or Macau.

China and Taiwan are in talks to add six more Chinese cities to the five that handle Friday-through-Monday flights, and to shorten some of the flight paths. Trade and transit links with fast-growing economic powerhouse China should help lift Taiwan out of a seven-year economic slump aggravated by the global financial crisis. Taiwan is in last place among emerging Asian markets, and these direct flights can add business opportunities. At a round of talks expected in mid-2009, negotiators will discuss investment guarantees, financial relations and double taxation.

The head of the Solomon Islands Leadership Code Commission Emanuel Kouhota has told members of parliament that it is illegal to borrow money from individuals, while in office. The commission is investigating members of the Sikua government for possible misconduct. Local media have reported 18 ministers and backbenchers secretly obtained so-called loans from a prominent Honiara businessman.

The Speaker of the Solomon Islands Parliament, Sir Peter Kenilorea, has told the allegations are serious. "If it is true that such a situation occurred, then all I could say is that I would concur with the view of chairman of the Leadership Code Commission that it would be improper, and that it could be considered as misconduct in office."

Security forces are patrolling the streets of Thailand's capital, Bangkok, in an effort to maintain calm a day after deadly clashes. The leaders of mounting protests in Thailand have been granted bail after turning themselves in on charges related to their campaign to topple the government. A senior People's Alliance for Democracy leader Sondhi Limthongkul says the police have granted him - and six others - bail unconditionally. Sondhi said he was heading directly to the protest camp at the prime minister's Government House offices, which the PAD have occupied since late August. No details were immediately released about the amount of bail. All seven protest leaders had turned themselves in on outstanding arrest warrants on charges of inciting unrest and illegal assembly. The move comes after PAD supporters and police clashed on the streets of Bangkok on Tuesday, with two people killed and hundreds injured. Leaders of the anti-government People's Alliance for Democracy say they will continue their rallies until the elected administration steps down.

A new report shows middle income earners and younger New Zealanders are at risk of debt stress by Christmas. The New Zealand Herald reports Dun & Bradstreet's latest survey of consumer credit expectations shows a debt divide emerging in New Zealand as the global credit crisis impacts spending behaviours. One third of middle income earners and younger people expect to be forced to use their credit card to make ends meet, while one third of high income earners expect to lower their debt levels in the coming three months. The survey conducted last month shows younger New Zealanders and middle income earners face the greatest risk of debt troubles.

Written: by LuisB

U.S. Economy was fake after all!

2008-10-06T15:26:00+02:00

The U.S economy has been known as largest in the world.

But just recently it collapsed dramatically. Well, the time has come.

Most of the U.S. GDP, which is largest in the world comes from consumption, not production.

They buy many things from abroad. How come that is possible for people who don't produce so much buy goods from abroad?

It is because foreign countries lend them money buying U.S. treasury bonds. The biggest owner today is China.

They just print dollar bills if they have to pay the debts back because the U.S. dollar has been the world's key currency. Every country in the world uses that.

But the dollar value is just depreciating. And then this subprime loan crisis hit the economy. No one can rely on the U.S. economy.

Now the world is reconsidering how to deal with the U.S.

The U.S. is no longer supepower of the world. No country can be like that any more.

The U.S. is softlanding to be one of big countries in the world. President Obama would be the symbol of non-superpower America.

Maybe that is normalization of the world.

That may be the beginning of interesting era of human history.

All's Grand on the Naked Avenue....distinguishing Money from Markets..Golden Eagle's Opinion

2008-10-04T02:44:00+02:00

'Man looks in the abyss, there's nothing staring
back at him. At that moment, man finds his character. And that is
what keeps him out of the abyss.'

Lou to Bud in 'Wall Street'

'The main thing about money, Bud, is that it makes you do
things you don't want to do.'

Lou in 'Wall Street'

"There are eight million stories in the Naked City. This has been one of them."

ABC TV series 'Naked City'

Trees from the forests....Money from the Markets.

We are now 30 days out from the pivotal 2008 US congressional and Presidential elections.Our theme of 'The Hero with a Thousand Faces' with regard to Barack's Odyssey steps up pace in dramatic fashions.Economy, stupid.The Economy.Since our last TigerHawk post a week ago, we've had our predicted plunge in the New York Stock Exchange. The Dow Jones Industrials fell 777 points last Monday, September 29,2008.The largest ever one-day drop.Any numerologists in the house? Who writes this script?Even more than at 9/11, 2001.The immediate cause was the break-down of the 'Bail-out' agreement in the US House of Representatives.Remember that sell-off melt-down after the $85 Billion 'seizure' of AIG, and Wall Street's panic frenzy were only tamed with Hank Paulson's promise of a 'Bail-out' for the misbehaving financial industry.We, the collective citizenry are now responsible to assuage their fear of collapse by assuming purchase of their 'toxic' paper formerly called mortgage-backed securities or collateralized debt obligations.However, we called it here last week. The impolite topic of ideology arose in the US Congress. While Democrat Speaker Nancy Pelosi corralled her side of the aisle's votes, the Republicans splintered with an outbreak of Reaganism and challenged the Bush Treasury's plans.Remember no government,free enterprise etc? Well these elected officials, bombarded by antsy constituents back home, ready to vote for ALL 435 Congressional seats, felt it was time to renew their Reagonomics membership cards.The White House was not amused. A revolt and disrespect to an obvious lame duck Republican Administration by laissez faire purists.The White House had abandoned the 'Free Market' religion. The romper room crowd did not grasp the gravity and sophistication of the crisis. The matter was no longer about Wall Street and the Financial Industry, but was now 'bleeding' over to Main Street.The panic in banking circles has created a drying up of credit . Small businesses, corporations, municipalities and States are all credit starved facing operational contraction and shutdown,which means unemployment increases.Less money in the wallets and purses.The highway to

Obama Country.

Yesterday on the eve of the Vice-Presidential debate, the wires relayed McCain's pulling campaign resources out of Michigan. Apparently the management on the ground assessed the effort to be futile, as the economic hardship in the Auto state had smashed the Palin personality/McCain maverick hopeful game plan.In fact, five diverse polls all show Obama opening his lead in six of seven swing states.107 Electoral College votes of the winning 270 reside in these places. Last night's debate , while having no faux pas by the Alaska governor Sarah Palin, took nothing away from Senator Joe Biden, Obama's running mate.The worse the economic news, the greater Obama's poll numbers rise.A fascinating dynamic as a few months ago we were sure that Obama's experience and race would define the campaign. Arizona Senator McCain was of similar reasoning, bringing in a white young female to challenge and undermine Obama's 'rock star' charisma. Unfortunately, the Katie Couric interview was a bit disjointed at the very moment McCain need a boost deflecting away from the Wall Sreet crisi,s and its Main Street fall-out.California is now asking the Federal government for $7 Billion to bridge a budget short fall.. The September unemployment figures were a 5 year high,Guaranteed to compound the cosumers and investors' anxiety and fear.

'One thing's for sure: The next administration's economic team had better be ready to hit the ground running, because from day one it will find itself dealing with the worst financial and economic crisis since the Great Depression.'

Paul Krugman,New York Times

October 3,2008

Paul Krugman sounded the alarm today warning in his New York Times opinion piece that we're at the Abyss.What was an obscure Wall Street contagion has bled into all our lives.Main Street and Side Street.Our money, and money prospects are under attack and we all face converging challenges.Our collective Abyss. That is why McCain's diversionary tactics and' don't trust the 'exotic' guy's talk' strategy, is not making traction. The populace is poorer , skeptical and fearful.We need hope or a visionary leadership tonavigate away from from the abyss. We here at TigerHawk are not impressed with the details or thoroughness of Obama economic policy, However, we agree with many Americans that he seems to have a better grasp of the urgency, and the macro-economic complexity beyond tax breaks and budget balancing.Ask California's Republican Governor how far such ideological rigidity has got the Golden State back on the road to economic prosperity.The racist pathology and deceit of the mentioned Bradley syndrome/effect, is an obvious danger to Obama.Some whites cannot allow themselves to vote for a black man.An unfortunate and deep-seated legacy of Slavery. However,the depth of the Obama/Biden war-chest,aggressive ad-buys in Red-states, the increase of new voter registrations and the galvanizing of the African-American vote since his conversation in South Carolina, have put Wizard Karl R's low road former W victory formula, under pressure.Obama reminds us that he's been in the campaign for 19 months and always under-estimated.HRC will testify that the plan that Super Tueday would seal the Democratic nomination, was torpedoed by a bold and new electoral strategy by the Harvard Law graduate.Last election cycle in 2004 , Mr.Evil Bin Laden popped up that last campaign weekend to add to foreign policy and security debate. Let's see which Jack pops out of which box.

From Faith, Hope and Charity to Flower,Hope and Grand.

The epicenter of Los Angeles' banking and finance power is in the Bunker Hill area downtown L.A. We have reported on the Grand performances from the California Plaza on Grand Avenue.Along with Hope and Flower,all threeenvelope upscale and corporate Bunker Hill.In 1849 just two years after winning California from Mexico, the Christian Anglo settlers named the three hills-Faith,Hope and Charity Avenues. In time Faith became Flower,Hope retained its name, but Charity seemed too indulgent for the Protestant Industry and became Grand Avenue. Today Grand (north of 5th street and the Library) is the elite cultural center of Los Angeles exhibiting banking skyrise canyons. The Mark Taper Forum,The Walt Disney Concert Hall,The Dorothy Chandler Pavilion, The Colburn Art School(Juilliard West) and The California Plaza all shout L.A's power, culture and dominance.We recently have been on assignment in this Financial/Cultural 'Hood, and have enjoyed the ambiance, aesthetics, the bold architecture and the multi-cultural populace occupying the corporate/banking towers.Despite the sophisticated veneer, one senses an imperceptible tension which is bordering on collective deer in the head-lights posture.The Naked City.The Naked Avenue.Similar to Manhattan. Millions of stories at the edge of the Economic Abyss. After all a few days ago Wachovia and WaMu(Washington Mutual) both had economic marriages of convenience. Despite the up-beat press releases to impress the share-holders, these folk on pay-roll in these Bunker Hill canyons are aware of the Corporate degradation in Wall Street, and the upper Corporate circles are unreliable and golden parachute obsessed.As Obama said at his nomination, its not about him or any one leader but it's about us all.The neighboring hill of Hope reminds them daily of America's spirit of resilience.

Golden Eagle Comments on the Wall Street Crisis.

We have a Vietnamese-Chinese Lady who was once a high-powered trader in the sophisticated markets from Bunker Hill high-rise offices. We started this discussion at our temple in China-Town and Golden Eagle has agreed to make a commentary here at TigerHawk, sharing her insights:

' It is unnecessary for the Federal government to bail-out Wall Street because:
Corporate CEOs took advantage of the lack of oversight and enriched themselves while running their companies into the ground.
The government has no business of becoming another investment bank itself. This is totally un-American and un-Capitalistic. I believe possible future profits of the proposed government bail-out would be spent on political pet projects( rather than down paying the budget deficit or national debt) which would benefit us the consumers or (Main street).

Proposed fix:
Create economic Oversight Agency by full time independent economists without political affiliation.
Create total transparency of all Wall Street transactions without golden parachutes for present or future CEOs.
Replace pseudo government agencies like Fannie Mae and Freddie Mac
With independent investment Clearing-houses.
Maybe have private investment firms buy up bad portfolios, let them be insured at $70 Billion total and problems can be solved quickly.'

Golden Eagle

Ache',Paz Y Luz,

TigerHawk

Obama on the Economy:Strong Speech

2008-09-24T05:05:33+02:00

Wanted: Political Leaders

2008-09-02T17:45:00+02:00

POLITICS according to The New York Times:

(used with a sing. verb)
1. The art or science of government or governing, especially the governing of a political entity, such as a nation, and the administration and control of its internal and external affairs.
2. Political science.

"Art or science of governing" Hmm.. It seems (bloody obvious) that the world is running out of good political leaders.

For less than a year, Japan had 2 Prime Ministers who resigned from office. They were Abe Shinzo and Fukuda Yasuo, respectively. What happened to Japan? Well, it's happening everywhere in the world.

Recession is pandemic. I've heard the U.S. of A owes People's Republic of China a big debt. You might want to check the following:
[link]
[link]

And let's not go farther. No need to bother crossing the Great Ocean when we have our own country. The Pearl of the Orient is still in big debt. I wonder how much every Filipino owes.

As for overseas policies, Pres. GW Bush is still unable to have his desire to help make a Palestinian State. I'm actually glad he's failing with that. Curse is him who will divide the land of the Jews. That makes the son of a former president fortunate. And I hope U.S. State Secretary Condoleezza Rice will not enter the picture.

I think I should watch out for world leaders now and look for the one who is equipped with charisma, knowledge, wit, wealth and power to rule and please the world. Not that I will join his crowd.

Music:

Natalie Imbruglia - Torn

5 in state House race focus on jobs, economy

2008-07-29T08:51:27+02:00

State Rep. Brian Palmer's advice to whoever succeeds him as the elected speaker for the 36th District in Lansing: be bold. "We need people who will take bold steps to turn things in the state around," the outgoing state legislator said. "We don't want more of the same. We need people to be bold and take a chance." Palmer, R-Romeo, is term-limited at three two-year terms. AdvertisementOn Aug. 5, voters in the 36th District will choose a Republican and a Democrat to face off Nov. 4. The district, which is viewed as Republican territory based on its voting history, includes the northern Macomb County communities of Bruce Township, Shelby Township, the village of Romeo and Washington Township. Those who vote in the Democratic primary will have three candidates from which to choose; those who cast votes in the GOP primary will have two. Jeff Grundy, 62, and Greg Moore, 55, both of Washington Township, and Robert Murphy, 51, of Romeo are running as Democrats. Their rivals from the Republican Party are Matthew Hedge, 39, and Pete Lund, 44, both of Shelby Township. All five say the top issues facing the district -- as well as Metro Detroit and the rest of the state -- are Michigan's stagnant economy, its growing unemployment and rising energy costs. Grundy believes lawmakers must step up efforts to retain businesses in Michigan and lure new ones to the state to improve the state's health. He also thinks his background as a business development manager equips him the best for that task. "We've had lots of lawyers and bean counters, but we haven't had enough real business people in Lansing," he said. Meanwhile, Moore's plan for helping the district's residents focuses on promoting education -- especially for children. "I'm also pledging to donate $10,000 of my salary to my district to help its citizens, if I'm elected," said Moore, who boasts more than 20 years experience in the health care industry. The base salary for a state representative is $79,650. And Murphy, a mediation specialist, believes his skill as a negotiator makes him the best-suited candidate. "My training and experience has been invaluable in resolving problems," Murphy said. "I'm going to work closer with our U.S. congressional delegation to get funding for my district and the state from Washington." If elected, Hedge, who has more than a decade of experience in corporate finance management, plans to introduce legislation to lower taxes and cut government spending. "We have to lower taxes across the board and everything will follow from that," he said. "That'll attract capital into the Michigan marketplace and allow us to compete with other states." Pete Lund is arguably the most well known of the candidates because he's served as a Macomb county commissioner for the last 10 years. He is also the owner of a direct mailing company and an adjunct professor of finance and economics at Walsh College. "I understand how to work with others, put coalitions together and get things done," Lund said. He said his top priority will be to push for the repeal of the Michigan Business Tax to attract businesses to the state. Palmer's other of piece of advice for his successor: "You're going to have to do those things, which are the right things to do but they don't get you re-elected," he said. "You have to make your own way."

Business Opportunities in India: 5 Key Sectors .

2008-06-13T12:45:00+02:00

It’s official! India is happening. With an economy growing at the rate of 9 per cent, business opportunities in India are increasing more than ever before. So much, so that Investors around the world are making a beeline for doing business in India. The FDI Confidence Index 2007 by A T Kearney shows India as second most attractive destinations for foreign direct investment.Obviously, opening up of the market in the beginning of the nineties is paying dividends. Higher income generated at the bottom of the pyramid has fuelled the high octane growth of business opportunities in India across all sectors. Lion’s share of the business opportunities in India exists in the knowledge intensive industries like, Information Technology. Its enormous talent pool available at a reasonably low cost helps India to edge out the competition. According to a NASSCOM-Deloitte study, this sector has contributed 5.2 per cent of India’s GDP in 2007.Some other sectors that offer maximum business opportunities in India are:Telecom: Five leading telecom companies in the world have already invested large amounts to cash in the business opportunities in India’s telecom market. The sheer population of India reflects the growth potential of the segment. Oil and Gas: With a 25-50 per cent lower capital cost alongside the strategic location on the route of Middle East crude for East Asian and Pacific-rim markets India is fast emerging as the global hub for oil refining.Infrastructure: Growing at a rate of 8.6 per cent (2006-7), this segment offers tremendous business opportunities in India.Retail: India tops the AT Kearney's annual Global Retail Development Index (GRDI) for the third consecutive year, maintaining its position as the most attractive market for retail investment.Apart from the above, huge business opportunities in India lie the sectors like, financial services, healthcare and real estate.In the post reforms period, setting up a business in India, is not a worry at all. The elimination of license raj has been able to cut off bureaucratic red tape to much extent. The liberal regime has shaped up an investor friendly economic climate over the years.

Center for Resource Solutions: Green-e Certified Renewable Energy Sales Increase in 2007

2008-06-05T14:20:56+02:00

According to preliminary data, the Center for Resource Solutions (CRS) certified 15 million MWh of renewable energy sales in 2007, up more than 50% from 2006. This represents sales to more than 90,000 new residential customers and 50% more commercial customers, for Green-e certified renewable energy. The audited report will be released later in the fall.The CRS Green-e program in the US provides independent, third-party certification to ensure certified renewable energy meets environmental and consumer protection standards. The program currently certifies products for 190 participating vendors.For additional information click on this link

Money Woes - Profiles of Real People

2008-04-05T22:35:00+02:00

This series at CNN Money, which presents more than 50 brief, first-person profiles of individuals and families struggling financially with job loss, downsizing, reduced home values, student loans, gas and food prices, etc., is enlightening and disheartening at the same time. I empathised with the stories of many folks; this one really speaks to me.

immigrant efforts

2007-02-06T16:52:15+01:00

the second article in our series of interculturaliy in the world, i would like to present you something on how immigrants are effectively shaping a local economy by their energy and thrive.

this article has been edited from a herald tribune news magazine.

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Immigrant entrepreneurs shape a new economy
By Nina Bernstein
Tuesday, February 6, 2007

Manuel Miranda was 8 when his family immigrated to New York from Bogotá. His parents, who had been lawyers, turned to selling home-cooked food from the trunk of their car. Manuel pitched in after school, grinding corn by hand for traditional Colombian flatbreads called arepas.
Today Miranda, 32, runs a family business with 16 employees, producing 10 million arepas a year in the Maspeth section of the borough of Queens. But the burst of Colombian immigration to the city has slowed; arepas customers are spreading through the suburbs, and competition for them is fierce. Now, he says, his eye is on a vast, untapped market: the rest of the country.In the long run, as with bagels, "you're going to have arepas in every store," predicted Miranda, whose innovations include a "toaster-friendly" version (square instead of round), and an experimental Web site that offers online sales nationwide. "But I don't have the connections. I don't know the people who can advise how to take us to the next level."
As the flow of immigrants to suburban and small-town America outpaces the growth of bustling ethnic centers in New York, many foreign-born entrepreneurs like the Mirandas are facing an unfamiliar crossroads. In the city, rising rents and density hamper growth, while swelling ethnic enclaves in the suburbs generate competitors. Yet in other places, opportunity beckons as never before, as immigrants expand the tastes of mainstream America.
Whether these businesses exploit the new chances to break out or succumb to the new perils, the city's economy will feel the effects."Immigrants have been the entrepreneurial spark plugs of cities from New York to Los Angeles," said Jonathan Bowles, the director of the Center for an Urban Future, a private, nonprofit research organization that has studied the dynamics of immigrant businesses that turned decaying neighborhoods into vibrant commercial hubs in recent decades. "These are precious and important economic generators for New York City, and there's a risk that we might lose them over the next decade."
A report issued by the center Tuesday highlights both the potential and the challenge for cities full of immigrant entrepreneurs, who often face language barriers, difficulties getting credit and problems connecting with mainstream agencies that help businesses grow. The report identifies a generation of immigrant-founded enterprises poised for the big time — or already there, like the Lams Group, one of the city's most aggressive hotel developers, or Delgado Travel, with about $1 billion in annual revenues.

In Los Angeles, at least 22 of the 100 fastest-growing companies in 2005 were created by first-generation immigrants. In Houston, a telecommunications company started by a Pakistani man topped the 2006 list of the city's most successful small businesses.
But even in those cities and New York, where immigrant-friendly mayors have promoted programs to help small business, the report contends that immigrant entrepreneurs have been overlooked in long-term strategies for economic development.Some are doing just fine anyway. Lowell Hawthorne, the Jamaican-born chief executive of Golden Krust Caribbean Bakery, has parlayed a single bakery, opened in the Bronx in 1989, into more than 100 franchise restaurants nationwide.
Other companies, like Rajbhog Foods, which started as a mom-and-pop Indian sweets shop in Jackson Heights, Queens, seem to be on the edge of a similar breakthrough, even as they struggle with rising costs and shifting immigration patterns.
"Two steps forward and then back one step," said Sachin Mody, the chief executive and son of the founders. "That is the hardest part, to keep hurdling and keep evolving."Mody said the company had about 70 employees and three plants and sold its vegetarian products to stores in 41 states and Canada. Its catering operation handles Indian weddings and conventions for as many as 10,000. But six years ago, in recognition of a changing market, it began opening franchise stores in places like Jersey City and Hicksville, on Long Island, where Indians have settled in large numbers.
In some ways, New York may have a head start on the growing pains of immigrant businesses. The nation's recent surge of newcomers started earlier in the state and peaked by the mid-1990s, when immigration was still growing rapidly elsewhere.

Now, some children of the early influx are trying to build on their parents' success — success that has increased the cost of doing business, by driving up rents and creating congestion.
One example is Jay Joshua, a Manhattan company that designs souvenirs and then has them manufactured in Asia and imported. Jay Chung, who arrived from South Korea in 1981 as a graduate student in design, started printing his designs for New York logos and peddling them to local T-shirt shops. His company is now one of the city's leading suppliers of tourist items, from New York-loving coffee mugs to taxicab Christmas ornaments.But frustration mixes with pride when the Chungs, both U.S. citizens now, discuss the company's growth.
Thirty years ago their wholesale district was desolate. Now hundreds of importers are there, said Chung, a leader of the Korean-American business association. Members face a blizzard of parking tickets and high commercial rents — nearly $20,000 a month for 1,400 square feet, or 130 square meters, he said.
Seeking to relocate the wholesale site, the association made a deal with the city for a redevelopment in the College Point section of Queens, only to have the city back out eight months later. Older, white residents had expressed fear that the area would become like Chinatown or Flushing."It was a disaster for us — not only financially, but our image," Chung said.
Apologetic city officials offered five other locations, and the group is negotiating for a private project in the Jamaica section of Queens that could yield a 13- story center in four years. But the episode underscores the importance of partnerships with the city — and the pitfalls.

Immigrant entrepreneurs seem ambivalent about getting more attention from the city. Some are leery of red tape, though they would welcome, say, a municipal parking garage. Others cite concrete help they have received from city agencies.
When Mr. Miranda's arepas company, Delicias Andinas, was struggling with high trash bills two years ago, he said, a city agent in an industry retention program referred him to a recycler. Now much of the company's garbage — mostly corn leftovers — is sold to hog farms."They helped us out to a win-win situation," said Mr. Miranda, now an American citizen who calls himself "a dyed-in-the-wool New Yorker."
"For us, it was a big deal. Right now, I don't need money. I need knowledge."

edited by globalnomad