What will happen when the next shock hits? We believe we may be nearing the stage where the answer will be – just as it was in the Great Depression – a calamitous global collapse. The root problem is that we have let a ‘doomsday cycle’ infiltrate our economic system. This is a quote from very interesting article, titled ‘The doomsday cycle’ by Peter Boone and Simon Johnson.
“So where are we going with our current reforms? It is now obvious that risk taking at banks will soon be larger than ever. Central banks and governments around the world have proved (once again) that they are willing to bailout banks at enormous public cost when things go wrong. Markets are now again providing very cheap loans to banks, with the comfort that the state will bail them out.

Today, Bank of America and the Royal Bank of Scotland are each priced to have just 0.5% annual risk of default above their sovereigns during the next five years in credit markets. This is a remarkably low implied risk considering that both banks were near to collapse just a few months ago. Creditors are clearly very confident that they will be bailed out again if necessary. Indeed, they are more comfortable lending to large risky banks than to many successful corporations.

There is no doubt that the regulatory environment is going to be tougher for the next few years. But nothing has changed to make us believe the regulatory system will succeed this time, when it has failed so enormously – and repeatedly – in the recent past. To bring about the dramatic change that is needed also requires international cooperation and consistency. We doubt such change is truly on the table as so few policy-makers seem to demand it.

Many of our current policymakers – Ben Bernanke, Mervyn King, Alistair Darling and Gordon Brown – are the same ones that inflated the last bubble. So we know with great confidence that they are the types that will bail us out each time things go wrong. They are all currently on course for seeding our next rise and collapse. Cheap rates and credit, with large moral hazard, are the initial stages of each cycle. Very few of these people, apart from Mervyn King, appear prepared to recognise their past role in creating our current problems and then to discuss resolutely how to change it.

The danger this system poses is clear, as Figure 1 shows. With our financial system now well oiled to take on very large risk once again, and to gamble excessively, can we be sure that we can continue this cycle of bailing out eventual failures? At what point will the costs be so large that both fiscal and monetary policies are simply incapable of stopping the collapse?

Last year, we came remarkably close to collapse. Next time, it may be worse. The threat of the doomsday cycle remains strong and growing.”

Youcan read complete text here – http://voxeu.org/index.php?q=node/4659

Financial and economic condition of Greece is the theme for the alarming news and frightening prophecies for many months already. The European Union is concerned about the country’s huge public debt of around 300 billion euros, which corresponds to 113% of GDP. Greek budget deficit in 2009 reached to 12,7% and despite the government tries to reduce it to 8,7% it is sataying to grow. EU calls Greece for cuts in public spending. Analysts scare businesses collapse of the Greek public finances, which is able to lift the global economy from the optimistic equilibrium.

Critics prescribed recipes one after another. Greek law experts converged on analytic television, happily talk about the usefulness of some of the costs of the country. However, is it easy to heal the public finances of Greece and stop the ship to rock the EU?

It is the first time in the history of modern Greece that world media, particularly the financial press, have shown such concern and interest in the country. Even the Olympics didn’t attract this much attention.

Whether you’re a freelancer or a contractor, whether you travel or work from home, whether you turn over 10k a year or 100,000k a year; you will benefit from the guidance of an accountant.

I am a self employed web developer and look after my own books, however when it comes to tax return time I have a word with my accountant because I know how much he can save me in tax. Recently I saved £1700 in tax just by adding on expenses I didn’t know I could.

There are various benefits to outsourcing accountancy – it saves a lot of headaches and frees up time, so you can work spend that time working and not worrying about invoices and such like.

Expanding on this, there is such a thing as an umbrella company that essentially looks after self employed people as employees. This is beneficial for people in my position because I don’t have to worry about chasing my clients for invoices, and working as a freelancer through recruitment agencies often require the umbrella of a limited company.

Another obvious benefit is that accountancy is done for you with a minimal percentage being taken per job completed. This means you take home a decent amount and don’t have to worry too much about dealing direct with the client in regards to payment matters.

There are various contractor accountants out there, spend a little time looking around for the one that suits you.

This information was prepared by the Latvian Ministry of Economics.
On 29 September, the Ministry of Economics informed the Cabinet of Ministers on Latvia’s macroeconomic situation and stressed that further growth and economic recovery would be determined not only by global economic recovery, but also by the effectiveness of the Latvian government’s economic policies.

According to the International Monetary Fund’s corrected prognoses, the world’s economy has begun to recover from the unprecedented recession of the last decades. Nevertheless stabilization is not unequivocal and the expected recovery is going slowly. Financial conditions have improved faster than expected mainly due to active measures undertaken by countries. New data indicates that the shrinking of the economy has slowed down. Notwithstanding positive tendencies, the global recession has not been fully overcome, recovery is slow, and financial systems have not fully stabilized.

The Economics Ministry’s economic prognosis for 2009 and 2010 is based on weak external demand and a shrinking internal demand. If the 2008 economic recession was determined by a decrease in internal demand, then the main factor in 2009 has been reduced external demand. Most likely, the 3rd quarter of 2009 will reveal a sharper GDP decrease then first two quarters. However, it is anticipated that GDP reductions will gradually diminish until mid-2010, when Latvia’s economy will hit the lowest point of its recession. Compared to the previous report on the macro economic situation Latvia, the prognosis for 2009 remains constant, and anticipates an 18% decrease of GDP. The government will continue to consolidate the state budget in 2010 and plans to substantially reduce government expenditure. As the result government and private expenditures will continue to fall. Restricted access to credit will restrict investment. Weak internal demand will decrease the volume of imports. On the other hand, as external demand grows in the second half of 2010 and manufacturer competitiveness improves, it is expected that export levels will exceed the 2009 figures. Despite positive tendencies for the second half of 2010, overall GDP could face a 4% decline in comparison with 2009.

Latvia’s economic recovery could begin in 2011, if the world’s financial markets fully stabilize andcredit availability is renewed. This would provide a positive stimulus for domestic business and
ensure a steady growth in demand for products and services in Latvia’s primary export market countries. GDP growth in 2011 is expected to increase by 1,5% in comparison with 2010. According to Economics Ministry’s experts, labour market recovery is expected a year later then the recovery of overall economic growth. It will be based on productivity and not on the number of employed. Social problems related to low employment will remain an issue for the next 3 to 4 years. The decrease in demand for labour will experience its biggest reduction in 2009 and 2010.

It is projected, that in 2009 the number of people employed will decrease in all sectors, and unemployment figures, in comparison with 2008, will increase sharply.

Vauxhall cars in Britain will be rebranded under the Opel name in an effort to appeal to the Russian car market, according to the former managing director of Rover, Times Online reports.

Professor Kevin Morley, who is now director of business studies at the University of Warwick, said the involvement of Russian companies in the deal to save Opel and Vauxhall would lead to thousands of cars being imported into Russia under the Opel brand.

“No one in Russia knows what a Vauxhall is,” he told The Times. “I’m sure we’ll see Vauxhall the brand disappear soon after the deal. Vauxhalls in the UK will sell here as Opels.”
But actually there is a story told that when the Russians sent a delegation to London in the latter part of the 19th century to look at our railway system, the British Government, fearing that the Russians were simply spying on us, arranged for them to visit Vauxhall, saying that it was one of our mainline stations. The delegation returned to Russia and henceforth all Russian mainline stations (and others) were called Vokzál.

In October 2008 Paul Krugman, a professor of economics and international affairs at Princeton University believed that increased public spending — akin to the efforts of the New Deal during the Great Depression — is the best way to escape the financial crisis and regain American global leadership, npr.org. reported.

“It’s politically fashionable to rant against government spending and demand fiscal responsibility. But right now, increased government spending is just what the doctor ordered, and concerns about the budget deficit should be put on hold.”

Ehat’s tiday? What’s the matter with Europe now? Many countries in Western Europe have weak financial sectors with high systemic risk. We know about the collapse in Iceland and no doubt thsi is not an isolated incident, but rather a harbinger of things to come for smaller countries with large financial sectors such as Austria, Denmark, Ireland, Sweden and Switzerland and even the United Kingdom are waiting now their turn.

Promotion is considered to be one of the most important things in the work of every company. Of course today during the world financial crises you must cut down your costs. But in any case you should invest large resources in promotion which is the key element in your marketing strategy. That is why many companies order advertising products which give an opportunity to promote your company products and services to your new potential customers. In fact such advertising gifts can be easily employed practically in every sphere of business starting from real estate to construction. For example, many companies order real estate gifts to promote their services.

For example they can deliver Screenprinted t-shirts to every potential customer who enters their office. In fact people would be much more interested in getting to know about the work of the company which presented them such a lovely gift. In this case you make use of the psychological approach in promotion because people like getting gifts.

Afterwards they will tell about your company other people thus promoting your company goods and services. Is not it a great idea to promote your company with advertising gifts.

As you know promotion is one of the most effective tools which give an opportunity to improve the work of your company. Of course you can admit that much of the success lies in the product itself because people need particular qualities or unique design. And of course prices matter. That is why you try to optimize the work of your company. But in fact it is only partially true because if nobody knows about your product nobody is going to buy it. It is 100% true. That is why you must invest great financial resources in promotion and advertising your company products. That is why many companies order promotional items from the best well-known producers which can meet the requirements of every business. For example, you can order specially designed real estate promotional products if you are involved in this sphere of business. Everything which is required form you is to make and order.

Afterwards managers will choose promo products which suit you most. For example, they can offer you custom mugs with the logo of your company. This is a perfect choice because you can deliver such advertising gifts both to your managers and of course to your potential customers and business partners.

Billionaire investor Warren Buffett told CNBC televisionsays on Monday the US economy has “fallen off a cliff fallen off a cliff,” Buffett said Monday during a live appearance on cable network CNBC. “Not only has the economy slowed down a lot, but people have really changed their habits like I haven’t seen.”" and warns that inflation may accompany a rebound, US economic developments were close to the worst case he had imagined and recovery would not happen fast. “People are confused and scared,” he said. During his interview Buffet said that the current economic climate is at the worse end of the scale he expected.

“What is required is a commander in chief that’s looked at like a commander in chief in a time of war,” Buffett said.

Whatever the government does to help the economy will likely benefit some people who made poor financial decisions, but Buffett said Americans should realize that everyone is in the same boat.

“The people that behaved well are no doubt going to find themselves taking care of the people who didn’t behave well,” Buffett said.

The current efforts to help revive the economy are likely to produce inflation that could be worse than what the country suffered in the late 1970s, Buffett said.

But even though the nation will have to pay for current policies with future inflation, Buffett said, the U.S. government still needs to act.

“We’re in a big war, and we’re going to use money to fight it,” he said.

Maintaining faith in the nation’s banking system will be important to restoring the economy’s health, Buffett added. He said President Barack Obama needs to make it very clear that consumers won’t lose money in banks even if more fail.

“If you don’t trust where you have your money, the world stops,” Buffett said.

Most banks are in good shape, Buffett said, and even some of the troubled banks will be able to remedy their problems over time by reducing dividends and collecting the difference between interest payments they receive on loans and the interest they pay on deposits.

“The banking system largely will cure itself,” Buffett said.

The worst economic turmoil since the Great Depression is not a natural phenomenon today Guardian totes, but a man-made disaster in which we all played a part. In the second part of a week-long series looking behind the slump, Guardian City editor Julia Finch picks out the individuals who have led us into the current crisis

So, who are those who led us down the Road to Ruin?

Alan Greenspan, chairman of US Federal Reserve 1987- 2006
Bill Clinton, former US president
Gordon Brown, prime minister
George W Bush, former US president
Senator Phil Gramm
Abi Cohen, Goldman Sachs chief US strategist
“Hank” Greenberg, AIG insurance group
Andy Hornby, former HBOS boss
Sir Fred Goodwin, former RBS boss
Steve Crawshaw, former B&B boss
Adam Applegarth, former Northern Rock boss
Ralph Cioffi and Matthew Tannin
Lewis Ranieri
Joseph Cassano, AIG Financial Products
Angelo Mozilo, Countrywide Financial
Stan O’Neal, former boss of Merrill Lynch
Jimmy Cayne, former Bear Stearns boss
Christopher Dodd, chairman, Senate banking committee (Democrat)
Geir Haarde, Icelandic prime minister and others.