December, 2009 | Sound Money Institute

North Korea bans foreign currencies

North Korea has banned the use of foreign currency, another sign its hard-line communist government is intent on reasserting control over the country’s nascent market economy.
Reports say the decree warns of severe punishment for anyone using U.S. dollars, euros, yuan and other non-North Korean currencies. Foreign currencies previously were accepted in some shops, restaurants and other outlets, particularly those catering to foreigners.

The order, issued by North Korea’s state security bureau and going into effect Jan. 1, aims to “forbid the circulation of foreign currency,” China’s state-run CCTV television said in a brief report late Wednesday.

The Daily NK, a Seoul-based online news outlet, said the order prohibits all individuals and organizations apart from banks from possessing foreign currency. It said the decree was posted in public and at workplaces, and went into effect Dec. 28.

There was no mention of the ban Thursday in official North Korean state media. In Seoul, a South Korean official confirmed the ban, speaking on condition of anonymity because he was not authorized to speak to the media on intelligence matters.

Read More: – By Jean H. Lee, Associated Press Writer

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Filed Under: News Tagged With: ban on foreign currencies, North Korea

Decade’s Investment Bubbles Could Haunt 2010

by F. Peter Brown Leave a Comment

A string of exploding investment bubbles that started with the dot-coms and ended with mortgages and oil dominated the years from 2000 to 2009.

And it looks like the next decade will be no different.

It doesn’t seem to matter to many hedge fund traders and other professional investors that the Standard & Poor’s 500 index has turned in its first losing performance over the course of a decade, having fallen 23 percent from 1,469.25 at the start of 2000 to its current 1,126.20.

Or that they or other investors helped create and then destroy the bubbles that left stocks worth $2.5 trillion less today than when the decade began — and that’s before adding in the effects of inflation.

A mix of investor hubris, ignorance and piles of easy money created the bubbles.

New ideas about where to invest seemed foolproof and greed crowded out doubts.

BP Alaska Oil Spill Larger Than First Thought

by F. Peter Brown Leave a Comment

BP PLC (BP) estimates that a breach at a well line in Alaska’s Prudhoe Bay oilfield resulted in a spill of as much as 100 gallons of crude oil, more than the company had originally calculated.

In a report released late Tuesday, state authorities said that the London-based company estimated it could have spilled between 300 and 700 gallons of liquids, including crude oil and water produced from the oil well. BP told the Associated Press on Dec. 23 that it had estimated that three gallons of oil and 131 gallons of water had been released.

The reason for the spill, which occurred on Dec. 21, is still under investigation, the Alaska Department of Environmental Conservation said in the report.

Read More: – Angel Gonzalez, Dow Jones Newswires

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Filed Under: News Tagged With: Alaska Oil Spill, BP

U.S. Midwest business growth less robust than thought

by F. Peter Brown Leave a Comment

An industry association revised downward its December reading on expansion in business activity in the U.S. Midwest on Thursday and said employment in the region failed to enter growth territory as it originally reported.

The Institute for Supply Management-Chicago revised its business barometer index reading to 58.7, from the 60.0 it had reported on Wednesday.

In addition, in detailing revisions based on seasonal factors, the group said its employment index for December was 47.6, below the 51.2 it reported on Wednesday.

Any reading above 50 indicates expansion.

Analysts expressed surprise over the revisions, especially coming just one day after the original release.

Read More: – Reporting by Burton Frierson, Reuters

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Filed Under: News Tagged With: business activity, The Institute for Supply Management- Chicago, U.S. Midwest

New York’s Aging Infrastructure a Costly Problem

by F. Peter Brown Leave a Comment

Tens of thousands of miles of aging sewer and water treatment systems need extensive repairs and upgrades that could cost New York billions in the next two decades, an expensive undertaking even with the help of federal stimulus funding, according to state officials.

New York’s Department of Environmental Conservation found sewage-treatment infrastructure around the state is aging out and in need of an estimated $36.2 billion in repairs over the next 20 years. A similar state Health Department study estimated that drinking water infrastructure is in need of approximately $38 billion in repairs over 20 years.

“There’s really not a corner of this state that doesn’t have an area that requires something to be fixed, but as soon as we fix one community, their neighbors will need something to be fixed,” said Matthew Millea, acting president of the New York state Environmental Facilities Corporation, which awards loans and grants for wastewater and drinking water projects.

Read More: – By Valerie Bauman, Associated Press Writer

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Filed Under: News Tagged With: Aging Infrastructure, Costly Problem, New York, Sewer and Water Treatment Systems, state officials

Taxpayer Tab for Housing Crisis Could Rise After Treasury’s Holiday Surprise

by F. Peter Brown Leave a Comment

The government’s Christmas Eve pledge of unlimited financial aid to mortgage giants Fannie Mae and Freddie Mac is aimed at making sure the housing market doesn’t take another turn for the worse and cause the economic recovery to unravel.

This insurance policy taken out by the Treasury Department will help keep mortgage rates low, and may wind up being a gift of sorts to struggling homeowners and banks.

But there’s a catch: the housing crisis is now likely to cost taxpayers much more.

The Obama administration’s latest lifeline to Fannie and Freddie will cover unlimited losses through 2012, lifting an earlier cap of $400 billion.

Moody’s: November credit card payments slip

by F. Peter Brown Leave a Comment

More U.S. credit card users fell further behind on their payments in November, Moody’s Investor’s Services said Tuesday.
The charge-off rate on U.S. credit cards, as measured by Moody’s Credit Card Index, rose to 10.56% last month after falling for the two previous months. October’s charge-off rate was 10.04%.

The charge-off rate measures those credit card account balances written off as uncollectable, as an annualized percentage of total outstanding principal balance. The record-high of 10.76% was reached in June.

The delinquency rate also rose, reaching 6.2% in November from 6.1% in October. That includes all credit card payments that are between 30 days and 180 days late, but have not yet been written off. This figured peaked at 6.4% reached in March.

Experts: Japan’s Growth Plan Lacks Solid Details

by F. Peter Brown Leave a Comment

Japan’s government said it aimed for economic growth of more than 2 percent over the next decade, but its long-term plan unveiled on Wednesday lacked detail needed to convince investors the goal is realistic.

The world’s second-largest economy emerged from recession in the second quarter, but persistent declines in prices and wages and ballooning public debt threatening Japan’s credit rating have fueled doubts whether the export-led recovery can be sustained.

The government said in its 30-page growth blueprint it would work with the Bank of Japan to overcome deflation as early as possible, but analysts said markets wanted to see how the authorities planned to achieve that.

“What we have at the moment is just a blueprint, a road map. It looks good on paper but we have to wait for details and how do they plan to implement it,” said Mitul Kotecha, global head of forex strategy at Calyon in Hong Kong.

He said the fact that there was no detailed plan for tackling deflation was a matter of concern.

“Unless markets see some concrete steps being taken in that direction they will remain unconvinced about the resolve.”

Economist: Many Risks Threaten Fragile Recovery

by F. Peter Brown Leave a Comment

The U.S. economy may not rebound quickly next year, said Nariman Behravesh, chief economist at Global Insight, the economic forecasting and consulting firm.

“The recovery will be slow and things will be fairly fragile,” he said, Yahoo! Tech Ticker reported.

The possibility of a double dip recession is not far fetched, he said.

“Any number of risks could knock us back down into recession,” Behravesh said.

The risks are a major decrease in consumer spending, failed monetary policy by the Fed or another major financial crisis, he said.

While another recession is not likely to occur, Behravesh said a 20% possibility is “too high.”

Nasdaq Evacuated, Times Square Closed

by F. Peter Brown Leave a Comment

New York City’s Times Square was closed on Wednesday, the day before the traditional New Year’s Eve festivities in the famed intersection, and the nearby Nasdaq building was evacuated due to a suspicious vehicle parked on a street, police said.

Police were using robots and remote cameras to examine the contents of the vehicle, a van that local media reported had been parked on Broadway for two days.

The Nasdaq stock exchange building and two other nearby buildings were cleared of people by order of the police, a department spokeswoman said.

North Korea bans foreign currencies

Decade’s Investment Bubbles Could Haunt 2010

BP Alaska Oil Spill Larger Than First Thought

U.S. Midwest business growth less robust than thought

New York’s Aging Infrastructure a Costly Problem

Taxpayer Tab for Housing Crisis Could Rise After Treasury’s Holiday Surprise

Moody’s: November credit card payments slip

Experts: Japan’s Growth Plan Lacks Solid Details

Economist: Many Risks Threaten Fragile Recovery

Nasdaq Evacuated, Times Square Closed

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