NEW YORK, March 7: The United States is the wealthiest nation in the world. The entire global economy swirls around it. It is an incontrovertible fact. It is now under a recession that has been described as broad and deep. Imagine more than 12.5 million Americans have been thrown out of employment in past several months.
The jobless figure is the worst for 25 years, the heading of a lead story in a reputed paper said today. The unemployment rate has climbed to 8.1 per cent. It may reach a double digit figure by the end of the year.
The story below will amply reflect the unemployment situation here in US. There were more than 5000 job hunters waiting in a line under freezing cold for 1000 vacancies. The unemployed people with Masters degree from even prestigious universities are parading their degrees in the hope of attracting the attention of a prospective employer.
The economists and policy planners are unanimous in prognosticating that nothing cheerful is likely to emerge in the foreseeable future. The American people are clearly suffering a White House aide was quoted as saying. The White House projection about the economy turning around was seen as too optimistic by the Republicans
This is a very serious recession and there is nothing in the near term to feel particularly good about, chief economists of Deutsche bank in New York was quoted by a reputed paper as saying. The lust and greed of executives have contributed to further worsening of the economy.
William Dudley, New York Federal Reserve Bank president did not mince words to give the bankers a good dressing down for exacerbating the financial crisis. Now is not a good time to raise capital. This desire to postpone capital raising stems from the fact the bank executives are not willing to dilute existing shareholders which of course include themselves (bankers). Dudley asserted.
Dudley visualises no quick remedy saying the economy has considerable momentum to bring down yield. New York's top regulators has blamed Bank of America of interfering with an investigation into payment of hefty bonuses to Merrill Lynch employees before it was acquired by the Bank of America. Bank of America has refused to furnish the list of Merrill Lynch employees who received multi-million dollar bonuses.
Wells Fargo joined other banks and blue chips companies that have cut their dividends rate in recent times as corporate America try to shield themselves from the rapidly engulfing economic meltdown. A Merrill Lynch insider has been put under suspension for " racking up more than $400 million in undisclosed losses". Merrill Lynch loses was $27.6 billion last year.
In Asia, Singapore like Switzerland, is a haven for those stashing stolen money or avoiding paying taxes. Both are known for their bank secrecy. Though Swiss government is reluctant to change its banking system, the country's largest bank UBS has agreed to pay penalties for allowing Americans to stash money without paying taxes. Singapore and Hong Kong are set to relax their strict bank secrecy laws in the face of escalating international pressure on tax evasion. Both the countries have decided to bring their tax transparency to international standard. It may be the beginning of the end of secrecy in banking.
On the international plane, there have been several major developments. Russia and US whose ties soured during Bush presidency have agreed to conclude a deal on arms control .The US has now embarked upon a course of shifting its stance from isolation to engagement in its foreign policy.
US has already hinted that Iran would be invited to a conference to chart the future of course of Afghanistan. Washington is also actively considering to engage Damascus as well to settle the vexing Middle East question.
