Frontierist News

Indian Express:

US Treasury Secretary Henry Paulson has put an Indian American of Kashmiri origin in charge of the George Bush administration’s $700-billion rescue effort for distressed financial institutions.

Neel Kashkari, 35, has been an advisor to Paulson since 2006 and was promoted to the post of second assistant secretary of the Treasury for international affairs this July, on the personal nomination of Bush.

AP:

The top congressional budget analyst says pension plans have lost as much as $2 trillion in the past 15 months.

Peter Orszag told a House panel on Tuesday that the losses are likely to force many workers to hold off on major purchases and delay their retirements.

Jewish Telegraphic Agency:

Frank Lowy, an Australian Jew, for the first time was identified as the nation’s richest man.

Lowy, who survived the Holocaust as a teenager on the run and then fought in Israel’s 1948 War of Independence, has amassed a fortune estimated at $4.5 billion from the Westfield Group, an empire of
shopping malls in the United States, United Kingdom, Australia and New Zealand.

He moved up to the top slot from No. 2 after the economic meltdown stripped billions from the former richest man, Andrew Forrest of Perth. Forrest saw his fortune plummet in recent weeks from $7.2 billion to $3.8 billion, according to the Australian newspaper, which extrapolated the figures from BRW magazine’s annual Rich 200 list.

Lowy is being audited by the Australian Tax Office after being named in a U.S. Senate report on tax evasion. The report alleged that Lowy hid $53 million in an account in Liechtenstein to evade paying taxes. Lowy claims the money was donated to charities in Israel.

The Guardian:

Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland’s currency, is in freefall and is rated just above those of Zimbabwe and Turkmenistan. One of the country’s three independent banks has been nationalised, another is asking customers for money, and the discredited government and officials from the central bank have been huddled behind closed doors for three days with still no sign of a plan. International banks won’t send any more money and supplies of foreign currency are running out.

People talk about whether a new emergency unity government is needed and if the EU would fast-track the country to membership. On Friday the queues at the banks were huge, as people moved savings into the most secure accounts. Yesterday people were buying up supplies of olive oil and pasta after a supermarket spokesman announced on Friday night that they had no means of paying the foreign currency advances needed to import more foodstuffs.

Newsweek

Once prized as a leafy haven from the social ills of urban life, the suburbs are now grappling with a new outbreak of an old problem: poverty. Currently, 38 million Americans live below the poverty line, which the federal government defines as an annual income of $20,000 or less for a family of four. But for the first time in history, more of America’s poor are living in the suburbs than the cities—1.2 million more, according to a 2005 survey.

Bits of News

Large economies that are getting long in the tooth have a tendency to move towards financialisation. The big money is not made through manufacture and production, but in financial services, acrobatics, and the liquidation of said manufacture and production. Arcane paper pushing and Ponzi schemes dominate the markets and make enormous paper profits for the people involved.

In such an environment neither the engineer nor the old school long term investor rules the roost. The Wall Street broker is king. And asset inflation is the name of the game.