Japan Repudiates the LDP

While official results are still being counted, exit polls by all major media said Yukio Hatoyama's Democratic Party of Japan was projected to win 308 of the 480 seats in the House of Representatives, the lower house in the Japanese Diet. That would easily be enough to ensure that Mr. Hatoyama will be installed as the country's next Prime Minister in a special session that is expected to start in mid-September.

The current and fourth in as many years Prime Minister Taro Aso, conceding defeat, said he would also step down as president of the ruling Liberal Democratic Party.

Although the vote gave the Democrats a landslide win, most voters were seen as venting dissatisfaction with the ruling Liberal Democratic Party more so than endorsing the policies of the opposition. In this light, the Japanese election is more a repudiation of the long-governing LDP than an embrace of the Democratic Party of Japan. The conservative Liberal Democrats who with their precursors have held or shared power for 62 of the past 63 years.

As Mr. Hatoyama noted in his victory speech this election was "a revolutionary election" and portends a reorientation of Japanese foreign policy away from the United States towards a more focused role in Asia.

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Global Banking - Regulator Envy.

(cross posted at kickin it with cg and motley moose)

Amid a global economic meltdown - Canada - with its highly regulated banking system has become the envy of the world.  In a survey by the World Economic Forum in October, with the financial crisis and bank failures that have shaken world markets - Canada was voted to have to world's soundest banking system followed by Sweden, Luxembourg and Australia.

Britain, which once ranked in the top five, has slipped to 44th place behind El Salvador and Peru, after a 50 billion pound ($86.5 billion) pledge this week by the government to bolster bank balance sheets.  The United States, where some of Wall Street's biggest financial names have collapsed in the fall, rated only 40, just behind Germany at 39, and smaller states such as Barbados, Estonia and even Namibia, in southern Africa.

The World Economic Forum's Global Competitiveness Report based its findings on opinions of executives, and handed banks a score between 1.0 (insolvent and possibly requiring a government bailout) and 7.0 (healthy, with sound balance sheets).  Canadian banks received 6.8, just ahead of Sweden (6.7), Luxembourg (6.7), Australia (6.7) and Denmark (6.7).  UK banks collectively scored 6.0, narrowly behind the United States, Germany and Botswana, all with 6.1. France, in 19th place, scored 6.5 for soundness, while Switzerland's banking system scored the same in 16th place, as did Singapore (13th).

The Globe and Mail's Report on Business created a neat little chart that summarizes how some banks around the world are doing:  

Canada
Ranked tops in the world by the World Economic Forum for soundness of banks. Canada's big five lenders all reported healthy profits in their most recent quarter, generally beating analysts' expectations. Tightly regulated, with cash-spewing retail banks that can offset losses in other areas of the business.

United States
There are 252 problem banks being tracked by the government's bank insurance program. In 2008, 25 banks failed, including household names like Washington Mutual. The government has rolled out numerous programs and spent at least $1-trillion (U.S.) in a bid to prop up the financial system, but there are no sure signs that the bailouts are working. The Federal Deposit Insurance Co. is now on track to seize 100 failed banks in 2009.

Brazil
The big economies in South America have had little trouble with bank failures resulting from stumbles on risky assets such as subprime mortgages. Still, they won't be immune to rising defaults from slowing economies, which will be a test of how far financial regulation and bank management have come in recent years.  

Iceland
The banking system of this tiny island nation -- which boasts a population half the size of Winnipeg -- represents probably the most spectacular rise and fall of the global financial meltdown. In 2003, Iceland's three main banks had just a few billion dollars of assets, but by 2006 this hit $140-billion (U.S.). Today, all three have failed and been nationalized in a bailout that's cost about $330,000 per citizen, leading to the collapse of the country's currency and economy.  

Sweden
Sweden faced a banking crisis in the 1990s, and was forced to remake its financial sector. This time around, while one bank has failed because of toxic assets, the country has mostly dodged the problems and Sweden's banking sector was ranked second only to Canada's for stability by the World Economic Forum. Exposure at some big banks to Eastern Europe could lead to loan losses.

Britain
The British government has been forced to bail out big lenders such as Lloyds Banking Group, Northern Rock Plc and Royal Bank of Scotland, which have been crippled by forays into risky mortgage products before the property market in the UK and in the U.S. fell apart.

Switzerland
The country's reputation as the home of the quiet, prudent banker is in shambles after gambles by Swiss giants UBS AG and Credit Suisse led to massive losses totalling more than $65-billion (U.S.). The government is now looking to write new rules to keep the financial sector out of trouble.

Austria
Austria has historically been the bridge between Western Europe and Eastern Europe. In recent years some of its largest lenders focused on expansion in such countries as Czech Republic, Romania and the Ukraine. Lending to the Central and Eastern European region amounts to almost 70 per cent of Austria's gross domestic product, according to Moody's. That was great when those countries were booming, but Eastern Europe is hurting badly and now many loans are likely to go bad.

Spain
Spain's banking system has held up better than most with banks reporting gains in profit in large part because of strict regulatation when it comes to high risk assets, a legacy of a banking crisis in the 1970s. As a result, big Spanish banks like Banco Santander focus mostly on low-risk retail banking. Still, there are signs it may not last. The country's swooning property market could lead to loan defaults, and the government and some bank executives warn that the domestic banking sector may have to be restructured should the global financial crisis deepen.

Namibia
Namibia has the highest-ranked banking system in Africa for stability, well ahead of Spain, the U.S. and Britain. According to the International Monetary Fund, the country's banks entered the financial crisis very profitable and well capitalized. And while the country is being buffeted by the global troubles, the resource-based economy is still expected to grow 1 per cent this year, according to Namibia's central bank.

Russia
The Russian government has already invested about $11-billion to try to aid banks, and is looking at another $55-billion stimulus package to restart the economy and support the country's ailing banking system. Lenders are suffering from a fast downturn in the oil-powered economy of Russia.  

China
China's big banks have avoided troubles with subprime and other toxic assets, and may benefit as the government unveils a big stimulus package designed to keep the country's economy growing quickly. If that doesn't work, though, expect the banks to face bigger loan losses.

Japan
Japan's response to the banking bust of the 1990s was a `What not to do' lesson. The country put off dealing with bad loans and propped up bad banks for too long. Just as the country finally started to take big steps to fix the problem, this financial crisis cropped up. So far, Japanese banks have avoided the worst of it, signalling perhaps they've learned from experience.  

Australia
Ranked fourth by the World Economic Forum for soundness of banks, Australia's system shares many attributes with Canada's. It's centralized, with a few big players that are making money. The big problem for Australia is an economic one: its banks may not be big enough to take up the slack as global lenders cut back on lending, leaving the country's borrowers in the lurch.  

Maybe government regulation is the way to go - don't you think?

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Progressive Democrat Newsletter Issue 198

It's been a good week. Obama has already begun reversing the horrible policies of the Bush Administration. Obama has set in motion the process of closing Guantanamo. Obama has reversed the Global Gag rule. And he has rejected torture. Not bad for his first few days in office.

There is one song that more than any represents the people's America, the America of the working class and middle class. The unofficial anthem of the United States has echoed through the decades. On Sunday, January 18th, 2009, that song was sung in Washington, DC, to usher in a new era. This Land is Your Land:

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"...To borrow and to borrow and to borrow..."

"To-morrow and to-morrow, and to-morrow..."


"Tomorrow and tomorrow and tomorrow" is the beginning of the third sentence of one of the most famous soliloquies in Shakespeare's tragedy Macbeth. It is the response of the protagonist, Macbeth, to the news of his wife's death. The speech can be divided into two parts, with the line "Tomorrow and tomorrow and tomorrow" marking the beginning of the second part. The full soliloquy reads:

"She should have died hereafter;
There would have been a time for such a word.
To-morrow, and to-morrow, and to-morrow,
Creeps in this petty pace from day to day,
To the last syllable of recorded time;
And all our yesterdays have lighted fools
The way to dusty death. Out, out, brief candle!
Life's but a walking shadow, a poor player
That struts and frets his hour upon the stage
And then is heard no more. It is a tale
Told by an idiot, full of sound and fury
Signifying nothing." -- Macbeth (Act 5, Scene 5, lines 17-28)

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Three grandfathers, one war.

On this Veterans Day, I remember the soldiers in my family that came before me.  They all fought in WWII.  The war took a different toll from each of them.

My mother's father.
My mother's stepfather.
My father's father.

(Cross posted at The National Gadfly)

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Diaries

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