ultranomics

The great success story of the new millenium, Pakistan’s friendly-giant neighbour, China is finally beginning to feel the effects of the global slowdown. The great hulking machine that was the powerhouse of world ‘trinket’ production is beginning to run out of steam. (We like the word trinket here at Ultranomics – by it we refer to objects bought by us consumers that often we could do without but we like to acquire to be fashionable or to keep up with our friends, like big TVs, ipods, new sofas, latest shoes).

Anxiety in Beijing is mounting that China’s economy is cooling much more quickly than was initially expected in the face of weaker international demand and a slowdown in the local property market.

Two recent surveys of manufacturers showed a slump in activity in October, confirming anecdotal evidence that the slowdown has accelerated in recent weeks. Some economists believe that growth, which was nearly 12 per cent last year, could fall to as low as 6 per cent next year without a substantial fiscal stimulus.

So, on Sunday China came out with a big bailout program for its ailing economy – a plan called a “Social Stabilization” program, in which the government will spend more than half a trillion dollars (actually £586bn if you prefer your cash in billions rather than trillions) to try to avoid a revolution. With demand from western countries for the trinkets made in Chinese factories dwindling, workers are finding that they haven’t been paid in months and there are reports of bosses just not turning up on a Monday morning and disappearing. Masses of these workers are returning back to the countryside from where they came, often with heads hung in shame, but more often with anger in their eyes. We’re just guessing that this is what is disturbing policymakers in the Mighty Kingdom – the horror of hundreds of millions of desperate, jobless Chinese.

Asian equity markets rallied on Monday – boosted by hope about the Chinese bailout plan. But then, the bad news kept coming…and by market open in New York, hopes were already falling. By the closing bell, stocks ended mixed in Asia and the Dow Jones had fallen 73 points. Gold was trading at about $745 yesterday – after rising on Monday. Oil was slipping again too.

We’ve already seen things begin to go wrong. Unless the next 44 days bring a remarkable bounce, this year will be the worst year for the stock market since 1937. Trillions of dollars has been lost…which has already caused a major change in the way people think. In a matter of weeks, the dominant emotion has shifted from greed to fear.

You’ll remember, the Bush administration worked hard to make people fearful. They came up with those preposterous “threat levels,” trying to convince the masses that they were in constant danger from Islamic terrorists.

Now, the masses actually feel in danger – in danger of losing their jobs and houses. Fear imposed by the government has given way to real fear of the type the Government did not want. They’re never happy are they? Be sacred/don’t be scared. We wish they’d make up their minds. So, when Obama declares that its time for ‘Change’ perhaps he’s thinking about his first job when he gets into office – that of changing the mood of fear into one of joyful confidence. The new Emperor has his work cut out we think!

TIME magazine calls it the “End of the National Nightmare.” No more Guantanamo. Troops out of Iraq. No more ‘threat levels.’ No more suspected terrorists working behind the counter at Burger King. Terrorists? Who cares about them? The danger is now real…and right out in the open. Everyone is living in fear.

Let the history books note that 2008 was the year when in the great USofA the first black president entered the White House and when one hoodwinking scam took the place of the previous one. What americans feared before was a worldwide terrorist assault on their freedom. Yet now, they would gladly give up that same freedom, just to stop losing any more money. The masses need Obama’s administration to give them financing for their homes, to bail out General Motors, to save their jobs and the economy. If they promise to keep us all safe heck the government can do what it wants. We won’t mind.