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Archive for June 15th, 2009

ILO Summit in Geneva

Posted by Alexandra on June 15, 2009

Geneva is hosting the International Labor Organization’s Summit on the Global Job Crisis, which is taking place from June 14 to 17. According to the ILO, this summit will

[...]provide a first-of-its-kind opportunity to discuss policies that are being implemented at the national and international level to address the global jobs crisis.

One of the speakers, Nicolas Sarkozy, the President of France, had the following to say (story from Le Figaro):

“We have to chance the model of growth, we need to regulate the globalization. The world cannot be governed by supply and demand only. A system of rules that lift everyone up instead of pulling everyone down is needed.”

According to him the role of the ILO needs to be enhanced:

“The ILO must be able to make its voice heard against the big financial institutions, the WTO, IMF and World Bank.

In his speech he also pushed to make the ILOs norms binding, saying:

“A norm that is not binding is not a norm at all. It is like a leaf blown away by the wind.”

Also in Geneva is Cristina Kirchner, the President of Argentina (story from La Nación). In her speech, she described the Argentinian model in detail to the audience.
She also defended the nationalization of the pension funds, and criticized the international financial institutions and their analysts harshly, that they “couldn’t forsee the crisis”.

“The cycle of econmic growth we are seeing is the most important one in the last 200 years. And it wasn’t a growth like the one in the 90ies with the massiv destruction of jobs, nor was it growth like the one at the beginning of the 20eth century, as the country only exported and the wealth went only to a little part of the population.
The growth is the most important and came in a different context. The econmic growth that we had since May 2003 came from a growth in production and from work.”

She also said, that the governement’s tools with which they faced the crisis were:

“the support of the labor force and the survival of the enterprises. It is essential that all the government’s actions are oriented towards maintaining the workers in their jobs.”

In a remark she also critized Lehman Brothers directly whose analysts did not see the crissi coming.

“One week before the fall of Lehman Brothers, their analysts forecast that Argentina was not going to be able to fulfll its commitments, as did other analysts, all of which made no mention of the impending crisis even though they were the ones who would have had to warn the world of it.”

They got my respect. Finally, a few heads of state are coming forward to defend those people who actually voted for them and those whom they represent, and who not only cater for the needs of their rich elite enablers.
However, as I always say, the proof is in the pudding. We will see if those encouraging words will actually lead anywhere, or if the BigCorps will succeed in killing this off again.

At this point I would like to point to the Universal Declaration of Human Rights, which I encourage you to read, and which says in its preamble (which states the intent of the document and lays out the rules according to which it has to be construed):

Whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world,
Whereas disregard and contempt for human rights have resulted in barbarous acts which have outraged the conscience of mankind, and the advent of a world in which human beings shall enjoy freedom of speech and belief and freedom from fear and want has been proclaimed as the highest aspiration of the common people,

Whereas it is essential, if man is not to be compelled to have recourse, as a last resort, to rebellion against tyranny and oppression, that human rights should be protected by the rule of law,
Whereas it is essential to promote the development of friendly relations between nations,
Whereas the peoples of the United Nations have in the Charter reaffirmed their faith in fundamental human rights, in the dignity and worth of the human person and in the equal rights of men and women and have determined to promote social progress and better standards of life in larger freedom,
Whereas Member States have pledged themselves to achieve, in co-operation with the United Nations, the promotion of universal respect for and observance of human rights and fundamental freedoms,
Whereas a common understanding of these rights and freedoms is of the greatest importance for the full realization of this pledge,

Now, Therefore THE GENERAL ASSEMBLY proclaims THIS UNIVERSAL DECLARATION OF HUMAN RIGHTS as a common standard of achievement for all peoples and all nations, to the end that every individual and every organ of society, keeping this Declaration constantly in mind, shall strive by teaching and education to promote respect for these rights and freedoms and by progressive measures, national and international, to secure their universal and effective recognition and observance, both among the peoples of Member States themselves and among the peoples of territories under their jurisdiction.

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Flash Orders and Dark Pools

Posted by Alexandra on June 15, 2009

The story about dark pools continues. The competion of exchanges for market share has led to yet another “innovation” in the field of finance. Reuters describes the issue of “flash orders” as follows:

NEW YORK (Reuters) – Recent moves by exchanges to dabble in anonymous stock trading is tripping yet another alarm for U.S. regulators and amplifying a debate over fair markets.There could be serious implications for the way orders circulate through capital markets if the moves, which reflect exchanges’ intense competition for market share, provoke a response from securities regulators.

The U.S. Securities and Exchange Commission has already received at least three letters of complaint, including one from the Securities Industry and Financial Markets Association, warning of a market that benefits a privileged few while distorting the prices of public stocks.

The SEC said it has not yet decided whether to act.At issue are so called “flash” orders — buy and sell orders the Nasdaq Stock Market and BATS Exchange this month began sending to a private group of select market participants before routing them to rival venues. The service closely mirrors one long offered by fast-growing alternative venue Direct Edge.

The flashes, an optional service, also alert some “dark pools” — non-displayed, private venues that anonymously match orders, allowing traders to hide their intentions.

Reuters also noted that

“You get the feeling when trading that you’re not seeing the whole picture,” said Bernie McSherry, senior vice president at institutional broker Cuttone & Co.”You’ve got lots of hidden liquidity, you’ve got orders that are being exposed preferentially to some participants and not others, and I think that just works against an efficient market,” he said. “It’s not a good development.”

I guess that is more than a feeling. That is the new cold hard reality. Those pools are the sanctum  of  the religion of mammon, access to which is closely guared by the caste of high-priests – which decides on its own who will be made part of it and who not – normal folks can only pray to the new god . If believe can move mountains, it can certainly push the Dow (or whatever) higher.

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