Danielle’s weekly market update with Talk Digital Network

Danielle spoke to Phil Mackesy of Talk Digital Network today discussing recent developments in the global economy and world markets. You can listen to the audio clip here. (warning from Danielle: “When I said 750m was paid per CDO deal to the rating agencies, I meant 750K, sorry for the extra zero misspeak.  The point is there was huge financial incentive on the raters to give out favourable ratings, and this was a problem we are all now paying for.”

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One Response to Danielle’s weekly market update with Talk Digital Network

  1. Tony Hladun says:

    Danielle, you made a comment about the Occupy protests and one such negative comment appeared in our local Camrose paper. Here’s my letter to the editor on the topic:

    I take issue with the editorial in the October 20th Canadian about the “Occupy protestors”. In part because when I was young my generation protested also, but also because young people today do face bleak futures with high unemployment and few prospects. Words like financial Armageddon, abyss, and contagion scream out from the media and our leaders. This all adds to an attitude of despondency and despair.

    What’s the problem? Here’s a simple explanation. After the fall of communism, globalization became the accepted world economic model. If you think it’s happening somewhere else other than Camrose, then remember that Russians own our biggest industry and at Wal-Mart we buy mainly Chinese-manufactured products. Is globalization and free trade good or bad? The answer is it depends. Globalization and free trade are good for big, global companies and developing countries. They are bad for high-income middle class people (like us) and medium-sized companies. Global companies are doing well as their markets expand and their executives, who are paid based on total company revenue, are doing very well indeed. The middle classes of India and China and other developing countries are doing better. So the very rich get richer and the Western middle class gets poorer while at the same time that the middle classes get richer in developing countries.

    The middle class of the Western World is an anomaly that developed and was needed during the cold war when it was “us against the world”. To maintain power and control the US (and it’s few allies) used technology, like the threat of nuclear weapons, to put the odds in our favour. This technology spun off into consumer goods and made the Western middle class highly productive and wealthy. When communism fell we suddenly had billions of new labour competitors. With free trade the technolgy and the associated jobs flowed to more competitive countries. For example, GM didn’t build cars in China during the cold war but they do now.

    For a while in the West we kept the game going by running up debts but now that has caught up to us. If we want to protect our middle class we have to put up fences like tariffs and trade barriers. Today these actions are highly politically incorrect (or at least to those who pay the experts to say what politically correct is). Otherwise, remember that the average (middle class) wage of the world is that of Indonesia and that’s where we might be headed. With that in mind if I were young I’d protest too.

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