1 The Guardian on new forces driving world economic order – one in which ‘rich’ countries run deficits and ‘poor’ countries accumulate assets. A new economic order is taking shape before our eyes, and it is one that includes accelerated convergence between the old western powers and the emerging world's major new players. For decades, many people lamented the extent to which the west dominated the global economic system. From the governance of multilateral organisations to the design of financial services, the global infrastructure was seen as favouring western interests. Suddenly, the world turned upside down: "rich" countries were running large deficits and, in some cases, tipping from net creditor status to net indebtedness, while "poor" countries were running surpluses and accumulating large stocks of external assets, including financial claims on western economies.
In an amazing turn of events, virtually every western country must now worry about its credit ratings, while quite a few emerging economies continue to climb the ratings ladder. We can now consider the image of western delegations heading to emerging countries to plead, cap in hand, for financial support, both direct and through the IMF.
Multilateral institutions, particularly the IMF, have responded by pumping an unfathomable amount of financing into Europe. But, instead of reversing the disorderly deleveraging and encouraging new private investments, this official financing has merely shifted liabilities from the private sector to the public sector. Fortunately it is not too late for policymakers to catch up. But doing so requires more than just better national policymaking in Europe and America; it is also time for urgent and deep reform of the multilateral system and its main institutions. That process requires joint leadership by the emerging world as a true equal and partner of western powers.
2 The Guardian on Fitch warning US of possible credit downgrade. Ratings agency Fitch has warned that it may downgrade America's triple-A credit rating unless action was taken to reduce federal debt. Fitch said the country's rising debt burden was not consistent with maintaining its top rating, but said it would probably not make a decision before 2013. Last month, Fitch changed its US credit rating outlook to negative from stable, citing the failure of a special congressional committee to agree on at least $1.2tn in deficit-reduction measures.
Despite Fitch's warning, US debt is being valued at levels that suggest it deserves to keep its AAA status. In the bond market, 10-year Treasuries are trading near their record high levels, pushing down the yield on the bonds to just 1.97%. Germany's 10-year bonds have a yield of 1.93%, with UK gilts have a yield of 2.06%. Both are AAA-rated nations. Ten-year debt issued by France, whose AAA rating looks rather shaky, is trading at a yield of 3.09%, – 50% higher than America's.
3 The San Francisco Chronicle on US population growing at the slowest pace since baby boom era of that began in the 1940s, quoting the Census Bureau. The nation's population increased 0.92 percent from April 2010 to July of this year. William Frey, a senior fellow at the Brookings Institution in Washington, said the decline was partly a result of fewer immigrants coming to the US, with the crash of the housing market offering fewer construction jobs for them.
4 The San Francisco Chronicle on Oracle profits diving 9% after the Redwood City software giant reported quarterly sales and profit that missed analysts' estimates. The stock closed at $25.77 for its biggest decline since 2002 and dragged down other software makers such as the Bay Area's Salesforce.com, VMware and Autodesk. Investors worry that corporate customers are spending less on programs that help them manage operations.
5 The New York Times on Indian Dalits fighting caste with capitalism. On his barefoot trudge to school decades ago, a young Ashok Khade passed inescapable reminders of what he was: the well from which he was not allowed to drink; the temple where he was not permitted to worship. At school, he took his place on the floor in a part of the classroom built a step lower than the rest. Untouchables like him, considered to be spiritually and physically unclean, could not be permitted to pollute their upper-caste neighbours and classmates. But on a recent afternoon, as Khade’s chauffeur guided his shimmering silver BMW sedan onto that same street in a village in the southern state of Maharashtra, village leaders rushed to greet him. He paid his respects at the temple, which he paid to rebuild. The untouchable boy had become golden, thanks to the newest god in the Indian pantheon: money.
As the founder of a successful offshore oil-rig engineering company, Khade is part of a tiny but growing class of millionaires from the Dalit population, the 200 million so-called untouchables who occupy the very lowest rung in Hinduism’s social hierarchy. The rapid growth that followed the opening of India’s economy in 1991 has widened the gulf between rich and poor, but the era of growth has also created something unthinkable a generation ago: a tiny but growing group of wealthy Dalit business people. With their new wealth they have also won a measure of social acceptance.
Dalits still lag behind the rest of India, but they have experienced gains as the country’s economy has expanded. A recent analysis by economists at the University of British Columbia found that the wage gap between other castes and Dalits has decreased to 21%, down from 36% in 1983, less than the gap between white male and black male workers in the US. The education gap has been halved.
6 The BBC reporting that over 1,500 custodial deaths have occurred in India in the last one year, quoting the country's Human Rights Commission. Most of the deaths in prison and police custody - 331 - were in the northern state of Uttar Pradesh. Rights groups say a large number of such deaths happen because of torture in custody, claims officials reject. The government routinely attributes deaths in custody to illness, attempted escape, suicide and accidents. An unnamed commission official told The Indian Express newspaper that they had collected the data on "the basis of individual complaints as well as those sent by prison authorities".
7 Khaleej Times on US going the Japan way. If you want to spook an economist, ask him about Japan. He will tell you of a ghastly place whose undying stagnation devours even the strongest stimulus. Quantitative easing, bank recapitalisations and fiscal spending all failed to revive the world’s soon-to-be fourth-largest economy. As the same measures fall flat in America, some are beginning to worry that the US could be headed for its own lost decades.
Both countries’ downturns started with bursting bubbles, but America’s housing bubble was less than half the size of Japan’s: in 1989, all the real estate in Japan was worth five times the country’s GDP while the US peaked at less than two. The stock-market bubbles were similarly skewed: Japanese stocks traded for 50 times earnings in 1989 while the S&P kissed 17 at its peak in 2007. The sinking feeling is corroborated by data: Real wages for most Americans are no better than in 1970. But globalisation isn’t zero-sum, and the market for truly innovative ideas is bigger than ever. These ideas are often born in the US, even now, and companies like Apple, Google and Facebook enjoy network effects on a global scale.
This is a key advantage over Japan, and America’s superstars will continue to profit mightily. Everyone else faces an uncomfortable reality: Unless you are one of the idea-slinging elite, then you are simply one of the many – competing for wages against not only countrymen but the entire world. The fact is that America is at much greater risk of continuing its own uneven growth than reliving Japan’s lost decades. Turning Japanese is beside the point. For most, being American will be bad enough.
8 Khaleej Times explaining why the world is a better place. At this time of Christmas and thoughts of peace on earth we should reflect that the world over most of public opinion is ignorant of just how much violence has declined over the last 3,000 years. Judging by the historical record the 21st century, thus far, is the least violent and safest century of all despite Iran, Afghanistan, Somalia and Sudan, with less people being killed in war than ever before and despite the preceding century being the greatest killing field of them all.
In this century the wars in Iraq and Afghanistan killed a mere four hundredths of a per cent of the American population. US war deaths in the two world wars, Korea, Vietnam and Iraq were 3.7 per 1000 of the US population yet Detroit in the 1970s and 80s had a homicide rate of 45 per thousand and the national average was 10 per thousand. All in all, the world is becoming a better place. Let’s rejoice and resolve to do even better rather than being taken in by the television news and the newspaper headlines.
9 The Dawn on Indian women taking to a mobile app to escape sexual harassment. A smartphone app launched in the Indian capital Delhi aims to fight a rise in sexual assault cases by enabling women to immediately alert friends or family if they feel at risk. The “Fight Back” app created by Indian non-profit Whypoll will —at the press of a single key —send an SOS message via text message, email and Facebook. Once the SOS is activated, recipients will be able to track the sender’s location via GPS and come to her aid. “I grew up in Delhi and it’s always been an unsafe city. And it just keeps getting worse. As a woman, you just don’t feel comfortable on the roads,” Whypoll co-founder Shweta Punj told AFP. “I was disgusted by the violence and wanted to do something about it.” Delhi now tops the list of India’s most unsafe cities for women, with 489 reported rape cases in 2010, up from 459 in 2009, according to police statistics.
10 The Wall Street Journal on Facebook’s desire to be a blue chip. Mark Zuckerberg spent Facebook Inc.'s early years trying to keep it cool. But the founder and CEO of the social-networking giant has spent the last 18 months methodically preparing Facebook to look and act more like a blue-chip business. "There was a period in Microsoft's evolution where they said, we want to put a computer on everyone's desk," said Mr. Zuckerberg in a recent interview. "That's the way that I want to run Facebook...We want to be operating in a way that we're working towards this longer vision of where we think the world should be." Facebook plans to file early next year with the Securities and Exchange Commission to take the stock public in the second quarter of 2012. The IPO could raise as much as $10 billion at a valuation of more than $100 billion. One remarkable thing is just how few employees are needed to create the company's $4 billion in revenues. Facebook employs 3,000, a number dwarfed by Microsoft's 90,000 and Google's 31,000.
11 The Wall Street on India staring at a repeat of the 1970s. The Indian economy hit choppy waters this year and investors fear it is about to get worse. Prime Minister Manmohan Singh's government has abandoned reforms, most spectacularly on foreign investment in retail this month. Some reassurance came from the central bank, which steadied the economy this year by fighting double-digit inflation. But that bit of stability is threatened after the Reserve Bank of India signaled that it's about to give up the fight, too. RBI Governor Duvvuri Subbarao is now losing his nerve. On Friday, he refused to hike interest rates for the first time this year and strongly suggested he would loosen credit next year. That's incredible given that the policy rate is still negative in real terms and growth in the broad money supply is running higher than expected.
Easy money is an easy response to flagging growth, but it's the wrong prescription. Subbarao seems to think he can trade off inflation in favor of growth, but the last 30 years of experience with priming the monetary pump—or even the last three—should have taught him that there is no such correlation in the long run. India's policy makers may not admit it, but they are stumbling into stagflation. The right way out of this mess is for Singh to drive growth through reforms and for Subbarao to maintain stable prices. It's bad enough that India's prime minister appears to have abdicated his responsibility, but its central banker will make things worse if he tries to compensate for Singh's failings.
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