From the Times…

On Friday Qimonda, of Germany, became the first big chipmaker to file for insolvency. The world’s fourth-biggest manufacturer of DRAM memory chips, used mainly in PCs, said that a €325 million (£306 million) rescue attempt by the German state of Saxony, Infineon, its parent company, and a group of banks had not been agreed in time to save it. Qimonda follows Nortel Networks, North America’s biggest telecoms equipment maker, in filing for insolvency.

The semiconductor sector was in poor shape before the present downturn, with large players having spent lavishly in early 2007 on increased production to expand their market share, resulting in oversupply and price collapses. Cash-strapped manufacturers have cut output, but the weakness in demand has prevented any meaningful price gains.

From Slate….

Gettelfinger argued Toyota’s workers actually make $2-per-hour more than UAW workers, if you count bonuses. But … but. … Toyota did not go bankrupt. … Toyota hasn’t had to be rescued with $17.4 billion of taxpayer money. … If Toyota can afford to pay its workers $2/hour more than UAW workers–perhaps because it doesn’t have to build cars under the union’s legalistic work rule system–that’s great. It doesn’t mean Gettelfinger’s workers have a right to $28/hour if at that wage their employers can’t stay in business without an ongoing multi-billion dollar subsidy. I’m sorry if this seems obvious. It’s apparently not obvious enough. … P.S.: So will promoters of greater unionization now boast that with unions, workers can earn $2/hour less?

The last line is the kicker.

On a different note….

Speaker of the House Nancy Pelosi boldly defended a move to add birth control funding to the new economic “stimulus” package, claiming “contraception will reduce costs to the states and to the federal government.”

Two words: Social Security.

Now for the ugly…

In a country where 12-hour workdays are common, the electronics giant has taken to letting its employees leave early twice a week for a rather unusual reason: to encourage them to have more babies.

“Canon has a very strong birth planning program,” says the company’s spokesman Hiroshi Yoshinaga. “Sending workers home early to be with their families is a part of it.”

Japan in the midst of an unprecedented recession, so corporations are being asked to work toward fixing another major problem: the country’s low birthrate.

At 1.34, the birthrate is well below the 2.0 needed to maintain Japan’s population, according to the country’s Ministry of Health, Labor and Welfare.

Now I am all for babies as much as it is possible for a guy to be. But I dunno about working for a company that feels compelled to urge you to multiply. Business is Business and family is family. Still, the ugliest thing about the above story is that 1.34 figure. Japan no longer has the time to turn their birth rates around. They are doomed without massive immigration and I don’t see anyone in Japan willing to accept that.

From the Times….

A coalition of leading American exporters, including Boeing, Caterpillar and General Electric, is trying to stop a “Buy America” clause being included in President Obama’s $825 billion stimulus package.

The American Steel First Act would ensure that only US-made steel was used in $64 billion of federally funded infrastructure projects.

The money, earmarked for roads, bridges and waterways, is aimed at kickstarting the economy, but the initiative by steelmakers, which secured support last week in the House of Representatives Appropriations Committee, is opposed by American exporters, who fear retaliation by foreign governments.

Their concern is given credence by the European Commission and by Eurofer, the association of European steelmakers, which said that it would urge the European Union to challenge the “Buy America” clause at the World Trade Organisation.

Also from the Times…

The head of the International Monetary Fund turned up the heat on China over its exchange rate policies on Monday, arguing that it was clear that the Chinese yuan was “significantly undervalued”.

Dominique Strauss-Kahn, the IMF’s managing director, said that it was in Beijing’s clear interest to allow the yuan to strengthen on foreign exchanges and insisted that the fund had been straightforward on the issue and had repeatedly spelled out this assessment.

Mr Strauss-Kahn’s intervention stepped up pressure on China over its currency only days after Tim Geithner, President Obama’s nominee as US Treasury Secretary, sent a tremor through markets as he signalled a potential shift to a harder line from Washington over the yuan.

From Slashfilm…..

Following up on our previous news regarding Monty Python material on iTunes, Mashable is now reporting on a staggering increase of Monty Python DVDs sold on Amazon soon after the Python crew made some of their their more popular material free on Youtube. And by staggering, I mean 23,000% worth. Mashable notes that Monty Python’s DVDs climbed to the #2 spot on Amazon’s Movie’s and TV Bestseller List, and you don’t have to be a genius to follow that the sales were probably influenced by the Amazon links found on all of their Youtube clips.

You also don’t have to be a genius to note that people who figure out ways of making Youtube work for them make more money then those who spend their time worrying about how Youtube is being used to pirate their clips.

From the Times….

ING, the Dutch financial giant, announced the departure today of its chief executive and 7,000 job losses as it posted a fourth-quarter deficit of €3.3 billion (£3.1 billion)

It also said that it had reached an agreement with the Dutch Government over €22 billion of state loan guarantees for its troubled mortgage loan portfolio.

From the Times…

President Obama is considering another massive injection of cash into America’s stricken banking system, a move that will be deeply unpopular with the public but is being forced upon him by the speed at which the US economy is unravelling.

With the collapse on Saturday of the third US bank this month – the First Centennial Bank of California – Mr Obama is under pressure to spend hundreds of billions more to rescue the financial system. It would come on top of last year’s $700 billion (£515 billion) Wall Street rescue package that was opposed by a most of Americans. They viewed the plan as a bailout of the bankers that they blame for the financial crisis.

Any additional move to ease the crisis afflicting America’s banks will be separate from Mr Obama’s $825 billion economic stimulus package that senior aides spent the weekend trying to sell to a growing number of Republican sceptics and the US public.

Does anyone remember that California needs money soon before it goes under? The problems are happening faster than they can handle them.

From the Utica Observer…..

A recent cold weather snap and low fuel prices might be the reason why some area retailers had to travel to Syracuse for home heating oil recently.

Some began commuting to Syracuse and other locations last week after they were told by regional distributors that more home heating oil would not be available here through the Buckeye Terminal pipeline until Wednesday.

Some consumers who use heating oil to warm their homes might have seen a short-term rise in costs as retailers tried to offset their traveling costs.

The article goes on to explain the errors of forecasting and greed (some people held off buying until it was too late because they thought that prices were going to fall even further) that led to these problems.

But I think they may be missing something. I know of a certain hospital in upstate New York that has what they call interruptable gas supplies. What this means is that they are charged a lower price for their natural gas in exchange for guaranteeing that they have enough oil on hand to switch over to fuel oil at a moments notice.

Well, it just so happen that they had a problem with a pumping station on one of the natural gas pipelines that serves the upstate area in late December. This necessitated shutting down the pipeline for an extended period of time (it just recently got back on line). So this hospital and every one else who had interruptable gas supplies were told they had to switch to fuel oil as fast as they could be required to by contract. And the hospital was told that if it was at all possible for them to switch faster they should pretty please do so. This was done so that the natural gas suppliers could insure that there would be enough gas for those with uninterruptable gas contracts.

What this meant is that the hospital suddenly started burning thousands of gallons of fuel oil a day during the coldest part of the year. Naturally the hospital had enough fuel oil on hand that this was no problem. But they did not want their stock of fuel oil to shrink because nobody knows what is going to happen in the future. Thus, tractor trailer loads of fuel oil were being delivered to this hospital every couple of days.

Multiply this by all the other places that had interruptable gas contracts and you had a huge hit to local oil supplies at the same time a cold snap hit the area.

From Financial Advice……

Tonight there are new claims that Gordon Brown is starting to show signs of panic after the announcement that the UK is officially in recession. The opposition parties appear to have sensed a draining of confidence from the UK Treasury and the Prime Minister after literally billions and billions of pounds appear to have been wasted on a number of rescue packages. The situation with the UK economy has taken a serious downward lurch over the last few days amid signs that the government is running out of ideas.

When I first came across this (via a link on a Belmont Club post) I thought it was overstating its case. I have long thought that the U.K was in big trouble. But I had not seen signs that Gordon Brown was panicking. But then I saw this from the Telegraph….

If you hadn’t seen, Mr Rogers has been urging investors to join in the pound’s slide and “sell any sterling you might have.”

“The City of London is finished,” according to the American now living in Singapore. He believes Britain’s former glories – its North Sea oil supply and the major financial centre in the City of London – have gone to pot and are no longer able to support sterling.

The comments have ruffled a few feathers, including it would seem, the Prime Minister’s. “If you think we are going to build our policy around the comments of a few speculators who want to make money out of Britain then you are very, very wrong indeed,” he told the Today Programme on BBC Radio 4 this morning.

Mr. Rogers is only a millionaire. For Gordan Brown to treat his comments seriously is a sign that he is indeed worried. In normal times Rogers would have been laughed off.

From the Times….

Across the whole of the UK, 49% of the economy will consist of state spending, while in Wales, the figure will be 71.6% – up from 59% in 2004-5. Nowhere in mainland Britain, however, comes close to Northern Ireland, where the state is responsible for 77.6% of spending, despite the supposed resurgence of the economy after the end of the Troubles.

Even in southern England, the government’s share of spending is growing relentlessly. In the southeast, it has gone up from 33% to 36% of the economy in four years.

The state now looms far larger in many parts of Britain than it did in former Soviet satellite states such as Hungary and Slovakia as they emerged from communism in the 1990s, when state spending accounted for about 60% of their economies.

Large-scale layoffs in the northeast will mean a rise in benefit payments. Newcastle-based Northern Rock was nationalised last year and has shed 1,500 jobs. Nissan announced three weeks ago that it was to cut its workforce in Sunderland by 1,200.

This explains a lot of the stories that come out of Great Britain. When the state has a Soviet size share of the GDP it will have Soviet type powers.

But such sniping aside, this shows how the economic health of Great Britain is dependent on the economic health of the government of Great Britain. Much of the money that sustained the government came from oil and gas revenues from the North Sea and the financial services industry in the city of London. Now that energy prices are falling around the world and the financial services industry is getting hammered, who is going to fund the government of Great Britain?