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Showing posts with label America. Show all posts
Showing posts with label America. Show all posts

Thursday 5 December 2013

Malaysia, US, UK and Australia lag in global education rankings as China and Asian countries rise to the top





 Malaysia students score below global average

PETALING JAYA: Malaysian students have scored below the global average under the Programme for International Student Assessment (Pisa) 2012.

According to the results released by the Organisation for Economic Cooperation and Development (OECD), Malaysia scored 421 in Mathematics, 398 in Reading and 420 in Science respectively.

The results achieved in the latest survey showed Malaysia was below the global average score of 494 in Mathematics, 496 in Reading and 501 in Science.

Based on the mean score for 2012, Malaysia is still placed in the bottom third, ranking 52 out of 65 countries, and 55 out of 74 countries in the 2009 survey.

In 2009, Malaysia scored 404 in Mathematics, 414 in Reading and 422 in Science.

Pisa is administered by the OECD every three years on 15-year-olds in both OECD and non-OECD countries and offers students questions in the main language of instruction in their respective countries. Each round focuses on one area of either Reading, Mathematics or Science.

The assessments have been conducted since 2000, with Malaysia taking part for the first time in 2009.

Currently, Malaysian students are at the bottom one-third among more than 70 countries in international assessments like Timms (Trends in International Mathe­mathics and Science Studies) and Pisa. The Malaysia Education Blueprint has set the goal for Malaysia to be in the top third of countries participating in Pisa and Timms by 2025.

 Contributed by Kkang Soon Chen The Star/Asia News Network

US students lag in global education rankings as Asian countries rise to the top

Students in the United States made scant headway on recent global achievement exams and slipped deeper in the international rankings amid fast-growing competition abroad, according to test results released Tuesday.

American teens scored below the international average in math and roughly average in science and reading, compared against dozens of other countries that participated in the 2012 Program for International Student Assessment (PISA), which was administered last fall.

Vietnam, which had its students take part in the exam for the first time, had a higher average score in math and science than the United States. Students in Shanghai — China's largest city with upwards of 20 million people — ranked best in the world, according to the test results. Students in East Asian countries and provinces came out on top, nabbing seven of the top 10 places across all three subjects.

U.S. Education Secretary Arne Duncan characterized the flat scores as a "picture of educational stagnation."

"We must invest in early education, raise academic standards, make college affordable, and do more to recruit and retain top-notch educators," Duncan said.

Roughly half a million students in 65 nations and educational systems representing 80 percent of the global economy took part in the 2012 edition of PISA, which is coordinated by the Paris-based Organization for Economic Cooperation and Development, or OECD.

The numbers are even more sobering when compared among only the 34 OECD countries. The United States ranked 26th in math — trailing nations such as the Slovakia, Portugal and Russia. What’s more, American high school students dropped to 21st in science (from 17th in 2009) and slipped to 17th in reading (from 14th in 2009), according to the results.

“These numbers are very discouraging,” Eric A. Hanushek, an expert on educational policy and a Paul and Jean Hanna Senior Fellow at the Hoover Institution of Stanford University, told NBC News. “They say that we have to work more seriously at trying to raise the performance that leads to these scores.”

The exam, which has been administered every three years to 15-year-olds, is designed to gauge how students use the material they have learned inside and outside the classroom to solve problems.

U.S. scores on the PISA have stayed relatively flat since testing began in 2000. And meanwhile, students in countries like Ireland and Poland have demonstrated marked improvement — even surpassing U.S. students, according to the results.

"It's hard to get excited about standing still while others around you are improving, so I don't want to be too positive," Jack Buckley, commissioner of the National Center for Education Statistics, told the Associated Press.

Duncan said the results were at "odds with our aspiration to have the best-educated, most competitive work force in the world."

The scores are likely to reopen a long-simmering political debate about the state of education in America as economically ascendant nations like China eclipse U.S. students' performance.

American students historically have ranked low on international assessments, owing to a range of social and economic factors — from skyrocketing rates of child poverty to sheer population diversity. Nearly 6,100 American students participated in this round of testing.

"Socio-economic background has a significant impact on student performance in the United States, with some 15% of the variation in student performance explained by this, similar to the OECD average," according to a PISA summary of U.S. performance. "Although this impact has weakened over time, disadvantaged students show less engagement, drive, motivation and self-beliefs."

Shanghai students also dominated the PISA exam in 2009, according to the AP.

Tom Loveless, a senior fellow at the Brookings Institution, told the wire service that the educational system in that city is not equitable — and the students tested are progeny of the elite because they are the only ones permitted to attend municipal schools due to restrictions that, among other things, prohibit many migrant children.

"The Shanghai scores frankly to me are difficult to interpret," Loveless told the wire service. "They are almost meaningless."

Buckley told the AP that U.S. officials have not encountered any evidence of a "biased sample" of students administered the exam in Shanghai. He said if the whole country was included, it is unclear what the results would show.

Hanushek told NBC News that the performance of Asian teens says a great deal about the modern mindset of the Far East.

“These East Asian countries are hungry,” Hanushek said. “They have the view that improving their lives and improving their future depends on education.”

And the U.S., he added, has grown too accustomed to leading the world in knowledge that it may have lost its edge.

“We have the strongest economy in the world. But everybody is too complacent,” Hanushek said.
The test is premised on a 1,000-point scale. Here's a sampling of the leading findings:

— In math, the U.S. average score was 481. Average scores ranged from 368 in Peru to 613 in Shanghai. The global average was 494.

— In science, the U.S. average score was 497. Average scores ranged from 373 in Peru to 580 in Shanghai. The global average was 501.

— In reading, the U.S. average score was 498. Average scores ranged from 384 in Peru to 570 in Shanghai. The global average was 496.

Students from all states were tested. For the first time, three states — Massachusetts, Connecticut and Florida — elected to boost participation in PISA to get more state-specific data.

Average scores from Massachusetts rose above the international average in all three subject areas.

Connecticut students scored on average near the global average in math and higher than the global average in science and reading. Florida students on average scored below the global average in math and science and near the global average in reading, according to the AP.

The Associated Press contributed to this report.

PISA Results Show UK Students Lagging Behind Rest Of The World
uk students lag behind rest of world pisa
 - The Huffington Post UK/PA

UK teenagers and students are lagging far behind their peers across the world as the country fails to improve its performance in reading, maths and science, a major international report reveals.

Young adults in Singapore, Estonia and Slovenia are storming ahead, despite the UK spending more than average on education. There has been "no change" in the country's abilities in the basics, according to the latest results from the Programme for International Student Assessment (PISA) study 2012.

The UK was in 26th place for maths, 23rd for reading and 21st for science, it found.

More than half a million 15-year-olds from 65 countries took part in the Organisation for Economic Co-operation and Development's (OECD) study last year, which assesses how students could use their knowledge and skills in real life, rather than just repeating facts and figures.

The findings show that the UK's average score for maths was 494 and in reading it was 499, broadly the same as the OECD averages for the subjects and putting the country on a par with nations such as the Czech Republic, France,and Norway.

In science, the UK's teenagers scored 514 points, above the OECD average and similar to results in Australia, Austria, Ireland, New Zealand and Slovenia.

But it also leaves the UK lagging far behind leading nations including Shanghai in China, Singapore, Hong Kong, Korea and Japan in each of the areas tested.

The OECD concluded that across all three subjects the UK's average performance in maths has remained unchanged since the PISA tests in 2006 and 2009.

Andreas Schleicher, special adviser to the OECD's secretary-general, said: "The relative standing and the absolute standing of the UK is really unchanged."

He added: "In essence you can say that the UK stands where it stood in 2009."

The results come despite major investment in education in the UK.

The study found that the UK spends more per head on education than the average across OECD countries, at around £59,889 per student between the ages of six and 15. The OECD average is £50,951.

It says that expenditure per student can explain about 30% of the difference in average maths results between countries, but that moderate or high spending per pupil does not automatically equate to particularly high or low performance in the subject.

The report shows that around one in eight (12%) of UK teenagers are considered "top performers" in maths scoring the highest results, this is a similar proportion to the OECD average. Around nine percent were top performers in reading, while 11% fell into this category in science.

And more than a fifth (22%) were "low performers", compared to the OECD average of 23%, meaning that at best they can solve simple maths problems. Around 15% were low performers in reading, along with 15% in science.

The results also showed that students from an immigrant background in the UK perform as well in maths as other students, whereas in many other OECD countries they score significantly lower.

It adds that UK students are generally positive about school, but like those in many other countries they are less positive about learning maths.

Mr Schleicher said that the latest PISA results could not be used to judge the Coalition Government's education reforms, saying "you couldn't possibly see anything of what's been done in the last couple of years."

Education Secretary Michael Gove said: "These poor results show the last government failed to secure the improvements in school standards our young people desperately need.

"Labour poured billions of pounds into schools and ratcheted up exam grades - yet our education system stagnated and we fell behind other nations."

He added that the performance "underlines the urgent need for our reforms".

Shadow education secretary Tristram Hunt said: "The PISA report is a big wake-up call. Eastern dominance centres on the importance that these high performing education systems place on the quality and status of the teaching profession as the central lever for driving up standards.

"This report exposes the failings of this Government's schools policy: a policy that has sent unqualified teachers into the classroom and prevented effective collaboration between schools."

Australian students slipping behind in maths, reading: OECD report

Video: Christopher Pyne says the results are a 'serious wake-up call' (ABC News)
Related Story: Labor refuses to back own move to cut university funding by $2.3b
Related Story: Pyne hails 'national model' after backflip on Gonski funding
Related Story: Abbott to honour Gonski school funding deals

A new report comparing Australian high school students with 65 other countries shows the nation is slipping further behind in maths and reading skills.

The 2012 Programme for International Student Assessment (PISA) measures the mathematics, reading and science skills of half a million 15-year-olds from around the world.

It found Australian teens placed equal 17th in maths, equal 10th in reading and equal 8th in science.

Asian countries like China, Singapore, Korea and Japan are pulling ahead of Australian students in maths and reading.

The results show Australian students are slipping in maths performance by about a half a year of schooling compared to 10 years ago.

How the states/territories rated:

MathsScienceReading
ACT518534525
NSW509526513
VIC501518517
QLD503519508
SA489513500
WA516535519
TAS478500485
NT452483466
AUST504521512
Shanghai613580570

The decline was stronger in girls than boys, with girls dropping to the Organisation for Economic Co-operation and Development (OECD) average.

The report also found a wide gap between students in different parts of the country.

Tasmania and the Northern Territory lagged well behind other states in all three areas.

About 14,500 Australian students from 775 schools were measured in the assessment, which was conducted by the Australian Council for Educational Research (ACER) for the OECD.

ACER's director of educational monitoring and research, Dr Sue Thomson, says gender, Indigenous status and socio-economic status still divide student outcomes.

Australian students from a wealthy background show a difference of about two-and-a-half years of schooling compared to a student from the lowest socio-economic group.

Questionnaire responses have also found girls hold a much more negative view about maths.

"Australia has slipped backwards to the type of gender disparity that was seen decades ago, and the performance scores of girls coupled with a number of particularly negative motivational attitudes puts Australia further away from providing all students with the same educational opportunities," Dr Thomson said.

Indigenous students are on average performing significantly worse than non-Indigenous students, a difference of about two-and-a-half years of schooling or more in maths, science and reading.


Ms Thomson also raised concerns that more than two-fifths of students failed to reach base proficiency levels in maths.

"These are the levels at which the Ministerial Council set as not really ambitious goals but achievable goals for a country such as Australia and for a large proportion of students not to be achieving those results is quite a worry," she said.

Twelve other countries also showed declines in maths literacy over 10 years, with the largest decline occurring in Sweden, then Finland, New Zealand, Iceland then Australia.

See how the countries compare in the latest results:



Embed: Map of educational performance, December 4 2013  

Results back Government's plan to focus on teachers, says Pyne

Education Minister Christopher Pyne says the results are a bad report card on Labor's years in office.


"In that period our results dramatically declined," he said.

"These are the worst PISA results since PISA began in 2000.

"They are demonstrably worse than anything that ever occurred under the Coalition government. They are a serious wake up call for the Australian education system."

He says the report's findings vindicate the Coalition's plan to focus on teacher quality.

Prime Minister Tony Abbott says the Government has fixed the school funding issue and school standards are the key to lifting rankings.

"We've got the funding sorted out. We need to have a debate about better school performance, about more principal autonomy, about more parental involvement, about more community engagement and above all else, about higher standards and that can now happen," he said.


Federal Opposition Leader Bill Shorten has used the report to intensify pressure on the Government to adopt all of Labor's Gonski schools plan.

The Federal Government will go ahead with Labor's Gonski plan from next year but will only commit to four years of funding.

Mr Shorten says it needs to get on board for the full six years.

"It's time to implement Gonski in full. It's time to stop the political games and bandaid solutions and get on board giving the next generation of Australians the best start in life."

Opposition Education spokeswoman Kate Ellis says the figures are worrying.

"We have always conceded that the system has been broken, that the old Howard-style system is broken, which is why the Labor government went through the biggest reform of our school system in 40 years and why the Abbott Government now cannot afford to toss it aside."


Kevin Donnelly from the Education Standards Institute says he is not surprised by the results.

"We have in fact been in trouble, if you like, for many, many years.

"We have trouble with disruptive classrooms...[and] we don't allow our teachers to mentor one another and to help one another. In places like Singapore, they actually respect teachers, children respect teachers, they are well-resourced.

"They have a lot more time to learn from one another and to improve classroom practice."
He says the debate is not only about funding.

"Money is important, but it gets back to a rigorous curriculum, effective teaching practice, good teacher training - so there are a few things we can look at there."

Results back push for needs-based funding model: Greens

The Greens say Australia's results in the report should put more pressure on the Government to adopt a needs-based school funding model.

Senator Penny Wright has attacked the deals the Government struck with Queensland, Western Australia and the Northern Territory on Monday for more school funding.

She says those deals ditch the so-called Gonski funding model in favour of a "no-strings-attached" model.
 

"It's not just the quantity of money handed out to the states, it's the way that money is spent," Senator Wright said in a statement.

"If that money doesn't get to the most disadvantaged students, Australia will continue to decline on an international scale."

The Australian Education Union says the widening gaps vindicate the predictions of the Gonski review.

"This must be a wake-up call to the Abbott Government," deputy federal president Correna Haythorpe said in a statement.

"They have consistently refused to embrace the Gonski recommendations for more equitable funding arrangements.

"Amid the constant backflips and chaos, it remains impossible to determine whether they even care about the inequity in education and the social and economic cost of it.

"The Government must make a full six-year commitment to the more equitable funding arrangements contained in the Gonski law and agreements if schools are to be given the resources and time required to lift achievement levels and break the connection between disadvantage and poor outcomes."

http://www.scribd.com/doc/188865848/PISA-in-Brief-2012

China's education system could be model for other countries


http://player.cntv.cn/standard/cntvOutSidePlayer.swf?videoCenterId=806efeb522434775af811976bb0c6dd2&tai=outSide.english&videoId=20131206100648

A global education survey has revealed that when it comes to mathematics, reading and science, young people in Shanghai are the best in the world. The findings are part of the 2012 Program for International Student Assessment or PISA. Full story >>

For more on this, we are joined by Wang Yan, Director of the Department of International Communication at the National Institute of Education Sciences.

1. Good evening. It’s not unusual to see Chinese students ace an exam. But do you think training children to be good at taking tests at a young age is a good strategy, or something that should be changed?

2. There was criticism from experts of China’s basic schooling system. But as Chinese students continue to excel internationally, do you think other countries will begin adopting parts of China’s educational model?

Related post:
 Shy boys given rooms to grow as they are lagging girls - Rightways

Friday 11 October 2013

US mind-boggling politicians: stop rocking the boat, China Daily said

Furloughed federal employees, along with their family members, protest the government shutdown outside the US Capitol in Washington DC, USA, 08 October 2013. The federal shutdown in the US is in its second week - EPA Photo.

The prospect of dimmer global growth predicted by the International Monetary Fund should make it a matter of urgency for US politicians to stop manufacturing crises.

Five years after the start of the global financial meltdown triggered by the bankruptcy of Lehman Brothers, it is pitiful that the US is now putting the fragile global recovery under renewed threat with its mind-boggling political infighting.

The IMF on Tuesday cut its global growth forecast to 2.9 percent this year and 3.6 percent for next year. This year's growth forecast is 0.3 percentage points lower, and next year's 0.2 percentage points down, than the July projection.

Indeed, the growth slowdown in major emerging economies, as the Washington-based global lender identified, will contribute to a global growth fall in the coming years. Both cyclical and structural problems in these economies are demanding immediate and bold reforms to make growth more sustainable.

However, when financial ministers and central bankers gather in Washington later this week to discuss global growth issues, they will be lucky if their attention is not too distracted by the US government shutdown.

The inconvenience caused by the shutdown may be the least of their worries. The elephant in the room, the once inconceivable notion of the US defaulting on its debt and ensuing dollar upheavals will have to be acknowledged.

As the world's largest economy and the home of the global reserve currency, the US surely has the wherewithal to fund its government and avoid a catastrophic default by raising its self-imposed debt ceiling.

Yet the astonishing failure of the US Congress to put national needs before their partisan interests has sparked fears among investors and governments around the world that maybe it is time to think about the unthinkable.

That may explain why the biggest US creditors, China and Japan, have expressed concern over developments in Washington which could affect their several-trillion-dollar investments in US Treasury bonds.

US politicians can discuss, bicker and argue over government spending and economic growth. Kicking cans is one thing, but throwing caution to the wind is not a course of action worthy of the world's leading economy.

-  China Daily

Related posts:
Time for crucial fiscal reforms: Malaysia Budget 2014 
USA government shutdown !

Thursday 10 October 2013

IMF, China, Japan warn USA's debts on default! Demystifying the US debt ceiling


UNITED States (U.S.) President Barack Obama Tuesday declared that he was willing to negotiate with Republicans in passing at least a short-term budget that opens up the government at current funding levels.

But Obama, during a media briefing Tuesday, said his offer to negotiate with Republicans on the issues would “absolutely” stand if Congress passes even short-term clean spending and debt ceiling bills.

However, he declared that “the only thing that I will say is, we’re not going to pay ransom for” America paying its bills.

This came as it was revealed yesterday that there are no talks going on at any level to resolve differences over the government shutdown and the debt ceiling deadline.

But Washington’s march toward self-inflicted financial calamity is setting off alarm bells around the world as general bewilderment turns into genuine concern over a possible default by the world’s lone superpower.

The International Monetary Fund (IMF) as well as China and Japan – which hold a combined $2.4 trillion in U.S. debt – have called for a quick resolution to the crisis and expressed worries over the economic consequences of a default.

Meanwhile, Obama said U.S. credit-worthiness will be affected if markets see that “we’re not paying all our bills on time.”

Noting that he missed a major conference in Asia this week because of the government shutdown issues, said the president said: “whenever we do these things, it hurts our credibility around the world. Makes it look like we don’t have our act together.”

He warned that if Congress doesn’t raise the debt ceiling, “every American could see their 401Ks and home values fall,” and the country would see a “very significant risk” of a deep recession.

Obama said that Congress has to vote to raise the debt ceiling as soon as it votes to reopen the government. Failing to raise the debt ceiling “would be dramatically worse” than a government shutdown, he said.

He criticised House Republican tactics in dealing with the government shutdown and a debt ceiling increase. “Let’s lift these threats from our families and our businesses and let’s get down to work,” he told reporters yesterday.

Obama spoke after Republicans reportedly offered a new approach yesterday to resolve the U.S. fiscal standoff, proposing creation of a bipartisan panel to work on deficit reduction and find ways to end the government shutdown and make recommendations on a debt-limit increase.

The proposal, which was quickly dismissed by Democrats, came as House of Representatives Speaker John Boehner and President Barack Obama spoke by telephone shortly after Boehner adopted a slightly more conciliatory tone in comments to reporters.

“There are no boundaries here. There’s nothing on the table, there’s nothing off the table,” Boehner said after a meeting with House Republicans, making no mention of his recent demands to delay parts of Obama’s healthcare law in return for approving funds to end the government shutdown.

In the first official response by China, Vice Finance Minister Zhu Guangyao said that a solution must be found quickly in order to “ensure the safety of Chinese investments” and provide stability for economies around the globe.

“We ask that the United States earnestly take steps to resolve in a timely way the political issues around the debt ceiling and prevent a debt default,” he said. “This is the United States’ responsibility.”

The International Monetary Fund (IMF) has trimmed its forecast for global economic growth at the same time as lifting its UK growth projection.

It now expects global growth of 2.9% this year, a cut of 0.3% from July’s estimate. In 2014 it expects global growth of 3.6%, down 0.2%.

It cited weakness in emerging economies for the cut.

But it warns that the political standoff over raising the US government’s borrowing limit, if it results in the US defaulting on its debt payments, “could seriously damage the global economy”.

It expects growth of 1.6% in the US this year and 2.6% next year, down 0.1% and 0.2% from its July forecast.

Economists have predicted that a default would do great harm to economies around the world.
Obama recounted to reporters his telephone discussion yesterday morning with House Speaker John Boehner:

He was happy to eventually talk with Republicans about issues they care about, but that “shouldn’t require threats of a government shutdown” or economic chaos over the heads of the American people.

Yesterday, there were news conferences and a high-level phone call between Obama and the House Speaker, but no immediate sign of progress on reopening the government a week into a partial shutdown or reaching a deal to avoid the first-ever U.S. default next week.

Obama called Boehner yesterday morning, and the White House then announced the president would make a statement and take some questions from reporters at 2 p.m. ET.

Earlier, Boehner demanded that Obama and Democrats negotiate with Republicans on steps needed to end the shutdown that began on October 1 and raise the nation’s debt ceiling before the deadline for default on October 17.

“Americans expect us to work out our differences, but refusing to negotiate is an untenable position,” Boehner said, adding that Obama and Senate Majority Leader Harry Reid are “putting our country on a pretty dangerous path” by rejecting GOP calls for talks

- The Guardian

Demystifying the US debt ceiling: 5 things you should know

As the US government is about to hit its so-called debt ceiling of $16.7 trillion on Oct. 17, the frightening prospect of the world’s biggest economy running out of cash is dominating headlines around the globe.

So, in an effort to shine some light on what exactly the debt ceiling means to all of us, Business RT spoke to leading Moscow financial expert Chris Weafer, a senior partner at Macro-Advisory.com.

What exactly is the “debt ceiling?”
 
The US debt ceiling has existed for almost a century, and describes the maximum amount of money the US can legally borrow. The country introduced the legislative limit on its debt back in 1917, and since then it has stipulated the affordable amount of national debt that can be issued by the US Treasury. As of September 25, the US Treasury reported federal government debt at just shy of $16.7 trillion
($16,699,396,000,000.00, to be exact) in its daily statement, a figure which has been reported for 130 days straight. This is about $25 billion shy of the precise legal limit – $16,699,421,095,673.60. When the US approaches this debt limit, it can take some “extraordinary measures” to buy some time before Congress agrees to raise the ceiling. In its entire history, the US has so far never reached the point of default, where Treasury can’t pay its debt obligations.

Who holds the US debt?
 

The US owes about two-thirds of its debt to US-based creditors, with almost 66 percent of the country’s debt held domestically. US individuals and financial institutions hold around 31.7 percent of US Treasuries, with the US central bank, the Federal Reserve, which holds some 12 percent of the debt. Foreign creditors, including China and Japan, own an estimated 34 percent of total US government debt. These two 'big lender' countries have recently urged the US to take decisive steps to avoid a default.

3 What does the US borrow the money for?
 
In the US, often referred to as a 'big-spending' country, both individuals and the government have habitually spent more than they earn, pushing the economy deeper into debt.

“Just like any ordinary individual, the choice is either to cut back on spending or to borrow money to bridge the gap,” Weafer says.

In 2012, 22 percent of total government expenditures went to social security (means-tested payments to the poor and unemployed), while 21 percent was spent on healthcare, again mostly for poor Americans who cannot afford private health insurance. The third largest expenditure item is defense at 19 percent. In recent decades, the US defense bill has ballooned, mainly due to costly wars in Iraq, Afghanistan and elsewhere. The so-called War on Terror has also added greatly to the debt burden, while the Department of Homeland Security, created after the September 11, 2001, attacks on the US, has cost taxpayers more than a cumulative $800 billion.

The biggest contributory factor to the fast-growing debt mountain in recent years, however, has been the economic crisis that began in 2008. Apart from hundreds of billions of dollars paid out to rescue failing Wall Street banks that had made too many toxic loans, the US government has also paid out large amounts on vital social programs to aid the growing 'army of the unemployed'. Coupled with the Bush-era tax cuts to the rich and big business, lower average incomes and greater unemployment have hit government tax revenues hard, sending federal government debt sky-high.

Why can’t they simply print more dollars and pay their debt?
 

No economy in the world can simply turn on its printing presses and create as much cash as it wishes, as this would make its currency worthless.

“If the amount of currency in issue is not sensibly related to the strength of the economy, then foreign trade partners will … devalue the currency quickly,” Weafer explains. “If you have one asset and income source which allows you to issue one dollar, and then you print one more dollar, everybody else will see what you have done and will value your one dollar at only 50 cents. Some countries have done that in the past, but in those cases people soon had to use suitcases just to carry enough currency to buy a loaf of bread.”
 
Under the Bretton Woods financial system, established in 1944, the amount of currency in circulation was linked to gold reserves. But in 1971, the US abandoned this system and started to include a number of other economic factors, based on a recognized ability to service debt and prevent inflation, and maintain orderly trade with the rest of the world.

5 How would a US default affect people around the world, on a macro and personal level?
 
If the US defaulted, then the world’s financial system “would start to freeze up,” Weafer says. “Banks would pull back from risk and lending. The US economy would slide towards recession and the global economy would quickly be affected.” A prolonged US default would lead to job losses everywhere and much tougher borrowing conditions for companies and individuals, he adds.

“A short period of default would also have a bad effect in that it would hurt confidence in the world’s financial system,” he says. “Bankers and investors would assume that a short-term fix in the US would mean it would only be a matter of time before the same issue arises again in 2014. The resulting caution would make life that much tougher for all of us.”
 
- RT news

Related post:
 USA government shutdown !

Thursday 3 October 2013

USA government shutdown !

The mood was grim at the Capitol Monday as Democrats and Republicans couldn't get it together for the good of the nation. 


OUT OF SERVICE: Federal government enters first shutdown in 17 years; lawmakers remain divided over Obamacare

The U.S. government has shut down as Democrats and Republicans refuse to negotiate on Capitol Hill. GOP leaders remain determined that key aspects of Obamacare must be delayed, while President Obama insists that the demand 'is the height of irresponsibility.'

WASHINGTON — The first shutdown of the U.S. government in 17 years began early Tuesday as Congress bickered and bungled an effort to fund federal agencies due to a bitter ideological standoff over Obamacare.

The embarrassing disruption that an angry President Obama said was “entirely preventable” and would “throw a wrench into the gears” of the country’s recovering economy was triggered as a midnight deadline passed without agreement between the Republican-controlled House and Democrat-run Senate.

Senate Majority Leader Harry Reid (D-Nev.) disclosed at midnight that the White House budget office had directed agencies to start closing up shop. He then called a recess until 9:30 a.m., meaning that there would be no House-Senate deal in the wee hours Tuesday.

President Obama criticized Republicans' efforts to delay key aspects of the Affordable Care Act.
Susan Walsh/AP

President Obama criticized Republicans' efforts to delay key aspects of the Affordable Care Act.


The shutdown would keep 800,000 federal workers at home on Tuesday and inconvenience millions of people who rely on federal services or are drawn to the nation’s parks and other attractions. Critical workers, from the Border Patrol to air-traffic controllers, would remain on the job, unpaid.

Legislation was passed, however, to fund the armed services during the shutdown.

House Speaker John Boehner said Obamacare 'is having a devastating impact.'
Chip Somodevilla/Getty Images

House Speaker John Boehner said Obamacare 'is having a devastating impact.'

Despite the drama, members of Congress faced no threat to their own pay, because the 27th Amendment to the Constitution bars their salaries from being subjected to the annual appropriations process. Obama, too, will still be paid.

PHOTOS: GOVERNMENT SHUTDOWN FURLOUGHS THOUSANDS OF FEDERAL EMPLOYEES

Conservative firebrand Sen. Ted Cruz (R-Tex.), who made himself the face of the GOP effort to block Obamacare through the funding bill, pledged Monday to donate his salary to charity during the shutdown.

Many Americans will be inconvenienced by a shutdown.
Photos by AP, Debbie Egan-Chin/New York Daily News

 

Many Americans will be inconvenienced by a shutdown.

Repeatedly Monday, amid all the political posturing and rhetoric, the House amended a Senate resolution to fund the government to add a one-year delay in Obamacare, and other alterations. Repeatedly the Senate rejected those conservative-backed changes.

The House was expected to pass the latest health-care law changes in an early morning vote. The Senate was set to reject those additions when they return Tuesday.

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Senate Majority Leader Harry Reid (D-Nev.) arrives at the Capitol Monday. The Senate voted Monday to defeat a House bill that links keeping the government funded to delaying 'Obamacare' for one year.
Win McNamee/Getty Images

 

Senate Majority Leader Harry Reid (D-Nev.) arrives at the Capitol Monday. The Senate voted Monday to defeat a House bill that links keeping the government funded to delaying 'Obamacare' for one year.

As the nearly ridiculous legislative tit-for-tat played out, Obama went to the White House briefing room to insist that Republicans give up their demand to tie new money for the government to scuttling or delaying his health care law.

“One faction of one party in one house of Congress in one branch of government doesn’t get to shut down the entire government just to refight the results of an election,” Obama said.

“You don’t get to extract a ransom for doing your job, for doing what you’re supposed to be doing anyway, or just because there’s a law there that you don’t like.”


The front page of the NY Daily News on October 1, 2013.

The front page of the NY Daily News on October 1, 2013. 
 
RELATED: MEADOWS PUT GOVERNMENT ON ROAD TO SHUTDOWN

House Speaker John Boehner (R-Ohio) responded a few hours later on the House floor. “The American people don’t want a shutdown, and neither do I,” he said. Yet, he added, the new health care law “is having a devastating impact. . . . Something has to be done.”

Even more troubling than the shutdown was that the partisan stalemate that caused it sets the stage for an even more high-stakes clash, as Congress must soon deal with raising the debt limit by Oct. 17 — a matter in which both sides concede that failure would be perilous for the U.S. economy and economies worldwide. Republicans also want to attach conditions to that vote. Democrats said giving ground now would encourage Republicans to take a harder line in that fight.

Congress remained gridlocked Monday over legislation to continue funding the federal government. The federal government shut down after both chambers failed to pass a resolution before midnight.
Win McNamee/Getty Images

 

Congress remained gridlocked Monday over legislation to continue funding the federal government. The federal government shut down after both chambers failed to pass a resolution before midnight.

“You know with a bully you can’t let them slap you around because they slap you around today, they slap you five or six times tomorrow,” Reid said.

RELATED: PANDA-MONIUM: NATIONAL ZOO’S BELOVED PANDA CAM WILL SHUTTER IF FEDERAL GOVERNMENT SHUTS DOWN

Monday’s failure on Capitol Hill caused the stock market to drop on fears that gridlock would continue and Congress would shoot the recovering economy in the foot. The Dow Jones slipped 128 points, or 0.8%.

The last shutdown happened during President Clinton's time in office.
Photo by AP

 

The last shutdown happened during President Clinton's time in office.

The fight also sent Congress’ already abysmal approval plunging to a new low. A CNN poll released late Monday found that just 10% of Americans approve of the job Congress is doing, while a record 87% disapprove. And Americans are blaming the Tea Party and its no-holds-barred-against-Obama stance for the crisis — the party had its lowest favorable rating in its five-year history, at 31%.

At times Monday, Washington seemed like a real-life “House of Cards,” the Netflix drama in which D.C. power players are motivated by dark self-interest rather than the national interest.

RELATED: US LAWMAKERS TRADE BARBS AS GOVERNMENT SHUTDOWN LOOMS

Boehner arrives with his security detail at the Capitol on Monday, remained adamant that 'Obamacare' be delayed. 'This law is not ready for prime time,' he said.
JONATHAN ERNST/REUTERS 

Boehner arrives with his security detail at the Capitol on Monday, remained adamant that 'Obamacare' be delayed. 'This law is not ready for prime time,' he said.
Congress, and the government, needed to act because there was no authorization for the government to spend any money as of 12:01 a.m. on Tuesday, the start of the new budget year.

Monday’s maneuvering began in the Democrat-controlled Senate, which voted, 54 to 46, to kill a House-passed bill that would keep the government funded but delay Obamacare for a year.

The Senate then sent the House a so-called “clean” bill — one that would simply keep government running through Nov. 15. With the ball back in their court, House Republicans sought different concessions in exchange for keeping the government funded. They called for a one-year delay in the Obamacare requirement for individuals to buy coverage.

Only 36% of Americans blame President Obama for the shutdown, a poll released Monday showed. 46% blame Republicans.
Charles Dharapak/AP 

Only 36% of Americans blame President Obama for the shutdown, a poll released Monday showed. 46% blame Republicans. 
Sources: NEW YORK DAILY NEWS

Shutdown effects ripple across US

A string of cancellations and delays caused by the federal government shutdown is rippling across the United States, ruining dream vacations, upending carefully laid wedding plans and complicating the lives of millions of people.

From blood drives to daycare programs, musical performances to research projects, the disruptions caused by the political stalemate in Washington sparked growing frustrations and left people scrambling to make alternative plans.

Scores of weddings planned at national parks and monuments around the country were moved or postponed, and vacationers hustled to change their itineraries after finding iconic sites from the Statue of Liberty to the Lincoln Memorial closed.

"We're really disappointed. We spent a lot of days waiting for tickets so we just want to go inside the statue," said Gaelle Masse, a tourist from Paris who was startled to discover the Statue of Liberty was closed.
Thousands of tourists with prepaid tickets to visit Alcatraz Island, the famed prison site in San Francisco Bay, were unable to tour the former penitentiary.

In Boston, Italian tourist Federico Paliero and his girlfriend Claudia Costato peered through a closed metal gate to catch a glimpse of the USS Constitution, a wooden, three-masted US Navy ship from the 18th century docked in Boston Harbor that serves as one of the city's major attractions.

Normally buzzing with tourists, the site was nearly abandoned on Wednesday, except for a handful of people looking lost and dismayed as they gawked at a sign explaining the closure.

"Italy is not the only state with money problems," Paliero said, rubbing his thumb and forefingers together.

At Great Smoky Mountains National Park in Tennessee, park staff said nearly 30 weddings scheduled for the next two weeks are threatened by the shutdown, which also sent hundreds of campers packing.

'WORRIED ABOUT RAIN'

Two dozen weddings planned at monuments on the Washington mall in October also were threatened, a park service spokeswoman said.

"I wasn't worried about the government shutting down. I was worried about rain," said bride-to-be MaiLien Le, who was planning to walk down the aisle at the Jefferson Memorial on Saturday.

Having to possibly change venues just days before her wedding is "really upsetting," she said on NBC's "Today" show.

In northern Virginia, officials canceled blood drives that would have provided transfusions for up to 900 area patients.

The Library of Congress in Washington closed its doors, disrupting research projects and canceling a musical performance by Randy Newman.

About one-fifth of the classes at the Naval Academy in Annapolis, Maryland, were scrapped, and science laboratories at the school were shut down as furloughs for civilian Defense Department employees took hold.

The Smithsonian, which shuttered all of its museums and the National Zoo, also had to close its early childhood center even though many parents had already paid between $300 and $400 in tuition for the week, according to local radio station WTOP.

"When you have to sit down and explain to a 5-year-old why he can't go to school, it's a difficult conversation," Virginia resident Brian Katz, whose two children attend the Smithsonian Early Enrichment Center housed in the Natural History Museum, told a local Fox television station.

Juleon Rabbani, 28, got a call from the National Park Service informing him that his scientific research in national parks would be shut down for now, compounding funding issues he was already facing.

"I wanted to graduate in the fall of 2014, but with my funding being held up and since my research sites are national parks, it will be well into 2015 before I am done," he said. "The funding I need won't come through, and who knows how long this shutdown will be."

Some Washington businesses faced growing uncertainty as the shutdown continued, keeping government events away from hotels and federal workers out of their usual restaurants.

David Hill, general manager for two area hotels, said two dozen events at the hotels have been canceled in the coming weeks, including one large government group that triggered a $45,000 loss.

"What I've told my team is: for us, it's business as usual ... but everything in the future is in limbo," said Hill, who manages the Phoenix Park Hotel just blocks from the US Capitol and the Four Points by Sheraton near the White House.

Grain traders in Chicago were preparing to cope without weekly US Department of Agriculture data on export sales typically released on Thursdays. The data, covering sales the previous week, can roil prices for crops like corn and wheat if demand is unexpectedly strong or weak.

"For now, we'll go with our best guesses," said Sterling Smith, futures specialist for Citigroup.

Traders and analysts were frustrated that USDA websites went dark as a result of the federal shutdown. They mine the sites for data on crop supplies and demand to project price trends.

Terry Reilly, analyst for Futures International, said he could not complete presentations on the grain markets for clients because USDA data was unavailable.

"It makes no sense to me that they would shut down their websites," he said.

Sources: Reuters

Tuesday 25 June 2013

Winning education, America and China!

Providing a student with a taste of life in two of the most powerful and dynamic nations in the world is a winning combination.

I AM always being asked by anxious parents about where they should send their sons and daughters to school or university.

As a graduate of a British university, most people would expect me to be a big promoter of UK institutions.
In the past, that would have been the case, but nowadays I’m no longer so convinced.

Indeed, the smartest Malaysian parents have already anticipated changing trends, sending their offspring to the United States, especially schools on the East Coast (and Ivy League colleges).

At the same time, virtually every young Chinese Malaysian scion is expected to spend at least a year or so brushing up his or her Mandarin in Beijing.

Some even attempt courses at the city’s prestigious Peking University.

To my mind, it’s a winning combination: providing a student with a taste of life in two of the most powerful and dynamic nations in the world.

This doesn’t mean that I think American graduates (even Ivy Leaguers) are cleverer than their British counterparts.

If anything, they’re just more articulate and confident.

These are qualities, however, that tend to evaporate the moment they put pen to paper.

Indeed, I’ve never understood the educational value of multiple choice tests so in vogue in the American education system.

Why is this trend occurring?

Well, for one thing, American universities really score in terms of the money at their disposal and the incredibly diverse student body.

This in turn creates a superb and influential network for the future for their students.

At the same time, one of the most high-profile recent British graduates was Bo GuaGua, the son of disgraced Communist Party apparatchik Bo Xilai.

The young Bo studied at the elite British public school, Harrow, followed by Oxford University’s Balliol College.

When his father and mother fell so spectacularly from grace, GuaGua’s ostentatious ways and flamboyant educational choices were viewed as evidence of his parent’s waywardness and lack of discretion.

With China now the source of the world’s largest number of overseas students (surpassing even India), GuaGua’s disastrous stint in the UK may well prove to be a powerful disincentive for other parents in Beijing and Shanghai.

Indeed, a million Chinese students were studying abroad by the end of 2006 and in 2011 alone, 340,000 students headed overseas.

The shift may well take time as London remains an important financial capital despite its fading diplomatic leverage.

Still, the Great Power rivalry across the Pacific means that the United States possesses a powerful allure for Chinese parents as they seek to prepare their children for the future.

The children of China’s new rich can now be found in places like the Phillips Andover Academy (founded in 1778, the alma mater of President George W. Bush), its rival Phillips Exeter (1781) and the Groton School (1884, where President Franklin Delano Roosevelt studied).

They’re attractive to Chinese parents because it gives their children the edge for entry to Ivy League universities like Harvard or Yale.

Even Bo GuaGua headed to the Harvard Kennedy School (HKS) to study public policy after Oxford.

US Department of Homeland Security numbers indicate that there were 6,725 Chinese students in American secondary schools in 2011, compared to just 65 in 2006.

Overall, more than 157,000 Chinese students studied in America that year – a full 22% of the total number of foreign students there.

China again surpassed India as the largest source of overseas students for America in 2010.

Malaysia, in contrast sent just 6,190 students to America that year.

It would seem that many Malaysians still hanker for British educational institutions – perhaps to our disadvantage.

As this is being written, the best and brightest minds from the world’s two superpowers are rubbing shoulders in the schoolyards and lecture halls of America as well as, increasingly, China.

It’s always a good thing when young people come together.

Perhaps the long-feared clash between China and the West may not materialise after all as children from both compete in their respective elite institutions instead.

  Ceritalah
By Karim Raslan

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Wednesday 23 January 2013

Chance to invest in distressed assets

Distressed property markets where deals are difficult to finance and yield spreads are at all-time highs provide attractive investment opportunities, according to Morgan Stanley’s real estate unit.

In the Asia-Pacific region, Morgan Stanley Real Estate Investing is most focused on China, India, Australia and Japan, said Olivier de Poulpiquet, who helps oversee $36 billion in real estate assets as the global co-head for the unit.

In India and China, demand is driven by strong demographic trends amid a dearth of financing, while in Australia and Japan, low borrowing costs are providing opportunities, he said.

Morgan Stanley, with a team of 280 globally in 11 countries dedicated to the property business, has about 45 percent of its investments in the U.S., 33 percent in Asia and about 22 percent in Europe.

In many developed markets, such as U.S., Japan and Australia, the yield spread between real estate and the risk free rate, typically the interest rate on U.S. Treasury bills, is as much as 400 basis points, de Poulpiquet said.

“Asia and the U.S. will continue to offer opportunities,” de Poulpiquet said in an interview in Singapore yesterday. “Investments in real estate have seen a flight to safety globally and in particular in the U.S. and Europe.”

Interest in property investments by institutional investors is improving as the asset class is viewed as an effective portfolio diversifier and an inflation hedge, de Poulpiquet said. Allocations to real estate by major institutions may climb from an average of 7 percent currently to 10 percent, he said, without providing a time frame for the increase.

India, China

In India and China, Morgan Stanley is finding opportunities by financing developers that are seeking money to complete projects amid a scarcity of capital, de Poulpiquet said.

In its almost three-year effort to tighten the property market, the Chinese government has raised down-payment and mortgage requirements, imposed a property tax for the first time in Shanghai and Chongqing, and enacted home-purchase restrictions in about 40 cities. India’s biggest developers have struggled to rein in record debt as they grapple with high borrowing costs, dwindling sales and banks’ reluctance to lend.

“The major trend in these markets is that this growth is combined with a capital constrained environment for real estate, mostly driven by government interventions and price cooling measures,” de Poulpiquet said.

“In India and China, there is less opportunity to buy existing assets but greater opportunity to pick the right developer and build to either lease or sell.”

Favorable Demographics

India will have 127 million more working age adults by 2020, while in China, the 470 million adults leaving rural areas for cities will reach a rate of 11 million per year, said de Poulpiquet.

Over the next 15 years, the total global urban space growth will reach about 82,000 square kilometers (31,660 square miles), 47 percent of which will be driven by India and China, he said.

In markets such as Shanghai, the supply of class A office spaces is relatively low while demand is forecasted to remain robust, de Poulpiquet said. In India, the trend is similar where the residential sector continues to offer interesting opportunities, he said.

In Australia, distressed assets sold by European banks which are undergoing deleveraging processes to clean up their balance sheets are attractive, said de Poulpiquet.

In Japan, Morgan Stanley is buying class B office assets in Tokyo and greater Tokyo, he said.

“In many markets globally, including Japan and Australia you can buy class B plus assets, at significant yield differential between your cost of borrowing and the real estate yield,” said de Poulpiquet. “It is a relatively safer investment with good quality yield and return profile.”

Europe will also increasingly offer attractive investments in real estate with all the level of distress in the market, he said. Still, Morgan Stanley remains “cautious” and focused on making “defensive investments” in the region as prices still have some room to fall, he said.

“Overall, we will see slower growth, more volatility but in Europe, it’s neither a doomsday scenario nor in a happy recovery and this will last for a while,” he said.- Bloomberg

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Wednesday 7 November 2012

America's problem: Money politics seldom supports reforms


“Money politics” has become even more prominent in the U.S. presidential race this year.

In 2010, the U.S. Supreme Court removed the limits on corporate donations to political campaigns and ruled that corporate donations are a protected form of free speech. As a result, this year’s congressional and presidential elections have become the most expensive in U.S. history, with billions of U.S. dollars spent already.

While rich people are throwing loads of money into the presidential election, ordinary Americans are worried about their own financial conditions.

Over the past 20 years, the income of middle-class Americans has been on the decline, and the income gap is becoming increasingly wide.

A poll has found that most Americans believe that too much money has been spent on the elections, and political contributions will only enhance rich people’s influence over the policy-making. No matter who is elected the U.S. president, he is bound to pay more attention to the needs of the rich than those of the poor.

Rich people are enjoying greater influence in politics, while the rights of ordinary voters are being damaged, which runs counter to the U.S. constitutional principle of “political equality.”

The economy is the decisive factor in this year’s presidential election, but the two candidates have mainly attacked each other, and failed to introduce specific plans for solving the country’s economic problems when it comes to debates on economic issues.

The weak U.S. economy is a result of both the global financial crisis that broke out a few years ago and the country’s own political problems. All Americans see on television is the ugly partisan strife and politicians’ lack of courage to carry out reforms.

The U.S. president needs great public support to lead the country out of crisis, and should figure out whether he rules simply for the sake of ruling or acts only after carefully considering the people’s immediate and long-term interests. Americans should remember that money politics seldom support reforms.

Read the Chinese version: “金钱政治”砸不出变革动力

Source: People's Daily; Author: Zhong Sheng

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