Energy watchdog warns against reliance on fossil fuels

The Paris-based International Energy Agency warned today that world governments are locking themselves into a potentially disastrous future that depends too much on fossil fuels. The message came as the IEA released its annual World Energy Outlook.

The IEA has served as a kind of energy watchdog for industrialized nations since the 1973-74 oil crisis.

"We cannot continue to rely on insecure and environmentally unsustainable uses of energy,” said IEA Executive Director Maria van der Hoeven, adding that recent events helped illustrate the dangers, "The Fukushima nuclear accident, the turmoil in parts of the Middle East and North Africa and a sharp rebound in energy demand in 2010, which pushed CO2 emissions to a record high, highlight the urgency."

The IEA has projected a growth in world energy demand of 33% by 2035, most of it driven by China, India and emerging economies. But it also believes that the share of global energy provided by renewable sources, under current mandates, will rise from 13% currently to only 18% during the same period.

That means that the demand for oil, for example, will only continue to increase, from 87 million barrels a day in 2010 to 99 million barrels a day in 2035, the IEA said. The use of coal, the IEA predicts, will rise 65% by 2035.

“Governments need to introduce stronger measures to drive investment in efficient and low-carbon technologies," van der Hoeven said.

The IEA said the modest rise in the share of energy gained by renewables by 2035 was also predicated on a growth in government subsidies from a current $64 billion to $250 billion by 2035, a rise that is by no means certain "in this age of fiscal austerity." The IEA also noted that government subsidies of fossil fuels amounted to $409 billion in 2010.

Also: Gasoline could hit record highs in 2012

A boom in U.S. oil production

Expected delay in pipeline decision

-- Ronald D. White

Photo: A National Transitional Council fighter patrols the Libyan Oil Refining Co. in Ras Lanuf, west of Tripoli. The Libyan civil war shut down that country's 1.6-million-barrel-a-day oil production. The unrest throughout the Middle East was a sign, says the IEA, of the peril of dependency on fossil fuels. Credit: Youssef Boudlal / Reuters

 

 

Who Rules the Global Economy?

Nancy Folbre is an economics professor at the University of Massachusetts, Amherst.

Most economists today don’t ask who rules the global economy, visualizing it as a decentralized competitive market that cannot be ruled. Yet new evidence suggests that global economic clout is highly concentrated among large interlocking transnational companies.

Today’s Economist

Perspectives from expert contributors.

Three Swiss experts on complex network analysis have recently examined the architecture of international ownership, analyzing a large database of transnational corporations. They concluded that a large portion of control resides with a relatively small core of financial institutions, with about 147 tightly knit companies controlling about 40 percent of the total wealth in the network.

Perspectives from expert contributors.

Their analysis draws heavily on network topology, a methodology that biologists use to good effect. An article in the British magazine New Scientist describes the research as evidence of a global financial oligarchy.

The technical details of economic network analysis are daunting, but the metaphors evoke a “Star Trek” episode: the network is described as a bow-tie shaped “super entity” of concentrated corporate ownership. One cannot help but worry about threats to the safety of the starship Enterprise.

In recent years, research on industrial organization has focused more on corporate strategy than on social consequences. A recent article in the socialist journal Monthly Review, by John Bellamy Foster, Robert W. McChesney and R. Jamil Janna, criticizes both mainstream and left-wing economists for their lack of attention to monopoly power.

Focusing on the United States, they note that the percentage of manufacturing industries in which the largest four companies account for at least 50 percent of shipping value has increased to almost 40 percent, up from about 25 percent in 1987.

Even more striking is the increase in retail consolidation, largely reflecting a “Wal-Mart effect.” In 1992, the top four companies accounted for about 47 percent of all general merchandise sales. By 2007, their share had reached 73.2 percent.

Banking, however, takes the cake. Citing my fellow Economix blogger Simon Johnson, the Monthly Review article notes that in 1995, the six largest bank-holding companies (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley) had assets equal to 17 percent of gross domestic product in the United States. By the third quarter of 2010, this had risen to 64 percent.

Some of these companies have undergone name changes in the process. A graphic published about a year ago in Mother Jones beautifully illustrates their merger history.

Large companies are often able to offer lower prices than small ones because they can take advantage of economies of scale. On the other hand, if their market power reaches a certain level, they can increase prices as much as they like. The consequences of economic concentration for consumers are complicated by more difficult-to-trace impacts on small businesses, American workers and small businesses.

The concentration of economic power at the top distills political power in ways described long ago by the sociologist William Domhoff in his classic “Who Rules America?” The related Web site provides updated information, exhorting today’s “change agents” to conduct social scientific research seriously.

Public concerns about economic concentration are stoked by hard times. Congress authorized a full-scale investigation of the topic back in days of the Great Depression.

Seems like the time has come for a fully international update.

Inflation and property prices ease in China

Inflation in China eased for the third consecutive month in October on government policy tightening that has also started to drive residential property prices down with greater momentum.

China’s annual inflation rate fell to 5.5%, the country's National Bureau of Statistics said Wednesday, down from 6.1% in September.

The decline potentially gives the central government room to ease new credit after months of strict controls aimed at cooling down the country’s overheated economy.

Looser bank lending may soon be necessary to blunt the effects of another global recession and carefully guide economic growth down from unsustainable annual rates of 9% to 10%.

“Weakness in the export sector will be the main hindrance to economic growth in the coming quarters,” Jing Ulrich, an economist for J.P. Morgan, said in a research note. “However, with falling inflation clearing the way for policy easing, we believe that China will manage a ‘soft landing,’ achieving respectable GDP growth of 8.3% in 2012.”

That will require delicate policy tinkering as signs are growing that China’s frothy property market has begun its long-awaited correction.

A national index of property prices in 100 cities has declined two consecutive months as cash-strapped developers are experiencing steep declines in sales.

Tight credit and rules targeting speculators could drive prices down 10% to 30%, according to Barclays Capital.

That’s a relief to potential homebuyers priced out of the market and to a government worried a property bubble was stoking social instability.

So far, only angry homeowners have openly protested changes in prices. Last month, hundreds gathered outside the offices of a Shanghai developer that cut prices, demanding refunds and contract cancellations.

The government risks sinking prices at its own peril. Real estate accounts for a fifth of China’s economy, according to some estimates, and contributes up to half of local government revenue in the form of public land sales.

Still, Premier Wen Jiabao remains committed to driving residential prices down.

“We aim to lead housing prices back to a reasonable level and promote a healthy development of the real estate industry at the same time,” Wen told reporters Sunday.

RELATED:

China appears unlikely to come to Eurozone's rescue

China's economy slows in third quarter

Inflation remains a worry in China

-- David Pierson  

twitter.com/dhpierson

Photo: Two women look at buildings under construction in Chongqing, China. Credit: Getty Images

Thin profits, high fuel costs winnow Pacific trade players

Most of the cargo lumbering along on the gigantic ships of the transpacific trade are traveling between Asia and the United States. But only two U.S.-flagged and -headquartered companies have a piece of the action, and it's a very small piece indeed.

As of Thursday, there will be only one.

On Nov. 10, a cargo ship operated by Charlotte, N.C.-based Horizon Lines will depart the U.S. West Coast with supplies for Guam for the last time. That voyage will end the company's Five Star Express service between China, Guam and the U.S., which had been in operation for less than a year.

Horizon Lines had begun the service in December, when the recovery from the deep global recession still seemed strong, and had hoped to grab a share of what was then a lucrative route in international trade. But trade levels failed to meet expectations, competition drove down freight rates, and high oil prices drove up the cost of the bunker fuel that the ships use.

"This has been a very difficult decision," said Stephen H. Fraser, president and chief executive of Horizon Lines. "Our decision to exit this highly volatile market will allow Horizon to focus on our core domestic ocean shipping services, and provide the opportunity to produce a more profitable and stable financial performance over time."

The transpacific trade, like most of the world's major ocean shipping routes, is dominated by huge foreign carriers that are large enough to roll with tough times. The three biggest -- APM Maersk of Copenhagen, Geneva-based Mediterranean Shipping Co. and Marseille-based CMA-CGM -- each has a fleet larger than that of the U.S. Navy.

Horizon is small by comparison, ranked 33rd in the world by the French maritime industry consulting firm AXS Alphaliner in terms of the amount of cargo it can haul and the number of ships it has in operation.

Alphaliner said that Horizon is one of six companies that entered the transpacific trade in the last two years. All but two have since dropped out.

Horizon said the amount that it could charge customers to transport a 40-foot cargo container has fallen 37% in the last 12 months, down to $1,500. During the same period, Horizon's fuel costs rose by 40%.

Oakland-based Matson Navigation Co., a subsidiary of Honolulu-based Alexander & Baldwin Inc. and the last U.S. carrier on the transpacific trade route, has said it will offer service to Horizon's customers.

Also:

Cargo surge takes a holiday

Manufacturing growth slowed in October

Chinese economy grows at slowest pace in two years

-- Ronald D. White

Photo: A forklift arranges cargo containers near a port in Shanghai. Declining freight rates and high fuel costs along the ocean route between Asia and the U.S. have resulted in a rising number of companies abandoning the trade. Credit: Eugene Hoshiko / Associated Press

Jefferies suffers as investors look for the next MF Global

As investors wonder which Wall Street firm might be the next to catch the cold that brought down MF Global last week, most of the suspicion has fallen on one originally founded in Los Angeles, Jefferies.

Investors have sent Jefferies stock down nearly 20% from before MF Global's bankruptcy, leading the firm to spend much of the last week beating off rumors that it may soon suffer from the same problems with European sovereign debt that brought down MF Global.

MF Global took a series of ultimately fatal bets on the bonds of struggling European nations, causing clients to worry that MF Global would find itself unable to sell those bonds and unable to carry out other customer business. That fear proved contagious and ultimately sunk MF Global, according to industry experts.

Just this morning, Jefferies announced that it took the highly unusual step over the weekend of selling off 50% of its holdings of European bonds, just to show that it could.

"We undertook this reduction in our holdings solely to demonstrate the liquid nature of this market-making trading book,” Jefferies Chief Executive Richard Handler said in a statement explaining the move. 

The big bets on European bonds at MF Global were part of a strategy -- initiated by its recently hired chief executive, Jon Corzine -- to expand the firm through risky bets made with the company's own funds.

Jefferies has had a similar business model to MF Global's -- at least before Corzine took over -- but Jefferies executives have been trying to convince investors that they did not take the kind of bets that Corzine pushed for at MF Global.

Last week, Handler released a full accounting of Jefferies' holdings of European bonds. 

"We decided the only way to conclusively dispel rumors, misinformation and misplaced concerns is with unprecedented transparency about internal information that is rarely, if ever, publicly disclosed," Handler said in a statement on Nov. 4.

That was not enough to calm worried investors. The stock price continued to sink, leading to the unusual moves over the weekend. This morning, those moves gave Jefferies stock an initial boost, but it has recently sunk down again almost to the level where it closed Friday afternoon. It is currently trading up 1.6%, or 19 cents, to $12.26.

A columnist at the Wall Street Journal this morning wrote evocatively that Jefferies is "being strip-searched at gunpoint by the markets."

RELATED:

Jon Corzine resigns as CEO of MF Global

Jon Corzine caught up as MF Global inquiries escalate

MF Global is investigated for possible misuse of customer funds

-- Nathaniel Popper in New York
Twitter.com/nathanielpopper

Airline traffic worldwide up nearly 6% in September

Airline passenger traffic jumped nearly 6% in September over the same month last year but industry leaders worry that future numbers won't be as positive.

The International Air Transport Assn., the trade group for the world's largest airlines, reported the September increase but said economic uncertainty in Europe and proposed tax increases in the U.S. could jeopardize future growth and profits.

While passenger traffic increased 5.6% in September, air freight traffic dropped 2.7% in the same month, marking the fifth straight decline, according to the trade group.

The trade group attributed most of the increase in global passenger traffic to growth in emerging markets, such as Latin America, where demand jumped 10.6%, according to the trade group. A weak euro may have prompted more travel into Europe, sparking a 9.2% increase in traffic among European-based airlines, according to the group.

In North America, demand increased only 1.2% in September, compared with the same month last year, the association said.

IATA's director general, Tony Tyler, said economic uncertainty and a proposal by the Obama administration to increase taxes on airlines could cut into growth and future airline profits.

"September's strength in passenger demand was a pleasant surprise," Tyler said. "We are still expecting a general weakening in passenger traffic as we head toward the year-end."

Related:

International travel to the U.S. expected to boom

Airline industry continues to hire for now

Christmas travel spending to increase, survey says

--Hugo Martin

Photo: Passengers wait for flights at Los Angeles International Airport. Credit: Los Angeles Times.

Seaport traffic will grow slightly through the end of the year

Global Port Tracker, the monthly study of retail goods imported to the U.S. through the nation's largest seaports, has greatly reduced its expectations for the remainder of 2011. The numbers suggest the economic recovery is weaker than  previously believed.

One month ago, the report's authors, Hackett Associates, had been expecting a nearly 12% increase in imported goods in September. The jump in September was also to have been followed by a slow tapering off of holidays sales traffic, but the initial surge never materialized.

Now, Global Port Tracker says that cargo imports through the ports of Los Angeles, Long Beach, Oakland, Seattle Tacoma, New York-New Jersey, Virginia, Savannah, Charleston and Houston rose by just 2.7% in September when compared to the same month a year ago.

October is now expected to show a 2.6% increase in import traffic compared to a year earlier, but the National Retail Federation was putting the numbers in the best possible light.

"Retailers are poised to succeed in maintaining the careful balance between inventory and sales that keeps customers happy while keeping retailers profitable,” said Jonathan Gold, vice president for supply chain and customs policy for the National Retail Federation.

The National Retail Federation is also forecasting 2.8% growth in holiday sales this November and December, for a total of $465.6 billion, compared to the same two months at the end of last year.

Although the numbers aren't a strong as the National Retail Federation would have liked, Hackett Associates founder Ben Hackett said that it could have been much worse.

“General economic indicators are giving us a mixed set of signals,” Hackett said. “Yet at the same time there are indications that things are not quite that bad. We are of the opinion that the probability for economic growth is higher than the probability of recession.”

Also: Cargo surge takes a holiday

Cleaner engines for short line railroad

 Southern California needs this jobs generator

--Ronald D. White

Photo: A Pacific Harbor Line locomotive on the right hauls cargo containers of imported goods bound for the nation's store shelves. Credit: Katie Falkenberg / Los Angeles Times

 

Wal-Mart executives resign in China labeling scandal

Wal-Mart said Monday it was replacing the head of its operations in China, the giant U.S. retailer's latest setback in the country after employees were arrested and detained last week in the western city of Chongqing in connection with a labeling scandal.

The company said in a statement posted on its website that Ed Chan, its chief executive in China since 2007, was leaving the company for personal reasons. Clara Wong, a senior executive for human resources, was also stepping down, the statement said.

Though Wal-Mart did not link the personnel moves to the controversy in Chongqing, the company continues to deal with fallout from charges that it sold about 140,000 pounds of pork over the last two years that was mislabeled as a more expensive organic variety. The added cost to consumers amounted to about $115,000, according to the city government's website.

Wal-Mart executives resign in latest set-back for U.S. retailer in China

Wal-Mart said Monday it was replacing the head of its operations in China, the latest set-back in the country for the giant U.S. retailer after employees were arrested and detained last week in the western city of Chongqing over a labeling scandal.

The company said in a statement posted on its website that Ed Chan, its CEO in China since 2007, was leaving the company for personal reasons. Clara Wong, a senior executive for human resources was also stepping down, the statement said.

Though Wal-Mart did not link the personnel moves to the controversy in Chongqing, the company continues to deal with fallout over charges it sold about 140,000 pounds of pork the past two years that was mislabeled a more expensive organic variety. The added cost to consumers amounted to about $115,000, according to the city government’s website.

Poll: Americans struggling more than Chinese to keep families fed

Nearly 20% of Americans found it difficult to put food on the table over the last year, according to a Gallup poll released this week. In China, however, only 6% of residents are running into the same problem, the study found.

It’s a sharp turnaround from 2008, when 9% of Americans were worried about feeding their families, compared with 16% of Chinese.

But the nominal economic recovery has been difficult in the U.S. with incomes slipping amid high food and gas prices. Meanwhile, the class of uber-wealthy Chinese seems to be growing, even as a huge portion of the country remains poor.

On the housing front, Americans are better equipped to afford a place to live, with 11% of U.S. residents struggling to afford shelter compared with 16% of Chinese.

But that gap may narrow –- the percentage of people grappling with housing prices has shrunk in China since 2008 while growing in the U.S.

The Asian superpower lashed out this month at the U.S. over accusations that its yuan currency is undervalued. Not long after a bill that would impose tariffs on Chinese goods cleared the Senate, China's Foreign Ministry urged the House to reject the legislation.

"This won't solve America's own economic and employment problems," said Ma Zhaoxu, a Foreign Ministry spokesperson, in a statement.

RELATED:

China's trade surplus shrinks on weakened global demand

Chinese inflation remains high amid signs of economic slowdown

Trade deficit with China cost nearly 2.8 million U.S. jobs since 2001

-- Tiffany Hsu

Photo: A vendor waits for customers at a Beijing fruit stall. A recent Gallup pound found 20% of Americans struggled with putting food on the table compared with 6% of Chinese residents. Credit: AFP/Getty Images

Chinese inflation remains high amid signs of economic slowdown

Inflation in China moderated in September for the second consecutive month, but still remained stubbornly high amid growing signs of a global slowdown.

China’s consumer price index, the main gauge of inflation, grew 6.1% from a year earlier, down slightly from a 6.2% rise in August.

The index remains far above the 4% annual target set by the central government, making it difficult to loosen monetary policy if China’s economy is pulled into a global decline.

There’s evidence that the world’s second-largest economy may be slowing down.

Trade data released Thursday showed Chinese exports decreased in September over slackening European demand and a strengthening yuan, the country’s currency.

Prices for crude oil and copper fell on news of the data, reflecting jitteriness in China’s ability to import commodities as voraciously as it has in the past.

Meanwhile, thousands of small businesses in China’s coastal provinces are reportedly being squeezed by the country’s credit crunch. China’s State Council said it would support the small firms by increasing loans and offering tax breaks.

But central leaders say reining in inflation remains an overall priority –- dulling expectations that policymakers will loosen credit, drop interest rates or lift buying restrictions in China’s stagnant residential property market.

“For the moment, we remain in policy stasis -– no more tightening, but no real loosening -– while Chinese authorities nervously eye developments in the Eurozone,” said Alistair Thornton, an analyst for IHS Global Insight in Beijing. “It is the Eurozone and U.S. that form the greatest downside risk for China’s outlook.”

RELATED:

China’s trade surplus narrows in September

China calls on U.S. to oppose currency legislation

Senate OKs sanctions for nations holding down currency values

-- David Pierson  

Twitter.com/dhpierson

Photo: Customers look at prices for vegetables at a supermarket in Hefei, China. Credit: Reuters

California winemakers hail South Korean trade agreement

California grape growers and vintners are excited about ratification by Congress of a free-trade agreement with South Korea.

The treaty calls for the immediate removal of a 15% Korean tariff on California wine and 45% import duty on grape juice concentrate. Korean excise, value-added and other taxes on California wines also will be lowered, making the products more attractive and affordable to Korean consumers.

California accounts for 90% of all U.S. wine exports to South Korea, which totaled 500,000 cases worth $11.2 million last year.

Korea has a significant wine-drinking culture, with import consumption growing 177% in the last decade, said Robert P. "Bobby" Koch, president of the Wine Institute, a trade group based in San Francisco.

California long had been the second biggest exporter of wine to Korea, behind France. However, Chile surpassed the Golden State in 2005 after the South American nation signed a trade agreement with Korea that sharply lowered import duties. The European Union signed its own treaty with Korea, which became effective on July 1, boosting the likelihood of increased wine sales.

The U.S. action Wednesday is expected to make California wines more competitive in the growing Korean market.

Related:

Redwoods versus red wine

Farm brings every muscat imaginable

New law bans self-service alcohol sales

-- Marc Lifsher

Photo: Foley Winery in Santa Ynez Valley. Credit: David Langford / Associated Press

Wall Street: Stocks and gold rising

Gold: Trading now at $1,668 an ounce, up 2.0% from Friday. Dow Jones industrial average: Trading now at 11,360.94, up 2.3% from Friday.

Big Monday. Stocks are having a big day as investors grow encouraged about the rescue effort in Europe and financial data in the U.S.

Recession averted? Bloomberg thinks the good economic data of the last week is enough to say that a recession has been averted. 

Earnings season. Bank earnings season begins again this week, and the results are not expected to be good.

Lehman averted? A struggling Belgian bank was broken up in a surprisingly peaceful fashion over the weekend, averting what some thought would be a calamitous collapse.

Nail in the coffin. One of the last vestiges of Bernie Madoff's empire -- a trading division that had been sold off after Madoff's Ponzi scheme was exposed -- has now bitten the dust.

Paulson's bad year. For John Paulson, the hedge fund magnate who made billions of dollars betting against the subprime mortgage market, the bad news keeps coming -- one of his funds has lost almost 50% since the beginning of the year.

-- Nathaniel Popper in New York
Twitter.com/nathanielpopper

Photo credit: Stan Honda / Getty Images

Next-generation cargo ships will be the largest ever

During slow economic times, on-road freight haulers park trucks and rail lines idle locomotives. If the need is for greater efficiency, standard operating procedure might be to convert to smaller and lighter transports, but ocean freight lines have a different response to both: They build bigger ships.

The reason, say the shipping lines: better economies of scale. It costs less to send a string of three or four big ships across the oceans instead of a larger fleet of smaller vessels. The new ships also will have more efficient engines and lower emissions, which means lower fuel costs as well.

Danish shipping giant AP Moller Maersk, for example, is spending $1.9 billion on 10 new ships that will carry 18,000 cargo containers each. The new ships will have a cargo capacity 16% greater than the world's biggest cargo ship currently afloat, the Emma Maersk. They will be more than 1,312 feet long, more than 193 feet wide and will stand 239 feet tall.

The new ULCS, or Ultra Large Container Ships, could hold an NFL football field, a standard NHL hockey rink and an NBA basketball court, laid end to end, and still have room to spare.

Maersk is not alone in the shipbuilding binge. AXS Alphaliner, the Paris-based maritime research firm, released a report Wednesday that said: "It appears that the container carriers’ answer to the challenges of sustainable shipping and the reduction of emissions is to build ever-larger ships. Compared to a decade ago, the average container ship size has doubled."

To give a sense of the scale of this transition, Alphaliner says that 48% of all new ships built in the coming years will be able to carry 10,000 or more cargo containers. Just five years ago, the world's largest container ship, the Gudrun Maersk, had a capacity of 9,500 containers.

Maersk said the new ships will help it achieve its goals of reducing costs and lowering emissions, while hopefully impressing customers.

"It is not only a top priority for us, but also for our customers, who depend on us in their supply chain, and also for a growing number of consumers who base their purchasing decisions on this type of information," said Maersk Line chief executive Eivind Kolding.

Also:

Short rail line gets greener

Port cargo declines in August

Justices request opinion in California clean air case

-- Ronald D. White

Photo: The Emma Maersk can hold 15,500 containers, but her days as the world's biggest cargo vessel are numbered. Credit: AP Moller Maersk.

 

Wall Street: Stocks down, gold up on mixed data

Gold: Trading now at $1,649 an ounce, up 1.6% from Friday. Dow Jones industrial average: Trading now at 10,829.38, down 0.8% from Friday.

Mixed results. Stocks have been bouncing around this morning on good news about the U.S. economy but worrying signs out of Europe.

Protest prime time. As the Wall Street protests spread across the country to Los Angeles, the 700 arrests this weekend in New York are helping the movement's cause.

Off with their heads. Roseanne Barr calls for a return of the guillotine, for use on bankers.

Inside the Koch empire. Bloomberg has a lengthy investigative take-down of the secretive company run by the Koch brothers, detailing a number of alleged instances in which the firm broke the law.

Merrill vs. Countrywide. Merrill Lynch, the Wall Street firm acquired by Bank of America, is doing okay these days but it is being dragged down by BofA's other recent acquisition, Countrywide, and employees are not happy.

-- Nathaniel Popper in New York
Twitter.com/nathanielpopper

Photo credit: Stan Honda / Getty Images

Wall Street: Stocks and gold bounce

Gold: Trading now at $1,622 an ounce, up 0.3% from Wednesday. Dow Jones industrial average: Trading now at 11,178.20, up 1.5% from Wednesday.

Good morning. Investors are feeling hopeful this morning after a vote in Germany and new data in the U.S. on unemployment and economic growth.

HP turns to Goldman. To deal with potentially hostile activist investors, Hewlett-Packard has hired a company that has experience with hostile activist investors, Goldman Sachs. 

Disappointed by banks. Investor Stephen Ross collected money to invest in banks, but his analysis of banks has disappointed him so much that he has given the money back.

Lewis on California. After providing probing analysis of what is wrong with the economies of Iceland and Greece, Michael Lewis now turns his attention to California.

A picture of protesters. Can't make it to the Wall Street protests yourself -- here is a photo gallery of 50 of the protesters camped in lower Manhattan.

-- Nathaniel Popper in New York
Twitter.com/nathanielpopper

Photo credit: Stan Honda / Getty Images

Trade deficit with China cost nearly 2.8 million U.S. jobs since 2001

The growing trade deficit with China has eliminated or displaced nearly 2.8 million U.S. jobs since 2001 -– or about 2% of all domestic employment during that period, according to a briefing paper from the Economic Policy Institute.

California was the hardest hit, losing nearly 455,000 jobs from 2001 to 2010 due to trade with the Asian giant, according to Robert Scott, the institute’s director of trade and manufacturing policy research. Texas lost nearly 233,000 positions the same way.

The increase in imports from China is only part of the picture, according to Scott. Since the Chinese yuan is pegged to the U.S. dollar, the currency remained artificially low, making U.S.-made goods more expensive in China and pushing down exports.

And heavy competition and cheap labor from abroad has pushed down wages for U.S. workers and reduced their bargaining power -– especially among the 70% of the workforce without a four-year college degree. In 2006, for example, a full-time median-wage earner lost $1,400 due to globalization, according to the report.

Since China entered the World Trade Organization in 2001, the trade deficit has boomed to $278 billion in 2010 from $84 billion in 2001.

Over that period, nearly 70% of the U.S. jobs lost were in manufacturing. Factory positions working with computer and electronic parts were especially depleted, but other jobs in apparel, textile fabrics and motor vehicles and parts were also significantly affected.

RELATED:

Chinese currency quickening pace of appreciation

U.S. ambassador warns China: Foreign businesses feel unwelcome

-- Tiffany Hsu

Photo: Employees stand by a Sany Heavy Industry Co. 86m truck mounted concrete pump as it is introduced at the company's factory in Changsha, Hunan Province, China Monday. Credit: Forbes Conrad / Bloomberg

China rejects U.S. complaint against chicken tariffs

The steamed chicken feet just haven’t been as unctuous since China slapped tariffs on U.S. poultry imports last year.

The price of American chicken, including the prized feet euphemistically called “phoenix talons” in China, shot-up between 50% and 100%, which will cost the U.S. poultry industry an estimated $1 billion in sales by the end of this year.

With that in mind, the U.S. Trade Representative announced Tuesday it had filed a complaint with the World Trade Organization saying China violated international trade rules when it imposed anti-dumping and countervailing duties on U.S. chicken.

“China seems to have failed to observe numerous transparency and due process requirements, failed to properly explain the basis for its findings and conclusions, incorrectly calculated dumping margins, incorrectly calculated subsidy rates and made unsupported findings of injury to China’s domestic industry,” the trade office said.

In a response Wednesday, China’s Ministry of Commerce released a brief statement rejecting the U.S. claim.

“China’s anti-dumping measures follow the law and are in accordance with WTO rules,” the statement said. “China will study requests from the U.S. carefully and handle them under the WTO’s dispute settlement system.”

Imports of U.S. chicken to China have plunged 90% since the imposition of the tariffs, which are largely seen as retaliation for U.S. duties of 35% on Chinese tires.

The two countries are also sparring over steel, electronic payment services, wind energy equipment and industrial raw materials such as zinc and bauxite.

Before the battle over chicken erupted, U.S. poultry farmers enjoyed steady, high-margin business selling unwanted parts to China.

In 2008, about half the $677 million worth of chicken sold to China were chicken feet, sold for up to 80 cents per pound compared to just pennies in the U.S., according to Time magazine.

While poultry is growing in popularity in China (KFC is the king of fast food in China and expanding rapidly), pork is still the overwhelming meat of choice.

By one estimate, Chinese consume three times as much pork as chicken at nearly 100 pounds per capita each year.

With inflation driving prices-up for pork in China, U.S. hog farmers have found themselves in the opposite situation of their poultry-raising countrymen. Imports of U.S. pork have risen five-fold the first seven months of this year compared to the same period last year, according to the state-owned China Daily.

China and the U.S. now have 60 days to resolve the current dispute on their own. If negotiations fail, the WTO can launch proceedings.

RELATED:

Pork shortage hurting Chinese economy

China still restricting foreign media, U.S. complains

White House defends tariffs on Chinese tires

--David Pierson

twitter.com/dhpierson

 Photo: A woman picks out chicken wings and legs at a market in Shanghai, China, on Wednesday, Sept. 21, 2011. Credit: Qilai Shen / Bloomberg.

Port cargo numbers feed fears of slowing economy

Cargo traffic at the nation's busiest seaport complex was down in August compared with the same month in 2010, suggesting that the sluggish U.S. economy has caused retailers to order fewer goods to sell this holiday season.

At the Port of Los Angeles, which is the No. 1 ranked port in the nation in terms of volumes, imports fell 5.75% compared with August of the previous year to 376,190 cargo containers. The big bright spot was exports for Los Angeles, which rose nearly 25% to 184,232 containers compared with a year earlier.

The Port of Los Angeles is on course for a record year of exports, but that was largely the extent of the good news. At the neighboring Port of Long Beach, which ranks second only to Los Angeles in terms of volumes, imports fell 14.2% to 267,198 containers compared with a year earlier. Exports through Long Beach were also down 3.8% to 121,277 cargo containers compared with the same month in 2010.

In 2010, August was the best month for the ports in an unusual, post-global recession year in which retailers were ordering lots of products to replenish record low inventories. But this year is still a question mark.

"Retailers appear to be somewhat cautious going into the holiday season. We'll know more as we see the September and October numbers," said Los Angeles port spokesman Phillip Sanfield.

Jock O'Connell, an economist for Beacon Economics, said that retailers might be hoping to keep inventories lean enough to be able to demand top prices for their goods rather than leave themselves in a position of having too much stock and having to discount prices. He added that they can only wait so long if they expect to have goods on store shelves by the holiday shopping season.

"At some point, they have to pull the trigger," O'Connell said. "But all the economic forecasts seems to be pairing back from what they were saying a month ago. There was a hope that consumer demand would accelerate. I think there is a lot of hedging of bets right now."

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Photo: Tugboats help an OOCL container ship dock at the Port of Long Beach. Credit: Port of Long Beach

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