Willem Buiter, a former member of the UK’s Monetary Policy Committee who blogs for the FT, complains that macroeconomists have simply discarded the difficult stuff to make their models more elegant: “They took these non-linear stochastic dynamic general equilibrium models into the basement and beat them with a rubber hose until they behaved.”
Economists now understand much more than Keynes ever could about networks and complex interactions (thanks to agent-based modelling), psychology (thanks to behavioural economics) and the real world (thanks to econometrics). In principle, these advances should inform our understanding of the crisis. An early attempt is Animal Spirits, a book by George Akerlof, a Nobel laureate, and Robert Shiller, who identified the housing bubble early.
China simply makes too much steel. The government estimates that China’s annual production is about 100 million tonnes more than it should be, a figure equal to the whole annual output of the industry in the United States.
Worse, China has far too many steel companies, more than 700 at last count. Add in iron companies and companies that roll or otherwise shape steel, and the total comes to more than 7,000. Despite repeated government attempts to force them to consolidate into fewer, bigger companies, most of them are still small and inefficient.
Prices for Chinese hot-rolled steel fell to about $400 (U.S.) a tonne in March, less than half the peak of $980 a tonne hit last year.
China has 5,000 cement makers, 3,800 glass makers, 3,500 pulp and paper producers, and no less than 24,000 chemical companies.
As for steel, low prices coupled with China’s relatively high cost of production may have already tipped the trade balance in favour of imports. Russian steel producers “have been selling into the Chinese market at very competitive prices, and China might actually have become a net importer of steel in March,”
The IPO scam, unearthed in April 2006, involved depositories, depository participants and market operators, who allegedly used or helped some entities use 59,000 fictitious demat accounts to corner shares meant for small investors.
In November 2006, Sebi passed another order against NSDL and a few others asking them to pay a sum of Rs115.82 crore for alleged carelessness in opening of demat accounts. Of this, NSDL’s share was Rs45 crore. This led to NSDL filing an appeal with SAT.