Capitalism without Conscience

As Indians and Chinese work to out-do the U.S. and become greater capitalists, it is highly imperative that everyone is wary of capitalism run amok and investors ruining the lives of the poor and the children.

India Microcredit Sector Faces Collapse From Defaults - NYTimes.com: "India’s rapidly growing private microcredit industry faces imminent collapse as almost all borrowers in one of India’s largest states have stopped repaying their loans, egged on by politicians who accuse the industry of earning outsize profits on the backs of the poor.

The crisis has been building for weeks, but has now reached a critical stage. Indian banks, which put up about 80 percent of the money that the companies lent to poor consumers, are increasingly worried that after surviving the global financial crisis mostly unscathed, they could now face serious losses. Indian banks have about $4 billion tied up in the industry, banking officials say.

“We are extremely worried about our exposure to the microfinance sector,” said Sunand K. Mitra, a senior executive at Axis Bank, speaking Tuesday on a panel at the India Economic Summit.

The region’s crisis is likely to reverberate around the globe. Initially the work of nonprofit groups, the tiny loans to the poor known as microcredit once seemed a promising path out of poverty for millions. In recent years, foundations, venture capitalists and the World Bank have used India as a petri dish for similar for-profit “social enterprises” that seek to make money while filling a social need. Like-minded industries have sprung up in Africa, Latin America and other parts of Asia.

But microfinance in pursuit of profits has led some microcredit companies around the world to extend loans to poor villagers at exorbitant interest rates and without enough regard for their ability to repay. Some companies have more than doubled their revenues annually.

Now some Indian officials fear that microfinance could become India’s version of the United States’ subprime mortgage debacle, in which the seemingly noble idea of extending home ownership to low-income households threatened to collapse the global banking system because of a reckless, grow-at-any-cost strategy.

Responding to public anger over abuses in the microcredit industry — and growing reports of suicides among people unable to pay mounting debts — legislators in the state of Andhra Pradesh last month passed a stringent new law restricting how the companies can lend and collect money..."

Bloomberg Backs Uruguay's Anti-Smoking Laws - NYTimes.com: "Uruguay, viewed as a world leader in antismoking laws, is being sued by Philip Morris International in a Washington-based affiliate of the World Bank. The cigarette giant objects to two new Uruguayan laws. One covers 80 percent of the front and back of cigarette packages with a graphic health warning. The other bans more than one type of any brand of cigarette, such as Marlboro red, gold and silver.

The suit has rallied antismoking forces globally. They interpreted it as an attempt to intimidate Uruguay and send a message to other developing nations on the eve of a conference of tobacco control officials from 171 nations. The conference in Punta del Este, Uruguay, is expected to produce guidelines to enforce a broad antismoking treaty sponsored by the World Health Organization."

Fla. dealership offers free AK-47 for truck buyers - Weird News - Kentucky.com: "SANFORD, Fla. -- A central Florida dealership trying to drum up business is offering an unusual perk for potential used-truck buyers: A free AK-47 assault rifle.
General sales manager Nick Ginetta says that since the promotion was announced on Veterans Day, business has more than doubled at Nations Trucks in Sanford.
Customers would have to pass a background check before using the $400 gun shop voucher. They also have the option of using the money toward other firearms, or they can request a check in that amount instead."