Tuesday, May 12, 2009

The Economist - May 9th

The Colbert Report – France is looking good. While America and Britain show what happens without much regulation, Sarkozy gets to step into the leadership role. Jean-Baptiste Colbert was finance guy in 1670’s who helped French manufacturing through state intervention – example for today.

Some big GM BS - as Auto companies head toward bankruptcy, creditors higher up on the capital structure are getting screwed. Secured creditors are getting $0.28/dollar while UAW gets $0.43/dollar.

Nepal has 30 million people? - There was a long civil war and now peace is shaky as politicians try to help get the rival armies (Maoists and Royals) together on the same page.

Zimbabwe or Japan? Are those our only options? - .4% decline in prices, but mostly b/c of energy. Core inflation at 1.8%. demand is down so central banks would rather risk inflation and reduce rates to zero.

I thought copying was bad? – sharing the results of failed medical tests would help scientists avoid needlessly repeating tests on the 50-100 million animals tested each year.

Does anyone apply to the jobs in The Economist for fun?

According to the graphic, French babies cost €889 – The French may be on to something. Government spending on stuff, instead of tax refunds. Building/upgrading infrastructure, trains, etc. GDP drop by 3% but better than the rest. Bad: young unemployment, no start-ups, low growth

Supreme Court Justice Retires; Cable News Commentators standing by – Judge Souter retired. No one know who Obama will pick, but they all know that it will be an ugly confirmation hearing. Some want a Hispanic women, to provide greater representation among the 9 judges.

Pequeños pasos to Cuba – Cuban-Americans can now easily travel to Cuba. No complaints from hard-liners. Embargo isn’t up for negotiation yet, but bill in Congress to allow all American a chance to visit Cuba.

You can reach me at a PO Box in the Bahamas – Obama wants to reform tax code, but his proposed crackdown on foreign earnings by US corporations will make it more confusing. Right now, no tax on earnings unless profits are ‘repatriated’ into US.

Choo-Choo Trains (the underground and out-of-money kind) – The MTA is the NY subway, bus and train agency. They’re $2 billion in debt and want to raise fares and charge a $1.5 billion payroll tax. Time for a bail-out! (What?, no cap and trade for subway cars?)

The Kentucky Derby is fun – Mine that Bird won the race with 50:1 odds. Attendence at 145,000. Revenue of $105 mil, down from $121, but at least a horse didn’t die on the track this year.

Coal is (not) the future! – We need coal power plants because we don’t have enough alternatives yet, but new EPA ruling allows administration to shut down plants when it wants.

Jack Kemp dead at 73– an NFL quarterback and a pretty good congressman. Supply-side economics – cut taxes – Bob Dole running mate in ’96.

Goon Squad Teacher’s Union – new education secretary, Arne Duncan, has work cut out for him in fighting the ‘blob’ (teacher’s union). Charter schools, merit pay, accountability! How will cranky, tenured 40 year high school history teachers keep their jobs?

Swine Flu cost Mexico 0.3% GDP - $1.3 billion in tax breaks to help businesses affected. Public opinion supported response, but initial response showed health service problems in poorer areas.

Even Hugo Chavez doesn’t like unions – he prefers ‘workers councils’ (nice socialist ring) – oil and industry have most union workers and threaten his plans for world domination through their collective wage agreements.

The French Empire rises again! – St. Pierre and Miquelon is an island (formerly named Island of 11,000 Virgins) off coast of Canada. French claim rights to seabed around, ostensibly for oil and gas rights. Canada not pleased. Falkland War redux!

50% off Panama Presidents, this week only! – Mr. Ricardo Martinelli is a centrist, independent, businessman who defeated the left in the presidential election. He is 2% of Panama GDP.

Counterfeiting? No, I was just ‘stimulating the economy.’ – Peru seized $40 million in fake American dollar bills. Drug traffickers moving from Columbia to Peru.

Nepal has a weird flag – High Drama in the Himalayas! Maoist PM Pushpa Dahal is out. President Ram Baran Yadav fired General Rookmangud Katawal. Compromise collapsed and concern that younger Maoists want more power, possibly at the cost of another civil war?

Indian Politics – Narendra Modi is BJP minister of Gujarat. Losing respect but has seats across country. Are American politics this confusing to Indians here in Ohio?

Shadiness in Pakistan – Supposedly a big fight in Swat valley as Pakistani soldiers fight the Taliban. America keeps asking for help against fundamentalists, then gives money. Big ??? if this is any different than past ‘offensives’ that didn’t produce results.

Afghan elections – Hamid Karzai will probably win, but that’s because he’s an incumbent, there’s no organized opposition. Low support (15%) and Taliban controls 11 and influences 100 districts out of 400.

There’s golf in Indonesia? – political murder of a CEO tied to Antasari Azhar, head of anti corruption in Indonesia. President You-da-ho-yo-now up for re-election and should probably remain at a distance (literally and figuratively).

NGOs in Singamore are craaaazy! – AWARE (Association of Women for Action and Research) was taken over by old ladies to keep it from promoting a pro-gay agenda.

What? Is Fiji water too expensive? – South Australia is running out of water. Wah. Can’t grow grapes for wine. Stupid farmers growing food used all the water.

Aussies on the stah’board bow! – Kevin Rudd, PM, is leading defense industry change. Building navy and air force to hedge against China. Spending $100 billion on cool stuff. But I thought they were friends?

I tried boiling a frog, but he didn’t look as happy as the picture – Taiwan and China are kinda getting along. China let them participate in the WHO. Taiwan might get broader economic access to Chinese markets. No big changes to sovereignty arrangements.

Sudan turns a corner? – President Omar al-Bashir is under indictment by International Criminal Court – now promises to hold elections and new envoy from Obama administration. Might be trying to get West to off his back.

Obama goes on Leno; in Guinea, the new president is Leno – Moussa Dadis is the new coup-installed leader of Guinea. He has a cool TV show where he interviews people. Promises elections soon… probably unlikely as one of Transparency International’s top ten most corrupt countries.

Tanzania and Wabenzi – Solid east Africa country – President Jakaya Kikwete pushing image but not fixing paralyzing bureaucratic problems at home. Criticizes ‘Wabenzis’ – those who drive Mercedes. Probably a bunch of NGO assholes.

Fingerpainting tonight only! Meet behind the barbed wire near the sewing class – Prisoners in Iraq do fun arts and crafts while in jails, I mean ‘camps.’ Most will be released because of little evidence. Those associated with al-Qaeda and Mahdi Army get Iraq tribunals.

Iranian President Ahmadin-na-not-gonna-get-elected – Losing support among educated and urban voters. Opposition criticize the foreign grandstanding while inflation runs at 25% and little to show for $300 billion in oil review over last four years.

Pigs in Shiite (not true, but sounded better than Sunni) – Egypt, fearful of swine flu, is ordering all 250,000 pigs to be killed. Most are owned by Coptic Christians who clean up trash and think that it’s a plot by Muslim Brotherhood to discriminate against them.

Dachshund Exports on the rise; not so much for everything else – German exports decline by 19%. Big part of GDP, but no one is buying their cool industrial stuff. Might need to rely on (gasp!) consumption.

Jerry Springer has to go to Rome (and Paraguay) – Berlusconi, Italy PM, getting divorce. Hot wife called him ‘shameless trash’ (much sexier in Italian: sfacciata cestino) Berls partying with 18 year old aspiring models. Catholic church might not look favorably, from their moral high ground…)

Save us El Plan Obama! – Plan E (yikes – they’re already down to E?) put through $11 billion but unemployment still at 17.4%. PM Zapatero not really doing anything because he doesn’t have much political support.

Risk evaluation for Georgia: invading Russians – Georgian Pres Mikheil Saakashvili probably concerned. Mutiny in tank battalion, Russia still pissed and inside South Ossetia – Russians not worried about Western intervention since they didn’t do anything last time.

If EU elections are held in the woods and nobody votes, do they still count? – EU Parliament elections have had really low turnout, probably 34% for upcoming elections. Pretty much a worthless organization, Economist drops the ‘F-bomb’ - calls it an NGO, the lowest of Economist insults…

Gordon Brown rumored to steal lunch money from Economist writers – If you’ve read anything from this blog or The Economist, you know that Britain is in bad shape and it’s fun to bash Gordon Brown. He might make it through election with economic recovery and getting support for postal service reforms.

Londonistan – American radio personality Michael Savage banned from London for his ‘dangerous speech.’ He’s pissed. Britain not really living up to ‘free speech’ standards.

$45 ID cards? – Britain wants its citizens to buy ID cards, available at your local Walgreens and other fine retailers. Expensive and privacy concerns - ID scanners will be expensive too.

British Muslims – much more religious than other European Muslims, but much more loyal to Britain.

Thatcherism in Britain – Privatization and low income tax were hallmarks of Thatcherism, but now Britain deals with the situation by doing the opposite, yet not blaming them. Who is Bagehot? Because I’d like to kick him in the face for giving me a headache each week.

OOOOooo , look at us with our emerging economies - markets like China, India and Brazil established different policies than their western counterparts, leaning towards liberalization, lowing trade barriers, and risk pooling regionally (13 Asian countries have aligned to caution against fickle foreign capital).

More Pirates Walking the plank - Some countries like Portugal and Britain won’t capture pirates unless they have attacked their nation’s ships and the US wants those countries to be more badass. The real problem is fixing Somalia.

Bad News For the Poor (actual economist title)- Donations from rich people are down – believe it or not. Obama administration wants to put development aid on par with defense and diplomacy, but we are still short of past numbers. Foundations and endowments have not yet curtailed spending despite lower fundraising.

The Antitrust Problems in the Computer Industry - Intel, Microsoft, IBM, Google, and AMD all face antitrust suits because they do things that can be considered actions towards creating monopolies. The intense competition and rivalry has helped to stir up some of the lawsuits, and there doesn’t seem to be an end in sight.

Buying on the Dips – When prices are low, you should buy, groundbreaking stuff.
Mergers and acquisitions have not gone away in this economy. The number of deals is down a little but not much (still doing 80% of volume of deals compared to last ten years) with about a third of the big deals coming from bank restructuring. Expect more activity in energy and technology sectors in the near future.

Who took my e-bay? - Chinese dotcom companies borrow (steal) business models and designs of American websites (known as “copy to China” model and includes sites like e-bay, Facebook, and YouTube). One example is Qifang who does ‘peer to peer’ lending and focuses on student loans based on community group-lending schemes. They may actually have more plausible business models than US firms because they do crazy things like charging for apps and games – the nerve!

Strait Deals (body of water not sexual orientation) - Chinese company China Mobile invested in Taiwan telecom firm Far EasTone (get it?), breaking from tradition. It’s a big deal, not necessarily in size but as a sign of opening borders. Due in large part to new Taiwanese government, this could be the beginning of more Chinese investment in Taiwan.

Rolls-Royce goes compact - The luxury carmaker is still doing OK but people they are less likely to make luxury purchases of such a conspicuous symbols of wealth. The new model, the Ghost, is a lower end model (still over $250,000) that could be a big seller, also look for hybrid models in the future.

What happened to Ted Turner? - Time Warner Cable is looking to get out of its partnership with AOL, and into online TV. Advertising is the biggest concern, along with the internet problems the music industry faced, but online programming is here to stay. Hulu is touted for its plot to take over the world and the transition of TV into internet realm could be messy.

“Atomic” Anne Lauvergeon – France’s Homer Simpson? - Leading the French state-owned Areva (formerly COGEMA), one of the world’s largest nuclear power companies, has made Atomic Anne famous, but her days may be numbered. She is recognized as an important figure in the rehabilitation of nuclear power, but some mistakes, like being late and over budget on a new plant in Finland, may make the rest of the world worried about the feasibility of new reactors. DOH!

Help! American consumption fell and is stuck in the town well! – Nobody is buying anything – household wealth fell by $11 trillion. Debt to income ratio of 133%. Consumption of google-sponsored ads reported to contribute to reducing student loan debt.

The Economist is the guy who pops balloons at parties – We’re all excited because 66% of companies beat expectations and stock rallies. But broader view shows that nominal GDP has fallen for two quarters for the first time in 50 years. Wah. Big deal.

Stress Tests (not the Economist Quiz kind) – Banks need to demonstrate that they are capitalized enough to allow them to return federal money. Government still threatens to replace top leadership. Bank of American $34 billion short.

Landesbanken mit keine geld – Germany state owned banks have $1.1 trillion of toxic securities. Banking system not open, so bad banks can’t be taken over.

Infrastructure investments – Roads and utilities are supposed to provide stable returns, but they suck too. Stick with cash.

Mid-East Mergers – Arab banks are overpopulated, undercapitalized, and inefficient. Those banks that are Sharia (Islamic law) compliant are starting to consolidate.

Canada should keep dreaming – they want a more robust trans-atlantic trading arrangement with the EU to lessen their reliance on US for trade. Depends on success of Doha…

Swine Flu, Boo WHO – vaccine capacity is getting better, but not nearly enough to instantly ramp up production if the world needs it.

But what if the mice like testing new cosmetics? – Europe is passing new legislation that protects animals from testing. Three Rs of testing: Restrict, refine, replace.

How to make Electric cars really annoying? – electric cars are quiet, so scientists are worried that stupid pedestrians won’t hear them coming and not get out of the way. Wah. Proposed that they should beep so people hear them. Might be cooler to make my Prius sound like a ’78 Trans-Am.

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