Tuesday, May 26, 2009

Five Points from this week's issue

Five interesting facts from this week's issue: Good luck!

Rabobank (Co-op in Netherlands) has the only AAA rating (by S&P) among banks
What newspaper is the only source of Obama humor? The Onion
Congress Party won India elections - What is its symbol? An open hand
What African country is again at risk for al-Qaeda camps and extremist groups? Somalia
Daimler bought 10% of what Silicon Valley manufacturer of electric cars? Tesla Motors

Economist May 23rd

Starting a marketing meeting so I might not be free again until late. Here's some of the magazine to get you started on prep for tomorrow:

Indian Elections – Congress Party wins 206 seats of the 545 Parliament. Manmohan Singh is the leader. Symbol is an open hand. Trouble to deal with fuel and fertilizer subsidies and bureaucratic ‘leakage’ (corruption).

Decoupling? Is that what the kids call it these days? – Notion that emerging economies wouldn’t be affected by American troubles because they’re solid on their own – proved false as depression spread worldwide, but some suggest that strong emerging economies (China and Brazil) are decoupled from US as they will recover faster than us.

Hold on? Cap and Trade is not a good idea? – Economist can’t make up their mind. Now cap-and-trade is too complex. Better idea is carbon tax. Coming next week: Economist supports Gordon Brown.

Ugly End in Sri Lanka – Tamil Tigers are done. Leader Velupillai Prabhakaran is dead. Sri Lanka needs to take action to avoid continued civilian casualties and establish firm assurances that conflict is over.

Get on the Colonialism bandwagon! – China and Arabs are buying 20 million hectares of farmland for $20-$30 billion. Government to government deals are usually shady and what happens when governments change hands? 2015: The China-Congo War.

Gordon Brown: He whose name cannot be spoken – British Parliament is a mess. Time to clean house and kick out the crooked pols, but problem is not constitutional and overreaction would damage what has been an historically solid parliament.

Arnold gets a few more gray hairs – California budget proposal doesn’t pass. Layoffs in prisons (as in we’ll release 38,000 prisoners) and cut funding for Medi-Cal (health coverage for 225,000 children). Selling off property, like San Quentin prison.

New HUD at the table – Shaun Donovan is new secretary of HUD – Housing and Urban Development. 2.2 million foreclosures last year – April 2009: 1 in every 374.

Lindsay Lohan disease? - bats suffering from ‘white-nose syndrome’ – infection and powdery pattern on face. 500,000 bats have died. 2.4 million lbs of bugs will not be eaten.

Colorado on the rebound (kind of) – construction of new buildings has tanked, but unemployment below national average and house prices dropped only 4% as opposed to average 18.5.

Go read The Onion – even The Economist writers read it. Satire newspaper that is the only thing making fun of Obama: Black Man Given Nation’s Worst Job. Obama’s First 100 Days

Colom Cleansing, A YouTube Sensation – In a posthumously posted YouTube video, murder victim Rodrigo Rosenberg (a Harvard-educated lawyer) says Guatemalan President Álvaro Colom killed him because he knew of corruption in the partly state-owned bank – the Banrural. Question of the day: Is Guatemala a failed, lawless state?

Smacking Seriousness into the Brazilian Court Jester – Brazil’s Supreme Federal Tribunal (Supreme Court) is a bit of a joke. The court is overburdened by rules and provisions like “the limitless right to appeal against any court ruling until the case reaches the 11 wise men and women.” Brazil has more lawsuits per person than any Latin American country except Costa Rica.

I need a Vacation … from Taxes – The OECD, an economic group of rich countries, ruled to keep the Cayman Islands (a British colony) on its list of uncooperative tax havens. Additionally, Obama’s budget proposes to close loopholes that allow American companies to use offshore centers to avoid taxes (a Stop Tax Haven Abuse bill).

Welcome to the Jungle – Shushufindi 61, hidden away in the Ecuadorean jungle, is a dumpster for large oil companies, such as Chevron. Shushufindi is one of several hundred “dumpsters” that are at the center of a long-running legal wrangle between Ecuadorean and American activists and Chevron

The Srilankan Tigers are out of the bag - Srilanka declared victory over the ruthless Liberation Tigers of Tamil Eelam (LTTE). Sinhalese ethnic majority are happy but the Tamil minority continue to feel stranded by government and question the post-war reconciliation. International pressure for war-crime being called for by European Union.

Myanmar’s Opposition is helpless - Aung San Suu Kyi, Myanmar’s opposition leader of National League for Democracy (NLD) has been in restrictive forms of detention for last couple of decades. She is seen as a threat by “Junta” for next year’s election because of her popularity. General’s of Junta party are wicked and have isolated the country from global markets

Tag team battle for President election in Indonesia - Susilo Bambang Yudhoyono, the incumbent president, is up against both his predecessor, Megawati Sukarnoputri, and his deputy, Jusuf Kalla. Megawati & Kalla’s rating are poor and are not seen as a big threat. Yudhoyono’s rating is 70% and is rumored to have a strong pimp slap.

My new favorite Economist picture on page 45 - North Korea has few connections to the outside world and Kim Jong continues to break them. Recently broke industrial agreement with South Korea. Kim has asked United Nations Security Council to say sorry because they blasted him for testing a long-range rocket (latest updates say that another missile has been tested last week) Core Competency – Extortion through threats.

Nevermind. New favorite Economist picture on 46! - The opposition Democratic Progressive Party (DPP) wants independence from China and can only afford to protest on street. They claim government is secretly negotiating with China. Nationalist Party and President Ma have eased tension against China and signed agreements for liberalization

China Television Center drama - State broadcaster, China Central Television (CCTV) getting an extravagant complex. A fire (due to Firecrackers) gutted it three months ago which led to recent “firing” of broadcaster’s director, Zhao Huayong. The big Trouser structure (looks like pants) is scheduled for opening on day of the celebrations to mark communist China’s 60th birthday on October 1st.

China in “cruise control” of global economy - Chinese think their country is having a rather good crisis. E.g. President Hu Jintao’s importance at G-20 in April, China was center of all attention. Timothy Geithner, America’s treasury secretary, pays tribute in Beijing next month. A “G2” being proposed, where America and China get together to tackle the financial crisis, climate change and more (don’t we already have enough G’s doing nothing?)

Joe Biden to save the day - Almost all of the progress made in the Balkans since the mid 1990s has been erased by the global recession. Political tensions are building, especially in Bosnia, and the U.S., led by VP Joe Biden, feels obligated to help since they don’t believe the EU is capable of flexing enough muscle. However, the Balkan countries all want to be part of the EU, so EU involvement makes a whole lot more sense.

Does Chuck Norris make Dalia Grybauskaite jokes? - Politics in Lithuania are corrupt. Luckily newly elected President Dalia Grybauskaite is one tough cookie that has a black belt. I’m telling you, you can’t knock her over… they call her “The Wall”.

Gute Nachricht oder schlechte Nachricht zuerst? After bottoming out this winter, the Euro Zone appears to be slowly climbing out of recession. The country hit hardest was uber-productive and export-dependent Germany, although Spain has experienced more severe unemployment due to the temporary nature of many work contracts.

Turks might want to cut back on ‘crevice searches’ - Kurdish minors in Turkey are being abused and face prosecution for their involvement in illegal street protests in support of the separatist Kurdistan Workers’ Party. Turkish authorities have promised to address these concerns, but most are skeptical about their efforts, equating the promises to O.J. Simpson’s vow to find the real killer.

German Comedians - May 23rd is the 60th anniversary of the Federal Republic of Germany. There is an aside about the PrimeTime Theatre in Berlin that opens and closes the article and highlights the open-mindedness of the new Germany, something that 60 years ago didn’t expand beyond blond hair and blue eyes. Germany is now a diverse country that is trying hard to close the equality gaps of the east and west, all while managing the worst economic climate of the Federal Republic’s existence.

Ireland - After an initial defeat, a second Irish referendum on the Lisbon treaty will be held soon, and a Yes vote is expected this time around. The No vote is being campaigned by the Libertas party and its founder, Declan Ganley, who want more Europe power and less individual country sovereignty.

The Most Brightly Polished Turd Award Goes To… Figuring out which banks are best is like picking the prettiest war torn village, but things are getting better. As the financial strength of banks improve they are likely to repay govt aid $$$ (most likely to be gov’t free soon are Goldman, Morgan and JPMorgan). Economists pick for best banks: In the US the award goes to JP Morgan and in Europe to Credit Suisse. Interesting side note: Rabobank (Co-op in Netherlands) has the only AAA rating (by S&P) among banks.

Chicken or the Egg of Bull and Bear Markets - Bull markets are circular. One example is rising asset prices lead to looser lending which leads to increased demand for assets which leads to higher asset prices…yada yada yada. The opposite is true in bear markets…fire sales lead to dropping asset prices…yada yada. Forces that prolonged the bull market through the mid 2000s: Share buybacks, rising stock prices leading to companies not having to make contributions to pension funds, cities competing for tax revenue offering tax advantages for headquartering there. The opposite effects of these forces are at work in the bear market and it is difficult to shift momentum.

Japan is still a negative Nancy for now - Perhaps Japan’s GDP figures include so much negativity that the future could only look brighter. Japan’s latest economic data was the worst since WW2. Markets shrugged it off as there are signs of recovery in consumer confidence, industrial production and increased fiscal stimulus from govt. Weak exports really hurt Japan.

Take your late fees and shove em - Credit card companies are having a rough time. With high unemployment, write-offs for uncollectible debt is are expected to hit $94b this year, up from $61b last year. Additionally, Congress has voted through a bill that restricts their freedom to screw people over.

Mo money mo problems - Talks of single currency in the Persian Gulf region has been slowed as the UAE decided to pull out. The UAE gave no reasoning for this but it is likely due to plans of the central bank to be located in Saudi. Don’t expect a single currency in the region anytime soon, but overall they have been making progress toward this goal.

Brazilian’s export more than just bikini wax - Brazilian credit rating agency, SR Rating, will be issuing an AA rating on U.S. debt citing the huge debt America has incurred recently as a worry for the Treasury. It said that it is reserving AAA ratings for countries like Norway who sit upon lots of oil and have few enemies.

Tuesday, May 19, 2009

Question Predictions

Sorry - no poll this week, just suggestions:

What former South African Minister of Finance has been reassigned as the head of the planning commission? Trevor Manuel
What company was fined over €1 billion for antitrust violations? Intel
What is the unemployment rate in the US as of April? 8.9%
What problem is plaguing European countries like Italy, Greece, and England? Immigration
What country’s president claims that the state control of oil is a national security issue? Venezuela, Hugo Chavez
Who is the chairman of Vodafone? Vittorio Colao
What US State has the worst bond rating? California
What treaty has the US ignored? UN Convention on the Law of the Sea
What US director is back at work after ten years off? Francis Ford Coppola

What is the best commercial of the week:

Economist May 16th

Boom, Bust, repeat as necessary – Banks are back in action, with government protection and $$$ for desperate borrowers (like me). But how can we dampen the next bust? Better rules that reward bank managers to bank risk through bonds and increasing capital requirements for less stable banks.

American pastime: missing important deadlines – Oops. May 13th was the last day to submit your claim to the ocean floor. But since we’re not part of UN Convention on the Law of the Sea, we don’t get cool claims, like sovereign rights over standard 200 nautical miles from shore, or shipping passage rights. Sounds like a bad treaty from Civilization II.

America’s other pastime: trying to fix the Middle East – Obama has to convince Netanyahu to give a little with Palestine. Biggest problem is how to govern West Bank: Abbas and Fatah party aren’t effective, Hamas is strong, but they have the whole terrorist vibe going still.

Does this mean they’re cancelling Paperboy 2 for Nintendo? – people read their news online. Americans 18-24 who get news each day: 25%. New apps offer potential for WSJ and others to charge ‘micropayments’ – I promise you this: Business in Briefs will remain free, particularly with its strong advertisement supported model available on the right of your screen.

British MPs (members of Parliament) have fat chequebooks! – MPs get expenses to cover anything ‘necessary in pursuit of their duty’ – like hiring a guy to clean your moat. But they’re underpaid compared to American, European counterparts. Pay them more – attract better politicians and cut back on scandal. No jab at Gordon Brown?! Not one!

I will now demonstrate the proper way to club a baby seal – European Union politicians needed to appease the fur-loving animal rights people without actually impacting anyone doing business in Europe (like pig farmers), so they target Canadian seal hunters and ban sealskin products.

Best job ever – top right page 27 – Business Planning for Antarctica

Seabed is up for grabs – important stats: claim up to 350 miles from land, Russia claimed North Pole (good luck with that) France claims Canadian ocean through St. Pierre & Miquelon. Sulphide is important. Seabed mining companies: Neptune Minerals and Nautilus Minerals

Is California that screwed up? – Apparently yes. $42 billion deficit – May20th special election, but nobody votes other than crazy extremists. Time for a new state constitution to curb ‘citizen power

Old People are expensive and smile a lot. My suggestion – Budget deficit for US is $2 trillion. Budget director Peter Orszag keeps talking about social security and medicare as ‘problems’ because the future unfunded cost is only $104 trillion. Wah.

Gay Marriage in New England – New Hampshire and Maine are latest to say ‘Gay, OK!’ children could care less. State laws likely to change – federal law still problematic.

I prefer to call them ‘stress position’ pictures – there are 44 more pictures of prisoner treatment from Abu Ghraib. ACLU wants them released, Pentagon says hold on. Obama agrees that they just provide more trouble.

Wooo! Happy statistics from New Orleans! Ready? – 25% never came back. Only 57% medical facilities re-opened. 66% report chronic health problems. 2x suicide rate, 20% poverty. 20% considering leaving.

Center lane closed for construction – Republicans probably shouldn’t get more extreme. Center ideology served democrats well. Less toxic (Rush Limbaugh) and some competence?! Shocker!

Bush’s BFF is Shady, but Popular – Colombia President Álvaro Uribe, a close friend of G. Bush, to seek an unprecedented third consecutive term as president. Despite scandals of domestic spying and some ‘democratic security’, 84% of Columbians said they would support Uribe’s right to run again and his approval rating is 71%. I think someone is jealous

Chávez is an Oily Bohunk? –PDVSA (Petroleums of Venezuela) ran out of cash - accrued $70 billion in liabilities. Chavez turned it into state owned org. PDVSA builds houses, imports food, runs farms and pays for adult-education projects. Dial would say that PDVSA is trying to do too much – not a sustainable advantage.

Kirchner Poised to Win Husband-of-the-Year – Argentina’s president, Cristina Fernández, and her husband, Néstor Kirchner, are campaigning to keep the Peronist party in the majority. Two political parties threaten their power – Conservative Peronists and the Radical Party. Hubby Kirchner is campaigning particularly hard in Buenos Aires, which contains 2/5 of Argentina’s voters. The IMF believes that Argentina’s economy will shrink by 1.5% this year.

Still at it in Pakistan - Pakistan army continues to battle Taliban in Swat valley. Citizens unhappy and loosing trust in army because lots of innocent civilians dying in battle. American NGO survey result: 69% consider Taliban & Al-Qaeda a “problem” and 45% support army’s fight.

Spec Ops Commander in top job for Afghanistan: General David McKiernan fired. Insiders claim the general lacked Dynamism. The new commander will be General Stanley McChrystal (West Point ’76 - former head of the Joint Special Operations Command). Questions being raised because the Special Forces have figured in some of the worst mishaps, in which large numbers of civilians have been killed in air strikes.

Closing stages in Sri Lanka - The army and Tamil Tiger rebels continue to battle (480 civilian refugees killed in two days). Total of 8000 civilians killed so far in battle. Senior leader of the Tigers, Velupillai Prabhakaran is also in the battlefield (killed since publication). Government will not rest until the Tigers are all wiped out.

Nepal Political crises - Maoist Government in trouble. resignation of Prime Minister Pushpa Kamal Dahal. Maoists have stopped the assembly from functioning since the resignation. Opposition parties (UML and Nepal Congress) are attempting to form new government but they don’t have a majority and face stiff opposition from the Maoists.

Legacy of Sichuan earthquake – disaster last year left 86,000 people dead or missing. Government was praised initially for its rescue efforts. Government attempted to restrict media coverage and conversation with victims. Was the damage done because of lousy construction methods? Over 5335 students killed in a school building. Parents of victims and the public are angry with the government stance on this.

You must kill the Prime Minister of MALAYSIA! - United Malays National Organization (UMNO) led by Anwar Ibrahim got three legislators in Perak to switch sides disrupting the majority in 59-seat assembly. Opposition claiming that their man is the Chief Minister and his removal was illegal. Takeover approved by hereditary state ruler Sultan Azlan Shah. Lots of people own the Chief Minster seat in a very short time !!

Stimulating Australian budget: Booming Australian economy slowing down this quarter (after a decade of growth) with cash deficit A$58 billion ($44 billion in real money), or 4.9% of GDP. Kevin Rudd leader of labor party had promised big spending on health, education and attacking climate change. Now he has to either raise taxes or drop the plan. China is Australia’s biggest trading partner.

Yeah LDP, Yeah you know me! - Government debt at twice the economy’s output. Planning to float new currency. Opposition leader Mr. Ozawa under pressure to step down from DPJ(Democratic Party of Japan) leadership. Ruling party LDP (Liberal Democratic Party) has been in power for a very long time in Japan. Mr. Ozawa was initially with LDP and then moved to DPJ.

Peace in the Middle East? Not Likely…- Obama is ready to enter the Palestinian-Israeli war for peace in the Middle East. New diplomacy has gained support from some countries like Jordan and Egypt, and will face lots of problems from people like Iran and the threat of a potential nuclear war.

Can’t we all just Get Along? - Israeli Prime Minister Binyamin Netanyahu is visiting the White House this week for his first meeting with Obama where he may unfurl a new plan for cooperation with Palestine. Takes tough (unlikely to succeed) stance will center on the Palestinian conflict and the problems that Iran poses for the country.

AH the Right to Free Speech, Oh Wait, This is Qatar - Robert Menard, famous for his affinity for controversy, has been asked to run “the world’s first press freedom centre” in Doha. This is a big step towards liberalization in the region, but controversy will follow Menard and there are a lot of conflicting interests in play.

Jacob Zuma not the one in charge? Say it ain’t so! -Trevor Manuel, the popular (former) finance minister in South Africa, has been reassigned as the head of the national planning commission. The new post will reportedly give Manuel more power as Zuma doesn’t really know what he is doing and would rather be the public face of the government and let someone else call the shots. The real extent of Manuel’s power remains to be seen.

Special Section – Banking industry is changing. G20 average govn’t debt 100% of GDP by 2014. Total bill for financial collapse: $4.1 trillion (not counting my mortgage…yet). Blame Canada, even though The Economist gives them props for doing things right. Awesome graph on page 19.

Newsflash – There is a recession in Europe! - Baltic countries face the most uncertainty; Estonia, Latvia, and Lithuania have all seen year-on-year double-digit declines to GDP. The IMF has responded to stave off devaluation; a sign of better coordinated outside help. Many industries are in collapse, but the alternative energy industry is growing.

I swear, if I miss the Cavs winning a championship over this… - 89 year old Clevelander John Demjanjuk has been flow to Germany for another trial in his supposed involvement in the murder of at least 29,000 Jews during WWII, again. The facts will be difficult to prove, but this is yet another sign of Germany’s “demonstrative remorse” and its zeal for an honest reckoning with the past.

Well, it aint the Ritz Carleton… - So apparently French prisons are not very clean. Safety is a problem because of overcrowding and lots of people kill themselves. There are new laws to open new prisons and to revamp old ones to bring them up to European norms, while the really bad ones are being closed down.

Russia is Ready to Fight Some More - Russia threw a lavish parade equipped with 9,000 soldiers in Red Square to celebrate its military prowess and remind the world that it was a good guy during WWII. On a side note, Vladimir Putin for 2012!

Immigration a Problemo in Italy - Italy is being hit hard by illegal immigration from Libya and has begun returning seized boats to Libya as opposed to offering the immigrants a chance to seek asylum in Italy.

Immigration Also a Problem in Greece, or is it Discrimination? - Greece has always been known for the hospitality it shows to immigrants, but now that Pakistanis, Afghans, Iraqis, Sudanese, and Somalians want in Greece is singing a different tune. They still don’t turn them away, but they have policy aimed at discouraging them to stay. With camps and detention centers in place, the immigration scene is not pretty, but arrival rates show no signs of slowing.

The European Commission, aka Indian Givers - The European Commission has frozen funds it extended to Bulgaria due to fraud and conflicts of interest. This is all told through an anecdote about a dairy farmer named Stefan Petrov, who blames the mess on the Bulgarian government, and not on the EU.

Somebody skipped their ethics class in Parliament - MPs like to put a lot of their expenses on the corporate card. Most complaints stem from a second-home allowance worth up to 24,000 pounds per year. Voters are pissed, and not in the fun British-sense, but rather in the angry American sense.

It’s never as good as it looks - The actions of the Bank of England have helped to energize the British economy, as the stock market is up and fear of banks collapsing is down. Unfortunately, the labor market is not showing signs of relief as jobless claims are up significantly over the past 3 months, and earnings are down.

If everyone has an immigration problem, where are they coming from? - This time in England. Migrant farm workers in the countryside are subject to terrible living conditions and have been neglected for the most part until now. The majority of the migrants are from eastern Europe, primarily Poland.

Finally, Bagehot makes sense - Britain is living through a Yom Kippur moment and apologizing for everything, notably the bankers for sinking the economy and MPs for expensing everything. In typical Economist fashion Gordon Brown is urged to apologize for sucking at life.

I’m guessing the Popemobile doesn’t do sand off-roading well – Pope didn’t do too well in middle east. Managed to make everyone angry, didn’t strongly condemn a holocaust denying bishop. Biggest catholic country: Brazil but fading there too.

Most Unethical Corporate Behavior on the decline – Cutting back on CSR easy way to save cash. AEP not doing a wind farm in Indiana. Don’t disappoint your employees by not following through with promises.

Intel Inside (a big mess) - $1.44 billion anti-trust fine – not because prices are anticompetitive, but because they often exclude rival AMD. Maybe if AMD had Ajay Bhatt they wouldn’t have this problem.

How come we don’t have GM-Chrysler drama like this? – Ferdinand Piech is the chairman of VW, fought off takeover by Porsche – now will likely integrate Porsche into VW group (including Audi, Bentley, Lamborghini and Bugatti – who knew?!)

El Plan Stupido – Spain wants to ban advertisements on Television Espanola. We’ll just tax private broadcasters. Right. Because they’re doing so well as is.

Compensation based on performance! Shocking! – advertising agencies for big brands (Coke, P&G, etc…) now being paid per value, not time.

Australia v. Telstra ends in KO – Telstra is telecom giant, run by Sol Trujillo. Wasn’t that great at the political games. Now state will build $43 billion network and Telstra will take back seat or break up.

Japan still has shiny bright stuff – Uniqlo sells casual clothing – same-store sales increases at 19%. Muji sells plastic bottles and homes (hell of a product mix).

iPhone killer? – Vodafone has 290million subscribers. Trying to build universal software platform. Vittorio Colao is the boss and good at his job.

Asian Economies Could Recover Faster Than the West - Asian countries are pumping more stimulus $$$ into the economy as a % of GDP (China and Japan top the list at 5% of 2009 GDP). The main argument against the Asian recovery: frugal US consumers will buy less Asian imports. However, this dependence may be inflated. One estimate cited that American consumers are responsible for only 5% of China’s GDP.

Global Monetary System Changes - All monetary and economic systems balance borrowers who like inflation and lenders who prefer no erosion in purchasing power. The system has changed from the “gold standard” to the “dollar standard” to floating interest rates, which has worked ok over the past few decades, but change is on the horizon. As the US owes other nations gazillions of dollars and has a trade deficit to boot, China will have a lot of power to determine where we go from here with respect to the global monetary system.

You Call That A Stress Test?!#@ - tests worked to assure investors that banks were not cooking books and that loss estimates were likely not grossly optimistic, they really are no indication that the banks are well capitalized and will be able to operate without government support anytime soon. Banks have been raising capital in equity markets recently and only GMAC seems to be at risk of nationalization.

Did I tell you that I have two PhDs? - Two smarty pants professors from Harvard and Chicago came up with a plan for how to regulate the leverage of banks by basing their risk on the price of their Credit Default Swaps. Basically, it says to let the market decide how risky a banks debt is and then regulate accordingly.

Don’t have a pot to piss in or a window to throw it out of, but at least I’m earning negative 30% interest on my bank deposits!! - Poor people in developing countries actually have to PAY rates of 30-40% for keeping their $$$ in “banks.” incredibly broke individuals are somewhat financially savvy. Through a combination of loans and savings they are able to work it out so that what they eat today does not depend entirely on what they earn today.

Hedge Funds had garbage returns but investors are still putting $$$ in them.

Astronomers get some new toys to play with - Shuttle program is drawing to a close next year. The crew of the Atlantis is currently on an 11-day mission to give one last makeover to the Hubble telescope. The upgrade should keep it running until 2014.

Homo Erectus - "Obscene" statue discovered in south-western Germany. Dates back to when homo sapiens arrived in Europe - adding further evidence that male thinking hasn't changed much in the last 35,000 years.

Watch out Google - Wolfram Alpha is the latest search engine, though its inventor (Stephen Wolfram) prefers to call it a "computational knowledge engine". Dissects questions into components and performs calculations to come up with an answer, which it displays in a myriad of charts, tables and graphs. Unfortunately it can only handle complex questions and comes up empty with simple searches, such as "climate change".

Living abroad gives you a creative edge - Two psychologists proved this via a bunch of weird experiments involving candles, pins and matches and a role playing exercise about negotiating to get a job at a gas station.

British Chiropractic Association happily promotes "bogus" treatments - Dr. Singh, a well-known science author in Britain wrote this in an article published during Chiropractic Awareness Week and was sued for libel by the BCA. He's now facing $150,000 to settle and his chances at appealing aren't that great. Lawsuit boils down to the definition of the word "bogus".

Tuesday, May 12, 2009


New issue review is posted below - looking for some help for next week's issue - let me know and I'll assign a section to you. Thanks!

China Celebrates Its Status As World’s Number One Air Polluter

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.

Tuesday, May 5, 2009

Special Thanks

A big thanks to two guest contributors who helped with some of the reviews in light of this week's workload - Scott Armul and Mike Ross.

Enjoy the clip below, as well as the Cavs game and Cinco de Mayo!

More American Workers Outsourcing Own Jobs Overseas