Tuesday, May 26, 2009

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.

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