Best of the Web - October 2009 onwards

I started this blog back in 2006...when my wife, my mother all were there. In November 2008 I lost my wife. In October 2009 - I lost my mother. However the Sun still shines, the earth rotates, birds chirp and my son still loves going to school and watching cartoons. I need to live, true the heart is heavy and asks...why blog again?
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How to fill the gaps left by dollar decline
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China pushes CO2 capture, storage questions loom.
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My Seven Wonders of India
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Debate Still Rages Over Who Won the Cold War
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African nations make a stand at UN climate talks
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Internet Turns 40 Today: First Message Crashed System
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The Chinese Disconnect : Although don't agree fully...as many others say there's no country that ever grew richer by devaluing its currency. Presently the US intends to do that, and China merely is following. Moreover, when $ strengthened in the peak of crisis, Yuan also did, many other Asia currencies trade weaker (than Yuan to $)compared to their 2008 rates.
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Push to Legalize Marijuana Gains Ground in California
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Micro loans bring light to rural poor
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Best of the Web - August'08-Sept'2009

China's overcapacity: A waste but not a mortal danger
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David Einhorn, Greenlight Capital, “Liquor before Beer… In the Clear”
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Roadside doctors with no degrees thrive in India
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Indian royal splendour on display
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Particle beams injected into LHC
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Hungry to learn across the world: The youngest headmaster in the world
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Shanghai Cooperation Organization
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Russia ready to abandon dollar in oil, gas trade with China
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China's super-rich bounce back from financial crisis
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The Collider, the Particle and a Theory About Fate
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On Cluttered Ballots of India, Families Proliferate
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Rogoff Slams Four Toxic Words, ‘This Time Is Different’: Books
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Barack Obama Wins Nobel Peace Prize. For What?
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Will California become America's first failed state?
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Dollar Falls on Report Gulf States May Stop Using Greenback
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China Yearns to Form Its Own Media Empires
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Sixty years on: veterans of Chairman Mao's China remember
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Top 10 most significant events in shaping today’s China Mode
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China’s Mr. Wu Keeps Talking
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Patent Revolution
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Our One-Party Democracy
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Play It Cool, Mr. President
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Why capitalism fails
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ANALYSIS-Can we predict next world crisis?
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China vs United States: A Visual Comparison
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GDP Fetishism.
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U.S. Is Finding Its Role in Business Hard to Unwind
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The Father Of the Green Revolution
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China heaps scorn on U.S. tire duties
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50 million chemicals, and accelerating
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Trust in News Media Falls to New Low in Pew Survey : My respect and trust for NYT however has gone up (whereas most others have followed same trend as in the Pew survey findings).
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French president announces carbon tax collection program : How much does it become /barrel of crude, /mbtu of gas or /ton of coals?
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How Did Economists Get It So Wrong?: Liked the cartoons on the page as well...
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China showcases commercial jet at Asia air show
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China Tightens Grip on Rare Minerals
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It’s High Time to Ruffle a Few Billion Feathers: 'By Roach’s calculations, Americans account for about 4.5 percent of the world’s population and its consumers spent about $10 trillion in 2008. China and India, which account for roughly 40 percent of the world’s population, consumed about $2.5 trillion.'
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Victors in Japan Are Set to Abandon Market Reform
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Chinese learn credit card perils the hard way. And this section: 'According to Professor Wang, small and medium sized enterprises (SMEs), which tend to be private companies, account for 99 percent of the total number of firms in China; 60 percent of the country’s GDP; 70 percent of employment; 65 percent of the patents filed each year; 60 percent of exports and 50 percent of tax revenues. Despite this large contribution to the Chinese economy, SMEs only use 20 percent of China’s financial resources. Per yuan of investment, they are eight to 10 times more efficient than China’s large companies in creating jobs and four to six times more efficient in generating GDP.' is quite interesting as well. I doubt how these SMEs do it.
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ISB Founding dean Pramath Sinha...
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Opening new chapter of China-U.S. dialogue: It's more important now to see how the Chinese view it.
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Pope Criticizes World Economic System, Urges Social Responsibility
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Universities test morals, knowledge: It's a much welcome change, however it must also reduce the 'rote learning' stress that most students in countries like China and (probably more so ) in India face. Therefore it should not necessarily increase the stress, rather make it enjoyable for them to read and learn. During a recent visit to Tanzania, students their said how competitive Indian education system is (in urban middle-class society), and it sort of kills a kid-boy-teenager's early life. At the same time, in-spite of such huge loads, countries like India (or even China) fail to produce globally recognized scholars, nobel laureates. That means somewhere up the value chain, system collapses (it's not alone rote learning or holistic development - facilities in colleges/universitiesand capabilities of faculties are also important).
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Harvard Begins Case Study as Tainted MBAs Reveal Damaged Brand
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The Rise of the Underground
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China to Open Yuan's Role in Trade
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CEOs Give Thanks to Hank This Thanksgiving
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Christian Science Paper to End Daily Print Edition
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TIMELINE: Milestones in the yen's history
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Japan Returns to Pre-Thriller Era as Nikkei Slumps to '82 Level
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Apple Q4 earnings: Analyzing the analysts: Can the same be said about professional journalists and bloggers/citizen journalists?
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China Allows Short Sales, Margin Loans to Help Market : I must say I am quite surprised by part of this decision. That's China for rest of the world! I also sense that China is trying to send a message (snub?) hereby to market economy that where the US has failed, China would succeed. No doubt a bold move, however probably it was better to move more carefully at this particular juncture.
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Japan logs trade deficit as exports slow: That indeed is a news, and most unexpected (since 1082!). I expected the real trade figures (number, for imports and exports in $bns), however that's missing from the article.
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U.S. to lose financial superpower status - Germany & Asia Needs Deal to Prevent Panic Selling of U.S. Debt, Yu Says : Interestingly, 1st one comes from Germany and 2nd one from China. The OPEC voice can send the market in a real turmoil.
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Morgan Stanley's Mack Seeks Protection From You: I didn't expect such a harsh criticism of ongoing policies from Bloomberg...
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Treasury Seeks Authority to Buy Mortgages Unchecked by Courts : I have managed various reverse auctions in my earlier career with e-business service providers, but wonder how RA can be applied in such a case. Every house is unique, so for every house (mortgage), there's only one seller (or mortgage owner). If they club the mortgages in lots and based on quality of mortgage (what's likely), then again no two lots are same. Reverse auctions work when all suppliers are more or less equal in their quality of goods/services; which isn't largely true for this case. Therefore I foresee that the tresury would start buying the lowest quality of mortgages; and now one would like to be seller in the early days, believing that as the RA with $700 billion moves through (and also economy improves/liquidity/home prices improve), they would get a better price either through market (or through subsequent round of RAs). Only the mortgage holders desperate for cash would indulge in some sort of distress sales (what's the value Tresury can buy for every dollar in its 1st lot...asset of 3 dollars? I will rather put it at a less value...anyway let's see as more clarifications emerge).
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GM puts Volt through its paces in Milford
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Wall Street Journal to go into wine retailing
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China paper urges new currency order after "financial tsunami": Watch the timing...
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How to Handle a Market Gone Mad
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Sell the U.S. Dollar into Strength: Last few days I haven't written much/posted much as I am again bit active in market (and stressful with leveraged position...and in wrong foot at times). However I have been following all events closely. Surprisingly, this is the 1st article that talked about intervention as the ongoing phenomena whereas when dollar was weak, there was active talk about it. To me it surely looks like an intervention - then why not the Russians, Chinese, OPEC world shifting their forex in this rally to Euro. Or even buying gold? Something fishy...true, the job of trading in derivatives is more stressful than a bomb-diffuser. Hope I survive this time.
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UAL Story Blame Is Placed on Computer: I didn't know many things in the article...more about the computer-based trading (25% - astonishing!)
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UAL shares walloped by new posting of old news: Sometime back, I talked about Indian media broadcasting/printing news without any quality check (the Goa and Nazi story); however this highlights what's happening in so called western press (many of which I consider to be reputed ones!). Hilarious indeed - only not so hilarious who sold believeing the story.
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CERN fires up new atom smasher to near Big Bang: I briefly touched upon it in my book Wondering Man Money & Go(l)d...interesting developments. And there is a small fear in the mind as well.
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Here is one of the better measure of Indian inflation...and here is the official website. Unfortunately, as one Reuters article suggested even today, the data always leaks out before the scheduled time for market manipulation. And it happened today also.
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Asia leads mobile growth, but lags on Internet.
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Google Offers Web Browser for Download to Challenge Microsoft
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Text of Sen. Barack Obama's speech: Wish India gets a politician with similar idelogies...
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Japan Goes on Buying Spree, Shrugging Off '80s Bubble : It talked about Ranbaxy-Daiichi as well. One particular aspect, in which I never thought about, came out here and that's 'Japanese companies have cash equal to 11 percent of their assets, the second-highest amount after China among the world's 10 biggest equity markets, according to Bloomberg data'. It's good to always have cash - just as Mutual Funds or investors have. More so in boom time...
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Stocks Under 'Short' Order Fell During Protection Period & Did It Help to Curb Short Sales?: Markets are too powerful and its all about confidence...once the genie is out of the bottle, it's difficult to control it.
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India Sounds `Death Knell' for Jobs With Perks: And when one adds the complexity of withdrawing this PF in one's need (e-governance in India: a status report), one understands that this is another poverty tax that govt. employs on the informal sector and unorganized employees. Could anyone in India withdraw his/her PF when one of his/her family member needs some costly treatment at a short notice? I think not. The process takes minimum few months, and probably hell lot of applications and follow ups. Makes a sense for govt. employees, otherwise it simply does not have any relevance.
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China to overtake US as largest manufacturer: The FT subscription models (3-categories) show another interesting online trend. Regarding the article: 'China is set to overtake the US next year as the world’s largest producer of manufactured goods, four years earlier than expected, as a result of the rapidly weakening US economy.' I long felt it so, and I still don't understand how service economy (where Wall Street alone can be nearly 30%) can be more than 80% of a large economy.


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Asian Yahoos Don't Give a Google About Free Web
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Microsoft $20 Billion Buyback Signaled After Slump : It's surprising to see so much buy-back when possibilities are huge...true there's no point in spending the money in the drain either.
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China Wins Financial Olympics as Losses Hit U.S. : Remember Socialist China creates Capitalist records...
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Korea's No. 1 Money Manager Says Genghis Khan Model for Funds : Mirae picked up some stake in LIC Housing Finance, one of the scripts I follow (and occassionally hold, as I am doing now). I believe they entered at > Rs. 300. During the July slump in Indian markets, one day I was shocked to see the volumes in its futures. Normally the counter sees thin trading, at times to sell one contract, one needs to wait for minutes. And when NIFTY was close to 3800 or so level, with LIC Housing Finance at around Rs. 230-level; there were sale orders that numbered 100-s at one time. And there was a flood of sale orders for couple of days. Few days later, I read Mirae did close their India-specific fund, in which they had high realty exposure. There were another FII seller that month (some Mauritus-based funds like TCI or so); whereas Morgan Stanley and Credit Suisse picked up the stakes. Markets are indeed as dangerous and as fluid and as volatile as fire and water. Always be careful...

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The Trolls Among Us : We see increasing online collaboration amongst MSMs as Bloomberg directly linked to this. The article is interesting, and in-spite of being a member of pro-internet lobby; makes me think about its healthy future in an absolutely unregulated environment

May-June-July 2008

SAP 2Q Beats Views; Fiscal Year Guidance At Top-End: The constant currencies part is interesting...
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MSM Stealing Blog Content: Times Joins Growing Trend?: I see it as a both-way process where many bloggers also do the opposite. However reputed news-agencies must not do it, and the reason offered for not acknowledging content from blogs is ridiculous.
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China to Turn Economic Growth Into Olympic Gold, End U.S. Reign:
'Hawksworth's calculations show that the top 30 countries will win 82 percent of the medals, mirroring their 84 percent share of the world economy.'

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Temasek Invests in Merrill After Getting Compensation : So new instruments keep evolving, and they always favor the large bargaining power of large buyers.
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So Long, Capitalism
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Randy Pausch: The lecture of a lifetime: 'Sincerity translates, in other words, on a far more primal level than language...'

Makes one wonder on the sincerity level of Crocodile Hunter or Randy Pausch or people like them, and then people like me (or us) and then the so-called decision makers who are supposed to be the most sincere about the plight of mankind at large.
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Obama addresses 200,000 in Berlin with message of unity for world's people & Obama Speaks to Germany on European Ties
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Another Meeting? Say It Isn’t So
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Berliners welcome Obama as they did JFK: '76 percent of Berliners would vote for him, and he's been dubbed by influential news magazine Der Spiegel as "the president of the world." He could "stand on his head" and it wouldn't matter, said one media critic.' Lately I am seeing Der Spiegel online (in Google News), and do like it also.

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GM Teams With Dozens Of Utilities on Plug-In Cars: Oil dependence indeed looks to be slowing down...with such innovations now a possibility. Good article.
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The Inflation Haymaker Comes A Cropper: Interesting to know the history...also I found a new thing in Foxnews 1st time...stock-proces changing in real time basis...makes better sense than the quotes that Reuters or Bloomberg gives!
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Fannie and Freddie's Enablers
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Darkness on the edge of town: Newspapers 2008.
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Trouble at Fannie Mae and Freddie Mac Stirs Concern Abroad
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A Big Party Without the Guest of Honor : True...what a nostalgic moment...and what changes we saw in last 100-years
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For Short Sellers, It Doesn’t Get Much Better : And imagine, a market regulator like SEBI in India is introducing these monsters in India. FIIs would come and short-sale India; and RBI and SEBI would watch (rather facilitate).
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Chinese president meets Indian PM on bilateral ties, global issues : I believe it's time for India and China to take these words to action. China should take the initiative and India should be more open, rather than uttering the same-old dimplomatic words. Trust must be built first on the disputes regarding borders, and a status quo should be maintained. I liked the words of Hu Jintao, and hope he really meant it, with due understanding of complexity of Indian systems.
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UAE GDP revision highlights region's data problems: Because they are not yet professional liars, that's why they goofed up. I take all GDP and inflation figures with same degree of credibility, Money Supply is something that can be clearly quantified; but for some reason isn't, in a single global scale.
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Internet propels Obama but also creates risks: I rather disagree...Internet allows better control than the distortions often made by the mainstream/alternate media. Here one keeps the control and clarifications. True, close coordination amongst the different groups who are manahing the campaign with the candidate is needed.
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Old Harvard Ties Failing in New Egalitarian Age: Very much true globally...
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Came across Reportr.net as a blog and Prof. Alfred Armida as its founder.
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A Classic Final That Began So Harmlessly, and So Much Earlier : Indeed. I saw the match till the 2nd rain disturbed play in Star Sports. And like Rhoden, I also supported Nadal (true, from the 2nd set onwards). Federer was invincible...till 2008. All eras end. And I was wondering at the characters...be it Nadal (22-years) or Federer (26). What was I in 22 - or most of us? Mostly immatured but arrogant, about whatever strengths we had, without knowing much of the world. Great staff. Thanks to both the players. When he lost the 4th set in tie-breal from the 5-2 lead position, I felt inexperience is costing him. And Federer, with his serve-strength, always had an advantages in tii-breakers (probably the records also showed that). 'All that remained was to crown a champion, not determine the better (sports) man (for the day)...From Wimbledon to the streets of London, this was a great moment, a moment of transition in men’s tennis and transformation in one player’s life.
' Yes, too early to say about the era...shaken or broken? I remember Federer also lost the chance almost a year back to have the largest match winning-record. He was such a person that opponent always felt he was invincible. Probably not any more...
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Biofuels May Be Even Worse than First Thought: Lately I am seeing more of Spiegel Online in Google News. I must say 'I'm liking it (Google News)' as they say for McDonald or so. On more serious note, I wonder on these two figures: 75% (as the WB says) to 3% (as the US feels). No doubt top minds are involved...that's what I say about qualitative research.
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Glaxo Scientist's `Aha' Moment May Result in Malaria Vaccine
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The Weak-Dollar Threat to World Order
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India: A billion aspirations: Ha Ha... some laughter does help. Yes, I too saw the headlines (don't remember whenther on print or online), however didn't read it (the age impropriety, and not my line). True, I read a lot of stuff online (even trash), however this is something! Would be interesting to see whether these four media-firms change their articles or not (TOIN hasn't so far, the comments clearly saw the joke), and how they run the correction.
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Benedict Benjamin Bernanke
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Entire US financial system is to come under the scrutiny of the IMF
: 'macroeconomics textbooks are no longer worth much in the age of globalization'.
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GM Falls to Lowest Since 1974 on Goldman Rating Cut : Interesting point would be to note how Hindustan Motors (HM) performed over this period...I believe not so badly. So with so many management gurus and stories on GM and so much bad publicity (normally) against HM, I wonder who sustains, finally.
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Warren Buffett Says Sell to Me, Not `Porn Shop,' as Growth Dips : A must read for people in M&A space. Though I am, like millions others, is a Buffet fan; I wonder whether the Halo created around his personality is vulnerable. History says yes. Question is - for him, or for his firm?
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Hong Kong to Start Commodities Exchange to Trade Oil : Interesting part is, it will be all in dollar. I suspect, too early for any such conjecture so early, that going down, few years (2013 or even early based on geopolitics and global economy), they may shift to Euro or even their own currency (or as OPEC favors).
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I liked http://theinvestingspeculator.com/ (June 2008 posts), the BP chart of A dance to the music of time, energy sources by category and comparison of oil prices with other useful liquids.
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'Markets funny, fed prints money
Says it sunny, lies like honey, too sweet for me'... from IMF: Fed Should Leave Rates Steady
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Two Sides to Story Define Wall Street in Cioffi's Tale at Bear
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Weary Americans can't fight global inflation: 'Stephen Jen of Morgan Stanley estimates that at $120 a barrel, oil exporters are getting $6.8 billion a day. At $135 per barrel the six Gulf Cooperation Council countries have proven reserves worth about $65 trillion, as compared with global stock market capitalization of about $50 trillion.'.
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Why Paul Miller in Virginia Is Wall Street's Best Stock Picker .
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Fed's Bear Stearns Books Look Prime for Cooking
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Mostly irregular these days...
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Sometime back I stated that the world loves American people and values, but its policies (foreign policies). Here is the best example of that, not in the article, but in the 1st comment as posted by WillH. The article is one in which I took interest sometime back, Supreme Court maintains post-9/11 course on Gitmo. And here is the jewel of a comment, on America really is (on which I was confused like many): 'It's truly saddening to see posters using the American flag as an avatar making comments to the effect that constitutional rights ought to be suspended for security interests. I say you are no Americans at all, you do not share American values, you disrespect that flag and all that it stands for. Shame on you. This is the land of the free, we do not sacrifice our God given rights for fear, hate, or foreign policy. The moment we sacrifice our core values for security we've sacrificed the one thing that's truly worth protecting. The terrorists hate us and everything we stand for, when we give up these precious freedoms we're doing their work for them.

Many of these detainees are scumbags, I have no doubt. But they have rights and *because they have rights I know that I have rights.* If they are guilty then bring them before a jury and let them receive the punishment they deserve. If anything, this business of detainees only hurts our cause. It shows that we are hypocrites - claiming that we support freedom, equality, and justice (e.g. the after-the-fact justification for the Iraq war) but we deny those same values when it is expedient for us to do so. Gitmo is destructive to our values and our foreign policy interests.

I find these comments truly disappointing and would encourage those of you who disagree with the Court's ruling to go to Cuba or China, do us all a favor and take your fear mongering elsewhere. Your rhetoric smacks of totalitarianism, its un-American, and un-welcome in this country that I love.'
Thanks WillH, That should not be American value, but the global human value (borrowed from America! or there historically were other instances of such values elsewhere?)
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Google Diplomats Bend Free Expression to Preserve Global Power
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Mobile Phone Is Best Way to Provide Bank Access: The role of Central Banking itself should change...
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World Bank `Destroyed Basic Grains' in Honduras, Fueling Hunger : I don't remember exactly, however following another research report, in one of my article, I did talk about either same Honduras or another similar nation's plight under the WB advice.
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Argentine Farmers Block Grain Trucks, Withhold Crops to End Tax : The food shock of which I was comprehensive was for a long time is finally here, and I believe it's likely to last longer and be short of permamnent phenomena with temporary blips. Yesterday, one TV channel showed that local (Indian) prices of rice and wheat to be around 35-40% cheaper than global prices - and here is the big dilemma. In one way, govt writes off farmers' loans and subsidizes them (how much of it actually reaches them remains a question mark), it again exploits them by 'forcing' them to sell it at 35-40% cheaper! And imagine the import-price based formula that Indian industry adopts for almost everything from cement to steel to Aluminium to plastics (barring mobile call rates!). So we encourage the rich to exploit us, and the exploit the poor to help the rich (there is also significant number of poors and non-farmers, true). And in Argentina, the farmers are protesting. I suspect similar developments in India unless our policies become fare to the farmers.

Best coverage of global news - March-April: 2008

Wall Street Grain Hoarding Brings Farmers, Consumers Near Ruin : When 50% or more of agri-outputs are speculated by the Wall St., many elite Indians say that futures don't affect grain prices. Remember Schumpeter again on the future of capitalism...and Fed. prints more easy money for the Wall St. to hoard even more!
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Phillips Slams Wall Street, Feckless Politicians in `Bad Money' : This only validates the many posts I have written on GDP, economic growth and productivity growths. If financial services contribute 20% and manufacturing 12%, it merely means a country of traders with borrowed money where agri+ manu contributes only 15% or even less of GDP. And I have often doubted these GDP measures with very high services components, more so from financials.
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Due to following, I have been and probably would stay away from posting articles for few more days to months...
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There's been again some challenging times in my life where the challenges essentially drags one down. My son (6+ years) has been diagonised with Gall Stone and report for Hepatitis is due. This is on top of the benign mesothelioma cyst with which my wife's been suffering. I have rarely talked about my mother, and how little to nothing I could do for her. And now there's another challenge which like the others have also been talked about in my book (Wondering Man, Money & Go(l)d). I really don't know what to do...am I not following what I preach or talk about or write on? Yes...at times I feel I am fighting a losing battle. However then comes some optimist driven by our strong believe in God and the way my father acted against all adversaries. I am sure this cloudy phase would also pass and brighter days would emerge soon.
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Behind the Deal, the Hand of the Fed : Add to that the fact J P Morgan happens to be a shareholder of the Fed. (true?) as we found already in one post. And should one say anything more? And here is the BusineeWeek photo of Bernanke as a communist.
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Forbidden fields: Oil groups circle the prize of Iraq’s vast reserves: In line with one of my earlier posts. Would the big US gamble on Iraq war after five years pay-off? Depends on Iraqis...but interesting to see the gambling point here: 'Although no decision has yet been made in Baghdad over the nature of the development or the eventual exploration contracts that will be on offer, Iraq could prove one of the rare countries in the region where companies will be allowed to claim reserves as their own. “This is the big frontier,” says Raad Alkadiri, a senior director at Washington-based PFC Energy.' At what price...what would the Iraqis gain if companies (that too primarily US, UK and at times from France-based) claim the reserves to be their own. We know how good American back door policies are - however Iran, Russia, China or even India must also get close with Iraq and ensure that Iraq's oils are most used for Iraqis first, and then for the rest of the world, equally.
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Bear Economists Snipe at Bernanke: Can this comment be indeed true - 'The Federal Reserve is there to protect them. What is so well forgotten is that the Federal Reserve is not a part of our Government. Need further insight? JP Morgan is a shareholder in the Federal Reserve, you and I are not. Who benefited from the Bear Stearns bailout?'

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Somewhere else I read that Bear Stearns had derivative position of $13.4 trillion, and its money of $17 billion ran out in 2-days. God save this system. Sooner Fed bail-outs than the 1930s revisited : 'It has $13,400 billion of derivative positions, and has underwritten $491 billion in options contracts. Topple this domino at your peril. It risks a chain of cross-defaults through the entire "shadow banking system", that vast untested nexus of paper commitments.
Bear Stearns had a liquidity cushion of $17 billion early last week. It vanished in two days.' . Also by reading so many comments online, it's clear that 90% or even so people in the US or Europe isn't happy about the practice of this form of capitalism. However the question comes - where are these voices in mainstream media - in CNBC? Probably mainstream business media still favor a lot to the immoral side because of obvious business gains, though these comments would be an indicator that they better change. Otherwise it will be fools (who will burn their fingers at some point of time in future) and immoral investors alone would subscribe to these mainstream business media!
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The Fed Is Too Easy on Wall Street: If these numbers are true, we get around $140 billion of the already booked losses...'Here's a staggering figure to contemplate: New York City securities industry firms paid out a total of $137 billion in employee bonuses from 2002 to 2007, according to figures compiled by the New York State Office of the Comptroller. Let's break that down: Wall Street honchos earned a bonus of $9.8 billion in 2002, $15.8 billion in 2003, $18.6 billion in 2004, $25.7 billion in 2005, $33.9 billion in 2006, and $33.2 billion in 2007.'
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JPMorgan to buy Bear as Fed opens lending to Wall St: At $2 a share, less than its $80 a share book value and much less than its holding of land and buildings? As reported by Bloomberg also, I wonder whether shareholders would approve this deal. Had I been a shareholder of Bear Sterns (and only of Bear Sterns, which traditionally is my style against port-folio investments, and know it's fundamentally wrong), I would have forgone this $2 also and firmly would have said no. Dimon and J P Morgan gains...what a pity!
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Behind the Fed’s Bear Loan: Systemic Risk Fear: The desperation in getting the four votes and the manner in which it was done kills all the faith in Central Banks.
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Bear Stearns Bailout Was `Finger in the Dike,' Historians Say : 'Ever since Treasury Secretary William Gibbs McAdoo shut the New York Stock Exchange for four months in 1914, to prevent foreign investors from cashing out and throwing the U.S. into financial chaos at the outset of World War I, American policy makers routinely have suspended their support for free markets when confronted by economic peril.' History is so important, however unfortunately rest of the world which sort of preaches free market economy never learns from history. 'Morgan, 70 and semi-retired, obtained an emergency pledge of $25 million from the U.S. Treasury. He persuaded New York's leading bankers and trust executives to put up another $25 million, after locking them in his library all night, according to ``The House of Morgan: An American Banking Dynasty and The Rise of Modern Finance,'' by Ron Chernow (Atlantic Monthly Press, 812 pages, $45.95)...Congress authorized $250 million in loan guarantees to rescue Lockheed Aircraft Corp. in August 1971, over the objections of the late Democratic Senator William Proxmire of Wisconsin. By today's standard, the stakes were small: about $1 billion in potential losses and 60,000 jobs.' The scale just gets bigger. 'Representative Ron Paul, a Texas Republican who ran for president this year, told the House Financial Services Committee in February that financial services bailouts would reward bad behavior. Paul doubts the Bear Stearns rescue will prop up the economy, he said March 14. ``It won't work,'' Paul said. ``It's like drug addiction. You feel withdrawal pains, but you save the patient.'' This is the man of whom gold bugs speak highly about...
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The Twittering of Ben Bernanke: I liked this part very much...'But Fake Steve Jobs (aka Forbes editor Daniel Lyons) maintains a blog. That is so old media. This is Twitter, an attention-deficit-disorder medium for an attention-deficit-disordered age.'...I am very much in old media

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Dollar's plunge pushes eurozone past US, Goldman Sachs says: I expected this long back though my fundamental doubt on currency-related fluctuations in GDP is still not answered.
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Bernanke Discards Monetary History With Bear Stearns Bailout : I can be reasonably certain that no one could think about it as forthcoming, that too almost a year back. Now here you have it: Fed. to bail out failed hedge funds of Bear Sterns. The article was written as a spoof (all my spoof articles are like that only!), and true, one needs to go beyond the hedge funds to Bear Sterns itself now.
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‘India has conducive environment for gold mining’ : I don't know on what facts this story is made. China, S. Africa and the US are the three largest producer (I am not very sure...) whereas India is the largest consumer. The only commercial gold mine in India was closed years ago (somewhere in the south). However this must be explored (along with Uranium and other radio-active materials and technologies) as policy-matters.
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LS dismisses US govt’s observations on Nandigram: I saw the news in TV this morning, and thought...here we are...Indians (and many other nationalities are no different!). What are we first, what values do we stand for - no one is perfect. But do we value human rights and dignity first, or do we take empty pride in 'India' sort of being perfect, which all knows no nation is. I don't agree with many US policies, decisions, their double standards (middle-east, Palestine, Lebanon) but in this case, I will appreciate US decision. Yes, there was human rights violation...now whether US government says that or Pakistan or Indian political parties...that's immaterial. What rather is needed (and knowing India well, which is unlikely to happen for sure) is what learning did we have from it...none. Rather the ruling government learned that they can crush any opposition any time whereas Indian democracy would watch it as another piece of fun, and comment as we do on while watching violence on movies, rather than acting meaningfully on it. Shame on you - Indian parliamentarians, once again. '"Anything happening in India is a concern of the people of this country" and the US should have nothing to do with it.' What a joke...I am worried at unnecessary deaths in the Middle-East, and I am even more worried at Nandigram violence also. Being a human being matters first, then comes nationality. These guys can change their colors...and sad thing is 'Anything happening in India is a concern of the people of this country', but the people of the country just saw another violent act whereas the guilty proudly roamed about, even in the same parliament.

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Sab Maya Hai: Mukesh Ambani on Forbes' billionaires list: I like it Mukesh-bhai. You indeed are a genius...lekin desh or dus keliye bhi kuch karo (SEZ serf profit keliye mat karo...)
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Dollar's Clout Sinks Worldwide: 'And in neighboring Brazil, the Confidence Cambio money-changing service was the first to start offering yuan so travelers to China no longer have to change the money into dollars first. The service is already a hit because Brazil does big business with China, and lots of Brazilians are heading to the Olympics this summer.' Makes good sense...


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Iraq, the US trump to avoid a dollar collapse: This is the 1st time I accesses this site from GNews, this stats are intteresting at this hour of global economy: 'Referring to the weakness of the dollar, Ching Siwei, Vice-President of the Permanent Committee of the People's National Congress said last November that China "is going to readjust and diversify its monetary policy in financial and economic transactions around the world because we prefer strong currencies".(2) Putting deeds to words, China is already buying oil in Euros from Iran, which provides 13% of China's energy requirements...Maintaning the alliance with the US is ever more costly in political and economic terms. In Saudi Arabia current inflation rates are the highest since 1980, running currently at 7%. In the United Arab Emirates, inflation is even higher at 9.3%. (3) The reason is none other than the weakness of the dollar in economies completely dollarized as those countries' are. That is what has led the Saudis finally to let their arm get twisted and to accept now a discussion about the dollar in the terms proposed by Venezuela and Iran...And that is what the US is trying to stop, come what may. First, it is bolstering the presence of Iraq's collaborationist Oil Minister, Hussein al-Sharistani, in each and every one of the preparatory meetings for the next OPEC summit meeting. Secondly, it is pressing for final approval of the Iraqi oil law, which would leave that strategic sector in the hands of the US oil multinationals. Thirdly, Bush carried out his recent regional tour - not for peace, as the mass opinion forming media broadcast - to directly threaten the Gulf countries against changing their reserve currency. Fourthly, the US is pressuring these countries not to establish trade links with Iran at a time when that country has just set up its oil exchange to operate in Euros rather than dollars...Despite the fact that the US has literally bought off a large part of the Iraqi insurgency with the creation of the "Awakening" militia - which serves to confront insurgents and as a buffer for the occupying soldiers - it has not managed to pacify the sector controlled by Muqtada al Sadr despite the Mahdi Army's ceasefire holding firm and the one controlled by Sunni guerrillas, who carry on their struggle against collaborationists and occupiers. After almost a year of "normalization" armed attacks still occur throughout almost the whole country, not just against the occupying troops but against mercenaries - those "private security companies" - and collaborators...Nonetheless, if one has to note a credit side to the US strategy, the attacks against oil pipelines have certainly dropped noticeably in the last few months and that has made Iraqi oil production rise to 2.4 million barrels a day, the highest level since the country was invaded five years ago. The US has come very close to completing its energy strategy. It had reckoned on ending 2007 with production at 2.8 million barrels a day in Iraq (4) and made it to 2.4 million. Now it is being more modest and reckons on 2.6 million barrels a day for 2008, although the ultimate target is to reach no less than 6 million barrels a day within the next four years according to what the Iraqi Oil Minister has said in an interview to the British Times newspaper. (5) That would permit the US to break up OPEC from the inside, considerably increasing the number of barrels on the market and bringing down the price of oil to the amount the US considers "fair" : US$30. A figure that leaves out one important fact, namely, that it does not cost the same to extract a barrel of oil in Saudi Arabia or Iraq, to name the cheapest places, as in Venezuela or Iran, to name the dearest places. In Iran, it costs US$15 to extract a barrel of oil. So the proportionate profit of 1 to 6 in the Saudi case (a high quality oil which, from extraction to sale, is easy to find and cheap to produce) drops to 1 to 2 in the Iranian case since its oil is not good, sweet and cheap like that of the Saudis and the Iraqis...On January 24th this year, al-Sharistani met in Amman, Jordan with the leading oil multinationals to discuss "technical assistance contracts", or in other words to share out the oil fields, pending approval of the Iraqi oil law by the Iraqi parliament. Guess who was the first company he met with? Exxon-Mobil, the very same company that is in litigation against Venezuela for the nationalization in 2007 of wells in the Orinoco oil belt. If one believes the newspaper reporting the event, a contract will be signed during this current month of March. And so that the contracts will be profitable and operational the US has to keep a large contingent of troops in Iraq permanently...Even according to polls by the collaborationist local media, 70% of Iraqis are against what they consider the "handover of national sovereignty"...But the country is more divided than ever and that leaves the imperialist strategy a free hand. ' It gave references, which I am not quoting/checking. Indeed, a very interesting story.
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'Helicopter Ben' Bernanke and the 'Bankers' Bailout': So many suspect that beyond what's already overt, a covert bail out plan may already be operational...nothing new. 'Since there is so much opposition here to the idea of using taxpayer money to bail out borrowers and lenders who made bad choices, it's worth facing the facts: a stealth government bailout of the mortgage industry is well underway, and a bigger, more ambitious rescue plan appears more likely every day...Fed Chairman Ben Bernanke's latest dollar-dumping mission (they don't call him "Helicopter Ben" for nothing) is the latest chapter in what Cassidy calls "The Bankers' Bailout." It's too late to write your congressman to protest -- the bailout began last summer: "'It is no exaggeration to say that the mortgage market was effectively nationalized" in the third quarter, BNP Paribas economist Richard Iley wrote.' Watch this comment as people get disillusioned by this capitalism: '...and all of this from a government who decries socialized medicine!!!

We have socialized corporate welfare in this country. We taxpayers get nothing, except rising costs for everything.' or this one: 'This is the American way:

"Privatize the profits, socialize the losses."

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Gold Trades at $1,000 an Ounce in New York on Demand for Haven : As I was reading last article, I myself saw Gold at 997.7, but in between sometime it happened. Sad...this gold bug has no gold!
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Meltdown Looms Larger as Credit Markets Freeze: Watch this here: 'So, why is the Fed issuing loans to foreign banks? Isn't that a tacit admission of its guilt in the trillion dollar subprime swindle? Or is it simply a way of warding off litigation from angry foreign investors who know they were cheated with worthless toxic bonds? In any event, the Fed's largess proves that the G-10 operates as de facto cartel determining monetary policy for much of the world. (The G-10 represents roughly 85% of global GDP)...Wonderful. So now the Fed is planning to expand its mandate and bail out investment banks, hedge funds, brokerage houses and probably every other brandy-swilling Harvard grad who got caught-short in the subprime mousetrap. Ain't the “free market” great?' Echoes what I said in Wondering Man Money & Go(l)d...America is going broke and the rest of the world knows it...UBS puts the banks’ total losses from the subprime fiasco at $600 billion. If that's true, (and we expect it is) then the Fed is out of luck because, at some point, Bernanke will have to throw in the towel and let some of the bigger banks fail. And when that happens, the stock market will start lurching downward in 400 and 500 point increments. But what else can be done? Solvency can only be feigned for so long. Eventually, losses have to be accounted for and businesses have to fail. It's that simple. Looks scary because I still have some small money (whatever I am left with after the riot I had in May'06. Thanks to my wife, she has again doubled that in less than 2 years in-spite of the ongoing turmoil). Excellent article.
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India's Rupee Declines as Asian Stocks Fall, Crude Oil Advances : I am really concerned about this, with existing trade deficits high, exports down and now oil prices shooting new high, dollar rising against rupee but falling against most other currencies (includes BRC of BRIC), and stocks falling - India has all the ingredients right. It will be sell India sell story - FIIs know they can sell India and get it much cheaper later. And oil subsidy never help the needy...
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I also liked this one: On Helicopter Ben becoming Air Marshall from being the Fed. Chairman. Poor guy...I have full empathy for the bookish academician! "The risk of losses on U.S. Treasury notes exceeded German bunds for the first time ever amid investor concern the subprime mortgage crisis is sapping government reserves, credit-default swaps prices show," reports Abigail Moss at Bloomberg.' And I talked about it just minutes ago below: 'U.S Vice President Dick Cheney has been dispatched to the Middle East to try and talk down oil prices from $108. Good luck with that Mr. Cheney. Gulf States are importing inflation through their dollar pegs. Keeping oil prices high by refusing to increase supply may be the Saudi's way of getting back at Bernanke for gutting the dollar.' Even CNN sounded like conspiracy school: '"The Fed's actions are keeping banks from having to write down large losses and quite likely go into bankruptcy," he writes on his blog at the American Prospect. "The result is that the bank executives, whose inept management pushed them into bankruptcy, get to keep their jobs and their salaries, which run into the tens of millions a year." Meanwhile, homeowners facing foreclosure - not to mention ordinary savers who are watching inflation erode the value of their nest eggs - remain quite unbailed-out.'.
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Increasing Systematic Risk Portends Cartel ‘End Game’ Attempt: Reading conspiracy school theories help at times...I also believe that economists not having monetary fundamentals linked with gold as an absolute basis is bound to err. Surprisingly this article of 6th March or so sort of predicted what the Fed. did on 11th March. Would Bernanke succeed in bringing down the dollar, capitalism? I doubt that. Would he succeed in bringing up China, Russia...I would agree more here. 'Not only does the sacrifice of the U.S. Dollar penalize savers, as pointed out in the interview, it also hurts the purchasing power of all Americans and, particularly the middle-class and working poor. Indeed the purchasing power of the Dollar has declined over one-third in the past five years, vis-à-vis other major currencies. That is one reason why everything costs so much more.' . Who will explain that to Bernanke who is hell bent on svaing the Wall Street. 'What was all but explicit was the fact that the dramatic increases in money supply debase the currency. The logical conclusion is that the Fed is knowingly destroying the U.S. Dollar. This conscious destruction of the U.S. Dollar and its systemic implications are key components of the Cartel End Game (which Deepcaster first described in its 8/13/06 Alert, and then elaborated on in its June, 2007 Letter “Profiting From the Push to Denationalize Currencies and Deconstruct Nations” and most recently in its January, 2008 Letter).' True the words of strong dollar policy and bailing out in different forms contradicts...so is it a deliberate ploy to destroy dollar as they succeeded in destroying the gold window? 'Thus it is understandable that one (of several) key components of The Cartel’s End Game (clear even to some members of Congress) is to eventually replace the U.S. Dollar with the Amero (see Deepcaster’s June, 2007 Letter for details). Needless to say, the Amero would be another Fiat Currency whose issuance is planned to be controlled by the same Central Bank Cartel which now controls the fate of the U.S. Dollar.' Interesting theory...what happens to emerging countries forex reserves? All paper to be thrown to the sea?
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Bernanke Playbook Gives Hints on Fed's Next Moves: Why Bernanke's policy may not work, in the strictest economic sense (and not that the US uses its influence on OPEC or Saudi Arabia to increase production or similarly manipulates gold prices) is Bernanke remains a pure academician. Keynes himself I believe was a trader, and if Bernanke would have traded even for months in equities to the various derivatives of derivatives with leveraged positions, he would have realized the hollowness of the system. Capital (ponzy money) can't create capital by itself, it rather is a tool. And the tool was overly misused. US sort of provided money to all over the world, and capital markets globally are tanking to protect the US economy. Too much of anything is bad...remember Schumpeter...'So what other unconventional measures might we expect from Bernanke's Fed in the coming months, based on the speech that tagged him as ``Helicopter Ben'' because of its reference to Milton Friedman's phrase about helicopters dropping money into the economy?'. I am afraid that the Fed. do not enjoy the luxury of all the policies of his academic paper when the Fed. lives on borrowed money from other nations. 'So, brace yourself for a Fed funds rate close to zero, interest-rate-free loans in exchange for a much wider range of debt collateral, and further dollar weakness. And, if Helicopter Ben sticks to the script, the Fed might even guarantee the value of two-year Treasury notes. Strange days indeed.' I agree.
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Bernanke Seeks to Avert Deeper Slump by Accepting Mortgage Debt : My bias on this matter is clear. Let me see what happens, in a similar case, where you and I have bought some financial assets at price P1, and now it's down by significant amount, P2. If I need liquidity, I will have to accept the market price, which at no point no one says is the best judge of valuation, at times being even extreme and book losses. So can you and I also go to the Fed., pledge our assets and get value closed to P1 (keep aside AAA rating as yesterday it said S & P & Moody's have made fun of it as it didn't downgrade many yet!). So banks can take risk to maximize their profits and find lender of last resort at fair value, not you and I. Why?
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Bernanke Policy to `Destroy' U.S. Dollar, Faber Says : Faber said so before also, when Fed had its 1st interest rate cut in recent times. I absolutely agree with his statement that the ``In the U.S., they pursue essentially economic policies that target consumption, which in my opinion is misguided,'' Faber said in an interview with Bloomberg Television from Chicago. ``They should pursue economic policies that stimulate capital investment and capital formation.'' ...He predicted shares in India and China could lose 30 to 40 percent of their value as markets decline worldwide. '.
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Would-Be Borrowers Still Go Begging as Fed Cuts: I expressed my concern about this many times...reaching out to the people who need something most isn't easy.
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Government: U.S. needs foreign cash: 'A majority of American voters think these foreign infusions harm both the national security and the economy of the United States, according to a recent survey by Public Strategies Inc.' Quite expected, but that goes true for other countries also when mostly US-based FIIs poured money in other countries financial markets to create bubble and exited by creating a mess. Although I understand the vast difference between SWF and FIIs, however foreign funds of FIIs has historically not been responsible market participant, as such and SWFs are too new an entity to have much of any record on their responsible behaviour.
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Stiglitz the Nobelist Gets Math Wrong on Iraq War: A non-issue as $3 or 1.7 or whatever trillions is all based on your assumptions. US defense spends stats are only good.
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India Mustn't Kill Loan Sharks to Help Farmers: 'According to a 2003 assessment of farmer indebtedness conducted by the government, eight out of 10 farming households in India have 2 hectares (4.9 acres) of land or less; slightly more than half of them have no debt. As for the rest, half of each household's average 9,000 rupee debt is to ``non-institutional agencies,'' which is the government's euphemism for moneylenders. The smaller a farmer's land holding is, the more indebted he becomes to the loan sharks. This is not by accident. Banks Don't Lend - The formal credit-delivery system, which in villages consists of government-owned and cooperative banks, lends hardly any money to marginal farmers. The latter have no alternative except to agree to pay usurious interest rates -- often 100 percent a year -- to individual lenders. And farmers aren't alone.
Jena, the failed Orissa shopkeeper, was fortunate to have obtained cheap funds under a special government plan that seeks to promote self-employment among educated jobless youth. Not everyone is so lucky. Almost every small-business owner in the fast-growing economy is hungry for credit. Effective interest rates of 50 percent a year and more are quite common even as the State Bank of India's published prime-lending rate, the one at which the bank lends to its best customers, is 12.25 percent.'



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Trade Case Takes Aim at China on Financial Data : At times, decisions like this by Chinese policy-makers (to whom I have probably overpaid my respects repeatedly) act funny. One can surely gauge their deep suspicion and concern in case a financial catastrophe takes place, however market rumours anyway spread. Authentic news can alsways help, and these news-organizations, in-spite of their obvious bias, can't do any more damage than unfounded market rumors at time of disasters.
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Bovespa Beats Biggest Stock Markets on Brazil Consumers, Steel : Here's B of BRIC and some comarison with China. However I doubt the statement that said Chinese m-cap is less than $500 billion. And Brazil again here: Brazil Sends in Police, Sacrifices Jobs to Protect Rainforest
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Buffett says U.S. in recession, stocks not cheap: So the million dollar question finally gets answered from the Omaha...and I believe him more than the Fed or other Federal reporting agencies. And here's another on same topic: Warren Buffett withdraws bond re-insurance plan
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News from the schools, February 2008: ICFAI was in the process of getting accredition from AASCB (The Association to Advance Collegiate Schools of Business). Though I looked at the Economist just to see how it's been doing lately, I found this interesting piece here: Business schools and research, Practically irrelevant?. The article I wrote long back (and now many uses) on Web 2.0 and Academic Publishing is getting more elite recognition. Here is the final report of AASCB on Impact of Research.
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Peloton runs out of road: Being a victim of leveraged positions myself, I wonder why such products got created in the name of hedging and liquidity. All leveraged products should have a statutory warning. This is where I see Economist also coming out with Readers' comments. I also saw What's in the journals, February 2008 which led to Roll up your sleeves—midlife is your best and last chance to become the real you. and thereby following for other journal articles. I am not sure whether this is the vindication that contents (whatever sources, if meant for people at large) must be free, or similar practices have been there for long.

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The Reckoning : A different type of article from Bloomberg, and with lot of insightful numbers, as usual. '"A year ago, everyone thought trees were going to grow to the moon," Jamie Dimon, chief executive officer of JPMorgan Chase & Co., said in an interview on Jan. 27 at the World Economic Forum in Davos, Switzerland. "Obviously, 2007 was a much tougher year than expected, and 2008 is probably going to be the same."'.
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M&A Drop Presages Lean Year for Leaders Goldman, Morgan Stanley : '...investment banks raked in a record $42.4 billion in M&A advisory fees for 2007 for their work on $4.05 trillion in announced acquisitions'. SPeaks for itself...'By year-end, $865 billion in deals had been canceled, more than in any previous year...On Feb. 6, Rio Tinto rejected an all-stock offer from Melbourne-based BHP that would have been worth about $147.1 billion. A deal at that price would trail only the $186 billion sale of Time Warner Inc. to America Online Inc. in 2000 and Vodafone Group Plc's $185 billion takeover of Mannesmann AG in 1999.'


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UBS Faces Dearth of IPOs After Vaulting to Top in Stock Sales : 'The cut bankers got on U.S. IPOs last year averaged 6 percent, according to data compiled by Bloomberg. European initial share offerings generated an average fee of 2 percent.' I assumed these numbers to be much less...surprisingly high if equity is to be used as a low cost financing means of productive assets.
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Rupee weakens to 5-½ mth low as equities weigh: I am really concerned about the fall in Indian Rupee. Out of currencies of all major economies, it may be the worst performing globally. When US$ is in sort of a free-fall, INR still falls against US$ meaning the fall must be higher against other leading currencies. What a pity...the cries for subsidizing the exporters still abound everywhere in the lobby circles.
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Derivative Trades Fell Most in 14 Years in Money Market Freeze : The world trades nearly 10-15% of its annual GDP in derivatives trading everyday. Amazing.
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Venezuela, Ecuador send troops to Colombian borders : I saw the death of Raul Reyes in BBC as well, however as my funda of Latin American geo-politics is not as strong (Kumar has some knowledge of it, like Che Guevara and contemporaries like that). Understand that this is a significant news, but not sure of the implications much (nor know well the relationships the latin American leaders share amongst them).
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The Fall of the Dollar Empire : Came across this article with one of mine on crude, gold and inflation: I often wondered about the currency depreciation (the race to the bottom for export competitiveness and US being a late comer in that club though so long it was the founder and beneficiary of it) impact in US, and saw this: There are two views about the impact of the dollar decline on the US economy: one holds that it would eventually benefit the US economy through boosting exports while others believe that it damage the US economy. What is your opinion?

A.The export view is sheer unadulterated nonsense. The Dollar has been in fundamental decline since the end of WWII, as has its trade deficit!!! A weak currency is not a panacea for economic health. It merely delays the inevitable drive to increase competitiveness, as demonstrated by Germany which has again become the world's No. 1 exporter despite an 80 % appreciation in the Euro since 2001! The drop in the Dollar has, on the contrary, caused only a minimal reduction of its annual $ 750 billion trade deficit, which proves that US lack of competitiveness is truly endemic and not a function of exchange rates. A weak currency also boosts inflation as imports become more expensive. In America's case it represents a 'double whammy' because, while imports become more expensive they are unavoidable since the US doesn't produce many of the consumer goods it needs...The US is totally dependent on China's goodwill. If the US were to ban all imports from China tomorrow morning the US economy would suffer a heart attack as it would have to import those same goods more expensively from elsewhere. In retaliation, the Chinese would sell their surplus Dollar mountain and precipitate a global economic depression. The emerging economies would be better able to withstand such an Armageddon scenario because they are accustomed to hardship, while decadent US consumers are already bankrupt despite an environment of extended global economic growth. It went on to paint gloomier picture...
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Auction Supply `Tsunami' Foreshadows Deeper Municipal Losses : It's the chain reaction triggered by sub-prime to housing to CDOs to Muni-bonds and underwriters to student loan organizations ...to God knows what. A society running on insulins of credit is bound to face the squeeze at any place as the squeeze intensifies. All important question is, would it have a short-term impact or long term one. And even in long term or short term, how short and long they can potentially be? As I see it now, $: Yen stands at 102.88, I myself was bearish on Yen, and if this carnage continues, Yen can be at less than 100 a dollar within weeks. That still will not undo even half of all the carry trades, and I still keep my stand to be bearish over yen over the longer term (I am actually bearish on both dollar and yen, relatively more on yen). And on 3/3/08, as the world's financial markets bleed again from 29/2 losses of the NYSE/Nasdaq, China again shows that it has decoupled from the US markets.
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Gaza Pitfalls in Every Path : A solution must be found and this massacre must be stopped. Many say that's easier said than done, however I still believe it's difficult but possible. Abbas must ensure Palestine is united, and just for the sake of some useless power, he should not be a puppet of Israel/US. Neither the Hamas should run terrorist campaigns against Israel (though out of the two sides, which side is a worse terrorist is open to debate).

Copyright: Ranjit Goswami.

Best of the Web: February 2008: Geopolitics & Economics (With China Focus)

Subprime Mess Highlights Need for Tough Rules: 'A modest proposal: Force banks to redesign bonus structures to reflect long-term results and avoid such risky practices.' I must than Sesit for this great proposal. It's not modest one, it's rather the most appropriate one.
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Yen Rises to Highest in Almost Three Years on U.S. Bank Concern : Not the smaller, but the excessive risk-taking banks should fail. Fed. should not only bail out the large ones, which if fail, may do long term good to the economy. US economy needs major operation, not small tumor removals.
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Central Banks and Gold: Manipulation or Money Management?: Another balanced article as Gold continues its journey to $1000. Can this comment be true: 'Think about it? There is more shorts than all silver on earth.' I doubt...and here is another: The Current State of the Gold Market (though actually it dated back to 2002, like many Gold related or classic articles in this blog)
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Microsoft Fined Record EU899 Million by EU Regulator : Whoa...what a piece of news for open-source supporters and Windows haters! '``Microsoft was the first company in 50 years of EU competition policy that the commission has had to fine for failure to comply with an antitrust decision,'' European Competition Commissioner Neelie Kroes said in a statement today in Brussels. ``I hope that today's decision closes a dark chapter in Microsoft's record of non-compliance.''' . No doubt a slap in the face...

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The gold standard: A precious metal that's not just an investment but a worldview too: And I may be the only (or rarest) goldbug who never bought any gold other than gifting my sweet wife couple of bracelets (that too only once in our ten years of married life). Yes, I take a philosophical view of being a gold bug. 'All of the dates Blumert brings up are occasions when the federal government took actions to divorce currency from its precious-metal backing.' . The comments lead me to this article: New York Merchants Embrace Euro. Amazing...yesterday I was reading the 100000% inflation and currency depreciation in Zimbabwe; who can ever think even a microscopic fraction of that hitting the veru USA. I liked this comment as well: 'Anyone who thinks that diamonds and gold are stored up so that they don't flood the market doesn't understand economics, or has bought the lie." I suggest you Google "diamond" + "stockpile", and read about the $1.5 billion diamond hoard in vaults in Israel, the $2.7 billion stockpile in de Beers' vaults or the $5 billion in vaults in Russia. If even a portion of these tens of millions of carats were dumped on the market, the price for the standard -- a 1ct. D-grade flawless diamond would drop from the artificially propped-up $15,000 to a fraction of that. It's all a monopoly -- the DTC -- a cartel run by the Oppenheimer family. Look 'em up on Wikipedia. This stuff is all common knowledge with unimpeachable documentation.'
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Commodity boom means double whammy for food groups: Yesterday we saw the FT. multimedia, and this today: 'food products account for only 9 percent of UK consumer's wallets compared to 12 percent in the last UK recession in 1991.' What worries me is the same figure may be 50% or even more for 70-80% of people in developing nations (or true for 5 billion people of our world). Even if I think about my family, it would be closed to 50%, if not more.


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ANALYSIS - Google winner as Microsoft and Yahoo face off: I also believe so, however without putting too much on the ComScore search-ad findings; I believe Google would also face challenges eventually if they don't own content eventually. 'Mountain View, California-based Google could also see its R&D advantage shrink with a combined Yahoo-Microsoft. According to Wolk, Google spends about the same amount of money on Web R&D as Microsoft and Yahoo combined, but as separate entities, there is a lot of overlap in that investment.' That was surprising...I thought Google spent less and was more efficient.
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Help hard to get for troubled U.S. home owners: I must say that I was taken aback by this line '"They're lying bastards," said Mark Seifert, executive director of East Side Organizing Project (ESOP) in Cleveland, on a tour of the city's ravaged Slavic Village district. On some blocks here almost every last home is boarded up.' but then...that's how many sees.

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Doomsday vault for world’s seeds is opened under Arctic mountain: Great idea, strategic move and that's what I call 'fail-safe' planning and implementation. 'Many varieties of seed kept in the vault are no longer used commercially but it is possible that they will prove invaluable as world conditions change.' As I was reading the comments (the one on McDonald and Obesity was great!), the NASA Saturn probe did raise some doubts. Never heards of it...can it be so devastating as some felt? Most, most probably no...still...however...

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TVS Motor — learning a key lesson : I did cover the story between Bajaj and TVS spark-plug patent case which Bajaj won, and I said them these are (were) early days for India. Without having the technical knowledge, and therefore not buying fully the TVS side of the story; I believe the learning should be fast; otherwise it will be another area of failed democracy and judiciary as visible in many aspects in India.
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McCain, Obama Remind Asia It Needs to Decouple: The columnist apparently has done great analysis and still got the wrong conclusions. He seems to have forgotten that financial markets rely on money chasing assets. And due to the financial integration and easy credit policy and lack of credit in Asia (can someone tell me what's the credit money/person in US against that in India or China? I believe it would be much higher even when one factors in real size of economy/person in these areas), it's FII's easy money that drives Asian markets significantly. And these FIIs know that there is Fed. to bail them out anyway, so why not own/grab/speculate cheaper Asian assets with borrowed money from the Fed.?
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Dollar Falls to Record Low of $1.50 per Euro on Rate Outlook : I can't help but get a feeling that my forecast (how stupid it is for any to forecast anything in financial markets!) is coming true when global media was agaog with Yen appreciation and possibility of dollar rising against Euro. Why yen can't appreciate is simple: that would lead to another round of financial shocks as carry trades get fully trapped, and it soaks up the already scarce liquidity. On top of that I have fundamental doubts regarding strength of Japanese economy in-spite of its latest 3%+ growth rate as stated. It will be up for Euro, however it's already reaching unsustainable level here too. Long term up is Yuan only...
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I must also state that all the Indian hollah-bollah regarding exporters loss and Rs. rise is also falling apart. Since last couple of months, although dollar has stedily weakened against Yuan and other emerging leading currencies, it did remain steady or even appreciated again INR. And if more shocks (bound to be at some point) hit global financial markets, I am deeply worried with $100+ crude and Indian huge trade deficit (20-25%% of its trade). No doubt, much of the global financial problems are attributed due to uncontrolled rise in M3 in Yen and Dollar.
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Google Falls as Fewer Search Users Click on Text Ads : Expected as we get bombed by ads everywhere. The success would depend only on the exact positioning. 'Clicks on Google's sponsored links -- text ads that run alongside search results -- fell 7.5 percent in January from a month earlier to 532 million, Reston, Virginia-based ComScore Inc. said late yesterday in a report. Sponsored search links accounted for most of Google's $16.6 billion in 2007 sales...Billions Erased: Google fell $22.25, or 4.6 percent, to $464.19 at 4 p.m. New York time on the Nasdaq Stock Market, the lowest since May. The stock has tumbled 37 percent from its high on Nov. 6, wiping out about $17 billion in combined wealth for co-founders Larry Page and Sergey Brin. ' . That's awesome as it touched $700 as well if I am not wrong.
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Goldman, Lehman May Not Have Dodged Credit Crisis : If both the facts of Citi having $320 bn in VIEs and VIEs being worth 27 cents to a dollar are true, Citi is sitting over $250-odd bn of losses. That, again if true, and allowed to be operated with market forces, should be the death knell of Citi. So something is amiss somewhere, or as expected, market forces will be tethered again.
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Lou Suffers Blackstone's 'Fat Rabbits' in China Fund : It's too soon to judge Lou on his investment decisions, and all said and done, SWF, more so from China, would look at strategic interests more than investment returns. The article again shows how China develops professional policy-researchers and makers.
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We must curb international flows of capital: Excellent...I need to visit FT more often.
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Why are food prices rising?: The price rises, starting with inputs to agri-commodities, many by almose 7-10 times in last as many years, are phenomenal
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Yang: Microsoft Bid Was a “Galvanizing Event” for Yahoo: Insightful, philosophical statement; however time may be running out. The comments are also interesting.
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Wheat Breaches $12 for First Time After Biggest Gain Since 2002 : EVery alternate day I see wheat prices closing at upper circuit and something inside me tells me: it's an awful sign. Like Indian peeny stocks, but happening with the most used food item globally. Something fundamentally wrong. And inflation is contained...wonder how.
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Pearson Isn't Making Web Trade Better Than Newspapers : It may still be the trailer, the actual movie, when begins, will be fast and bloody. Text book publishers (and authors too) still make a lot of money in India, China and other populous emerging nations where books are comparatively cheap and online access is less (also awareness amongst faculty is less, the biggest reason). 'U.S. college students using Pearson's online learning programs jumped 44 percent to 1.3 million this school year.' .
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Google, Gates, Indian Diaspora Bet on Children: '...at 30 U.S. cents per child per year, the basic math, reading and writing skills required to help young learners retain their interest in education and keep them from dropping out of school are ridiculously cheap...Together, the two charities offered to help 10 million students for three years by pledging $9 million last year to Read India, an initiative of Pratham, a Mumbai-based not-for- profit organization for which Patel is a fund-raiser. Google.org, the philanthropic arm of Google Inc., chipped in last month with a $2 million grant to help fund Pratham's annual survey of the qualitative aspects of primary education in India. ' I also had a look at their (Pratham) site, and they deserve credit (it's being operational for long...)...'The remedial Read India program will have been administered to every child who needs it by 2010. But that, as Patel says, is just a ``one-time antibiotic shot.'' ' That's right. Education and information gathering is a continuous process.
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FCC Head Says Action Possible on Web Limits: As a researcher, I have been following network neutrality (and unlimited tariff plans mostly in place in the US). The future would have challenges as no firm directions emerge. 'Industry watchers said the chairman's comments were his strongest yet against the carriers. The prospect of punishment for those who violate the FCC's 2005 policy statement safeguarding net neutrality could pave the way for legislative action, some analysts said. With the backing of Martin, a Republican, the FCC's two Democratic commissioners -- both supporters of net neutrality -- would have the majority. "Martin has never had a clearly elucidated position on this, but we're seeing what Martin thinks now and he has the swing vote on this," said Tim Wu, a professor of law at Columbia University, following his testimony at the hearing. "He thinks that it's a consumer rights issue; whether that is a principle for the ages or principle for the case we don't know, but he certainly sent a message."' It also is covered well here: Comcast, net neutrality advocates clash at FCC hearing
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Bill Keller: "I'm proud to stand by this story." Times Public Editor: You Were Wrong To Run It: NYT seems to have lost this case...though (again not knowing much), I was for the NYT. Does it speak about my bias, my stupidity or my dislikings of the Republicans (as seen by the Cheney lot).
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I also saw certain articles in the Asia Times Online and from there went to the daily reckoning. I heard about it many times before, but visited it (probably, and consciously) for the 1st time. 'Until now, central banks could get away with soft money policies, because the Chinese offset increases to the supply of money with massive increases to the supply of labor. Millions of Chinese moved from the farms to the factories - lowering the price of labor worldwide…and with it, prices of consumer products.But there are many things cheap labor can't produce - oil, for example. And gold. And copper. And food. Copper is up 22% so far this year. Gold is up 11%. Wheat is off the charts. And oil broke through the $100 barrier just this week...Everybody loved inflation when it pushed up their stocks and house prices. But they hate it when it boosts the cost of their bread and taxi fares. Only gold investors like consumer price inflation. Hence, the smart money is wagering that the price of gold will go up…and so is our money!..These fellows (read central banks, Fed.) challenged the gods - pretending that they could control the markets and the business cycle. Of course, they couldn't. All they could do was to use the old familiar Keynesian flimflam…print a little extra money so as to trick people into thinking they were wealthier than they really were...And when you add in the states and local governments also borrowing and spending, borrowing and spending, borrowing and spending, too, you are suddenly talking about 75% of GDP being government spending! ' Can the last part be correct (when consumer spending is also 70% of GDP, true both can overlap). As I read, I understand inflation in Zimbabwe is more than 100000% (annual)...my stand is same here: 'All we know is that, now, the Gods are having their revenge. And while it may be painful to investors, homeowners, workers, and just about everyone else, it is nevertheless instructive. And for a mischievous economist - still fun to watch.' As I read this (I thought the US exports weapons and food and Boeing) '*** The United States is now a net importer of food, we read recently. If we understand that correctly, there is no longer enough food Made in the USA to feed Americans' appetites. Colleague Dan Denning began a nervous discussion on the topic when he sent this article from the Financial Times, with its headline reading: "The next crisis will be over food"'; I am deeply worried about India and all the middle-class and poor people in the developing world (South Asia and Sub-Saharan Africa particularly). One can look at Goldman Sachs foresight in Housing, now they are bullish on agri-commodities. '"But outsourcing your supply of food and water…depending on unfriendly or unreliable trading partners to keep sending fresh fruit and poultry…or thinking the global system of trade will forever expand and never again contract…these are all dangerous assumptions that could leave you with an empty national stomach at night."' '"In 1908, good farmland in England was worth about 45 pounds per acre. Similar land would now be worth about 4,500 pounds an acre…On that basis, land has risen by about 100 times…over the last century. "We can be more precise about gold. In 1908, an ounce of gold was worth four sovereign coins. At the current dollar price of $900, an ounce of gold is worth about 450 pounds, or about 110 times what it was worth a century ago."...Barclays Equity Gilt study, which the bank has been publishing for the last 53 years, takes a long view of the performance of British stocks and finds that for nearly 100 years - from 1899 to 1985 - U.K. stocks actually lost investors money. Compared to retail prices, the real return on equities over that entire period was negative. But in the 20 years following, share prices - in real terms - more than doubled. In America, the capitalists' stock rose even more. The Dow index went up more than 1,000% from '82 to 2000. Nor was this boom confined to the Anglo-Saxon economies. The Russians wised up fast, knocked down the wall, renounced communism and cut tax rates down to a third of the level in Britain. The Chinese kept their government but changed their creed: 'To get rich is glorious,' said Deng Shao Ping. The Indians dropped the "license raj" and got down to business. The whole world bustled and boomed. ' And still we don't learn...''Capitalism doesn't work,' said the sore losers and whiners. 'It favors the rich,' said the envious. "It needs to be controlled," said those who wanted their own fat fingers on the knobs and levers.' Very true...'The baker, for example, wants his own costs controlled and the bakery across the street put out of business. The factory owner wants the borders sealed against foreign imports. And the working man thinks he should have his job as a matter of right. What they all want is protection from capitalism…from the future…and from the unknown. Everyone wants a softer cushion under his derriere and he'll vote for the politician who offers it to him most convincingly. And almost every voter wants to stop free markets from doing what they do best'

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Internet & the US election: I took a look at both Obama for America and also at Hillary for President. Both look good with points that I didn't like also, however Obama apparently had an unconventional approach.
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Bernanke, Bush Fail to Build Better Economy With Cuts, Stimulus : Though my opinion on this issue had primarily been same (or even more severe), I also acknowledge that it's too early to make any comment on the impact of those decisions. Interesting to note this point: 'Households reduced their savings rate to virtually nil in December from close to 10 percent of disposable income 15 years earlier. That trend may reverse as credit becomes scarcer and home prices fall...Allen Sinai, chief economist at Decision Economics in New York, calls the pullback by consumers ``a seismic shift. For several years, the growth of consumer spending is going to be significantly below its long-run average of 3.5 percent.''
' . Meaning around 2.8% of growth came only from consumer spending (at the cost of savings or even by borrowings?). 'The increase is stoking fears of more to come. The yield on the 10-year Treasury note, which acts as a benchmark for mortgage rates, rose to 3.80 percent on Feb. 22 from 3.44 percent a month earlier, even though the Fed reduced its overnight lending rate by 1.25 percentage points during the period...Robert Gordon, a professor at Northwestern University in Evanston, Illinois, says the surge in productivity that began around 1995 was a one-time event sparked by the advent of the Internet. He pegs the underlying growth rate of productivity at about 1.8 percent, down from a high of 2.9 percent earlier this decade. Nobel laureate Edmund Phelps says there's little the Fed can do when faced with such a structural change. ``We've had a series of booms, and it seems to me they are now over,'' says Phelps, an economics professor at Columbia University in New York. ``As a result, we're going to see a period of slower growth than in the past.'' '.
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Hong Kong Stuck Between a Peg and a Hard Place: No doubt a well-written and researched article from this veteran. However all said and done, the need of this comes only due to misuse of its superpower status as often followed by the US (abd thereby status of $ in global currency market).
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Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish : Sounds ludicrous, but that's how corporate world works. Rules are meant for end-consumers, rarely for the corporates and implemented that way only.
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Nader Says He's Running for U.S. Presidency Again : Although I don't know anything about Nadar (and my knowledge about other candidates again being poor and superficial to a certain extent), what I appreciate is this reckoning: '``When you see the paralysis of the government, when you see Washington, D.C., be corporate-occupied territory, every department and agency controlled by overwhelming presence of corporate lobbyists, corporate executives in high government positions, turning the government against its own people, one feels an obligation to try and open the doorways,'' he said'.
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Investor group ready for New York Times proxy fight: Again on NYT...
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McCain story proves incendiary among journalists, conservatives: I saw the original story in NYT, and we also had Bill Keller's article on quality some time back. This article now shows how much research and investment these guys make for one story...any single example from India (I know there are few, but those also focus more on creating a hype rather than the issue). And on 23rd came 2nd NYT on this...one can be sure that NYT was not shooting in the air
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Microsoft targets sizeable online ad market: Interesting keeping my research interests and domestic market. $130 million and 50% or so growth rate isn't bad keeping in mind some 50-100 million (and all the figures in India vary) users. So roughly $2-3/user whereas total comes to $5/user. 'Bahat na insaafi hain' if one had to use the words of immortal Gabbar of Sholay.
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Conservation ‘halts cross-species plagues’: Good reading in a new area...never thought as such about it! The 1st comment was wrong about India.
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Magazines Up for Sale, Including Variety : It happened with Life, and more of it will happen as the evolution of content takes place. I was wondering whether Reed-Elsevier and Elsevier are part of same firm or parent-child. Probably. What would be interesting to observe is how academic publishers would get over the tide.
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Google Health Begins Its Preseason at Cleveland Clinic: Though I was expecting something different (How internet can help in diagonosis of rare medical cases)...however this gives me an idea that just like one stores photos, why not have a site to store the scanned copies of all your health records (till automatic updating takes place).
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'Benefit everyone, not just people like ourselves,' Gates tells Stanford students: I am a fan of this gentleman, and have great respect for him. '"People shouldn't graduate without having an understanding of the average living conditions of the poor," said Gates, pacing the stage at Memorial Auditorium. It is a "focus, a value system, that will drive more rapid change. "If you look at medical research - consider how much money is spent on (preventing) baldness compared with malaria," he said. "It's 50-to-1 for baldness. Malaria kills a million people a year."' And we want free capital market economy in India too!
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Yuan Climbs After China Pledges New Policies to Curb Inflation : For long I have been an admirer of Chinese policies, more so on monetary, financial and globalization related (with geopolitics too). What I would like to stress is the word 'Innovate' and searching for new policies continuously. What US Fed. and Govt. has done lately is nothing but innovating policies to help US economy (though I doubt its sustainability over the longer run); and by doing that they again try to pass the inflation to the rest of the world as they have done many times before. Developed world produces paper money, developing world produces goods...now it has gone too far as developed world borrow from poorer developing world to consume more! And traditional tools may not be much effective with free flow of capitals, people of developing countries not having credit access and assets being comparatively cheaper again. So one needs to always ensure that the real asset of people of developing world does not get transfered to the developed world for credit money alone. This is a complex thing...however China has so far been able to manage it excellently. Can it do it again as inflation shoots? They may but again without allowing Yuan to appreciate faster (mid-term measure) and finally by not allowing free credit to US (long term measure), they can do it; but both would have counter-effect as productive capacities would go down as demand falls.
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India struggles to tame its heart of darkness: Good article, however the question is not about 10% of Bihar's population alone. It rather is about anywhere between 50% (to 70 or as high as 85%) of people getting marginalized. 'Bihar's economy failed to register any growth in the first half of the 1990s, and has grown at just under four percent since, less than half the current national growth rate and barely one percent in per capita terms...Criminal convictions were almost unheard of in the reign of Laloo Prasad Yadav and his wife Rabri Devi. A new system of speedy trials helped secure nearly 10,000 convictions in 2007. Kidnapping for ransom, Bihar's biggest industry in Laloo's days, has fallen four-fold. In the past two years, more than 200 cases have been registered against corrupt government officials.' And then some faculties of IIMs or HBS think that the same man who ruined Bihar for a such long time is revamping Indian Railways...to get merely some political mileage. 'But the problem of Bihar -- and by extension the problem of India's widening inequality -- has even broader implications.'

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Wheat Shreds Goldman, USDA Forecasts Belied by Gains : Can be much more disastrous for a large number of people, more so in India, China, SOuth Asia, Africa than the impact of crude on economy.
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Equity Trades Defy Economy as Wall Street Transformers Abound : I am indeed surprised to see the volume (and thereby depth) of the NYSE. Almost all the m-cap got traded already...whereas in India (and not including derivatives, and also NYSE does not have derivatives), yearly turnover would be around m-cap. Another difference is, volatility (with a downward bias) increased trading there whereas it reduced trading in India. Speaks for itself on how Indian markets are susceptible (and therefore can be manipulated) easily by large players, primarily large FIIs.
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Alibaba has say in Yahoo, Microsoft talks & Alibaba, Beijing Fear Microsoft's Business Tactics: The earlier Bloomberg article raised few of these concerns which now are growing. I didn't know Yahoo! stake in Alibaba is as high as 39% (whereas Google apparently did sale its stake in Baidu).
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Looming end to DVD war cheers consumers: I followed this story for almost last 4-5 years (?), and Chinmoy did a case on that (like many of his works, he gave me credit for that too although other than the topic, I didn't even add a single word to it. I miss this great young guy (he helped me with lot many things, now even with this blog); and I have probably seldom seen such great character, honesty, sincerety, simplicity, modesty. Back to Ranchi now to look after his family.
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HC restrains TVS from launching Flame motorcycle : Interesting case for Indian patent office and judiciary...hope they are doing a good Job.
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Bernanke's Rate Cuts Force Asia Back to Price Limits, Subsidies : I can't help but state - 'Look. Who's preaching...and to whom?'
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Preparing For The Aluminium Boom: At times, I find the best analysis in many of this gold, commdities or off-main-stream media (which aren't strictly speaking alternate media as well). I read about Chalco & Alcoa picking up Rio shares, but until now no one talked much on the Aluminium side. Real good indeapth article
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Yahoo's Chinese Math Proves Miller Is Right at $40: Good and timely article...should have been there even before
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Hong Kong shares end morning sharply higher on Wall Street lead: I fail to get this again...the cheer in global equity market on 13-14/2, all led by o.7% change, upside one, in the US retail spend. That means US consumers did spend roughly $7 billion more in January (month on month or whatever these 0.4% drop and o.3% increase mean). And global financial markets, more so equity one, went up by a cool couple of trillion of dollars. Rather than focusing on fundamentals, savings, productivity, real economic growth and not on credit-driven economic growth; I don't understand on what we have been focusing. US economy is in a mess...irrespective of whether consumer spending reduces by few points or goes up by that. Tightening of consumer spend is quite good on the long run (only negative can be jobloss). So here you have someone, if someone has that interest, spend $7 billion more to get couple of trillion dollar of return within month in global equity markets. And credibility of Fed. to treasury to banks to governments is right that they cal easily manipulate that.
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Africa bright spot in Bush foreign policy legacy: Is it clearly so? I was getting the picture from global media that it is China who build its influence the most in Africa over last few years. True, many of the ruling regime in Africa may be having their loyalty to US (and President Bush), however on ground the alienation is more as more and more terrorist/violence acts get reported (in few cases with increased activities of Al Qaeda also).
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Japan Economy Grows 3.7%, Twice as Fast as Expected : I really really fail to understand this...after months of speculations on low growth rate, the sudden rate jumps to 3.57%. And Inflation, though lately on the rise, but still probably in 1-3% (or whatever) again defies logic when foodgrain prices globally are up by close to 100% in last couple of years, and so for oil, metals, shipping freight, one does not understand what inflation indeed measure (excluding energy and foodgrain, talk about services, real estate, rent...anything). Probably the inflation they measure follows Moore's law as applicable for electronics sector...a lot of hogwash indeed. However sometime back we saw a report that showed China to have replaced US in term of largest trading partner (both import and export even, if I remember right), and that again explains how Japan is more insulated now from a US recession than in earlier times. 'Rising oil prices may have boosted growth in real terms. The GDP deflator, a broad measure of prices used to calculate real growth from nominal, fell 1.3 percent from a year earlier, the biggest drop since the first quarter of 2006. The deflator is adjusted downwards when oil prices rise. In nominal terms the economy grew an annual 1.2 percent in the fourth quarter.
The GDP figures are preliminary and will be revised on March 12.' Amusing, indeed...
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Americans Selling Homes See Prices Go Below Mortgage : Nothing new as such, barring few more stats and numbers (like the wealth of an Average American is around $200,000 of which 33% is in real estate...I wondered what may be the debt/American again... at most a fifth of that?)
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Comcast Investors Seek Buyback, Payout as Shares Drop : We are yet to see similar investor activism in India, say against the Government for killing MTNL slowly (or the oil maretsing firms), against ABG for not rewarding anything in Hindalco and going through massive expansions and acquisitions. Cases are many, many more involve corrupt businessmen (Essar, Videocon...lot more as few are not corrupt).
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Developing Countries Grew More Biotech Crops in ’07 : The dimension of sustainability often gets linked with this (at least many believe, I am still confused about it). 'In 2007, 282.3 million acres of the world’s cropland were planted with soybeans, corn, cotton and other crops genetically altered to resist pests and herbicides, an increase of about 12 percent from the previous year, according to the report. The report drew criticism from advocates of traditional agriculture, who warned that adopting genetically engineered crops could trap poor farmers in a cycle of debt to the multinational companies that own patents on the seeds. Clive James, the report’s primary author, said reduced pesticide spraying and increased yields had brought down the price of production in “a very significant way and a sustainable way.” American farms continued to dominate biotech agriculture, devoting more than 142 million acres to engineered crops, led by soy. The planting of biotech corn rose 40 percent in 2007 from 2006, to nearly 20 million acres, driven mainly by the demand for ethanol. Argentina led developing countries with 47.2 million acres in biotech corn, soy and cotton. Brazil was second with just over 37 million acres of biotech cotton and soy. India grew 15.3 million acres of genetically engineered cotton in 2007, its only biotech crop. Spain ranked highest among European countries with about 173,000 acres of genetically engineered corn but was 12th over all. European countries have been among the most resistant to genetically engineered crops because of health and environmental concerns. According to the report, 8 of 27 European countries planted biotech crops in 2007, up from 6 the previous year, totaling about 260,000 acres.' Cotton farmers in India pais dearly, many even with their lives...
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From a Bloomberg article, came to know about Kishore Mahbubani, and his book The New Asian Hemisphere: The Irresistible Shift of Power to the East. 'Will the West resist the rise of Asia? The good news is that Asia wants to replicate, not dominate, the West. For a happy outcome to emerge, the West must gracefully give up its domination of global institutions, from the IMF to the World Bank, from the G7 to the UN Security Council. History teaches that tensions and conflicts are more likely when new powers emerge. This, too, may happen. But they can be avoided if the world accepts the key principles for a new global partnership spelled out in The New Asian Hemisphere.' STated often, but true...'alternative weltanschauung'...new concept but no doubt needed now.
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Asians Shouldn't Have to Be Reborn to Get Rich: Though the findings are good, I won't agree with many of the interpretations. Take for example Reliance Power IPO debacle, the failure lies more in fundamentals than a global market meltdown. The whole issue was a hype and fooling people, true in case equity market remained high, selling a hype is easy. However one can fool others quite a few times, but not always. Or even 'The poorest 5 percent of Germans are, as a group, at the 73rd percentile of the world income distribution, which makes them more affluent per capita than the richest 5 percent of Indians' has any meaning on per capita income basis. However I agree with this, again on a per capita basis or even more holistically: 'If each nation's population is divided into 20 income classes, then climbing nine rungs from the bottom -- a tough task in societies where vested interests allow only limited social mobility -- will take a person the same distance as can be more easily traveled by being born in a country twice as rich.'

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U.S. Payrolls Decline for First Time in Four Years : Many times they come up with revised data later on...however this is in expected line.
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Exxon Profit Rises as Oil Surges Toward $100 a Barrel : Quarterly profit of $11.7 billion and yearly $40.6. I am not sure what's the highest quarterly or yearly profit recorded by firm...number are mind-boggling (they can buy ONGC with one year's profit!). BP reported around $27 billion (annual) profit...'Profit for all of 2007 was $40.6 billion, topping Exxon Mobil's own record for full-year earnings by a U.S. company. Fourth-quarter revenue rose 30 percent to $116.6 billion.'
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Here's the big news of 2008: Microsoft Bids $44.6 Billion for Yahoo and Microsoft Offers to Buy Yahoo for $44.6 Billion : BW did have an article on that long back (where I had a comment, and I have been proven wrong now). 'Google, based in Mountain View, California, captured 56 percent of U.S. Web queries in December, almost double the combined share for Yahoo and Microsoft, which attracted 18 percent and 13 percent. Searches will account for 37 percent of the $27.5 billion U.S. online advertising market in 2008, estimates research firm EMarketer Inc.' By 2010 online ad market expected to be $80 billion...'The purchase would be the largest acquisition ever in the technology industry, surpassing Kohlberg Kravis Roberts & Co.'s $26 billion acquisition of First Data Corp. last year, according to data compiled by Bloomberg.' . Here's another article on it (Microsoft offers to buy Yahoo for $44.6 billion) and the 4th one (INSTANT VIEW: Microsoft bids for Yahoo). 'Internet audience researcher comScore estimates Google's share of the worldwide Web search market has reached 77 percent, while Yahoo is second with 16 percent and Microsoft was a distant third with 3.7 percent...Microsoft said the online advertising market is growing rapidly and expected to reach nearly $80 billion by 2010 from over $40 billion in 2007. It added it is "increasingly dominated by one player," referring to Google..."I would not be surprised to see this bid have to be raised over time," he said. "I think there are companies out there like Comcast (Corp) and Viacom (Inc) and others that still need to address the emergence of online media and haven't. So there are clearly other strategic companies out there."...The Microsoft-Yahoo deal would be the largest in the Internet market since the $182 billion purchase of Time Warner Inc by AOL in 2001, which was seen as the worst merger in recent corporate history, with clashing corporate cultures and many of the promised synergies never materializing. ' The other stated: '"It's about time. Great for Microsoft. Great for Yahoo shareholders. These Internet markets are winner-take-all markets and they cannot be built. Time is too valuable. Yahoo has one of the best positions on the Internet because it's integrated brand (advertising) with search..."They're in a pole position in several major industries. I expect News (Corp), Comcast, and GE will look at it. But Microsoft is paying a lot because they're trying to scare away other bidders..."Shocking! To me, the premium seems exorbitant, for what is a dwindling business. I personally don't see how the synergies of Microsoft-Yahoo is going to take on Google."It will obviously help the stock market immensely -- the overall market loves a big deal, here you go, and the futures are screaming.
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My views were similar...




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China Tries to Reassure U.S. About Its Investing Plans : '“We are like farmers — we want to farm our land well,” said Lou Jiwei, chairman of the China Investment Corporation, a so-called sovereign wealth fund established last year to invest some of China’s foreign exchange reserves...Referring to the $5 billion stake in Morgan Stanley that the fund purchased in December, Mr. Lou added: “Of course when there is good market opportunity, we can also make some direct investment, such as the Morgan Stanley deal.” Mr. Lou said Morgan Stanley had approached the Chinese fund rather than the other way around and that “after analysis we realized that this was a good opportunity.” He added: “If there is a big fat rabbit we will also shoot it. Some people may say we were shot by Morgan Stanley. But who knows?” China made headlines last May when it announced it would purchase a $3 billion stake in the Blackstone Group, a private equity fund. But Mr. Lou said only a third of the fund’s $200 billion in assets would be used to buy foreign assets. The other two-thirds are to be used to shore up three Chinese commercial banks, he said...Echoing what he said was a pledge by Prime Minister Wen Jiabao, Mr. Lou said that the Chinese government would not interfere in the operations of the Chinese fund or dictate its investment decisions, and that the fund would have its own corporate governance structure.'. Looks like the gentleman is answering various concerns of SWF raised in Davos recently.
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Sprint Plans Big Write-Off Of Assets: $31 billion write-off...I wonder any large scale telecom acquisition (where parties both not present in market) did pay off. 'Thomas Watts, an analyst who follows Sprint for the New York investment bank Cowen and Co., said the announced write-off was characteristic of a regime change. "Frankly, it is a fairly classic move by a new CEO," Watts said. "I come in, and I take a lot of charges. I write things off, and I blame it on the previous management." A $31 billion write-off would likely result in a big fourth-quarter loss. In the corresponding quarter of 2006, the company reported a profit of $261 million...The failure has led to deteriorating service and an exodus of customers. "They are at a big competitive disadvantage," said Bruce Greenwald, a professor of finance and economics at Columbia University. "They don't have a dominant share in any market that they compete in." ' Yes, many times to create competitive advantages, we rather do the opposite.
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China advises millions to abandon travel plans: 'The trip is often the only bright spot for workers who toil all year long in factories far from home. For an estimated 178 million people -- the size of the combined population of Italy, France and Britain -- the annual trek is sometimes the only opportunity to see family that they leave behind. This year, the holiday begins February 6.'
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Budget Hits $3 Trillion As Debt Marks Bush Legacy: 'The longer-term picture is darker. Despite his efforts, Mr. Bush failed to work out a deal with Congress to tackle the spiraling costs of government health and retirement programs. The next president, if he or she serves two terms, could find the U.S. government so deeply in hock that it would face losing its Triple-A credit rating, something that has never happened since Moody's Investors Service began grading U.S. securities in 1917.' Many never thought about it...we assumed that US Government by default enjoys triple-A credit rating. Great to see these institutes that capitalism has created, however behind the veil, there is a different game. As bond insurers cry for more money now as losses mount, and municipal bonds count losses from their sub-prime buying and other credit businesses; I would still like to keep my fingers crossed (although stocks responded quite well to the rate cut). 'The president's critics say his failings are twofold: He has squandered surpluses that could have helped pay down the $5 trillion federal debt. And he has let two terms pass without persuading Congress to take action that would preserve the government's social programs. According to the Concord Coalition, a fiscal watchdog group, the shortfall in Social Security and Medicare through 2080 will total $72.3 trillion, a number that dwarfs the impact of Mr. Bush's spending and tax cuts.' Good that someone studies that far (given a choice, I may at best do some ball park calculations, but not study or research); wonder if anyone in India ever bothers! 'In 1999, Moody's started a series of five downgrades of Japanese government debt after the debt reached 90% of the entire economy. "That could happen in the United States if these programs aren't reformed" as 2020 nears, says Moody's Vice President Steven Hess.'

Best of the Web - 2008: Geopolitics, global economics, US, Europe, China, India

Not dead yet: the newspaper in the days of digital anarchy: I didn't know about Hugo Young or Bill Keller, however I have deep respect for both The Guardian and the NYT (now-a-days I visit Guardian less, less even on Google News). Where is Indian journalism on value like this? 'Newspapers, including at least a few very good newspapers, will survive, simply put, because of that basic law of market economics: supply and demand. The supply of what we produce is sadly diminishing. And the demand has never been greater.' I absolutely agree. 'My little realm, the newsroom, consists of about 1200 people, journalists and support staff off all kinds. Every one of them has opinions about a lot of things. But just as doctors and lawyers, teachers and military officers, judges and police are sometimes expected to set aside their personal politics in the performance of their duties, so are our employees.' I am afraid I am not following if often now-a-days...dangerous!...'As my country grows more polarised and cynical, there is pressure on journalists to abandon the effort to be impartial, to openly take a side, and to write accordingly. Some of our critics insist that pure objectivity is unattainable, so why try? To me that is like saying that because much of our children's future is ordained by nature, by genetics, we should abandon the business of being parents. ' And here is something I can use for my research: ' I can't draw you a neat map from our current predicament to this new destination. Indeed, I would regard with deep suspicion anyone who claims to have such a map. Isaiah Berlin famously divided the intellectual world into foxes and hedgehogs -- the hedgehog knows one big thing, the more promiscuous fox leaps from idea to idea. The internet is a fox medium, that's fox with a lower case 'f'. It is perilous to get locked too firmly into one big idea - that people will pay for content on the web, or that they won't; that the key to success is brand loyalty, or, on the contrary, that it's all about scale. Anyone who gets too declarative about this medium is likely to be hedgehog road kill. But while I can't tell you quite when, or quite how, we reach the Promised Land, I will offer up a few reasons for my optimism that we will get there...The printed newspaper may eventually become a cult product, like vinyl LP records, but we are some years from that day.
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'Because the web is organised more by search than by the configuration of pages, we have turned all of that biographical and investigative material into a robust reference work. Stories that used to live for one cycle and then disappear into microfilm now are repackaged into candidate pages. If you are interested in how Rudy Giuliani really performed in the aftermath of the September 11 attacks, or in Hillary Clinton's tortured relationship to the war in Iraq, or in who is supplying Barack Obama with foreign policy advice, you can get it in a click.'. Simply great...I read a good article after a long long time. Forgot the scoring mechanism I had when I started best of the web blog...*****
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As America crash lands, the world looks east: 'A few decades ago, looking to China as the driver of global growth would have been unthinkable. Henry Kissinger, Nixon’s Secretary of State, who was instrumental in opening up the channels of communication with China in the early 1970s, told the World Economic Forum in Davos, Switzerland, last week that he had no idea at the time that Beijing could emerge as an economic competitor...Now it is the turn of the banks to feel the growing muscle of the Chinese. There could have been no more potent symbol of the shift of global power than the spectacle of America’s mightiest banks begging for cash from government-backed sovereign wealth funds from China and the Middle East to cover the vast losses they have clocked up through reckless lending. But America has relied on Asian cash for years, locked in a bizarre financial embrace with the country that has become the world’s factory, and in many ways its banker. Like many nations with a strong export sector, China has earned more than it could spend and has accumulated vast savings in the past decade. '
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The world crisis of capitalism and the prospects for socialism: 'Last May, the International Monetary Fund’s “World Economic Outlook” (WEO) noted that the average world growth rate for the period 2003-2006 was 4.9 percent and predicted it would continue for at least the next two years. The only stronger spurt was the period 1970-1973, when world growth averaged 5.4 percent. If the current rate were sustained, the IMF report explained, it would represent the most powerful six-year expansion of the world economy since the 1970s.''
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Why Is Bernanke Trying to Fight the Bear?: I absolutely agree with the title, though I am not sure on the impact (it may work and save US economy from recession or it may even aggravate the problem. However where are the free markets? You create money supply by lowering rates, create asset bubble and when they correct, again you stand by them. So bulls and Central Bankers effectively work against the common man and bears (don't take common men and bears to be synonymous, however bear market helps common man without ANY credit access to live better, own cheaper assets with own money than on borrowed money). The world has more commoners than bulls or bears
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Bernanke's Fed: an "academic in a china shop?": ''A commenter passed this along -- economic analysis from the blog of former Labor Secretary Robert Reich: "Most consumers are at the end of their ropes and can’t buy more. Real incomes are no higher than they were in 2000, while food and energy and health care costs are all rising faster than inflation. And home values are dropping, which means an end to home equity loans and refinancing. ... Add all this together and there’s just not enough consumer demand out there to keep the American economy going."'I believe it's equally if not more true for Japan also.
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Asia gripped by volatility after Fed rate cut: I also read the MSn article on Arson and Economic slowdowns...nothing conclusive as such. However the comments are interesting.
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China's Reserves Fit Harvard Linguist's Law: Interesting...in 1948 India had 20% of global forex reserves (in Gold or equivalent?)
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The Prime Minister delivers: Indeed a bold move 'Today's speech announcing that every teenager will have to stay in school or some other form of education or training until they are 18 will prove to be a quantum leap in terms of upskilling the workforce.'. It's more needed in poor literate societies like South Asia and Sub-Saharan Africa.
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Fees on 401(k)s Rock Boomers Facing Flawed Disclosure: Someone said, Government cheats, and they lie too.
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Believing (and Believing and Believing) in Bullion : I don't see mainstream focusing much on unsustainability of paper currency, nor economists talking about it (or I have become one of those so called gold-bugs, phisophically). Could it be really so that not Pravda, nor communism, nor China's Socialism; but what would sort of bring western civilization back by many years would be gold standards? Comments of Sinclair really proved to be true...
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Kidney racket scandal in Gurgaon shocks India: Not unexpected in a country that saw Nithari killings...matter of fact is the 'GDP-Cult' country, governance has failed.
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Legg Mason Names Fetting CEO, President: I didn't know anything about this trillion-dollar Legg Mason MF. 'The move caps a long, tough search for a successor to Raymond "Chip" Mason, the 71-year-old co-founder of Legg Mason -- and the only CEO in the firm's 27-year history. The $1 trillion Baltimore money-management firm has searched for a successor for years, and now desperately needs one that can turn the firm around.'
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Suharto's Corrupt Legacy Lives On in Indonesia: I must say I disliked this deploring 'cult-of-GDP' in India also...And India, like Indonesia (and much of Asia) Indonesia, is increasingly practicing at any cost how to grow faster, not how to grow better. 'It's the great Suharto paradox. During his tenure, per- capita income in the fourth-most-populous nation quadrupled and the ratio of those living in absolute poverty declined from more than three people in five to about one in 10 by 1998. Yet Indonesia's development model proved to be a house of cards that crumbled in a matter of months. Perhaps the bigger question is how a nation as resource-rich as Indonesia -- oil, gas, timber -- could do so little. This is among Suharto's biggest failings. Kleptocracy (I used it for Governance in African Nations, more in the past when leaders at times colluded with Western Governments, took loans in national accounts only to enrich their personal pockets) A decade after Suharto's ouster, some argue corruption hasn't been reduced, so much as decentralized. In Suharto's day, you knew who was in charge, and who should be paid. Now, the nation's system of graft is a more multilayered phenomenon.'

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China's Yuan May Gain More Than 10%, Sakakibara Says : Before the full fledged blow-out of this economic problem and turmoil in financial markets, I too was little bearing on Yen (in an article I talked about the range of 110-125 against dollar, ruling price then was 114 or so). So when I see Yen at times nearing 105, I understand how wrong I was. However over the longer term, I still remain bearinh on yen, and would put a target of 110 by 2009 Jan. Prof. Sakakibara however says it to be close to 95 even before that...a payment crisis on yen-carry trade can't be ruled out of Prof. Sakakibara is right, and no collusion made in the banking system.
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Bankers at Davos See Recession, Companies Yet to Feel Slump" : Same old stuff...'Morgan Stanley's Asia Chairman Stephen Roach called a global recession a ``close call.'' He said there's no substitute for the $9.5 trillion spent last year by American consumers. Households in China spent $1 trillion and those in India $650 billion, he calculates.'
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Statism Beats Capitalism; Gazprom Squeezes Exxon, BP: A situation like this in India can't be ruled out if the high decibel noise on gas and oil find in KG Basin and other places by private operators come true, more so when the OMCs are bleeding, and taxpayers losing out. 'Petrobras shares gained 46 percent in the past six months, while Gazprom, the world's largest gas producer, advanced 12 percent. Exxon Mobil lost 4.9 percent, and Shell dropped 8.6 percent. London-based BP fell 6.5 percent.'. '``We're making a shift away from the vertically integrated companies,'' said Daniel Genter, who helps manage $2.8 billion at RNC Genter Capital Management, a Los Angeles firm that sold more than 60,000 Chevron shares last year. ``As we go forward, the benefits of higher oil prices will go more toward the national oil companies and away from the major oil companies.''' We so far see an opposite of that at the cost of Indian citizens...'OPEC, along with Russia, Kazakhstan, Azerbaijan, Turkmenistan and Brazil, sit on 1.06 trillion barrels of oil, or 88 percent of global reserves, estimates from London-based BP show.' ' In the first nine months of 2007, production at Exxon and Chevron declined by about 2 percent from a year earlier, while output at Shell, based in The Hague, fell 4 percent. Most state- run producers had increases during the period, with Russia's OAO Rosneft reporting a 29 percent gain.'


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Rio predicts political strife as China’s appetite grows: I did harp on this point often, more so in comparison with the US post WWII and how the scenario has changed. 'Rio Tinto, the world’s second-largest miner, said last week that China already accounted for 47 per cent of all iron ore consumption, 32 per cent of aluminium and 25 per cent of copper. Tom Albanese, Rio’s chief executive, has predicted that within the next couple of years this will move to 58 per cent of all iron ore, 45 per cent of aluminium and a third of all copper. He said: “Even with the assumption that the current growth intensity will slow, we are looking at China consuming a higher percentage of global supply.”' What they haven't got there is coal, energy (oil+electricity), cars, computers, mobiles...and assuming these to be still less than iron ore, Al or Cu in %, in all China is number 1 or 2 anyway. And that's my puzzle in understanding GDP orders. 'Vivek Tulpule, Rio’s chief economist, said that with China likely to consume more than half of the world’s key resources within a decade, political concerns would be raised as the country seeks to control access to the resources its economy needs. In 1990, China accounted for only about 5 per cent of all copper demand and 3 per cent of aluminium and iron ore. The country is already the largest buyer of nickel, copper, aluminium, steel, coal and iron ore. Only in oil does it fall behind, coming second to the United States.' The shift in 17 years, put another 10-20 years, and we get the picture more so with slowing developed world economy. 'Mr Tulpule said: “The US’s consumption of the key metals has been going backwards while China has continued to grow. Its share of global demand will continue to rise until about 2020 when other economies like India start to challenge.”' Possible provided we in India gets our acts right.





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Wall St. Journal to Continue Its Charges for Web Content : I won't like it anyway, and believe there's a human tendency to feel good in being (so called) elite. So there's merit in this argument: 'But Dow Jones executives argue that the firewall not only generates revenue, it also creates an elite audience of high-income business-oriented readers whom advertisers pay a premium to reach. The Journal has a million paying online subscribers, some of whom also subscribe to the paper in print.'. However the online force may be much more powerful than that.
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Key quotes on the shift in global power: Coming from Davos, it itself exemplifies that key shift. Many said insightful things, but when it comes to practice, I don't see much.
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Atonement Comes to Wall Street as Exiled Risk Guardians Return : Yes, that's the way firms and CBs work. We rarely learn from history. Interesting to see the conflict between risk management and trading management (just like operations and sales at times). 'Goldman Sachs escaped subprime-related writedowns partly because it insists that risk managers and traders work together. Goldman CEO Lloyd Blankfein said during a November investor conference that the firm rotates people between trading and risk management so they better understand both sides of the business.' ...Interesting other than the opposite positions that Goldman supposedly took.
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More Risk for Fannie, Freddie?
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Bush and House in Accord for $150 Billion Stimulus : What again strikes us in India is how the policy-makers in the US responds to emergency and how Indian policy-makers escalate the emergency. Even right now in financial markets as brokerages pay rampant with margin money and shares of retail investors.
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Earnings illusion threatens Chinese market: 'The snake is eating itself' is a good phrase, no doubt. However 41% earning growth is also no small deal. Problem would be when the 29% earning growth from investment gains reverses totally and evan erases the 41% operational gains. 'Investment income for all non-financial companies listed in China has more than tripled from a year ago. HSBC found that after stripping investment income out, about 130 companies would have sunk into the red in the third quarter.' That's a disease...'Consumer and healthcare companies are likely to feel the most pain on the downside. They almost doubled net earnings in the third quarter, but their core earnings actually fell 20 percent and 7 percent, respectively. Now both sectors trade at above 100 times forward core earnings, while energy firms, telecommunications companies and banks are trading below 40 times.' However ultimately accounting is a jargon, if not followed in principle. crisis like Sub-Prime or Enron would routinely strike us. 'To make matters worse, a new accounting rule is also inflating earnings. China now allows companies to mark certain assets on their books at their present market value, in line with the international standard. The rule is supposed to be applied prudently, but many Chinese companies treat 'mark to market' as a tantalizingly easy way to boost profit. Those with a memory of not-too-distant times will recall that widespread cross-shareholdings were a big factor when the bubble burst in Japan. At the market peak in 1989, Japanese companies traded at price-to-earnings levels of about 40 to 50, similar to where China stocks are now. After the crash, even after the companies had lost about a third of their stock value, the PE ratios soared to about 70 -- a result of inflated "earnings" evaporating.' Yes, probably I need to be cautious on China and not get swayed by its Forex reserves, growth rates or trade surpluses alone.
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Wal-Mart Chief Offers a Social Manifesto : Good to see it coming from the world's largest (revenue wise) firm. 'In a lofty address that at times resembled a campaign speech, the chief executive of Wal-Mart Stores, H. Lee Scott Jr., said that “we live in a time when people are losing confidence in the ability of government to solve problems.” But Wal-Mart, he said, “does not wait for someone else to solve problems.”' no doubt looks very ambitious, but tha moment has come. So when one sees the following article on future of capitalism, in this we see another going forward where even government has failed. And that's what I like of capitalism, but surprisingly the focus of policy-makers is more for the speculators and less for productive firms. And the next para looks like a story from a science fiction...'He then laid out sweeping plans for the company on several health and environmental issues, and he hinted that even more ambitious goals might be on the horizon. Mr. Scott said, for instance, that Wal-Mart is talking to leaders of the automobile industry about selling electric or hybrid cars — and might even install windmills in its parking lots so customers could recharge their cars with renewable electricity...“We believe there should be one framework of social and environmental standards for all major global retailers,” he said....If an industrywide effort falters, Mr. Scott said, “Wal-Mart will in fact lead; we will move forward by ourselves.” ' The leader has indeed spoken, now remains to be seen what it delivers...true the promises are indeed tall.
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Market Bloodbath Highlights Cracks in Capitalism: I often repeated Schumpeter on his views why he felt Capitalism won't survive, and it's coming back. Like when a doctor says the patient is going to die, it does not mean s/he wants it.
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U.S. Policies Evoke Scorn at Davos : Well, now comes theories on reverse coupling, however who has been permamnently decoupled from the world's economic decision making processes are the 'have not's. numbering more than half the people of the world. And as HIGHLIGHTS 2-China replaces US as Japan's biggest export market, and so for India (here as trade partner, true); increasingly US loses its economic clout. The dependence of rest of the world economy (Europe, Japan) would be on China and not on US; so they would slowly be forced to decouple the 'dollar hegemopny'. At Davos, the Growling of Bears defined 'Roach doubts the world economy will decline to just 2.5% gross domestic product growth—the definition of a world recession—but he says it may come a lot closer to that level than current thinking holds. Chinese growth could even fall as low as 6%, he warns, well below current forecasts of more than 10%. The bears were on display in the Swiss Alps and Goldilocks was nowhere to be found'. My views sound bullish compared to that (at least on China), and I can well be proven wrong.
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Viewing another article (Bernanke Battles Wrong Ghost in Deflation Specter), I must say that I have a lot of respect for Bernanke as an academician who understands economics of past (almost a century early) very well. However what he does not probably understand is the complexity of derivative and derivatives of derivatives and financial engineering. back in the times of Great Depression, markets were not complex as it is today. Warren Buffet stated that deribatives are one of the banes of present world. And Bernanke, without having much idea (I understand the importance of his Chair, and therefore a statement like that may sound immatured; still it is so) on how present day financial markets work. Even the article believed so ('The focus, however, is a shame, for the 1930s comparison isn't the only relevant one. Some of my blogging colleagues have been debating whether 2008 is more like 1971 than 1929. The argument for the '71 analogy is strong. In the summer of 1971, unemployment was in the high 5s and low 6s, something like today.')


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Motorola Says Profit Slumps 84%; Forecasts Loss : Winning big...losing big. I also came to know from another article that Texas Instrument happens to be the largest mobile phone chip supplier in the world. 'Now Sony Ericsson Mobile Communications Ltd., the fourth- largest handset maker, is threatening Motorola's third-place spot. The company posted an 18 percent increase in unit shipments last quarter and may overtake Motorola this year, according to a report from Cowen & Co. analyst Matthew Hoffman in Boston. Motorola's share of global phone sales fell to 13.1 percent in the third quarter from 20.7 percent a year earlier, according to Stamford, Connecticut-based researcher Gartner Inc. The company probably lost more share last quarter, McCourt said. Nokia increased its market share to 38.1 percent in the third quarter, while Samsung boosted its share to 14.5 percent, according to Gartner. Sony Ericsson lifted its share to 8.8 percent.'

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Soros Sees End of Dollar as World's Reserve Currency : Would it really happen under market forces, or others (Europe, Japan, Australia, OPEC & Canada with obvious China) would collectively delay the process(or there can be conflicts within these few). '``The current crisis is not only the bust that follows the housing boom, it's basically the end of a 60-year period of continuing credit expansion based on the dollar as the reserve currency,'' Soros said in a debate today at the World Economic Forum in Davos, Switzerland. ``Now the rest of the world is increasingly unwilling to accumulate dollars.'' The dollar's share of global foreign-exchange reserves fell to a record low of 63.8 percent in the third quarter as demand for U.S. assets waned after the collapse of the U.S. housing market, according to International Monetary Fund data. It accounted for 65 percent three months earlier. The euro's share rose to 26.4 percent from 25.5 percent. IMF quarterly figures go back to 1999, the year the euro was introduced.'

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From Panic to Penicilin Bernanke Blogged: I have been developing for a liking for FT (compared to Bloomberg). The market cheers on naked Bernanke stated 'Bernanke says that the main reason to reduce US interest rates was “a weakening of the economic outlook and increasing downside risks to growth”. Rubbish. The problem is not the US recession or US growth – that’s merely a symptom. The problem is the staggering potential losses that are faced by the $2,300 billion in global lenders who relied on AAA-ratings that turned out to be false (the monoline insurance disaster).'.
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Hands Can Save EMI by Making Music Free on Web:'Making music freely available needn't be commercial suicide. Almost four out of 10 listeners chose to pay for a download of Radiohead's new album, chipping in $6 each on average. You can view that as being a glass that's half-empty or half-full, according to preference. When the record was released in a physical version this month, it went to No. 1 in the U.S. album charts, selling 122,000 copies in a week. Realistic Prices:
Just because it's free doesn't mean lots of people won't pay for the compact disc. So long as you price them realistically -- $5 to $10 -- buying a CD is a lot less hassle than downloading and burning an album. You get better sound quality and a picture on the cover as well. Next, there are opportunities for sponsorship and advertising. Free tracks could come with a sponsored message attached. Songs can be licensed to advertisers and film producers. Then there is touring revenue, which is soaring even as CD sales decline. Record labels can demand a share of that money. When you consider the multiple revenue streams, ``free'' music makes more sense than trying to bully people into paying for songs by threatening legal action. Slashing costs at EMI might work for Hands if it is part of a strategy to create a business that can survive the switch to a free system. But if it is just about saving money while the business declines, and if he can't take the artists with him, it simply won't work. Just attacking the music industry isn't enough. Hands needs to lay out a genuinely innovative strategy now. Given the rate at which the stars are heading for the exit, he doesn't have much time left. Incidentally, now the gaming industry has more sales than paid music sales (last year stats...)
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Greenspan Put Is Dead. Long Live Greenspan Put: 'Perhaps the Fed wanted to avoid the invective of consumer advocacy groups. More U.S. households own homes (68.2 percent in the third quarter of 2007) than equities (50 percent of households, according to the Investment Company Institute), either outright, through mutual funds or in 401(k) accounts...Households had almost twice as much of their net worth in real estate as stocks as of the third quarter of 2007, according to the Fed's Flow of Funds report.' .
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Chinese, Gulf Funds Deserve U.S. Welcome Mat: 'It's their growth curve that has won global attention, and they are poised to quadruple in value from $3 trillion now to $12 trillion by 2015, equal to the capitalization of the Standard & Poor's 500 Index. Morgan Stanley predicts the funds will have assets of $28 trillion by 2022, more than double the size of the U.S. economy today. That ensures their investment decisions will move markets and shape the financial system.

An important article by Treasury's Kimmitt in the newest issue of Foreign Affairs lays out a policy approach that boils down to this: voluntary multilateral agreements that ensure the West resists protectionism while the SWFs get more transparent and don't let politics drive their investments.

Such a reasonable approach won't be easy in a political season.' The last line has deeper implications beyond the US Presidential elections, which the author may have intended.

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Japan's Nikkei 225 Falls in Biggest Two-Day Drop in 17 Years : (Bloomberg changed the title and some content in between) I again have my empathy...bears are making money, bulls made enough but pigs always lose (I was one in 2006). In India, market froze two subsequent days...now at least I didn't lose sleep. In many of articles and blogs, I did caution Indian regilators on maturity of Indian markets to have sophisticated derivatives (and now short stock by sorrowing). Others felt otherwise...true, it's a global fall. However the 1.3 lakh crore derivateive markets would lose close to $5-6 billion in last two days, and that would further put selling pressure in a cascading effect. Government bail-out would give FIIs more opportunity to short as this time, the correction/bear phase may last longer. There's enough prove that Indian markets were manipulated by some influential people (which may even include some of the well-known billionnaires having direct interest lately); however they are more than Harshad Mehta or Ketan parekh. So Indian markets would have fanfare and routine murder and riot. It happened in 2006, 2007 and twice in 2008. In also happened in 2004 (or 5) when UPA came in power. And that's stable market for Dr. Singh - Indian PM. Why this original Bloomberg article is put here is because of Japanese m-cap. We have talked about $50 trillion global m-cap and US having nearly $20-trillion. The earlier version of the Bloomberg article suggested that the loss of 8.8% of m-cap in Japan over last two days wiped out around $324 m-cap, which would give a rough $4 trillion m-cap for Japanse market.
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Time Warner's Pricing Paradox: Well, many did talk about such a model...more in Management Class for IT blog.
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France gets military base in Gulf: Interesting, I am not a historian or geopolitical expertt. However when one takes the view that whether US-led western world' control on the oil-rich Middle-East has actually gone up or down over last decade; I don't have any firm answer.
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Recession risk as British bills come due: Can be a natural outcome as the heaven of the financial world and ingenuity, innovations of different instruments where trading alsone with credit drives the economy. 'And, when compared to the U.S., Britain can expect less support from either falling interest rates or increased government spending.' Because pound is not dollar, and sovereign funds may not go out again and again after those who may not be superpowers. 'But that very stability has encouraged a borrowing binge that has juiced economic performance, taking the ratio of debt to disposable income to 173 percent and nearly tripling house prices.' Debt to disposable income...can be a good ratio. '"It's not been an investment-led productivity project, it's been a consumption boom. The idea that ploughing ever more money into the housing stock is raising the productive capacity of the system is just a joke."' I wanted to say something (well not like a seasoned economist can do) in few of my articles. 'Unlike the Federal Reserve, which has a dual mandate of maintaining price stability and maximum employment, the Bank of England has a specific inflation target. But given that British consumer price inflation has been running persistently above that 2.0 percent target, an aggressive run of rate cuts to stave off recession cannot be taken for granted.' I am not sure who assigns this role-responsibility, however I never heard anything like this before. 'UK commercial property values fell 12 percent in the second half, and there is a bumper crop of new office buildings just coming on line. This makes the outlook for credit this year even dimmer.' In US, such a fall could have led to much more worse situation...that's the differentce of the US and the UK.






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China defends price controls as skepticism mounts: China indeed is a mystery, and they have strange ways to achieve something. What's interesting (and therefore credit should be given to Chinese policy-makers) is it mostly works, as per their plan. In India (and also in developed world now-a-days), it rather results in something opposite. '"It's very difficult to have partial capitalism and partial socialism," he said. "Market mechanisms will eventually kick in and a shortage economy will force the government to make adjustments later." Tao gave the example of restaurants in Lanzhou, a city in western China, which were forced to cap the price of noodles last year and responded by cutting back on portion size.'
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China stocks plunge over 3 pct after reserve hike: Chinese authorities and Rogers (? - the commodity Guru) must be happy that Chinese markets are finally showing some sanity. However what baffles me is this: 'Institutions dumped stocks with dual listings in China and Hong Kong after the average premium of China's A shares over Hong Kong-listed H shares .HSCAHPI soared to a record 108 percent on Wednesday as the Hong Kong market plummeted. Many institutions see levels near 100 percent as a signal that Chinese stocks are seriously overvalued once again.' This clearly shows market imperfections.


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Northern Rock Tumbles as Brown Weighs Nationalization : As a shareholder I know how it pinches, however there is no denying that nationalization still serves the best interest of all stakeholders in given situation for Northern Rock. $25lbs of British Money is already in Northern Rock, it would have defaulted long back. It also shows the fundamental draw-backs of fractional reserve banking system, where shareholders can take any risk knowing well central bankers would be forced to bail them out. That does not happen for a GM, or Enron; and therefore it's high time that central bankers instill high degree of control and (ownership as otherwise control may not work) effectiveness in this private banks. No doubt that we could have seen a few Northern Rocks in the US still had these US banks (including Citi) been in developing/emerging nations (no big sovereign fund or billionaire money along with Fed. would have tried to save it). 'Brown has support from all three of Britain's main political parties for placing the interests of taxpayers and depositors before those of shareholders.'
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Apple Unveils Movie Rentals, Thin Laptop at Annual Show: The expectations were built up, and now comes the intent.
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India's $2,500 Car Stirs Detroit Show, Isn't There : Quite expectedly. Also looking at the lowest cost cars in US, Japan or Europe ('The cheapest car in the U.S. is the $9,995 Chevrolet Aveo from GM. In Japan that distinction goes to the Daihatsu Esse at about $6,000. In Europe the Dacia Logan from Renault SA starts at just under 8,000 euros ($11,900)'), one may wonder why the $6K car of Japan sn't there in Europe or US (Emission norms? For Europe, it may be true). One can expect some high clockspeed in this ageold industry with new low prices, new technology (hybrid or fully battery driven) and also driven by external factors like oil prices, environmental concerns (hoping it really improves) and also legal concerns. 'Even Chinese automakers, which have plans for low-priced models in Europe and North America, aren't sure a $2,500 car is possible or a good idea. Suzuki Motor Corp.'s Alto, at 29,800 yuan ($4,112), is among that nation's cheapest. ``That car doesn't have air conditioning, power steering, air bags and other features. Do you dare to buy that kind of car?'' said Wang Chuanfu, founder and chairman of BYD Co., which is selling its first model at the price of 59,800 yuan. ``Some Indian consumers may buy it, but I don't think Chinese consumers will.'' I thought Alto is Indian model of Maruti Suzuki...
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Study: $90 wine tastes better than the same wine at $10: And probably it holds true in other aspects (as the article itself noted...cigarette, food, or even when it comes to our perceptions from the opposite sex, or even same sex: meaning how we perceive the attributes behind the person rather than what the person directly brings to the table for that brief time of interactions).
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Posted following message at http://chevy.nytimes.com/ (covered the issue in another of my blog y'day):
Hi,

I am Ranjit Goswami from India. I incidentally read about Volt and Toyota's Prius (on which we did some case studies earlier) yesterday. Yes, it's better late than never to have this dialog.

I don't own a car. I am not sure whether I will own Nano of the Tatas, though emission would be much less with Nano. The reason for not owning a car is mostly economical, however it gives me a sense of responsibility as well. And I would love to retain it, even if economic prosperity comes.

I read at one place that Volt would have almost 40-miles run after one 6-hour charge. A rough calculation as given for Prius also showed that using hybrid technology would reduce operational costs (I used power tariff rates in India). China's BYD group has also promised a hybrid car by 2010.

Is it the urge and concern for the environmet that is fueling all these initiatives, or suddenly market forces also mean there is money that's here. One school of thought says that the oil-lobby is too strong (evident from the size of oil-sector in any economy), however it will be really good to see of auto-sector can break away from this oil-lobby. There's been no bargaining power of this sector - between OPEC in the supply side and consumers in the demand side.

If your efforts are successful, and you introduce these models in developing nations like India also (at a price that we can afford), many like me can own a car and still feel good in our heart to be responsible global citizens. While stating that, I am not denying that power, more so when produced from coal, also pollutes. However there are efforts there again too to use cleaner fuels.

Best wishes,

Ranjit Goswami
Associate Professor, Indian Institute of Foreign Trade
India

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Gold, Platinum Rise to Record on Declining Dollar; Silver Gains : Nothing new in this report barring it's long expected. Goldbugs (and to some extent, i belong to this school) also felt that Central Bankers have again and again attempted and brough down any gold-rally by unfair means (dumping gold in large volume suddenly). And it's a bit of a surprise that it hasn't worked so far in this bull run. May be the reason is China as couple of days it was reported that Chinese buyers were buying at quite a high premium over the futures rate. Question is: how soon would it hit the 1K mark, in the 1st half itself or there may be the fact that CBs would again succeed. 'Gold has had a correlation of 0.71 against the euro-dollar exchange rate in the past three months, compared with 0.67 in the previous three months. A reading of 1 would mean the two moved in lockstep. Adjusted for inflation, gold is still below its all-time high. The metal is trading at $430.26 an ounce, adjusted for the U.S. urban consumers price index.' I never believed in technicals, however need to know how to exactly interpret the given data with this article: 'Following are technical gauges for gold:

20-day moving average 844
100-day moving average 778
200-day moving average 722

14-day relative strength index 77.49

Fibonacci Start End 50% 38.2%
745 904 825 806'
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Boomers eagerness to retire could cost them: There's been enough discussion on this and also impct of it on US economy and indebtedness. I also discussed this in my book, Wondering Man, Money & Go(l)d. The D-day finally comes (true, it's a rolling process). The figure of 79 millions are almost 27% of the US population (add to it existing retirees). Well, some detailed analysis is given in this article, however it didn't talk about sustainability of Social Security for over next 20-30 years (when the 62-year of today becomes 82-92 or so).
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World Bank Disgrace, and here is another report (the one I prefer most in India, even now)World Bank unearths fraud in health projects : Could have sounded frustrating to me couple of years back, but no longer. I probably did talk about that experience 1st hand with the callous WB people sometime back in my blogs, and then there was the ouster of its last chief. And I believe there's been an overdoing of this statement (I agree it is true in certain areas, but it can't be given as an excuse every time): 'The foreign aid lobby sometimes says that corruption is the inevitable price of "doing good" in the developing world.' At the same time, one must remember that WSJ was one of the strong defenders of Wolfowitz, and though India remained neutral in the front end; many Indian media (including myself) was against Wolfowitz. Now both must be looked independently, and WSJ, I hope isn't taking a stand to show the clear conscience of Wolfowitz here. Sack all those involved like Wolfowitz here again.
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A rose or a ladder?
: This is the real challenge India faces today. The article also prompted me to think whether I should hold Hindalco stocks. Ethically no, however as a real smallllll investor, how do I matter? And then the stody continues for Reliance, STerlite (IT firms little better) or even for banks (the way they recover loans, ICICI). One of my acquaintances once told me he never bought ITC because they are in the business of tobacco. Yes, I myself criticize me on my record of ethics; however at the same time I wish I had guts to look beyond my personal gains. Hindalco incidentally was awarded one of the CSR awards in Asia couple of years back (Debu Bhattartarya received it in one of the ASEAN nations, if I am not mistaken). Can we have a right balance - the stakeholders are essentially three. The firm, the environment and the local people. I tried various times to influence policy making by creating a win-win-win scenario; however they all failed to get any response. I am also aware that another person can take an opposite view from what shubhranshu choudhary has taken in this article. Both may be partly true; however when one keeps in mind the population explosion in India; we increasingly understand the challenges at the bottom of the pyramid. Can we have better balance of environment and local people's interests getting protected?
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Li Ka-Shing Rushes Into China Where Bond Angels Fear to Tread : The likelihood of a Chinese real estate slowdown is less, however it's also less likely that prices will move up at the rate they have been. And that's the paradox - one must give up. The challenge is how that stability returns. However in the rare event of a meltdown (of any form, stocks to real estate to excessive capacities) in China with slowing US (or already in recession?) economy will be nightmarish for people like me (who in-spite of being long desires a healthy correction).
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Indiabulls Targets Top 5 Slot Among India Funds With $6 Billion : It's actually worst of the web case where Bloomberg lowers it standards so much to start marketing a company. I know Indiabulls, true they have achieved a lot. But the way they cheat their customers D-mat holders/customers and also their employees (bonuses never paid and even salaries not paid, that's the feedback I got. I must admit my samples can be biased). And I also have the apprehension (and I would love to see) that few of these speculative players in India would go bust during any of the down economic cycle. Real estate, stocks - you name it; and it's all a mess created by moneysupply and manipulations.
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Medicare Spending in 2006 Rises at Fastest Pace in 25 Years : Though much of it was known, few numbers were interesting.
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India's Future May Depend on Eggs and Condoms: I was taken by little surprise by the title, however indeed a great article. Many of the stats I didn't know. And also on correct estimations on poverty levels in India (and what's the BPL mark: $1-a-day on PPP basis or $0.4 or something as the local govt. says and if the WB lower revision on PPP economy size is accepted by local government...the complexities are too many.
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Fed's `Inflation Problem' Gets Some Ad Hoc Help: This article is here only for impact of asset price deflataion on economy (and Interest Rate). '``Japan is a perfect example of what asset price deflation can do for you,'' Kasriel says. For the last decade, consumer prices in Japan have fallen at an average rate of 0.2 percent. Rock-bottom interest rates -- the Bank of Japan's benchmark rate has been below 1 percent for 12 years -- have done nothing to alleviate the modest deflation, or decline in the price level. Hard to believe, but Japan's double asset bubble -- in real estate and stock prices -- burst in 1989. And it still can't dig out from under.'
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Since this morning, I found Google to be a bit irritant as they ask me to verify as an individual before they proceed my search query. True, I do search often; and many of the search tags may not be common words/phrases. However I said earlier also that Panama of Yahoo! is getting better; and if Google does not change it - I would slowly shift to Yahoo!
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Engg. colleges to get satellite based tele-edu facilities : I must salute my amla mater IIT B for this noble effort so that education become open-sourced (like OCW of MIT). At the same time, I also feel that projects like this would have had more impact say couple of decades ago because all the recipient colleges now have Internet, and no better way of learning than doing self-research over the web.
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China Flexes Its Muscles: A nice article to start 2008. However I don't subscribe to the title: The Coming Collapse of China (2001), and in this short period, it has rather been the opposite (true, it';s too short a period). The article goes well with the views expressed by (I believe) Remo in his Brand China article. Yes, Chins is shifting gear from the Peaceful Rise of China theme.
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Missing Evidence from Bhutto's Murder: I was taken by deep pain as the rest of the world when I saw this on TV on the 29th (and was surprised at why the washing took place at the blast scene). That's the sad part of story in politics in South Asia. I am also more pained to see the 19-year old Bilawal being chosen as a successor. One fatal event does not mean democracy being sacrificed. Moreover democracy is never a top-down approach (what the US preaches for the rest of the world but democracy in developed world is actually a bottom up approach). And if there no bottom-up approach (selection of a party leader in the case of PPP after the demise of Benazir), effectively there is still no democracy. So effectively one can have (true democracy (driven by bottom up), or (2) top down only (what we have in Iraq, Afghanistan, Palestine where top down did back fire as Hamas came to power or even in Lebanon), Bangladesh and India even, in some respect do present this scenario as well or (3) Pseudo Top-down (something which would be in place if Votes take place in Pakistan under President Musharraf if PPP comes to power and the PM becomes a crony to Bilawal or Mr. Asif Ali Zardari.

बेस्ट ऑफ़ थे वेब - इकनॉमिक ऎंड गेओपोलितिच्स - दिसम्बर 2007

China to push telecoms overhaul in 2008 -Xinhua: 'Industry sources have speculated for more than a year that Beijing intended to split up China Unicom's (0762.HK: Quote, Profile, Research) wireless networks and hand them off to fixed-line players China Telecom (0728.HK: Quote, Profile, Research) or China Netcom (0906.HK: Quote, Profile, Research). But that, and other proposals have been dogged by infighting and local interests, the sources say. Now, Beijing realises that full-service players serve the industry's best interests, the Xinhua News Agency reported.' This is the market that probably accounts for 30% of global phone users (and soon would be on Internet as well), therefore any moves would affect what will be the norms in the world in future too. True, today they take signals from the world, but going forward it may be partly reversed as well.
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Japan's Nikkei index falls 11% in 2007, first loss in 5 years: Looks a bit ironic that the country that fules much of the asset bubble thro' Yen-Carry-Trades, itself deflated. Probably that's the natural outcome and it's been seen again and again with $. Take money away from costly domestic assets, create bubbles in emerging markets, sale and make money and reinvest in domestic market. The cycle has worked well so far, and must stop now for better equality and to stop the siphoning of assets from developing nations to the developed ones. 'The dollar has lost about 5% against the yen for the year.'.
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Dollar Is Near 2-Week Low Against Euro as Housing Slump Deepens : I wonder whether Fed. needs any reason to cut rates (matter of fact is they will anyway cut rates...that's been the foregone conclusions so far. Only thing is media will speculate and so would markets). On the other hand, this looked a bit surprising...Dollar Strategists Predict End of Bear Market in 2008 : Yes, I have rather different opinion...both yen and dollar will remain weak or at best maintain status quo. Buffett bets on America with latest purchase is less about America and more about fundamental business: 'Buffett generally favors companies with easy-to-understand businesses, strong management, consistent earnings power, good returns on equity, and little or no debt.'
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Sector Glance: Apple Passes $200 Mark: May be, following Google, one can also say 'Investors hate a matured Apple'. So long Apple was immatured in releasing products before their time, and now they get it right. If I am not mistaken, before iPod, the share may be languishing in 20s or so (and last year low was $76 as the article said). What's the m-cap - 167.67 billion...I believe that's higher than IBM again (no...not really IBM at 176 billion+...). But that's awesome for Apple. PE for Apple is at 50 whereas for IBM it is at 16.5, and for Google, PE is at 55 and m-cap is at 210 billion ($). Microsoft is at $389 billion (m-cap) and PE of 24-25.
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Mr. Market's Dear Santa List Has Fed Funds at 1%Hilarious, and hard but true...
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Home Prices Fell Faster in October : The story still unfolds. 6.1% or so down since July 2006, and expectations are 10-30%. And I said earlier, the various attempts by the Wall Street and the Fed. in not allowing the corrections to take place would rather hamper the economy longer than a quick sharp correction (true, it's painful and that's why I advocate Fed. should directly aid the end-consumers than trying to bail out the Wall Street where resources spent will be more, ineffective and also would take years).
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Savannah Cries About a Bicycle Left Behind in Reset of Subprime : ``Derivatives don't reduce risk, they shift risk,'' Kasriel says. ``The development of the derivatives market enabled investors to shift risk at a lower cost, and that encouraged them to take on more risk.'' Who knows it better than me...'From 2001 to 2006, as U.S. home prices rose 50 percent nationally, owning the debt and guessing that borrowers would keep current paid off. Since July 2006, however, when housing supply began to outstrip demand and the number of late payments started to rise, the short position, or wagering against the performance of mortgages, has prevailed...Mortgage salesmen peddled loans ``based on the borrowers' ability to refinance rather than the borrowers' ability to repay,'' said David Einhorn, co-founder of Greenlight Capital LLC in New York and a former director of New Century Financial Corp., the second-biggest subprime lender in 2006, at an investors conference in October. If the borrowers defaulted, the mortgage salesmen still got their commissions. Now many of them are jobless and broke. '
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Dollar May Fall to 95 Yen on Housing Slump, MUFG's Mizuno Says : 95 took me also by surprise, because Japan's economy also look no better (other than savings rate of public and trade surplus; however govt. debt is one of the highest). I see both the US and Japanese economies to be very much inflated; and therefore yen:$ would rather gyrate within a range, and that range can be as wide as 95-125. But no uniform directions can be stated. 'The dollar depreciated in five of the past six years against the euro, leading Asian and Middle Eastern nations to diversify their reserves. The dollar made up 64.8 percent of central banks' currency reserves in the second quarter, down from 71 percent in 1999, the year the euro made its debut, according to the International Monetary Fund. The euro accounts for 25.6 percent. ``Now is the beginning of the end to dollar standard system,'' Mizuno said.

Housing Slump

The Fed will be forced to cut rates from 4.25 percent to 2.25 percent by the end of 2008, Mizuno said. Interest-rate futures on the Chicago Board of Trade show traders see a 76 percent chance the Fed will cut its benchmark rate to 4 percent at its Jan. 30 meeting. Home prices in 20 U.S. metropolitan areas slumped in October by the most in at least six years, a private survey may show today, according to a Bloomberg News survey. The S&P/Case- Shiller home-price index, which has data back to 2001, may show prices dropped 5.7 percent in the 12 months that ended October, a 10th consecutive decline, economists forecast.

``The U.S. housing bubble saw prices overshoot,'' Mizuno said. ``The S&P/Case-Shiller home-price index may drop as low as 10 percent in the first half of next year.''

'

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China repeats pledges on energy security, price reform
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Unpaid credit cards bedevil Americans: The obvious question is: how far this credit-led growth can continue? Some of the comments are interesting...
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Toyota sets an ambitious sales goal: At 9.95 millions (production and sales of 9.85 millions), it will be probably higher than all cars sold in China (and marginally lower than figures of the US and Japan itself). 'Its recent growth has put Toyota Motor on track to beat General Motors to become the world's largest automaker by sales. GM has estimated that sales this year would total 9.3 million vehicles, against Toyota's estimate of 9.36 million sales...The Detroit automaker (GM) holds the industry record for annual global vehicle sales - GM sold 9.55 million vehicles in 1978.'
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Holiday Spending Is Weak, as Retailers Expected : Quite a few reports so far stated same. 'Spending from Thanksgiving to Christmas rose just 3.6 percent over last year, the weakest performance in at least four years, according to MasterCard Advisors, a division of the credit card company. By comparison, sales grew 6.6 percent in 2006 and 8.7 percent in 2005...Luxury purchases rose 7.1 percent, as the well-heeled splurged on $600 Marc Jacobs trench coats and $800 Christian Louboutin shoes. Footwear, at all prices, proved a bright spot for the clothing industry, with sales surging 6 percent...In the end, analysts said, the biggest winners are likely to be Wal-Mart, which emerged as the undisputed low-price leader this season, and Best Buy, which became the destination for competitively priced electronics...MasterCard Advisors predicts that shoppers will spend up to $60 billion over the next seven days, as they redeem gift cards and exchange unwanted ties and sweaters for the items they truly want...Like MasterCard, ComScore, a research firm, found that online spending rose steadily to $26.3 billion.
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BOJ Was Concerned About Global Growth, Minutes Show : Unfortunately the assessment remains so for nearly two years (and five years before that during the 0% interest rate); and no actions on tightening liquidity was seen. The money simply flows in emerging markets (less liquidity) and damages those economies. stripping assets from local ownerships (true, productivity improves, but what about the longer run?).
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Japan Mines `Flammable Ice,' Flirts With Environmental Disaster : Said feasible after $54/barrel of oil, and pilot project being tested in Canada. 'If successful, the gas drilling project could help Japan reduce a liquefied natural gas import bill that last year was 2.66 trillion yen ($23.3 billion). The country's LNG imports totaled 62.2 million metric tons, equivalent to 3.03 trillion cubic feet, according to the Ministry of Finance's trade report.'
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Wipro Gains Most Since May 2004 After Report on Cap Gemini Bid : The quality of the article is as such poor in terms of Bloomberg standards. However the news was in the air for quite some time (at least within people in IT circle in India). Cap Gemini, incidentally is 'Europe's largest computer services company Cap Gemini SA' and 'Cap Gemini is ``almost four times the size of the Indian player,'' Deshpande said '. I wonder whether it's in terms of m-cap (because in terms of people, it may not be so).
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Farm earnings may go down further in West Bengal: Some stats interesting (though I earlier had and still have bitter opinion on this publication media).
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Singaporean inflation hits 25-year high of 4.2% in Nov.: The one para-report makes much sense. One wonders when wheat is up 65%, crude up, commodities up over last few years and so are housing prices; how can we still have inflation in low single-digit numbers? Here at least it includes food and housing...
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$500,000 a Year Means You're Still Only Middle Class: Interesting, I must say. More so, when with my income of hardly $12000/annum (that too with INR's recent appreciation against $), and a family; where do I belong? At the Bottom of the Pyramid, ha ha...
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Putin's Military Might Fails to Keep Pace With His Ambitions : 'The nation's armed forces remain beset by manpower and morale problems, aging equipment, graft and unfulfilled promises to overhaul their Cold War-era structure, Western and Russian analysts say. While Putin, 55, has increased Russia's defense budget to a level four times greater than when he became president in 2000, it is still less than 6 percent of U.S. spending.' true, but all leads to the measurement system of currency valuations and GDP measurement practices. Just remembered that one speaker (faculty of a US University) in a conference that I attended yesterday talked about 'Goondas' taking over the public sector units in Russia under privatization (and this article also talked about corruption, question is if the view is so negative in the west, what drives the popularity of Putin in Russia. It's not limited to the elite (who can benefit from corruption the most), but it's in the masses? 'The Moscow researchers said that if present trends continue, attrition will reduce Russia's intercontinental missile arsenal to between 100 and 200 in a decade. Russia's Defense Ministry didn't respond to written questions about the military's capability.' I wonder if the US Defence Department regularly responds (or even receives queries) on its military capabilities. 'Aided by a 255 percent surge in oil prices during Putin's eight years in office, Russia's 2007 defense spending was about 821 billion rubles ($33.6 billion), about 15 percent of total government expenditures, according to the London-based International Institute for Strategic Studies. U.S. military spending in 2007 was about $582 billion, or 21 percent of the total federal budget, the institute said. Russia also suffers from endemic draft avoidance, with as many as nine out of 10 of those in the eligible 18-to-26 age group escaping service. ``If you've got 90 percent draft evasion, those who show up are just too stupid to evade it,'' Pike said. ``Imagine what kind of military you can put together with that.''' Whenever it comes to Russia, Venezuela or Iran, West's parroting theme is oil-prices. In same context, the US spend of $582 billion is totally based on money borrowed from others (less than its trade deficit).


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Bush Seeks to Restore Tattered U.S. Image With Heavy '08 Travel : 'A Pew study of public opinion in 47 nations found ``extensive'' anti-Americanism and ``increasing disapproval'' of the cornerstones of U.S. foreign policy. A perception that Washington acts unilaterally was shared by 89 percent of the French, 83 percent of Canadians and 74 percent of Britons. America's image in most Muslim nations is ``abysmal,'' Pew said. The exception, Pew found, is Africa, where the U.S. image remains positive, especially in Ethiopia and Kenya.'

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Holiday Internet Sales in U.S. Rise at Slowest Pace on Record : 'Online spending from Nov. 1 through Dec. 21 increased 19 percent from the same period a year earlier to $26.3 billion, Reston, Virginia-based ComScore Inc. said yesterday in a statement. Sales trailed last year's 26 percent growth and the research firm's forecast for a 20 percent gain during this year's holidays...ComScore hasn't recorded growth of less than 20 percent since it began reporting online sales figures in 2002. ' Is it sign of consumers spending less (with discounts on) or maturing Internet? Too early to say...primarily looks the former...'Wal-Mart Stores Inc., Best Buy Co. and Circuit City Inc. offered discounts of 50 percent or more and promoted savings for in-store pickup of products purchased online to attract shoppers during what may be the worst holiday shopping season in five years. The peak period for Internet purchases has passed, ComScore Chairman Gian Fulgoni said in the statement...Sales rose 25 percent in the five days through Dec. 21 from the same period a year earlier, ComScore said. ``Online has done well considering the tough economic spending situation,'' said Larry Freed, chief executive officer of online research firm ForeSee Results Inc. in Ann Arbor, Michigan...U.S. retailers' shares have dropped during the holiday season, with the Standard & Poor's 500 Retailing Index falling 10 percent since the start of November, compared with a 4.2 percent decline by the S&P 500...Spending through Web sites, which makes up more than 3 percent of all retail sales, may climb to $29.5 billion in November and December, ComScore estimated. That's a slower pace than the 26 percent growth in online sales during the holidays in 2006. '

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And here is that WB article: Economic clout of China and India is overstated, World Bank says, on which I beg to differ.
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India May Cut Taxes, Raise Subsidies After Ruling Party's Loss : Only for this stats: 'Gujarat hosts the world's third-largest oil refinery, owned by Reliance Industries Ltd., and is home to 5 percent of India's 1.1 billion people. It accounts for 21 percent of the nation's exports and 13 percent of its factory output, according to Gujarat's Industrial Extension Bureau...Reducing subsidies is unpopular in India, where the World Bank estimates more than half of the nation's 1.1 billion people live on less than $2 a day. India hasn't raised fuel prices this year even as crude oil costs surged 53 percent because of concern it will stoke inflation and alienate voters. Keeping fuel prices at their current level will have cost the government an additional $12 billion in subsidies in the two years ending March 31, equal to almost a 10th of India's annual budget. ' Now this $2 a day is PPP based (I believe), and on top of the recent WB findings that PPP economy size of India and China may have been overestimated (by 40%), this figure (of more than 50%) is likely to go up significantly. And who receives the major part of oil subsidy - not the poor, farmers - but the car-owners and heavy consumers...


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">ArcelorMittal Offers to Buy All China Oriental Shares : I do have respect for both Lashmi Mittal and his son (aditya), the sort of signals they send. 'China has accounted for 65 percent of global growth in steel production in the past 10 years, and is now four times the size of the U.S. steel industry.' ohhh...in an article I stated five times (my apologies) . The father must be good in managing relationships (getting the nod from Beijing in-spite of being an Indian!). 'The Chinese steelmaker, which has its main production plants in China's northern Hebei province and southern Guangdong province, controls closely held Hebei Jinxi Iron & Steel Co., the nation's 29th-biggest steelmaker, according to the company Web site...Hong Kong-listed China Oriental makes billets and strips, producing more than 3 million tons of crude steel a year. It posted a 769 million yuan ($104 million) profit from sales of 6.65 billion yuan for the six months ended June 2007.
' The valuation roughly meant $800 million/ton of steel capacity (what about captive resources, does this unit have it?)
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Libya to Invest $100 Billion Abroad, Spend $155 Billion at Home : Interesting to know this 2nd largest African oil exporter, sitting on oil funds.
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Two Koreas restore rail link after 50 years: I visited this place when I was in S. Korea during May'07. A trip to the DMZ and also this station (where one puts a symbolic seal on one's passport). And yes, the talk was about this: 'South Korea's next goal is to run its freight and passenger trains through North Korea and into China and Russia and onto Europe.'. If only India could learn!
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One Night in Bangkok Shows the Folly of Bali: 'Thailand's capital has the dubious honor of being among the 10 major cities most at risk from rising sea levels. Kolkata, formerly known as Calcutta, headed the Organization for Economic Cooperation and Development's list of high-population cities vulnerable to climate change by 2070. Also in the top 10 were Mumbai; Dhaka, capital of Bangladesh; Guangzhou, China; Ho Chi Minh City and Haiphong, Vietnam; Shanghai; Yangon, the capital of Myanmar formerly known as Rangoon; and Miami.' And to say the least, I live in Kolkata (this year was marooned a few times already!)
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Arab Stocks Lure BlackRock, Goldman, Blair as Europe, U.S. Fall
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Gore Urges Bold Moves in Nobel Speech : I respect this man and his mission (yesterday night, it was broadcast in BBC, however as my son now keeps more control of the TV remote, I had to give up). I also talked about many of these issues in my book: 'Wondering Man, Money & Go(l)d'. But the sad thing is another piece of news: U.S. says no to firm emissions targets. 'The ceremony marking the 2007 prize, given to Mr. Gore and to the Intergovernmental Panel on Climate Change, comes as representatives of the world’s governments are meeting on the Indonesian island of Bali to negotiate a new international agreement on reducing greenhouse gas emissions. The new treaty would replace the Kyoto protocol, which expires in 2012...In an interview before his speech, Mr. Gore said that the Bush administration was “the principal stumbling block to progress in Bali right now” but that he foresaw a change in American policy, regardless of which party won the 2008 election. “I think that they do not accurately represent the wishes of the American people,” he said of the United States government. “We are in the midst of a process of massive change. The world is coming to grips with this crisis, but we are in a race against time. The United States of America, the natural leader of the world community, should lead instead of obstructing...He wrote the speech himself, he said in the interview, “with the help of Mr. Google.” '
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South America launches rival to the IMF, World Bank: So these guys moved from words (covered in my blog during Wolfowitch crisis) to actions. Good show...there should be accountability. What I have not written about so far is: couple of months back, there was a vacancy post in the World Bank (ad in the ET, leading Indian business daily). And application was to be online. When I visited the WB site and searched for the job-code, I didn't find any. I wrote to them, they send me a link which is intranet-based (actually I was surprised at this height of goofishness!). Again I write, and then they give me another link which works. I still applied but even in my application I didn't lose the chance to criticize them (for this goof up). No wonder again I received rejection. However in my 1st mail I told them that I smell a collusion where an ad comes for ads sake, as no one can apply because the job does not exist online. And then they puck-up someone's girlfriend. And hold-on, they digested it, said sorry and then in their 2nd mail sent me the right link (and all these mails are there in my mailbox). On more lighter issue, in India reality TV shows have become very popular. This Sunday, while looking at one in bengali, a head-master of a school says when he asked there the largest mental asylum of the world is, the students respond: it's the headquarter of the UN. And sad but true, these Institutes, by following US dictates even if those are wrong, have effectively become spineless mental asylums.
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Rio Tinto in "put up or shut up" challenge to BHP: The contest to own or control natural resources, be it with private capitalistic set-up owning allegiance to certain nations or other block would only heat up. I am not sure whether Rio as a firm would prefer, given a choice, to be acquired by Chinese funds or by BHP. However I sense, China won't give up the chance and control easily. With $27 billion of trade surplus each month, it can afford buying a Rio every five to six months, a BHP, a Google, A Shell (if allowed) and don't forget the war-chest of $1.5 trillion. As US economy increasingly looks weak, China would love to diversify its asset holdings to natural resources than US bonds. So as of now, though prematured, I would bet for Blackstone+China fund.
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UBS makes $10 bln writedown, raises new capital: These developments make me wonder whether professional management can bypass shareholders and can issue fresh shares/inject capital at its own terms anytime. I assume here that the shareholders of UBS (or take the case of Citi) were unaware of these fund-injection, at what value and what terms. It may lead to a situation where professional managers would deliberately create a crisis, and then in collusion with new investor, offer them stocks at attractive rates (I am talking about the possibility, and not suggesting it happens all the time). The coupon rate of 9% for UBS is no doubt 'exceptionally high. "It shows what a pitiful state they are in," said the source, who asked not to be identified.' From SIngapore, I was thinking about Telasek Holding, however it turned out to be GIC (Govt. of Singapore Investment Corpn, I didn't know about it until now!). 'UBS has been the hardest hit among Europe's major banks. CEO Peter Wuffli left the bank in July and was replaced by Rohner. The bank has since replaced nearly all of its top managers.' So only solace investors can have is that the management which almost sank the ship is not rearranging funds now.
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China's PPI surprise surge adds to inflation worry: I wonder whether all these are a result of cost-push inflation or market-pull inflation. It's more likely to be cost push, although increased demand also can't be ruled out because, expectedly in China, a larger and larger section of affluent and middle class consume more now. Now the question is - what's the benchmark of the price point for this additional demand? My point is - as a country turns from exporting economy to domestic consumption story, the benchmark of price should also be against the earlier export level prices. Today, the question is - is exports more remunerative for Chinese, or selling in the domestic markets. As capacity is not much of a problem (leaving aside agri-products and items like pork), it may be due to cost-push (imports + domestic tightening of money supply - in interest costs) and also export-substitutions at new-found domestic opportunities. Anyway, the answer would be known better in future (as usual!).
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Wheat to Increase to Record, USDA Undersecretary Says : Matter of fact is I see a great bull run in agri-commodities now (which will affect India badly unless it can have a 2nd Green Revolution, fast). 'Wheat for March delivery gained 13 cents, or 1.4 percent, to $9.3450 a bushel in after-hours trading on the Chicago Board of Trade at 11:06 a.m. in Singapore. The price soared 87 percent this year, reaching a record $9.6175 a bushel on Sept. 28.' (1 bushel = 27.2 kgs) (comes to Rs. 14/kg around, and five-kg packs of atta by Indian manufacturers cost near Rs. 100; in same measures, gasoline in US at $3 a gallon costs around Rs. 32/liter, much lower than cost of petrol and around same(?) foe Diesel)). High grain prices would help US trim its trade deficits further (as this happens to be the largest exporting area with surplus in the US). I find it quite amusing that the most developed nation of the world, having less than 2% of its GDP reliance on agricultures gets maximum export competitiveness from agriculture!
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Paulson Mortgage Plan Surfaces Too Late to Stem Housing Slide
: Remember Fed. to bail out failed hedge funds of Bear Sterns (though came as a spoof article back in July). 'Paulson's plan is being introduced as the number of Americans who fell behind on their mortgage payments rose to a 20-year high in the third quarter, the Washington-based Mortgage Bankers Association said in a report yesterday.' Figures of future foreclosures (till 2009) varied from 0.775 millions to defaults of 2.8 millions. 'The government-led initiative may ``reduce the severity of the decline,'' said Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University in New Haven, Connecticut. Still, ``if past cycles are a guide, we could have weak or declining markets for five to 10 years,'' Shiller said...Zandi estimates new and existing home sales will bottom at an annualized rate of 5.25 million units in early 2008 from a peak of 8.5 million homes in mid-2005. New home sales are projected to fall 13 percent in 2008, according to estimates from the National Association of Realtors in Chicago...Subprime borrowers face an average mortgage increase of 26 percent, or $400 a month, because of higher rates, according to data compiled by Santa Ana, California-based First American CoreLogic, a unit of the biggest U.S. title insurer.
'. That's less than the mortgage I pay in India, for a ten year-loan.
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Fed's Inflation Measure Says Rates Can't Fall as Traders Expect : Although theoretically it makes much sense to have a model that can predict inflation rate five years down the line, practically I think it is an immatured idea due to the various dynamics involved (uncertainties in global economics and geopolitics). Bloomberg itself in another article talked about risk and uncertainties - risks can be quantified (and therefore modelled, not uncertainties). However if it indeed works, not always but even most of the time (>90% confidence level), that's great!
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Mad, mad, mad money: Yes, it's more of entertainment, not only for Crammer but most of investment related TV channels (at least in India).
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Intimate Enemies, Shadow Doubles: The reason for putting the article here is this information, which came like a big surprise to me: 'Jawaharlal Nehru had envisaged an Asian federation of which India and China would be the two poles. After the People's Republic of China came into being India was the second country to recognise it, on December 30, 1949. When a permanent seat on the UN Security Council was offered to India in the early 1950s — something it would give an arm and a leg for half a century later — Nehru turned it down and offered it to Beijing instead. Nehru construed the offer to India as a move against China, a gesture replicated in recent times when Prakash Karat, on behalf of the CPM, interpreted the nuclear deal lifting technology barriers on India as a ploy to encircle China.' So India effectively gave up its UN post to China and now China opposes any move that plans to include India! I am increasingly getting more and more sceptical on the prudence of Nehru, other than probably setting up some basic industries (and the IITs).
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Hindu gods get summons from court & Hindu gods get court summons (2-different sources, but same title): In India, everything is possible, cheques issues by PMO can bounce, government can give aids to farmers amounting to couple of cents throug account payee cheques involving minitries and IAS officers, and many more. 'You failed to appear in court despite notices sent by a messenger and later through registered post. You are hereby directed to appear before the court personally," Judge Singh's notice stated...The newspaper notices were published, in keeping with accepted Indian legal practice, after two summons dispatched to the plaintiff deities were returned because their addresses were "incomplete". The dispute is over ownership of a 1.4-acre plot in Dhanbad which adjoins a temple dedicated to Ram and another one dedicated to the monkey god Hanuman. Worshippers claim the land belongs to the gods but the priest, Manmohan Patnaik, insists that it is his.' ' See, we follow rules...and our rules state that we follow standards set in 1880s for land acquisition. We don't have brains and our government expects that because they don't have any, and thereby sets rules accordingly.
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Student-Loan Problems Add to Debt Worry: A society where everything runs on credit...and in India one wonders. And it's for nature also. Nature doesn't give any credit. Student loan market itself is around $400 billion in size every year, and that must be ten times more than Indian budget for education. 1.12% default rates are anyway not alarming, though growth rate needs to be watched. 'The biggest student-loan player, Sallie Mae, officially known as SLM Corp., said that in the third quarter, charge-offs in its private loan portfolio were $110 million, more than double the amount a year before. Sallie Mae's private student loans total $28 billion.'
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Ping An Battles AIG for Title of World's Second-Biggest Insurer : Another usual China story, which is a paradox to the regular mining accidents. So after China Life, AIG now comes Ping An...the orders are changing fast everywhere. 'Ping An was the first Chinese insurer to receive approval to use local-currency assets to invest overseas, giving it potentially $3.4 billion to spend on foreign stocks.'. I didn't quite follow it...does it mean that the premium it collects can be converted into other currencies, and invested abroad? If so, what happens in the most likely outcome of Yuan appreciation? 'The U.S. insurance market is close to saturation with 77 percent of Americans owning some type of life insurance in 2004, data compiled by the American Council of Life Insurers show. Only 4 percent of China's 1.3 billion people have insurance, KPMG International reported.' 'Ping An's profit from banking rose 10-fold in the first half to account for 13 percent of net income. The company bought 89 percent of Shenzhen Commercial Bank last year and, along with China Life, Ping An paid 10.8 billion yuan ($1.5 billion) in March for about 10 percent of China Minsheng Banking Corp., the country's only privately controlled bank.' So China does have a privately controlled bank...?
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On Mortgage Relief, Who Gains the Most? : It seems that policy-making has been hijacked by the influential ones, not only in emerging lowly developed countries like India, but even in the US. What I still don't understand from the limited few articles on this Paulson-led bailout package is - who bears the cost of freezing interest rates (at unbelievably low entry rates) for five years. '“Talk about moral hazard,” remarked Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee. “We’ve all told people, don’t go any more deeply into debt. Now we’re saying that people who go more deeply into debt will have an advantage over people who don’t go more deeply into debt.” The administration’s theory is that there is a “sweet spot” in the market where it makes more financial sense for lenders to offer some relief than it does to foreclose on homeowners.' The last part probably answers my question - rather than booking losses now on CDOs, show book value of assets that has not gone down much. 'Most analysts agree there is a sweet spot of some sort. Investors typically lose 40 percent or 50 percent on homes that go into foreclosure, and the cost of shielding borrowers from a big jump in rates can be much less.' In some way, this sounds similar to the US stand on climate change...postpone the problem for a future date, when probably there will be less pressure on housing, and the people who get the 5-year freeze would (1) either be able to to finance their increased interest burden after 5-years, or (2) be able to sell it at an improved housing market, reducing his/her loss and that of mortgage provider. 'Indeed, there were rumblings of rebellion among some institutional investors. “Why would anybody in his right financial mind agree to a five-year price freeze, especially when we’re staring in the face of possible inflation?” asked Roger W. Kirby, managing partner at Kirby McInerney, which has represented investors in class-action lawsuits over securities. “Mr. Paulson has overestimated the generosity of people on Wall Street.”'. At times, I like NYT financial reporting more than Bloomberg, because they are not standardized like Bloomberg, covers basic relevant answers and queries, and are not repetitive (repetitive may be because I visit Bloomberg more often). Effectively this looks like a riot management...there has already been blood, there will be more blood but some blood will get saved based on in which direction the riot-police looks at.
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105 Killed in China Mine Explosion At times I get a feeling that I have the wrong picture of China based on its superficial growth rates, forex reserves and production capacities. The news yesterday showed 93-94 deaths, today 70 and now 105...China must ensure that it's people are not being sacrificed in order to pile up the forex reserves, or the cheap exports or even the domestic growth. With 5000-death figures in mining industry alone in a year, it is high time China does something about it.
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China Shipping Stock Sale Oversubscribed, People Say : Experts in India also say logistics is the area to be in. Unfortunately, as per some, from 1947 to 1997, there'e been any significant additions in road or rail network in India. And China has moved miles ahead. Now there is some slow movements, but scale is absolutely insignificant compared to China again.
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Teen births tilt up, unmarried rate hits record: Good article on population statistics, birth rates, sociology and demographics in changing social scenario. 'Unmarried girls and women accounted for 38.5 percent of all U.S. births last year, up from 36.9 percent in 2005. Among blacks, they accounted for 70.7 percent of births. Among Hispanics, it was 49.9 percent and among whites 26.6 percent.' That's sort of incredible in Indian standards! 'About 40 percent of unmarried women giving birth are in cohabiting relationships, she added.' 'There certainly is greater acceptance of children being born out of wedlock. For instance, you see many fewer marriages after conception but before birth than you did in the past,"...The U.S. fertility rate was about 2.1 births per woman of child-bearing age over her lifetime. It is the first time since the early 1970s that the rate was above the replacement level, at which a given generation can replace itself, the CDC said. The total numbers of births in the United States in 2006 was about 4.3 million, up 3 percent from 2005. The CDC also said 31.1 percent of all births last year were by Caesarean section, a record high. The proportion of births by Caesarean section has risen 50 percent in the past decade. '
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Subprime Rate Five-Year Fix Agreed by U.S. Regulators : So finally the deal that defies markets, that defies contractual values and obligations are done with, just to save guard a few. Well, one may think of that the beginning of the death of this type of free-wheeling capitalism driven by Bernanke, Paulson & Wall St. Co.
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Two contradictory picture, abd decoupling-validation: Fed May Couple Rate Cut With New Measures to Increase Credit and China Plans `Tight' Monetary Policy Next Year to Cool Economy : One isn't finding credit shooting inspite of lowering rates, and another is getting fruatrated to slow down investments even after increasing rates for five times. The decoupling story indeed looks complete on the surface level, but just like water moves to lower levels naturally, money - irrespective of $ or yuan, or move to higher returns. And therefore China would not be able to control its investments boom with domestic policies alone, unless the flood of money stops at Fed. (remember - Bubble in China? The answer is both Yes and no). What I fail to understand that if Fed. (and others like Treasury) can engage into lot many unethical and hypocritic measures to bail out the Wall St., why not directly tell them that whatever is in your account and has any resemblence of being NPAs; Fed. will reimburse equivalent full money. Doesn't that sound better? Here is another example in UK, on the other side of the Atlantic: Northern Rock's Bailout by U.K. Wins EU Approval, Aiding Sale , and now house prices there also fall, indicating rate cuts.
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Pentagon chief Gates in Iraq as violence drops: I did talk highly about Gates (compared to Rumsfeld). He talked less, and delivered much better than any could think of. And it's a good relief for all to see that the bloodshed in Iraq has slowed down, now it's time for normalcy to return normally.
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OPEC agrees no output change: delegate: I am not sure whether to read it as a sign of weakening US influence over OPEC. One way of looking at interest rates not strengthening further in Europe (or Japan) is their proximity to the US where opposing forces may cause further damage to dollar, and US economy. US would have definitely liked to insert the same influence over OPEC to have cheaper oil prices that could have made balancing inflation easy in light of higher liquidity, and lower interest rates. However OPEC rejecting it at a crucial time may therefore show that they care for their own interests more now (at least for a change) than caring for US alone all the time. The news was even out few hours before the official declaration, and US pressure in the interim period also can't be ruled out. 'But ministers argue that they (OPEC) cannot control prices because speculators have divorced prices from market fundamentals.' Very true, however unlike speculation over stock prices where firms don't pocket/lose anything against rise and fall, in this case I believe the OPEC gains (or loses) as prices move up or down (we also saw daily turnover in NYMEX to be 3-4 times the daily oil demand/supply).

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Fannie Mae to Raise Capital and Cut Dividend : The malice has been spreading for some time, and has affected these two giants (Freddie Mac)
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House to vote on "historic" deal to raise fuel economy to 35 mph 35 miles per gallon by 2020. Keeping in mind that 4.54 litre = 1 gallon, and 1.6km = 1 mile, it comes to 12.4 kms/litre of fuel. Not bad...for sustainability. yes, we must reduce usage of those oil-guzzlers (anyway I still don't have a car...). I am sure other nations would follow suit. 'Phyllis Cuttino, director of the Pew Campaign for Fuel Efficiency, noted the bill would reduce greenhouse gas emissions by 192 million metric tons by 2020, the equivalent of taking 28 million cars of the road."This is nothing short of historic," Cuttino said.'

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Lust in Lebanon, Low Pay Lead to Temporary 'Pleasure' Marriages : The statistics, along with the phenomena, no doubt is interesting.
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(by Stiglitz)Subprime crisis highlights hypocrisy of the IMF and the US: It's been highlighted in sections of this blog often. Just wonder the prescription of East Asian Financial Crisis, 25-40% interest rate, if is mandated on the Fed. again now. Even now, US is enjoying relatively lower interest rate, flooding our markets with liquidity where we have been paying the price with higher interest rates...crazy globalization and dollarization and monetary policies.
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China's U.N. envoy says "things have changed" on Iran: So China, staying in line, has been first to raise support for Iran again. And when I think about India, which does not have any intelligence of its own, dances to what Fed. or Pentagon or White House says delay-dallied on the Iran India gas pipeline (which no one knows the status of and whether Iran at all is interested) or even take that Iranian LoC for tea imports not being honored. No doubt a big slap at Indian foreign policy again, due to the goof up of US intelligence.
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New report ranks U.S. teens 29th in science worldwide
: I was more interested to see where emerging economies are, I found Hong kong (China) ahead of the US, Russia close and Brazil down. No mention of India or RoC.
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Dollar Slide Threatens African Cotton Farmers, Splits Families : Thanks to Bloomberg for reminding us the plight of cotton-growers in Africa again. They had already been pushed against the wall. And no doubt there will be no lobby to safeguard their interests in with subsidies or equal platforms in global trade discussions...'With cotton selling for about 9 percent less than a decade ago'...I think there are no other commodity which suffered this much (but why, even in the US, the costs must be up. Does it mean that the subsidy in the US has been rising?). 'While cotton prices have risen about 13 percent this year, ``the appreciation of the CFA franc has offset the benefits,'' according to Stephane Alby, an economist at BNP Paribas SA, France's biggest bank.
`Sinking Into Debt'
Most of the region's ``cotton producers are now on the verge of operating at a loss and sinking into debt,'' Alby wrote in the October issue of the Paris-based bank's Conjoncture publication. ``Meanwhile, the main ginning and marketing companies have chalked up heavy losses over the last two seasons, of which a large part has been supported by the government.''
Cotton accounts for 5 to 8 percent of gross domestic product across West Africa, according to the World Bank.Rural areas in the Sahel, the region that stretches across the continent from Senegal, Gambia and Guinea-Bissau, can be entirely dependent on it because few other crops grow there, says Terry Townsend, executive director of the International Cotton Advisory Committee, a Washington-based association of cotton-producing and consuming countries...The region, Sub-Saharan Africa's fastest-growing area during the 1990s, has been its slowest since 2004, according to the World Bank. For people in the poorest countries, a shift in the exchange rate can eliminate a month's food, says Daniel Sumner, an economist at the University of California, Davis, who wrote a study on cotton subsidies for Oxfam America, a Boston-based aid group.
Fifty dollars can be ``enough to feed a child for a year,'' he said. ``It's enough to pay the school fees for three to four children.''
Payments to farmers from cotton companies in western Africa have fallen an average 15 percent since 2004, International Cotton Advisory Committee data show. Production in western and central Africa may decline 21 percent this year, according to Dagris SA, a Paris-based company owned by the French government that holds stakes in African, Asian and Latin American cotton producers.

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The Fallout from the Iran Nukes Report: It's interesting...definitely it takes away some of the propaganda (and parts of myth) that the world slowly was beginning to accept.
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U.S. defense outlays seen staying high: The world (west) looks at $40 billion (or double of it) Chinese spending on defense with doubt, and it spends astronomical amount on its own defense year-after-year. (The page also carried ads of the Economist, as I stated earlier on NYT for McKinsey Quarterly. It surely shows that by not using a marketplace of news (like Google News, where earlier on Friday's I used to find articles from the Economist, but didn't see any last few weeks)).
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IITians spurn Dow jobs over Bhopal tragedy: This is an encouraging move by students' bodies to put pressure on erring corporates, as in developing countries like India, the law and policies are too laxed about their legitimate responsibilities.
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The November Newsletter of IIT Bombay says: ' No Indian varsities, including the prestigious Indian Institutes of Technology, figure among world's top 200 universities this year while six Chinese universities were listed. However, IIT Delhi and IIT Mumbai find mention among the world's top 50 technology institutions, with the former at 37 and latter at 33 - both way behind China's Tsinghua University, placed at 16'. . Sad state of affairs indeed...And the other day when I was having a caht with one of my friend exploring to pursue PhD, I told him that getting it from Beijing University (or other leading Chinese institutes) would be much better than the Ivy-league of the west, one looks at the past and one for the future.
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Chimps Exhibit Superior Memory, Outshining Humans : I didn't quite follow the split-second test, but it's interesting finding. No doubt that they have sharper sense organs than us.
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Chinese Steelmakers Study Bid for Rio to Counter BHP : BHP raised a Hotnet's Nest, and China understood the threat perception (if not now, even later; if not from BHP-Rio now; from some others at some other point of time later). I believe China would ensure picking up strategic stake in many of the natural resources firms as it's doing for energy. 'BHP and Rio would together control 38 percent of the global seaborne iron ore trade, according to the Australia & New Zealand Group Ltd., rivaling the largest producer Cia. Vale do Rio Doce. The proposal has met with objections from steelmakers in China, Japan, South Korea and Europe. ``Chinese steelmakers are so fragmented, putting them in a weaker position when negotiating with giant iron ore suppliers,'' Helen Wang, a Shanghai-based analyst at DBS Vickers Hong Kong Ltd., said by phone today. ``They have to face the reality that they have no choice other than teaming up with the government for a possible counter bid for Rio.'''

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Paulson Sees limited aid in rate plan: I stated same concerns in my article Growth, when derived from socialism for Wall St. & Financial Terrorism, not desired. The article further explains the operationalization problems. Another Bloomberg article also talked about slowing pace of manufacturing growth in US.
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No Sign of `Sell' on Wall Street as Analysts Say: `Buy,' `Hold' : It's always been similar story, there was an Economist article was covering it (the 90% wrong recommendations or so...). 'Only 7 percent of analysts' recommendations have been sell this year, down from 11 percent in 2003, data compiled by Bloomberg show...The ratio of hold recommendations has climbed to 48 percent this year from 40 percent in 2003, Bloomberg data show. '
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China, Japan schedule 2nd high-level economic dialogue for 2008 after 1st round success: It's an encouraging sign, however as an Indian what's painful is how India isn't moving forward. The problem does not rest with the rest of the world (or ASEAN, SAARC or Malayasia, for example), but it rests with our incapable leadership, governance and foreign polocies (and inconsistencies therein).
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Why Dollar May Be Set for a Rebound: I believe so, as Yen looks even more weak (and a bigger culprit), though it has appreciated a lot in last couple of months. 'By that reckoning, the dollar needs to drop an additional 20%. And the Fed's new openness to cutting interest rates, if the textbooks are right, should further weaken the currency as global investors flock to places with higher returns.' Yes, I don't see textbooks to be relevant, at least for short-to-mid-term (5-years or even more). 'One argument: Comparing what a dollar now buys in the U.S. (at U.S. prices) and abroad (at foreign prices) suggests that the dollar is undervalued. "You can't go to Europe and not think it's really expensive, and a European can't come to the U.S. and not think it's for sale," says Brad Setser, an economist at the Council on Foreign Relations. The Organization for Economic Cooperation and Development calculates that $1 converted into euros could buy a basket of goods and services in France that would cost only 80 cents in the U.S. A dollar converted to yen would buy things that would cost 82 cents in the U.S. Over time, markets are expected to narrow such gaps by pushing up the dollar and pulling down the euro and yen. Goldman Sachs economist Jim O'Neill says that by this measure, the dollar hasn't been so undervalued against major currencies since 1995. "You don't get these degrees of misalignment for long," he says. Hey...that's fine but what about India and China, you get in a dollar in these two parts what you can't get in $5 or even more in the US, Europe and Japan. And that's why you bring in your currencies and acquire our natural assets cheap.


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Venezuelans Reject Chavez's Plans for Constitution : On one side Putin's party received 62% of votes (as expected), many expected this also as the 1st election loss of Chavez. I believe (though I liked this 'crazy' man till some time back) is people fall in their own traps, try to play 'God', and don't know when to retire.
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Florida Schools Struggle to Pay Teachers Amid Freeze : We are used to similar stories in India, but this hitting the US, sort of unbelievable. In India, it's due to govt. apathy; and there...whatever it may be due to for ('classic run-on-the bank meltdown') is unimaginable.
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Paulson Presses for Subprime Accord, Investors Wary on Details : I am sceptical about this (Growth by socialism for Wall St. & Financial terrorism). The size of $7 trillion mortgage market makes it open for manipulations...and I doubt that no clandestine government money will not be involved. Looks a whole lot of hogwash...read with hundred other articles like Housing Slump's Third Year to Be `Deepest' Since WWII .
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SMS in 11 Indian languages by MTNL is an interesting development. Recently I worked on a policy-paper for making content available in local languages. I found surprising correlation between linguistic diversity and poverty, underdevelopment and illiteracy/poor literacy in both South Asia and Sub-Saharan Africa. We supported needs for converting existing content in local languages and some generation as well. Yesterday I also saw I-shakti (an initiative of HUL) towards this initiative, e-Chaupal also supports these). These are encouraging.
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This morning when I looked at Google News (where from now I study a lot, and try to keep me updated with global affairs), I was surprised at the cricket score (India-Pakistan match in Edens, 3rd day) in Google (India) News page on right hand corner. I am sure many of the Indian web-service companies (and mobile firms) will now see the competition from Google...they all have been 'me too', and they should now realize what innovations mean. It showed other ongoing match scores, and may be from cricinfo.com (any tie-up or just another news).
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Had a look at Jonathon Torritt's 'Capitalism: as if the world matters', and liked it. Concepts like Human Capital, Social Capital, Natural Capital, Manufactured Capital, financial Captal (and spiritual capital) made good sense. How China is facing the environmental challenges...and more on how financial capital is grosssssly being misused. many of the facts and numbers (the economist from Peru,Lima or capital market in providing capital to firms) were not known to me. Makes good reading...few of the points were on:

1. Out of $ 100 traded in financial markets, only $1 reaches firms for manufactured capital, and there's been cases with buy backs that there's been decapitalization. For one year in US (2002?), out of $20.4 trillion traded in US bourses, IPO was only $100 billion+. Many doubted this right of shareholders (short-term owners/speculators) against employees.

2. In Britain, out of incremental money supply, only 3% gets created by CB as debt free, and rest 97% by fractional reserve banking system, and make profit on it. Now if they speculate on it, and faces closure...who is to be blamed?

3. The examples that the tribals/rural people are undercapitalized came out well in that Peru-economist's work ($9 trillion). It's equally true for tribals and rural farmers in India...they own natural capital, but it's not financially capitalized. An average US or Japanese or British citizen is indebted (I am talking about personal loan, not govt. debt) by $25000 or even more (can be $10000 or even more).Now think if our government could hand over similar money to our people as credit. They could have improved their productivity many times. The study also pointed out of lack of property deal/ownership papers in rural areas which forces people not to avail credit. If they can, it does by 9 times. So we have two systems - one ets credit and acquires natural capital from people who does not have access to credit. THIS MUST BE STOPPED IN INDIA ASAP...DEALS CAN HAPPEN, BUT BOTH MUST HAVE ACCESS TO CREDIT, EQUALLY.

4. What I was surprised about India's energy efficient (compared to China by more than 100%). Chinese stories of pollutions are really concerning...that's why they may be thinking in nuclear powers (also the coal to liquid oil, coal gasification project).

Lot more insightful ideas...research findings

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Treasury near deal to aid struggling homeowners: Well, I was thinking about growth. Growth when achieved through socialism for the Wall Street and financial terrorism, it's not desired. But it seems that nothing will stop Bernanke, Paulson and Wall Street & Co, as nothing stops Bin Laden and Co.
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This month, having the other blog running on IT, I would focus only on geopolitics, global economics and environmental issues in this blog.