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.'