Escaping Decay: Japan Inc's Overseas Shopping Spree

♠ Posted by Emmanuel in , at 2/27/2015 01:30:00 AM
People used to fear Japan not so long ago, but now we have another situation.
There is perhaps no better indication of limited prospects for Japan going forward than its firms investing everywhere but Japan. It is not exactly cheap to make foreign acquisitions at this point in time with the yen at a weak level, but then again, things may get worse as the government tries even harder to pump-prime the local economy. Caught between weak domestic demand and better prospects outside of Japan, many have opted to go abroad despite the rising costs of doing so:
With shrinking prospects at home and the threat of further yen weakness, Japanese companies are rushing to buy overseas and seem willing to pay top dollar, as shown by Japan Post's $5 billion bid for Australia's Toll Holdings (TOL.AX).

Over the long term, Japan's demographics give a bleak prognosis for domestic demand; the population has been falling for a decade and is projected to drop from 127 million to 87 million by 2060, 40 percent of whom will be over 65.

But bankers and analysts say a more immediate impetus to the dash for overseas growth is the fear, in an era of deflationary pressure and huge monetary stimulus from Japan's central bank, that the weak yen will fall still further, making overseas targets more expensive if buyers don't strike now.
All of which demonstrates the counterweight to Prime Minister Shinzo Abe's efforts to kickstart the stagnant economy after decades of deflation and insipid growth.
The value of outbound Japanese acquisitions so far in 2015 is already at $27 billion, nearly half of the $56 billion total for all of last year, Thomson Reuters data show. By contrast, the value of domestic deals has more than halved since 2011, last year hitting a 16-year low of $36 billion [my emphasis].
Actually, the unintended effect of all the easy money being unleashed by the Bank of Japan is for firms to spend not at home but abroad:

After two years of stimulus from the central bank to boost inflation, consumption and investment, Japanese companies, excluding financials, have amassed record holdings of cash, reaching 233 trillion yen ($1.96 trillion), or 24 percent of their total assets.

Some of that money is now being put to use in overseas acquisitions. "This trend is set to continue," said Kengo Nishiyama, senior strategist at Nomura Securities.
Remember back in the 1980s when the widespread fear was that Japan was going to buy up the West? Sure the Japanese are again investing large sums of money abroad, but now they are doing so not because of overconfidence in Japan's future prospects but a lack of confidence. Things change, my dear, as flights out of Japan are becoming more crowded than those coming in.

Nuclear Option: UK Says Kick Russia Out of SWIFT

♠ Posted by Emmanuel in ,, at 2/26/2015 01:30:00 AM
To be cut off from SWIFT is to be cut off from international finance.
Here we go again: a few months ago I wrote about Western powers having designs on kicking Russia out of the Society for Worldwide Interbank Financial Telecommunication system or SWIFT. Since it handles most of the international transfers for trade, investment, and simply moving money around, SWIFT is a must-have for conducting commerce in the modern world. Yes, Russia has actually forecast a scenario wherein it would be kicked out of SWIFT due to its various shenanigans in Ukraine (see the link above). However, coming up with a financial transfer system of its own is not exactly viable at present since an interbank system of one nation doesn't quite cut it for obvious reasons.

Citing the perceived effectiveness of bringing Iran back in line after cutting it off from SWIFT, the British are now mulling the EU doing the same to recalcitrant Russia since SWIFT is based in Brussels, Belgium:
Excluding Russia from the SWIFT banking system should be an option in lieu of sanctions if a truce in Ukraine is not respected, British Prime Minister David Cameron said. Russia last month said it would retaliate strongly if it were to be cut off from SWIFT, the international financial industry's secure messaging system that facilitates transactions. 
Speaking to a parliament committee on Tuesday, Prime Minister David Cameron vowed that Britain would push for tougher sanctions against Moscow if a tattered truce between pro-Russian rebels and Ukrainian forces falls apart. "I would hope that the European Union collectively would respond very robustly with new sanctions, including so-called 'tier three' sanctions, really hitting the economy of Russia," Cameron said.
British PM Cameron's argument is that if Russia wants to behave like a rogue state, then it might as well not participate in the global financial system (an estimated 90% or more of Russian banks' international transactions are coursed through SWIFT):
"But were that not possible then, of course, we should look at other avenues as well -- obviously looking at the SWIFT banking issues is a big decision but there is a logic for it."

"If Russia is going to leave the rules-based system of the 21st century, then they have to start thinking about whether it's going to be in the 21st century system when it comes to investment, when it comes to banking, when it comes to clearinghouses."
It is, of course, easy for the UK's leader to suggest this course of action since it does not rely much on Russia for natural gas supplies. Unfortunately for him, the real Europeans--those on the mainland using the euro currency--are quite reliant on Russia for gas supplies. The UK relies on Russia for less than ten percent of its gas needs; Belgium, for instance, relies on Russia for over 40%. With 30% or so of total EU gas consumption met by Gazprom alone, Russia has a fairly big gun whose trigger it can pull on the EU if push comes to shove. You don't have to be a genius to figure out that Russia will wield the gas weapon for leverage over this matter.

Bottom line? I would be surprised if the EU even considers cutting Russia out of the Belgium-based SWIFT since it would probably mean being cut off from Russian gas supplies in turn. Unless relations deteriorate to such an extreme extent, that is.

Big Casket & US Protectionism vs. PRC-Made Coffins

♠ Posted by Emmanuel in , at 2/25/2015 01:30:00 AM
Caskets--where China has made limited inroads into the US market.
Make what you will of this rather morbid feature, but among the few things that are still Made in America purchased with regularity Stateside are caskets. Unfortunately, this phenomenon is not really down to the inferiority of China-made caskets or to the superiority of US-made ones but to the frustration of commerce by entrenched US firms. Apparently, the funeral industry is one of the few where pseudo-nationalistic arguments still hold water somehow:
By importing from China, [Las Vegas-based entrepreneur Jim] Malamas has followed a well-worn outsourcing playbook that’s upended markets for American-made goods from electronics to bedroom furniture. Working with four factories outside Shanghai, he imports 40-foot containers holding 64 caskets apiece and sells them to funeral homes and regional distributors for a fraction of the price. There is plenty of potential: In the U.S., caskets are a $1.6 billion business.

[But] Chinese casket imports haven’t gone as planned—for Malamas or anyone else. His revenue has stumbled. Where almost every other American manufacturer has failed to keep Chinese exports at bay, the casket industry has succeeded. Through aggressive litigation against importers, xenophobic admonitions to consumers, and good old-fashioned palm-greasing of funeral directors, Big Casket has made sure that 9 out of 10 Americans go into the ground in boxes made in the USA.

“The funeral industry has had a goddamn easy ride for the last 150 years,” says Joshua Slocum, the co-author of Final Rights: Reclaiming the American Way of Death and executive director of the Funeral Consumers Alliance, a Vermont nonprofit. “Why aren’t as many caskets imported as Chinese dishware? It defies all known rules of supply and demand.”
The Big Three of US-made coffins--Hillenbrand, Matthews and Aurora AKA "Big Casket"--have done their dardnest to frustrate the entry of China-made coffins:
To keep business, Big Three reps visit homes, meet families, and buy steak dinners. Funeral directors are often induced to sign nondisclosure agreements in exchange for discounts and goodies, such as the installation of casket showrooms.

Some funeral directors feel a patriotic duty to stick with the Big Three, analysts say. The industry still supports more than 3,300 U.S. workers, according to IBISWorld, an Australian market-research company. But protectionist instincts have their limits. Isard of Foresight Cos. tells the story of a funeral home client in North Carolina. A community built on manufacturing hardwood furniture, the area had itself been devastated by Chinese imports and was struggling with a 12 percent unemployment rate. Isard’s client began carrying Chinese caskets, displaying them on the left of its showroom, with American models on the right. The former were a third to half the price. After six months, 70 percent of families were choosing imported. “When given the choice, it’s just a box with a quilt,” Isard says.
Efforts to put Jim Malamas have included (bogus) mounting legal cases against him:
When Malamas entered the market, Big Casket moved quickly to defend its turf. In 2006 a Matthews subsidiary filed suit, alleging that ACE and its Chinese supplier were copying its designs. Matthews also sent letters to funeral homes and distributors, threatening to sue if they continued to buy from Malamas.

As the litigation dragged on, early customers bailed. Malamas had $2 million in legal fees. A judge almost detained him in Texas. Malamas says financial worries led his wife to divorce him.
“It was a nonsense lawsuit,” says Isard, who’s interviewed Malamas on his podcast at FuneralRadio.com. “But it slowed him down. The Big Three made their money back on legal fees many times over,” he says, by keeping in the fold funeral home clients who might have switched to Chinese caskets.
Apparently, the playing field is not yet level in all manufacturing industries in 2015. 

Ruble & Exodus from Russia of the Stans' Migrants

♠ Posted by Emmanuel in , at 2/24/2015 01:30:00 AM
Only in Moscow is Tajikistan so far away.
Here's another one of those interesting side stories to Russia's ongoing economies woes. In the past, workers--both documented and undocumented--used to flock there from the Central Asian republics or the "Stans" in search of work. You should be familiar with these: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. The factors which drove this migration are also well-known: they used to be part of the USSR after all, wages in Russia were comparatively higher, and employment opportunities back home were fewer. However, a new AFP article implies that workers from the Stans are fleeing Russia as the combined weight of Western sanctions, diminished energy prices, higher inflation and the loss of work opportunities for migrant workers are keeping them home in greater numbers:
"Almost 30 percent of the workers who left to spend New Year's as usual with their families in Uzbekistan or Tajikistan have not come back," said the head of a street cleaning company, who asked not to be named. The deputy governor of Saint Petersburg, Igor Albin, said recently that the city had lost half the migrant workers who do this type of manual labour.

Migrants from the ex-Soviet states in Central Asia used to flock to Russia to work as street sweepers, gypsy cab drivers or restaurant cleaners. Even the low wages seemed better than conditions back home. But many are returning to their countries as the Russian economy is choked by crippling Western sanctions over the Ukraine crisis and plunging oil prices. That has caused the ruble to lose half its value against the dollar, hitting migrants' paychecks hard.
It is not only economics but also politics keeping away more Stan residents away as migration officials have become stricter with migrant workers. (I would attribute this to natives becoming more hostile to migrants when they themselves cannot find jobs at home):
Almost three million people from Tajikistan, Kyrgyzstan and Uzbekistan live legally in Russia, while many more are there below the radar of the authorities. They are mostly unskilled workers who are paid off the books. The money they send to their families back home accounts for up to half their countries' gross domestic product. Galloping inflation in Russia is also eating into how much Central Asian workers can send home, and once the weaker rubles are converted into local currency their remittances are now worth much less.

She said that out of the current average monthly wage of 30,000 rubles ($460), migrant workers are no longer able to send more than $200 home each month. "It's not worth living a very harsh life in Saint Petersburg for such a meagre sum."

Russia has also increased the burden of red tape and fees, recently introducing a compulsory test on Russian language and history as well as new permits from the migration service. 
Tajik authorities concur that the numbers of those leaving from Russia are declining, too:
In Tajikistan, the poorest ex-Soviet country, the authorities confirmed that many migrant workers have returned from Russia. An immigration service official, Anvar Boboyev, told AFP that the number of Tajiks now leaving to work in Russia is half that of the same period last year. In January 2014, more than 60,000 Tajiks travelled to Russia, while last month it was only around 30,000, he said.

The Tajik government has vowed to create 200,000 jobs this year but experts say it will be far too little to meet the demands of returning migrants. Between 700,000 and one million Tajiks are thought to work in Russia.
Ultimately, that's probably setting the lower bound to how much migration from the Stans will slow: as bad as things are in Russia, they may be worse in the various Stans.

How the Ruble Became This Month's Best Currency

♠ Posted by Emmanuel in , at 2/23/2015 01:30:00 AM

The ruble rises again (somehow).
So much for the BRICs jibba-jabba: Russia has been downgraded back to junk status by Moody's, from the last investment-grade rating (Baa3) to the highest non-investment-investment grade rating (Ba1). This has prompted accusations of sinister machinations by the West [surprise!] from Russian authorities. However, it may indeed surprise you to know that, despite the downgrade, the ruble has actually been the best-performing currency of February 2015. How did this surprising performance happen? Also, is it for real? The answer is that the Russian government has asked the "help" of commodity-exporting firms to buoy the ruble by immediately changing foreign exchange earnings--dollars, euros, etc.--into the local currency:
Russian exporters are piling up rubles after President Vladimir Putin’s government asked their help in supporting the currency last year. OAO GMK Norilsk Nickel, Russia’s largest miner, and steelmaker PAO Severstal are among exporters converting more of their dollars and euros into local currency, according to company filings and people with knowledge of the situation. It’s a policy encouraged by the government to help stabilize the ruble after its 47 percent plunge last year.

As the currency crashed, Putin called on Russian companies to coordinate foreign exchange deals with the central bank. That some of the country’s largest businesses appear to be complying shows the growing influence of the state over the economy as Russia contends with lower oil prices, currency devaluation and sanctions. Russia’s central bank said it monitors currency sales by companies, though sets no targets for transactions. 
Ah, gentle persuasion from today's Russian government, i.e., they do not really have a choice lest they be ostracized by Putin and Co. With most of the current set of raw material-exporting oligarchs being Putin-friendly characters to begin with since they would have been long gone Khodorkovsky-style if not, there was not much persuasion needed. Rather, what's eyebrow-raising is that this artifice seems to be working so far:
“The serious work with exporters was important in December and the beginning of January when the currency market was very narrow and the volatility was high,” the bank’s press service said on Thursday in response to questions from Bloomberg. “Now the market is recovering and is not that dependent on the exporter revenue sales.”

The ruble has been the world’s best-performing emerging market currency this month, gaining 12 percent versus the U.S. dollar [my emphasis]. “Export revenue sales, which increased since the end of last year, give significant support to ruble and they are also one of the major reasons for the ruble’s plunge slowing down,” [said] Anton Tabakh, a director at RusRating, a Russian credit-rating firm.
Norilsk, controlled by billionaire Vladimir Potanin, sold foreign currency for about 30 billion rubles ($483 million) in cash since the end of December, after the government encouraged companies to switch export earnings into local currency, two people with the knowledge of situation said, asking not to be named because the information isn’t public.
To be sure, it's partly due to oil prices not dropping any further from the $50/bbl handle and the Ukraine crisis being tamped down somewhat. That said, "Russian ruble, February 2015's best-performing currency" takes some time getting used to.

China's Financial Liberalization, Post-Shanghai FTZ Edition

♠ Posted by Emmanuel in at 2/20/2015 01:30:00 AM
Shanghai FTZ: More than vaporware, actually.
Earlier on, I doubted the utility of the Shanghai Free Trade Zone (FTZ) as a viable endeavor given its emphasis on financial services instead of traditional goods processing. Liberalization of financial services for MNCs has long been a sticking point for them operating in China. While controlling "hot money" has been an official priority, it has also resulted in limitations for MNCs in funding PRC-based operations. That is, it is not so easy to borrow, lend, and otherwise use capital for day to day operations in a faraway land.

As it turns out, the Shanghai FTZ may turn out to be quite useful to multinationals. This is according to a firm that should know a thing or two about challenges faced by MNCs operating in the PRC--JP Morgan. It is quite sanguine about the prospects for MNCs in facilitating financial operations that were previously harder to conduct in China as Shanghai FTZ's more liberal regime is being spread China-wide:
The existing Shanghai FTZ rules have since brought China significantly closer to regions such as the United States and Europe in terms of ease of cross-border liquidity management. The extension of the RMB cross-border liquidity management rules to nationwide, now further close remaining gaps. The new rules largely permit MNCs to conduct RMB cross-border sweeping from anywhere in China, though there are some eligibility and operational criteria of which to be aware. Day-to-day operations of RMB cross-border sweeping under the nationwide rules must comply with a number of requirements, which include:
  • Minimum prior year annual revenues of RMB 5 billion and RMB 1 billion, respectively, for both onshore and offshore participants
  • A quota on borrowing by onshore entities from offshore counterparts (there is no quota limit for lending from onshore to offshore)
  • Some additional restrictions (over and above those already applicable to the Shanghai FTZ scheme) on what offshore borrowing may not be used for, including investments in derivatives and use for wealth management products or entrustment loans to non-participants
  • Both onshore and offshore participants must have been in operation for more than three years
While these requirements may preclude some MNCs from participating in the nationwide scheme, the limitations for many larger entities are not seen as major obstacles. For instance, one of the perennial issues for MNCs that established operations in China was that once they became profitable, they faced a challenge in repatriating retained earnings. Therefore, the inbound quota is likely to be seen as much less of an obstacle than the opportunity of no quota for outbound flows.
I believe that the Shanghai FTZ is another example of China's small-scale experimentation with liberalization. Insofar as the Shanghai FTZ experiment was judged a success by metrics PRC officials hold--don't ask me what they are, exactly--loosened restrictions are now being implemented PRC-wide. In the process, the PRC will more and more resemble other countries where capital flows more or less freely. This development is certainly in line with the PRC's wishes to make the yuan an international currency. That is, you cannot establish your currency as a medium of exchange when there are several restrictions to using it onshore and offshore as required by trading necessities.

Crap Financial Journalism and the Daily Telegraph

♠ Posted by Emmanuel in at 2/19/2015 01:30:00 AM
Three-breasted aliens do program trading! (But even Rita Skeeter will shut up if you pay her enough.)
Regular readers will note that I am actually discriminating about the news outlets I feature despite the wide range of topics on offer. For instance, I will never, ever knowingly excerpt from the Business Insider founded by pump-and-dump specialist Henry Blodget. Call me radical, but the platform of a barred securities trader may not be the best source of information about business. I am not fond of its brand of hucksterism. Another whipping boy around these parts is the British Daily Telegraph for similar reasons With its sensationalist headlines regularly forecasting the end of the commerce as we know it, I have justly labeled it as yellow financial journalism. Its grasp of finance is pretty poor, too.

However, all is not always economic doom and gloom with the Daily Telegraph. Just as with Blodget, conflicts of interest are rife at the Daily Telegraph. Recent revelations by its former chief political commentator Peter Oborne reveal that this fearless publication may pull punches--for major advertisers, that is. You see, British bank HSBC has confessed to helping clients dodge taxes. In the modern world of banking, that's unexceptional. What's more newsworthy, though, is that the Daily Telegraph did its best to bury the HSBC tax-dodging story in its pages. So much for journalistic integrity. From the Beeb:
The chief political commentator of the Daily Telegraph has resigned from the paper, accusing it of a "form of fraud on its readers" for its coverage of HSBC and its Swiss tax-dodging scandal. Peter Oborne claimed the paper did not give due prominence to the HSBC story because of commercial interests. Newspapers had a "constitutional duty" to tell readers the truth, he said. 
An analysis by the Beeb's David Sillito indicates the political economy of modern newspapers. As their readerships decline--whether folks read less or obtain news from other outlets--the source of newspaper revenues is tilting away from readerships and more towards advertisers. There is, as a result, more pressure to cater to the latter's concerns as opposed to some hoary notion of the public's right to know:
Amongst responses from journalists and news executives it's described as "eye-popping", "stunning", "explosive" and from professor Jay Rosen at New York University "one of the most important things a journalist has written about journalism lately". The Daily Telegraph is accused of a "sinister" betrayal of its readers.

Stories about HSBC, Tesco and China are said to be placed or sidelined for commercial reasons. But this is not just a parting swipe at an employer by a disgruntled member of staff, it's an explosion of anger about an issue that is worrying journalists across the industry. Newspapers are in a state of crisis. The Telegraph has seen its print sales drop by around half over the last 10 years. 
Peter Oborne's own account reveals the level of editorial tampering at this newspaper:
This was the pivotal moment. From the start of 2013 onwards stories critical of HSBC were discouraged. HSBC suspended its advertising with the Telegraph. Its account, I have been told by an extremely well informed insider, was extremely valuable. HSBC, as one former Telegraph executive told me, is “the advertiser you literally cannot afford to offend”. HSBC today refused to comment when I asked whether the bank's decision to stop advertising with the Telegraph was connected in any way with the paper's investigation into the Jersey accounts.

Winning back the HSBC advertising account became an urgent priority. It was eventually restored after approximately 12 months. Executives say that Murdoch MacLennan was determined not to allow any criticism of the international bank. “He would express concern about headlines even on minor stories,” says one former Telegraph journalist. “Anything that mentioned money-laundering was just banned, even though the bank was on a final warning from the US authorities. This interference was happening on an industrial scale.
The sensationalism is also explained well: its financial news is, in effect, the economic equivalent of hoaxes about three-breasted women. It's tabloid fare masquerading as news designed to draw the attention of the ignorant and impressionable:
Stories seemed no longer judged by their importance, accuracy or appeal to those who actually bought the paper. The more important measure appeared to be the number of online visits. On 22 September Telegraph online ran a story about a woman with three breasts. One despairing executive told me that it was known this was false even before the story was published. I have no doubt it was published in order to generate online traffic, at which it may have succeeded. I am not saying that online traffic is unimportant, but over the long term, however, such episodes inflict incalculable damage on the reputation of the paper.
To make a long story short, the Daily Telegraph is crap. Regular stories--those about poor sods not lucky enough to be major advertisers--are subject to tabloid-style sensationalism. Meanwhile, advertisers are above such treatment. Why the heck would you waste your time and money on this garbage? PT Barnum would be proud, but I do not subject my readers to such drivel. If you want a side helping of science fiction and fantasy, though, you know where to get your financial news.

Death of 9-5 Office Work: Fantasy or Reality?

♠ Posted by Emmanuel in at 2/18/2015 01:30:00 AM
The end of the office era will not be missed as the butt of endless jokes.
As someone who does not particular enjoy adhering to 9-to-5 white collar office work--as the saying goes, few will say "I wish I had spent more time at the office" on their deathbeds--I have watched changing patterns of employment with some fascination. The United States having invented the wretched thing, we are now watching how work patterns change there. In an environment characterized by greater job insecurity, white collar work is now changing not only because employers cannot guarantee employment for years on end but also because people are increasingly fed up with office culture. In other words, the supply of and demand for monotonous office slaving are both on the wane:
For much of the past century, the Era of Big Work — the 40-hour workweek and its employer-provided benefits — were the foundation of our economy. That was then. Now, independent work is the new normal. Freelancers, independent contractors and temp workers are on their way to making up the majority of the U.S. labor force. They number 42 million, or one-third of all workers in the nation. That figure is expected to rise to 40% — some 60 million people — by the end of the decade.

A number of factors both economic and cultural are causing the independent workforce to swell. Technological advances and globalization have greatly contributed to the erosion of traditional work arrangements. The private sector's need for speed and adaptability is increasingly incompatible with maintaining a large, full-time workforce. And of course, the Great Recession has put to rest the notion that there is such a thing as a stable full-time job.

It's true that many have been forced into this brave new world of freelance work by external factors. But many are getting into it by choice because independent work aligns with a paradigm shift in values that is happening both at work and in the marketplace.
The overall argument is that lifestyle changes are driving employment pattern changes. If you are not an avid consumerist, then there is no need to work so much to mindlessly buy tons of junk like Americans of previous generations:
Some argue that millennials don't buy big-ticket items because they can't afford them — for instance, the number of cars purchased by the 18-to-34 demographic fell almost 30% between 2007 and 2011. But that's only one factor in a much larger equation.

In reality, millennials tend to value experiences more than things. Their consumption habits are driven less by what kind of job they have and more by their pursuit of ever-evolving technology, brands that align with their ideals and sustainable and social purpose purchasing.

From what we buy to how we work — and why we do either — the American economy is undergoing a change every bit as epic as the shift a century ago from an agrarian society to an industrial one. When workers left the farm for the factory, there were, undoubtedly, plenty who mourned the loss of the old way of life, while others eagerly looked to the next era with vision and enthusiasm. The same is true today.
To be sure, it's trickier to find employment freelancing and working independently. Sure you set your own work hours and thus can schedule your life accordingly. However, this may instead translate to lower and irregular pay contrary to the largely positive account given above by head of the US-based Freelancers Union who would of course offer such a spin on their activities.

However, the soul-crushing nature of pencil-pushing is compounded by the health-destroying nature of spending hours and hours sitting behind a computer. This was well-recognized at the inception of office work; however, it's only now that the full health consequences are being documented. It is probably no wonder that the US became a byword for obesity during a time when office work became the norm instead of "manly" labors:
The solution, then as now, was straightforward: exercise throughout the day. [19th century office work critic Dr. Dudley] Sargent went on to invent a series of exercise machines that, save for some antiquated features and materials, wouldn't be out of place in a CrossFit facility today. And for office workers unable to pop down to a gym for a workout, Sargent and his followers had more prosaic advice: Stand, don’t sit.

All this advice is getting a second life, and with good reason. The remedy, if not the diagnosis of potential health risks, remains valid, even if the medical reasoning has changed. Simply put, sitting motionless for long stretches of time is bad for the body and the mind.

But our renewed concern for the ill effects of sitting probably reflects our collective disquiet with the changing nature of work in this country. Not so long ago, many Americans labored at physically demanding jobs in the nation’s factories, mills and mines. But these have largely disappeared, increasingly replaced by rows upon rows of people sitting hunched over a computer screen.
Rest assured that I do not spend hours on end behind a computer screen even if my tasks as an academic are still largely of this nature. It's just that I have more leeway when choosing when to work writing academic articles....or blog posts for that matter. All the same, the death of the office cannot come soon enough when reality shows based on it will be quaint reminders of a curious period in human history.

Why Cheap Oil Won't Stop Solar Power

♠ Posted by Emmanuel in at 2/17/2015 01:30:00 AM
Mainly, solar power is becoming really cheap relative to other sources.
I almost forgot about this one: many environmentally-conscious folks have become increasingly concerned that low oil prices may slow or even reverse the movement towards renewable sources of power--especially solar. Why change when gas has halved in price or more in less than a year? However, the reality is that the current phenomenon of cheap oil is actually a non-event in the inexorable march towards solar power. To this end, Bloomberg identifies seven reasons as to why this is so:
  1. The Sun Doesn't Compete With Oil -  Oil is for cars; renewables are for electricity. The two don’t really compete. Oil is just too expensive to power the grid, even with prices well below $50 a barrel.
  2. Electricity Prices Are Still Going Up - The real threat to renewables isn’t cheap oil; it’s cheap electricity. In the U.S., abundant natural gas has made power production exceedingly inexpensive. So why are electricity bills still going up? Fuel isn’t the only component of the electricity bill. Consumers also pay to get the electricity from power plant to home. In recent years, those costs have soared. Annual investments in the grid increased fourfold since 1980, to $27 billion in 2010, according to a report by Deutsche Bank analyst Vishal Shah. That’s driving bills higher and making rooftop solar attractive. [That is, power distribution instead of power generation costs are driving up power delivered via the grid.]
  3. Solar Prices Are Still Going Down - You may have seen this chart [above] before. It’s the most important chart. It shows the reason solar will soon dominate: It’s a technology, not a fuel. As time passes, the efficiency of solar power increases and prices fall. Michael Park, an analyst at Sanford C. Bernstein, has a term for the staggering price relationship between solar and fossil fuels: the Terrordome. Case in point: Oil-rich Dubai just tripled its solar target for the year 2030, to 15 percent of the country’s total power capacity. Dubai’s government-owned utility this week awarded a $330 million contract for a solar plant that will sell some of the cheapest electricity in the world. 
  4. Sales of Plug-Ins Are Doing Just Fine, Actually - Conventional wisdom says cheap oil is an existential threat to electric vehicles. It’s been true in the past, notably when Congress retreated from funding EV research in the 1980s as oil prices tanked. Things are different now, and global sales of plug-ins rose by about a third last year, according to BNEF. 
  5. Pump Prices Haven't Dropped as Much as Oil Prices - They haven't changed at all in Malaysia, Indonesia, and Thailand. There are a couple of interesting reasons why savings at the pump haven't kept pace with falling oil prices. First, a number of countries, including India and Indonesia, have used the price drop as cover to cut gasoline subsidies that were weighing down their budgets. Second, countries that include China have pocketed the savings from cheaper oil by increasing gasoline taxes to make up the difference[...]Fossil-fuel subsidies outpace renewable-energy subsidies by a factor of 6 to 1. Reducing the subsidy gap is one of the cheapest ways to increase fuel efficiency and speed up the switch to cleaner energy. Expect similar moves as the rising toll of climate change pushes governments to take action. 
  6. Oil Prices Won’t Stay This Low Forever - The history of oil prices follows a golden rule: What goes down must come up. Goldman Sachs identified almost $1 trillion in investments in future oil projects that are no longer profitable with oil under $70 a barrel. American drillers are idling rigs faster than they have since 1991. Eventually, supply will shrink and prices will rise again. 
  7. Global Investment in Clean Energy Keeps Flowing -  The biggest question for renewables and the oil plunge is: How much does perception shape reality? Shares of solar and wind companies have been pulled down with oil prices. Will this artificial drag bleed into direct investments in energy projects? Not likely. There are too many forces pulling in the opposite direction. Global investment in clean energy increased 16 percent last year, to $310 billion, according to data compiled by BNEF. The U.S. and China, the world's biggest emitters, reached a historic deal in November to rein in greenhouse gases.
Related to the third point, global overproduction of solar panels should also drive their prices down further and improve the power bang for your buck

The Sartorial Bankruptcy of Greece's Socialist Leaders

♠ Posted by Emmanuel in , at 2/16/2015 01:30:00 AM
"Tspiras, you dress as crappily as you 'govern'"
Ah, the tieless Greek leaders. Aside from their unreasonable demands--how can Greece stay afloat rehiring several thousands of laid off government workers basically pushing paper and not much more--the Syriza party flunkies also strike me as sartorially inept. The problem is that these flunkies are neither here nor there with their outfitting choices. If they really wanted to convey an air of rebellion against the EU establishment, then they wouldn't bother to wear business suits with dress pants and jackets. How defiant does not wearing a tie make you, after all? If I really wanted to show Western Europeans my retro-Communist leanings, why I'd show up at EU gatherings wearing an ushanka like Carlos the Jackal. Or a Nehru jacket with a bolo tie and clown shoes. Anyway...
What Greek voters might not have expected was the first big reaction to Tsipras's maverick streak would be all about his sartorial choices. As soon as the 40-year-old was sworn in as prime minister, people began asking one question over and over again. Where is his tie?

It didn't go unnoticed. When Martin Schulz, head of the European parliament, met with the Greek leader last week, reporters saw him apparently making a comment on the lack of tie to Tsipras. According to the Associated Press, French finance minister Michel Sapin also made some kind of similar gesture when he met the new Greek leader.
Their excuse is that they are no part of the "political class" (whatever that means):
There's no codified protocol for attire during meetings like these: European leaders are simply more used to seeing their peers wearing ties. But given that the entire Greek government can be seen without ties at points, it looks as if the ministers are trying to convey a deliberate political message.
So what lies behind the new Greek political classes rejection of ties? At first, Tsipras told reporters that he may never wear a tie, a comment that played into finance minister Yanis Varoufakis's idea that Greece's new leaders were "reluctant" politicians who simply want to fix Greece's problems: They were average guys, not of the political class.
This is of course nonsense. Just as you wouldn't show up at a formal wedding wearing bermuda shorts and a tank top, you must look the part when meeting with Eurocrats. Not wearing a tie is a sign of flippancy, and even more so when the persons you're talking to are your creditors to the tune of hundreds of billions of euros. The halfway step of wearing business suits without ties doesn't cut it at all--you might as well show up in ponchos and Megadeth T-shirts.

Finance Minister Varoufakis looks even more ridiculous.
Tspiras (and company): you think it's "cool" not to wear a tie, but really, you end up looking like a bunch of dorks way out of your league. The promise to wear a tie when Greece's situation is resolved is hilarious: given the extent of its problems, it will take more than a generation to sort out its situation. Being unfit to be in the EU--economically or sartorially--is the Greek meta-narrative since the country got into the EMU under false pretenses to begin with.