FIFA Fines HK for Booing PRC National Anthem

♠ Posted by Emmanuel in , at 10/09/2015 01:30:00 AM
"Let's jeer the Chinese national anthem; it certainly ain't ours!"
Given how much the Hong Kong economy depends on that of mainland China--consider the many HK-listed stocks of Chinese companies--it has always surprised me how much animosity Hong Kong residents have for their "motherland." Yes, the Communist Party leadership continually frustrating substantial moves towards self-governance has been a constant sticking point, but at the end of the day, you have to realize who butters your bread, right?

Well, some prefer not to. Since the 1997 handover by the British to the Chinese, the "March of Volunteers"--China's national anthem--has been Hong Kong's, too. So, pro-democracy campaigners have used the playing of this anthem to jeer their erstwhile PRC oppressors. Apparently, even the hyper-corrupt FIFA has had enough. In the latest booing episode, the Hong Kong Football Assocoation has been hit with a fairly stiff fine over the behavior of Hong Kong fans:
Fifa have fined the Hong Kong Football association (HKFA) £3,400 after Hong Kong fans booed the Chinese national anthem during a World Cup qualifier last month. Hong Kong has shared the anthem with mainland China since British rule ended in 1997 and disgruntled fans jeered 'March of the Volunteers' in the wake of their 3-2 defeat to Qatar.

Reports also claim that an object was thrown onto the pitch during the incident. Fifa warned Hong Kong's supporters about their conduct prior to the game as the anthem had been booed twice previously, but their warning was not heeded.
But wait, the excitement is set to be ratcheted up further as Hong Kong meets China for the right to play in the next World Cup:
Sarah Lee, a spokesperson for HKFA, said that the association were keen to install a "positive atmosphere" in order to deter booing in the future. Hong Kong's relationship with the mainland has become tense in recent years and culminated in a string of pro-democracy protests last year.

Hong Kong are scheduled to play mainland China on November 17 and have an opportunity to leapfrog their opponents in Group C as they attempt to qualify for a World Cup for the first time.
When you're fined by FIFA over governance matters, wow, that's pretty bad. More fireworks are probably in store, though. Politics and football often mix: see the US national team being booed by Latin fans on American soil when meeting Mexico's squad. Or, think about Barcelona FC stalwarts supporting Catalan independence.

Utterly Predictable: Candidate H Clinton 'Opposing' TPP

♠ Posted by Emmanuel in ,, at 10/08/2015 01:37:00 PM

The general rule for modern Democratic candidates is to voice skepticism for trade agreements in the run-up to elections, and then warm up to them once in office. The electoral dynamics are simple: organized labor remains strong within the Democratic party even if they are a much-diminished force in the overall picture Stateside. I bring this up because there are so many articles coming out about how Hillary Clinton has allegedly changed her position on the Trans-Pacific Partnership enlargement. Here is a representative quote:
Hillary Clinton said Wednesday she opposes the 12-nation Trans-Pacific Partnership, marking a significant break with the Obama Administration as she heads into the first Democratic presidential debate.

In an interview with PBS NewsHour, Clinton said that while she is still reviewing the deal, she is “worried” it benefits drug companies and does not address currency manipulation. “What I know about it as of today, I am not in favor of what I have learned about it,” Clinton said. “I’ve tried to learn as much as I can about the agreement, but I’m worried...”

“I’ve tried to learn as much as I can about the agreement, but I’m worried,” Clinton said. “I’m worried about currency manipulation not being part of the agreement. We’ve lost American jobs to the manipulations that countries particularly in Asia have engaged in.”
To make a long story short, like Obama and her husband before her, masquerading as a trade-o-phobe during election campaigning to please organized labor constituencies is standard practice. Witness the 2008 nomination process where it was [surprise!] the supposedly trade-hating Obama--under whom TPP was concluded--criticizing Clinton for jumping on the FTA-bashing train late during the 2008 campaign:
In Ohio, where union workers are a major presence and the manufacturing economy is hurting, Sen. Barack Obama attacked Sen. Hillary Clinton for her position on the North American Free Trade Agreement, called NAFTA.

"Yesterday, Sen. Clinton also said I'm wrong to point out that she once supported NAFTA," Obama said. "But the fact is, she was saying great things about NAFTA until she started running for president. A couple years after it passed, she said NAFTA was a 'free and fair trade agreement' and that it was 'proving its worth.' And in 2004, she said, 'I think, on balance, NAFTA has been good for New York state and America.' "

The Clinton campaign says Obama is wrong, that Clinton was critical of NAFTA "long before she started running for president." We looked into Clinton's past remarks on NAFTA and concluded that she has changed her tune, from once speaking favorably about it to now saying the agreement needs "fixing."
Some people never learn, If elected, I am sure that Missus Clinton will support TPP ratification Stateside after reading the TPP text "more carefully"--or something along those lines. Unlike Obama who was a senator in 2008 when running for president, she doesn't even hold any office at present, so what does it matter if the "opposes" TPP?

As an aside, the China-aimed currency manipulation concern about TPP is the most asinine thing I've ever heard. First, China is not a party to the @#$%^& agreement. Second, even if it were, it is drawing down and not increasing its foreign exchange reserves, implying that it is trying to maintain the value of its currency.

Early Winners and Losers From TPP Enlargement

♠ Posted by Emmanuel in ,,, at 10/06/2015 08:15:00 PM
Get ready to see lots more of these sorts of plants in Vietnam (read why below).
Bloomberg has an initial rundown of countries expected to win and lose from the conclusion of the Trans-Pacific Partnership (TPP) enlargement. When I pointed out earlier that there is a potential for very significant carve-outs for important TPP participants, I definitely had Japan in mind. True enough, one of the remarkable bits of agricultural protectionism that remains intact concerns rice. Despite the staple food becoming an ever-smaller part of the Japanese diet, rice farmers remain a core Liberal Democratic Party constituency. How so? Try a 1%--I am not joking--non-tariff import quota. Yippee, 1% tariff-free market access! With concessions like these....Anyway, here is the list together with some of my thoughts about the other countries:


*Japanese car and auto-parts makers may be the biggest winners, as they get cheaper access to the U.S., the industry’s biggest export market
* Japan was forced to reduce some of the protections granted to its rice farmers, creating a non-tariff import quota of one percent of its total consumption
* Livestock farmers may be harder hit as tariffs on beef will be cut to 9 percent over 16 years from 38.5 percent, while pork tariffs will also be slashed


* The deal will remove about A$9 billion of import taxes from Australian trade, Prime Minister Malcolm Turnbull said
* Australia will gain access to the U.S. sugar market while Japan will also reduce levies on the product and the cut in the beef tariff will help Australian ranchers
* Seafood and most horticulture products will see tariffs dropped, while preferential quota access will be created for grains, cereals and rice
* Australia and New Zealand successfully pressured the U.S. to compromise on the amount of time pharmaceutical companies would get protection for new biotech drugs, granting companies a minimum of five years rather than the 12 years of protection pushed by the U.S. That could lead to cheaper drug prices and more competition
* Reduced tariffs on everything from iron and steel products, to pharmaceuticals, machinery, paper and auto parts will help Australian manufacturers

COMMENT: Biotechnology stocks stateside are being driven down Tuesday as a result of the biotech provisions

New Zealand:

* Tariffs due to be eliminated on 93 percent of New Zealand’s trade with its TPP partners representing annual savings of about NZ$259 million ($168 million), Trade Minister Tim Groser said.
* The dairy industry, which accounts for about a quarter of exports, will see savings of about NZ$102 million a year. Some tariffs to remain in key markets such as the U.S., Japan, Canada and Mexico. Though New Zealand will get preferential access to new quotas, Canada only agreed to set foreign quotas for 3.3 percent of it dairy market over five years
* Tariffs on beef exports will be eliminated with the exception of Japan where they will drop to 9 percent from 38.5 percent, he said. Tariffs on all other exports including fruit, seafood, wine and sheep meat will be eliminated
* “While I am very disappointed that the deal falls far short of TPP’s original ambition to eliminate all tariffs, there will be some useful gains for New Zealand dairy exporters in key TPP markets such as the U.S., Canada and Japan,”  John Wilson, chairman of Fonterra Cooperative Group Ltd., the world’s biggest dairy exporter, said in a statement.

COMMENT: Canada and Japan's unwillingness to open up their agricultural markets significantly when faced with this agricultural exporter's wishes demonstrates the value the Americans placed on their participation. Remember also that New Zealand was an original TPP member before the United States thought about expanding it. In agricultural terms, however, it is a watered-down agreement on matter how the Yanks claim it is a "high quality" and "comprehensive" agreement.


* Vietnam to be among the biggest winners, according to the Eurasia Group, with the agreement potentially boosting GDP by 11 percent by 2025, with exports growing 28 percent in the period as companies move factories to the low-wage country, the report said.
* Reduced import duties in the U.S. and Japan will benefit country’s apparel manufacturers, whose low labor costs have enabled them to grab business from China. Still, impact may be limited as Vietnam will still face strict rules-of-origin on materials.
* Fishing industry to benefit from elimination of import tax on shrimp, squid and tuna, now averaging 6.4%-7.2%
* Eliminating import taxes on pharmaceutical products from the current average of about 2.5% will lead to tougher competition between Vietnamese domestic companies and foreign companies. TPP will also increase patent protection, restricting Vietnam companies access to new products as well their ability to produce new drugs.

COMMENT: Low-cost assembly work in Vietnamese factories is set to get a boost since few of the other participants offer the same sort of comparative advantage. Maybe they'll diversify from Samsung phones as a result.


* Malaysia’s state-owned enterprises may suffer from the deal which calls for equal access to government procurement
* Electronics, chemical products, palm oil and rubber exporters are among beneficiaries. Malaysia is the world’s second-biggest palm oil producer and one of the biggest growers of rubber


* The world’s second-biggest economy may be among the biggest losers as it failed to join the TPP, allowing the U.S. to tighten trade ties across the region and advance the Obama administration’s so-called pivot to Asia. After initially dismissing TPP, Chinese officials have now indicated some interest in possibly joining in the future
* "China has an open attitude towards system building that complies with WTO rules and is conducive to economic integration in the Asia-Pacific region, and hopes the agreement and other free trade arrangements in the region can be mutually beneficial, so that they can make contributions to trade, investment and economic growth in the Asia-Pacific region," China’s Foreign Ministry said in a statement.
* Chinese exporters may lose some market share in the U.S. and Japan to developing countries such as Vietnam, according to Bloomberg economist Fielding Chen
* China will push its "one belt, one road" strategy of resurrecting trade routes from Asia to Europe and its new development bank and try to reach more free-trade deals with other countries, especially in Asia, Chen said. “While opening up its own door, China doesn’t want to see other countries are closing their doors,” Chen said.

COMMENT: Yes, yes, China is not a TPP signatory. To me, the real litmus test of whether TPP matters is if China loses enough business in the medium-term to want in despite the United States having thought up the TPP enlargement in the first place. China has alternative preferential blocs in mind, but it has lost out already in getting them inked.

A Done Deal? Trans-Pacific Partnership is Inked

♠ Posted by Emmanuel in , at 10/05/2015 05:09:00 PM
The international trade deal is signed; individual nations ratifying it remains.
This comes as a bit of a surprise to me: the Trans-Pacific Partnership has, at long last, been completed. I had expected divisive issues to hold it up--agriculture and automobiles especially--but it seems I was mistaken. There are APEC economies starved for further trade deals including, much to my surprise, Japan, which I had expected to complicate matters over its closed markets for the aforementioned goods. While the full text of TPP is yet to be released, here is the summary from the USTR:
On October 4, 2015, Ministers of the 12 Trans-Pacific Partnership (TPP) countries – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam – announced conclusion of their negotiations.  The result is a high-standard, ambitious, comprehensive, and balanced agreement that will promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in our countries; and promote transparency, good governance, and enhanced labor and environmental protections.  We envision conclusion of this agreement, with its new and high standards for trade and investment in the Asia Pacific, as an important step toward our ultimate goal of open trade and regional integration across the region.
The USTR also touts five key features, although these talking points should be familiar by now:

Five defining features make the Trans-Pacific Partnership a landmark 21st-century agreement, setting a new standard for global trade while taking up next-generation issues.  These features include:
  • Comprehensive market access.  The TPP eliminates or reduces tariff and non-tariff barriers across substantially all trade in goods and services and covers the full spectrum of trade, including goods and services trade and investment, so as to create new opportunities and benefits for our businesses, workers, and consumers.
  • Regional approach to commitments.   The TPP facilitates the development of production and supply chains, and seamless trade, enhancing efficiency and supporting our goal of creating and supporting jobs, raising living standards, enhancing conservation efforts, and facilitating cross-border integration, as well as opening domestic markets.
  • Addressing new trade challenges.  The TPP promotes innovation, productivity, and competitiveness by addressing new issues, including the development of the digital economy, and the role of state-owned enterprises in the global economy.
  • Inclusive trade.  The TPP includes new elements that seek to ensure that economies at all levels of development and businesses of all sizes can benefit from trade.  It includes commitments to help small- and medium-sized businesses understand the Agreement, take advantage of its opportunities, and bring their unique challenges to the attention of the TPP governments.  It also includes specific commitments on development and trade capacity building, to ensure that all Parties are able to meet the commitments in the Agreement and take full advantage of its benefits.
  • Platform for regional integration.  The TPP is intended as a platform for regional economic integration and designed to include additional economies across the Asia-Pacific region.
Attention now turns to the specifics: what sorts of concessions were offered to the likes of Japan...or even Canada? Beyond that, this international agreement needs to be ratified by all of the 12 participants in the negotiations. So there is still quite some ways to go.

What China Gets From Giving Venezuela $45B

♠ Posted by Emmanuel in ,,,, at 10/05/2015 01:30:00 AM
The largest Venezuelan note is now worth 12 cents.
Next week, the IMF is holding meetings in Lima, Peru in the region that has suffered as much as any other from the global slump in commodities. It's not bound to be a happy occasion for many of those gathered. Despite everything, some commodity exports have managed to accumulate substantial foreign exchange reserves precisely in anticipation of these lean years. Others, meanwhile, have tried to lessen dependence on commodity exports to literally fuel growth.

As you would expect, Venezuela has done none of these things as it amassed very little in reserves--preferring to waste oil revenues on quite frankly idiotic attempts to show "global solidarity." Diversification away from oil? If nothing else, Venezuela has become more dependent on energy in the past few years...just as China-buoyed global demand has ebbed. Meanwhile, as the rest of the world combats deflation, Venezuela is confronting hyper(inflation) as the bolivar heads to oblivion. It has fallen by 88% in 2015:
Venezuela’s bolivar passed the physiological barrier of 800 bolivars per dollar Tuesday in black market trading as Venezuelans rushed to protect savings amid rising inflation. That means that the country’s biggest currency note of 100 bolivars is now worth about 12 U.S. cents.

The currency has declined 14.7 percent in the past month to 816 bolivars per dollar, according to, a website that tracks trading in street markets where Venezuelans go to skirt limits on foreign-exchange purchases. The government maintains official rates of 6.3, 13.5 and about 200 bolivars per dollar for authorized purchases of items deemed essential.

Venezuela’s inflation, estimated by some to be nearing 200 percent, is the fastest in the world as President Nicolas Maduro’s administration prints more currency to pay budget expenses as the falling price of oil reduces foreign currency income. The amount of bolivars in circulation passed 3 trillion for the first time on Sept. 19, up 97 percent in the past year, according to data compiled by Bloomberg.
The only thing keeping Venezuela from economic oblivion is not the hated IMF, but rather the People's Republic of China. Ricardo Hausmann, the Venezuelan economist at Harvard, blames the worsening of Venezuela's worrisome situation to continued Chinese cash infusions which now amount to an astounding $45 billion. Who needs the IMF when you've got the PRC?
The billions of dollars China loans to Venezuela in exchange for oil are a “disgrace” and used for corrupt purposes that go undisclosed to the general public, said Harvard professor Ricardo Hausmann.

Venezuela, which has tapped China for more than $45 billion over the last decade, is increasingly reliant on the world’s second-biggest economy for cash because of its unwillingness to comply with the requirements of the International Monetary Fund, Hausmann wrote in a Sept. 28 opinion piece for Project Syndicate. Those loans have become more important than ever as the nation’s international reserves tumbled with oil prices to a near 12-year low.

“The Chinese have not required that Venezuela do anything to increase the likelihood that it regains creditworthiness,” wrote Hausmann, a former Venezuelan planning minister. “They merely demand more oil as collateral. Whatever the IMF’s faults,” China Development Bank “is a disgrace.” The loans have “built-in privileges for Chinese companies” in sectors including telecommunications, appliances, cars and oil drilling, Hausmann said. An e-mail to the bank seeking comment, sent after business hours, wasn’t immediately returned.
Think of tt as underdevelopment theory with a twist. Instead of the "imperialistic West" making its dictates known through the IMF, you have "third world champion" China. Remove the labels though and what you see happening is similar: ever-broader swathes of the Venezuelan economy falling into the hands of the Chinese. I hardly think the Chinese are doing this for altruistic reasons--would they extend so much credit to a resource-poor country? In China's calculations, $45 billion is a drop in the bucker compared to gaining leverage over the vast reserves Venezuela supposedly holds--especially in the form of unconventional reserves.

The question remains, though, of whether the Chavista leaders will continue to have warm relations with China into the future. Or, if these Chavista leaders will remain in place as they are quite unpopular for obvious reasons with the Venezuelan electorate. I guess China throwing billions and billions of dollars at them is one way of helping to guarantee that they do until such as time that China can be paid in full--and more.

I don't use the word "giving" instead of "lending" in the title for nothing.

Do Computers 'Taming' Volatility Make it Worse?

♠ Posted by Emmanuel in at 10/02/2015 07:02:00 PM
'I'm sorry Dave,'
The story of computers or robots doing their masters wrong when they were supposed to work to the benefit of humanity has a very long lineage in science fiction. In Carnegie Mellon's "Robot Hall of Fame," there is the fictional HAL 9000 that tried to kill off astronauts on board the spaceship Recovery in the legendary 2001: A Space Odyssey. Not having mastered space flight to such a degree fourteen years after the year that movie was set, however, it seems we still have machines trying to kill off

You see, the recent turbulence in global financial markets is now being blamed on trading algorithms designed to...wait for it...limit volatility:
Since the bruising losses of the financial crisis investors have sought out novel and complex ways to play markets more safely. Many have increasingly turned to computer-driven “systematic” investment strategies that aim to maximise returns while mitigating risks — whatever the market conditions...

This has burnished the appeal of the systematic investment industry, the creation of a new generation of scientist asset managers who use complex algorithms to beat the market. Freed from the shackles of human bias and slow reaction, their funds harness computer power to constantly and automatically exploit millions of minuscule investment opportunities, using sophisticated risk management tools that aim to tame volatility rather than be terrorised by it.
Instead of limiting volatility, however, the overall effect of these computer-based strategies may be to increase such volatility:
But the recent stock market turbulence has raised new concerns that these automated and algorithmically-driven strategies are compounding problems, not insulating investors from them. Some analysts and investors fret that the systematic strategies are a financial version of the Cobra Effect. “We have been breeding cobras, and we are now releasing them into the wild,” says Andrew Lo, a finance professor at MIT’s Sloan School of Management. “We ought to be very concerned about this growing phenomenon . . . This is no longer a cottage industry.”

Some analysts fear that the rise of systematic investment strategies has made markets even less predictable, more volatile and potentially susceptible to sudden, inexplicable crashes should the role of algorithmic, automated trading continue to climb. “Every investment cycle is defined by the collective desire to avoid the mistakes of the last one. Taken to extremes, that often becomes the catalyst for the next crisis,” warns Vadim Zlotnikov, chief strategist at AllianceBernstein, an asset manager.
Those favoring algorithm-based strategies need to demonstrate that they do not increase overall volatility using such strategies, but it will be difficult to devise a suitable test. For instance, how can you tell them to lay off for one month and be active another? In the meantime, watch out for the machines. Or, to be fair, the folks with unyielding faith in them.

First Time Ever: PRC Reports Reserve Holdings to IMF

♠ Posted by Emmanuel in ,, at 10/01/2015 01:30:00 AM
Sucking up to the IMF in all sorts of ways--now including reporting on forex reserves.
"Transparency" and "Chinese officialdom" are strangers to one another. That said, the PRC seems to be making improvements in one regard: After years of obfuscation, PRC authorities have only just begun reporting reserve data to the IMF Composition of Foreign Exchange Reserves (COFER). Previously, they furnished no data whatsoever--nada, zilch, zip, diddly-squat. But, all that changed recently with China partially--repeat, partially--reporting on its reserves.

How "partial" are we talking about? In aggregate, total reported reserves to the IMF jumped by $600 billion. Assuming that all the increase is due to China's new reporting, it falls well short of the $3.56 trillion it is believed to hold even with its recent sell-off of foreign exchange to slow the rate of yuan depreciation. From an earlier report in the WSJ:
The People’s Bank of China said Monday that its reserves fell by $93.9 billion, the biggest-ever monthly drop in dollar terms and the largest in percentage terms since May 2012. The decline in China’s foreign-currency reserves has accelerated, deepening a trend that illustrates the pressures of the country’s slowdown, rising capital outflows and expectations for monetary tightening in the U.S. China used its reserves to stabilize the yuan after the central bank devalued the currency on Aug. 11, a move that heightened worries about growth in the world’s second-largest economy and sparked a sharp selloff across global stock markets.

At $3.56 trillion as of the end of August, the currency reserves held by the PBOC still account for nearly one-third of all holdings by central banks world-wide. But the reserves have declined since a peak of nearly $4 trillion in June 2014 as more money leaves the country
Now, Dow Jones newswires reports on China's COFER contribution:
China has begun to report its currency reserves to the International Monetary Fund for the first time—a milestone in opening a key facet of the country's economy to the public view. The move comes as Beijing seeks to have its currency, the yuan, included in the basket of reserve currencies that comprise the fund's lending instrument.

The IMF said China has reported a "representative portfolio on a partial basis," meaning that what it has shared represents the fractional breakdown of its holdings of different currencies. China will gradually report its full foreign-exchange holdings over two to three years, the IMF said.

Reported currency reserves world-wide jumped by around $600 billion with China's new data. The IMF's numbers don't reveal how much each of the reporting countries holds. But based on the fund's breakdown of the aggregated share of different currencies held, it seems China's portfolio matches most central-bank holdings: roughly 60% dollars and 20% euros and pounds sterling—with the Japanese yen and other major currencies making up the difference.
So approximately $600B reported out of about $3.5T is, in the bigger picture, just a fraction of China's entire forex holdings. But then again, it's a start given how secretive the Chinese are. The prize the Chinese are after remains IMF inclusion of the yuan in the SDR basket of currencies:
To win reserve-currency status China has begun to liberalize its exchange-rate regime and provide more transparency about its currency policies. Last year China committed to providing more details about its reserve holdings, an effort that will allow economists to better gauge the degree to which the country is intervening in its exchange rate. China now discloses its foreign-exchange reserves every month, whereas in the past it reported the figures quarterly. It also has started to disclose its holdings of gold every month.
You didn't think the Chinese were doing this out of the goodness of their hearts, did you?

The Utter Unlikeliness of Call of Duty: Singapore [?!]

♠ Posted by Emmanuel in , at 9/30/2015 04:12:00 PM
Call of Duty: Singapore is a really dumb idea. I look forward to Call of Duty: Kirby's Apartment.
If you were going to set a fictional video game franchise concerning a terrorist attack somewhere, the very last place yours truly would think of is Singapore. It is a highly antiseptic society that has banned chewing gum. More seriously, Singapore is a country that, to its credit, I can honestly say has truly tried to be accommodating of all races and faiths. Yes, migrants are sometimes discriminated against...but by Singaporeans of all races and faiths who've had the privilege of getting there first instead of being of certain colors or creeds. Terrorism isn't usually spawned by such grievances.

So it was of some surprise to me that the latest installment of the Call of Duty franchise--concerning a terrorist attack--was set it Singapore 2065. Even more puzzling, they've used live blogging to promote the game, leading some impressionable netizens to believe the "attack" was real:
A "terror attack" has taken place in Singapore - all part of a controversial web campaign to launch the newest title from the popular Call of Duty video game franchise. Set in Singapore during the year 2065, Call of Duty: Black Ops III begins with a mission where players must investigate the "mysterious disappearance" of a CIA station.

Ahead of its worldwide release on 6 November, US-based games maker Activision launched a series of tweets, setting up the opening scene for a fictional attack in Singapore. While the tweets aimed to tease fans and also introduced new characters to the game, many social media users were unimpressed at the way things were playing out on Twitter, saying the scenario was in bad taste. 
Local media (read: government-friendly) are, unsurprisingly, blasting the PR stunt. See the Straits Times and Today Online. My complaint is not that the tweets were in bad taste. Rather, the scenario is rather implausible.

What's next, Call of Duty: Zurich?

French-Built Warships for Russia: Sold to Egypt

♠ Posted by Emmanuel in ,,, at 9/28/2015 02:50:00 PM
From scaring Russia's neighbors to fighting ISIS: a new role for the star-crossed Mistral-class warships.
I almost forgot to post about the continued travails of warships originally built by France for the Russians. With the outbreak of hostilities over Ukraine, the French government canceled the sale since the Mistral amphibious assault ships could be used to support Russian--how do we say it--excursions in neighboring countries. These warships are helicopter carriers that can also land troops during...adventures in others' territories. So, they have sat in French ports for a long time over what Russia will use them for nowadays. That is, until just recently when they were instead sold to Egypt of all countries:
Egypt will buy two warships that France originally built for Russia but refused to deliver because of Moscow’s role in the conflict in Ukraine, French President Fran├žois Hollande said...Egypt will pay €950 million ($1.06 billion) for the two Mistral class warships, French defense officials said, speaking on condition of anonymity. Russia agreed to pay €1.2 billion for the Mistrals, but the officials said the two contracts aren’t identical: Notably, France was supposed to help Moscow build future models of the ships in Russia. Transferring that capability isn’t part of the deal with Egypt, the officials said.

The vessels would add powerful capabilities to Egypt’s military arsenal, as President Abdel Fattah Al Sisi battles Islamist militant threats to his government in places such as the Sinai Peninsula and from across Egypt’s western border in Libya. For France, the deal closes an uncomfortable chapter in Mr. Hollande’s presidency that forced him to choose between cultivating Russia as a major customer of the French defense industry or severing ties because of Moscow’s support for pro-Russian rebels in Ukraine.
Actually, Egypt and other Arab governments have been moving closer to the Europeans for supplying their military equipment requirements. You can probably chalk that down to the United States' warmer relations with Iran. Plus, the US hasn't exactly cottoned up to the current Egyptian government which took the place of an elected (albeit Islamist) regime:
The accord is also a further sign that Egypt and other Arab governments have been moving to reduce their dependence on the U.S. as a military supplier. France has been eager to step in. Earlier this year, Egypt bought 24 Rafale fighter jets, made by France’s Dassault Aviation SA, AM -1.59 % for around €5 billion.
Using the warships for fending off ISIS seems to be a much less controversial purpose to put these warships to instead of, say, threatening former Soviet satellites (and Baltic states too). Moreover, selling the vessels to a Middle Eastern authoritarian regime instead of another in Europe hardly represents a step forward in rewarding "good governance."

At the end of the day, though, the ships had to be paid for somehow, in this instance by a (marginally) less odious buyer.

Pol Eco of Stats: World Bank's New $1.90 Poverty Line

♠ Posted by Emmanuel in , at 9/25/2015 08:17:00 PM
New targets require new measures of poverty, right?
There has been, in the memorable characterization of Robert Wade, a "political economy of statistics" concerning poverty and inequality. As standard-bearers of neoliberal, market-led globalization, the World Bank would of course claim that the world's decades-long towards putting faith in market mechanisms has resulted in a global reduction of both. Robert Wade begs to differ. Needless to say, methods of measuring these "bads" remain contentious.

There are of course all sorts of ways to measure poverty. For quite some time now, the World Bank has kept an easily-remembered shorthand of expenditures of less than $1.25 on a PPP basis. This, of course, was preceded by the famous $1/day standard before 2008. There are thus many complaints about this standard: sure $1 is a nice round number, but can such inter-country comparisons really be made even after adjusting for purchasing power?

Well, guess what: just as people were still arguing about the $1/day standard when the $1.25/day standard came along, the World Bank is now about to introduce a $1.90/day standard. As we transition from the Millennium Development Goals (MDGs) anchored on the $1.25 standard to the Sustainable Development Goals (SDGs) which replace the MDGs this year, I suppose the development experts came to the conclusion that we need a new international poverty line as well:

The World Bank is to make the most dramatic change to its global poverty line for 25 years — raising its measure by a half to about $1.90 per day — in a move likely to swell the statistical ranks of the world’s poor by tens of millions. The move from $1.25 would be the biggest revision since the World Bank introduced its $1 a day yardstick of global poverty in 1990...

The bank is expected to follow the event by shifting its poverty line to about $1.90 ahead of its annual meetings in Lima, Peru, in early October — a move likely to result in significant shifts in the estimated size and distribution of the planet’s poor. It is difficult to predict exactly how many more people will be defined as poor. However, when researchers at the bank tested a notional poverty line of $1.92 earlier this year, it led to a surge of 148m.

Most of the difference came in east Asia where the ranks of those falling below the poverty line almost doubled from 157m at the old $1.25/day measure to 293m. In Latin America, the result was an increase of 8m, or more than 25 per cent, in the number of poor to 37m, while in south Asia the ranks of the poor grew by 7m to 407m. Under that line, sub-Saharan Africa remained steady at some 416m.
Interestingly, there are now complaints coming from the right. If you assume that globalization has reduced inequality in recent years--and most orthodox economists would say it did--then why change the standard? The new accusation is that the World Bank would not have any work otherwise "helping" the newly (re-)classified folks qualifying as poor as per its mission of helping to eradicate poverty:
Angus Deaton, the Princeton economist and persistent critic of a poverty line that he argues has been misleading for years. “You’ve got a line that no one knows where to put it, PPPs that change, and underlying data that is bad,” he said. “It is sort of a statistical problem from hell.” The World Bank’s administering of the poverty line also carried a hint of conflict of interest, he said, as the bank’s main task was fighting poverty, and its very existence depended on its own poverty measures.

Mr Deaton added: “I think they have some institutional bias towards finding more poverty rather than less.” 
Talk about the political economy of statistics: from the left you have folks like Wade saying these measurements are bogus. On the right they say these statistics and bogus and self-serving.  There's just no pleasing some people.