I Dream of Naomi the Globophobe

♠ Posted by Emmanuel in at 9/30/2007 10:43:00 PM
Let me qualify that--I have bad dreams about Naomi Klein. She is, of course, the author of the popular book that attacked the evils of corporate globalization, No Logo. A favorite of the anti-globalization movement, she has recently released another, more ambitious book entitled The Shock Doctrine. The book makes an analogy between electroshock therapy applied to psychiatric patients and the "shock therapy" doctrine of wholesale economic makeover. (Although Jeffrey Sachs is associated with the term, he claims not to like it.) Just as electroshock therapy is designed to break down patients and make them susceptible to reprogramming,...
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US Student Loans: Subprime II?

♠ Posted by Emmanuel in at 9/30/2007 09:58:00 PM
Uh-oh, we've seen this movie before. Just as the subprime mess has revealed the troubles in America's love affair with costly credit (and not reading the fine print), it seems private student loans may be headed in the same direction with equally dire consequences. Instead of the pitch that adjustable-rate mortgages could be refinanced anyway since the housing market was unsinkable, the pitch here is that college graduates would be able to find good-paying jobs after their graduation that would pay for their college loans. In many instances, however, it seems that college graduates are having trouble finding jobs or jobs that...
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John Lipsky, the IMF's David Lereah

♠ Posted by Emmanuel in , at 9/30/2007 12:08:00 AM
Recently resigned National Association of Realtors Chief Economist David Lereah is (was?) infamous for his ever-optimistic take on the state of the US housing market. His belief is best summarized by his book's title, "Why the Real Estate Boom Will Not Bust - And How You Can Profit from It: How to Build Wealth in Today's Expanding Real Estate Market." So infamous is Lereah that there's even a website critiquing his merry pronouncements of everlasting housing mirth. Unfortunately for the rest of us, while Lereah is gone, we still have to listen to another Lereah-esque character. Worse yet, he's at the IMF, the supposed guardian...
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Travel Cheaply w/ "Surging" Yuan

♠ Posted by Emmanuel in , at 9/29/2007 04:38:00 PM
Here's a travel article from our favorite Party publication the China Daily that will either elicit your interest or have you scratching your head in disbelief. This article is yet another entry in the vast genre of travel stories that go like this: Ever since the currency of country X became that much stronger, citizens of X have gone shopping in country Y and other blighted places suffering from devaluation. (You can read Canada-US and UK-US versions, for instance.) The notable twist to this story is that China is country X and country Y is merely the city of Hong Kong. While the renminbi AKA the yuan has strengthened by...
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The Burma<->Wonga ($) Nexus

♠ Posted by Emmanuel in , at 9/29/2007 03:00:00 PM
I have a nasty neighbor like the Association of South East Asian Nations (ASEAN) does. Whereas I have to put up with a neighbor playing loud gangsta rap that goes "smack that biatch" and "kill those mofos", ASEAN's neighbor Burma actually does those things all the time. Why does Burma do so? Because it can. It's about the wonga (slang for money), naturally. Corporate social responsibility (CSR) issues aside, there's a heckuva lot of energy reserves not being tapped by America because of its sanctions just waiting for those who can stand dealing with the Burmese junta. As long as it can get a cut on such deals to sustain itself...
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Structurally Adjusting the IMF

♠ Posted by Emmanuel in , at 9/28/2007 02:59:00 PM
And now here's an old-school, straight-up IPE topic: the fate of the IMF. As you know, the IMF was originally intended to be a lender of last resort when countries ran into balance of payments crises. When a country no longer had the ability to pay for its exports since its foreign exchange holdings were depleted, it had to call on the IMF. The most visible, relatively recent calls for help were made when the Asian financial crisis plunged East Asian countries into financial turmoil as foreign investors pulled out their FDI and portfolio investments en masse while regional currencies devalued severely. Countries that turned...
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Chinese SWF: All Hat, No Cattle?

♠ Posted by Emmanuel in at 9/28/2007 02:31:00 PM
Texans use the term "all hat, no cattle" to describe all hype, no action. In computerese, it's called "vaporware." Much discussion has centered on the possibility that the Chinese government would use its whopping $1.4 trillion in reserves to buy up the West and the rest of the world through its newly created sovereign wealth fund, the China Investment Company (CIC). As the CIC opens its doors this Saturday, Reuters' Alan Wheatley urges us not to believe the hype--for now at least. Among other things, the CIC is likely to be under the thumb of the People's Bank of China (PBoC). Lest we forget, there are also those past bugaboos of el crappo Western investments like Flint--I mean, Blackstone stock and rising Western protectionism for CIC to deal with:The formal launch of China's investment agency may prove to be a milestone in the development of sovereign wealth funds but for now it is largely irrelevant to the conduct of the country's economic and monetary policy.Besides giving...
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US cattle ranching...in Inner Mongolia

♠ Posted by Emmanuel in ,, at 9/28/2007 02:04:00 PM
One of the truisms in development is that food demand increases as a country becomes increasingly prosperous. Nowhere is this dynamic more apparent than in the PRC. One of the (rather Westernized) habits that the Chinese have picked up is an appetite for beef, AKA heffers. So, enterprising American cattle ranchers have decided to set up shop near the booming Chinese market--in Inner Mongolia. However, big operations modeled after American methods will likely bring social (smaller farmers put at a disadvantage), environmental (carbon emissions and water pollution), and political (growing political-economic clout of big operators)...
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EC: NGOs Distort LDC's Trade Views

♠ Posted by Emmanuel in ,, at 9/27/2007 06:55:00 PM
Holy moley, the world is awash with a glut of trade news these days. Of course, I try to do the best I can to keep IPE Zone readers up to date. What we have here is the European Commission (EC) accusing NGOs like ActionAid and Oxfam of souring African nations on trade deals in general. In case you missed it, today was the NGO-sponsored "International Stop Economic Partnership Agreements" day (click on Oxfam link).If you will recall, the EU for the longest time had preferential trade agreements with former colonies under the ACP (Africa, Caribbean, Pacific) grouping. However, the formation of the WTO subsequently led to the...
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Four Fantabulous FT Features

♠ Posted by Emmanuel in ,, at 9/27/2007 01:54:00 PM
I am continually surprised by the breadth and quality of the content of the Financial Times. But, don't take my word for it. Have a look for yourselves at these pieces on Boeing v. Airbus, French national champions, Hollywood in Abu Dhabi [!], and drrrty rating agencies. Call it my overactive imagination, but the post-Murdoch Wall Street Journal is already falling behind the FT. Let's start with that old chestnut, Boeing versus Airbus, the pot-and-kettle contest. As most of you know, these firms have dueling claims pending at the WTO. In a nice twist, someone's been quoted as saying that the likely result of these shenanigans is "mutually assured embarrassment." IMHO, there's very little to choose from here as to who is more "innocent" from government support. They more or less cancel each other out:Alleged illegal government subsidies to Boeing, the US aircraft maker, have cost its European rival, Airbus, some $27bn in lost revenues over the past three years, the European Union...
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Hu Jintao; Burmese Junta

♠ Posted by Emmanuel in ,, at 9/27/2007 12:02:00 AM
The Chinese are famed for their so-called principle of non-interference in the internal affairs of other countries, most notoriously in Sudan. One of the more interesting developments is China's current reaction to the turmoil in Burma (Myanmar), as the Chinese government has worked closely with the military junta there. It's a familiar criticism of the PRC as a one-stop totalitarian shop offering to purchase natural resources, sell weapons to "silence" critics, and to veto UN measures against human rights violations. To China, Burma offers the lure of a country rich with raw materials and a relatively close location. In other...
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Flash Gordon, Meet Susan Schwab

♠ Posted by Emmanuel in , at 9/27/2007 12:01:00 AM
With apologies to Brian May and Queen:Schwab! Ah-ah...savior of the Doha Round! She's for ev'ry one of us Stands for ev'ry one of us She'll save with a mighty hand Ev'ry man ev'ry woman ev'ry child With a mighty FTA!This current outburst of silliness on my part is driven by the journalistic hyperbole in the title of this Fortune piece about US Trade Representative Susan Schwab, "Can This Woman Save Free Trade?" Its equally grand subtitle is "Susan Schwab's Crusade to Keep Globalization Alive." Unlike most of the Bush junta, I've already indicated that I hold a generally favorable (gulp!) view of Susan Schwab. Nonetheless, it's of course an exaggeration to pin the hopes of the completion of Doha on the shoulders of the USTR. Still, this Fortune article provides an informative glimpse into her efforts to win over Democrats who Bush previously railroaded with previous trade deals before they gained majorities in both houses of Congress. Not that they're getting along exceedingly...
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