Gold Diggers: Meet Some Olympic Mercenaries

♠ Posted by Emmanuel in at 8/31/2008 07:38:00 AM
There is a saying that "every man has his price." A few months back, I discussed how many European countries were not averse to "nationalizing" foreigners to help their cause in the Euro 2008 football competition, citing the particular case of erstwhile Brazilian Marcos Senna. Senna, of course, played a large part in Spain's eventual victory. When it comes to Olympic competition, things are no different. Some participating countries in the just-concluded Beijing Summer Games had few qualms about throwing money around to "earn" an Olympic medal haul. Somehow, I am not surprised that Georgia's president encouraged such hanky-panky...
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Mauldin: Iraqi Bonds Safer Than Some US Banks'

♠ Posted by Emmanuel in , at 8/30/2008 10:37:00 AM
Dontcha just love the smell of subprime in the morning? If you haven't done so yet, consider signing up to not-so-maudlin John Mauldin's informative (and free) newsletter covering the latest investment trends in the United States. I was struck by Mauldin's latest finding: many US banks--especially those heavily exposed to the housing contagion--now have debt issuances with yields higher than those of Iraqi sovereign paper [!] Providing evidence that credit rating agencies have lost even more credence than previously thought, the Cleveland-based FIs mentioned are actually rated "A" despite their fat spreads of Treasuries. In contrast, Iraqi debt isn't even rated by the agencies. This is from Mauldin's newsletter dated August 29:And it can get much worse for some banks. In the "for what it's worth" department, Iraq's bonds are now considered safer than those of many US banks. The country's $2.7 billion of 5.8% bonds due 2028 have gained 45% since August 2007, according to Merrill...
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MSG 2 USA: TXTING 4 POLITICS NOT NU T L

♠ Posted by Emmanuel in , at 8/29/2008 05:03:00 PM
For all your humble correspondent's faults, rest assured that Amerocentrism isn't one of them. In the blogosphere, there are any number of blogs commenting on issues of international interest. However, some--but not all--are somewhat handicapped in terms of how cosmopolitan their outlooks are by the fact that they are maintained by Americans in the United States. If you buy the notion that travel broadens the mind, then the resulting implications are clear. Most of the time, I post from outside my home country (not the US) as you may have guessed by now. This thought comes to me as I came across an entry in a PC World blog...
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The ASEAN Union Dream; Bilateral Deals Galore

♠ Posted by Emmanuel in ,,,, at 8/27/2008 10:56:00 AM
One of the things that has always befuddled me is how anti-globalization types misconstrue the repeated failures of the Doha round to be completed as an indicator of "de-globalization." What these folks often forget is that trade rounds are simply negotiations for achieving, well, more trade. If you use global trade volumes as an indicator of globalization, you will easily see that trade has grown by leaps and bounds during the period in which the Doha round has stalled. By now, who cares about Doha, really? Its success or failure is by no means a barometer of the continued appeal of trade.Which brings me to the topic at hand....
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Russia in the WTO? Not a Chance Now, Bub

♠ Posted by Emmanuel in , at 8/27/2008 10:17:00 AM
A few days ago after the outbreak of hostilities between Russia and Georgia over the breakaway republic of South Ossetia, I ventured that the chances of Russia joining the World Trade Organization were much diminished. With Russia now giving formal recognition to South Ossetia and Abkhazia, it cannot but help alienate even more current WTO members. This point is important as Russia needs the approval of all WTO members--including Georgia--should it be permitted to enter into the organization.Our cyberfriend Daniel Altman says given the continued inability of the Doha round to finally be completed, the incentives for Russia joining are getting even less attractive. After fifteen years of laying the groundwork for eventual WTO accession, Russia is effectively throwing it all away. Not only is it becoming increasingly belligerent toward its would-be club members, but it is also pooh-poohing the supposed benefits that membership holds. I don't quite agree with the IHT blogger that...
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Will Bengali Farmers Doom Tata's One Lakh Car?

♠ Posted by Emmanuel in , at 8/25/2008 02:15:00 PM
I didn't particularly lakh hearing this news, but it deserves to be noted by a wider audience. Ratan Tata's much-ballyhooed "One Lakh Car" priced at the equivalent of $2500 is supposed to set a new benchmark in automotive affordability in fast-growing India. However, like that other consumer product famously built to a price point, the OLPC "$100 laptop," the Tata car is running into some difficulties. Unlike the OLPC, here's hoping that the car fares better. Unlike the product launch in which they played Richard Strauss's "Also Sprach Zarathustra," maybe the appropriate soundtrack for the production run of the $2500 car...
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Rio Tinto Saga Continues: PRC Buys More of It

♠ Posted by Emmanuel in , at 8/25/2008 01:48:00 PM
BHP Billiton's bid to buy archrival Rio Tinto is a clash of the titans if there ever was one. Yet, caught out in the middle of the fray is China, with its voracious appetite for what comes out of Australia's mines. To secure its economic fortunes, the PRC is well-advised to ensure a predictable source of such supplies into the future. The BHP bid for Rio upset the applecart somewhat in that the resulting combination could potentially wield greater pricing power over China. Thus, earlier on, there were separate rumours that the sovereign wealth fund China Investment Corporation or state-owned Baosteel were weighing a bid to...
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Shhhh! Japan (Kind Of) Welcomes Migrants

♠ Posted by Emmanuel in , at 8/20/2008 09:52:00 AM
Although Japan's fertility rate rose in 2007 for the first time in six years, there is no mistaking that the 2007 rate of 1.32 children per woman is still very, very low. Indeed, it is far below the replacement rate of 2.10 children per woman. The woeful demographic profile of Japan going forward is causing it much worry--as it should. On one hand, there will soon be too few young'uns to perform required tasks. On the other hand, the homogeneous culture of Japan--especially in business circles--makes importing foreign labour a dicey proposition. Accordingly, two recent articles in the International Herald Tribune caught my...
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Malaysia Aims to Maintain Islamic Finance Lead

♠ Posted by Emmanuel in , at 8/20/2008 09:44:00 AM
Sometime ago, I argued that there is not much to distinguish conventional banking practices from those of Islamic banking. While others are bound to disagree--especially practitioners of this sort of banking--the concepts we are familiar with such as leases and instalment buying have direct equivalents, as do many other Islamic banking instruments. My scepticism aside, however, Islamic banking promises to be a growth industry given the huge amounts of petrodollars sloshing around the Gulf region. Accordingly, one of the countries with an established history as an Islamic banking hub, Malaysia, has been made to reassess its offerings given emerging competition from the Middle East and elsewhere [1, 2]. Remember, too, that having the Islamic Financial Services Board (IFSB) in Malaysia is a "home advantage" of sorts as it coordinates Islamic banking practices with the Bank of International Settlements (BIS).The consulting firm PriceWaterhouseCoopers (PWC) has an informative profile...
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Marxism, Opiate of the Japanese Masses?

♠ Posted by Emmanuel in , at 8/14/2008 11:47:00 PM
In these days of rising economic inequality as well as chronic episodes of financial manias and panics, many have come to revisit these evergreen themes through the refracted light of Karl Marx's works. In the past, I have discussed how these current economic convulsions would be interpreted via a Marxist perspective [1, 2]. Marxism has, in diffent times, found appeal in various parts of the world. For instance, Marx was voted the "greatest thinker of the millennium" in a 1999 BBC online poll. Einstein, Newton, Darwin, and St. Thomas Aquinas? They were all overhauled by the bushy-bearded one. With Japan headed into another...
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Dropping Euro: Doh Curse of the Homer (Simpson)?

♠ Posted by Emmanuel in at 8/12/2008 12:26:00 AM
The recent and rather dramatic fall in the value of the euro from heights previously uncharted is attributed by pundits to any number of things: (1) the Eurozone looks like it's about to enter recessionary waters, if it isn't there already; (2) the commodity price boom which has favoured the euro is coming undone as global demand for commodities slows in response to ebbing consumption in the world's #1 final destination market, the United States; (4) the US stock market has regained its footing somewhat, bolstering the beleaguered dollar. Certainly, sensible arguments can be constructed out of one or more of these points.On...
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Yammerin' Hank Paulson on China in Foreign Affairs

♠ Posted by Emmanuel in at 8/12/2008 12:01:00 AM
US Treasury Secretary Hank Paulson (or Paulson's speechwriter, at least) calls for, among other things, faster yuan appreciation in his latest missive in Foreign Affairs on China. Recall that during his prior years as CEO of Goldman Sachs, he was always keen on establishing amicable relations with the powers-that-be in the PRC. It appears that little has changed. Do read it if you are at all interested in the most important bilateral economic relationship of our time. What follows is the concluding part entitled "Looking Ahead" where Paulson identifies America's policy options towards the Middle Kingdom for his successor. While I do believe that Paulson makes way too much of the strategic economic dialogue (SED) events that have been held between officials of the two countries, his reasoning reflects current US policy to a reasonable extent. Will his successors be more combative?Going forward, there are three possible ways for the United States and China to pursue their economic...
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The Mystery of Empty Seats at the Olympics

♠ Posted by Emmanuel in , at 8/11/2008 12:27:00 AM
While following some of the Olympic events, I've been struck by how many empty seats there often are. Given that so many folks--especially the Chinese--have waited in line to get a shot at availing of tickets, this situation is rather curious. If the Olympics are such a hot ticket--indeed, the world's premier sporting event--then why are people not filling in the seats despite an officially announced sell-out (note how much the meaning would change by omitting the en dash)? Wouldn't the man in the (hyperpolluted Beijing) street be excited at the prospect of watching the Games live instead of on the boob tube? As with many,...
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Casting Adam Smith, Karl Marx as Tabloid Fodder

♠ Posted by Emmanuel in at 8/09/2008 07:52:00 PM
It's a sorry reflection of modern society how the chattering classes just lap up tabloidal fare with gusto. Perhaps it's just human nature; people enjoy bringing others down via the "tall poppy syndrome"--especially those who claim the high moral ground or at least allude to being virtuous. Standard fare includes those old standbys, marital infidelity and patronizing prostitutes. Contemporary examples of the former include Bill Clinton and John Edwards. Examples of the latter include F1 pooh-bah Max Mosley and Elliot Spitzer. Indeed, Mosley and Spitzer goes for the daily double by both engaging in infidelity and prostitution....
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Georgia, Russia, McDonald's, WTO & War

♠ Posted by Emmanuel in ,, at 8/08/2008 05:47:00 PM
New York Times bestselling author Thomas Friedman asserted in the Lexus and the Olive Tree that no two countries have gone to war with each other after acquiring McDonald's franchises. In his conception of globalization, McDonald's represents, to some degree, the civilizing elements of capitalist culture. To paraphrase Albert Hirschman, the interests of commerce can subsume the passions--including those of waging war. While I must admit that the idea is cleverly expressed by Friedman, the veracity of the "Golden Arches Theory of Conflict Prevention" was already debatable prior to the outbreak of hostilities between Russia...
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All You Want to Know About "Creative Capitalism"

♠ Posted by Emmanuel in at 8/08/2008 04:30:00 PM
Unbeknownst to me, the Bill and Melinda Gates Foundation has just set up a discussion blog about "creative capitalism" (also see a previous post). As I've said before, I am not so keen on the terminology. Still, I'd say that the participant list there is even more impressive than the by invitation only membership to Martin Wolf's blog. Not only are economists involved, but also other academics and business leaders from all walks of industry. Visit it if you have the inclination and the time: Richard AdamsWashington editor of the Guardian and former correspondent for the Financial Times Abhijit BanerjeeFord Foundation International professor of economics at MIT Gary BeckerUniversity Professor of Economics and Sociology at the University of Chicago Nancy BirdsallFounding President of the Center for Global Development Matthew BishopChief Business Writer and American Business Editor of The Economist magazine Warren BuffetChairman and CEO of Berkshire Hathaway Kyle...
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