'Buy Gun Stocks; Yanks Like Shooting Each Other'

♠ Posted by Emmanuel in at 3/31/2009 03:55:00 PM
The behavior of Americans is a subject of fascination to the rest of the world. Having American relatives, I must admit to being occasionally puzzled by their behavior. In the past, I have done my fair bit of pop anthropology in describing US culture as one based on commerce. However, when an old grad school roommate from Greece had too much to drink, he would tell me a more elaborate version of the American gothic which went something like this: "You know these Americans, Emmanuel. First they eat too much. So, they cannot fit in compact cars and have to buy hulking SUVs. To park these giant SUVs, they must in turn buy huge...
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PRC's Great Currency Game, or Nothing Special?

♠ Posted by Emmanuel in ,,, at 3/30/2009 01:11:00 PM
The story that dollar debasement going forward will occur is a familiar one. TIME even has a photo essay comparing present-day America with Weimar-era Germany. One certainly hopes this comparison isn't apt for a number of reasons, but you certainly cannot rule it out. Life is a cabaret, old chum. Much has been made in recent days of China's proposal to diversify out of dollars which the US has certainly done everything humanly possible to debase; this point is not really under much contention outside of neo-Bushian "strong dollar" comments from Obama administration officials. This new Reuters article notes that the bluster...
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Obama Gives UAW, Organized Labor the Shaft

♠ Posted by Emmanuel in , at 3/30/2009 12:16:00 PM
Say what you will about organized labor's agenda, but it seems to me like it's being given a bum deal. Real liberals have criticized Obama for cozying too much to moneyed interests, and this story will do nothing to allay that particular concern. Democratic presidents of recent vintage have displayed a similar modus operandi: court the votes of organized labor and then largely forget about them when in power. Think of Bill Clinton signing on to NAFTA and allowing those human rights violators China to join the WTO. Why, just a few months ago, Obama was being heralded as the champion of the United Auto Worker's union as he garnered...
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G-20 Protests: Let Leftist Profs Be Leftist Profs, Etc.

♠ Posted by Emmanuel in at 3/29/2009 09:50:00 AM
And so the world is awash with protests over the upcoming G-20 meeting. In London just yesterday, they were 35,000 strong--not a bad showing. I will soon post at greater length about the G-20's prospects--more hopeful than you'd probably expect--but for now let us cover the sideshow. A criticism many have had of the so-called anti-globalization movement has been its rather scattershot agenda, throwing together anarcho-syndicalists, deep ecologists, neo-primitivists, rioters, party animals, etc. into the mix. Same here. If you think this world is run pretty poorly by the axis of spending (Barack Obama, Gordon Brown, and someone...
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Bilateral Mania: Antipodes Strike FTA with ASEAN

♠ Posted by Emmanuel in , at 3/29/2009 07:39:00 AM
I almost forgot to mention this news closer to home: A few months ago, I mentioned that the ten-member Association of Southeast Asian Nations (ASEAN) was engaging in several bilateral trade negotiations--with China, Japan, South Korea, India, Australia and New Zealand. There are a number of reasons for this deal frenzy after a long history of ASEAN being little more than a talk shop, including stalled WTO negotiations leaving these countries hungering for more elsewhere and lingering fear of China leaving them far behind economically. Because negotiations seemed more advanced, I expected the ASEAN-India deal to be inked as scheduled in December 2008. For a number of reasons, it's been delayed. This means the rather mouthful ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) came to fruition sooner.The press blurb on the ASEAN Secretariat's website dating from February 27 of this year is informative, including this nugget on how ASEAN countries are significant trade partners...
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Why Do Aussies Keep Bashing Chinese Investors?

♠ Posted by Emmanuel in , at 3/27/2009 05:54:00 PM
I find this utterly disgraceful. The Chinalco bid for a share in Rio Tinto being "reviewed" for three months has been covered here and elsewhere as a sign of incipient protectionism. There is, however, a lesser profile bid by another Chinese mining concern for a similarly endangered Australian entity. In this case, it's Minmetals for Oz Minerals. Just as Rio Tinto overextended itself with acquisitions at the height of the commodity boom, so did Oz Minerals. As is usually the case for these things, "national security" concerns are being invoked.The purported catch here is that Oz Minerals' most lucrative mine is located inside...
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Seychelles: Rich and Famous to Heavily Indebted

♠ Posted by Emmanuel in , at 3/27/2009 05:45:00 AM
You can easily picture Robin Leach of "Lifestyles of the Rich and Famous" fame yukking it up with the great and the good in Seychelles, the idyllic island playground for the uber-wealthy. The official website purports that is a travel destination for romance, sailing, diving, and fishing--a potent mix for sure. Unfortunately, the current economic crisis has not favored the Seychelles as revenues from tourism and fishing have dried up. This is rather unfortunate as the country has borrowed big in expectation that the good times would continue to roll. This Fortune article suggests "think again," although it's a little too late...
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Trade Down? Use Shipping Containers for Housing

♠ Posted by Emmanuel in , at 3/27/2009 04:10:00 AM
I remember watching an episode of Seinfeld where the character Kramer decided to live in a shipping container to cut down on living expenses. It seemed like a funny idea at the time, but some people are actually ingenious enough to make this idea more plausible and actually desirable. Not only does it make good use of shipping containers as international trade is going to the dogs, but it's also environmentally friendly in the sense of recycling old discarded containers for livable housing. But first, let's get to declines in container trade. We start in the US of A via Portworld:The top 10 US box ports registered their 19th-straight...
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Investors to Stimulus Lubber Gordon Brown: Stop It

♠ Posted by Emmanuel in ,, at 3/26/2009 08:25:00 AM
As I've said again and again to the point of grating on blog readers, this is exactly what the rest of the world needs to do to the United States: like Barack "Trillions in Deficits" Obama, British PM Gordon "British Jobs for British Workers" Brown has been throwing good money after bad at stimulus packages without much afterthought. Like the US, the UK thought that its currency's status as a reserve unit could finance unprecedented fiscal expansion. As I've said before, both plan a level of (fiscal) debauchery unseen since the heyday of Sodom and Gemorrah. Well, the UK now finds itself in a bit of a pickle as a gilt auction has just failed (cue "Hey Big Spender" above to up the irony factor):Wednesday’s failed government bond auction [NOTE: see my explanation below] looks ominous for investors, as auctions rarely fail in the sovereign market. For a government looking to raise a record amount to pay for fiscal stimulus packages and bank bail-outs, a trend of bond auction failures...
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Exactly: EU Says US Policies on "Road to Hell"

♠ Posted by Emmanuel in ,, at 3/26/2009 04:52:00 AM
Sometime ago, I lauded the first Czech PM Vaclav Havel's high opinion of Frank Zappa as encapsulated by then-US Secretary of State James Baker's clear annoyance when he said, "You can do business with the United States or you can do business with Frank Zappa." The obvious flaw in Baker's reasoning was that Zappa was very much your archetypal exponent of American capitalism. Now it seems current (endangered) Czech PM Mirek Topolanek is also a big music fan. (The Czech Republic is current EU rotating head.) In this case, I believe that he's cranking Aussie AC/DC. Like me, ol' Mirek has a similarly dim view of America's so far ineffective efforts to revive its moribund economy. Yes, he says, America is on the road to hell. Friedrich Hayek and Angus Young--what a combination.He is hardly alone as several other countries are being hurt by these infantile policies. Obamanite protectionism [e.g., 1, 2, 3, 4] has been widely noted here in addition to ridiculous stimulus packages that...
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A Petition Against Protectionism

♠ Posted by Emmanuel in at 3/26/2009 02:59:00 AM
Since both Jonathan Dingel and Ben Muse have already done so--both of whom maintain what I consider as peer blogs--I thought it only proper to mention this petition from the Atlas Economic Research Foundation against the troubles with protectionism. As this place has threatened to become the International Protectionism Economy Zone due to seemingly endless stories of trade barriers being erected, here you go. What follows is a snippet of the statement:But the fact that protectionism destroys wealth is not its worst consequence. Protectionism destroys peace. That is justification enough for all people of good will, all friends of civilization, to speak out loudly and forcefully against economic nationalism, an ideology of conflict, based on ignorance and carried into practice by protectionism.Two hundred and fifty years ago, Montesquieu observed that “Peace is the natural effect of trade. Two nations who differ with each other become reciprocally dependent; for if one has an...
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See? US Frowns On Alternative Reserve Currency

♠ Posted by Emmanuel in , at 3/25/2009 12:48:00 AM
In recent days, we have gone on a mini-binge of reserve alternative stories [1, 2, 3]. Bang on schedule, the United States is pooh-poohing the notion that an alternative reserve currency and medium of exchange for world trade is needed. Debase the dollar? Not me, says the US. First up, let's see what Obama has to say:There is no need for a global currency to replace the dollar as suggested by Chinese leaders, President Barack Obama said Tuesday. "The dollar is extraordinarily strong right now," he said, because the American economy and political system are stronger than many others. Yes, whatever. These guys are starting to sound exactly like Bush and Paulson with the tragicomic "strong dollar" theme that any reasonably informed commentator would see through. Speaking of whom, US Treasury Secretary Tim Geithner and Fed Chairman Ben Bernanke also chimed in with the same message. From MarketWatch:Federal Reserve Board Chairman Ben Bernanke and Treasury Secretary Timothy Geithner...
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California's Tent City of the Foreclosed is Closed

♠ Posted by Emmanuel in , at 3/24/2009 10:03:00 AM
I thought it right to post about this to achieve some, ah, closure. In times past, I have marveled about the existence of a tent city of the foreclosed at the heart of America's wealthiest state, California [1, 2]. Recently, I had an upsurge in hits for these two older posts, making me wonder what was going on. It turns out that Ontario, CA was featured on the Oprah Winfrey show. For so long, Hollywood has sold the California Dream like a giant Beach Boys soundtrack. However, the housing implosion in the boom-to-bust Inland Empire has meant skyrocketing foreclosure rates, forcing many to live in the now-infamous Tent City...
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My Wish Come True? China Backing $ Alternative

♠ Posted by Emmanuel in , at 3/23/2009 04:21:00 PM
Well here's some potentially very welcome news. In recent days, I have discussed proposals emanating from the UN concerning the creation of an alternative reserve currency to the US dollar [1, 2]. I liken the US to a lumbering giant drunk on massive amounts of debt plied by LDCs even its behavior becomes more and more irregular with its various stimulus cravings. What is common to the various UN proposals has been the absence of a key dollar victim/co-perpetrator in creating massive global economic imbalances--China. Well, it appears that my wish is coming true (at least in part) as China realizes the future extent of its...
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Olive Oyl Globalization: Stiglitz's UN Populism

♠ Posted by Emmanuel in , at 3/23/2009 01:32:00 AM
Cartoon watchers of all ages are familiar with Popeye damsel in distress Olive Oyl. When in trouble, she calls for Popeye to come to the rescue. To paraphrase her in the context of today's offering, "Woe is me, LDC!" Now, the history books are littered with past efforts at creating meaningful groupings that promote an LDC agenda. Among others, the Non-Aligned Movement, the G-77, and the New International Economic Order have tried to counteract the influence of industrialized countries at important multilateral institutions such as United Nations and the Bretton Woods twins (World Bank and IMF). The reason why you don't hear...
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Fight Rejoined Over Soya Export Tax in Argentina

♠ Posted by Emmanuel in , at 3/21/2009 06:01:00 PM
It baffles me how long this has been going on: In May of last year, I posted about Argentina's efforts to keep the local market well-supplied with soybeans as farmers preferred selling to export markets given the prevailing high prices of commodities. Fast-forward nearly a year and things are rather different as soybean prices have fallen markedly alongside those of other commodities (see chart). Plus, a continuing drought is worsening prospects down on the farm. Now Argentinean farmers are unhappy that, despite the fall in soya's price and hence the original justification given by Argentinean President Cristina Fernandez-Kirchner,...
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Investment Grade Debt for Libya? Yessiree Bob

♠ Posted by Emmanuel in at 3/21/2009 05:39:00 PM
Picture this: a country whose leader was not so long ago synonymous with terrorist activity is now a near-shining model of economic rectitude, while its historical antagonist the United States is a basket case whose currency the community of nations will soon suggest others flee from. How time change, eh? From MarketWatch:[Standard & Poor's] assigned Libya A- long-term and A-2 short-term foreign and local currency ratings, citing the strength of its balance sheet. The ratings agency assigned the sovereign rating following a request from Libya's government, said David Beers, global head of sovereign ratings at Standard & Poor's, in a phone interview with MarketWatch."I think it's fair to say that their motivation to ask for the rating is in keeping with the broader philosophy of recent economic reforms," Beers said. "The rating is useful in terms of helping the country attract more foreign investment. Unsurprisingly, the focus of investor interest has been overwhelmingly...
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North-South Divide: UN To Say "Let's Ditch the $"

♠ Posted by Emmanuel in ,, at 3/20/2009 01:13:00 AM
It's times like this when you should be glad about my semi-fastidious approach to classic IPE problematiques. Today, we return to the never-ending issue of a North-South divide between industrialized and developing countries concerning reserve currencies. It is no secret that the US is resorting to all sorts of dollar molestation tactics to buoy its economy. The US government will print something on the order of $2 trillion in IOUs to pay for a $787 billion stimulus package and a plan to refinance foreclosed mortgages (many of which will foreclose again anyway). Plus, you have news that the Fed plans to add $300B or so more...
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The Official Anthem of Protectionist Mania 2009

♠ Posted by Emmanuel in , at 3/19/2009 08:45:00 AM
I'm strapped for time but, in light of this place becoming the International Protectionist Economy Zone, here's my choice for this year's new official song. This one is off Jamaican disco goddess Grace Jones' classic album from 1980, Warm Leatherette. I was inspired to look for this song appropriately entitled "Bulls--t" on YouTube and, sure enough, here it is. I suggest they play it at the next G-20 meeting before proceedings get underway:And if I wander down the wrong road,It's alright baby, just let me go,If I get tired of all those a--holes,It's alright cause' I want them to know.I'm sick and tired of all this bulls--t,Rough s--t, same s--tJuice protectionism, mining protectionism, trucking protectionism..I really am tired of these never-ending variations on a pathetic the...
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