A Swingin' IMF: The Multicountry Credit Line

♠ Posted by Emmanuel in at 2/27/2010 04:02:00 PM
No, no, I am not referring again to past indiscretions of IMF Managing-Director Dominique Strauss-Kahn. That stuff is old. Instead, what we have here is yet another proposal to make the international financial institution more in tune with the times. After a slow period in the wake of the Asian financial crisis, it seems the IMF has sprung up all over the place and is still gathering momentum. As I see it, the essential point here is that modern financial crises have contagion-like characteristics that affect groups of usually neighbouring countries facing similar difficulties: think of Southeast Asian countries that couldn't...
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The Varieties of Chinese Finance in Africa

♠ Posted by Emmanuel in , at 2/26/2010 01:26:00 AM
There's interesting commentary coming from Chris Alden and Riaan Meyer suggesting that not all Chinese finance in Africa is the same. Contrary to the image that China is a one-stop shop for dictators wishing to obtain infrastructure improvements, aid and forex in exchange for natural resources the PRC needs, they argue that a more nuanced picture needs to be made. That is, there are many modes of Chinese finance that cannot be lumped into a simple view of it being an extension of the non-interference principle. They also envision China's activities in Africa being part and parcel of a wider drive to build alternatives to the dollar as a vehicle currency for trade:The conventional view of Chinese finance in Africa is that it is a lump sum concessional loan, negotiated in secret between Beijing and the host government, built around the twin pillars of a substantive Chinese investment in infrastructure in exchange for access to African resources. The idea is that it is all wrapped...
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Hand of God? Nope, UK Oil Drilling in the Falklands

♠ Posted by Emmanuel in ,, at 2/25/2010 03:44:00 PM
Brezhnev took AfghanistanBegin took BeirutGaltieri took the Union JackAnd Maggie, over lunch one dayTook a cruiser with all handsApparently, to make him give it backIn "Get Your Filthy Hands Off My Desert" above, Roger Waters implies that the United Kingdom expended lives and resources for a Phyrric victory in regaining the Falkland islands after Argentina's then-dictator Leopoldo Galtieri invaded the place in 1982. The aftermath is well-known: British Prime Minister increased in stature over this display of strength while Galtieri was bounced after this misadventure.Tensions over the Falklands between the UK and Argentina never seem to have entirely dissipated. A case in point is the never-ending British whingeing over Diego Maradona's infamous "Hand of God" goal [clip here] during the UK versus Argentina quarterfinals of World Cup 1986 held in Mexico City. Old enmities die hard indeed.And so we find ourselves in another situation in which matters which haven't entirely healed...
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Shell In Nigeria: An Enduring CSR Conundrum

♠ Posted by Emmanuel in , at 2/25/2010 12:02:00 AM
This is a follow-up to a post I made concerning Nigeria's oil curse. In that post, I discussed how it was a real shame that Nigeria has not built up significant oil refining capacity despite being the largest exporter of crude oil in Africa. Here, we zero in on the activities of one of the foreign firms whose activities have received criticism over the years in the oil-rich but troubled Niger Delta. The still-controversial execution of Ken Saro-Wiwa of the Ogoni tribe is well-known and has caused many corporate social responsibility issues to be raised with regard to Shell. Nevertheless, the activist group The Ecumenical Council...
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Enron the Play? You Better Believe It

♠ Posted by Emmanuel in , at 2/23/2010 07:49:00 PM
Are you kidding me? Did we take advantage? That's what we do, that's how the world works! If you want an objective morality, you're living in a dream. So when you ask, 'did we take advantage?', I hear, 'do you make a living?', 'do you breathe in and out?', 'are you a man?'! Yes, we took advantage. And the only difference between me and the people judging me is they weren't smart enough to do what we did. Now, are you gonna judge me or are you gonna help me? -- 'Jeff Skilling' in Enron the PlaySamuel Johnson is attributed with saying that a person who is bored with London is bored with life. Well, add this to London's brilliant parade. Some of you probably know this already, but in case you don't, they've been staging Enron the Play since November of last year and it has just extended its run based on initial success. This play mixes factual elements about the Enron story--routing Internet broadband through pipelines originally intended for delivering energy--with more fantastical...
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Questionable Socialist Stylings: Ecuador's Correa

♠ Posted by Emmanuel in ,, at 2/23/2010 07:26:00 PM
On 27 October 2009, Ecuadorean President Rafael Correa came to speak at the LSE. Brandishing the classic repertoire of Latin American firebrands, he denounced American imperialism, the Washington Consensus, neoliberalism, neoclassical economics, free trade, "kicking away the ladder," and so forth. While I do not have particular issues with several of these denouncements--I've made some myself--it is worth comparing how rhetoric compares with reality. The text of his speech is available online, as are a podcast and video. Still, I kind of wonder why one needs a PhD in Economics from a fine institution like the University of...
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Nobody Home: Inflating a Chinese Housing Bubble?

♠ Posted by Emmanuel in at 2/23/2010 12:31:00 AM
I've got wild staring eyesAnd I've got a strong urge to flyBut I got nowhere to fly toOoh, babe when I pick up the phoneThere's still nobody homeThere's an interesting article in the Financial Times cataloguing the emergence of ghost cities in the wake of massive property investment borne of the PRC telling government banks to open the lending spigots wide open. (As you can see above, it's evoked a classic Pink Floyd number, too.) The essential question is whether this torrent is being put to good use of will go to waste. Two arguments--pro and con--are being advanced. Either all this investment is being thrown away since they're building new edifices for which no one will come, or it is just what is needed to accommodate China's still-burgeoning growth going forward. As with most things, I believe that the truth lies somewhere in between, though exactly where that lies is still up in the air:Chenggong is a new town near Kunming, one of the main cities in the south-west of China....
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Three Flawed Arguments for a Stable Yuan

♠ Posted by Emmanuel in at 2/23/2010 12:17:00 AM
Steven Dunaway at the Council of Foreign Relations has an interesting essay on why those who argue for a stable yuan--especially PRC officialdom--are incorrect. While I am general agreement with his arguments, the real question for me that remains largely unanswered is how to get China to move on the matter of currency. Without further ado, here are the arguments he shoots down:------------------------I. The first old argument making a comeback is that a stable yuan is not only good for China, but is good for the rest of the world. The roots of this argument go back to the Asian financial crisis of 1997-98. At that time, China was persuaded to keep its exchange rate fixed against the U.S. dollar when its currency was facing downward pressure to prevent setting off a round of competitive devaluations among the crisis-stricken countries in the region. While at the time this was a very important policy decision by the Chinese authorities, any competitive disadvantage that China...
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Why UK Academia Must Be Real-World Relevant

♠ Posted by Emmanuel in at 2/22/2010 12:01:00 AM
Obviously not being extremely familiar with the goings-on in Stateside academia, I am amused by what appears to be an ongoing tussle to make make academia more relevant to real-world concerns. Instead of staying in ivory towers, American academics are urged to make [gasp!] tangible contributions to society. I hate to noodle our US-based friends again on the Amerocentric nature of the blogosphere, but us bumpkins (1) have already taken a look at this question and (2) are in the process of doing something about it.In general, British academia is more reliant on state funding than American academia. Whereas US institutions have...
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$ Long Positions Most Since 2008; Turnaround Near?

♠ Posted by Emmanuel in at 2/21/2010 03:29:00 PM
Woes for the US dollar need little recounting from me as the American currency is faced not only with massive debt projections at the national level but also at the state level [1, 2]. As yet, it is unclear to me how states will manage with their deficits and underfunded liabilities. They will probably ask Uncle Sam to fund them, so the headline figures for US budget deficits are, in all likelihood, worse than what the already dismal figures suggest.I mention this in light of yet another bout of inexplicable dollar strength. Currency speculators seem to have decided that the dollar is a good alternative at the moment since...
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PRC Football Diplomacy & Africa Cup of Nations

♠ Posted by Emmanuel in ,,,, at 2/19/2010 01:01:00 AM
I've just emerged from a most interesting lecture here at the LSE featuring the prominent sportswriter and leading IPE of sports commentator David Goldblatt. The name should be familiar to those of you who've studied IPE in Britain as one of the co-authors of the earlier editions of the standard IPE textbook Global Transformations. I also own his nearly 1000-page magnum opus on the history of football, The Ball is Round, though I must sheepishly admit that I haven't gotten around to reading it yet as free time is hard to come by for me nowadays. He has since given up academia to become a sports journalist, and his many travails...
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Chile's Salmon Industry Sleeps With Fishes Tonight

♠ Posted by Emmanuel in , at 2/19/2010 12:22:00 AM
It's been a long time since I've done an environmentally-related post so I'll take the opportunity to do so here. The FT is reporting that prices of salmon have shot through the roof as of late because of declining hauls from Chile. Previously a burgeoning industry in Chile, it's been hit hard by an outbreak of a lethal virus that's causing declines in fish stocks:Salmon prices are jumping after a sharp decline in global supply following the collapse of the Chilean industry following an outbreak of a fish disease. Since the start of the year, wholesale prices for Norwegian-produced Atlantic salmon have risen 20.6 per cent,...
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Franco-German Banks Will Be Hurt if the PIIGS Are

♠ Posted by Emmanuel in , at 2/18/2010 01:05:00 AM
Prior to the IMF-led rescues of ailing Eastern European countries like Hungary, Latvia, and Romania, one of the oft-spoken interests for the EU in hastening the effort was the large volume of lending emanating from the likes of Sweden to these nations that would, in turn, be endangered in the event of sovereign default. And so it is that we are hearing similar noises about how much French and German banks, among others, have at stake in lending to the financially pigged-out EU members Portugal, Ireland, Italy, Greece, and Spain. The graphic of an informative WSJ article on the subject matter pretty much says it all about the...
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Preview: US Branding China a Currency Manipulator

♠ Posted by Emmanuel in , at 2/18/2010 12:03:00 AM
We are nearing that time of year when the US Treasury is required by Congress to report on the currency practices of trade partners as per the Omnibus Trade and Competitiveness Act of 1988. Originally devised with Japan in mind, this act has since been turned into a biannual ritual held in April and October. Once more, we get to see whether those hawkish on China are finally getting the upper hand. Last year, I said Treasury Secretary Tim Geithner wimped out on doing so; and he did so again in October. This year, we are running over the same old ground once more. Since the surrounding issues are well know, let me just bring you two articles portending what may come. First up is the Wall Street Journal:"We expect to see actions by China" to help rebalance global trade flows, a White House official said. If Beijing fails to act, that "will put greater and greater pressure on the U.S. to respond.""We have 10% unemployment and China is racking up huge trade surpluses with an undervalued...
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Beauty and the Beasts: Ukraine's Tymoshenko, IMF

♠ Posted by Emmanuel in ,, at 2/17/2010 12:59:00 AM
If politics really is showbiz for ugly people, then stylish Yulia Tymoshenko should never have become the current prime minister of Ukraine. To my eyes, she looks more like the heroine of a space novel than the leader of a country suffering from something as terribly prosaic as...balance of payments problems. She seems to have used her looks for political advantage. Heck, even her bloc's logo features a heart. But, don't take my word for it: some bloggers with too much free time on their hands have dubbed the famously lovely Missus T the "#1 Hottest Head of State." I heartily agree; in second place is Cristina Fernandez of...
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Why Yes, China is Already Unloading US Treasuries

♠ Posted by Emmanuel in at 2/17/2010 12:30:00 AM
I haven't the slightest idea of why most media outlets and the rather logic-proof foreign exchange market haven't made more of the news that, yes, China is shedding its identifiable holdings of Treasuries. Fortunately, the ever-reliable Reuters--my favourite newswire nowadays--picks up the trail. Not that it's showing up in the yen's value but Japan has actually surpassed China in terms of recorded official holdings for the first time since August of 2008:China fell behind Japan to become the second-biggest holder of U.S. Treasuries in a sign the Chinese have been acting on recent complaints about U.S policy by unloading U.S. debt. As one of the biggest creditors of the United States, China has complained over the past year about U.S. policies and worried publicly about the security of its dollar-denominated assets.China sold more than $34 billion in short- and long-dated Treasuries in December, bringing its total holdings down to $755.4 billion from $789.6 billion in November,...
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Greek Tragedy? No, Greek Tragicomedy Must End

♠ Posted by Emmanuel in ,, at 2/16/2010 08:22:00 AM
This is becoming farcical: given recent EU flailing over what to do with Greece, the latter's Prime Minister George Papandreou has gone into Marxist recycling mode by describing his country as "a laboratory animal in the battle between Europe and the markets." Pretty soon, this guy may be talking about circuits of capital and the rest of it. Meanwhile, the well-known German economist Otmar Issing, formerly on the boards of both the Bundesbank and the ECB, ups the tragicomic ante by offering an op-ed describing why the EU "cannot afford" to give Greece a helping hand: Participation in Emu brings huge advantages. The benefits...
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