Where's Yer White People Now? On 'Saving' Egypt

♠ Posted by Emmanuel in , at 2/27/2013 11:08:00 AM
I borrowed the line in the post title from The Ten Commandments when the Hebrews were being persecuted by the Egyptians: "Where's your Moses now?" Nowadays, I'd like to ask the current Egyptian leadership--especially the Muslim Brotherhood--something similar: Where's yer IMF white people now brandishing $4.8 billion? Daily reports emanating from Egypt talk about an economy teetering on the brink of collapse. I guess those "Internet Freedom" fantasists did not reckon that the dupes who supposedly tweeted their way to overthrowing Mubarak didn't imagine that those "bad old days" of dictatorship could now be the "good old days." Bravo; what an improvement. Although I have written much about the "Internet Freedom" folly of Egypt, there is more to be said (unfortunately). The Christian Science Monitor points out something I hadn't recognized before but is surely true: Given that the government uses Egyptian pounds to fund food and energy subsidies, the currency's further depreciation...
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Too Long in Exile: ADB's Kuroda Next BoJ Guv'nor?

♠ Posted by Emmanuel in at 2/25/2013 07:50:00 AM
It is curious that Western financial new media is finally paying attention to Asian Development Bank President Haruhiko Kuroda. Despite being the head of the most prominent regional lender in our part of the world, he has so far toiled in relative obscurity outside Asia. How obscure is he? His Wikipedia entry consists of two sentences despite being the ADB chief since 2005 [!] Talk about the stereotypical faceless Asian bureaucrat and you may have his photo in there somewhere. Still, he is now being portrayed as the front-runner in becoming the next Bank of Japan chief since his views are similar to those of PM Shinzo Abe....
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Japanese Stimulus: Enough White Elephants Yet?

♠ Posted by Emmanuel in at 2/24/2013 01:40:00 PM
When it comes to the most pigheadedly wasteful spending to supposedly jump-start an economy, portly and profligate Americans only have one serious rival: the Japanese. Granted, the Japanese have been attempting to escape stagnation for over two decades now instead of America's one. Still, the sheer pointlessness of their entire endeavour is something to behold. In contrast to America's infrastructure which is on par with that of Damascus after the umpteenth rebel mortar assault--the American Society of Civil Engineers gives the US a "D" and estimates $2.2 trillion needs to be spent--Japanese infrastructure is nowhere near...
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Redefining 'Lame': Proposed EU-US Trade Deal

♠ Posted by Emmanuel in ,, at 2/22/2013 01:52:00 PM
If you're wondering about scant coverage of the proposed EU-US FTA in what purports to be the IPE Zone, nobody said that I had to cover rather pointless trade deals. While I am not entirely indisposed to doing so, the ones I do mention at least have some entertainment value alike the (rather unlikely) EU-MERCOSUR deal which has been decades in the pipeline. Unfortunately, an EU-US FTA ranks right up there with a New Kids on the Block reunion on my radar screen. Who the £$%^ cares? The overall premise is overwhelmingly underwhelming. Let us count the ways: (1) Exporting stuff nobody buys at home because folks are hard up doesn't assure sales abroad when your trade partner is equally hard up. The underlying premise of this FTA, trade creation, is highly dubious. We owe a debt of gratitude to none other than Karl Marx in the stupefaction sweepstakes evident here: We know that both the EU and the US are terminally stuck in reverse gear. Both economies are shrinking. Household incomes...
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2014 Sochi Winter Games = 1936 Berlin + Oligarchs?

♠ Posted by Emmanuel in at 2/21/2013 02:47:00 PM
A vainglorious leader with an authoritarian streak; a country with a chip on its shoulder against Anglophone powers; and massive Olympic spending to burnish a national reputation--where did we see all these things before? The parallels are not exactly edifying, but they're there nonetheless. Reuters has a very interesting take on this latest Olympic boondoggle. Despite what the article mentions, I honestly doubt whether the Russians are pouring an unprecedented $50 billion into the 2014 Sochi Winter Olympics. Still, even if they spent even half that much it would be an astounding amount given that (a) it isn't the Summer Olympics which is a far more watched event and (b) Sochi isn't even a second-tier Russian city with a population of under 350,000. There is a twist to this story, however: The Russian government, likely being ever-so-wise as to the financial calamities that have befallen any number of previous Olympic hosts, is making the Russian oligarchs foot the bill in...
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England's Comeuppance to EU Exit: Scots Exit UK

♠ Posted by Emmanuel in at 2/17/2013 07:32:00 AM
British politics are weird. No sooner did British Prime Minister David Cameron appease Eurosceptics within his party by promising a referendum on the UK remaining in the EU by 2017 that he warned the independence-minded Scottish National Party (SNP) about breaking away from the United Kingdom through a yes vote in their referendum scheduled for next year meaning its automatic exit from the EU. In other words, he is offering his compatriots a decisive break from the European project while threatening his Scottish peers that breaking away from the UK would mean they would no longer be in the EU. In one case, EU membership...
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Of Quota Reform and American IMF Hegemony

♠ Posted by Emmanuel in , at 2/17/2013 05:16:00 AM
Two things strike me as notable with the recent news that the US plans to finalize changes in the shares of quotas at the IMF and thus the voting rights there: 1. Given that the US has effective veto power at the IMF by virtue of having more than 15% of quota shares when a quorum of 85% is necessary to make a decision, it alone has the ability to unblock the quota reform process which remained deadlocked during the 2012 presidential elections at a time when it has become by far the world's largest debtor: The Obama administration is hoping to move ahead shortly with legislation to finalize IMF voting reforms agreed in 2010, which will make China the third-largest voting member in the global financial institution, a senior U.S. official said on Saturday. The official, speaking at the end of a Group of 20 meeting of finance ministers in Moscow, said the administration was actively discussing legislation with relevant members of Congress. The 2010 package cannot be finalized...
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Sharia Chameleon: Egypt's Clerics Decide on IMF?

♠ Posted by Emmanuel in , at 2/14/2013 11:33:00 AM
People who are not distracted by business or trade from commemorating God - Sura 24:37 There's an interesting new complication in Egypt's never-ending quest to obtain IMF loans (which we aren't even sure the IMF wants to give anyway). Islamist lawmakers from the Salafist party want to add even more difficulties to the whole process as if there weren't enough. Remember, the Salafists are even more conservative than the Muslim Brotherhood-allied Freedom and Justice Party (FJP). The main bone of contention of the Salafist Islamic hardliners, as you probably know already, will surround the IMF charging interest (riba) on these emergency loans. Strictly speaking, the Quran disavows charging of interest. The famous quotation on usury is this one: Those who devour usury will not stand except as stands one whom the Satan by his touch has driven to madness. That is because they say, "trade is like usury", but Allah has permitted trade and has forbidden usury - Al Baqra 2:275 It...
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More Than WTO, Vatican Needs Third World Head

♠ Posted by Emmanuel in , at 2/12/2013 07:49:00 AM
Aside from China's arranged leadership succession, there are two more noteworthy ones this year at global institutions. The one we had long expected is that of WTO director-general. Since the WTO's formation in 1995, there has only been one from a developing country, Supachai Panichpakdi of Thailand. Adding insult to injury, he only served half a term because of internal politics at the WTO which meant he headed the institution for three years from 2002 to 2005. Meanwhile, the Frenchman Pascal Lamy served one full four-year term from 2005-2009 and is currently serving another from 2009 to September 1, 2013. For his second...
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Growing Export Markets by Immigration to Canada

♠ Posted by Emmanuel in at 2/10/2013 03:10:00 PM
Pro-migration voices like myself usually argue that the exchange of people is mutually beneficial for destination and source countries alike. Destination countries--usually wealthier Western nations experiencing declining birth rates--benefit from having newer workers joining the labour force whose activities help generate revenues to fund commitments made to previous generations. Meanwhile, source countries benefit from remittances sent and know-how gained by their migrants. The Conference Board of Canada, however, has a novel addition to the benefits of migration: how about the destination countries growing their exports to the source countries of migrants in the process? HSBC Global Connections has a summary of the findings: A recent paper, Immigrants as Innovators, published by the Conference Board of Canada, found a direct relationship between higher immigration and increased imports and exports from a particular country, a relationship that was independent of the wealth,...
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HM Imported BoE Guv'nor: Most Powerful CBanker

♠ Posted by Emmanuel at 2/07/2013 11:41:00 AM
 I am currently watching former Bank of Canada Governor Mark Carney testify before Britain's Monetary Policy Committee about what he will do once he assumes the equivalent position at the Bank of England in July. These are difficult times for the UK; of that there's no doubt as a double-dip recession threatens to become a triple-tip recession. As always, it is debatable what role monetary policy plays in helping economic recovery along with even "Helicopter" Ben Bernanke circling overhead with the point that it can only do so much (and by extension him). Aside from importing another country's central banker who has...
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United States vs S&P: Sovereign Ratings Next?

♠ Posted by Emmanuel in , at 2/05/2013 03:07:00 PM
It is with great interest that I am following the ongoing civil suit by the United States against the rating agency Standard and Poor's. Awhile ago, Tim Sinclair over at Warwick University came out with a book entitled "The New Masters of Capital" describing how credit rating agencies supposedly had powers of nearly life and death on any number of countries and firms via the act of rating. I was not very receptive to this all-encompassing argument. First, the parent companies of S&P, Moodys and Fitch's have hardly outperformed broad market indices--which they would if they truly were "masters of capital." Second, while developing countries may be adversely affected by ratings decisions of these firms and affect their ability to access global capital markets, others are not so vulnerable. Japan and the US among others appear insensitive to credit downgrades. What's more, governments alike those in the US and Europe give them sanction to issue ratings in the first place. Think...
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EU-Mercosur FTA vs Trade-Willing 'Pacific Alliance'

♠ Posted by Emmanuel in ,, at 2/03/2013 06:44:00 AM
Which does not belong? In case you missed it, recent talks between EU and Latin American leaders again failed to produce an FTA that has long been under consideration, EU-MERCOSUR. This was at a CELAC gathering in Santiago, Chile where European leaders who bothered to make the trip alike Angela Merkel found that while there were non-MERCOSUR nations keen on trade deals, Argentina was (surprise!) not. What's more, el presidente Cristina Fernandez senses that the Latin American grouping now has the upper hand and says Argentina will make a counter-proposal later this year: (T)he EU's most ambitious goal – to finally sign...
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South Korea Declares Int'l Currency War on Japan

♠ Posted by Emmanuel in ,, at 2/01/2013 08:56:00 AM
Ho hum, another week, another declaration by a non-Western country that it will attempt to staunch the inflow of capital from elsewhere that is driving up the local currency and making imports less competitive. Japan of course started the latest salvo when the LDP regained power and promptly declared that they would use open-ended fiscal and monetary support to get the Japanese economy jump-started after over two decades now of stagnation. (Western nations have long been on this path, having implemented them after the global financial crisis.) In response, other Asian exporters have been manoeuvring to deal with the ongoing deluge from Nippon. Spooked investors in South Korea have begun pulling out in fear of the authorities taking a more proactive stance in determining the value of the Korean won. I suppose the Korean authorities are pleased with the results of their verbal jawboning thus far of making foreign investors think twice and weakening the currency: South Korea's...
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