In 2010 I wrote about the UK Parliament publishing documents about how it should have a foreign policy more independent from that of the US, special relationship be damned. This, of course, came a few years after Tony Blair was portrayed in British media as Bush's poodle. At the time, few believed that the UK was striking out more on its own and thought the publication did not mean much of anything. These folks included my then-boss Michael Cox who is considered one of the most prominent British experts on US foreign policy.
However, the first big litmus test for UK foreign policy independence--hastily convening Parliament during the summer break to decide on British participation in planned US air strikes against Syria for its alleged use of chemical weapons--went against America. It was not quite a thumping defeat at 285-272, but it was a defeat nonetheless. This time Labour had no intention of Blairing things up, while enough renegade Tories sunk their own leader's please...
Death $: Tracking US Military Aid to Egypt
♠ Posted by Emmanuel in Middle East,Security
at 8/29/2013 12:13:00 PM
I was watching Al Jazeera, designated the "real news" by Hillary Clinton, when I came across an interesting feature about how US military sales to Egypt were publicly disclosed by law. A little sleuthing brought me to the Department of Defense website. A Bing search (talk about irregularities in government procurement) brings us recent American "foreign military sales" to Egypt:
Aircraft parts, anyone?
General
Electric Co., Cincinnati, Ohio, (FA8604-13-D-7953) is being awarded a
$9,148,074 requirements contract for contractor engineering and
technical services support for the F-110-GE-100, J-85-21B engines and
F-16 C/D aircraft. The locations of the performance are Dannelly Field,
Ala.; Atlantic City, N.J.; Springfield, Ill.; Sioux Falls, S.D.;
Duluth, Minn.; Dover, Del.; Travis, Calif.; and Tinker, Okla. Work is
expected to be completed by Dec. 31, 2014. The contracting activity is
AFLCMC/PZIEB, Wright-Patterson Air Force Base, Ohio. Contract...
United States' UN Hatred vs Seafarers' Rights
♠ Posted by Emmanuel in Labor,United Nations
at 8/27/2013 09:34:00 AM
The [UN] Secretariat building in New York has 38 stories. If it lost ten stories, it wouldn't make a bit of difference - John Bolton, US Ambassador to the UN 2005-2006
How much has US thinking changed about prospects for international cooperation, multilateralism and all that good stuff about being a responsible member of the world community? To be honest, not all that much. The infamous Bush appointee John Bolton once said that blowing up the top ten stories of the UN wouldn't make a difference in world affairs. Conservative media certainly hasn't stopped its crusade against the UN. Although Obama and his foreign policy...
LDC Currency Free-Fall: Party Like It's 1997?
♠ Posted by Emmanuel in Currencies,India
at 8/26/2013 06:30:00 AM
I was dreaming when I wrote this; forgive me if it goes astray. But when I woke up this morning and watched the Bloomberg channel, I could have sworn it was judgment day. Having lived through the 1997 Asian financial crisis while working as a banker (of all things), I have a heightened sensitivity to currencies going berserk. Friends, I feel for the Indian artist above wanting to save the falling rupee. Aside from highly touted BRICs coming under pressure alike Brazil and India, anticipated normalization of interest rates in the United States is unleashing complications around the world. Indeed, there is a fear that we may...
U R in Trouble: Brazilian Forex Intervention
♠ Posted by Emmanuel in Currencies,Latin America
at 8/23/2013 10:03:00 AM
Here's another victim of the so-called "taper" of Federal Reserve purchases of US Treasuries worth $85 billion a month or so. To make a long story short, rising interest rates Stateside in expectation of less American bond market intervention from the Fed are causing those who've invested abroad in search of higher yields to reassess their strategies. For several years there was a Brazil "carry trade": borrow in dollars, convert to Brazilian real, then lend in real while pocketing the interest rate spread (after charges and fees, of course).
The end of Fed Treasury purchases has whiplashed many developing countries...
Obstacles to the Global Mobile Banking Era
In many parts of the developing world, mobile banking or "m-banking" has largely supplanted conventional banking as the primary interface of customers with the financial system. For starters, many of the poor cannot meet minimums to open bank accounts. And, even if they did, bank branches are often sparse outside of urban centres. (Some m-banking heavy countries have generations of customers who've never even really used bank branches.) Just as cell phones have become far more plentiful than land lines in LDCs, though, people have needs for financial services as well as communications. Hence the ongoing popularity of using...
Subsidies or Thailand's Descent Into Egyptification
♠ Posted by Emmanuel in Agriculture,Southeast Asia
at 8/19/2013 10:09:00 AM
One of the biggest (fiscal) drags on the Egyptian economy is its continued use of massive subsidies for food and energy. At a touch less than a third of the national budget, it eats up a lot of money arguably better spent elsewhere. Moreover, you can hardly say that these subsidies have bought the country peace as the natives have been restless for years and years now and seemingly enjoy killing each other for the heck of it. Having (temporarily) exhausted Detroitifaction as a metaphor for industrialized countries descending into Hades, let us now talk of something happening in the developing countries. You guessed it--Egyptification.
Unfortunately,...
So, Why are China, Japan, ROW Dumping Treasuries?
There is a debate going on here in the rest of the world concerning the United States. It isn't really whether American officials are trustworthy, but whether they are more of BS artists or ripoff artists. When it comes to foreign holdings of US Treasuries, it's arguably both: The United States likes to con others with "strong dollar" rhetoric as it runs unfathomable deficits and the dollar falls to some godforsaken level. There is a lie, and a large financial consequence to believing in such nonsense.
Or, is there a limit to global gullibility? Will the rest of the world
continue to be held hostage to this "financial balance of terror"? As it
turns out, the top two suckers--China and Japan--have actually been
selling loads of dollar detritus in recent months. What's more, the rest
of the world are following suit, intensifying movement away from
greenback garbage:
China and Japan
led an exodus from U.S. Treasuries in June after the first signals the
U.S. central bank...
Why Venezuela Has Egypt-Like Forex Reserves
♠ Posted by Emmanuel in Energy,Latin America
at 8/13/2013 04:59:00 PM
Unlike many (left-leaning) colleagues, I remain profoundly unimpressed by the "post-capitalist" stylings of countries alike Argentina and Venezuela. When it comes to the geopolitics of the world economy, I am generally unconcerned about whether countries style themselves as "pro-American" or "anti-American" since it's largely beside the point. The point being, of course, that perceived friendliness to the world's largest economy has little to do with sound economic management.
Today we have an excellent case in point: How the heck can Latin America's second largest oil exporter after Brazil have Egypt-like foreign exchange reserves? With sustained high oil prices for years and years, it's hard to imagine but it's true in the case of [surprise!] Venezuela. Nor did it help that Hugo Chavez stashed a lot of foreign exchange in state-owned enterprises, which are now likely to be recalled to help repay the debts of this financial basket case:
Venezuela can more than double its reported...
Only in Hong Kong: Designer Handbags as Collateral
♠ Posted by Emmanuel in China
at 8/13/2013 10:31:00 AM
It's been such a long time since we've had a luxury goods feature, so here's one: Anyone who has been known to Asia knows the social pecking order here among cosmopolitan (small-c, that is) women has something to do with carrying designer handbags. Mainland China is becoming a large and lucrative market and Japan remains a steady customer for big-ticket items, but Hong Kong is still a prime destination--especially in designer-handbags-per-capita terms since the city is Asia's second largest market overall for these products. It does help that you can buy these items duty-free there. Some markets are built to retain their...
House Demolitions or the Detroitification of Spain
♠ Posted by Emmanuel in Credit Crisis,Europe
at 8/12/2013 03:25:00 AM
A chair is still a chair
Even when there's no one sittin' there
But a chair is not a house
And a house is not a home
When there's no one there to hold you tight
And no one there you can kiss goodnight...
As the late Luther Vandross explained, a house is not a home. Unoccupied houses--whether deserted or incompletely finished--blight the developed world. In the benighted American wasteland of Detroit, they have been bulldozing more and more unoccupied homes, and this phenomenon now stretches to parts of Japan. Meanwhile, we have a related occurrence in Spain. Alike the US, Spain experienced a housing boom in mid- to late-2000s,...
Depopulation or the Detroitification of Japan
There is a spectre haunting the developed world--the spectre of Detroitification. (Take that, Marx and Engels!) It involves depopulation and industrial hollowing out destroying the tax base of locales barely able to provide basic public services. Aside from the highly questionable logic of Japan incurring more debt to "cure" problems arguably caused by an oversized debt overhang, I have a more fundamental doubt about its economy moving forward. Simply, demographics dictate that an ever-shrinking population places nearly-insurmountable pressure on enfeebling the economy. Too many seniors drawing on too many benefits compared...
If I Were On Drugs, I'd Do Ratings Like Moodys
♠ Posted by Emmanuel in Southeast Asia
at 8/04/2013 09:43:00 AM
So, just how "moody" is Moodys? For reasons I'll explain, it makes me want to take large amounts of hallucinogens to acquire their "expertise." The global financial crisis revealed that, if anything, major credit rating agencies are not trustworthy. Conflicts of interest and plain negligence abounded. When push comes to shove, it's ultimately up to us to perform due diligence on prospective investments and not have some self-proclaimed rating agency do the job (poorly) for us.
This introduction brings me to the Philippines seeking to complete all major credit rating agencies giving it an "investment grade" designation. On March 27 of this year, Fitch granted the country such a rating after waiting for it for quite some time. On May 2, Standard and Poors followed suit in doing so. All this leaves just Moodys to grant the Philippines such a designation.
During the past week, Moodys people were in Manila assessing what rating to give the Philippines. These discussions were somewhat...
Screw Panama; Chinese & $40B 'Nicaragua Canal'
♠ Posted by Emmanuel in China,Supply Chain
at 8/02/2013 11:57:00 AM
It's been a long time since we've had a video feature, but now is as good a time as any. Recently, a young Chinese telecoms magnate came to an arrangement with the (rather impoverished) Nicaraguan government to develop a Panama Canal alternative slicing through that Central American republic:
Wang Jing, a 40-year-old Chinese telecommunications billionaire, has emerged as the next mogul to give it a go. Nicaraguan President Daniel Ortega, who fought the U.S.-backed contras in the 1980s, signed a 50-year concession on June 14 that grants Wang’s HK Nicaragua Canal Development Investment Co. (HKND) rights to develop a $40...