Posts of 2014

The Japan That Can't Save

♠ Posted by Emmanuel in Japan at 12/30/2014 04:26:00 PM

Japanese seniors do exercises and draw down savings. Modern Japanese have a reputation for being polite to a fault. Despite being eliminated from the group stages of this year's World Cup, Japanese football astounded the world by cleaning up after the national team's (rather disastrous) matches. Yet always apologizing for slights the rest of us hardly notice and very rarely saying "no" to anyone has its drawbacks. In 1989, LDP bigwig Shintaro Ishihara and Sony chairman Akio Morita dropped a political-economic bombshell on this image of a reticent Japan with their book The Japan That Can Say No. Calling for equality with...

How the Pirate Bay Was Dismembered

♠ Posted by Emmanuel in Europe,Underground Economy at 12/27/2014 01:30:00 AM

The Pirate Bay folks go to jail; the site went to the big cloud server in the sky. In the interest of, ahem, academic research, I've noticed that what was once one of the world's largest torrent sites has been inoperational for two weeks now. The Pirate Bay, we hardly knew ye. Whatever your views are of torrent sites, it is always interesting to follow the cat-and-mouse game between the authorities--usually Western trade or intellectual property agencies acting on behalf of copyright holders--and the torrent sites. So the Pirate Bay is (was?) one of the largest torrent trackers. That said, there are literally dozens more...

2014's Worst 'Currency' is Bitcoin; Its Best Surprises

♠ Posted by Emmanuel in Africa,Currencies,Europe,Russia at 12/24/2014 09:13:00 AM

I've been following currency gyrations in 2014 with great interest since their movements do correlate with internal and external disturbances related to wider economic phenomena and geopolitical events. To no one's surprise, Russia's ruble and Ukraine's hryvnia have followed each other to near-oblivion. A while ago, I also explained why I believed Bitcoin was a dud while Apple Pay held out much more hope for becoming a "mainstream" form of money. Oh, if only I had tracked it more closely. At year-end, the world's three worst-performing monies are, (3) the Russian ruble, (2) the Ukrainian hryvnia, and, taking the cake--(1)...

From New Cold War to Trade War: Russia at the WTO

♠ Posted by Emmanuel in Russia,Trade at 12/23/2014 11:57:00 AM

Well don't you worry about the situation... To paraphrase Carl von Clausewitz, trade war is Cold War by other means. Everything old is new again in international relations. This hackneyed analogy got going when Mikhail Gorbachev, last leader of the Supreme Soviet, recently declared the breakdown in Russia-Western relations as indicating the beginnings of (yawn) a New Cold War. Despite being no particular fan of Vladimir Putin, Gorbachev believes that American actions have exacerbated tensions to such a point by "calling the shots in everything" and denying Russia any say in political-economic matters. (Personally, I believe...

Macau's Evolution: Life Beyond Gambling

♠ Posted by Emmanuel in China,Travel at 12/22/2014 09:03:00 AM

Xi says it's time for the shifting Sands. By now everyone is aware that Macau is by far the world's largest gambling destination, dwarfing Las Vegas in terms of gaming revenues. Las Vegas only earns one-seventh of its revenues at this point. Yet, for all this success in attracting gamblers--high-rollers especially--there are downsides. The recent crackdown on PRC officialdom using state funds to gamble in Macau, initiated by President Xi Jinping, has resulted in a rather severe deterioration in the fortunes of casino operators in Macau? How severe, you ask? Try wiping out $75 billion in market capitalization, for starters: Xi,...

Cuba Stories: Venezuelan Oil, Buena Vista Social Club

♠ Posted by Emmanuel in Entertainment,Latin America at 12/19/2014 01:30:00 AM

Some Buena Vista Music Club musicians are gone but not forgotten. I actually watched Obama's announcement that the United States has entered a process of normalizing relations with Cuba. As something I've been wishing for a long time, I'm glad it's finally come. Let's face it: at a time when the United States has long since normalized relations with the likes of China and Vietnam, it seems odd that it has held out on doing the same with "Communist" Cuba--especially since it's so much closer to the US. The Cold War's long since been finished, mates, and it's time that both sides realized this. Now, there are two interesting...

Can Modi Break Indian Coal Miners' Balls?

♠ Posted by Emmanuel in Energy,India at 12/18/2014 01:30:00 AM

It's Thatcher time for N. Modi. (Cue the AC/DC before proceeding.) The make-or-break moment for new Indian Prime Minister Narendra Modi is at hand: Part of the process ushering in modern Britain--"neoliberalization" its critics would label it as a term of abuse--is the marginalization of organized labor. Similar things happened in the United States that set the shape of things to come as organized labor has been ground small all over the world. However, the defining moment remains Britain's showdown three decades ago. It was the Iron Lady Margaret Thatcher versus Arthur Scargill, leader of the coal miners who obviously...

Argentine & Venezuelan Deadbeats' Paymaster, China

♠ Posted by Emmanuel in Energy,Latin America at 12/17/2014 01:30:00 AM

Oh boy, oh boy. It is no big secret that the new Latin Left abhors the United States. For a long time now, China has been on hand to buy the loyalties of these countries in a geopolitical tug-of-war that's largely unspoken. Call it the "new" Cold War. With America the target of opprobrium the world over, it isn't exactly hard to find these sorts. Today's case in point are our favorite anarcho-economies, Argentina and Venezuela. Largely shunned by international credit markets, these nations have had to turn to China to shore up their funding as of late. First up is Argentina, which has had a swap arrangement in place with...

Freedom Schmeedom: Martial Law Boosts Thai Tourism

♠ Posted by Emmanuel in Southeast Asia at 12/16/2014 01:30:00 AM

Democracy shmemocracy--Thai tourism prefers martial law over democracy's anarchy. Even by Southeast Asian standards, Thai politics are, how do I put it, rambunctious. If you want me to explain Thai politics, it's very simple: a Shinawatra family member or one of its toadies wins popular elections by offering populist programs that are financially unsustainable. Eventually, the old-guard of royalists and the Bangkok elite kick out the Shinawatra-ites through either legal maneuvers or military coups. Both have been used already. All the while, the Thai economy suffers as protests by both sides paralyze transportation in...

Corporate Governance: Of Korean 'Nut Rage' & BMW

♠ Posted by Emmanuel in Governance,South Korea at 12/15/2014 01:30:00 AM

Headlines here in Asia have been dominated by the story of the Korean Air executive who went ballistic on a flight attendant because he had served her nuts in a bag instead of on tableware. Hence the "nut rage" label applied to Cho Hyun-ah, the daughter of the Hanjin (chaebol conglomerate) chairman that owns Korean Air. Talk about nuts: She boarded the flight at JFK headed for Incheon and ordered it returned to the boarding gate over macadamia nuts to unload the poor fellow. The flight attendant Park Chang-jin was even coerced to cover up the incident to Korean government investigators. Does that make this incident "Nutgate"? [Cho]...

Back to the Junkyard? S Africa's Credit Ratings

♠ Posted by Emmanuel in Africa at 12/13/2014 01:30:00 AM

Power outages in S Africa at a time of falling energy prices aren't a good sign. Of all the BRICS (with a capital S) countries we've taken a look at as of late, it seems South Africa has received little attention. Mind you, it's not that South Africa is doing any better than the rest as the BRICS encounter economic headwinds going into the middle of this decade. Rather, it seems that the incomplete process of reform in this large nation has stalled the economy, too. If you were hoping for a BRICS success story circa 2014, I am afraid that you will have to write one yourself and file it under "creative writing." Sad but...

Kazakhstan, Unlikely Master of Geopolitics

♠ Posted by Emmanuel in China,Energy,Russia at 12/12/2014 01:30:00 AM

Kazakhstan and oil do mix. Let's take a trip to somewhere we do not frequently go. Unbeknownst to many, one of those who've managed to deftly manage pressures from east and west is Kazakhstan of all places. It is an energy-rich country that's simultaneously feeling heat from Russia as it tries to make China a business partner in addition to its current stable of European countries. Challenging? Well, less likely than you'd think for fairly savvy Kazakh diplomats: Kazakhstan's record rests on the artful management of three balances: first, a political balance between Russia, with its post-imperial ties, a rising China,...

Will Ferrari Leave Italy for Tax Reasons?

♠ Posted by Emmanuel in Europe at 12/11/2014 01:30:00 AM

Ferrari leaving Maranello is the secular equivalent of the Pope leaving the Vatican. While Ferrari is a world-famous marque, its situation is no different from that of many other European multinationals attempting to cope with the lukewarm business climate in Europe. Motor racing fans know it's been a tumultuous year for Ferrari. Longtime Ferrari Chairman Luca de Montzemolo--mastermind of its early 2000s resurgence in motor racing and the revamp of its road car lineup--was forced out in September. Among other things, he supposedly didn't want to increase the marque's production of about 7,000 vehicles annually since demand...

Russia 'Defends' the Ruble? You Must be Joking

♠ Posted by Emmanuel in Currencies,Russia at 12/10/2014 01:30:00 AM

Russia's losing battle to shore up the ruble. Before we rotate out of the currency fixation we've had for the last few days, here's an interesting feature from Bloomberg I found illustrating the recent slide in the Russian ruble. Yes, I know, it's been doing the dive-bombing thing for a few months already. However, the recent price action is interesting insofar as the rhetoric has been cranked up by Putin and Co. As you would expect, bluster about "punishing speculators" and so on have not done much to shore up the currency's value absent concrete action by the central bank. Here is the blurb: Russian President...

Death to Speculators 2014: Malaysia Warns on Ringgit

♠ Posted by Emmanuel in Currencies,Southeast Asia at 12/09/2014 01:30:00 AM

Bank Negara says, "Don't tread on the MYR." After the recent post on Russia "cracking down" on currency speculators, we now have word that the Malaysian authorities are mounting their own effort to limit currency speculation on the Malaysian ringgit (MYR) as its value declines together with most other developing country currencies given the widespread expectation that the Federal Reserve will raise interest rates on the US dollar soon. Lest you think the IPE Zone has become the Currency Speculation Zone, rest assured that there are interesting aspects to this matter of concern to developing countries the world over aside...

Japan's Desperation: Gambling on Casino Openings

♠ Posted by Emmanuel in Gambling,Japan at 12/08/2014 01:30:00 AM

Beyond pachinko - luck be a Japanese tonight. You cannot help but feel sorry for Japan as it tries everything to get its economy rolling again except for the thing which promises the most--opening itself up to migration in an era of depopulation. Abenomics is a dud; despite US-style money-for-nothing policies, it has had even more limited success pump-priming its economy. In fact, it's fallen back into recession and Abe has had to call for another election to renew his mandate for...I do not know precisely what. Since generating revenues is one of Japan's many problems, this option had to pop up sooner or later: when in...

Vlad [Putin] the [Forex Speculator] Impaler

♠ Posted by Emmanuel in Currencies,Russia at 12/05/2014 01:30:00 AM

Forex speculating "Hitlers," watch your backs. One of the things we are learning about the current self-inflicted economic crisis in Russia is just how lame the bluster of Vladimir Putin is. Despite his shirtless antics frolicking amidst assorted wildlife and military paraphernalia, the truth is that this vainglorious chap's economy is rather lame. He should have seen all the sanctions slapped on his country coming a mile away. Yet, it seems he is surprised by the drubbing it is getting as the ruble slides to oblivion while bond yields on sovereign debt soar to infinity. Really, he could probably do much better firing all...