Posts of February 2014

Death to Speculators! (RMB Deluxe Edition)

♠ Posted by Emmanuel in China,Currencies at 2/28/2014 09:17:00 AM

During the Asian financial crisis, then-Malaysian PM Mahathir Mohamed singled out speculators for blame. Although he didn't specifically say "death to speculators," he became associated with the catchphrase. Speaking of which, it is enjoying something of a revival. You see, Chinese monetary authorities are wary that its currency is becoming a one-way (appreciating) bet for currency speculators as China gradually strengthens then yuan and reduce its (perceived) undervaluation. In either case, speculators are persona non grata. Over the past few weeks, Chinese authorities have thus thrown speculators a curveball in American-speak by appreciating its currency sharply by the standards of its post-2005 transition to a managed float from a strict peg, culminating with recent moves that took many by surprise: A two-week slide in China's yuan accelerated Friday, with the currency taking its biggest tumble since a 2005 revaluation on speculation the central bank is stepping up efforts...

Activists' Deed? PRC Drops HK for Beijing to Host APEC

♠ Posted by Emmanuel in China at 2/27/2014 03:07:00 PM

The view Beijing doesn't want you to see? Cough, cough...the global reputation of the Chinese capital as a pollution haven is legendary. Unfortunately for APEC delegates, I guess they will have no choice but to suffer Beijing's (literally) killer air quality. Observers have now likened it to a "nuclear winter." Sometime ago I discussed China's advantage in terms of agenda-setting over the US of being the APEC host in 2014. However, it seems they have just received bad PR as Hong Kong was originally meant to be the site of the APEC finance ministers' meeting. But, with Hong Kong pro-democracy activists promising disruptions...

Buying Canadian Citizenship Costs More Now

♠ Posted by Emmanuel in Migration at 2/26/2014 11:27:00 AM

The good stuff When it was announced that the British would hand Hong Kong back to the Chinese in the year 1997, there was a flurry among its wealthy residents to decamp to Canada. Back then, we were uncertain of whether the place would lose its freewheeling, entrepreneurial culture and be replaced by a command economy reminiscent of China's at that time (19 December 1984). True, activist Average Joe Hongkongers are unhappy with the dwindling political freedoms granted by the Beijing overseers and protest loudly by HK standards, but the business elite has largely continued as they were by toeing the CCP line. In other words,...

After Ukraine: Argentine, Venezuelan or Thai Gov't Falls?

♠ Posted by Emmanuel in Europe,IMF,Latin America,Southeast Asia at 2/24/2014 10:02:00 AM

Business as usual in downtown Caracas Which shaky government will fall next? That is the question. The honest truth is that Ukraine's economic situation was hardly improved by either the pro-EU Yulia Tymoshenko or pro-Russia Yanukovych factions. Indeed, Tymoshenko leading the country into the poorhouse in the aftermath of the global financial crisis enabled Yanukovych to be elected, upon which he did nothing to fix things. With Tymoshenko ally and interim President Olexander Turchynov taking over, it is possible that things will revert to the status quo ante of her regaining power in upcoming elections. Party like it's...

Tens of Trillions of Yen Later, Abenomics is a Dud

♠ Posted by Emmanuel in Cheneynomics,Japan,Migration at 2/23/2014 10:03:00 AM

The plight of the developed world is of massive interest to developing countries such as ours for the simple reason that, since we aspire to being developed status, what comes next is of consequence. Sadly, the examples of moribund Western Europe, North America (especially the hapless US), and Japan are not especially encouraging. As our nearest neighbor in Asia, Japan's plight is especially troubling. Could American-style helicopter-dropping and free-spending economic nihilism AKA "Abenomics" really revive Japan from its lost decades? As we are learning, the answer is loud and clear: HELL NO! It's not as if some folks...

US Footballers from Mars, Dutch Skaters from Venus

♠ Posted by Emmanuel in Americana,Europe,Sports at 2/21/2014 01:12:00 PM

Oranje-filled, Yanqui-free speedskating podium: the new Olympic standard Sometime ago, John Gray penned the pop psychology bestseller entitled Men are From Mars, Men are From Venus. Not to be outdone, realist author Robert Kagan said in the wake of 9/11 that, in terms of foreign policy, Americans are from Mars and Europeans are from Venus. Quoth he: American and European perspectives are diverging. Europe is turning away from power, or to put it a little differently, it is moving beyond power into a self-contained world of laws and rules and transnational negotiation and cooperation. It is entering a post-historical...

How Computer Forex Traders Obliterated Humans

♠ Posted by Emmanuel in Casino Capitalism,Currencies at 2/20/2014 09:57:00 AM

When I become a wheezy old grandpa reminiscing about the "good ol' days" as my captive audience of grandchildren pays scant attention, I will discuss how people [remember those?] actually did market trading back in the day. Recent international investigations into alleged collusion in foreign currency trading are the spur here, with the parent banks of FX biggies Deutsche Bank, Citigroup, Barclays and UBS AG feeling the heat. Since they have already been through countless investigations and billions of fines over subprime mortgages, tax avoidance, Libor scandals, etc., major banks have likely had enough of forex trading as well. To ensure human frailties do not get the best of traders and the temptation to collude, what better way is there than to replace them with computers via program trading? Apparently, that's they way things are headed for forex, too: A widening probe of the foreign-exchange market is roiling an industry already under pressure to reduce costs as computer...

Ballroom Dancers 1, Anti-PRC Vietnamese Protesters 0

♠ Posted by Emmanuel in China,Southeast Asia at 2/17/2014 11:31:00 AM

We can dance if we want to / We can leave protesters behind... This has to be my favorite Southeast Asian country versus China story of the year so far: Vietnam deploys dancers to foil [anti-PRC] protests says the headline. You see, the Vietnamese have a monument dedicated to Ly Thai To--the king who moved the capital to Hanoi--in the center of the capital. Protesters have usually made a beeline for the statue to commemorate conflicts of national importance. China's invasion of Vietnam in 1979 was provoked by Vietnamese forces in turn invading Cambodia to oust the Khmer Rouge that was said to be destabilizing Vietnam. Expecting...

PRC & IP: Imitation, Flattery, Copycat Culture

♠ Posted by Emmanuel in China,Innovation at 2/16/2014 09:32:00 AM

There's an interesting article from the Commonwealth publication Global: The International Briefing which goes into that age-old question of why the Chinese are not especially innovative despite having the world's second-largest economy. In short, why are there no globally-recognized Chinese brands? Also, why are many indigenous Chinese products and services me-too efforts without any real distinction from what everyone else makes? These two questions have spawned alarm about Chinese development. First, there is little value-added in churning out commodities, possibly ensuring that Western concerns will continue to dominate in terms of where the real money is made--branding, design, and marketing. Second, China may be making itself vulnerable to legal challenges on the intellectual property front. Anyway, to the oft-cited socio-cultural roots of imitation: China’s existence is premised on these calculated approaches to life. To succeed in public life in the past, the state...

A Guide to Venezuela's Now Four-Tiered FX Rates

♠ Posted by Emmanuel in Credit Crisis,Latin America,Socialism at 2/14/2014 03:54:00 PM

Just count 'em! How many bolivars do you need to exchange for 1 USD? Here's the handy-dandy IPE Zone guide for understanding the economic wasteland that is modern day Venezuela: 6.3 bolivars - official rate for "preferential" goods (read: largely for show; few can avail of it save for the well-connected). 11.36 bolivars - rate at the last weekly auction held for greenbacks known as "Sicad" (read: still not everyone can get into this auction). ??? bolivars - rate to be set at yet another round of auctions just announced that commentators dub 'Sicad 2.' Expectations are for the rate to be rather higher since only the Venezuelan government espouses that it has greenbacks left on an appreciable scale: Maduro, who said that the new system would be known as “Sicad 2,” has blamed inflation and shortages on an “economic war” waged by the “parasitic bourgeoisie.” He gave businesses until Feb. 10 to cut prices to “fair” levels and reduce their profit margins to a maximum of 30 percent. Venezuela...

The PRC-India Trade Imbalance, c/o 'Shamsung'

♠ Posted by Emmanuel in China,India,Intellectual Property,Trade at 2/12/2014 10:51:00 AM

Spot the fakery When it comes to globalized commodities, you probably cannot outdo Chinese no-name electronics as PRC-sourced fakes are the wares of street hawkers the world over. Hence, the 'Shamsung': Made-in-China products are also flooding into Indian markets served mainly by small and midsize local companies [read: mom-and-pop shops given limited inroads made by retail trade liberalization]. The deluge of Chinese imports is beginning to further strain a tense bilateral relationship, which is traditionally prickly because of a territorial dispute. Indian consumers are for now embracing cut-price Chinese offerings....

VW and 'Unionization' of Southern US Car Plants

♠ Posted by Emmanuel in Labor at 2/11/2014 11:16:00 AM

There's much interesting politicking going on at the moment among Southern states in the US Sun Belt hosting foreign automobile plants. For a very long time, they have been drawing Japanese and European carmakers keen on avoiding the hassles American unions--in particular, the United Auto Workers--have introduced for their American counterparts in the Rust Belt. Large financial incentives for locating in the Sun Belt have certainly lured them there, too. Now, however, one of the European biggies in Volkswagen seems to be encouraging the formation of labor representation in its plant in Chattanooga, Tennessee. One of the...

Unlike US, Why EU Doesn't Hurl Expletives at Russia

♠ Posted by Emmanuel in Europe,Russia,Sports at 2/09/2014 09:36:00 AM

I strongly feel that the Sochi Olympics is a giant feast for the Western media to rip Russia to pieces. And as such, any detail, any mistake, anything negative at all no matter how small will be the centre of attention – and all the positive things will go unnoticed - Yulia Ivanova, Russian expat in London Unfortunately for the Sochi Olympics, it seems most of the entertainment so far is not of the sporting variety. To no small extent, this is the Russian host's fault and not of Western media. While parading their (comely) female athletes in scantily-clad poses is not especially eyebrow-raising in this day and age, I think they would capture the world's attention more if they, er, actually managed to win some medals at this stage. They're athletes, right? Another sideshow of Olympic dimensions has involved Ukranian President Viktor Yanukovych meeting his Russian counterpart Vladimir Putin at Sochi. Having eased out his rabidly pro-Russian Prime Minister Mykola Azarov...

Will US Allow Lenovo to Buy Parts of IBM & Google?

♠ Posted by Emmanuel in China,FDI at 2/07/2014 11:44:00 AM

Does it come with PRC minders listening in as a standard feature, NSA style? Call it Reds Under the Beds, Cyber Edition. The supposed land of free trade has customarily thrown significant roadblocks in the way of Chinese firms signaling their intent to purchase US tech-related firms on "national security" grounds. The reasoning usually goes like this: Chinese firms trace part of their ownership to the PRC itself, hence there is a threat that their political overlords will ask them to incorporate spying apparatus in the electronics they sell Stateside. It's a lot of "could bes" and "what ifs" when, in reality, we know that...

Rebuilding the USSR, Retaking the Commanding Heights

♠ Posted by Emmanuel in Russia,Sports at 2/06/2014 10:42:00 AM

The stuff of Putin's fondest dreams With the 2014 Winter Olympic Games kicking off in Sochi, Russia, the world's attention has naturally focused on that country. The story of Boris Yeltsin handing over large swathes of Soviet-era industry to so-called "oligarchs" who purchased these interests at fire sales prices is well-known. Pressured to privatize state-owned firms by the West, Russian authorities unloaded energy and raw material concerns quickly and irrationally. In Russian President Vladimir Putin's second term beginning in 2012, earlier nostalgia for Soviet strength from Yeltsin's handpicked successor has turned...

Repopulating Doomsville: Detroit & US Migration

♠ Posted by Emmanuel in Americana,Migration at 2/05/2014 11:01:00 AM

Followers of international migration know that there is a movement among traditional migrant-receiving nations, usually Anglophone countries Australia, Canada, New Zealand, and the United States, to steer migrants away from overcrowded gateways into less-populated areas short on labor. In other words, your chances of successfully petitioning for permanent residency are greater in, say, Toowoomba instead of Brisbane. In the United States, something similar is happening as authorities are interested in managing demography. Instead of packing people off to [zzzzz] New York, Los Angeles or Chicago, why not send them where they are needed like, say, Detroit? To you and me it may be a terrible instance of urban decay that is in its death throes via depopulation and bankruptcy. For others, however, it is a prime example of the Land of Opportunity. The Arab American News has an interesting article along these lines as a Polish immigration lawyer says there is no better time than now...

Buying Thai Rice: PRC Now Cares About Corruption?

♠ Posted by Emmanuel in Agriculture,Southeast Asia at 2/04/2014 11:22:00 AM

Yinglucks legacy is a colossal waste of food and money China is famous for espousing a policy of non-interference in the internal affairs of other countries. This, of course, is in contrast to Western powers who usually demand "good governance" for aid or investment in terms of lessening corruption, promoting democracy and so on. Critics say that in doing so China undermines others' efforts to instill better governance. On the other hand, China says it does not meddle with others' business--especially other developing countries that have grown tired of Western paternalism. It is thus interesting how China seems to be bowing...

Did Harry Reid KO Obama's Asian, European FTAs?

♠ Posted by Emmanuel in Economic Diplomacy,Trade at 2/02/2014 11:28:00 AM

Reid Floors Obama with Lethal 1-2 Combination The traditional constituency of the United States' Democratic Party has always included organized labor. Despite union membership continuing to fall, organized labor remains crucial to the fortunes of many Democratic candidates come election time given their organizational strengths in mounting get-out-the-vote efforts. Tensions have always existed in the Democratic Party about the benefits of "modernizing" in the Reaganite, investor-friendly sense: fewer worker benefits, easier to hire and fire, etc. Both Democratic presidents of recent memory, Bill Clinton and Barack Obama,...