Escaping Decay: Japan Inc's Overseas Shopping Spree

♠ Posted by Emmanuel in , at 2/27/2015 01:30:00 AM
People used to fear Japan not so long ago, but now we have another situation. There is perhaps no better indication of limited prospects for Japan going forward than its firms investing everywhere but Japan. It is not exactly cheap to make foreign acquisitions at this point in time with the yen at a weak level, but then again, things may get worse as the government tries even harder to pump-prime the local economy. Caught between weak domestic demand and better prospects outside of Japan, many have opted to go abroad despite the rising costs of doing so: With shrinking prospects at home and the threat of further yen weakness,...
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Nuclear Option: UK Says Kick Russia Out of SWIFT

♠ Posted by Emmanuel in ,, at 2/26/2015 01:30:00 AM
To be cut off from SWIFT is to be cut off from international finance. Here we go again: a few months ago I wrote about Western powers having designs on kicking Russia out of the Society for Worldwide Interbank Financial Telecommunication system or SWIFT. Since it handles most of the international transfers for trade, investment, and simply moving money around, SWIFT is a must-have for conducting commerce in the modern world. Yes, Russia has actually forecast a scenario wherein it would be kicked out of SWIFT due to its various shenanigans in Ukraine (see the link above). However, coming up with a financial transfer system...
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Big Casket & US Protectionism vs. PRC-Made Coffins

♠ Posted by Emmanuel in , at 2/25/2015 01:30:00 AM
Caskets--where China has made limited inroads into the US market. Make what you will of this rather morbid feature, but among the few things that are still Made in America purchased with regularity Stateside are caskets. Unfortunately, this phenomenon is not really down to the inferiority of China-made caskets or to the superiority of US-made ones but to the frustration of commerce by entrenched US firms. Apparently, the funeral industry is one of the few where pseudo-nationalistic arguments still hold water somehow: By importing from China, [Las Vegas-based entrepreneur Jim] Malamas has followed a well-worn outsourcing ...
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Ruble & Exodus from Russia of the Stans' Migrants

♠ Posted by Emmanuel in , at 2/24/2015 01:30:00 AM
Only in Moscow is Tajikistan so far away. Here's another one of those interesting side stories to Russia's ongoing economies woes. In the past, workers--both documented and undocumented--used to flock there from the Central Asian republics or the "Stans" in search of work. You should be familiar with these: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. The factors which drove this migration are also well-known: they used to be part of the USSR after all, wages in Russia were comparatively higher, and employment opportunities back home were fewer. However, a new AFP article implies that workers from...
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How the Ruble Became This Month's Best Currency

♠ Posted by Emmanuel in , at 2/23/2015 01:30:00 AM
The ruble rises again (somehow). So much for the BRICs jibba-jabba: Russia has been downgraded back to junk status by Moody's, from the last investment-grade rating (Baa3) to the highest non-investment-investment grade rating (Ba1). This has prompted accusations of sinister machinations by the West [surprise!] from Russian authorities. However, it may indeed surprise you to know that, despite the downgrade, the ruble has actually been the best-performing currency of February 2015. How did this surprising performance happen? Also, is it for real? The answer is that the Russian government has asked the "help" of commodity-exporting...
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China's Financial Liberalization, Post-Shanghai FTZ Edition

♠ Posted by Emmanuel in at 2/20/2015 01:30:00 AM
Shanghai FTZ: More than vaporware, actually. Earlier on, I doubted the utility of the Shanghai Free Trade Zone (FTZ) as a viable endeavor given its emphasis on financial services instead of traditional goods processing. Liberalization of financial services for MNCs has long been a sticking point for them operating in China. While controlling "hot money" has been an official priority, it has also resulted in limitations for MNCs in funding PRC-based operations. That is, it is not so easy to borrow, lend, and otherwise use capital for day to day operations in a faraway land. As it turns out, the Shanghai FTZ may turn out...
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Crap Financial Journalism and the Daily Telegraph

♠ Posted by Emmanuel in at 2/19/2015 01:30:00 AM
Three-breasted aliens do program trading! (But even Rita Skeeter will shut up if you pay her enough.) Regular readers will note that I am actually discriminating about the news outlets I feature despite the wide range of topics on offer. For instance, I will never, ever knowingly excerpt from the Business Insider founded by pump-and-dump specialist Henry Blodget. Call me radical, but the platform of a barred securities trader may not be the best source of information about business. I am not fond of its brand of hucksterism. Another whipping boy around these parts is the British Daily Telegraph for similar reasons With...
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Death of 9-5 Office Work: Fantasy or Reality?

♠ Posted by Emmanuel in at 2/18/2015 01:30:00 AM
The end of the office era will not be missed as the butt of endless jokes. As someone who does not particular enjoy adhering to 9-to-5 white collar office work--as the saying goes, few will say "I wish I had spent more time at the office" on their deathbeds--I have watched changing patterns of employment with some fascination. The United States having invented the wretched thing, we are now watching how work patterns change there. In an environment characterized by greater job insecurity, white collar work is now changing not only because employers cannot guarantee employment for years on end but also because people are...
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Why Cheap Oil Won't Stop Solar Power

♠ Posted by Emmanuel in at 2/17/2015 01:30:00 AM
Mainly, solar power is becoming really cheap relative to other sources. I almost forgot about this one: many environmentally-conscious folks have become increasingly concerned that low oil prices may slow or even reverse the movement towards renewable sources of power--especially solar. Why change when gas has halved in price or more in less than a year? However, the reality is that the current phenomenon of cheap oil is actually a non-event in the inexorable march towards solar power. To this end, Bloomberg identifies seven reasons as to why this is so: The Sun Doesn't Compete With Oil -  Oil is for cars; renewables...
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The Sartorial Bankruptcy of Greece's Socialist Leaders

♠ Posted by Emmanuel in , at 2/16/2015 01:30:00 AM
"Tsipras, you dress as crappily as you 'govern'" Ah, the tieless Greek leaders. Aside from their unreasonable demands--how can Greece stay afloat rehiring several thousands of laid off government workers basically pushing paper and not much more--the Syriza party flunkies also strike me as sartorially inept. The problem is that these flunkies are neither here nor there with their outfitting choices. If they really wanted to convey an air of rebellion against the EU establishment, then they wouldn't bother to wear business suits with dress pants and jackets. How defiant does not wearing a tie make you, after all? If I really...
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Did IMF Austerity Worsen W African Ebola Outbreaks?

♠ Posted by Emmanuel in ,, at 2/13/2015 12:59:00 AM
Poor IMF: among the many ills supposedly attributable to its activities worldwide, chalk its historical emphasis on "structural adjustment" for weakening West African health care systems to the extent that the onset of Ebola crises in Guinea, Liberia and Sierra Leone hit them with full force. Yes, the IMF has since pledged additional emergency lending to these affected countries, but the seeds of failure to confront epidemics meaningfully were supposedly sown long ago. We begin with the current situation of IMF response: As the spreading Ebola emergency took center stage in Washington, the World Bank and International...
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A $465B Fight: On PRC Purging US IT Firms

♠ Posted by Emmanuel in , at 2/10/2015 01:30:00 AM
Bye-bye, Big Blue...in China? I've posted about China's efforts to encourage government agencies and state-owned enterprises to "buy Chinese" instead of American or European electronics brands. This is especially true in the financial services sector which, in China at least, is dominated by state banks. With things ramping up in 2015 with new regulations, American firms are crying foul and are asking for support from their government: U.S. business groups are seeking immediate action from the Obama administration to reverse “troubling” Chinese security requirements they say will block foreign software, servers and computing...
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Setting the Stage for US, PRC Declaring Currency War

♠ Posted by Emmanuel in , at 2/09/2015 01:30:00 AM
I'd rather not witness the firepower of this fully armed and operational battle station. As competitive devaluation continues apace in the world economy via "accomodative" policies, the world's two largest economies--the US and China--appear fed up with being those left holding the bag via relatively stronger currencies. The US, after all, is supposedly doing better than most and the dollar is strengthening accordingly while China only allows for limited currency movements in a ±2% daily band. Well, surprise, surprise: these two are readying new salvos in the currency war as the EU and Japan headline efforts by so many...
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US Trade Deficit with China Hit All-Time High in 2014

♠ Posted by Emmanuel in at 2/07/2015 01:30:00 AM
The US trade roach motel: goods come in, but few go out.  The global financial crisis was attributed to imbalances of the global economy coming undone. In particular, China was too export dependent with limited domestic demand as the income share of capital relative to labor went more and more in the former's favor. Meanwhile, the United States was consuming too much and exporting too little. Fast-forward six or seven years or so later and we have a world economy in which, er, the US still doesn't export all that much as its purchases of manufactures have hit all-time highs. Based on the latest data, full-year figures...
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Welcome Back the Bad Old Brazil

♠ Posted by Emmanuel in at 2/06/2015 01:30:00 AM
In the end, we make our own hell. It wasn't supposed to be this way: Brazil hosting the 2014 World Cup and the 2016 Olympics to boot was meant to signal its arrival on the world stage. After years of epitomizing the image of Latin American backwardness--slow growth, high corruption, soaring inflation and a plunging currency--these marquee sporting events were meant to showcase the "new" Brazil: a dynamic young economy powering ahead as one of the BRICs. Unfortunately, things have taken the wrong turn as Brazil flirts with recession time and again, corruption has driven its largest company Petrobras into the gutter together...
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Friends, Comrades: the Venezuela-ization of Greece

♠ Posted by Emmanuel in , at 2/05/2015 01:30:00 AM
They do [bank] run run, they do run run. Recalling the statement that Argentina was becoming Venezuela and Venezuela was becoming Zimbabwe, here's my international spin: Greece too is becoming Venezuela, while Argentina is becoming North Korea. Like the Kirchners' Argentina or the Chavistas in Venezuela, the new socialism in Greece is taking its toll. But before we get to that, here's your daily dose of Venezuelan conspiracy theory lunacy. It shows the severity of the situation there when the source is the left-leaning Think Progress that ice cream parlors and crossword puzzles are now being tarred as American conspiracies...
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On Beijing Hosting 2022 *Winter* Olympics [Cough]

♠ Posted by Emmanuel in , at 2/04/2015 09:59:00 AM
If Beijing hosts the 2022 Winter Olympics, we'll have fat guys in Speedos instead. One of the things global warming makes me ponder is the fate of the Winter Olympics. In a world where the average temperature keeps rising, there may come a time when "winter" is the stuff of history books. Modeling future climate change, only 6 out the previous Winter Olympics venues will qualify as "climate reliable" near the end of the century. Vancouver was the warmest of all time, with Sochi not that far behind. Now we have another contender for these, er, "Temperate Olympics": Beijing. This is not a typo--the host of the 2008 Summer...
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Sunk-Cost Fallacy: MNCs in Venezuelan Socialist Hell

♠ Posted by Emmanuel in , at 2/03/2015 01:30:00 AM
Exciting foreign [currency] escapades await MNCs in Venezuela. When it comes to all things dealing with "Venezuela" and "business," the correct advice since Hugo Chavez gained power was to hit the road. Get on the A320 and never look back. Apparently, some folks did not heed this commonsense advice for a country in the process of Zimbabwe-fication. While energy companies at least had the excuse of having potentially bountiful sources for energy reserves in sticking around, there were not any country-specific resources many others had. These include all sorts of US-based consumer goods manufacturers who have persisted in...
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