Mitt Romney proved this week that he has repaired his steamroller, the one that suffered a minor break-down in South Carolina.
I now see no likelihood of anyone other than Romney getting the Republican nomination, though Newt can keep it entertaining in the meantime.
That still doesn't tell us how the end of this political year is going to go.
On another, but not an unrelated point, I was talking recently with bright finance-industry people in east Asia. They said two things. First (my paraphrase), some of them say: buy Samsung. The year 2012 is shaping up as a good one for Korean industry in general and for that company in particular. (By the way, if you actually are stupid enough to buy Samsung based on hearsay in this or any a blog ... just please don't. Stick with broad-based indexes, some of which can get you exposure to east Asia in general.)
The second thing I've taken away from these recent conversations is more intriguing, and more worth passing on to you, dear reader. Some of them believe that there has been too much emphasis on the part of certain analysts, in London and New York, about how China is going down for a "hard landing." My sources believe there will be some contraction in the PRC, but it will be rather soft, as landings go.
I don't know whether that's true. Surely the PRC seems to be due for some sort of landing, and indeed a contraction is underway. If my friends were kidding themselves, wacky optimists as they may be, and it really is a hard landing, a bursting of a Sino-bubble on the way, then this could have macro global implications.
Which brings us back to the politics of this campaign. We could be hearing an awful lot about China before November.
Showing posts with label People's Republic of China. Show all posts
Showing posts with label People's Republic of China. Show all posts
02 February 2012
31 December 2009
Top Financial Stories 2009
I generally ask myself at this time of year what were the biggest stories of the past twelve months, in business/financial news.
By "stories," I don't mean themes, such as "Doubts about efficacy of SEC regulation" or "US/EU relations." I mean stories, such as one might have seen in a particular newspaper on some specific day. Of course, I choose the ones I do largely because they illustrate an important theme. But the theme itself isn't the story.
Further, I don't rank them, as in a top ten list. For the first couple of years that I did this I simply gave one "top" story from each of the twelve months of the year now ending. Last year was so wild, especially in its second half that I couldn't stick to the one-a-month presentation. I ended up with a list of 18 big stories, two per month starting with July.
This year, for the sake of balance I suppose, I have produced another list of 18 stories, twice a month this time for the first six months, then just one a month from July.
All that understood: Here we go! The list is dominated this year by a meta-theme. We might call it: the triumph of experience over hope.
January. (a) The inauguration of a new President of the United States, and Barack Obama's choice of Timothy Geithner to head Treasury. Geithner's presence in the new administration is not a sign of change, but one of continuity. During most of the Bush years, Geithner was the very visible President of the Federal Reserve Bank of New York.
(b) Financial crisis in Iceland brings street protests, shake-up in government there. Iceland, on the one hand, has long been a free market economy, with taxes lower than those of most other OECD countries. On the other hand, it has maintained a Nordic welfare system, including universal health care and post-secondary education. Whatever may be true of Las Vegas: what happens in Iceland, is widely watched elsewhere.
February. (a) Obama signs the stimulus act, a/k/a the American Recovery and Reinvestment Act (ARRA). The full title seems better to convey the almost cartoonish Keynesianism involved: "An act making supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization, for the fiscal year ending September 30, 2009, and for other purposes."
(b) Zimbabwe asks African states for $2 billion in aid -- Mugabe vows to continue brilliant policies. I'll simply offer a link here.
March. (a) Bernie Madoff pleads guilty without a plea deal, claims to have acted alone. Of course, he did not act alone, but by taking the fall and keeping mum on confederates, he appears to have earned some necessary prison cred.
(b) UK Financial Services Authority adopts new rules on derivatives. In London as in Washington, complicated and insufficiently regulated derivatives are widely blamed for the crisis of 2008. That diagnosis is jejune, but is to be expected. The particular derivatives that draw fire in the UK are known as "contracts for difference."
April. (a) Dow Chemical finally closes on its Rohm & Haas deal. The idea of this merger was to craete a "leading specialty chemicals and advanced materials company." Its logic would have been more powerful, and the deal would have gone through smoothly, had the timing been a bit better.
(b) Chrysler files for bankruptcy This is the first of three headline events on our list of 18 that may stand in for a single momentous theme -- the frog-marched restructuring of the US automotive industry in general. And we won't bother listing separately that GM too passed through a bankruptcy court proceeding.
May. (a) China-Brazil oil/loan deal The Brazilian oil company Petrobras finalized a deal with the People's Republic of China. Petrobras got a (US)$10 billion loan and PRC got a long-term supply of 'black gold.' This is a straw in a lot of different winds -- the rise of China to global prominence on the back of its huge dollar reserves is one of them.
(b) Obama announces new CAFE/ emissions standards. This is our second auto industry headline of the year. The program is projected to reduce oil consumption over the period from the 2012 to the 2016 model years by approximately 1.8 billion barrels. (As you probably would expect, dear reader, I think such projections warrant skepticism.)
June. (a)US Supreme Court decides Traveler's Indemnity v. Bailey. Asbestos is one of the big "mass tort" issues that have rocked our civil legal system in recent decades. Travelers thought it had a deal that limited its exposure via a settlement trust established by order of the federal district court in Manhattan back in 1986. Unfortunately for them, state law claims and "collateral attacks" made that trickier than they had expected.
(b) Elections to Euro parliament strengthen the center-right parties. For purposes of the italicized statement, anyway, we may understand the term "right" to mean the group of parties or factions that are suspicious about the role of the Parliament they are joining, either on behalf of separate sovereign nationalisms or on behalf of EU-regulated global commercial concerns or both. The "left," which lost this round, consists of those that see a need for a more activist EU.
From here on we are presenting just one headline per month.
July. Cash-for-clunkers program in the US. This is our final US-auto-industry headline. There was always an ambiguity to the plan. Was it designed chiefly to stimulate the auto industry, or to improve fuel efficiency? The goals aren't obviously in harmony. Still, any critique of its efficacy in one respect could be deflected by pointing to the other.
August. Settlement of US/Swiss Dispute over UBS Confidential Client Information. The relationship between Switzerland and the US seems to have grown closer in a number of respects over the last year.
September. Target Corp. declassifies its board Reform has come to the field of corporate governance, though what over-all impact such reforms may end up having it is hard to say.
October. Ireland votes in favor of Lisbon Treaty, effectively secures the new continent-wide government It is difficult to tell where Europe is headed. The Lisbon Treaty would certainly seem to be a step toward closer political integration. But the European Parliamentary elections, as noted above, were won by parties skeptical thereof, and there are a lot of centrifugal forces at work.
November. What is patentable? SCOTUS hears arguments. My own expectation is as follows: (a) the Justices will uphold the court below in its finding that Bilski's 'process' is really an abstract idea and thus not patentable; and (b) they will work harder than the court did below in order to define what is or isn't an abstract idea.
December. Two crucial bills advance through the Houses of the US Congress -- the health care reforms and the financial-regulatory system overhaul.
It seems very likely that something will be enacted into law in both of these areas sometime early next year. But I could be wrong even about that.
By "stories," I don't mean themes, such as "Doubts about efficacy of SEC regulation" or "US/EU relations." I mean stories, such as one might have seen in a particular newspaper on some specific day. Of course, I choose the ones I do largely because they illustrate an important theme. But the theme itself isn't the story.
Further, I don't rank them, as in a top ten list. For the first couple of years that I did this I simply gave one "top" story from each of the twelve months of the year now ending. Last year was so wild, especially in its second half that I couldn't stick to the one-a-month presentation. I ended up with a list of 18 big stories, two per month starting with July.
This year, for the sake of balance I suppose, I have produced another list of 18 stories, twice a month this time for the first six months, then just one a month from July.
All that understood: Here we go! The list is dominated this year by a meta-theme. We might call it: the triumph of experience over hope.
January. (a) The inauguration of a new President of the United States, and Barack Obama's choice of Timothy Geithner to head Treasury. Geithner's presence in the new administration is not a sign of change, but one of continuity. During most of the Bush years, Geithner was the very visible President of the Federal Reserve Bank of New York.
(b) Financial crisis in Iceland brings street protests, shake-up in government there. Iceland, on the one hand, has long been a free market economy, with taxes lower than those of most other OECD countries. On the other hand, it has maintained a Nordic welfare system, including universal health care and post-secondary education. Whatever may be true of Las Vegas: what happens in Iceland, is widely watched elsewhere.
February. (a) Obama signs the stimulus act, a/k/a the American Recovery and Reinvestment Act (ARRA). The full title seems better to convey the almost cartoonish Keynesianism involved: "An act making supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization, for the fiscal year ending September 30, 2009, and for other purposes."
(b) Zimbabwe asks African states for $2 billion in aid -- Mugabe vows to continue brilliant policies. I'll simply offer a link here.
March. (a) Bernie Madoff pleads guilty without a plea deal, claims to have acted alone. Of course, he did not act alone, but by taking the fall and keeping mum on confederates, he appears to have earned some necessary prison cred.
(b) UK Financial Services Authority adopts new rules on derivatives. In London as in Washington, complicated and insufficiently regulated derivatives are widely blamed for the crisis of 2008. That diagnosis is jejune, but is to be expected. The particular derivatives that draw fire in the UK are known as "contracts for difference."
April. (a) Dow Chemical finally closes on its Rohm & Haas deal. The idea of this merger was to craete a "leading specialty chemicals and advanced materials company." Its logic would have been more powerful, and the deal would have gone through smoothly, had the timing been a bit better.
(b) Chrysler files for bankruptcy This is the first of three headline events on our list of 18 that may stand in for a single momentous theme -- the frog-marched restructuring of the US automotive industry in general. And we won't bother listing separately that GM too passed through a bankruptcy court proceeding.
May. (a) China-Brazil oil/loan deal The Brazilian oil company Petrobras finalized a deal with the People's Republic of China. Petrobras got a (US)$10 billion loan and PRC got a long-term supply of 'black gold.' This is a straw in a lot of different winds -- the rise of China to global prominence on the back of its huge dollar reserves is one of them.
(b) Obama announces new CAFE/ emissions standards. This is our second auto industry headline of the year. The program is projected to reduce oil consumption over the period from the 2012 to the 2016 model years by approximately 1.8 billion barrels. (As you probably would expect, dear reader, I think such projections warrant skepticism.)
June. (a)US Supreme Court decides Traveler's Indemnity v. Bailey. Asbestos is one of the big "mass tort" issues that have rocked our civil legal system in recent decades. Travelers thought it had a deal that limited its exposure via a settlement trust established by order of the federal district court in Manhattan back in 1986. Unfortunately for them, state law claims and "collateral attacks" made that trickier than they had expected.
(b) Elections to Euro parliament strengthen the center-right parties. For purposes of the italicized statement, anyway, we may understand the term "right" to mean the group of parties or factions that are suspicious about the role of the Parliament they are joining, either on behalf of separate sovereign nationalisms or on behalf of EU-regulated global commercial concerns or both. The "left," which lost this round, consists of those that see a need for a more activist EU.
From here on we are presenting just one headline per month.
July. Cash-for-clunkers program in the US. This is our final US-auto-industry headline. There was always an ambiguity to the plan. Was it designed chiefly to stimulate the auto industry, or to improve fuel efficiency? The goals aren't obviously in harmony. Still, any critique of its efficacy in one respect could be deflected by pointing to the other.
August. Settlement of US/Swiss Dispute over UBS Confidential Client Information. The relationship between Switzerland and the US seems to have grown closer in a number of respects over the last year.
September. Target Corp. declassifies its board Reform has come to the field of corporate governance, though what over-all impact such reforms may end up having it is hard to say.
October. Ireland votes in favor of Lisbon Treaty, effectively secures the new continent-wide government It is difficult to tell where Europe is headed. The Lisbon Treaty would certainly seem to be a step toward closer political integration. But the European Parliamentary elections, as noted above, were won by parties skeptical thereof, and there are a lot of centrifugal forces at work.
November. What is patentable? SCOTUS hears arguments. My own expectation is as follows: (a) the Justices will uphold the court below in its finding that Bilski's 'process' is really an abstract idea and thus not patentable; and (b) they will work harder than the court did below in order to define what is or isn't an abstract idea.
December. Two crucial bills advance through the Houses of the US Congress -- the health care reforms and the financial-regulatory system overhaul.
It seems very likely that something will be enacted into law in both of these areas sometime early next year. But I could be wrong even about that.
15 August 2009
Chimerica: An Exchange
Two valuable pundits, Niall Ferguson and James Fallows, last month discussed the question what is wrong with Chimerica, and how may it be fixed.
The premise of this discussion is that the People's Republic of China and the United States of America have entered into an implicit alliance, with China supplying the cash for the implicit hegemon.
So the world is run by Chimerica and Chimerica still has to figure out how it is to be run.
That is all the background you need. Click on the link and decide what you think. Thanks.
The premise of this discussion is that the People's Republic of China and the United States of America have entered into an implicit alliance, with China supplying the cash for the implicit hegemon.
So the world is run by Chimerica and Chimerica still has to figure out how it is to be run.
That is all the background you need. Click on the link and decide what you think. Thanks.
07 February 2009
Edward Elgar Publishing
Edward Elgar is a UK based publishing company focused on economics, finance, and management.
So: why is such a company named after an orchestral composer?
I presume the reason is simply that until quite recently Elgar's face graced the 20 pound note, the most common note in circulation in the UK. There are many such notes with his visage still in use, although they are being phased out in favor of a note with the face of Adam Smith.
Anyway, I've recently received a catalog of EE's new 2009 titles and I thought I'd list a few of the more intriguing ones here. I'll add a word of explanation where it seems necessary -- some of the titles explain themselves pretty well.
Alice de Jonge, Corporate Governance and China's H-Share Market. The H-Share Market consists of mainland Chinese companies listed on the exchange in Hong Kong, with prices denominated in HK dollars rather than in the yuan. The catalog says that the book is "a story of individual firms being pragmatic in mediating the different agendas of state agencies that own or control them."
Klaus Liebscher, Josef Christl, Peter Mooslechner, and Doris Ritzberger-Grunwald, eds., Currency and Competitiveness in Europe
Richard A. Iley & Mervyn K. Lewis, Untangling the US Deficit: Evaluating Causes, Cures and Global Imbalances
Donato Masciandaro, Elod Takats, Brigette Unger, Black Finance: The Economics of Money Laundering
Philip Arestis & Malcolm Sawyer, eds., A Handbook of Alternative Monetary Economics What is "alternative monetary economics"? The basic idea of the AME theorists is that mainstream economics treats money as essentially a unit of exchange, a more efficient substitute for barter. The aternative, though, is to treat money as in essence a unit of account, a way of incurring and keeping track of debts.
Jorge Martinez-Vazquez & Jose Felix Sanz-Sanz, Fiscal Reform in Spain: Accomplishments and Challenges. Franco has been dead for a long time now. What happens in the budgeting and taxing institutions of a nation making a peaceful transition away from fascism?
So: why is such a company named after an orchestral composer?
I presume the reason is simply that until quite recently Elgar's face graced the 20 pound note, the most common note in circulation in the UK. There are many such notes with his visage still in use, although they are being phased out in favor of a note with the face of Adam Smith.
Anyway, I've recently received a catalog of EE's new 2009 titles and I thought I'd list a few of the more intriguing ones here. I'll add a word of explanation where it seems necessary -- some of the titles explain themselves pretty well.
Alice de Jonge, Corporate Governance and China's H-Share Market. The H-Share Market consists of mainland Chinese companies listed on the exchange in Hong Kong, with prices denominated in HK dollars rather than in the yuan. The catalog says that the book is "a story of individual firms being pragmatic in mediating the different agendas of state agencies that own or control them."
Klaus Liebscher, Josef Christl, Peter Mooslechner, and Doris Ritzberger-Grunwald, eds., Currency and Competitiveness in Europe
Richard A. Iley & Mervyn K. Lewis, Untangling the US Deficit: Evaluating Causes, Cures and Global Imbalances
Donato Masciandaro, Elod Takats, Brigette Unger, Black Finance: The Economics of Money Laundering
Philip Arestis & Malcolm Sawyer, eds., A Handbook of Alternative Monetary Economics What is "alternative monetary economics"? The basic idea of the AME theorists is that mainstream economics treats money as essentially a unit of exchange, a more efficient substitute for barter. The aternative, though, is to treat money as in essence a unit of account, a way of incurring and keeping track of debts.
Jorge Martinez-Vazquez & Jose Felix Sanz-Sanz, Fiscal Reform in Spain: Accomplishments and Challenges. Franco has been dead for a long time now. What happens in the budgeting and taxing institutions of a nation making a peaceful transition away from fascism?
25 September 2008
"The mountains are high"
There's an old Cantonese saying: The mountains are high and the Emperor is far away.
It means what the late American politician Tip O'Neill also meant when he said, with less imagery but greater concision, "All politics is local."
I encountered this proverb in a novel recommended to me by a friend, Fragrant Harbour (2002) by John Lanchester. It comes into play there because one of the characters, Matthew Ho, runs an air conditioner manufacturing business, headquartered in Hong Kong but with certain crucial investments in Canton, the province of mainland China surrounding that special administrative region.
Matthew's investments run into trouble, of a sort that's make-or-break for his business as a whole. He tries to threaten a provincial official with the prospect of goig over his head to Beijing, only to be told: "The mountains are high and the Emperor is far away." We do our own thing around here, buddy.
Read about Lanchester's novel here or just admire the front cover above.
To test whether the proverb was perhaps the product of Mr. Lanchester's imagination, I did manage to drop it into a conversation I had with a businessman while I was in Hong Kong recently. He recognized it, and seemed pleased that I knew of it.
The idea that the southeast of China does things differently, that the mountains are high, etc., long predates the arrival of the Brits in the region. It may date to a Mongol invasion of China in the 13th century. As the Mongols conquered the north, the remnants of the Song dynasty retreated into what Canton. Though the Mongols eventually ended resistance there, too in one of the largest naval battles of history, and the Cantonese had to recognize Kublai Khan as their emperor, they may have begun soon thereafter to take solace in the idea expressed in the proverb.
He's up there in his "stately pleasure dome," and we're here shaking down air conditioner makers.
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