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Chan Akya
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Beyond parody
Who needs parody when the news - such as ''Governments borrow to fight debt crisis'' - already fills the spot, supported by ill-informed commentators and readers/audiences? People in the West, emerging from a period of prosperity and "entitlement'' are ill-equipped to deal with this crisis, and hard facts are putting comedy writers out of work.
(Apr 2, '13)
EU takes sinister path in Cyprus
The European Union's action against banks and (notably Russian) deposits in Cyprus marks a departure from usual EU practices to something more sinister and ''directed''. If in the name of social justice for Europeans, Russian depositors can be targeted today, what next - Muslims tomorrow and Chinese investors the day after? (Mar 21, '13)
Of mutton and lamb
Britain has been rocked by the scandal of liberal portions of horsemeat being found in what consumers thought was beef. It has been less shocked by a health scandal involving hundreds of negligent hospital deaths. The different levels of apparent concern could be down to a media conspiracy - or just a preference for juvenile jokes over grim facts of healthcare.
(Mar 8, '13)
All the world's a stage...
The sight of Michelle Obama involved in the Oscars circus was, for some, an affront to the dignity of the office of the United States president. They miss the point - our time requires those in power - from presidents to treasury secretaries - not so much to enact their authority but merely to act as if they were doing so. And an important part of such acting is to be seen to be acting.
(Feb 26, '13)
Ride the chaos
curve
Little about the present bond and stock markets makes
sense, with ridiculously low bond yields and laughable share valuations.
Investors would be advised to consider chaos and game theories rather than
fundamentals (or take a speedier route to wisdom and just buy gold). (Feb 8, '13)
Schumpeter's long revenge
The recent demise of various high-profile companies, including HMV and
Blockbuster, highlights the benefits of creative destruction, while posing
uncomfortable parallels where non-market forces interrupt this process. While
the French keep their industrial giants like Peugeot alive, capital thus wasted
will add inexorably to longer-term liabilities. (Jan
22, '13)
Deaf frogs, markets and credit
ratings
Much like central bankers who took and applied the wrong lessons from the
financial crisis, we now have sundry pundits pronouncing the end of credit
quality as a determinant for sovereign debt yields, due mainly to the strong
performance of the category this year. That is the primary reason there will
very likely be a blow up in the global sovereign debt market over the course of
2013. (Dec 21, '12)
A paean to (corporate) tax
evasion
Tax evasion has become an international obsession particularly as bankrupt
governments attempt to raid companies to cure their own excesses. Yet when done
by companies, such savings actually benefit society at large due to
recirculation of productive savings to capital investments that bear higher
returns than generic government waste. (Dec 18, '12)
The end of Japan as we know it
Between a dysfunctional democracy that seeks to return traditional parties that
show little innovation, an economy that is losing competitiveness with every
passing day, a demographic time bomb and prickly relations with its neighbors,
Japan as we know it may simply cease to be a major functioning economy over the
next couple of decades. Political paralysis may embody rather than be the cause
of a sclerotic economy. (Nov 26, '12)
UBS goes under cover
The decision of UBS to close its investment banking side is a response only in
part to regulatory action against "casino banking". It also reflects a slump in
fee income and that global banking is going private, beyond the disclosure
requirements of the corporate world. (Oct 29, '12)
Regulators and technology
Microsoft's launch of its new operating system, Windows 8, was spoiled by Apple
grabbing the limelight and European Union regulators moaning about the absence
of browser choice. It was little consolation that the EU suits were merely
demonstrating their own ineptness. (Oct 26, '12)
Benign neglect vs aggressive
indifference
The last of the US presidential debates confirmed what has been perfectly clear
for a while - whether the incumbent or the challenger is in the White House
next year, US policies aren't going to change on the economy or foreign policy.
The all-noise-and-no-heat show will be seen as yet another piece of evidence
that the US will decline to irrelevance even as China assumes its mantle.
(Oct 24, '12)
A tale of two princes, part 2
The tale of the Bumi price collapse unravels into a potentially messy divorce
for the Indonesian tycoon from his British partners; but along the line also
raises some serious questions on what it is about the search for capital that
drives Asian tycoons into Western markets with results that seem primed for
disappointment. (Oct 19, '12)
Bumi price crash: A tale of two
princes
A curious tale has popped up in the business pages of late, one that brings to
mind a modern-day South Sea Bubble as it were. It combines politics in a
country that houses the world’s largest Muslim population whilst bringing to
the fore a Jewish family and a wealthy Indonesian tycoon. This is potboiler
stuff, and not even half the story may have been written yet.
(Sep 28, '12)
Maybe it's just me …
So today's main news is that Iran will be building a nuclear weapon that could
wipe out Israel, but is the new iPhone 5 any good at all … hang on there, Xi
has gone missing and that surely means … al-Qaeda is back in Libya with a bang
you say … what, you got the topless photos of Kate Middleton? Global media is
suffering from changed economics, and this has destroyed centuries of
experience in clearly articulating stories. (Sep 18,
'12)
President Ryan
Paul Ryan, putative candidate for the job of Vice President in a Romney
administration, represents a major, if not the first significant, ideological
challenge to the Keynesian idiocies at the heart of government policies in the
US and Europe since 2007. Selecting a vigorously Austrian candidate as his
running mate may have been cold political calculations for the otherwise
uninspiring Mitt Romney, but it is a stroke of genius.
(Aug 17, '12)
Olympics of greed and fear
This year's Olympic Games may be marked by inadequate infrastructure, strikes,
poor weather and acts of violence along with great athletic achievements. But
whatever other records are broken in London, they may be most remembered as the
"Greed and Fear Games". (Jul 27, '12)
Laundry of your choice
HSBC's travails in the US Senate money-laundering investigation risk being
trivialized, when in reality the careless acts of a few can compromise the
lives of thousands. That said, governments and banks are ill-equipped to handle
the complexities of today's technological, privacy and transactional
challenges. (Jul 20, '12)
Half a Ferris wheel
Five years after the global financial crisis broke, the Europeans have failed
to set their house in order, while the United States has moved forward but with
little thought to ending the country's financial follies. While a half-built
Ferris wheel is of little use, a completed one is of little more value.
(Jul 13, '12)
Who put the lie in Libor?
Britain's Barclays bank, and its now former chief, American Bob Diamond, have
been fingered as the bad boys in the rate-fixing Libor scandal. The real
villains, though, are found elsewhere, snugly in charge, for instance, at the
West's main central banks. (Jul 6, '12)
Naked emperors, holy cows
and Libor
It would take a brave person to draw a line between tottering Arab
dictatorships, American bankers under siege, the European sovereign debt
crisis, credit rating agencies losing their mojo and this week, the Libor
scandal. Institutionalization of habits tends to create its own perverse ripple
effect within which the seeds of chaos are embedded. This isn't about
capitalism versus socialism but rather the appreciation of inertia as the
greatest force known to mankind. (Jun 29, '12)
The blonde pimpernel
Boris Johnson, the blonde, unruly and newly re-elected mayor of London, may
well be the closest thing to a political voice in Europe who is unafraid of
stating obvious necessities to cut government spending, roll back Keynesian
policies and let the markets do their work. Johnson goes against the European zeitgeistand,
should he so choose, has the opportunity to be the modern day Pimpernel.
- Chan Akya (May 14, '12)
The crisis tales roll on
Exile on Wall Streetby Mike Mayo
Mike Mayo may be the most suitable person to stare down the CEOs of the world's
top banks. As he points out in one of four books by various others reviewed
here, the global financial crisis "didn't occur because of something that banks
did. No, it was the natural consequence of the way banks are, even today."
(Apr 25, '12)
My kingdom for a 5-year-old
It is obvious to the average five-year old that a default has taken place in
Greece. No less obvious - yet largely ignored so far - is that the levels at
which government bonds issued by rich countries currently trade just do not
reflect reality. (Mar 16, '12)
The jaded sage
Sage of Omaha Warren Buffett, richer (surely) than Croessus, and an American
hero, advises holding on to soft-drink shares rather than gold. Two decades
from now, economists and finance students may ponder the madness of times that
made a man like him the world's foremost investing genius.
(Feb 28, '12)
Debt, cash and bonfires
As a deal on Greek's debt is reached - or perhaps not - debt frenzy has caught
on in Europe, with a billion in bail-out money available for every outstretched
hand. No one wants to listen to the Germans speaking sense, but the Hungarians,
demonstrating the likely consequences, have found a new way to keep warm.
(Feb 10, '12)
The Pied Piper of Humbug
A gaggle of comic and self-righteous critiques of the evils of capitalism -
amid the assorted chirping from Davos - led us on a merry dance over the past
week. We've heard the tune before, but the piper's credibility is at stake in
the absence of viable institutions to police fast-changing markets.
(Jan 27, '12)
Draghi: Europe's master of
illusion
Belief in the markets, and the breathtaking bravado of new European Central
Bank president Mario Draghi, may already have saved the euro - just two months
into the job - thanks to the impressive illusion of stability his handouts have
created. Mere facts will do nothing to derail such a rally.
(Jan 20, '12)
Year of Dali
This year has been fraught with surprises, even for the most experienced of
observers - not so much on the scale of "how did that happen", but more on the
lines of "why couldn't they escape that". Whether in the travails of humanity
in the face of natural disasters such as earthquakes, floods and tsunamis, or
merely the goings-on among financial assets and politicians, surrealism has
more than crept to the surface - it has usurped the entire proceedings.
(Dec 21, '11)
The trick to flying
As Europe's leaders try to muddle through to a resolution of their debt crisis
and the United States does no better on fixing its budget deficit, it is
possible to consider the most likely outcomes. Most involve the word "decline",
and even there they carry a strong whiff of wishful thinking.
(Nov 23, '11)
Financial fascism
Europe's leaders, in their treatment of Greek wishes for an austerity
referendum, have brought back the era of fascism as they contend with the
financial contradictions that the euro project has become. The elite of Europe
are choosing to perpetuate the euro's existence at the expense of the people.
(Nov 7, '11)
Europe - into the end game
Concerted action is required to resolve the eurozone's deepening woes, yet the
institutions in Europe and the United States required to play a key role are at
war with each other, while external intervention, say from China, has little in
the way of positive history. We are approaching, or are already in, the end
game for the euro project. (Sep 14, '11)
JACKSON HOLE
Deeper than '08 ...
The world's central bankers gathering in Wyoming's Jackson Hole had little to
cheer them during their annual retreat, with three years of effort poured into
generating an economic recovery looking increasingly a wasted effort. With
Greece's latest posturing on its debt, 2008 could soon look a relatively minor
crisis. - Chan Akya (Aug 29, '11)
London riots reduce lies of left
to ashes
London's burning shops are proof that rioters aren't sated but spoiled by
welfare states, whose costs will never be recovered absent miraculous economic
growth. Europeans must cut the welfare state today, or the Chinese and Indians
will do it for them tomorrow. (Aug 15, '11)
A world without a benchmark
Americans who question the validity of the downgrading of United States debt by
rating agency Standard & Poor's, or China, which has called on America to
rein in its ballooning budget deficit, are almost entirely wrong with their
assumptions of how this particular fork in the global financial crisis road
needs to be navigated. New rules apply in the markets now.
(Aug 8, '11)
Beggars and choosers
The European Union, like a well-meaning passer-by handing out coins to beggars,
has thrown more cash at Greece, blind to the truth of what is involved.
Markets, with an eye on Spain and Italy, will test the claim that this is the
"first and only" such deal, and the core Greek solvency problem remains
unresolved. (Jul 22, '11)
Murdoch, Moody's and
Mandelbrot
The scandal enveloping Rupert Murdoch's News Corp echoes the evolution of the
crisis in global markets, seen in the series of events that threatens to bring
the United States' credit rating down. In events triggering conflict, lost
credibility or a collapse in confidence, the same trajectory applies - and the
smart money follows mathematician Benoit Mandelbrot.
(Jul 19, '11)
Say no to 'Sino'?
The Sino-Forest scandal further dents the reputation of Chinese companies on
the world's stock markets. More transparency, thinner skins on company bosses,
and more good accountants and lawyers in China would make it less necessary for
them to raise funds abroad. Otherwise, Prada and its like will carry on
pocketing the real cash in China's backyard. (Jul
11, '11)
Pointless Europe, redux
Developments in Europe over the past three years confirm the view that the
continent operates on emotional rather than economic principles to the point of
becoming entirely dysfunctional. The transition from major economy to derelict
tourist destination will soon be complete. (Jun 24,
'11)
Bank folks can't count
The illusions of grandeur (and questionable math skills) displayed by the
European Union as it throws another US$86 billion into the Greek debt pit
recall the contrasting basketball athleticism of Wesley Snipes and Woody
Harrelson. The markets are at least recognizing that survival of the euro is no
slam dunk. (Jun 13, '11)
Saleem in the shadow of Massoud
In 2001, al-Qaeda killed Ahmad Shah Massoud, the Lion of Panjshir and leader of
the Northern Alliance, as he had become an inconvenience to the Taliban in
Afghanistan. Is it possible that the killing of Syed Saleem Shahzad, Asia Times
Online's Pakistan bureau chief, took place because he had become an
inconvenience to those planning a major operation, possibly against Israel?
(Jun 2, '11)
Web of self-deceit
American disenchantment with the supposed double-game played by Pakistan in
taking money from the US government while housing terrorists can perhaps be
mollified by the realization that much the same game has been played with
taxpayer's money in the US banking system. Throwing other people's money at a
problem without full understanding or control is to blame in both cases.
(May 6, '11)
With friends like these
The notion that central banks, governments or multilateral agencies would come
to grips with the complexities of the financial system let alone muster the
courage to do something meaningful about the problems has been dealt a fatal
blow by a recently released trinity of reports. There is no hope for the global
financial system as things stand today except to continue bobbing from one
crisis to the next. (Apr 21, '11)
S&P adds its own
footnote to crisis
S&P's declared willingness to downgrade US government debt formally marks
the possible end of that debt's status as the global benchmark for risk-free
assets - at a time when the ratings business increasingly comes under attack
from the same government. The move means an uncomfortable way forward for the
global investment community. - Chan Akya (Apr
19, '11)
Calculated risk
As we have seen only too clearly, government officials and other people in an
earthquake-prone area tend to act in a fashion that suggest an underestimation
of risks, while with respect to nuclear power plants their behavior suggests an
overestimation of risks. The fault is not with them; rather it lies in what
they think the rest of us expect from them.(Mar 21,
'11)
Do you feel lucky?
For four years, central banks have fired salvo after salvo in their efforts to
keep economies from collapse. Now, with widespread unrest further unsettling
market nerves, investors must surely be asking: "Have they anything left in
their armories?" (Mar 11, '11)
Ostrich investing
Ignoring all manner of macro risks, investors appear to be ever focused on
answering the rallying call of risk assets. This fashion for "ostrich
investing" is bound to end in tears, but the strategy for everyone appears to
be to push the day of reckoning as far into the future as possible. That
entails a concerted effort to sweep beneath all the world's carpets some
inconvenient truths. Go ahead and dance, but stay near the exit.
(Jan 28, '11)
... And they all fall down
Tunisia is just the sign of things to come, not just for overwrought Arab
nations but for demographically challenged European countries. The little
nugget that all politics boils down to the Golden Rule (he who has the gold
makes the rules) is set to be challenged as those without the gold strive to
make amends for a century of inaction. (Jan 19, '11)
The value of a nuclear Iran
A nuclear-capable Iran may be exactly what is required to destabilize the
Wahhabi establishment, reduce support for extreme groups such as al-Qaeda - and
usher in a new era of democracy across the Middle East. If the issue of Iran's
attitude towards Israel can be addressed comprehensively, a strong Shi'ite
state may well suit the strategic requirements of both the West and Asia.
(Dec 17, '10)
The saving grace of markets
Short-sellers aren't evil. Cynics and skeptics aren't bad people. A failure to
toe a government's line of thinking isn't a crime. Fallacies spread by those in
power are falling away, with lies being exposed and wrong-doers punished - at
least in the markets; in turn changing government behavior.
(Dec 10, '10)
Bottom fishing for the brave
Gunfire on the Korean Peninsula, a bailout for Ireland - there could be much
more to come of that specific catalyst to creating value; panic. Many points of
weakness exist, not least a collapse of European unity. While a sharp sell-off
is unlikely, the patient and the brave can scoop up long-term value.
(Nov 24, '10)
(F)Ire and Ice
Crisis-hit Iceland froze out bank creditors as it sought stability, but in
Ireland the Dublin government has had to bail out banks, impose austerity
efforts - and even then hold out a cap for help. That is the price of eurozone
membership and the key to why the European project is over.
(Nov 19, '10)
THE POLITICS OF DEBT
Pay up, or wiggle out
The debt loads carried by democracies can be hard to confront when
externalities are altered, so a little discipline is no bad thing. When it
comes to seeing their savings disappear or banks being rescued, aging voters in
particular know the decision they will back. - Chan Akya
(Nov 16, '10)
This article concludes a two-part report.
PART 1:
Debt and democracy
Debt and democracy
Strikes in France and the United Kingdom, mass mailing of letter bombs in
Greece, the ruling party rejected in the United States - with the cost of debt
and austerity in Western democracies mounting in more ways than one,
old-fashioned dictatorships are looking a safer bet for investors.
(Nov 10, '10)
The wizards of ABS
With the patina of collateral being peeled away from the edifice of
asset-backed securities , what remains is simply a mountain of debt that cannot
be serviced by America's banks, nor its government. A rapprochement of sorts
between the US and China is a vain bid to hold the house of cards from simply
falling down. (Oct 29, '10)
The Incorrigibles
The end game of a second round of quantitative easing is all but done as a deal
between the United States, Europe and Japan. Fans of quantitative easing round
2 (or QE2) should perhaps pay attention to the other QE2 - an aging cruise ship
that ruled the seas in its day and is now a rust bucket parked outside Dubai.
The monetary version will end up creating more rust buckets for future
generations to ponder. (Oct 15, '10)
Circular firing squad
Competitive devaluations of the sort being enforced by Japan, the United
States, China and now Europe spell the end of the camaraderie the Group of 20
attempted to enforce to usher in globally coordinated economic growth. Trade
wars are the tip of the iceberg; what lies beneath in terms of stock and bond
market destruction represents the more credible threat to global prosperity.
(Oct 1, '10)
Salami tactics
Big crises in politics and economics tend not to happen all of a sudden -
although those in power, when they are not themselves blind to events, might
wish ordinary folk to see things that way. They develop bit by bit, with risk
managers on the receiving end obfuscating and procrastinating as the rot
develops. Call it salami tactics. (Sep 24, '10)
The 'tragi-terror' that is Pakistan
With any semblance of a nation essentially washed away in the recent floods,
Pakistan will most likely once again descend into anarchy; to be rescued by the
armed forces in its role as the sole surviving national institution. And the
country's plight remains largely ignored by the United States and Europe.
(Sep 13, '10)
Obama's battles in Asia
Across Asia, from Japan to China to Indonesia, United States President Barack
Obama has missed opportunities that are likely to haunt America for some time
to come. It's not too late, though, and greater engagement would go a long way
towards rectifying matters. (Aug 13, '10)
Unintended consequences
Keynesian policies intended to get the world out the financial crisis have
produced the opposite of the desired results for two years running. To persist
with these policies, as some governments appear determined to do, is worse then
unfortunate. It is a simple case of insanity. It is time for tightening.
(Aug 9, '10)
Burqa over the Bastille
The French move to ban women from wearing the all-covering burqa - with
other European countries possibly following suit - has elicited widespread
public and media reaction. Tellingly, it appears that Europe and America have
polar opposite points of view. The "war on terror" could have something to do
with this. (Jul 23, '10)
The 'why' of Europe's banks
The dismal state of European banks, in stark contrast to the Agriculture Bank
of China's world record US$22 billion share sale, offers Chinese authorities a
window on what should - and should not - be done to prevent Chinese lenders
heading in the same direction that European banks followed over the past 20
years. (Jul 9, '10)
The short list
None of the numerous reasons being given for this week's steep stock market
declines should come as a surprise, and the sensible response is simple - sell
almost everything, and if you want to buy, go low-tech, small (Singapore), or
African. Most obviously, go gold. (Jul 2, '10)
Bhopal, BP and karma
The public mauling of BP chief executive Tony Hayward by US congressmen stands
in stark contrast with the attitudes of the United States government, courts
and industrialists towards industrial catastrophes visited by US businesses on
communities overseas. If United Carbide's reaction to the disaster in the
Indian city of Bhopal, for example, were the template, Hayward would merely
wash his hands of the whole business. (Jun 18, '10)
The cup of joy
Emerging football nations such as China and India may not be participating and
the South African hosts may be nervous over predictions of low revenues and
soaring costs, but millions in Asia still can't wait for Friday's start to the
2010 World Cup. Gamblers may fancy outsiders like North Korea - who will
hopefully just be launching shots on goal - but a real wild card entry is the
weather. - Chan Akya (Jun 9, '10)
The new order is chaos
This week's stock trading should tell academics and economists all they need to
know as they struggle to define the "new normal". It isn't about relative
economic growth or the dynamics of inflation. It is the return of gut-wrenching
volatility that places investing in a permanent state of siege. Chaos is
the new order; a constant state of crisis is the new normal.
(May 21, '10)
Yes, debtor
For all her posturing for tough austerity measures by countries asking for
bailouts, German Chancellor Angela Merkel's eventual retreat underlined the
power of European bureaucrats who engineered the eventual eurozone bailout
package despite the absence of any democratic mandate to pull it off. The
decisions being taken by Brussels appear to have nothing to do with the popular
will of Europeans. (May 14, '10)
Keynesian Waterloo
The numerous factors that contributed to Thursday's record intra-day decline in
the Dow Jones Industrial Average should not mask that we are witnessing the
consequence of government overindulgence in spending as buyers of debt now fear
an explosion of credit risk. Smart advocates of Keynesian profligacy should
recognize the magnitude of this rout and consider quiet exile.
(May 7, '10)
South Park - the markets
Somewhere along the line a joke can suddenly seem not so funny, and the fun and
games suddenly stop - sometimes when some loon pulls out a gun, real or
otherwise. The markets are not immune to innocuous squibs masquerading as real
explosives, or vice versa. Recently, they all seem to be hallmarked "G".
(May 5, '10)
IPL - or India's predictable
larcenies
The Indian Premier League cricket tournament has over three years gone from a
zero revenue base to a hugely popular event, securing US$1 billion in
television contracts. With that cash has come corruption, politics and sex, as
yet another emerging market effort to supplant developed country brethren
implodes on an inability to adopt adequate governance standards.
(Apr 23, '10)
BOOK REVIEW
Lewis comes up short
The Big Short by Michael Lewis
The celebrated author of Liar's Poker returns to his old hunting ground
of the financial markets to chase down the characters who saw the financial
crisis coming and backed their insights with hard cash. The "who" and the "how"
are vintage Lewis. Missing, unfortunately, is the big question(s) - "why?". - Chan
Akya (Apr 16, '10)
The perfect crime
Rating agencies, for all their role in fueling the financial crisis, survive
essentially untouched by subsequent regulation - official zeal no doubt
tempered by government needs to raise cash (and get ratings) in the bond
markets. If ever there was an issue for Asian countries to take a lead on, the
pursuit of truth in credit ratings, this is it. (Mar
26, '10)
Liar's punishment
Deceit at the highest levels increasingly appears the norm - from the nonsense
of Greek debt figures to the accounting sleight of hand that US regulators
accepted at Lehman Brothers. Capping them all, perhaps, are impossible claims
that exports will haul the world into full recovery. The lesson? Believe no
one, sell everything (except solid precious metals). And distrust even this
warning ... (Mar 19, '10)
The blame game
European governments scrabbling for a way to resolve the Greek debt crisis are
focusing on the role played by peddlers of credit default swaps. Money was
certainly there to be made by those who anticipated events, but government
energies would be better spent. As that ancient Greek Sophocles put it, no one
loves the messenger who brings bad news. That's no reason to shoot him.
(Mar 5, '10)
Asia's permanent advantage
Traveling around Asia quickly teaches that "growth" is more than economic
statistics - it increasingly means efficient airports, good roads and quality
service that mock "developed-world" counterparts. Asia, with the financial
muscle and determination to continue this trend, is developing an apparently
permanent advantage, leaving Europe and North America ever further behind.
(Feb 26, '10)
Oedipus wrecks
The European Union's public pledge of support for Greece makes clear for the
rest of the world that, off-stage, there is no government in Europe, let alone
one that is effective or coordinated. Currency death and economic pain among
this family of nations has just started as the latest Greek tragedy works
towards its climax. (Feb 12, '10)
Hair of Damocles' sword
United States Treasury Secretary Timothy Geithner's future in office might be
short, with a warning by Moody's Investors Service that the US is at risk of
losing its triple A credit rating, giving more ammunition to critics of his
handling of the financial crisis. Whenever his successor takes over,
humiliating deals with China are likely to be part of a thankless work load.
(Feb 5, '10)
Vestigial organs
As governments in the United States and Europe figure out how to bail out their
struggling states - California and Greece the prime candidates for failure -
the rest of the world can consider the body's vestigial organs, such as the
appendix, and wonder if such a fate now awaits the US dollar and the euro.
(Jan 29, '10)
Bonus battles
The popular view that bank bonuses represent greed, gluttony and perhaps lust
ignores the factors allowing banks to make such money - central bankers' sloth
and government pride in their financial systems. When the bonus drama ends, it
will be because people realize the true culprits are, indeed, governments.
(Jan 22, '10)
Nine pins from '09
The ghosts of the year past are wasting little time in making their chilling
presence felt on the investment outlook for 2010 - from Alcoa's earnings
results to China's monetary tightening to increasing preference for cash, the
harbingers are spooky at best. (Jan 15, '10)
What's in a name?
Renaming the world's tallest building to honor Dubai's financial rescuer may
mark the death of a non-resource-based model of development in the Arab world.
It could also serve to encourage other similar changes - RBS could be renamed
the People's Bank of Britain, or California (given the right terms with China)
could become Xinjiang (West). (Jan 6, '10)
It's who you know
Perhaps the best way to summarize 2009 would be to look at the obvious winners,
such as Wall Street and Big Government, against less obvious losers, such as
taxpayers, the unemployed and small businessmen globally. With the Japanese way
of capitalism well established, the year could be remembered as sowing the
seeds of the longest depression the world has seen. While that may be an awful
thought, think what will need to happen to end such a depression.
(Dec 23, '09)
How to solve climate change
The failure of the Copenhagen summit on climate change is exactly as expected.
Whenever people try to come together and solve an issue that is of importance
to all of humanity, the binding force has to be greed or fear; but never
altruism. There isn't enough fear in climate science yet, therefore a monetary,
that is, economic approach, is the only notion that could've worked.
(Dec 21, '09)
'Good peg' illusion
Whether a currency peg is intended to address external or domestic imbalances,
it will likely be the source of significant volatility, with some effects
visible and others not quite so. Ignoring the basic truths of the "unholy
trinity" will always prove detrimental in the long run to the interests of
those who wish to take undue advantage of a currency peg.
(Dec 8, '09)
Dubai, debt and a return to
reality
The trouble with debt-burdened Dubai isn't that its woes could trigger serious
shocks around the global financial system. Rather, that irrespective of
liquidity conditions, the world remains an unforgiving place for those who
borrowed too much and gave up too little in return. Various other notions, such
as "too big to fail" and "implicit guarantee", will soon fall by the wayside.
(Nov 30, '09)
Hollywood, the macabre
The latest and most popular releases from Hollywood present disturbing
vignettes of where the West in general and the United States in particular are
headed. Teenage vampires in The New Moon represent the age-old quest for
immortality, even as 2012 plays truant with Armageddon. Both represent a
grudging acceptance, if not adulation, for unattainable elite status.
(Nov 24, '09)
No country for gold men
People of all nationalities should now look to gold as the ultimate hedge
against inflation as well as globally irresponsible monetary policy, as the
absence of an exit strategy from central banks combined with an explicit
targeting of inflationary increases would create the ideal conditions for
wholesale destruction of savings stored through financial instruments.
(Nov 13, '09)
Leverage not level
The picture is familiar - higher oil prices, a lower US dollar, and rising US
stocks. Missing from the picture is the leverage taken in, and related to,
monetary expansion in China - and what happens once that expansion is removed.
(Nov 6, '09)
Time to go Dutch
The ruling by the European Union Commissioner for Competition that Dutch bank
ING Groep should sell its insurance unit and US banking arm demonstrates that
the Europeans, unlike their US counterparts, are taking the right route
regarding stewardship of the global financial system.
(Oct 30, '09)
The truth about banks and dogs
Over-aggressive, yappy and totally incapable of fending for themselves -
today's banks are similar to small breeds of dogs created by man's manipulation
of nature. Banks know full well that any misstep will lead to a government
rescue, just as Chihuahuas and Pekinese turn into a furry ball of trembling
fear without their masters. (Oct 23, '09)
Us and them
Controlling the renewed menace of the Taliban will involve actions in the
United States and Europe to destroy the demand for heroin and oil; the twin
fuels of Islamic fundamentalism. Getting those achieved may not be the most
popular course of action, but this is more likely to succeed than mere
adjustments to the current war strategy. Historical evidence involving the
decline of the British Empire favors the notion, too.
(Oct 19, '09)
Double or quits
As the employment picture in the United States grows ever more weak, Keynesian
economists are producing their standard calls to government - spend more, and
the good times will come. This after seeing vast amounts already poured into
rescuing the economy come to little effect. It is the cry of despair of a
failing gambler. (Oct 5, '09)
One man's terrorist ...
Behind the defeat of the Liberation Tigers of Tamil Eelam in Sri Lanka and the
killing of Pakistani Taliban leader Baitullah Mehsud are stories of countries
creating bands of terrorists to do things that were impossible for those in
power to be seen to be doing directly. In this dangerous game, blowback is
inevitable. (Oct 2, '09)
Running out of road
China, of all countries the best placed to mitigate an asset bubble, appears
the most concerned about the impact of government stimulus packages. Elsewhere,
the assumptions underlying hopes of better times ahead look all too flawed.(Sep
28, '09)
Moral hazard is back
There is clearly a class of people who do not face the full force of the law
because of who they happen to be. The same stunning level of corruption is also
true for banks, bailouts and financial systems. This will be the unsavory
legacy of the Lehman Brothers aftermath. (Sep 18,
'09)
The Surreal Symphony
World governments have succeeded in postponing the reckoning for leverage and
asset prices, not to mention global real incomes, without any prospects of
avoiding a repeat of the very circumstances that led to the current financial
crisis. If this were a fairy tale, it would be both surreal and have a nasty
ending. It is not, so we are just left to ponder the latter ...
(Sep 11, '09)
We are all Japanese now
The end of capitalism as the system du jour will happen not with a bang
but with a whimper. Lower growth, higher debt and more bank failures will
feature in the distant future; but for now, many people will celebrate the
death of laissez faire and the advent of Japanese capitalism in its place.
(Sep 4, '09)
Prada to Pravda
European luxury brands championed the consumerism of the United States and
European countries that led to the global financial crisis; that situation is
now being replaced by a pseudo-reality straight from the pages of old Soviet
newspapers. Now, governments dictate market movements, even as they slant news
coverage to suit specific requirements. (Aug 28,
'09)
Crisis hindsight
As the storm recedes, at least for a while, from the worst financial crisis
since World War II, bookshelves are littered with accounts claiming insight
into how and why it happened, if not why so few saw it coming. Whether you opt
for the views of PIMCO's Mohamed El-Erian, famed investor George Soros or the
insightful but relatively obscure Thomas E Woods - choose with care. Not all
are what they seem, as with ex-bond salesman Michael Lewis.
(Aug 14, '09)
Faith-based investing
Continued gains in the world's stock markets have attracted numerous
explanations in harness with poor analytical skills, self-contradicting
indicators and a lack of basic math. There is only one answer for rising market
values for risk assets - and therein lies the path, once more, to economic
ruin. (Aug 4, '09)
Goldman's Atlas shrug
No sooner than a Wall Street firm had announced bumper earnings than all the
communists squirm out of the woodwork to criticize them for "profiteering",
whatever that means. It is very much the job of capitalists to make money off
the idiocy of communists and socialists, and given the rich pickings across the
world, more are likely to follow Goldman Sachs principles than those of
communists in government. (Jul 20, '09)
Raining on the Blue Fox
The shine has started wearing off the "Green Shoots" story that has propped up
stock markets and helped various countries pretend that further developments
aren't imminent. As various US states approach different stages of bankruptcy,
the time for governments to change policies is dawning.
(Jul 3,'09)
The Jackson factor
Global investors can find in the debt and drugs-fueled tragedy that marked
Michael Jackson's final years a parallel to the current goings-on in stock
markets. Stimulus funds sourced from government debt are leaking into the stock
markets while antidepressants may be helping people ignore rising valuation
risks. (Jun 29,'09)
BRIC plotters stage a farce
The inaugural "BRIC" summit of leaders from Brazil, Russia, India and China
ended in farce, as can only be expected when four disparate economies attempt
to cobble together an alliance based on ephemeral rather than sustainable
competitive advantages. The motley crew, instead of plotting the downfall of
Julius Caesar, merely ended up begging for more, like Oliver Twist.
(Jun 19,'09)
Principal over principle
The very moral fiber of Anglo-Saxon countries appears to have come under threat
In response to the ongoing financial crisis. Be it the nationalization of vast
swathes of US industry, the expenses scandal in Britain or the attacks on
Indian students in Australia, the very ugly side of these societies has been
pushed into plain view. (Jun 5,'09)
Till debt do us part
Getting out from under the weight of debt is a hard business, not the stuff of
magic wands some in the financial media seem to want it to be. With some
governments adding to the confusion amid both creditors and debtors, today's
recession is likely to become a global depression before individuals and
capitalists, not least those in China and Brazil, once more take charge of
their destiny. (May 29,'09)
Easy bets with other folks' cash
Recognizing the role financial engineers are playing in the current global
stock-market rally will help investors identify just how they are being
hoodwinked. Irresponsible comments from central bankers and government
officials aside, it is the people who talk up their own books who merit the
most ire. (May 22,'09)
Truth is too hard to handle
Greed and fear have re-established themselves as the drivers behind bond and
stock performances. All hint of logic is absent as the markets adopt the "green
shoots" anthem. Yet in reality, we can forget about the stability of financial
institutions and stop imagining any chances of corporate earnings recoveries.
Higher interest rates and lower stock values beckon.
(May 11,'09)
Swine flu over cuckoo markets
The outbreak of swine flu and the continuing global financial crisis have more
in common than their potential to disrupt the lives of numerous people across
the globe. Both highlight the danger of maintaining unsustainable modus
operandi at the core of modern humanity's lifestyle.
(Apr 28,'09)
G-8's first bankruptcy
The United Kingdom is the leading candidate for the first sovereign bankruptcy
among Group of Eight countries. Rather than learn from the downward spiral of
its financial system, the government is crawling back towards populist
socialism in a move that is destined to destroy the economy.
(Apr 24,'09)
China's unreal estate
Chinese property is a perfect example of what happens when irresponsible
policies meet indomitable market forces. The u-turn within a year - from
efforts to cool property prices to measures to prop up the sector - highlights
the consequences of a pegged exchange rate maintained by a government that
claims to know what's best for the country, with all evidence to the contrary.
(Apr 9,'09)
The G-20 piles folly on folly
Broken window panes apart, the only tangible result of the Group of 20 meeting
in London - the tripling of International Monetary Fund resources to to US$750
billion - is astounding. The people whose incompetence has made the fund a
byword for poverty and who had no clue about the present crisis until it burst
on us are now supposed to show the foresight to end it.
(Apr 3,'09)
Bonus-free knuckleheads
The way out of the financial logjam is to provide the private sector with
incentives to get its act together rather than by driving through retrospective
moves designed to placate popular anger. Governments don't have any experts to
deal with this problem, and it is time they acknowledged that fact.
(Mar 20,'09)
Buyer beware
Endemic fear of deflation has pushed Western governments to issue mountains of
cash to their citizens. Asia is feeling the pinch, and not just in terms of
currency values. Savers are seeing a decline in both current income and future
purchasing power. (Mar 13,'09)
No work and no play ...
Terrorist attacks on sportsmen have pushed the conflicting agendas of social
development, national ego and attention-seeking into a new reality that is
compounded by the ongoing economic crisis. Being fabulously wealthy and all too
often cheating their way to achievements, sportsmen risk becoming the new focus
of social anger. That is, once anger over the financiers has cooled down a tad.
(Mar 6,'09)
Beggar, I thy neighbor
The economic crisis, unsurprisingly if painfully, is forcing political
realignments around the globe. The pace at which pseudo-autonomous states, from
within Europe to the Gulf to the western United States, are being pushed into
the embrace of richer neighbors presents rare opportunities for a new
generation of Bismarckian politicians. (Feb 27,'09)
Slumdog communists
A successful and critically acclaimed film may well do more to get Indians out
of their self-inflicted rut than any other media in this movie-crazy country.
The more everyone around the world praises the film Slumdog Millionaire,
the greater the embarrassment for the Indian middle classes who look but do not
see the abject poverty and low living standards around them.
(Feb 13,'09)
False hope of protectionism
It didn't take too long for protectionist impulses to rear up across Group of
Seven leading industrialized countries as the initial bouts of Keynesian
spending failed to provide any relief. Yet demographic factors dictate that any
salvation for developed countries waits on increased consumption in the Asian
region. (Feb 6,'09)
Capitalism at the crossroads
The battle between capitalism and its alternatives is set to intensify as the
malcontents of 2008 come back seeking systemic adjustments that could prove
unnecessary in the realignment of the global economy. Every step the socialists
take will bring a great depression closer for a bulk of the world population.
(Jan 15,'09)
Ask not for whom the bells toll
Analysts taking perverse pleasure at the decline of emerging markets miss the
main point - that the serious erosion of confidence will become an
all-pervasive global affair. As the decline of the United Kingdom can be
attributed to the conniptions faced by Russia, other developed countries could
be tripped by the current decline of emerging markets.
(Dec 24,'08)
Honey, I switched the medication
Every government in the world is engaged in exactly the wrong course of action
in response to the current crisis. As the largest borrowers attempt to bump up
their borrowings, the largest savers are attempting currency devaluation to
increase production. Both groups are doomed to fail, and improvement to the
global economy is most unlikely over the near future.
(Dec 12,'08)
Going, going, GOME
China continues to avoid a radical overhaul of its corporate governance
structures, leading to the scandals that plague its top companies, the arrest
of GOME's founder and chairman being the most recent. That further erodes what
remains of investors' trust, undermines capital-raising and leaves too much for
the government to do. (Dec 5,'08)
Debt cold turkey
Perhaps the worst thing you can tell a bankrupt person on a festive day such as
Thanksgiving is that worse is yet to come. That precisely is what is in store
for people across the global economy as deleveraging will continue to devour
every scrap thrown at it by well-meaning but useless government officials
around the world. (Nov 26,'08)
Blind leading the one-eyed
The Group of 20's Washington summit on the global financial crisis can be
charitably described as a waste of time. The world's leaders agreed to fluff
with no bearing on today's structural problems and maintained confidence in the
institutions that led the world into this mess. As bad, leaders of countries
such as Brazil, China and India bought into this malarkey.
(Nov 17,'08)
The party's beginning
Emerging countries, particularly those in Asia, have a brighter chance of
making government intervention work if only because of higher profit potential
and the low level of debt relative to potential gross domestic product. This is
the crux of the argument of turning the world around, not the well-worn ideas
of propping up the leading industrialized countries. (Nov
14,'08)
This concludes a two-part report.
Part 1: The
party's over
The party's over
Keynesian intervention now seems the consensus choice for governments combating
the economic crisis. This response requires turning a blind eye to balance
sheets and questionable assumptions regarding countries expected to subsidize
consumption globally. The coming summit in Washington will be largely
pointless, given the apparent lack of concern over these dynamics.
(Nov 14,'08)
James Bond, communist villain
The iconic British spy has much in common with communism in the over-arching
use of deadly power to discipline those disagreeing with the central tenets of
government. The current tilt towards socialism makes James Bond a role model
for interventionists of all hues, which is why unraveling the mystique is
critical for everyone who believes in free markets. (Oct
31,'08)
Pretenders all
Alan Greenspan had the option of other responses this week when he delivered
his confessionless testimony to US legislators investigating the collapse of
the financial system the former Federal Reserve chairman had nourished for
nearly two decades. But we all make mistakes - commentators as well as bankers
- as the present state of Russia, South Korea and India demonstrate.
(Oct 24,'08)
A Fukuyama moment in finance
The panic in global markets this week doesn't conjure up any obvious safe
havens, except for the classic one that goes back to the historical purpose of
markets. Investing in young countries with competitive advantages in factory
productivity is the way forward. Not quite the end of history, but certainly a
pause. (Oct 17, '08)
Europe's death by guarantee
A humiliating deal for Iceland is just the starting marker of the terminal
decline of Europe. Domestic economic problems combined with unwieldy banking
and regulatory supervision will put paid to the continent's hopes of surviving
the current market carnage. (Oct 10, '08)
Math of doom
Simple math helps to debunk the mumbo-jumbo carelessly thrown around by central
banks and the media with respect to the present financial crisis. The exercise
proves among other things that the US Treasury will certainly buy assets above
fair value, while European efforts to save their banking systems are doomed.
(Oct 3, '08)
Deaf frogs and the Pied Piper
The United States financial crisis is being hailed as the death of market
capitalism and has resurrected enthusiasm for socialism, notably as practiced
in various parts of Asia. Choose that route, and Asian governments can yet
manage to heap misery on their unsuspecting populations for years to come.
(Sep 29, '08)
Terminal velocity
Bailouts in the United States and elsewhere in the West bring fast forward the
decline of the Group of Eight industrialized countries, and mark another key
moment in the rise of Asia as the world's sole economically viable region.
These trends will only accelerate if existing G-8 governments are voted back to
power - and if Asia's central bankers display intelligence.
(Sep 22, '08)
Waiter, there's a banker in my
soup
The Fed's timely courage at avoiding a Lehman bailout and pushing through an
AIG takeover, allied with a decision to hold interest rates steady, may yet be
seen as the steps that helped to stem the US's financial crisis. It certainly
doesn't feel like a turning point, but that is the way emotions differ from
fundamentals. (Sep 17, '08)
Pareto's Bazooka
The roots of Lehman's precipitous decline this week can be traced to the US
government's policy actions in the rescues of Bear Stearns, Fannie and Freddie;
all of which sufficiently changed the motivation of major market players to
essentially invalidate core principles. The resulting food fight is lethal for
the chances of a meaningful economic recovery. (Sep
12, '08)
Triangulating an Asian conflict
It's possible that in the near future Islamic extremists will have their finger
on the Pakistani nuclear trigger, while Han nationalists in China and Hindu
fundamentalists in India likewise control their nuclear-armed countries. These
are the trends shaping tomorrow's world, writes Chan Akya, who does not
see the avalanche of words about a US vice-presidential candidate as
particularly relevant. (Sep 5, '08)
Bear-faced bluff
Bluffing to buy time is the latest must-do pastime from China to the US, South
Korea to Singapore. Political leaders, central bankers and now their commercial
counterparts are at it - accompanied by the sound of Asian cash gurgling down
the US drain. (Aug 29, '08)
Asian economies meet gravity
Asian economies are losing their vibrant growth as they feel the impact of
slowdowns in the United States and Europe. Intra-Asian trade will offer little
in the way of an alternative stimulus, while further reforms are overdue, and
much needed, in India and China. (Aug 21, '08)
Utterly pointless Europe
The utter pointlessness of Europe's existence was driven home by a combination
of political, strategic and economic developments this week. Far from being a
counterweight to the United States or a center of power on its own merit,
Europe has turned out to be merely a vestigial organ. Russia is right to take
advantage of this mess. (Aug 15, '08)
The
anatomy of an Olympic winner
Sporting success is a source of nationalist pride, an avenue for chest thumping
or more usually an opportunity to make money. Americans love and respect
sportsmen, which is why they consistently produce some of the world's best
athletes. Perverse incentives force ex-communist countries to rely on producing
the world's best chemists. India doesn't win medals because it simply isn't
profitable for individuals to do so. (Aug 7, '08)
And now, for Fannie and Freddie
The US government, faced with a possible failure of mortgage guarantors Fannie
Mae and Freddie Mac, is looking to once again prop up defunct institutions
instead of giving up the ghost on such entities. The markets may welcome such
efforts, but the implications for the ultimate credit quality of the government
are negative. (Jul 11, '08)
The gullible and the greedy
Cringe-worthy analysis by luminaries ranging from the Bank for International
Settlements to the Indian finance minister shows fundamental misunderstanding
of market mechanisms. Yet with so-called experts from investment banks and
rating agencies found wanting in their basic responsibilities, other
participants have plenty of leeway to mumble-swerve.
(Jul 3, '08)
Incredible India, indeed
While its neighbors blissfully ignore bigger economic trends, India's
policymakers have made a series of poor strategic choices for the country, in
effect pushing the economy into the eye of the global storm. As the government
grapples with inflation and contends with a fractious coalition, the outlook is
murky. (Jun 30, '08)
Lehman and the liars
A fresh crisis at a US investment bank brings to the fore a similar phalanx of
deceit and consequences in other corners of the financial markets, ranging from
yields on US Treasury bonds to the price of donkeys in Turkey. At the heart of
all these events is the unraveling of convenient lies.
(Jun 13, '08)
Cheap talk, pricey banks
US Federal Reserve Board chairman Ben Bernanke's desperate attempts on Tuesday
to talk up the US dollar highlight the Fed's increased concerns of further
stress in the financial system after investment banks report their quarterly
results later this month. A rising US dollar though is murderous for Asian
inflation, while investments in US banks are bad for regional wealth.
(Jun 4, '08)
 Oil
prices fall in Asia on Fed chief's comments (AFP)
Mr Market combats the Taliban
Reduced opium production in Afghanistan as a result of soaring wheat prices
points the way both for the conduct of war in poor countries, and perhaps more
importantly, handling emerging environmental issues. Change that is led by the
markets will prove more sustainable than any that's thrust by war.
(May 30, '08)
Indiana Jones and the
last capitalist
The latest avatar of the archetypal American capitalist takes viewers on a
thrilling ride while raising existential questions on the side. Individual
liberties and innovation that spawned decades of prosperity are now under
assault globally as much from a sprawling corporate culture as from Luddite
forces of modern communism. (May 23, '08)
India's real terrorists
Though Asia in general had a bad week, India's problems stand out as the most
intractable and subversive, harking as they do to the dominance of age-old
communist thinking that has bred a cesspool of corruption. Other Asian
countries also face this peril. (May 16, '08)
All aboard the
USS Titanic
As the world comes to grips with declining United States power both
in political and economic terms, it almost seems surreal that global media
appear so keen to paper over the cracks. With even the corrupt and unctuous
Gulf dictators rebelling against the US dollar, this is the beginning of the
end. (May 2, '08)
Western excess is the
Earth killer
The problem with people trying to save the world, as intended in this
week's Earth Day, is that everyone has different living standards and
objectives. What will benefit the environment is a reduction in excessive
consumption by Europe and the US, not a reversal of Asian progress.
(Apr 25, '08)
Bankrupt
policies, empty stomachs
Inflation in food products has become the new front in the geopolitical
battlefield. Asians can start by blaming themselves for the present mess in
which their farmers remain poor, their poorest struggle to pay for basics such
as rice, and their governments continue to pay economic allegiance to the
has-been powers of America and Europe. (Apr 18, '08)
Asia must rally
behind China
Asian countries must rally behind China ahead of
the Olympics as Group of Seven countries and their lackeys aim to increase
their shrill rhetoric at their meeting this weekend. Using a combination of
diplomatic and economic moves to trip the Americans, the region could gain the
upper hand for the long term. (Apr 9,
'08)
A
conspiracy against gold
The global conspiracy against gold has been gathering steam, with central banks
rallying around the US Federal Reserve to prevent a full-scale economic
collapse. This will succeed over the near term, but as the US runs out of
things to sell, so will the latest bout of risk-taking in global markets.
(Apr 2, '08)
The new Brahmins
Socializing risk and privatizing profit points to a global economic gridlock
that would likely drive Asia's poor back into their shantytowns. The elite of
global banking can rest assured that society will pay its toll in perpetuity,
essentially creating a new super-caste of bankers. It's not Asia that is being
globalized, it is the West that is absorbing the worst Asian habits.
(Mar 28, '08)
Why markets love dictators
This week's developments once again highlight the reasons for markets to prefer
dictatorships compared with freewheeling democracies. Clarity in
decision-making is more important than preserving the rights of individuals,
for the benefit of society at large, as seen by the market reactions to recent
political changes in India, Taiwan, Japan, Malaysia and China.
(Mar 20, '08)
Trust
goes down the drain
The acquisition of Bear Stearns by JPMorgan Chase at a knock-down price of $2
per share means investors cannot trust the reported book value of US financial
firms any more. And if they cannot trust investment banks, can the trust of
commercial banks be really all that higher? The Fed and other central banks
should now understand that the bailers themselves may need to be bailed out in
time. (Mar 17, '08)
Forget Spitzer, fire Bernanke
While the New York governor resigned for what was essentially a private
matter, the world's central bankers cause greater damage and have proven less
accountable for their actions. Continued debasement of fiat currencies leaves
the financial system unhinged and more prone to collapse.
(Mar 14, '08)
Euro-trash
Europe's leaders are too busy destroying their economies to notice the grand
opportunity to assume global leadership. The European Central Bank is also far
from being the paragon of virtue that many economists consider it. A failure to
grasp this dynamic means that the rise of the euro against the US dollar will
be in vain. (Mar 10, '08)
Dead dollar sketch
The demise of the world's reserve currency reads like a financial version of
the infamous Monty Python Dead Parrot sketch. The arguments of US dollar
supporters appear increasingly hollow. The implications are much more
geopolitical than merely economic. (Mar 3, '08)
How about a Y?
With recession a distinct possibility across the G7, the question of
any eventual recovery’s shape depends much on the ability and willingness of
Asia to embark on sensible economic policies. For the first time in a few
centuries, we are likely to witness a Y-shaped recovery.
(Feb 22, '08)
Tear
down that Wall (Street)
Instead of trying to rescue the world's moribund financial firms, the US and
other governments must stand aside and let the process of creative destruction
go into hyperdrive. Kicking out a bunch of overpaid bankers onto merciless
streets of unemployment would hardly be the worst thing imaginable today.
(Feb 15, '08)
Missing
genius
What if Hitler hadn't pushed Einstein into America's welcoming hands? This
hypothetical question bears examination when we consider the future of Chinese
and Indian emigration into the US and Europe. The deliciously circuitous
decision variables will likely entail the last push into a permanent downward
spiral for these countries. (Feb 8, '08)
Cry
mummy
So the Fed blinked in its efforts to win market credibility, but that only
seems to make investors panic even more. After one of the worst January
performances on record, the rest of the year promises to be a hard, long slog.
Asia's refusal to cut the umbilical cord of currency pegs with the US economy
promises to send the region into a downward spiral. (Feb
1, '08)
The
rogue and the pogue
The trader who lost Societe Generale US$7 billion is a kindergarten brat
compared with the chaps heading the world's major central banks, whose actions
cost the world economy a few trillion dollars, give or take. That said, he
might well have forced the Federal Reserve's hand this week, complete with
consequences that include upward pressure on Asian currencies.
(Jan 25, '08)
Drunk
in a bankrupt world
What unites Mitt Romney's pledge to save Michigan, mounting US
bank losses and the World Bank's most recent corruption scandal in India with
monetary tightening in China and the launch of the cheapest car in the world
this week? Fool's gold, mainly. (Jan 18, '08)
More
racist than thou
The racism row involving Indian cricketers highlights the different standards
of Asia with respect to the rest of the world. Simply put, race differentiation
is part of the regional culture; attempts to impose Western standards would
simply go against the grain of thousands of years of history. As for the game
of cricket itself, what works will be determined by Indian audiences.
(Jan 10, '08)
Black swans and greedy oilmen
Two books stand out from last year's motley publications covering the subjects
that matter - economics and markets. Both will in time be misused, but for now
they present important learning opportunities for Asian policymakers.
(Jan 5, '08)
Storm warning for Asia
Asia's economies, already under pressure amid rising regional security risks in
the form of an unsettled Pakistan and a belligerent Russia, could see their
growth prospects blown away as the impact of the crippled US financial system
goes global. The biggest economies may pull through eventually; the smaller
ones will have a tougher time finding port. (Jan 3,
'08)
Annus
financialitis
The year that the global financial sector experienced a meltdown has not
reached its denouement, with restrictions on credit likely to intensify rather
than ease in the coming 12 months. The crisis will adversely affect Asia before
too long, despite the salutary effects of abundant liquidity, due mainly to a
paucity of credit skills. (Dec 21, '07)
Inflation
- China's lost battle
China has lost its battle with inflation, recording the highest figures in
recent history last month. In the face of burgeoning domestic demand, the
inability of Chinese authorities to control money supply lies at the heart of
the matter. Lacking will, the authorities are also losing credibility with
their people, which will result in greater social unrest next year.
(Dec 14, '07)
How central
bankers could save the world
Discussions on climate change in Bali ignore the crucial role that can be
played by inflation-targeting central banks. If they do what
it says on the can, central bankers could help to engineer
substantial changes in the flow of capital and ideas across the global economy,
helping to cut carbon emissions. Instead, they have chosen short-term goals
much to the detriment of the world population. (Dec
7, '07)
Vanishing minnows
Asia's emerging giants are crowding out both
investors and regional alignments, changes underlined by the renewed search for
relevance by ASEAN and other Asian groupings. The increasing likelihood of a US
recession next year will only exacerbate the downward spiral facing many of
these countries. (Nov 30, '07)
Playing South Asia's World War III game
Using game theory to understand recent events in South
Asia shows the possibility of a calamitous slide towards World War III,
led by the decline of US power. China can't intervene in Pakistan and India
won't, leaving a vacuum that will be filled by Islamic fundamentalists and
their archrivals, the neo-conservatives.
(Nov 16, '07)
What's Chinese for 'Ponzi'?
Four of the world's top 10 stocks by market capitalization are now Chinese, but
the measure is a flawed representation of actual value. Unless the authorities
take urgent action, including the freeing up of capital controls and letting
the currency float, the outcome will be horrible for both investors and the
government. (Nov 9, '07)
Off with their heads
Chief executive officers are losing their jobs by the dozen on Wall Street, in
what constitutes a cathartic process for the eventual recovery of the sector.
The contrast with the experience of Japanese banks in the 1990s shows the
relative success of market-based capitalism as against state-sponsored
nonsense. (Nov 5, '07 )
Pants
on fire
Echoing a tragicomic version of the children's game,
financial results by some banks and brokers have cast shadows on the accuracy
of results declared by others in the same game. With thieves no longer treating
each other honorably, financial system volatility will increase across Western
economies. Not to fear though, because Asian central banks will be called to
bail out all these firms soon enough. (Oct 26, '07)
Dear Dinosaurs
Discussions in this this weekend's G8 meetings will probably ignore emerging
fault lines in the "developed" world. If someone in those meetings were
actually serious about confronting issues head-on, these are a few topics to
focus on. Then again, it may all be too late for these countries, as the
"meteorite" of Asian powers taking charge of world affairs unfolds.
(Oct 19, '07)
Ben, beef and Buddha
The rise in food prices globally threatens to undo all the good work on the
anti-inflation front by central bankers over the past two decades (excluding
exposing economies to frequent asset bubbles). Ben Bernanke's decision to cut
interest rates last month now looks monumentally stupid; the only solution is
to encourage Americans and Asians to turn to Buddha.
(Oct 12, '07)
Ram-ming the Indian economy
India's central government has taken to playing the religious card in its
efforts to keep a center-left alliance in place for the next elections, in
moves that will play havoc on the country's economy. Unnecessary intervention
in economic development is a major reason for India to vastly underperform on
its growth potential, and there are no signs of the situation improving any
time soon. (Oct 5, '07)
Capitalism does work
America's subprime problems have unleashed a torrent of left-wing chest-beating
among the world's media, a lot of which casts the borrowers as victims of
unscrupulous lenders. Much of the criticism, especially in Europe and Asia,
appears to have extended to capitalism and free markets in general. For
economies across Asia, though, now is hardly the time to experiment with any
alternative systems. (Oct 28, '07)
Rocking the land of Poppins
The near default of Northern Rock in the United Kingdom must
give pause to every Asian central banker and especially the ones in China and
India. Rather than adopting a self-congratulatory tone on the travails of
European and US banks, the region's central bankers must use the current
period of strength to undertake serious structural reforms. These involve
aggressive culling of small and medium-size entities, and increased supervision
that incorporates sophisticated market understanding.
(Sep 21, '07)
Osamanomics and the greens
Osama bin Laden's latest video extols green causes in addition to the usual
litany of religious nonsense. That the world's foremost terrorist chooses to
ally himself with anti-modern and Luddite green activists is not happenstance -
both groups, after all, aim to cut global economic prosperity and keep billions
living in servitude. Nice mustache, though. (Sep 14,
'07)
In gold we trust
The global financial system is broken, with banks refusing to lend to one
another at any cost, even as central banks attempt to increase system
liquidity. As LIBOR, the global interbank rate, surges well past normal levels,
usual circuit-breakers such as liquidity facilities have simply failed. In this
environment, only the holders of physical assets such as gold and oil appear to
have the upper hand. Sell your equities, by the way.
(Sep 7, '07)
India's
Muslim 'problem'
With
sickening regularity, India's middle classes suffer terrorist outrages that are
blamed on the subcontinent's restive Muslims. But the factors that drive people
to such unspeakable acts of terror against their fellow citizens are ignored by
feckless politicians who lack both the vision and credibility to grasp an
obvious solution, namely increased economic opportunities for the diverse
minorities, with a particular emphasis on urban areas.
(Aug 31, '07)
'Cracks' in credit
America's addiction to cheap credit now needs a fresh
injection of liquidity from the rest of the world, and in particular Asia. No
good will come to Asian banks from supporting a fresh bubble in the US economy;
conversely, much good will result from calling America's bluff and ending the
scourge of excessive US consumption. But the US will attack its creditors, much
as its military tried to overrun Colombian drug suppliers.
(Aug 27, '07)
South Asia's schizophrenic twins
The birth of India and Pakistan 60 years ago was marked with considerable pain.
Their record is largely abysmal, even if the most recent history points to an
improved outlook. Political failures have caused the breakdown of civility
between the twins that only economic ties can resolve. For the long-suffering
poor in both countries, the outlook remains desperate.
(Aug 17, '07)
Asia and the vicious cycle of bank bailouts
As with every market crisis, recent upheavals in global
markets have claimed a host of victims in both US and European banking. The
penchant of central banks to bail out their constituents undoubtedly predicates
future crises for such banks as well as their countries. Asians can help end
this vicious cycle by cutting their holdings of US and European bonds, and
focusing on investments with high total returns.
(Aug 10, '07)
Pay for what?
The process of paying government workers elicits more than its fair share of
controversy across Asia. While some countries such as Singapore have the
formula more or less right, others such as China and India are struggling to
respond to changing market conditions. Focusing government activities on
attainable aims would be the logical first step to paying public-sector
workers, with stringent punishment for corruption becoming the second plank.
(Jul 27, '07)
The new imperialism
Asian countries remain beholden to archaic economic notions,
attempting to control the growth of their economies by indulging in significant
trade and investment manipulation. The resulting large wealth transfer to
already rich Western societies comes at high cost to Asians, preventing them
from fixing the most pressing items on their domestic agendas, including
corruption, pollution and infrastructure issues. (Jul
20, '07)
The robbery of the century
Hardworking Asian savers will see their central banks post
billions in losses in the next few years as investments in US subprime mortgage
bonds turn to dust. The central bankers allowed themselves to be led by the
nose by Western rating agencies and Wall Street investment banks, but
ultimately the Asian banks and governments have only their own policy follies
to blame. As usual in Asia, nobody will be held accountable, and one of the
greatest robberies of our time will be swept under the carpet.
(Jul 13, '07)
Asia's scalded cats
In the 10 years since the Asian financial crisis exploded with the devaluation
of the Thai baht, the region has made significant progress in improving its
financial strength. However, the pendulum has swung too far in the opposite
direction, with an over-emphasis on exports that are now anachronistic. The
cost of the missed opportunities will be severe: rising inflationary pressures
and eventually, a substantial bust in global asset prices.
(Jul 6, '07)
Deja-Wu: Why China must revalue
Rampant currency manipulation by China has elicited the same
kind of US reactions that Japan experienced in the 1980s, which started with
exaggerated media focus on any slip-ups by Japanese manufacturers. The recent
focus on poorly manufactured Chinese toys, pet food and tires marks the start
of the battle royal, which will leave Vice Premier Wu Yi with no option but to
accept revaluation, just as the Japanese did.
(Jun 29, '07)
TWO ROADS TO HELL
PART 1: Caste-away
What do developing countries need to do to achieve
social justice? In the first of two articles examining the socio-political
framework underpinning China's and India's economic development, Chan Akya
examines the latter's plans for affirmative action. Democracy has produced a
curious race to the bottom in India that must be quickly reversed if
longer-term competitiveness can be maintained.
(Jun 14, '07)
PART 2: Pork-barrel politics
What do pork prices and a record number of public disturbances
have in common? For China, both these indicators are likely to
continue rising until the government takes a step back and accepts the
futility of centrally directing the economy in perpetuity. This is the second
of two articles dealing with social justice in China and India. (Jun
15, '07)
When
progress is against the law
A Malaysian court's
decision to enforce a ban on conversion from Islam to Christianity is but the
latest sign of the stranglehold on Islamic thinking that Luddite elements
possess, with their far-reaching economic impact across all countries in which
Muslims live. Attempts to accord an insular framework to Muslim societies
raises the question of whether any human development is possible without an
incendiary war of civilizations.
(Jun 1, '07)
Pegged problems
Coincident bubbles around the world threaten the
credibility of central bankers, especially those in Asia. In China as
elsewhere, at the heart of the problem is stubborn resistance to
allowing currencies to appreciate against those of major trading partners,
which has made the execution of domestic monetary policy nearly impossible.
Instead of addressing the root of the problem, Chinese policymakers are fueling
a secondary bubble. (May 24,
'07)
Lifting the hood on the car industry
This sale of Chrysler, one of America's erstwhile Big
Three auto makers, at a heavily discounted price to a private equity firm
brings up the question of industrial organization, and the role of governments
versus market forces. Even for big multiplier industries such as cars,
arguments in favor of regulation and protectionism generally fail.
(May 18, '07)
Brace for a China-led chill
Having lost control of the stock markets, Chinese regulators
are left with no option but to enact multiple policy moves, including a freeing
up of the currency regime. The result will be massive losses for speculators,
as well as many of the biggest banks in the country. But it won't stop there;
all Asian stock markets will face a chilling downturn in the aftermath.
(May 11, '07)
Lessons from Kashmir and Xinjiang
While both China and India can claim success in dealing with
their sometimes restive Muslim populations, the methods adopted to quell
rebellion are vastly different, and yet quite similar in results. That said,
much also depends on the continued stability and expansion of Pakistan's
economy, the success of which has robbed insurgencies in both India and China
of much of their supply of cannon fodder.
(May 4, '07)
Bang for the buck
The tragic shooting of students in Virginia now occupies the
media center stage, pushing other stories such as Paul Wolfowitz's continued
troubles at the World Bank to the inside pages. Life imitates art, as the
American mainstream media embrace Hollywood's double standards with respect to
the portrayal of violence being more normal than sex.
(Apr 20, '07)
Those bubbling property markets
Archaic land-use regulations across Asia have caused
significant distortions in property markets, in turn creating vicious cycles of
volatility. Much as Japan lost economic growth and an entire generation of
people because of its failure to address land reforms, other Asian countries
that fail to learn from the experience are condemned to repeat it.
(Apr 13, '07)
Toward food FTAs
Even though the US-South Korea free trade agreement
may be all about ushering in a unified Korea, authorities in both countries
have clearly missed the bigger picture in terms of using the framework to
capitalize on their competitive advantages. The biggest battle, over
agriculture, has only just begun, and rich Asian countries simply have the
wrong approach. (Apr 11, '07)
'Economic, social and Jew'
South Asians have a greater tolerance for
mediocrity than any other people, wrought primarily by historical animosities
that are used by the powers that be to cover up their own incompetence.
Politics aside, this malignant culture extends into the world of sport and even
the performing arts, where the typical cultural reverence for seniority all too
often engenders mediocrity. (Mar
30, '07)
Hollywood's Muslim villains
The controversy over the
new film 300 is misplaced. Cold-hearted economic thinking underpins
Hollywood's forays into multiculturalism. Heroes and villains are
selected on the basis of the audience reaction they are likely to
evoke, rather than any notions of historical accuracy that pedants may wish to
foist upon these creative geniuses.
(Mar 23, '07)
A good use for the IMF: Bail out America
The US crisis in mortgages is spreading to the rest
of the economy, threatening to take down the world's top consumers in the next
12 months. But fear not, for help is at hand from the International
Monetary Fund, whose record of destroying economies in Asia and Latin America
can now be put to use closer to home.(Mar 16, '07)
Hobson's choice
Global economic growth is likely to dip in
coming quarters as the US economy heads for a recession. Declining house prices
have exposed the soft underbelly of the US, namely its borrowings from the rest
of the world. Along with the US, most developing countries will lose out,
unless they can move from production to consumption. That would require
significant adjustment of currency values, starting with China - now.(Mar
9, '07)
India
1, China 0
China made a mess of its
financial-market regulation this week, even as India charged ahead, albeit with
a reform-chary government acting as the proverbial millstone. Structural
factors provide a distinct advantage to India as the rule of law and stronger
institutions help to dull market volatility. Chinese market policies, in
contrast, are reminiscent of tin-pot dictatorships.
(Mar 2, '07)
The jihadi ate my homework
And not just jihadis - Maoists in India and Nepal, Tamil separatists in Sri
Lanka, and many other players exploit children who should be in school as
cannon fodder for their wars and disputes, perpetuating a vicious cycle of
poverty and violence. At the heart of the problem are government priorities
that push education far down the agenda. (Feb 23,
'07)
Rich bad, poor bad
Communism fails the rich, capitalism fails the poor but Islam as an
economic system appears to fail both. Failure to prepare their young for the
modern world leaves Islamic countries over-dependent on the progeny of Muslims
in secular democratic countries such as those in Europe. Therein lies the case
for separating religion and politics across all these countries.
(Feb 16, '07)
Sun Tzu's art of investing
Following the practices
set out in the ancient Art of War, the Chinese government has embarked
on significant changes to its investment philosophy, the net result of which
will be to provide self-sufficiency in imports, and a greater say in world
affairs. Collateral damage from this could well snowball to a precipitate
decline of both the US and the Middle East. (Feb 9,
'07)
Pointless pontification in Davos
The recently concluded World Economic Forum in Davos, Switzerland, produced
more than its fair share of howlers from the assembled ranks of has-beens and
wanna-bes. With financial markets proving more adept at transferring risks
across a wider group of investors, policymakers simply have much less influence
than they used to. Asian participants were embarrassing representatives of this
status quo ante. (Feb 1, '07)
Barbarians at Asia's gates
Private equity players have trained their full
attention on Asia, hoping to unleash many a transaction in the next few months.
Over the short term, this is bound to cause confusion in Asian markets, but in
the long term Asia - mainly China and India - will benefit from the creative
destruction necessarily entailed by the process.
(Jan 26, '07)
The immigration reality show
On a visit to India, British prime minister in
waiting Gordon Brown has spoken out against "intolerance" in the light of the
ongoing row over racist slurs apparently suffered by a second-rung
Bollywood actress on a third-rate British "reality" program. But beyond the
platitudes, Brown has drawn attention to important economic trends regarding
the shrewd management of immigration.
(Jan 19, '07)
The thief and the scorpion
A lost war in Iraq and continued financial skulduggery increase the
distaste of the global community for all things American or European, be it
foreign policies or cars. With the US dependent on the munificence of strangers
like no other superpower in history, its decline is unstoppable. That said, the
surge in the value of Chinese stocks underlines the desperation rather than
genius of global investors. (Jan
12, '07)
Who gives a dam?
The tortuous process of getting large hydroelectric projects commissioned in
India contrasts with the relatively easy path hewn by China. While Indians can
be proud of some aspects of due process that help to maintain the rights of
those adversely affected, there is much to learn from China's ability to
convince broader interest groups of economic advantages to be derived from such
projects. (Jan 5, '07)
It's the money, honey
Everything about society can be explained by economics. While the naive and the
romantic might believe in the influence of other factors such as religion,
politics, emotions and values, these work for individuals rather than for
societies. It follows that social ills can only be fixed by an overhaul of the
underlying economics.(Dec 21, '06)
Mid-life crisis for ASEAN
Much like many 40-year-olds, the Association of Southeast Asian Nations has run
into a mid-life crisis. It has failed to transit from an informal talk-shop to
an organization with powers to regulate or penalize its members, and faced with
resurgent terrorism and an unforgiving global economic environment, it could
unravel sooner than expected. (Dec 15, '06)
Economics and Bamiyan
The destruction of the Bamiyan statues marked the nadir for secular forces in
Afghanistan, but attempts to reconstruct the site will fail unless a supporting
economic framework can be properly established. Tourism rather than
industrialization offers the way out for the country, as the success of secular
politics in Egypt and Turkey so clearly demonstrates.
(Dec 8, '06)
Feral cats, beware
The unraveling of Iraq amid political uncertainty in Washington heralds the
demise of the American century. With financial markets also voting with their
feet on the US dollar, Asia has to confront both the costs and the opportunity
presented. The re-emergence of Russia provides a useful time lag for China to
prepare the ground for taking over from the US as the world's next superpower.(Dec
1, '06)
When left is right
Forget nuclear weapons and a crashing US economy - Asians must be more
concerned about the surge in populist policies across the continent, which will
inevitably result in slower economic growth over the next few years. The two
giants, China and India, are badly positioned to fight off this tendency, which
will be bad news for stock and property markets. (Nov
22, '06)
Hazards of Oz
What really is the strategic role of Australia in Asia, besides providing a
constant source of embarrassment and one-upmanship with regional superpowers?
The declining role of the US could provide a short-term fillip to Australia's
regional ambitions, but given a looming economic crisis, the country's citizens
may be best advised to sell and move out. (Nov 17,
'06)
Love your children, those little terrors
It's all very well for Islamic societies to deny
any broad confluence of interests between terrorists and the large majority of
Muslims, but economic trends will force this eventuality. An inability to
employ its legions of youth characterizes the key difference between Islamic
societies and those of China and India. (Nov 3, '06)
India vs China in the market
Indian business people are stealing a march on their Chinese counterparts
when it comes to taking over Western companies. And the reason
has nothing to do with negotiating skills or access to capital.
(Oct 27, '06)
Not a major planet
The weekend tests of an apparent nuclear weapon by North Korea bring the fourth
horseman to the apocalyptic party that the world has now become. There is now a
kind of "atomic crescent" of states whose motives for possessing - and possibly
using - nuclear weapons differ from those of the old order. The good news is
that there are plenty of other planets in the universe.
(Oct 10, '06)
Death of city-states
Recent events once again call attention to the future of Asian city-states,
particularly in the context of ongoing economic and infrastructural development
in China and India. Reviewing the prospects across the region, it appears that
some city-states like Hong Kong are doomed, while others such as Singapore
could continue to thrive. (Oct 7, '06)
co-friendly terrorism
The over-consuming West (with Japan) is the enemy both of environmentalists and
of the likes of Osama bin Laden. Proposals by Western greens for saving the
planet would tend to damage China, India and other Asian economies that are not
a significant part of the problem. Terrorism against over-consuming,
over-polluting Western cities might reduce global carbon emissions more
equitably. (Sep 29, '06)
Demo-crazy
The larger question from the current shenanigans in Bangkok is not why
Asian countries have a low tolerance for the foibles of democracy and weak
political institutions, but why middle-class Indians tolerate the system's
shortcomings phlegmatically. While Indians probably do not want to go down the
path of military coups like so many of their neighbors, they should also not
assume that the current situation is either optimal or self-sustaining.
(Sep 23, '06)
BOOK REVIEW
In-Sen!
Identity and Violence: The Illusion of Destiny
by Amartya Sen
This book is not only tedious, it misses golden opportunities
presented by the everyday experiences of youth in Britain and Saudi Arabia to
find more cogent arguments than the "can't we all just get along" rhetoric. Sen
refuses to evaluate the impact of underlying economic imperatives on social
behavior, instead looking at prejudices as a "given".
(Sep 15, '06)
Garfield with guns
We're hearing a lot about Hitler, fascism and appeasement these days as the
Bush administration tries to conflate today's military
adventures with America's "good war", World War II. But Americans who like
to portray the conflict in the Middle East in civilizational terms need to
confront the notion that they are attacking what they call "Islamic fascism"
not because it represents anything different from their own values, but because
it possibly represents the future of their own culture. Like poles repel, after
all. (Sep 1, '06)
Islam and the absence of Chinese terrorists
The world populations of Muslims and Chinese are
nearly equal, but a look at the terrorist profile suggests an absence of
Chinese. The history of Buddhism has much to do with this divergence. For
Muslims, the main lesson is to push the more modern face of Islam forward while
restraining its hard core. (Aug 25, '06)
The wages of corruption
Corruption is endemic in Asia. Those Westerners who do
business with Singapore or Hong Kong don't realize that those countries are
exceptions to the rule. Chan Akya examines how corruption is
based on culture and history in Asia's three largest countries - India, China
and Indonesia. (Aug 18, '06)
Indian reform: It's all bark and no bite
It's fair to say that no movement toward reform of
the Indian economy has taken place since the 1990s. Prime Minister Manmohan
Singh is ineffective, and the next generation is filled with do-nothing scions
of famous families. Don't expect meaningful change for decades.
(Aug 15, '06)
PART
1
World War III - what, me worry?
Sam Huntington's The Clash of Civilizations is now being made
operational in the Middle East, thanks to the neo-conservatives' vision of the
West triumphing over Islam. But where would China and India stand? Both could
benefit from an all-out war, but they are more likely to engage in
navel-gazing. This is the first article of a two-part comment.(Jul
24, '07)
PART 2
China and India in World
War III
Pakistan will likely trigger
World War III - after a coup and a nuclear weapon going missing in the wake of
US attacks on Iran. India, with its large Muslim population, would stay out of
it while the West would turn to China. But the West would likely have to go it
alone. And the outcome would be a weakening of both the West and Islamic power
over the following 20 years. This is the concluding article in a two-part
report. (Jul 25, '06) |
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