Government's Efforts in Emerging Markets

Well if that's the case then I guess there's nothing wrong.

An article about how Kenya & Georgia's government in their efforts in becoming more transparent in fighting corruption, while at the same time encourage the participation of its citizens in data collection. I find this intriguing as the things that they are doing has yet to be done in oother more advanced countries.

But the bigger question would be its effectiveness; which needs to be tracked over time.

The Seperated States of America

Anyone up for putting on some duct tape?

So Obama’s new stimulus plan has been criticized. Big deal. He knew it was going to happen, Congress knew about it, even the people would’ve expected it. Based on the proposal in which he will table to Congress, the new stimulus package is meant to address the issue on high unemployment while increasing domestic consumption at the same time. So how will the USD$ 447 billion stimulus package be funded? Through one off cuts from the Healthcare programmes, as well as “limiting deductions for upper middle income earners”; in other words, taxing the rich.

The so called “Buffet Rule” (with reference to Warren Buffet), I don’t think this would much a very attractive package, particularly in the eye of politicians since apparently a significant number of the House of Representatives and The Senate are meant to be millionaires? But it seems like the Republicans are much more resistant towards the idea of reshuffling the budget to spend more rather than being taxed. There’s also the matter of the effectiveness of Obama’s plan; some find it to be “non-progressive” in nature since the stimulus package is funded through one-off cuts rather than a complete overhaul on the American fiscal structure. Frankly, I couldn’t agree more on this claim.

We all know that stimulus packages are a double-edged sword; it helped them pull through the 2008 without dragging the whole world with them (but no politician will get credited for actions he took which avoided catastrophes; people have a short memory) but we’ve also seen countries like Japan pull of a number of programmes which has done nothing to help to put their economy back on track (putting both their macro and microeconomic characteristics aside that is). From Obama’s point of view, pulling an austerity stunt would without a doubt drive the American economy straight off into the Recession river. So would this measure help save them?

As much as I hate to say this, I don’t know.

The Heat Of Financial Volatility

Very nice I like very much

Turns out the sneaky Chinese government finally came out of the closet by professing that in return for buying European bonds, the EU should reciprocate by granting them "market economy" status. Pretty smart eh? I've always known that the Chinese are a bunch of sneaky people. I've always had a sense of respect for them, until this Korean guy I met told me about his opinion on the country and its government. It all came much clearer when he reminded me of the country's kanji characters; "中国", where "中" means "centre / middle" and "国" refers to country. Get it? They see themselves as the centre of the world.

On another note in relation to the current Global Financial Meltdown; the one that has been hogging all of my blogspace of late to a point where I cant find any other shit to write about since its all over the news, Steve Forbes openly criticized Barrack Obama's stimulus package by quoting Japan's experience in dealing such matter; that they have had 15 stimulus packages in the last 20 years, and the outcome? Nothing. Frankly, I couldn't agree more on this but there are vast macro and microeconomic characteristics between United States and Japan (some discussed here), so a set of stimulus measures which doesn't work in Japan, might work in United States and vice versa.

The funny thing I find about this whole ordeal is how America keeps telling Europe to get their shit together but they can't even handle their own problems. This entire charade is too politically intertwined; stimulus package is tied to America's next General Election, Europeans can't think as a united entity and China is buying debts not for investment purposes, but for political gains. It's like the whole world is a fucking stageshow!

Think about the people you twats.

Where Are We Headed Part 2

But then the sun will go down again!

In a continuation of my previous post, where I somehow feel that the world is heading into a period of stagflation, let me justify that this was made based on three critical assumptions, where the fulfilment of all three (not either one) would definitely plunge the global economy into a period of stagflation;

Assumption 1 ;

If America fails to reduce and control its fiscal deficits; the downgrading of the American bond is not as much of a threat when compared to its inability to control its own budget. What happened subsequent to the downgrade was the lost in investor's confidence (from individuals to small companies) since, if the market really thought that America couldn't pay its debt, China would already be on a fire sale since they are America's biggest lender.

Assumption 2 ;

That unless Europe either kick the shit out of Greece out of Europe (for failing to meet their fiscal target), increase European Financial Stability Fund's funding capacity, or actually act as a fucking United Europe instead of whining like a bitch about how they have to pay for the other countries' fuckups, the region's continued instability posses a massive risk to the global economy. To put it simply; they need to stop being politically divided and stand united.

Assumption 3 ;

Unless China controls its rate of inflation, the global inflation rate would continue to rise. This is simply driven by the fact that the Chinese just manufacture too much shit; everything for $1 dollar. If the domestic prices continue to increase, then this would gradually lead in an increase of prices for their exports. Then, we can start getting ourselves busy by digging our own graves.

Luckily, it seems that China's inflation rate seems to be cooling off of late, and by the looks of it the government plans on putting their consistent interest rate hikes to a halt to accomodate growth. But the prospects for America still looking uncertain as they plan for another massive job growth package, while at the same time, urging European countries to bail out their debt-riddled neighbors under the pretext that "stronger members should absorb the costs; else, the regional effects would cost much greater". As Assumption No. 3 slowly cools off, we still have the first two to worry about; would we still be headed towards a global stagflation?

By the looks of it, the indicators are too strong to suggest otherwise.

Why Stupid People Get Richer

Is a very interesting book title

Here we have the deputy chairman of The Star giving a speech to UTAR graduates on how to be more creative and take (calculated) risks. An interesting and thoughtful speech.

Would've been better if I was there to hear it myself.

Where Are We Headed Part 1

Coming soon to a store near you.

In the west, we have America's debt ceiling crisis (which remains partially unresolved), with Europe on the verge of kicking Greece out of the eurozone for failing to meet their fiscal targets; being one of the conditions they accepted when receiving the bailout fund from the European Financial Stability Fund / European Central Bank. I knew that this whole debt-crisis bullshit would somehow spread to the east, but I didn't expect it to have such an impact to a point where Fitch Ratings changed their outlook to China to negative, with a high probability of downgrading their bond ratings as well; including Japan.

Although numerous organizations are confident that chances for a double-dip recession or a meltdown similiar to 2008 are low, the outlook is still bleak, worse, we might even be heading towards a total global stagflation. Personally I believe this is the only direction in which the global economy is heading, and the signs are evident. High inflation, with moderated or low economic growth leaves legislators and central bankers with a massive headache. The South Korean government is one of the many countries currently experiencing this issue.

Despite all this, OECD has called for central banks to maintain their interest rates, wheras the IMF has urged countries to opt for stimulus packages or introduce some measures to develop growth (provided that they develop a credible mid-term debt control strategy) instead of focusing on short term austerity measures. These options however, are extremely tight and limited; not many countries (especially ones which are currently debt riddled) have the luxury executing anything else except an expenditure cut. So where does all this leaves us? In a shithole without a doubt.

Maybe Paul Krugman can come up with a Plan C this time?

World's Solar Panel Industry

We needz moar energi!

I have always been under the impression that America is the world's leader in terms of innovation, technological development and advancement in sciences. But with the closure of some of the Solar Manufacturing Companies; some backed by Barrack Obama himself, citing stiff competition from their Chinese counterpart, is this a tipping point where soon we will see China lead the way for solar panel developments?  It seems that solar panel manufacturers in South Korea are also suffering due to the loss of their American competitors and Chinese competition. Surely this is a sign predicting a shift in the World's Economic Centre of Gravity?

Cliche, but only time will tell.