Europe's Final Countdown

"As much as I hate this fatass ..."

... I still think that his article is a brilliant piece of work. Lack of political integration despite unified monetarily speaking, the fallibility and reflexivity of modern economic theories; without understanding the problem - just some of the issues plaguing Europe.

Time's running out!

Are Maids That Necessary?

"Thats a shitload of sand to vacuum."

In the blue corner, we have a maid whose face was branded with an iron. In the red corner, we have a maid who took off with half a million worth of luxury goods. Ready?

Fight.

This issue has been dragging on long enough to affect Malaysia and Indonesia's political dance; which has been devoid of any romance since the day Malaysia was formed. On one hand we have the Malaysians who actually need the assistance of maids to do the daily chores while the parents get off for work whereas on the other, Indonesians who are in dire need of a job - any job. But let us ask ourselves this one question first before we go deeper into the topic;

Do most Malaysians who claim that they need the service of maids actually need it, or are they just blatantly lazy? Or perhaps the main question is; because the services cheap enough, Malaysians have developed this perception that the price in which they pay can is worth the free time and hassle they receive in return? Fine, I lied; there's more than just one question.

Looking through the articles in which I've gathered, here we have issues such as maids getting ripped off by agencies, and making agencies reimburse clients due for unsatisfactory service provided, at the same time protecting maids' rights.

Yesterday I bumped into this article, where towards the end, it mentioned a very good point on how hiring maids results in children growing up without knowing how to perform simple tasks. I couldn't agree more or this; the over-reliance on maids has resulted in Malaysia developing a mentality where having maids in each household is the norm; without it a family becomes dysfunctional - ridden with simple tasks. Now can you categorize this as a form of "outsourcing" ? or do you reckon its just a way of dealing with laziness?

Personally I don't think its a form of outsourcing; laziness would probably be the primary driver. Much like how the industry would rather source cheap foreign workers (at the same time higher productivity) compared to hiring local staff. Can we blame them on this? Doubt it; but to the least there should be some control over the amount of maids being brought into the country, in order that we can curb the over-dependance on maids.

Question is; are we capable of doing it?

Demystifying Japan

"Yeah, those Japanese love their stimulus bills"

I found four back to back articles relating to Japan which argues for and against (mostly the former) the idea that Japan's economic outlook is a "failure". To make things easier, let me go through each of the articles one by one and summarize the sailent points in which the authors are pointing out.

The Myth of Japan's Failure by Eamonn Fingleton

• Author has the opinion that the Japanese Economy has done very well during the so-called lost decades.
• Average Japanese lives longer than Americans.
• The Japanese has one of the fastest internet services in the world.
• The Yen has risen by 87% against the US Dollar and 94% against the British Pound since 1989.
• Japan's account surplus grew more than threefolds since 1989 to USD$ 129 billion.
• Its citizens seems to be living lavishly with the latest cars and spoiled pets.
• America's higher growth rate compared to Japan is an overstatement as American statisticians have been using a hedonic method of adjusting inflation which distorts the actual growth.
• Electricity output per capita is twice that of America.

Japan, Reconsidered by Paul Krugman 

• Agrees that there is an overstatement of Japan's decline.
• Current account surpluses are not necessarily a sign of success.
• Proposes that GDP Per Working Age is shrunk during the lost decades.
• Concurs that the data doest not match the picture of relentless decline.
• Believes that America is doing worse than Japan ever did.

The Myth of The Myth of Japan's Failure from Tokyo To The World 

• Japan's account surplus is being eroded by the rising yen.
• The Yen's rise is exacerbated by the Dollar & Euro's woes.
• Unemployment figures does not include those who work part time.
• Even if unemployment was lower than america, that might be due to fewer eligible people.
• Japan has the highest Debt to GDP Ratio in the world.

A Reply to Paul Krugman by Eamonn Fingleton

• Argues that GDP Growth is distorted due to Services Sector's contribution to GDP and measurement techniques.
• Differing political agendas; America wants to display strong growth with Japan the other way.
• Argues that the sobriquet "Juggernaut Japan" solidifies the importance of Trade Surpluses.
• Quoted John F. Kennedy's fear of Nuclear War and Trade Deficits.
• How Japanese companies still pioneer high tech industry based on research

Undoubtedly, some very, very good arguments, points and opinions being thrown around. These articles shed a lot of light on my interest as to why Japan has not be performing so well. Some may be disputable, others however, are very interesting. Here are some of the things that I found interesting;

America's overstatement of growth is driven due to statistical measuring techniques.

It has never really occured to me that America could in a way overstate their growth due to differing statistical measuring techniques. I would expect this to come out of my own country but not from America where Transparency is being thrown aloud, which brings me to my second point.

Differing political agendas.

This is undoubtedly try and beneficial to parties who know how to manipulate information being published. America, in all their might, and as the self-proclaimed leader of the world would always want to project an image of a strong economy and stand out against other countries in order to be able to keep the world under its grip. The Japanese however have a different agenda; after being forced to adapt to the Bretton Woods system (which many attributed to their downfall), they would have lesser incentives in showing themselves to be a dynamic and economically influential. Despite still laying low, they are both tempted and sort of being influenced to participate in the latest FTA - the Trans Pacific Partnership.

Unemployment figures does not include those who work part time.

To some extent I would agree to this idea. Normalyl employment figures are based on number of people contributing to national pension funds; which could either be full time or part time workers. Unemployment figures could be manipulated by including figures that would not be taken into account elsewhere; again bringing us to the issue of measurement technique used.

Distortion in GDP's ratio to services and measurement techniques.

I know for a fact that measuring Services Exports itself is a pain; let alone Services Sector's contribution to a country's GDP, measuring techniques used and other variables which can be identified to measure a country's GDP growth. So this would definitely distort the actual figure of a country's overall economic performance.

Throughout the articles, there were a lot of calls on how westerners should actually come and visit Japan itself to see how well they have progressed. But not all of us have the luxury of doing so. So yes, I must say, after reading all the above, my perception towards Japan's performance has undoubtedly changed.

But which side of the fence its on is still a blur.

Grow Up Greece!

"Cage them! Cage them now!"

To be a single nation or not to be? That is the question.

In order to answer this question, another question must be answered beforehand - would Greece be able to pay off their debts? Clearly, the answer is no. Knowing thism Greeks must unite and take the necessary measures in oreder to contain their financial problems - but the problem is even the citizens themselves don't know who to elect. Reason being? All the candidates speak of austerity measures which is extremely unpopular with the public.

Are fucking retarded?

Its high time that you put a sock in it after years of binge spending. You want to tell me you're unwilling to cut down your spending? Isn't that a bit childish? Look at how Koreans were willing to give their personal gold during the Asian Financial Crisis 97/98 just to help their country to get out of the debts in which those IMF & World Bank assholes put them into.

Get your act together retards!

Can Japan Rise From The Ashes?

"Never thought I'd see a pin like this."



This is probably my third article related to how Japan is losing to Korea, with the latest one written right before my lengthy distraction - yes, I was distracted.

It seems like a large number of Japanese companies admit that they are lagging behind their Korean counterpart, in particular, the Television Industry to which Samsung and LG are currently holding the heavyweight title. To say that the Japanese are completely out of the picture however would be too much of an understatement; they are still somewhere on top with their Advanced Robotics Industry, among other high tech things.

I think the bigger question in this case would be how long can South Korea maintain their position as a top producer and exporter of electronic goods? I recall having this interesting chat with the Assistant Trade Commissioner from Korea based here; we were talking about how Koreans work late and I thought that this could be a factor draining creativity and innovation to which he couldn't agree more. He also questioned Korea's how long can they sustain their top position. Personally, what Koreans have achieved so far can be attributed to their sense in reverse-engineering; for instance, have you tried comparing Samsung's Galaxy series to Apple's iPhone? Notice the similarities? I also question their status as a "developed" country; and wealth generation which does not distribute income equally.

Korea's ability to maintain their top position can be question through the multiple suits launched by both Samsung and Apple against each other (to which I think was overly stupid and childish). Why you ask? Well after the couple settled down, Apple now plans on purchasing memory and microprocessors from Japan and Taiwan, in an attempt to "reduce their dependance on Samsung" to which, is nothing more than a bunch of pure, unadulterated bullshit. It's clear that Apple was butthurt with the entire charade; so their relataliating by swapping suppliers. Now the question is; how would losing a major client such as Apple affect Samsung's overall direction? I'm pretty sure their future direction now is somewhat shaky to the least.

Clearly, only time will tell.

The Great Hiatus

"We will return shortly ... maybe after 2 months"



... Yeah. Procrastination and pretending to be busy at work was probably the reason.

Getting back;,here are two interesting stories.

So it seems like there's a growing number of Chinese Companies defaulting on their contracts; why you cunning bastards. Can't blame them since there's their economy has been going downhill since last year. Now that demand on their side is weakening the whole world is in panic mode; affecting countries like Australia. Could this mark the downfall of China's economy - therefore the world? Fuck no. I'm pretty sure its temporary. I had a good chat with a newly made acquaintance who thinks that the China's economy isn't really slowing down; the Chinese government is artificially cooling (with the relevant policies) the economy to make sure they don't grow 12" inches too long or to a point where inflation comes on their faces harder than a brick wall. In his words; Effective first, then Effeciency. So I guess the government is making tweaks to make sure growth is stable in the long run; hell any GDP growth of <5% should be better than any of the already developed countries.

On another note, I recall reading an article on South Korea being pressured to halt their imports of oil from Iran; although America agreed to allow them to continue all non-oil related transactions, EU is starting to throw a fit and rejected any exemption appeals by the Korean government. Not a big fucking deal to me anyway but I was drawed towards this particular line in one of the articles;

European insurers have a monopoly on shipping insurance, so it will be extremely difficult to find replacements

How come they have monopoly over shipping insurance; in particular, for Oil Shipments? I think that is a huge fucking question that needs to be answered; I'm demanding it to be answered. Could it be because of the fact that they have been in the industry so long? Is it because only they have the capital for it? I doubt it. This is definitely something worthwhile doing a bit more research on.

Feels good to be writting again.

Korea Fastfoward?

I think its a Chinaman and nota Korean on the right side ...

As much as Japan is changing (refer to previous article) and how Korea is overtaking Japanese Companies, here's a newer area in which Korea is overtaking Japan in. Come on you Japs, what the hell are you guys doing?

Why I Stopped Learning Japanese

Impossibru!

This is why. I've always wondered why there are elements of incest in some of their mangas and animes; apparently much like how England outcasted convicts to Australia, China sent incest-lovers to Japan.

Mind-blowing.

Say No To Populism

Take ALL the money!

I've always wondered by the name Bahk Jae-wan comes up in ChosunIlbo; turns out he's one of those policitians who actually knows shit but not sucumbing into populist measures during election years, unlike Malaysia. Its these kind of politicans that we need - people who act not based on what the people want, but what what's best for the people.

Pancake Index?

Mmmmm pancake. Dope!

There seems to be some sort of obsession by the team at The Economist; in addition to creating the Big Mac Index in measuring currency over or under valuations (with its own set of limitations of course), they have (unofficially) developed another index based on cost of pancake ingredients; although it seems that they have done this to commemorate Shrove Tuesday rather than planning on doing it on a regular interval.

Still, deliciously informative.

Notes to the Prime Minister

He has spoken!

Two recently good articles by Mahathir on how the west is poor and how Malaysians are immature in dealing in rationally discussed emotional and sensitive issues.

Sustaining Japanese Exports

Good point; why dont they try to export their Sumo sports?

Well can they? In a recent article from Yomiuri, Japan posted their first Trade Deficit in 31 Years (since 1980); should we call this an achievement? Definitely, but not a positive one.

The deficit is a result of four consecutive events which occured in 2011; The Japanese Earthquake, The Flooding of Thailand, Appreciation of Yen and a Surge in LNG Imports to commenstruate the loss of power generated from the Fukushima Nuclear Plan. Now apart from Trade Deficit, another concern of theirs would be their dwindling Current Account Balance.

Ouch! Two hits in one year; that can't be pretty. Apparently the majority of the surplus in their Account Balance is driven from the interest payments received from U.S. Bonds in which the Japanese Government holds quite a nice sum. This is what happens when you get America to spend a lot, and East Asian countries to produce them; imbalance in the production and spending side of Capitalism. So when a major importer like America and EU get hit by recessions, they don't have anywhere to export their products. This trend can be seen happening in all high value (non commodity) export-dependant countries like South Korea as well; actually based on another article from Voxeu, Korea's economy looks much more volatile compared to Japan.

The graph basically depicts Import Contents of each main GDP Component; carefully look at their "Exports" column, and you'd be surprised to see that close to 40% of the products they produced contain imported contents (most probably from Japan or China). So what does this tell us? Simple. Either find new markets, or stimulate your domestic economy. Concerns are currently being raised in Japan; the appreciation of the Yen has led (more like forced) companies to move their manufacturing operations overseas, potentially hollowing out Japan's manufacturing industry. So what happens next? Good example is America; where the rich get richer and the poor get poorer.

Don't you just love the world that we live in?

Repurcussions on Denouncing FTAs

Sorry ... I don't speak Chinese, English please?

I was surprised to read an article saying that should the opposition party in Korea win the upcoming April 2012 elections, they might be inclined to repet the US-Korea FTA which was some at, uhm, sometime ago after (what I recall as) a long series of negotiations. To answer the question whether they should or should not write off their FTA, they must first ask themselves; what made them negotiate and sign an FTA with America in the first place?

I recall reading a discussion on the US-Korea FTA in one of my groups on LinkedIn. As far as I can remember, the argument was even though both parties opened up certain industries for mutual benefit, Korea loses grounds in their agriculture industry; where the evidence can be seen in the government's efforts to give support to their Farmers and Fisherman (also interesting; 15,000 farmers earn more than USD 100,000 annually). Now as much as I am all go for Free Trade Agreements, one thing I would disagree is creating a disadvantageous environment (unfair competition) for key industries, one of which is Agriculture. The reason being is, if you open yourself or create an environment where basic necessities such as food being open to foreign competition, what if the import supply gets cut off?

Now of course, this is quite a contentious issue and the government knows this and is trying to circumvent the issue by giving them subsidiaries. But would that be enough? We all know subsidies can help cushion certain impacts but also creates market distortions. So the question now for this particular issue is; are they making the right move?

Obviously no.

Yen Intervention; Again?

Illustrates the actual situation perfectly.

The Japanese Government is at it again by selling up the yen to ease the appreciation of the Japanese Yen against the dollar. Have they ever thought for the slightest moment that, the problem resides in the depreciation of the US Dollar rather than the appreciation of the Yen? Would selling the Yen increase the circulation of the currency therefore, devaluing their currency? I doubt so; and wouldn't such an intervention be deemed as illegal? How come America's allies always gets away with everything and Iran's so called "Nuclear Programme" suddenly gets a bill banning any financial institution from conducting dealings with them. God damn capitalists.

But the results are apparent, they posted their first Trade Deficit in 31 years, and numerous Japanese companies are feeling the pinch, instances like NEC cutting 10,000 staffs globally, Sony changing their CEO, Toyota posting the largest loss ever since their inception; and so too is Panasonic. To top this off, South Korea; both its citizens and companies are surpassing them in every front. Their people are learning English overseas, creating human capital capable of integrating into the global economy much easier compared to Japanese and its firm. Now they're losing out on their exports; they should either stimulate their stagnating domestic economy or change the perception of their citizens on adapting to globalization.

The question is, are willing to do so?

Linguistics with Trade & Economics

Parle vu Englisheru?

Very thoughtful argument on the impact of language on trade and integration of the economy into the world. I do believe language does have an influence somewhat (e.g. my belief that one of the reasons Korea is surpassing Japan stems from the fact that a lot of Koreans are open / willing to learn English; to the extent that a lot of Koreans spend their highschool years overseas in English Speaking countries) on the economic development of a country. I think claiming that learning other language is "useless" is extremely one-sided. The exchange languages, apart from English, generates economic activities itself; through cultural mediums be it tangible or not. Should the world unify and speak one language; wouldn't it be a dull world?

Be damned if it wouldn't!

Repatriating Koreans

Picture totally unrelated. Seriously.

A bit off topic - but I plan on making this a regular thing.

This is an amazing article about how the founder of Ticket Monster (Dan Shim) quit his job at a reputable consulting firm (McKinsey) to do his own startup - very inspirational indeed. Remind to self; start doing your own research and brainstorming sessions.

State Capitalism

Didnt really get the comic but close enough

Here we have an article about the argument (mostly) against State owned Capitalism; e.g. companies in China, Petrobras etc. Let's get straight to the point; it argues that State owned Companies are ineffecient, breeds corruption and cronnyism, with strong manipulation and control by the government. Not to be a socialist / communist myself, but I think in some critical areas / sectors of a country (e.g. Energy & Utilities, Food Supply) it could be rather useful for a country to manage it from afar by owning a majority of the shares. I blatantly disagree if you were to say that all entities should be privatized as if you did it; you'll end up being like America.

The questions is why? and how?

You want to talk about corruption and cronnyism? What about all those companies and corporations who sponsor Presidential Campaign ads, only in turn, make the President of one of the world's economic powerhouse their puppet - much like corruption? sounds like cronnyism to me too. Companies being ineffecient? Ineffecient in terms of making money; but not necessarily ineffecient in terms of serving the people socially. Manipulation and control by the government is essential since to me, I find that no coporation should be more powerful than the government; else people would suffer; simple cases, America, United Kingdom, South Korea. Fine they have a larger GDP Per Capita - but look at how the underprivellaged are treated (those with no money) and look at how they spend?

But of course, this is a contentious issue.

Still open to discussion.

Why He Needs To Come Back

Ex-PM, 86 Years Old, still runs it Like A Boss

Despite being past his prime, he still exerts a strong influence over the country, while at the same time displaying hit wit and wisdom (with a tinge of criticism) in his latest public appearance. Always brings out goods points (but arguably not all the time); but I've always been an advent supporter of his Look East policy, condemning the West for their extravagant spending, and the mentality that they will always be rich.

Come back to us bro.

Overdependancy On Credit Rating Agency

Oh relax Sarkovsky. It just means that a woman can manage their finances better than you.

This is a good article on how investors should not rely too much on Credit Rating Agencies - much like how professional violinist, olympic judges, and wine critics lack consistency in their judgement. Humans by nature are prone to bias hence, we shouldn't solely rely on other individuals as a proxy to our own critical thought process and judgement.

Trade Protectionism; Do They Actually Benefit Anyone?

Thats is, come closer, come closer

I've been rather intrigued, no, actually concerned. In the past month, I have been placing emphasis on reading policies set by other governments around the world on trade. Where some countries opt to free their markets further through FTA, others have been skewed more towards protectionist measures (based on Global Trade Alert). A paper done by Simon Evenett also questioned WTO's role in restraining protectionism; although I somewhat agree to the fact that WTO's role all this while seems to be focusing on liberalizing international markets, they should somehow place efforts in hastening their Trade Dispute Settlements, or create a clear guidance on the level of protectionism a country is allowed to take when attempting to protect national interests.

But another issue was also raised by Richard Baldwin is Murky Protectionism. What Baldwin discussed in his compilation paper was that certain countries (particularly developed ones) tend to create protectionist policies masquaraded as Green Policies under the guise of increasing quality standards or protecting the environment (under the pressure of their domestic contingencies). To be fair, their concerns on both national interests as well as increasing quality standards is justified however, what I believe is rather absurd is the timing as well as unnecessary clauses in their policies which would further increase costs to exporters and extend processing time (among others). Such policies would have a high probability result in companies passing the cost to consumers, further aggravating and dampening trade between nations.

In the globalized world we live in, vertical specialization has resulted regions, no, the world's production chain to be fully integrated. As explained briefly in his report, Richard Baldwin illustrated the supply chain for Hard Disk Drives, clearly showing how each part and componenet was derived from each of the ASEAN countries - from here we can infer that should one country implement a protectionist-skewed measure against any of the componenets, it would have drastic effect on other countries within the region due to the movement of parts and components. Putting all this aside, the main question still remains; do Trade Protectionist Policies actually benefit countries, companies, consumers or anyone in that matter?

Personally I don't.