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ISOLATIONISM |
rffrydr
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 Posted: Wed Feb 17, 2010 5:51 pm Post subject: ISOLATIONISM |
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Coming through the polls now, and will mark a cultural shift for some time to come.
http://www.mcclatchydc.com/homepage/story/80015.html
China already number one in our own eyes. We'll see if that leads to more protectionism and general resignation--or fires a new competitive spirit and pushback to a general effeminacy and culture of safety, sickness and entitlement that now preoccupies this country. That will be the real test of health-care reform.
I'm bearish on lawyers and the like. BK reform and CoCo debt is first sign. Guantanamo and Iraq set the stage. Ironically they drive protectionism.
Indeed, war as an argument is fading: US presence in Iraq has declined to under 100,000 and the drones are now shipped directly to Pakistanis.
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rffrydr
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rffrydr
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rffrydr
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| Posted: Mon Feb 07, 2011 2:23 pm Post subject: |
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India about to shut the door on solar imports as $20billion in subsidies begins to flow. The chinese "joint venture" is supposed to be the model. But the trend is already established:
| Quote: | .... U.S. and foreign companies are running into a range of regulatory and market-access hurdles in India. Retailers including Wal-Mart Stores Inc. are still barred from setting up stores because years of debate over relaxing that sector's ban on foreign direct investment haven't yet produced any action. Foreign banks are struggling to expand in India because each new branch they open requires approval by the government. Tech companies including BlackBerry-maker Research in Motion Ltd and Google Inc. have faced stepped-up scrutiny from regulators over their content and services. The government is considering a proposal to make it harder for foreign pharmaceutical firms to buy Indian companies.
Mr. Locke, the first U.S. cabinet minister to visit India since Mr. Obama came here and called for a deepening of the U.S.-India trade relationship, is here to promote exports in sensitive areas such as civil nuclear energy, civil aviation, defense and homeland security. Overall U.S. goods exports to India quadrupled to more than $16.4 billion between 2002 and 2009 and are growing quickly.
But Mr. Locke said India should continue the process of economic liberalization it started in 1991 by reducing tariffs on a range of goods, from pistachios to medical devices, and allowing greater foreign investment in sectors such as retail and infrastructure. "Even though India has made tremendous strides to open up its economy, there is much more work that's left to be done," he said in a speech to a business conference.... |
--wsj
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rffrydr
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| Posted: Thu Nov 11, 2010 6:24 am Post subject: |
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Europe announces tariffs on plastic bottle constituents coinciding with G20. We'll get some pushback to the Bernanke beating.
Free Trade deal with Korea scrapped (their auto market remains a sacred cow)....Politics and Trade never greater bedfellows.
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rffrydr
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| Posted: Mon Nov 08, 2010 7:14 am Post subject: |
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Thai FM, BOK, and PBOC have recently discussed the
idea of capital controls and the need for a stable dollar.
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rffrydr
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rffrydr
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| Posted: Tue Sep 28, 2010 4:41 pm Post subject: |
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53% don't like "platform economy":
http://www.cnbc.com/id/39407846
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rffrydr
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| Posted: Fri Sep 24, 2010 9:41 am Post subject: |
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"Take this idea and run with it." Their even copying the words. Make an electric car? We will make your electric car. Luv that new china entrepreneurial spirit!
http://www.bloomberg.com/video/63112648/
Japan released captain today....definitely bullish.
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rffrydr
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| Posted: Thu Sep 23, 2010 8:30 pm Post subject: |
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2hrs on Yuan....we got more comin'.
Knowing the past does not make it any easier dodging the future.
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rffrydr
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| Posted: Wed Jun 16, 2010 9:18 pm Post subject: |
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The Grasshopper and the Ant:
| Code: | The grasshoppers and the ants – elucidating the fable
By Martin Wolf |
Fables seek to illuminate reality. The goal of the one I told last week – concerning "the grasshoppers and the ants" – was to provide a simplified account of the world economy. Today I wish to address two questions: who benefits from the trade flows between import-surplus grasshoppers and export-surplus ants? Can the two co-exist fruitfully?
First, who benefits? My colleague, Robin Harding, raised this question in response to my advice to ants: "If you want to accumulate enduring wealth, do not lend to grasshoppers." He asked: what about the gains for the grasshoppers?
The traditional answer is that both sides should gain from any voluntary exchange. That includes these "inter-temporal exchanges" – in which ants offer goods to grasshoppers now in return for future repayment.
Yet this assumes that the decisions are well informed, markets are flexible and contracts are enforced. None of these assumptions seems all that plausible. A reason people may not make informed decisions is, readers argue, that what some call "locusts" (financial capitalists) fool both grasshoppers and ants. At best, agency and information problems in financial markets make it hard for ants or grasshoppers to understand what is going on. At worst, locusts use their wealth and knowledge to rig the game to their advantage.
Financial markets are certainly subject to cycles of euphoria and panic. A big role is played by the property market. In good times, rising land prices provide collateral for leverage and an incentive for risk-taking. In bad times, a collapse in land prices may lead to mass bankruptcy and threaten to destroy leveraged financial institutions.
Some economists question whether the benefits of trade in goods and services apply to trade in finance at all. Jagdish Bhagwati of Columbia University wrote a famous article on these lines in the wake of the Asian financial crisis of 1997-98. In this he decried what he called the "Wall Street-Treasury complex".*
In sum, we cannot assume that cross-border finance allows ants and grasshoppers to make wise decisions about the timing of lending and spending. Ants are likely to find that their funds have been consumed or invested in production of non-tradeable assets, such as housing. They are also likely to find it hard indeed to extract repayment from grasshopper colonies. True, inside the eurozone, powerful ant nations may be able to put the countries in trouble under central control, though even that would only be possible with smaller countries. But the equivalent will be impossible vis-a-vis the US – the biggest net debtor.
The implication seems to be that grasshoppers should at least benefit from an inflow of often unrequited resources. But that assumption is unwarranted if the outcome is unsustainable levels of consumption and underinvestment in capacity to produce tradeable goods and services. The economic collapse, when inflows of capital halt, can be very painful – even more so if a fixed exchange rate (or currency union) demands a period of falling nominal wages and prices. That, in turn, tends to raise the real value of debt, worsening the plight of the grossly overindebted grasshoppers.
In all, large-scale net flows of debt finance from ants to grasshoppers seem unlikely to do either side much good. Ants, it is true, do build up their productive capacity. But they also accumulate poor-quality assets and become dependent on what may well be unsustainable grasshopper demand. The economies of grasshopper colonies, in turn, come to depend on unsustainable capital inflows and excessive consumption. When the glorious party ends, both sides end up with big headaches.
This leads to the next question: is there a way to ensure ants and grasshoppers coexist harmoniously?
A part of the answer must be to reduce the instability of financial markets. This is the focus of the debate on regulation – a topic I have discussed previously. I would add two points here: first, seek to reduce the extremes of the property cycle by taxing the rental value of land; second, remove incentives for leverage from the tax code.
Yet the biggest single problem of the global system, in my view, is the attempt by ants to provide so much "vendor finance" to grasshoppers. In the end, both ants and grasshoppers have ended up disappointed. A more productive use of the surplus savings and productive capacity of ageing ant nests would be to lend to younger ones. So finance should flow to emerging countries, in general, and fixed investment in emerging countries, in particular. It is in the latter that the best opportunities for new investment should exist. It is the latter that are also most likely to generate the ability to service and repay the loans they have received.
This seemingly sensible proposition runs up against two huge difficulties: the first is that almost every attempt to generate large net flows of capital to emerging countries over the past three decades has ended up in a crisis; the second is that, as a result, the emerging world has decided to run current account surpluses and recycle those surpluses into ever larger foreign exchange reserves: in 2010, for example, according to the International Monetary Fund, the current account surplus of emerging countries will be $420bn, with an accumulation of reserves of $630bn.
Thus, in aggregate, emerging countries are recycling current account surpluses, plus the net private capital inflow, into reserves. Nearly all of these surpluses are generated by emerging Asia, in general, and China, in particular, though these countries have the best investment opportunities.
So long as this remains true, the grasshopper colonies of the developed world are likely to remain net recipients of capital, which they will surely continue to waste. Yet, under the pressure of the crisis itself, many erstwhile grasshopper colonies are being forced to become more "ant-like". If today's rich ant nests do not change their behaviour, potential surpluses will be huge. Either the emerging world as a whole starts to absorb these surpluses into potentially productive younger nests, or the world will be stuck in a demand trap, with everybody seeking export surpluses.
Flows of finance from export-driven ant nests to advanced grasshopper colonies end in tears. Flows of finance from old ant nests to young ones
have not worked out either. If a way is not found to fix these failures, the open global economy itself may disappear.
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rffrydr
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rffrydr
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| Posted: Mon May 31, 2010 3:03 pm Post subject: |
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Markets can be their own kind of protectionism. Japan on the high road, now India on the low:
India
Published: May 30 2010 20:34 | Last updated: May 31 2010 16:19
| Quote: | Multinational companies’ love affair with India is not all sweetness and light. UK companies, which have embraced the Indian growth story and surging middle class, are discovering the pitfalls. Vodafone had to take a £2.3bn write-off on its Indian telecommunications operations in the last financial year, while SABMiller racked up losses. Heavy industrial groups have seen orders, at least in the first quarter, dry up.
There are two main problems: competition and whimsical rule-making. India’s growth credentials act as a magnet for all comers, who then have to tough it out with each other as well as domestic players. Hence price wars in everything from soap powder, where Unilever has stabilised market share, to mobile phones (14 players). A quixotic approach to alcohol regulation, in a country that has never really got to grips with the end of prohibition, has tilted the playing field for SABMiller. The brewer bled money in India last financial year after two provincial governments forced prices down to uneconomic levels. |
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