CHAN AKYA

March 12, 2010

"Do not be very upright in your dealings for you would see by going to the forest that straight trees are cut down while crooked ones are left standing." - Chanakya (350-275 BC)

For more on the original Chanakya, the inventor of skullduggery, click here.

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 could be better spent. As that ancient Greek, Sophocles, put it, no one loves the messenger who brings bad news, but that's no reason to shoot him.

(Mar 05, '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 the "developed" world. 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 to 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)

The 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. Whoever his successor, humiliating deals with China are likely to remain part of a thankless workload.

(Feb 05, '10)

Vestigial organs

As governments in the United States and Europe figure out how to bail out their struggling states - California and Greece are the prime candidates for failure - the rest of the world can consider the human body's vestigial organs, such as the appendix, and wonder if such a fate 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 06, '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, so an economic approach is the only one that could have worked.

(Dec 21, '09)

Currency pegs hung out to dry

Following the Dubai debacle, a lot of hogwash has been written about currency pegs, specifically Dubai's "bad" one and China's "good" one. Whether a currency peg is intended to address external or domestic imbalances, it will likely be the source of significant volatility, detrimental in the long run for those wishing to take undue advantage.

(Dec 08, '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 New Moon represent the age-old quest for immortality, even as 2012 plays truant with Armageddon. Both represent a grudging acceptance, if not adulation, of 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)

Moving the leverage fulcrum

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 06, '09)

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THREAD: Re:Asia's permanent advantage
DrCore
(Mar 12, '10)
A few random points: USA's interstate highways served a significant military purpose. Its cost should be calculated under military spending, then its economic ROI is a...
Read full post/respond
THREAD: Re:More Denial by CA...
Michael
(Mar 12, '10)
two separate issues replacing and upgrading infrastructure is different than building it for the first time, the stuff that we are adding in NA is usually of the mass t...
Read full post/respond
THREAD: Re:More Denial by CA...
quark
(Mar 12, '10)
(Gad! These Chinese are becoming like us!) So why not upgrade your infrastructure like China is doing?
Read full post/respond
THREAD: Re:More Denial by CA...
MonsoonWind
(Mar 12, '10)
quark wrote: [quote Seven lane superhighway: Expressways in China are financed with various mechanism. Only a fraction of new roads are financed by central governm...
Read full post/respond
THREAD: Re: heres one for you Mike!
MonsoonWind
(Mar 12, '10)
Michael wrote: after that hockey game no one is feeling anything but good Speaking of hockey: perhaps you could clarify for me what Sarah Palin meant during her ru...
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THREAD: Re:More Denial by CA...
quark
(Mar 11, '10)
How do you figure out the ROI on infrastructure? China is building infrastructure and the multiplier affect can be compared to a similar multiplier in US in the 50/60's an...
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THREAD: Re:More Denial by CA...
MonsoonWind
(Mar 11, '10)
Chan Akya wrote: Permanent Advantage explained - did I extrapolate much? Actually no. You need to travel around Asia to see what I have seen, and enjoy what I ...
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THREAD: Re:More Denial by CA...
Chan Akya
(Mar 11, '10)
Not at all .. but the point is that an empty 7 lane superhighway in China has a tendency to fill up over 3 years and within 5 years they are soon talking about the need fo...
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THREAD: Re:More Denial by CA...
Michael
(Mar 11, '10)
Read full post/respond
THREAD: Re:More Denial by CA...
Michael
(Mar 11, '10)
so your telling me that its actually full then?
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The blame game

Asia's permanent advantage

Oedipus wrecks

The hair of Damocles' sword

Vestigial organs

Bonus battles

Nine pins from '09

What's in a name?

It's who you know

How to solve climate change

Currency pegs hung out to dry

Dubai, debt and a return to reality

Hollywood, the macabre

No country for gold men

Moving the leverage fulcrum

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