CHAN AKYA

March 14, 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.

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 18, '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 11, '08)

Dismal math

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 04, '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 30, '08)

Terminal velocity

Bailouts in the United States and elsewhere in the West 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 23, '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 18, '08)

Pareto's bazooka

The roots of Lehman Brothers' 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 enhanced 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 13, '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 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 06, '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 30, '08)

Economies in Asia 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 22, '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 16, '08)

The anatomy of an Olympic winner

Sporting success is a source of nationalist pride, an avenue for chest thumpingor 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 08, '08)

A Turkish theater for World War III

Turkey has been sold to the Saudis at a bargain price for Riyadh's assistance to the George W Bush administration in pushing down the price of oil ahead of the United States presidential elections this year. The path chosen is the same as that used to turn Pakistan into a breeding ground for terrorists, with an accelerated timetable in keeping with a preset script. Around the corner, a civilizational war beckons.

(Jul 25, '08)

A stone for Chris Cox

Investors in the United States might wish they, like Pakistanis, could stone their stock exchange. New rules designed to reduce market volatility will have the exact opposite effect by locking in unsophisticated investors into a permanent downward spiral.

(Jul 19, '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 12, '08)

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THREAD: Re:Asia's permanent advantage
Chan Akya
(Mar 14, '10)
The idea of savings as a function of national character is debatable to say the least ... MW's points are contentious, and in my opinion not necessarily apt for most reaso...
Read full post/respond
THREAD: Re:Asia's permanent advantage
MonsoonWind
(Mar 14, '10)
DrCore wrote: Another factor that is at least true in China, (but I think also apply to other Asian, post-1997 flu countries) is that most of the infrastructure ...
Read full post/respond
THREAD: Re:More Denial by CA...
MonsoonWind
(Mar 14, '10)
quark wrote: (Gad! These Chinese are becoming like us!) So why not upgrade your infrastructure like China is doing? When we can afford to I am sure we will!
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THREAD: Re:Asia's permanent advantage
Michael
(Mar 13, '10)
2. Crony capitalism is wrong, and always backfires in the end because of the misallocation of capital always???? the Rockefellers, haute finance, resource capitalism i...
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THREAD: Re: heres one for you Mike!
Chan Akya
(Mar 13, '10)
MW, I would expect pretty much ANY thing that Sarah Palin says would lead one to scratch his head .. I have heard the expression 'soccer mum' before i.e. mums who take...
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THREAD: Re:Asia's permanent advantage
Chan Akya
(Mar 13, '10)
MW, Your pursuit of clean air and elbow room is commendable - but not to worry, all Western countries with their demographic declines and net emigration (i.e. negat...
Read full post/respond
THREAD: Re:Asia's permanent advantage
DrCore
(Mar 12, '10)
Another East/West difference is that in Asia, the boundary between public and private interest is far more blurry. This is not just Communist China, it applies just as we...
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THREAD: Re:Asia's permanent advantage
Michael
(Mar 12, '10)
everybody love infrastructure no one wants to pay the cost.
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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...
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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

More...

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A Fukuyama moment in finance

Europe's death by guarantee

Dismal math

Deaf frogs and the Pied Piper

Terminal velocity

Waiter, there's a banker in my soup

Pareto's bazooka

Triangulating an Asian conflict

Bear-faced bluff

Economies in Asia meet gravity

Utterly pointless Europe

The anatomy of an Olympic winner

A Turkish theater for World War III

A stone for Chris Cox

And now, for Fannie and Freddie

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