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Article Archive: World Rule, Britannia 03/03/24   World "We think a long-term bet on upward mean reversion for Europe should also include a cap-weighted allocation to the UK because discounts are greater in Britain. UK stocks represent around 24% of aggregate tickers in the combined investment opportunity sets of the UK and Europe." The right level of inflation 02/03/24   World "once inflation surpasses 1%, views change quite quickly. The share of people who think inflation is too high and would better be lower starts to rise quickly, while the share of people who think inflation would be just right drops fast. This indicates that any change in the inflation target will likely trigger a significant public debate and will not be easy to communicate to the public." Adding China? 01/21/24   World "To the extent that your portfolio is diversified internationally, it's important to keep an eye on developments elsewhere. At the top of the list: China, which is now the world's second-largest economy." Demographics are not the problem 10/29/23   World "Many people (including me a few years ago) assumed that as Japan got older the Japanese would continue to stop working at the same age. But that doesn't seem to have been the case, and thus the number of available bodies in Japan has risen much more than expected. That reflects both better health and less strenuous jobs." Shorting socialism 10/29/23   World "Our research into the market experience of recent Latin American regimes seems to support the broader research on democratic norms, private property rights, and resulting market returns for countries that kept their distance from collective ownership whether via vote or vanguard. We continue to believe that investors trying to discern where to invest their capital over the decades should significantly discount markets that seem prone to policies advancing objectives that are mutually incompatible with those of capitalism." The China model 09/16/23   World "The Peking University professor Zhang Dandan recently estimated that the unemployment rate among youth ages 16 to 24 could be close to 50 percent, more than twice the official figure." Japan in demand 08/07/23   World "On the corporate front, buybacks are set to hit a second consecutive record-setting year in Japan, and dividend yields in deep-value Japanese stocks reached parity with the rest of the developed markets for the first time in 20 years this last year. With these developments already in the works, it's not too surprising to see global asset allocators run out of tangible reasons for the continued dramatic underweight on Japanese equities." The depopulation bomb 06/25/23   World "Stephen J. Shaw, data scientist and demographer, talks about the global decline in birth rates" [video] U.S. investors underestimate risk 05/14/23   World "The tendency to invest in domestic stocks may appear safer to Americans than the risk experienced by global stock investors. While it is important to use expected returns as the primary input in a financial plan, advisors should be aware that the possibility of extreme losses that could derail a plan isn't limited to the worst-case scenarios experienced only by U.S. investors." European value 04/08/23   World "the European market is effectively a large value index today, as it trades at 13x Price/Earnings, which is cheaper than the US large value index at 14x Price/Earnings" Dan Wang on China 03/05/23   World "What I did not sufficiently appreciate is that a state that would so casually decapitate a sector like online tutoring would also have the will to visit catastrophe upon whole cities. And fear of those moves is wearing on people. I perceive a fading sense of enthusiasm among businesspeople and youths." The build-nothing country 03/05/23   World "Ever day, new examples of this stasis pile up. In Berkeley, a plan to build student housing was just blocked by a court, which demanded that the university study whether students themselves constitute an environmental hazard. I wish I were kidding, but I'm not." Sudden Stops 12/11/22   World "South Korea screens as the most vulnerable country, due primarily to high levels of domestic credit (165% of GDP) as well as capital inflows measuring 5.7% of GDP. We estimate the probability of South Korea experiencing a crisis in the next quarter as 3.55%." Democracy is good for returns 08/27/22   World "Lei and Wisniewski's findings suggest that because stock investments in more autocratic countries have provided lower returns with higher volatility and have been accompanied by expropriation risk, investors should underweight these countries in their portfolios. Investors wishing to minimise expropriation risk should consider screening out autocracies from their portfolios, or at least minimise exposure to them." Who owns sovereign debt 07/10/22   World "The researchers found that during recessions foreign non-bank investors and domestic banks dramatically reduce their holdings." Floodgate 06/17/22   World "will the Fed have to hike rates far enough to cause a recession? The most probable answer now is yes, absolutely. Ben Bernanke in his 1997 paper showed that central banks tragically capitulate to fighting energy-driven inflationary episodes, only to learn later that hiking rates into such events roughly doubles the effect of tightening because higher oil prices eventually act like a tightening on their own." Commonness of divorce in America 06/12/22   World "Out of people who married at least once, the percentage of people who were married more than once or divorced approaches 50 percent as you get to age 60. But mortality appears to take precedence after that." Deep roots 04/03/22   World "Innovation in particular is hard to envision if you think of it happening all at once. When you think of it as tiny increments, where current innovations have roots planted decades ago, it's more believable - and the range of possible outcomes of what we might be achievable explodes." Tyler Cowen on economic growth 03/27/22   World "He visits the podcast to discuss the moral argument for high economic growth and discusses the relationship between growth and issues like general happiness, geopolitics, and the transition to a society with net zero carbon emissions." [video] Crisis in Turkey 03/13/22   World "We differentiated between two types of crises: global ones, defined as a 50% drawdown in emerging markets that happen in parallel with a 20% drawdown of the S&P 500, and idiosyncratic ones, where only the local market has drawn down. Our research suggests that value stocks are strong return generators in global crises, but US dollar-denominated government bonds are a more reliable bet in idiosyncratic crises." Will the optimists triumph yet again? 03/06/22   World "Despite the wars, depressions, and sicknesses of the last 100 years, we somehow pulled through. The optimists triumphed. As we face similar challenges in the days and years ahead, the question is: will the optimists triumph yet again?" Surprise, shock, and uncertainty 03/06/22   World "The world breaks every decade or so. There are so few exceptions to this it's astounding." CS Yearbook 2022 02/26/22   World "This is an extract of the Yearbook 2022, produced in collaboration with the CSRI by Elroy Dimson, Paul Marsh and Mike Staunton. This year's edition focuses on diversification as a special topic and offers an extended dataset by adding three new markets." [pdf] Japan's empire builders 01/22/22   World "There may be a lot we can learn from the curious case of Japan's empire builders. Japanese companies both do far less M&A than US firms and seem to have had better results from the deals they do. Yet strangely, it is American consultants, bankers, and lawyers who believe their methods of doing business are superior, not the other way around." The same stories, again 11/06/21   World "No one knows how they'll respond to risk and setback until they're in the moment of terror." A meta supply chain 11/06/21   World "Oil prices continue to soar, but natural gas prices in Europe and Asia are the near term concern for the global economy and equity markets." Buying cheap assets 09/12/21   World "Robert Arnott will discuss why he believes this long era of U.S. large-cap growth dominance could be coming to an end and what could take its place." [video] Turning Japanese 07/25/21   World "Demographers now predict that by the latter half of the century or possibly earlier, the global population will enter a sustained decline for the first time." In defense of global stocks 07/19/21   World "As you can see, most global stock markets would have increased your wealth most of the time. The primary exceptions to this are Spain in the 1970s, Japan in the mid-1980s to mid-1990s, and a handful of countries in 1999 and after the year 2000. The worst performing market in the group is clearly Greece, which destroyed wealth at a rapid clip starting in the early 2000s onward." Following Japan 05/16/21   World "Obviously, this is not some romantic version of being active and productive in old age. Most of the time, older Japanese have to go back to work in some minimum wage jobs just to make ends meet." Weighting on China 05/16/21   World "Our conclusion is that, compared to Japanese public equities today, Chinese public equities are not technically public or equitable to the extent we can measure. They are massively more expensive and are probably subordinated to much more dubious lending practices than the government-approved ratings agencies would let on, according to S&P's mathematical standards. But we must admit that the trailing and one year forward growth is red-hot in the market that's marked-to-Marxist." Money printing and inflation 04/25/21   World "Intuitively, inflation should follow the money supply. The more money that circulates in an economy, the more demand for products and services, which should lead to higher prices. However, the economy consists of many interrelated variables and linear models frequently fail to represent reality." The economic recovery in Japan 03/21/21   World "Despite one quarter of value outpacing growth, LTM EBIT margins are still 52% below their 2018 peak. Because of this, upward pressure on stock prices should depend very little on multiple expansion. Simply getting back to 2018 operating income is a ~100% return if these value stocks can hold their current multiples." The great forgetting 02/14/21   World "Perhaps the most firmly established proposition in late 20th century macroeconomics is that the Great Inflation of 1966-81 was caused by central banks printing too much money. If that proposition is wrong, then I might just as well give up. Everything else I believe about macro hinges on that being true. If the Great Inflation wasn't caused by too much money, then what can macroeconomics tell us about the world?" Emerging markets crisis investing 02/14/21   World "Verdadcap's 55-page study of emerging market crises." [Book] Stagnating growth 01/17/21   World "Recently released Census Bureau population estimates show that from July 1, 2019 to July 1, 2020, the nation grew by just 0.35%. This is the lowest annual growth rate since at least 1900." Children can't live here anymore 01/10/21   World "The consistent policy of the US since the 1930s is to make life harder for successive generations. The unique and unusual growth post-WWII hid that, but declining growth is laying that bare now. Social Security was a very sweet deal then for old folks that has become a very sour deal now for young folks. Defined benefits plans are a thing of the past, replaced by modest encouragements to personal savings using defined contribution plans. And now we see the same in monetary policy, where suppressed interest rates relatively favor those who are older. And, increased indebtedness slows future GDP growth." Locking it in 11/14/20   World "Regardless of how long the current downturn lasts, we believe current oil prices are unsustainable as they trade below the breakeven price of most major producers." The Global Market Portfolio 11/08/20   World "The global market portfolio realizes an average compounded real return of 4.45%, with a standard deviation of annual returns of 11.2% from 1960 until 2017, gross of trading costs, taxes, and/or management fees." Emerging concerns 11/08/20   World "While the U.S. isn't perfect, many emerging markets countries have policies that should give investors pause. Some have authoritarian regimes. Others exhibit little respect for intellectual property and have shown a willingness to confiscate or nationalize businesses. Corporate governance and accounting rules are more lax." Hidden world of failure 10/24/20   World "This hidden world of failure helps to create a deeply flawed understanding of the universe. By not seeing failure, we misunderstand the elements of success." Overnight tragedies 10/24/20   World "An important thing that explains a lot of things is that good news takes time but bad news happens instantly." Canned tuna got canned 08/22/20   World "Price fixing is absolutely wrong, especially for a product that people depend on. That's the difference between them eating dinner and not eating dinner. That's canned tuna. We're not talking about bluefin toro that's served at Nobu." U.S. stocks vs. world GDP 08/16/20   World "With the stunning rise in big American tech stocks, the U.S. portion of this global equity market capitalization is nearing all-time highs. While there isn't necessarily a connection between stock values and economic output, it is a way to estimate sentiment and valuations." The tab for the free lunch 08/14/20   World "Today the tab for the free lunch has expanded well beyond the saver. The action of central banks committing to bail out capital markets on such a scale has stemmed market dysfunction but at the consequence of artificially shoring up asset prices, usurping the role of markets in pricing risk. New Age thinking of the sort currently proposed is on the cusp of a political takeover of the economy." Fertility rate 07/18/20   World "Researchers at the University of Washington's Institute for Health Metrics and Evaluation showed the global fertility rate nearly halved to 2.4 in 2017 - and their study, published in the Lancet, projects it will fall below 1.7 by 2100." Do civilisations collapse 06/06/20   World "The idea that the Maya or Easter Islanders experienced an apocalyptic end makes for good television but bad archaeology" The Simon Abundance Index 2020 05/03/20   World "The Earth was 570.9 percent more abundant in 2019 than it was in 1980." Assessing the oil shock 03/15/20   World "if we look beyond these short-term jitters, a supply shock like the one we witness at the moment should only be short-lived in nature. Russia will eventually have to fall in line with OPEC quotas at which point, oil prices should rise to the levels we saw last week. In the meantime, the lower oil prices will provide a small benefit to economic growth in developed countries that helps alleviate some of the negative consequences of the Covid-19 epidemic." What a time to be alive 01/03/20   World "The difference between an optimist and a pessimist isn't usually over substance. It's the time frame they're looking at. Problems are easier to spot today, but progress is almost always more powerful over time." The best decade in human history 12/27/19   World "Let nobody tell you that the second decade of the 21st century has been a bad time. We are living through the greatest improvement in human living standards in history. Extreme poverty has fallen below 10 per cent of the world's population for the first time. It was 60 per cent when I was born. Global inequality has been plunging as Africa and Asia experience faster economic growth than Europe and North America; child mortality has fallen to record low levels; famine virtually went extinct; malaria, polio and heart disease are all in decline." Talk about nuclear 07/07/19   World "Serious people are finally talking about decarbonizing national economies by mid-century, but such talk must be accompanied by credible plans - and no plan can be considered credible if it does not deal explicitly with nuclear power." Cheap vs expensive countries 05/27/19   World "An alternative to selecting single stocks is to focus on entire countries and rank these as cheap or expensive. The rationale for abnormal returns from buying cheap stocks should apply on country level as well. From the perspective of a current Value portfolio, this might result in replacing the shares of Deutsche Bank with indices for Greece or Portugal, which are two countries that have been trading cheaply in recent years given structural problems in their economies." China, leverage, and values 05/27/19   World "The truth is that the U.S. China relationship has been extremely one-sided for a very long time now: China buys the hardware it needs, and keeps all of the software opportunities for itself - and, of course, pursues software opportunities abroad. At the same time, U.S. acquiescence to this state of affairs has denied China the necessary motivation to actually make the investments necessary to replace U.S. hardware completely, leading to this specific moment in time." What is the heck is going on 03/11/19   World "The striking parallels between commerce, education, and politics isn't a coincidence. In fact, it's inevitable. In the past decade, the information environment has inverted from information scarcity to information abundance, and the effects are evident in every corner of society." Bill Gates on Energy 03/04/19   World Bill goes nuclear on energy. [video] What else matters 02/25/19   World "All economic growth is just population growth plus productivity growth. Half of that equation turns ugly over the next 30 years in a way it wasn't over the last 30 years. Or 50. Or 200." The world is shrinking 02/13/19   World "Dire predictions about an impending overpopulation crisis have loomed large in the human imagination for centuries. Darrel Bricker and John Ibbitson co-authors of, 'Empty Planet: The Shock of Global Population Decline,' say these predictions have been greatly exaggerated. In fact, the global population is on the decline." [video] Venezuela is a socialist catastrophe 01/28/19   World "In the meantime, the larger lesson of Venezuela's catastrophe should be learned. Twenty years of socialism, cheered by Corbyn, Klein, Chomsky and Co., led to the ruin of a nation. They may not be much embarrassed, much less personally harmed, by what they helped do. It's for the rest of us to take care that it never be done to us." What I learned at work this year 01/01/19   World "Global emissions of greenhouse gases went up in 2018. For me, that just reinforces the fact that the only way to prevent the worst climate-change scenarios is to get some breakthroughs in clean energy." Factfulness 12/17/18   World "let's clear up some false impressions of the world around us - that 'everything is getting worse.' If you don't think this belief is widespread, let me give you the results of a quiz designed by Mr. Rosling." A fifth of China's homes are empty 11/12/18   World "Soon-to-be-published research will show roughly 22 percent of China's urban housing stock is unoccupied, according to Professor Gan Li, who runs the main nationwide study. That adds up to more than 50 million empty homes, he said." Won in translation 11/01/18   World "We visited a few times and fell in love, particularly with the city of Granada. The next logical step: determining if we could swing it financially." The curious case for emerging markets 09/24/18   World "Since the inception of the MSCI Emerging Markets Index in 1988 through August of this year, EM returned 10.84% annualized while the S&P 500 returned 10.80%. Despite the eerily similar gains, a blend of the two, rebalanced annually, would have yielded better results." P/E 10 works better in some markets 09/24/18   World "the more domestically-concentrated a given market is, the less the explanatory power of its P/E 10" What's killing rural Canada 08/28/18   World "Crime, opioid abuse, boarded-up businesses and fleeing populations are destroying the country's heartland." Dematerialization 05/22/18   World "Humans want more and more all the time, which seems like bad news. Aren't we going to use up all the natural resources and pollute the Earth as we keep growing? MIT scientist, Andrew McAfee, advocates that the answer is actually 'no.' Evidence from America shows that, amazingly enough, we are now dematerializing: using fewer resources year after year and treading more lightly on the planet." [video] Venezuela crumbles 08/28/17   World "In 2001 Venezuela was the richest country in South America; it is now among the poorest." Gray Rhinos threaten China 07/23/17   World "Let the West worry about so-called black swans, rare and unexpected events that can upset financial markets. China is more concerned about 'gray rhinos' - large and visible problems in the economy that are ignored until they start moving fast." Venezuela leaps towards dictatorship 04/02/17   World "The regime is in desperate need of the money that such ventures bring. Although Venezuela has the world's largest proven reserves of oil, the socialists have mismanaged the economy so badly that people struggle to buy food and hospitals are bare of medicines." Big Mac index 01/15/17   World "In Big Mac terms, the Mexican peso is undervalued by a whacking 55.9% against the greenback. This week it also plumbed a record low as Mr Trump reiterated some of his campaign threats against Mexico. The peso has lost a tenth of its value against the dollar since November. Of big countries, only Russia offers a cheaper Big Mac, in dollar terms, even though the rouble has strengthened over the past year." The anonymous billionaire 12/24/16   World "Luiz Alves Paes de Barros is something of an enigma in Sao Paulo's financial circles. At 69, he's known around town as the 'anonymous billionaire' for quietly amassing a fortune by wagering on stocks almost no one else seemed to want." The ace of spades 12/17/16   World "On his wall, Eric has a framed Cuban cigar, he starts his story by explaining the significance of that cigar." Canada's innovation problem 12/11/16   World "Why do we export so many world-class business ideas to the rest of the world?" Venezuela, a failing state 11/27/16   World "Once the richest country in South America, it now has the world's highest inflation rate and is plagued by hunger and violent crime. How did this happen?" How Venezuela imploded 10/29/16   World "Things are pretty bad right now in Venezuela. Grocery stores don't have enough food. Hospitals don't have basic supplies, like gauze. Child mortality is spiking. Businesses are shuttering. It's one of the epic economic collapses of our time. And it was totally avoidable." Howard Marks on Brexit 06/25/16   World "'Are people going to produce less? Are people going to buy less?' Marks asked rhetorically in an interview Friday with Bloomberg Television's Erik Schatzker. Though the referendum will have significant psychological effects, he added, 'I have trouble viewing it as a financial catastrophe.'" [video] Trump, trade and the China shock 04/03/16   World "Freer trade has inflicted a more grievous toll than economists, myself included, had expected." Economic world history 10/24/15   World "The poorer countries, especially in South-East Asia, have caught up. The two-humped camel shaped has changed into a one-humped dromedar shape - the world is not divided in two anymore. And not only is the world more equal again, the distribution has also shifted to the right - the world is much richer" Zombie factories 08/30/15   World "Still, such steps may do little more than keep zombie companies alive - to the detriment of the overall economy. By pumping up growth with fresh credit and stimulus, the government might temporarily revive some factories, but also exacerbate the economy's problems of excess capacity and high debt." Hyperinflation in Venezuela 08/26/15   World "Venezuela is preparing to issue bank notes in higher denominations next year as rampant inflation reduces the value of a 100-bolivar bill to just 14 cents on the black market." How silver wrecked China 08/26/15   World "In the Great Depression, China found itself vulnerable to the price of silver, thanks to the misguided moves of U.S. policy makers." Goodbye to all that 08/22/15   World "The real curse for producers is over-supply in almost all raw materials. Yet they continue to act as if they are blithely unaware of it. Capital is still pouring into holes in the ground, creating a hangover that may last at least a decade." China's long Minsky moment 08/16/15   World "Underlying all of this is the fact that China is still dealing with the consequences of an enormous credit and real-estate bubble that has accompanied, and prolonged, the latter stages of the growth miracle." Burger benchmark finds greenback too dear 07/18/15   World "Exchange rates are currently being buffeted by the euro crisis, the growing likelihood of a rise in interest rates in America, China's slowing economy and the sharp drop in the oil price, one of the drivers of the rouble's slump. By showing how much these forces have driven different currencies off course, the Big Mac gives a flavour of what may be to come." Could China be the next Japan? 07/18/15   World "China today is very similar to Japan in 1990, and the world's No. 2 economy should be wary of repeating the policy mistakes of Japan" China crash bigger than subprime 07/18/15   World "Hedge fund manager Paul Singer said that China's debt-fueled stock market crash may have larger implications than the U.S. subprime mortgage crisis, echoing warnings from fellow billionaire money managers Bill Ackman and Jeffrey Gundlach." Successful Austerians 07/18/15   World "Post-1990 Canada certainly looks like a country with successfully managed fiscal and monetary policy. The federal government brought fiscal policy under control and reduced the burden of government debt, and the central bank adhered to its announced inflation target. How did they do it? In the 1995 federal budget, some well-liked social programs, including government health care, remained more or less intact, and cuts were made in a politically palatable way." Poorer than Greece 07/12/15   World "Europe's great Greek crisis is often cast as the downtrodden Hellenic heroes versus the ubermasters of austerity in Berlin. In reality, however, it is smaller nations that have faced crisis themselves, swallowed the austerity medicine and lived to tell the tale who are most hostile to another bailout for Athens." Greece's culture of victimhood 07/12/15   World "There are many issues at play in the Greek tragedy, but the fundamental thesis being tested is this: do states have a budget constraint? Is there a limit to how much a country can spend and borrow or - as the Syriza government and its academic apologists seem to suggest - is there not?" Germans call for Greece to leave 07/05/15   World "German Chancellor Angela Merkel's deputy said Athens had wrecked any hope of compromise with its euro zone partners by overwhelmingly rejecting further austerity." China's stockmarket crash 07/05/15   World "The Shanghai Composite, the country's main index, has fallen nearly 30% in less than a month. The sell-off of small-cap stocks, which had led the rally, has been even sharper. Chinese regulators may have more levers to pull than their peers in most countries, but even they, it turns out, are powerless to tame the alternation between exuberance and fear that makes stockmarkets yoyo. In fact, their efforts to do so may be exacerbating the volatility." Why the Greek bailout failed 07/05/15   World "As the Greek crisis evolves, it is important to understand that a successful structural-adjustment program requires strong country ownership. Even if negotiators overcome the most recent sticking points, it will be difficult to trust in their implementation if the Greek people remain unconvinced. That has certainly been the experience so far. And without structural reform, there is little chance that the Greek economy will see sustained stability and growth . not least because official lenders are unwilling to continue extending an unreformed Greece significantly more money than it is asked to pay." Greece lost the public relations battle 07/04/15   World "One of the most striking aspects of the Greek situation is just how much the Greek government has lost the public relations battle. They have lost it among the social democracies, and they have lost it most of all with the other small countries in Europe. They retain some sympathy in the American government, but we are not willing to put any money on the table and basically we want the European Union to clean up the problems for us." Tsipras's wild promises 07/04/15   World "Now look at Sunday's referendum. The people have been given eight days to take a decision that will have repercussions for a generation. What's more, the question is convoluted. The people are officially being asked whether to accept or reject an offer made by Greece's creditors on 25 June. They are then referred to two complex documents, which have been translated into Greek from English. One of these was mistranslated to say that the country's debt was unsustainable under all three scenarios considered, whereas it actually said it was unsustainable under only one of the three. The ballot paper also puts 'No', Tsipras's favoured option, above 'Yes'." Greece closes banks 06/28/15   World "Greece moved to avert the collapse of its financial system, shutting its lenders as of Monday, a measure that will deepen the recession and risk driving the nation toward an exit from the euro." Close to the threshold 06/27/15   World "An incoherent proposal from the Greek government opens a new chapter in the crisis" Bruce Greenwald on the great recession 06/13/15   World "Bruce Greenwald talks about an alternative explanation of the great recession at 24th annual Hyman P. Minsky conference." [video] Risky bet on Greece 06/10/15   World "The contrarian American billionaire Wilbur L. Ross Jr. made a bundle betting on the Irish banking system when it was down and out, and a similar wager on Cyprus now looks promising. But Greece may prove to be the toughest test yet of his knack for cashing in on eurozone crisis spots." Greece saunters across the autobahn 05/07/15   World "If you want to predict what people will do in most financial situations, then figure out what is in their narrow self-interest to do, and assume they will sooner or later figure it out, too. But that doesn't work when people's behavior isn't confined to the narrow channel of self-interest. That's why it's so hard to predict which way the Greek people will jump. And why it must feel so tempting, when they jump right in front of your BMW, to simply run them over." On the Gredge 04/23/15   World "A Greek exit from the euro may soon become inevitable" Austerity is not Greece's Problem 03/07/15   World "Unsustainable growth paths often end in a sudden stop of capital inflows, forcing countries to bring their spending back in line with production. In Greece, however, official lenders' unprecedented munificence made the adjustment more gradual than in, say, Latvia or Ireland." What now for Greece? 01/25/15   World "With 90 percent of the vote counted, Syriza, an acronym for Coalition of the Radical Left, took 36.3 percent, just two seats short of an absolute majority. Leaders of smaller parties signaled their willingness to back Tsipras in the formation of a new government." Venezuela should be rich 01/24/15   World "The problem with socialism isn't that you eventually run out of other people's money. It's that you eventually run out of oil money. Well, at least in Venezuela." The spectre of a Grexit 01/12/15   World "Meanwhile the messages from Berlin are becoming louder: Greece should in principle stay in the euro, but Mr Tsipras's demands for a debt write-off and spending binge are unacceptable. The spectre of a Grexit, laid to rest while the Samaras government got on with its reforms, has resurfaced." Harsh debt dynamics 12/21/14   World "Whether the next governmet is a revamped coalition led by the current prime minister's New Democracy, or one led by Syriza, it will face the same, harsh debt dynamics." Canada finds oil route around Obama 10/11/14   World "So you're the Canadian oil industry and you do what you think is a great thing by developing a mother lode of heavy crude beneath the forests and muskeg of northern Alberta. The plan is to send it clear to refineries on the U.S. Gulf Coast via a pipeline called Keystone XL. Just a few years back, America desperately wanted that oil. Then one day the politics get sticky. In Nebraska, farmers don't want the pipeline running through their fields or over their water source. U.S. environmentalists invoke global warming in protesting the project. President Barack Obama keeps siding with them, delaying and delaying approval. From the Canadian perspective, Keystone has become a tractor mired in an interminably muddy field." The great Chinese exodus 08/24/14   World "Today, China's borders are wide open. Almost anybody who wants a passport can get one. And Chinese nationals are leaving in vast waves: Last year, more than 100 million outbound travelers crossed the frontiers. Most are tourists who come home. But rapidly growing numbers are college students and the wealthy, and many of them stay away for good." Russian history is on our side 05/25/14   World "Now that we've failed to use Russia's corrupt and degenerating economy, subservience to the international banking system, and vulnerability to falling energy prices to pop Vladimir Putin like a zit, we're going to have sit on our NATO, E.U., and OSCE duffs and take the long view of Russian imperialism. Fortunately the long view, while a desolate prospect, is also comforting in its way, if you aren't a Russian." The slaves of Eritrea 05/10/14   World "If conscripts really did help build Bisha, then every Canadian citizen profited a little from slavery in a far-off land." Keystone's frustrator-in-chief 04/27/14   World "By the time Harper hung up, according to people with knowledge of the episode, he had sized up the potential economic calamity for Canada and its oil ambitions. Western Canada's land-locked Alberta oil sands hold roughly 168 billion recoverable barrels of heavy crude known as bitumen. America gobbles up almost all of Canada's oil exports. An energy research group in Calgary had run the math: If Keystone died, it could cost Canada C$632 billion ($573 billion) in foregone growth over 25 years -- 94 percent of it from the economy of Alberta, the province Harper calls home." Global solar dominance in sight 04/12/14   World "Photovoltaic energy is already so cheap that it competes with oil, diesel and liquefied natural gas in much of Asia without subsidies." China's steelmakers into shadow banking 04/12/14   World "What's happening in China's steel industry illustrates not only how painful the economy's inevitable slowdown will be, but also how the country's complicated tangle of debts are straining the connective tissue of supply chains, endangering the whole system." Slice of life 03/15/14   World "KCPT's Randy Mason takes US 36 to Chillicothe, Missouri, where in the summer of 1928, sliced bread was made available for the first time, anywhere. Otto Rohwedder invented that slicer, Frank Bench put it to work in his bakery, and from then on, the sandwich was never the same" Bill Gates interview 03/15/14   World "The majority of the foundation's money goes to a finite number of things that focus on health inequity - why a person from a poor country is so much worse off than somebody from a country that's well-off. It's mostly infectious diseases. There's about 15 of those we're focusing on - polio is the single thing I work on the most. And then, because of the importance of nutrition and because most poor people are farmers, we're in agriculture as well." The Big Mac index 01/26/14   World "For example, the average price of a Big Mac in America in January 2014 was $4.62; in China it was only $2.74 at market exchange rates. So the "raw" Big Mac index says that the yuan was undervalued by 41% at that time." How did Zimbabwe become so poor 01/12/14   World "Zimbabwe faces impossible challenges, unbearable choices. It has been a hard country to live in for the last ten years, and it is likely to remain one for the next ten. Every hyperinflation leaves a legacy that lasts for generations. In Zimbabwe, that legacy is just beginning." Paul Krugman's blind spot 11/17/13   World "Few have written more about the European financial crisis since 2008 than the Nobel laureate, New York Times columnist, and Princeton economics professor Paul Krugman. After five years, it is clear that the eurozone has survived contrary to his predictions and the countries that pursued fiscal discipline, contrary to Krugman's advice, have done better -- both economically and politically -- than those that did not." America has changed the way it measures GDP 08/04/13   World "The problem is that there is scant information on investment costs. Moreover, the asset - the right to the music, manuscript or TV format - is rarely sold. Rather it is used to create a future stream of products, like books and TV shows. So the BEA must estimate likely future royalty fees, and translate them into today's money to value the investment." Why Buffett bailed on India 07/28/13   World "India has long been viewed as a value investor's dream: rapid growth, 1.2 billion people pining for a taste of globalization, and underdeveloped industries ripe for turnarounds. So it surprised few when the genre's guru, Warren Buffett, placed a bet on the world's ninth-biggest economy. What did come as a surprise, though, was last week's decision by the billionaire's Berkshire Hathaway Inc. to give up on India's insurance market after just two years. Adding to the drama, the withdrawal came the same week India unveiled plans to open the economy as never before to foreign-direct investment." Slow ideas 07/28/13   World "Some innovations spread fast. How do you speed the ones that don't?" Chinese stocks earn 1% per year 07/14/13   World "The MSCI China Index has gained about 14 percent, including dividends, since Tsingtao Brewery Co. (168) became the first mainland company to sell H shares to international investors in Hong Kong in July 1993. That compares with a 452 percent return in the Standard & Poor's 500 Index, 322 percent in the MSCI Emerging Markets Index and 86 percent from Treasuries. Only the MSCI Japan Index had a weaker performance among the 10 largest markets, losing about 1 percent." Mind the expectations gap 07/06/13   World "So it should come as no surprise that the economic performance of the past few decades has strongly influenced expectations about economic growth. However, when optimistic expectations get detached from reality we risk creating a significant expectations gap - a disconnect between what we take for granted given our recent experiences and what we should anticipate given simple arithmetic." Lottery raided 07/06/13   World "Argentina owes itself more money than ever as President Cristina Fernandez de Kirchner squeezes pesos out of public institutions from the pension agency to the lottery, a decade after losing its access to overseas financing." The toilet paper revolution 05/19/13   World One of the most hilarious things I've read recently ... "'The revolution will bring the country the equivalent of 50 million rolls of toilet paper,' he was quoted as saying Tuesday by state news agency AVN. 'We are going to saturate the market so that our people calm down.'" Viva la revolucion! Will Portugal be the first one out? 04/14/13   World "Portugal's leading elder statesman has called on the country to copy Argentina and default on its debt to avert economic collapse, a move that would lead to near certain ejection from the euro." Why Canada can avoid banking crises 04/10/13   World "Since 1790, the United States has suffered 16 banking crises. Canada has experienced zero - not even during the Great Depression." Housing and the never-ending recession 04/07/13   World "They argue that the recession is far from over and that the lingering effects of the collapsed housing market will be felt for years to come." Cyprus details heavy losses for bank customers 03/30/13   World "Major depositors in Cyprus's biggest bank will lose around 60 percent of savings over 100,000 euros, its central bank confirmed on Saturday, sharpening the terms of a bailout that has shaken European banks" Cyprus said to reach deal 03/24/13   World "Deposits below the EU deposit-guarantee ceiling of 100,000 euros will be protected, and a loss of no more than 40 percent will be imposed on uninsured depositors at the Bank of Cyprus, two EU officials said. Uninsured depositors at Cyprus Popular would largely be wiped out, two other officials said." Unfair, short-sighted and self-defeating 03/16/13   World "The logic behind both of these reform initiatives is that bank deposits have two, contradictory properties. They are both sticky, because they are insured; and they are flighty, because they can be pulled instantly. So deposits are a good source of funding provided they never run. The Cyprus bail-out makes this confidence trick harder to pull off." Levy on bank deposits 03/16/13   World "They call Sicily the island of the mafia. It's not Sicily, it's Cyprus. This is theft, pure and simple" Hugo Chavez: Good timing, not good leadership 03/10/13   World "Chavez was not a dictator, exactly. Like Vladimir Putin in Russia, Chavez could claim genuine support. Also like Vladimir Putin, Chavez carefully controlled the country's institutions - courts, media, bureaucracy - to ensure his rule. Chavez mimicked Putin in one final way: His power ultimately rested on his control of his nation's oil." Chavez was bad for Venezuela 03/08/13   World "Politically, what Chavez did was successful. But that success came at the cost of the future. Instead of building a more stable foundation for long-term prosperity, Chavez started cutting chunks out of the house and handing them out to the crowd. Socialists, especially, take note: he essentially destroyed one of the most competent, successful, state run companies in the world. Thirty years from now, that--and not the transitory social programs that were thereby funded--will be his real legacy to Venezuela." Fewer, richer, greener 01/20/13   World "The world has been going to hell in a handbasket for as long as anyone can remember, but it never quite seems to get there. In fact, according to just about any objective measure you choose, the health and wealth of the human race has been improving rapidly and almost continuously for at least the last 200 years." National balance sheets 01/19/13   World "But Morgan Stanley reckons the shortfalls are so large (between 800% and 1,000% of GDP in the US and UK) that the situation is hopeless. In effect, the public sector must impose a burden on the private sector but the only question is how." Hey, small spender 10/06/12   World "This slowdown is partly owing to lower prices for Canada's resource exports, weak demand for its goods from Europe and a strong currency. But home-grown factors have also played a part." Hayek on the standing committee 09/22/12   World "In the past year, the spirits of Keynes and Hayek have done battle for the minds of China's policymakers. This month Andrew Batson of GK Dragonomics, a research consultancy in Beijing, argued that Hayek seems to be winning. China's leadership is now keen to avoid the 'Hayekian risk' of wasted investment, he wrote, even if that increases the 'Keynesian risk' of inadequate demand and weak growth." Krugman's Baltic problem 09/22/12   World "All the southern European countries have overregulated labor markets that have caused persistently high unemployment. In Spain, it is easier to get a divorce than to sack a worker -- which explains in part why companies are very reluctant to hire new ones." A conversation with Ray Dalio 09/14/12   World "Ray Dalio, founder and co-chief investment officer of Bridgewater Associates, L.P., discusses global economics." The weatherman is not a moron 09/08/12   World "The one area in which our predictions are making extraordinary progress, however, is perhaps the most unlikely field. Jim Hoke, a director with 32 years experience at the National Weather Service, has heard all the jokes about weather forecasting, like Larry David's jab on 'Curb Your Enthusiasm' that weathermen merely forecast rain to keep everyone else off the golf course. And to be sure, these slick-haired and/or short-skirted local weather forecasters are sometimes wrong. A study of TV meteorologists in Kansas City found that when they said there was a 100 percent chance of rain, it failed to rain at all one-third of the time." China's growing economic crisis 08/31/12   World "One problem is that China has run out of obvious ways to kick-start its $7.3 trillion economy. It was easy in 2008: Pump tens of billions of dollars into a sweeping stimulus project and 10 percent growth followed. China's success gave markets the impression that its leaders could wave some magic wand and growth would be the result. Magic is in short supply now. Local governments are cash- strapped and awash in debts that could turn bad. The euro zone seems locked into permanent-crisis mode while the U.S. is bogged down with debt, economic stagnation and political paralysis. China proved it can live for a few years without U.S. and European customers, but not forever." Apocalypse not 08/18/12   World "When the sun rises on December 22, as it surely will, do not expect apologies or even a rethink. No matter how often apocalyptic predictions fail to come true, another one soon arrives. And the prophets of apocalypse always draw a following.from the 100,000 Millerites who took to the hills in 1843, awaiting the end of the world, to the thousands who believed in Harold Camping, the Christian radio broadcaster who forecast the final rapture in both 1994 and 2011." Looking at China's problems 08/12/12   World "The Austrian approach raises the possibility that there is no way for China to make good on enough of its oversubsidized investments. At first, they create lots of jobs and revenue, but as the business cycle proceeds, new marginal investments become less valuable and more prone to allocation by corruption. The giddy booms of earlier times wear off, and suddenly not every decision seems wise. The combination can lead to an economic crackup - not because aggregate demand is too low, but because the economy has been producing the wrong mix of goods and services." A Greek story 07/28/12   World "Tsanis said he steadfastly refused to bribe anyone. In one incident, in 2005, he appealed to a minister in Athens to get a permit unstuck. "The minister called in the public servant who was refusing to give us the permit and ordered him to issue it the next morning," he said, declining to specify the minister or ministry involved. "When we went back to get it, the civil servant told me: 'Australian, that guy is a politician and he'll be gone tomorrow, but I'll be here waiting for you.'" Ideologue vs. Estonia 07/21/12   World "'What Krugman has not mentioned at all,' says Urmas Varblane, 'is that when economic crisis entered Estonia in 2008, then we had already our own crisis.' For Varblane, who teaches economics at the University of Tartu, the real crisis was what came before the downturn: unsustainable, debt-driven growth that distorted the economy." 10 reasons countries fall apart 06/30/12   World "Some countries fail spectacularly, with a total collapse of all state institutions, as in Afghanistan after the Soviet withdrawal and the hanging of President Mohammad Najibullah from a lamppost, or during the decade-long civil war in Sierra Leone, where the government ceased to exist altogether. Most countries that fall apart, however, do so not with a bang but with a whimper. They fail not in an explosion of war and violence but by being utterly unable to take advantage of their society's huge potential for growth, condemning their citizens to a lifetime of poverty. This type of slow, grinding failure leaves many countries in sub-Saharan Africa, Asia, and Latin America with living standards far, far below those in the West." Sand in the gears 06/27/12   World "Cleaning up this mess is what we mean by 'structural reform.' How to achieve it politically seems like a nightmare to me. Fighting each of ten thousand regulations one by one seems hopeless. Each one sounds good, each one taken alone seems minor, each one has an entrenched interest backing it and an army of bureaucrats whose jobs depend on its enforcement. And the economy dies the death of a thousand cuts. Can you really abolish it all in one fell swoop or grand bargain?" A glimmer of hope? 06/18/12   World "We've got a bank run. How to stop it? Ah, deposit insurance! But who is going to pay for that? 'Countries' are not credible. The whole problem is that 'countries' used their banks as piggy banks, stuffing them with sovereign debt. So, if the countries default on their sovereign debt, the banks go under, and the same 'countries' obviously don't have the money to guarantee deposits. A cross-national deposit insurance scheme, while banks are already stuffed with sovereign debt, is back to Plan A, run for the exit and stiff Germany with the bill." Euro explosion 06/17/12   World "I read last week say that payments are simply stopping in Greece. If there's a chance to pay in Drachma next month, why pay in euros now? Shipments are stopping -- if your invoice might get paid in drachma, no point in sending goods today. This is simple implosion." Europe really is on the brink 06/12/12   World "The European Union was created to avoid repeating the disasters of the 1930s, but Germany, of all countries, has failed to learn from history. As the euro crisis escalates, Berlin should remember how the banking crisis of 1931 contributed to the breakdown of democracy across Europe. Action is urgently needed to stop history from repeating itself." Exhausting the Earth's resources? 06/09/12   World "But firms that make their money mining this planet say the Earth is one big, practically inexhaustible mine, with just as many unexplored corners as outer space. 'We think there are 10,000 more years of minerals left for civilization,' said Andrew McKenzie, a geologist and BHP Billiton PLC's chief executive for nonferrous metals. 'Civilization will change, of course, and there will be different minerals involved, but 10,000 more years.'" Turning slumdogs into millionaires 06/07/12   World "The idea behind Dakshana was to find some of India's most brilliant and poorest kids and prepare them for the rigorous entrance examination for the Indian Institutes of Technology. The IITs are a group of the nation's most prestigious engineering and technology universities. Its graduates are virtually guaranteed employment and success." Euro breakup precedent 06/07/12   World "It was a currency union of 15 states in 1992. Two years later, as budget deficits spiraled out of control, hyperinflation reigned and economies shriveled, just two members of the Soviet Union's ruble zone were left. As Greek politicians threaten to break terms of the country's bailout with international lenders, Spain calls for financial help, and northern European nations balk at funding the south, historians are asking whether the euro region is about to face a similar exodus. They take a longer view of the European Union's crisis than economists, and it's much bleaker." A contrarian moment 06/01/12   World "Ian Harnett of Absolute Strategy Research, a consultancy, says that European equities are trading on a cyclically adjusted price-earnings ratio - a measure that averages profits over seven years - of 11, towards the bottom of its range over the past 30 years. By contrast, the ratio for American shares is 18.1 (see chart). Wall Street generally trades at a premium to Europe but the premium today is more than three times the historical average." Austerity and debt realism 06/01/12   World "Aside from wringing their hands, what should governments be doing? One extreme is the simplistic Keynesian remedy that assumes that government deficits don't matter when the economy is in deep recession; indeed, the bigger the better. At the opposite extreme are the debt-ceiling absolutists who want governments to start balancing their budgets tomorrow (if not yesterday). Both are dangerously facile." A run they cannot stop 05/28/12   World "It's been a week since shares in Bankia plummeted on reports, later denied, that customers were pulling deposits out of the Spanish lender. Fears of a full-scale bank run in Greece have not yet materialised. But the possibility of a deposit run in Europe's peripheral states is still very much alive. It is also the thing that policymakers are least prepared for." Leaving the Euro 05/16/12   World "Some two decades ago, when Europe's leaders worked out the details of their grand vision to connect the European Union with a single currency, virtually every economist on this side of the Atlantic - and most of those on the other - figured out that the euro would be fatally flawed." The crazy way Europe measures inflation 05/16/12   World "There's a long list of things that could kill the euro zone. But the most deadly might also be the most overlooked. It's the crazy way that Europe measures inflation." What price a slowing population? 05/16/12   World "Nomura has taken a shot at calculating just how significantly population changes can hit GDP ..." Lessons of the recession 05/03/12   World "In fact, today's economic troubles are not simply the result of inadequate demand but the result, equally, of a distorted supply side. For decades before the financial crisis in 2008, advanced economies were losing their ability to grow by making useful things. But they needed to somehow replace the jobs that had been lost to technology and foreign competition and to pay for the pensions and health care of their aging populations. So in an effort to pump up growth, governments spent more than they could afford and promoted easy credit to get households to do the same. The growth that these countries engineered, with its dependence on borrowing, proved unsustainable. Rather than attempting to return to their artificially inflated gdp numbers from before the crisis, governments need to address the underlying flaws in their economies." Price controls in action 04/30/12   World "Similar problems have played out with other agricultural products under price controls, like lags in production and rising imports for beef, milk and corn. Waiting in line to buy chicken and other staples, Jenny Montero, 30, recalled how she could not find cooking oil last fall and had to switch from the fried food she prefers to soups and stews. 'It was good for me,' she said drily, pushing her 14-month-old daughter in a stroller. 'I lost several pounds.'" Richard Koo presentation 04/14/12   World "His new presentation looks at the current state of the global economy, what's been tried to jump start things, what's worked, and what hasn't." Greece: same old high yields 03/17/12   World "Yields on the Greek government's brand new bonds are already trading at distressed debt levels - suggesting that despite February's bailout package investors still see a strong chance that Greece will not be able to sustain even its much-reduced debt burden. As the first week of trading closed, yields on the benchmark 10-years were at 18.24 percent - down from Tuesday's closing high, but still the highest in the euro zone." The end of Asia's demographic dividend 03/17/12   World "Demographics is not destiny, though it does set the parameters of possibility. Asia has grown used to a demographic tail wind. For many of its economies, that wind is about to start blowing the other way." Goodnight Sunshine 02/20/12   World "Germany once prided itself on being the "photovoltaic world champion", doling out generous subsidies - totaling more than $130 billion, according to research from Germany's Ruhr University - to citizens to invest in solar energy. But now the German government is vowing to cut the subsidies sooner than planned and to phase out support over the next five years. What went wrong?" Wodehouse's lead pipe 12/19/11   World "Recent real side indicators and financial market movements indicate a striking dichotomy between improving economic indicators here at home and signs that financial markets and economies continue to sour on the other side of the Atlantic. Thus, just as we had come to see the light of an evolving domestic recovery, one senses Europe, and possibly the emerging economies, sneaking up behind us, Wodehousean-pipe in hand, poised to knock us off course." China local debts dwarf official data 12/19/11   World ""The real problem is the real estate market cannot fall, the price can't go down," he said. "If the property market really falls, the local government financing vehicle problems will really come out. Not only will they have problems, but the banks will have problems." There are signs the market is already declining, with residential property prices falling in November from the previous month in 49 cities of the 70 measured, the worst performance this year. The cities of Guangzhou in the south and Wuhan in central China canceled land sales in the last three months. Tianjin, which isn't among the cities piloting municipal bonds, was reliant on land sales for 41 percent of its income in 2009, according to China Index Academy, a Beijing real-estate research firm. That doesn't bother Xu Hongzhi, the chief accountant for Tianjin Binhai Construction, which is building Yujiapu's transport hub. He said that the company can pay its debts because the area's economy is growing at 10 percent a year. "There is no risk," he said." Chavez rolls back seizures 12/17/11   World "Venezuela's President Hugo Chavez is enlisting Mexico's Gruma SAB, French retailer Casino and other international companies to boost supplies of milk, corn flour and cement as shortages threaten to dent his bid for re-election in 2012." China's hard landing 12/04/11   World "Property construction became 'the most important sector in the universe,' in the words of UBS economist Jonathan Anderson. It directly accounts for about 13% of the economy, 20% if one includes related industries like concrete and steel. It also provided 40% of local government revenues through land sales. Worsening inflation forced the government to put on the brakes this year. As with most property busts, transactions dried up, followed by a free fall in prices. Land prices were down 60% year on year in September. Property developers are slashing prices of new homes to stave off bankruptcy." Is this really the end? 11/26/11   World "The chances of the euro zone being smashed apart have risen alarmingly, thanks to financial panic, a rapidly weakening economic outlook and pigheaded brinkmanship. The odds of a safe landing are dwindling fast." China's vanishing factory bosses 11/05/11   World "The reckoning began in June, when three factory bosses, confronted with debts they couldn't pay, disappeared without a trace. Spooked, the 'shadow banks' that had become the lenders of last resort - pawn shops, credit companies, in some cases loan sharks who pooled the wealth of individual investors - started calling in more debts. More than more 100 other laoban, as bosses are known in Chinese, fled or went into hiding. Some say the number on the run is twice that, and at least two Wenzhou laoban have jumped off tall buildings to their deaths." Bill Gates changes the world again 11/03/11   World "The results have been equally massive: 3.4 million lives saved from hepatitis B, which causes liver cancer, 1.2 million lives from measles, 560,000 from the Hib bacteria, 474,000 from whooping cough, 140,000 from yellow fever and 30,000 from polio. In the past year the new initiatives have prevented another 8,000 deaths from pneumonia and 1,000 from diarrhea." Irish see opportunity 10/27/11   World ""There's a political problem for the government," said Gavin Blessing, a bond analyst at Collins Stewart Plc in Dublin. "The Greeks, who are seen to be behaving badly, get rewarded, whereas the Irish, the top boys in the class, get nothing."" The euro deal 10/27/11   World "Even if the euro zone succeeds in avoiding CDS payouts, this could prove a Pyrrhic victory. If losing half the face value of a bond does not amount to a default, what does? Undermining the value of CDS insurance could deeply distort the market. If banks or other investors lose faith in their ability to hedge risks, they will be tempted to cut back on risk or demand higher yields. So, perversely, sparing a CDS payout on Greece could push up the borrowing costs of other countries." Michael Pettis talks China 10/24/11   World "A talk by China skeptic Michael Pettis" Why China won't conquer the world 10/13/11   World "Its young are incapable, its old are exhausted, and box-ticking bureaucrats make life hell. China, a superpower? First it needs to grow up" California and bust 09/30/11   World "The smart money says the U.S. economy will splinter, with some states thriving, some states not, and all eyes are on California as the nightmare scenario. After a hair-raising visit with former governor Arnold Schwarzenegger, who explains why the Golden State has cratered, Michael Lewis goes where the buck literally stops - the local level, where the likes of San Jose mayor Chuck Reed and Vallejo and fire chief Paige Meyer are trying to avert even worse catastrophes and rethink what it means to be a society." Ireland recovers as Greece sinks 09/21/11   World "The country is meeting targets set for it by the EU, IMF and European Central Bank as Kenny's government pushes austerity measures through parliament by controlling 113 seats in the 166- seat legislature. By contrast, Papandreou's four-seat majority imperils the implementation of Greece's bailout package. Chatzis, the plastic surgeon, said he moved to Ireland in 2000 in part because the Irish were similar to Greeks in that "they both like to talk and have fun." The difference is "in Greece, the black economy thrives, many people avoid taxes, and you can get one price with a receipt and once price without," he said. "Here, there is respect for the system. People will do what it takes."" Fewer 08/22/11   World "At that rate, according to some back-of-the-envelope calculations by The Economist, it would take about 25 generations for Hong Kong's female population to shrink from 3.75m to just one. Given that Hong Kong's average age of childbearing is 31.4 years, it could expect to give birth to its last woman in the year 2798. (That is some time after its neighbour, Macau, which has a higher reproduction rate, but a much smaller population.) By the same unflinching logic, Japan, Germany,Russia, Italy and Spain will not see out the next millennium. Even China, which has a recorded history stretching back at least 3,700 years, has only about 1,500 years left - if present trends continued unbroken." Generation Fd 08/13/11   World "The UN's first ever report on the state of childhood in the industrialized West made unpleasant reading for many of the world's richest nations. But none found it quite so hard to swallow as the Brits, who, old jokes about English cooking aside, discovered that they were eating their own young." It's the economy, dummkopf! 08/10/11   World "With Greece and Ireland in economic shreds, while Portugal, Spain, and perhaps even Italy head south, only one nation can save Europe from financial Armageddon: a highly reluctant Germany. The ironies - like the fact that bankers from D sseldorf were the ultimate patsies in Wall Street's con game - pile up quickly as Michael Lewis investigates German attitudes toward money, excrement, and the country's Nazi past, all of which help explain its peculiar new status." Once Greece goes... 07/09/11   World "The economic crisis in Greece is the most important thing to have happened in Europe since the Balkan wars. That isn't because Greece is economically central to the European order: at barely 3 per cent of Eurozone GDP, the Greek economy could vanish without trace and scarcely be missed by anyone else. The dangers posed by the imminent Greek default are all to do with how it happens." Fear and loathing in the Eurozone 07/04/11   World "The problem, as Mundell anticipated, is that if the shocks to the system are not random and are specifically and continually related to one country the concept of currency union begins to fall apart. In particular, if specific countries are characterised by lack of price flexibility and rigid labor laws restricting wage adjustment in response to lack of competitiveness the only alternative is to transfer money from one region to another: and potentially to keep on doing it, till the voters squeak." Beware China's political bubble 06/19/11   World "Although China has been churning out its share of unpleasant news, many onlookers don't consider its problems as serious as those of other big economies. They should think again. China's biggest economic challenges are political in nature and daunting, and will almost certainly get worse. That is because its autocratic system, for all the stability it has provided, will struggle to handle the sustained economic slowdown the country is likely to confront during this decade." Is Sino-Forest a Sino-Fraud? 06/13/11   World "It is exceedingly difficult to build a private business in the state-dominated Chinese economy without committing high crimes and misdemeanors. Entrepreneurs, as a practical matter, have to lie, cheat, and steal every day just to keep their businesses going. In these circumstances, do you really think they tell the truth to auditors, underwriters, and regulators?" Shale boom in oil 05/28/11   World "The technique, also called fracking, has been widely used in the last decade to unlock vast new fields of natural gas, but drillers only recently figured out how to release large quantities of oil, which flows less easily through rock than gas." Fair-trade coffee fix 05/15/11   World "Today, on World Fair Trade Day, we have something else to feel guilty about. That fair-trade cup of coffee we savour may not only fail to ease the lot of poor farmers, it may actually help to impoverish them, according to a study out recently from Germany's University of Hohenheim." Fantastic pieces of journalism 05/14/11   World "Awards season in journalism is almost over: David Brooks has long since handed out the Sidneys, the Pulitzer Prizes have been issued, and the National Magazine Award finalists find out who won next week. Throughout 2010, I kept my own running list of exceptional nonfiction for the Best of Journalism newsletter I publish. The result is my third annual Best Of Journalism Awards - America's only nonfiction writing prize judged entirely by me. I couldn't read every worthy piece published last year. But everything that follows is worthy of wider attention." More denial 05/11/11   World "Muddling through and hoping for the best is the strategy but it ain't going to work. The Greeks won't wear it (there's another national strike today) the markets won't wear it (three year Greek bond yields are nearly 25%) and German voters won't wear it either." Three cheers for the cheapeners 05/09/11   World "A feature of innovation is that the greatest impact of a new idea comes not when the light bulb goes on over the geek's head, but when the resulting technology eventually becomes cheap enough for many people to use - perhaps decades later. The first plane at Kitty Hawk had zero impact on the world economy, but budget airlines have a huge impact the first computer was a curiosity, but cheap laptops changed the world." Will Canada be going Dutch? 04/18/11   World "Once the current commodity boom ends the loonie will plunge, the economy will stumble badly, wages will fall and complacent policy makers will find out what happens when there isn't enough growth to compensate for a lack of fiscal prudence." Property bubble hits the grave 04/09/11   World "In Beijing and Guangzhou, where the average per sq m price of a burial plot now exceeds that of houses, some Chinese call themselves fen nu (grave slaves). This label is derived from fang nu (housing slaves) - those burdened with huge housing mortgages." Stepping on the Gas 04/02/11   World "In the early 1980s, George P. Mitchell, a Houston-based independent energy producer, could see that his company was going to run out of natural gas. Almost three decades later, the results of his effort to do something about the problem are transforming America's energy prospects and the calculations of analysts around the world." Is ethanol to blame for global unrest 03/29/11   World "The U.S. produces more corn than any other country. The total value of its crop in 2009 was about $50 billion, and that was before the recent price surge. It was also more than double the combined value of all the crops produced in Canada. Until a few years ago, corn was used almost entirely for animal feed, booze, processed foods for humans - such as corn flakes and high-fructose corn syrup - and backyard corn roasts. Today, 40% of the U.S. crop is devoted to ethanol, up from 33% in 2008. A decade ago, the figure was just 7%." The Canada bubble 03/18/11   World "Eleven years into the bull market in commodities, it's easy to forget just how much Canada has riding on strong resource prices. For one thing, the boom has boosted our paycheques. The rise in commodity prices was responsible for two-thirds of the 15 per cent gain in disposable income experienced in the last decade, Bank of Canada governor Mark Carney said in a 2008 speech. While Canada's soaring loonie has hurt manufacturers, it's also improved living standards by keeping inflation low. And rising commodity prices have also helped keep unemployment muted. As bad as Canadians think the recent recession was, in terms of the job market it was the mildest downturn of the last 30 years. In January, the Canadian economy added nearly double the number of jobs created in the entire U.S. economy, which is 10 times larger." Made in America 03/08/11   World "For US firms, the decision to manufacture overseas has long seemed a no-brainer. Labor costs in China and other developing nations have been so cheap that as recently as two or three years ago, anyone who refused to offshore was viewed as a dinosaur, certain to go extinct as bolder companies built the future in Asia. But stamping out products in Guangdong Province is no longer the bargain it once was, and US manufacturing is no longer as expensive. As the labor equation has balanced out, companies - particularly the small to medium-size businesses that make up the innovative guts of America's technology industry - are taking a long, hard look at the downsides of extending their supply chains to the other side of the planet." The Myth of Japan's 'Lost Decades' 02/28/11   World "There is clearly a contradiction here, and after studying the facts on the ground in Tokyo for decades I find it hard to avoid the conclusion that the story of Japan's stagnation is a media myth. Certainly anyone who visits Japan these days is struck by the obvious affluence even among average citizens. The cars on the roads, for instance, are generally much larger and better equipped than in the 1980s (indeed state of the art navigation devices, for instance, are more or less standard on many models). Overseas vacation travel has more than doubled since the 1980s. The Japanese boast the world's most advanced cell phones, and the biggest and best high-definition television screens. Japan's already long life expectancy has increased by nearly two years. Its Internet connections are some of the world's fastest -- something like ten times faster on average than American speeds. True, not all of Japan's indicators are equally impressive. The Tokyo stock market, for instance, has never recovered from its 1990s slump. Neither has the real estate market. (In the latter case, however, there is a silver lining in a major boost to living standards, in that young home buyers now get far more space for their money. In any case the implosion since 1991 has merely restored some sanity to valuations that had previously become -- very temporarily -- outlandish)." When Irish Eyes Are Crying 02/02/11   World "First Iceland. Then Greece. Now Ireland, which headed for bankruptcy with its own mysterious logic. In 2000, suddenly among the richest people in Europe, the Irish decided to buy their country - from one another. After which their banks and government really screwed them. So where's the rage?" Lies, flame-grilled lies and statistics 01/28/11   World "Burgernomics does support claims that Argentina's government is cooking the books. The gap between its average annual rate of burger inflation (19%) and its official rate (10%) is far bigger than in any other country. Its government deserves a good grilling." China is a bubble close to bursting 01/23/11   World "The Mayfair hedge fund manager said he started work when he saw some news reports on China's "ghost towns". Last year Al Jazeera, the Middle Eastern television channel, aired a short report from Ordos Shi, a city in inner Mongolia built for one million people that is almost entirely empty. The report reveals empty streets, housing estates, shops and restaurants. The locals prefer the old town of Ordos and tell the cameras there's no need to move to the new city. According to Corriente, China has consumed just 65pc of the cement it has produced in five years, after exports. The country is outputting more steel than the world's next seven largest producers combined. It has 200m tons of excess capacity. In property, Corriente said it had found an excess of 3.3bn square meters of floor space in China - yet 200m square meters of new space is being constructed each year. Despite the vast population, the property is generally out of the price range for most. House prices are around 22 times disposable income in Beijing." Coming in from the cold 12/19/10   World "The consoling thought for Ireland's put-upon taxpayers has been "at least we're not Iceland", whose outsize banks failed spectacularly in 2008. But that comfort is fading. Evidence of economic recovery in Iceland means the Irish can no longer persuade themselves that things are worse elsewhere." Toronto a city of socioeconomic extremes 12/19/10   World "Toronto is becoming a city of stark economic extremes as its middle class is hollowed out and replaced by a bipolar city of the rich and poor - one whose lines are drawn neighbourhood by neighbourhood." China's credit bubble 12/07/10   World "Experts argue heatedly over whether or not China has managed to outdo America's subprime bubble, or even match the Tokyo frenzy of late 1980s. The IMF straddles the two. It concluded in a report last week that there was no nationwide bubble but that home prices in Shenzen, Shanghai, Beijing, and Nanjing seem 'increasingly disconnected from fundamentals'. Prices are 22 times disposable income in Beijing, and 18 times in Shenzen, compared to eight in Tokyo. The US bubble peaked at 6.4 and has since dropped 4.7. The price-to-rent ratio in China's eastern cities has risen by over 200pc since 2004 The IMF said land sales make up 30pc of local government revenue in Beijing. This has echoes of Ireland where 'fair weather' property taxes disguised the erosion of state finances." 200 Countries, 200 Years, 4 Minutes 12/05/10   World "Hans Rosling's famous lectures combine enormous quantities of public data with a sport's commentator's style to reveal the story of the world's past, present and future development. Now he explores stats in a way he has never done before - using augmented reality animation. In this spectacular section of 'The Joy of Stats' he tells the story of the world in 200 countries over 200 years using 120,000 numbers - in just four minutes. Plotting life expectancy against income for every country since 1810, Hans shows how the world we live in is radically different from the world most of us imagine." The slaying of the Celtic Tiger 11/14/10   World "Ireland itself is a fiscal mess, thanks to a budget deficit that makes Greece's look like spare change. The real estate market is a disaster, and interest rates demanded by bond investors are so high that the exchequer effectively can't afford to finance the country. The Irish government has some breathing room - it doesn't have to return to the capital markets until next July. But if that bond auction fails, the country will almost certainly be broke and require a bailout from the European Union." Cultures of Impunity 11/10/10   World "The Irish government now has to deal with the effective evaporation of a major source of revenue at the worst possible time - raising taxes on either individual taxpayers or businesses will further deepen the economic hole that the country is in. But even with drastic cutbacks in government spending, it's unavoidable. This particular bit of the Irish crisis is a direct result of the country's grossly skewed taxation model. And it's left the country in a pretty horrible bind." Ireland is effectively insolvent 11/09/10   World "Ireland faced a painful choice between imposing a resolution on banks that were too big to save or becoming insolvent, and, for whatever reason, chose the latter. Sovereign nations get to make policy choices, and we are no longer a sovereign nation in any meaningful sense of that term. From here on, for better or worse, we can only rely on the kindness of strangers." The Man Who Saved the Whales 11/06/10   World "In the last half of the 19th century, whales were facing extinction. They were hunted in large part because their oil was the best, most affordable illuminant available to growing western nations. One man more than any other headed off their extinction, a man whose picture should be in on the wall of every Greenpeace office: John D. Rockefeller, founder of the Standard Oil Company." More from less for more 10/28/10   World "Engineer RA Mashelkar shares three stories of ultra-low-cost design from India that use bottom-up rethinking, and some clever engineering, to bring expensive products (cars, prosthetics) into the realm of the possible for everyone." Secret Past of Chinese Stocks 10/23/10   World "This week, the People's Bank of China jolted stock markets around the world with a surprise interest-rate rise, and the leaders of China's Communist Party called for 'accelerating the transformation of the nation's economic-development pattern.' This drive to manage growth harks back to a declaration on April 22 that 'of the many government functions, the most important is to facilitate commerce and help industries.' The odd thing is, the Chinese government made that statement on April 22, 1903. Amid the almost irresistible excitement over China's explosive growth, it is important to understand that the Asian giant has run this exact race before - several times - and the results weren't pretty." The Future of Fish 10/23/10   World "As overfishing threatens the world's wild fisheries, aquaculture advocates say fish farms will play a far greater role in feeding people around the world. 'We are no more going to get our seafood from the wild than we get our beef, nuts, fruit from the wild,' predicts Kevin Fitzsimmons, a professor at the University of Arizona and former president of the World Aquaculture Society. He is also on the board of HQ Sustainable Maritime Industries (HQS), an NYSE Amex-listed company that sells Chinese-raised tilapia. 'It's all going to be farm-raised,' he says. And there's no fish better suited to this new world than tilapia, says Fitzsimmons. It's a fast-growing species with mild-tasting flesh that producers can easily adapt to all kinds of uses. 'Tilapia,' says Fitzsimmons, 'is going to be basically where chicken is with poultry.'That means that the creatures thrashing in Chen's ponds are the future of fish. The growing American appetite has led to a boom in Chinese aquaculture: With hundreds of breeding centers, fish farms, feed mills, and processing plants, China is the world's tilapia superpower." Ridley and the rational optimist 10/21/10   World "Matt Ridley, author of The Rational Optimist, talks with EconTalk host Russ Roberts about why he is optimistic about the future and how trade and specialization explain the evolution of human development over the millennia. Ridley argues that life is getting better for most of the people on earth and that the underlying cause is trade and specialization. He discusses the differences between Smith's and Ricardo's insights into trade and growth and why despite what seems to be strong evidence, people are frequently pessimistic about the future." Spain's Solar on Edge of Bankruptcy 10/19/10   World "Spain stands as a lesson to other aspiring green-energy nations, including China and the U.S., by showing how difficult it is to build an alternative energy industry even with billions of euros in subsidies, says Ramon de la Sota, a private investor in Spanish photovoltaic panels and a former General Electric Co. executive. " How Fake Money Saved Brazil 10/05/10   World "This is a story about how an economist and his buddies tricked the people of Brazil into saving the country from rampant inflation. They had a crazy, unlikely plan, and it worked." A Greek Bankruptcy Is Unavoidable 10/05/10   World "Sitting in his bare office at Harvard University with the shades drawn, Rogoff says, coolly and soberly: 'A Greek bankruptcy is unavoidable. There is a 95 percent chance that Spain will go bankrupt. Hungary is on the brink. Things will get much worse in Eastern Europe. We will have a certain number of countries that will go bankrupt. We will have a number of euro zone countries that would be well advised to take a sabbatical from the euro for a year. The situation in the United States is very worrisome. The markets will refuse to tolerate this level of debt.' The worst of it is that it sounds as if he were expressing unavoidable facts." China Metal Monopoly 09/30/10   World "A generation after Chinese leader Deng Xiaoping made mastering neodymium and 16 other elements known as rare earths a priority, China dominates the market, with far-reaching effects ranging from global trade friction to U.S. job losses and threats to national security." Beware of Greeks bearing bonds 09/07/10   World "After systematically looting their own treasury, in a breathtaking binge of tax evasion, bribery, and creative accounting spurred on by Goldman Sachs, Greeks are sure of one thing: they can't trust their fellow Greeks." Britain reels as austerity begins 08/23/10   World "Last month, the British government abolished the U.K. Film Council, the Health Protection Agency and dozens of other groups that regulate, advise and distribute money in the arts, health care, industry and other areas. It seemed shockingly abrupt, a mass execution without appeal. But it was just a tiny taste of what was to come." Is giving bad!? 08/08/10   World "When one of the most popular economic blogs writes a post like this (title: "Should We Be Leery of the Generosity of the Uber Rich?" - no - seriously - that is the title!), and the overwhelming majority of the commenters agree with the author, it makes me weep for the future of America." Tracing oil reserves 08/04/10   World "Today, a principal tenet of geology is that a vast majority of the world's oil arose not from lumbering beasts on land but tiny organisms at sea. It holds that blizzards of microscopic life fell into the sunless depths over the ages, producing thick sediments that the planet's inner heat eventually cooked into oil. It is estimated that 95 percent or more of global oil traces its genesis to the sea." Small reactors? 07/22/10   World "A growing body of plant designers, utility companies, government agencies and financial players are recognizing that smaller plants can take advantage of greater opportunities to apply lessons learned, take advantage of the engineering and tooling savings possible with higher numbers of units and better meet customer needs in terms of capacity additions and financing. The resulting systems are a welcome addition to the nuclear power plant menu, which has previously been limited to one size - extra large. Developing a broader range of system choices using nuclear fission energy could have a measurable impact on segments of the energy market that have been most often served by burning distillate fuel or natural gas. Small modular reactors offer a reason to be optimistic that human society will have access to all of the energy that it needs for increased prosperity for larger portion of the population." Down with doom 07/07/10   World "By the time I was 21 years old I realized that nobody had ever said anything optimistic to me - in a lecture, a television program or even a conversation in a bar - about the future of the planet and its people, at least not that I could recall. Doom was certain." The Andy Grove essay 07/04/10   World "The former Intel chief says 'job-centric' leadership and incentives are needed to expand U.S. domestic employment again" The fog of war 06/22/10   World "Robert S. Mcnamera's own words about everything from world war 2, JFK, Vietnam and the Tonkin bay incident, the cold war and the Cuba crises. A must see." Paid not to marry 06/21/10   World "Sophia Constantinidou works as a teacher in a private school in Athens. She also has a more lucrative job: remaining unmarried. The 52-year-old gets 400 euros ($496) a month from the Greek government, part of her late mother's state pension. Under the current system, Constantinidou qualifies to receive the payment for life as the only surviving child of a deceased civil servant, provided she doesn't tie the knot." Canada key to trade 06/18/10   World "The Obama administration is looking to Canada to help realize its goal of doubling U.S. exports by 2015, but Canadian business leaders say that won't happen unless a number of trade irritants are dealt with first." The coal age continues 06/18/10   World "One way to keep perspective amid all the Beltway cogitation over how to keep a climate component in an energy bill is to pay attention to the global coal industry. Coal is the prime factor determining the pace of growth in emissions of heat-trapping carbon dioxide as human populations and appetites crest in the next few decades. And regardless of what happens in the United States, the industry's leaders see nothing but bright prospects ahead. We're still stuck on the coal rung of Loren Eiseley's heat ladder." The $600 billion challenge 06/16/10   World "Bill Gates, Melinda Gates, and Warren Buffett are asking the nation's billionaires to pledge to give at least half their net worth to charity, in their lifetimes or at death. If their campaign succeeds, it could change the face of philanthropy." How to destroy an industry 06/15/10   World "Mr Chavez has often threatened Lorenzo Mendoza, Polar's billionaire chairman, with expropriation. But as the rotting food shows, his government is better at destroying the existing order than at creating a viable alternative. Some 70% of Venezuela's food is now imported, which generates ample opportunities for graft. Most of the farms and food companies the president has expropriated suffer from inflated payrolls, declining productivity and rampant inefficiency. His threats against Polar are rejected by a well-paid and loyal workforce. The company is one of the biggest remaining obstacles to the installation of Cuban-style communism in Venezuela. But to seize it now might well lose Mr Chavez the legislative election. As Venezuelans say 'love, with hunger, doesn't last.'" The strange survival of ink 06/13/10   World "The survival of newspapers is by no means guaranteed. They still face big structural obstacles: it remains unclear, for example, whether the young will pay for news in any form. But the recession brought out an impressive and unexpected ability to adapt. If newspapers can keep that up in better times, they may be able to contemplate more than mere survival." A gambling man 06/13/10   World "Is it far-fetched to argue that having cast his main bets Mr Obama can now do nothing except await their result? Of course. He can, for a start, work harder to explain them. The president did not expect health reform to go down like this. Once it was passed, he predicted in the spring, Americans would wise up to the lies of the Republicans and see that 'nobody is pulling the plug on granny'. Now that spring has given way to summer, the White House has embarked on yet another campaign to hasten the voters. understanding. Mr Obama visited an old folks. centre in Maryland to spell out the excellence of the forthcoming changes. But voters, not being stupid, are not so sure. This is complex legislation whose full costs and benefits will take years to be seen. Another thing Mr Obama can do is double down: more stimulus, more troops, more controversial legislation in areas such as energy and immigration. But after the huge decisions he has already taken his stock of money, troops and political capital is severely depleted. For the first term at least, what you see now is probably the bulk of what you are going to get, and success remains uncertain. Much more gripping than an oil spill." A breakthrough in China 06/13/10   World "For China's thousands of stainless steel producers, the combination of nickel and iron is hugely attractive. They pay NPI producers the same price (or slightly less) as they would pay traditional producers to get the nickel content they need to make stainless steel. They get a bonus of iron - another ingredient needed to make steel - for free." Red tape hamstrings Greek growth 05/29/10   World "Critics say a sprawling civil service has tried to secure its own survival through an opaque patchwork of fees, taxes and red tape. The European Commission estimates the administrative burden of Greece's bureaucracy - the value of work devoted to dealing with government-imposed administration - is equivalent to 7% of gross domestic product, twice the EU average." Easy money, hard truths 05/27/10   World "Are you worried that we are passing our debt on to future generations? Well, you need not worry. Before this recession it appeared that absent action, the government's long-term commitments would become a problem in a few decades. I believe the government response to the recession has created budgetary stress sufficient to bring about the crisis much sooner. Our generation - not our grandchildren's - will have to deal with the consequences." Shale gas 05/25/10   World "If gas stays above $4, a price that lets companies cover costs on existing wells, U.S. output could grow 20 percent to 65 billion cubic feet (1.8 billion cubic meters) a day from 2008 through 2030, says Peter Wells, director of U.K. research firm Neftex Petroleum Consultants Ltd. Shale gas production could quadruple to more than 20 billion cubic feet, he says." How will Greece get off the dole? 05/23/10   World "What the income figures fail to capture is the relative weakness of Greece's economic institutions. They are not remotely comparable to those of Germany and some of the other better-governed European Union nations, which is why the current crisis will prove so difficult to solve." The very bad luck of the Irish 05/20/10   World "With the European Central Bank announcing that it has bought more than $20 billion of mostly high-risk euro zone government debt in one week, its new strategy is crystal clear: We will take the risk from bank balance sheets and give it to the central bank, and we expect Portugal-Ireland-Italy-Greece-Spain to cut fiscal spending sharply and pull themselves out of this mess through austerity. But the bank's head, Jean-Claude Trichet, faces a potential major issue: the task assigned to the profligate nations could be impossible. Some of these nations may be stuck in a downward debt spiral that makes greater economic decline ever more likely." Rogoff criticizes debt strategies 05/19/10   World "Despite the headwinds of poor jobs growth and a troubled housing market, the U.S. will avoid a double dip recession, according to Kenneth Rogoff, the Thomas D. Cabot Professor of Public Policy, Harvard University." Malcolm Gladwell keynote address 05/17/10   World "Bestselling author Malcolm Gladwell (The Tipping Point, Outliers) addresses the Options Industry Conference." The difficult choices facing Europe 05/16/10   World "Pimco's chief executive Mohamed El-Erian considers the painful options facing policy makers now that the massive interventions already appear to be stalling" The case for doom and gloom 05/12/10   World "Brenner's analysis of the current downturn can be boiled down to a fairly simple point: that the underlying cause of the current downturn lies in the 'real' economy of private goods and service production rather than in the financial sector, and that the current remedies - from government spending and tax cuts to financial regulation - will not lead to the kind of robust growth and employment that the United States enjoyed after World War II and fleetingly in the late 1990s. These remedies won't succeed because they won't get at what has caused the slowdown in the real economy: global overcapacity in tradeable goods production." The Goldilocks recovery 05/09/10   World "Strict financial regulation and a new commodity boom have turned 'boring' Canada into an economic star." The future of public debt 05/08/10   World "Since the start of the financial crisis, industrial country public debt levels have increased dramatically. And they are set to continue rising for the foreseeable future. A number of countries face the prospect of large and rising future costs related to the ageing of their populations. In this paper, we examine what current fiscal policy and expected future age-related spending imply for the path of debt/GDP ratios over the next several decades. Our projections of public debt ratios lead us to conclude that the path pursued by fiscal authorities in a number of industrial countries is unsustainable. Drastic measures are necessary to check the rapid growth of current and future liabilities of governments and reduce their adverse consequences for long-term growth and monetary stability." Europe finds the old rules still apply 05/06/10   World "A recurring theme of my academic research with Carmen Reinhart is that 'graduation' from emerging market status is a long, painful process that can take 75 years or more to complete. Twenty years without, say, a sovereign debt crisis is significant, but hardly enough definitively to declare a country a 'graduate'. Greece resolved its last sovereign default only in the mid-1960s and Portugal had an International Monetary Fund programme as recently as 1984. (Spain's modern history is much better, despite holding the record - more than 12 - for most independent sovereign default episodes.)" Greek wealth and taxes 05/02/10   World "In the wealthy, northern suburbs of this city, where summer temperatures often hit the high 90s, just 324 residents checked the box on their tax returns admitting that they owned pools. So tax investigators studied satellite photos of the area - a sprawling collection of expensive villas tucked behind tall gates - and came back with a decidedly different number: 16,974 pools. " The arithmetic of bank solvency 04/29/10   World "All banks more or less anywhere get their finances entwined with the finances of the sovereign. No sovereign will (or in my opinion should) allow a mass run on banks but they can only stop such a run if their own credit is good. But this link between sovereign solvency and bank-system solvency means that bank funding costs at a minimum are bounded at the lower end by sovereign borrowing costs." The X PRIZE and Risk 04/28/10   World "Diamandis is on a mission to open space for all humanity, and he embraces the risk inherent to such an undertaking. "A true breakthrough requires tremendous levels of risk," says Diamandis. "It's really in the entrepreneurial sector that people are willing to risk their lives, risk their fortunes, their reputations, to do something they fundamentally believe they can do."" The party's over 04/25/10   World "So will ours be the Chinese century? Probably not. China has just about reached high tide, and will soon begin a long painful process of falling back." James Chanos interview 04/15/10   World "James Chanos, President, Kynikos Associates. He is the man who predicted the Enron downfall and now predicting a housing bubble in China," Time to rebalance 04/04/10   World "America's economy will undergo one of its biggest transformations in decades. This macroeconomic shift from debt and consumption to saving and exports will bring microeconomic changes too: different lifestyles, and different jobs in different places. This special report will describe that transformation, and explain why it will be tricky." An unconventional glut 03/17/10   World "Now North America has an unforeseen surfeit of natural gas. The United States' purchases of LNG have dwindled. It has enough gas under its soil to inspire dreams of self-sufficiency. Other parts of the world may also be sitting on lots of gas. Those in the vanguard of this global gas revolution say it will transform the battle against carbon, threaten coal's domination of electricity generation and, by dramatically reducing the power of exporters of oil and conventional gas, turn the geopolitics of energy on its head." Is China actually bankrupt? 03/12/10   World "The nation has erected a complex system for magically making its debts disappear, but a look up China's sleeve shows that its IOUs may equal its GDP." The Greek debt bubble 03/12/10   World "Seen in this comparative perspective, Greece is bankrupt today without a great deal more European assistance or without a much more drastic austerity program. Probably they need both." Canada's marvelous mortgage system 02/26/10   World "There were some significant differences between Canada and the United States during the recent financial crisis. In general, Canada's banking system proved more prudent, more resilient, and much less prone to excesses. Taking a closer look at these differences might tell us how the United States got into the mess it is in, and illuminate some ideas for future reforms." Dubai 1,000 Times 02/22/10   World "Local-government officials have wasted stimulus funds by replacing infrastructure that was fine in the first place. State media complained in May 2009 that party chiefs in Jianyang, Sichuan province, decided to help boost the local economy by rebuilding a bridge that was in such good condition it had emerged unscathed a year earlier from the earthquake that killed 70,000 people. The so-called Bridge of Strength withstood a demolition crew that tried to blast it to pieces with dynamite, the official China Daily reported." Greek tax-dodgers 02/16/10   World "The government is seeking to tap more revenue from a society in which 95 percent of taxpayers declare annual income of less than 30,000 euros. The Bank of Greece estimates a campaign against evasion and corruption could glean as much as 5 billion euros a year." Greece's Goldman Sachs swaps 02/16/10   World "EU regulators have blessed the use of derivatives contracts to let countries curb their deficits. In 2001, the Commission, the EU's regulatory arm, approved Italy's use of derivatives that helped to reduce its budget deficit in 1997. Italy swapped fixed payments on a three-year, yen-denominated bond in 1996, for a floating rate, allowing it to temporarily cut the amount of interest paid on the debt." [Yikes!] Greece: our debt, your problem 02/16/10   World "So here's the deal: No matter what happens, the debt is now at a level where its growth has reached escape velocity. Even if Greece were to run zero deficit, ultimately we are heading to default. We can default now or we can default later." Short Canada 02/10/10   World "Although I have mentioned the enormous property bubble in Canada on numerous occasions, I have also stated a belief that Canada as a whole was better off than the US. Not so fast ..." Japan fades into the future 02/10/10   World "If Japan does not do it then aging and death is inevitable. The working population will be stuck looking after and funding the huge numbers of retired. Japan's industrial growth - now anemic - will collapse entirely with its population. The great Japanese industrialization experiment will walk slowly into the setting sun aided by a walking stick." [Warning: Some harsh language.] Europe risks another depression 02/08/10   World "The entirely pointless G7 meeting this weekend only served to underline the fact that Europe is again entering a serious economic crisis." What Toronto can teach New York and London 02/01/10   World "This tendency to react to the mere mention of Canada with either yawns or guffaws may be why, as the world struggles to figure out what went wrong in 2007 and 2008, not much international attention is being devoted to figuring out what went right in Canada. Canada is the only G7 country to survive the financial crisis without a state bail-out for its financial sector. Two of the world.s 15 most highly valued financial institutions - a list dominated by China - are Canadian and a recent World Economic Forum report rated the Canadian banking system the world's soundest." A Greek bailout, and soon? 01/29/10   World "In Brussels policy circles, the question asked about a bailout of Greece used to be: are European Union governments willing to do this? Now, I can report, the question among top EU officials has changed to: how do we do this?" Oil windfalls and living standards 01/24/10   World "When a country or a community discovers oil, should they rejoice or mourn? Should citizens be thrilled or worried when their governments receive fiscal windfalls? It might seem that the answers to these questions are obvious. How could finding an abundance of natural resources or stumbling on greater resources for the government to spend in the community be anything other than wonderful news? Yet economists are increasingly sceptical and many of them openly entertain the seemingly paradoxical notion that resources and windfalls may actually be bad news. In fact, some go so far as to speak of the "curse of natural resources"" China's silicon ceiling 01/18/10   World "Can China get rich without becoming free? History suggests it can't." How America can rise again 01/18/10   World "Are the fears of this moment our era's version of the 'missile gap'? Are they anything more than a combination of the two staple ingredients of doom-and-darkness statements through the whole course of our history? One of those ingredients is exaggerated complaint by whichever group is out of political power - those who thought America should be spelled with a 'k' under Nixon or Reagan, those who attend 'tea bag' rallies against the Obama administration now. The other is what historians call the bracing 'jeremiad' tradition of harsh warnings that reveal a faith that America can be better than it is. Football coaches roar and storm in their locker-room speeches at halftime to fire up the team, and American politicians, editorialists, and activists of various sorts have roared and stormed precisely because they have known this is the way the nation is roused to action." In China, fear of a real estate bubble 01/12/10   World "With property prices soaring in key cities, many investors and bankers worry that China has the next great real estate bubble waiting to be popped." Endless oil 01/09/10   World "Even if the new technologies add just a few percentage points to the recovery rate, such gains add years to global supply and boost the industry's profits. So the technology of coaxing oil out of the ground is constantly improving." Chavez devalues Bolivar 50% 01/09/10   World "Chavez is trying to maintain spending for his 21st century socialist revolution as South America's largest oil exporter fails to emerge from its first recession in six years. The government is seeking to stem its falling popularity and the highest inflation rate among 78 economies tracked by Bloomberg ahead of parliamentary elections scheduled for September." The Iceland rebellion 01/07/10   World "In many countries, taxpayers are rightly cranky over the idea that their governments are bailing out banks and others -- including their own regulators and central bankers -- who helped create the 2008 global financial meltdown. Iceland appears to be setting a new standard of taxpayer response that politicians everywhere might want to note." Crash in China 01/07/10   World "James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other high-flying companies whose stories were too good to be true. Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc." Our white collar nation 01/05/10   World "Farm productivity has exploded, increasing 1.9% per year over the last half of the century. At that rate, every 100 years, the same inputs on a farm produce 6.5 times as much foodstuffs. The percentage of the population engaged in farming dropped from 40% to under 2%, and yet we became a great exporting power in agricultural products. Similarly, manufacturing productivity rose 1.3%, on average, over the course of the second half of the 20th century." Note to Kevin O'Leary 01/05/10   World "Mr. O'Leary likes to say that he wants to put his money in countries that have high GDP growth rates such as China and India, not developed markets in North America and Europe that have anemic growth. Mr. O'Leary should stop confusing economic growth with stock market returns and brush up on the vast quantities of academic research out there that shows that, if anything, the correlation between GDP growth and equity returns is negative" Fruitful decade for many in the world 01/03/10   World "It may not feel that way right now, but the last 10 years may go down in world history as a big success. That idea may be hard to accept in the United States. After all, it was the decade of 9/11, the wars in Iraq and Afghanistan, and the financial crisis, all dramatic and painful events. But in economic terms, at least, the decade was a remarkably good one for many people around the globe." Texas' banks hold lessons 12/29/09   World "When the financial system collapsed last year, a short-handed Federal Deposit Insurance Corp. went looking for people schooled in the grim art of cleaning up failed banks. At least the FDIC knew just where to find the grizzled veterans: right here in the heart of Texas, where a banking cataclysm two decades ago wiped out more than 650 Texas banks and savings and loans." A stock trade a day keeps stress away 12/14/09   World "Traders seeking a break from volatile global markets may want to head to Bhutan's bourse, where stocks are traded on just four computers -- when they have not crashed -- only twice a week." An energy answer in the shale below? 12/03/09   World "Just a few years ago, the industry didn't have the technology to unlock these reserves. But thanks to advances in horizontal drilling and methods of fracturing rock with high-pressure blasts of water, sand and chemicals, vast gas reserves in the United States are suddenly within reach." Coal world 12/03/09   World "It might even be motivating. Because unless we get serious about using the remaining oil to fund the 25 year construction phase for a new class of power generation, the world will become ever more energy impoverished. And when you.re impoverished, you don.t burn expensive oil. And you certainly don.t build out vast wind power and solar capacity. When you.re impoverished you burn coal." Dangers of an overheated China 11/29/09   World "China has had a 30-year run of stellar economic growth. But it's only human nature for such expansion to breed too much optimism, overextending an entire economy. Americans have found this out the hard way in their own financial crisis. History has shown that no major economy has grown into maturity without bubbles, crises and possibly even civil strife or civil wars along the way. Is China exempt from this broader pattern?" A six thousand year-old bubble 11/13/09   World "In a world with multiple fiat moneys, the zero value of money equilibrium lurks for each of the fiat currencies, including gold. Admittedly, as regards gold, so far so good. Gold has positive value. It has had positive value for nigh-on 6000 years. That must make it the longest-lasting bubble in human history." U.S. is destroying manufacturing 11/12/09   World "'What do you think I am going to do?' Farr asked. 'I'm not going to hire anybody in the United States. I'm moving. They are doing everything possible to destroy jobs.'" Big-spending, high-taxing, lousy-services paradigm 11/10/09   World "It's true that many people are less sensitive to taxes and more concerned about public goods, and these consumer-voters will congregate in places with extensive services. But it's also true, all things being equal, that everyone would rather pay lower than higher taxes. The high-benefit, high-tax model can work, but only if the high taxes actually purchase high benefits - that is, public goods that far surpass the quality of those available to people who pay low taxes. And here, California is decidedly lacking." Detroit: Urban Laboratory 11/10/09   World "As the focus on agriculture and even hunting show, in Detroit people are almost literally hearkening back to the formative days of the Midwest frontier, when pioneer settlers faced horrible conditions, tough odds, and often severe deprivation, but nevertheless built the foundation of the Midwest we know, and the culture that powered the industrial age. No doubt in the 19th century many of those sitting secure in their eastern citadels thought these homesteaders, hustlers, and fortune seekers crazy for leaving the comforts of civilization to head to places like Iowa and Chicago. But some saw the possibilities of what could be and heeded the call to 'Go West, young man.' We've come full circle." The quiet death of the Kyoto protocol 11/06/09   World "Reading the climate-change news in recent weeks, one might wonder who won the last election. The Obama administration has rejected the Kyoto Protocol (ensuring it will expire), adopted some of former President George W. Bush's key positions in international climate negotiations, and demurred when asked about reports that the president has decided to skip the December climate summit in Copenhagen. United Nations climate negotiator Yvo de Boer has concluded that it is 'unrealistic' to expect the conference to produce a new, comprehensive climate treaty - which also describes the once-fond hopes for passage of domestic climate legislation this year - or even in Obama's first term. This is not how it was supposed to be." What's killing California? 10/27/09   World "The real problem could be much more simple and yet much more terrifying in its implications. California has simply now outgrown its youth and is now well into its middle age. Like the Rust Belt before it, California is now old. As with people as they age, .chronic lifestyle diseases. hit places too. These are: unfunded liabilities, the end of growth economics, and institutional rigidity, each of which builds on the one before it." Hu versus Sarkozy 10/25/09   World "There is no more reliable rule than the 95% rule: 95% of what you read about economics and finance is either wrong or irrelevant." After Empire 10/02/09   World "The young black doctors who earned the same salary as we whites could not achieve the same standard of living for a very simple reason: they had an immense number of social obligations to fulfill. They were expected to provide for an ever expanding circle of family members (some of whom may have invested in their education) and people from their village, tribe, and province. An income that allowed a white to live like a lord because of a lack of such obligations scarcely raised a black above the level of his family. Mere equality of salary, therefore, was quite insufficient to procure for them the standard of living that they saw the whites had and that it was only human nature for them to desire - and believe themselves entitled to, on account of the superior talent that had allowed them to raise themselves above their fellows. In fact, a salary a thousand times as great would hardly have been sufficient to procure it: for their social obligations increased pari passu with their incomes." The ghost fleet of the recession 09/13/09   World "The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination - and is why your Christmas stocking may be on the light side this year." The man who saved billions 09/13/09   World "Norman Borlaug, the man who saved more human lives than anyone else in history, has died at age 95. Borlaug was the Father of the Green Revolution, the dramatic improvement in agricultural productivity that swept the globe in the 1960s. For spearheading this achievement, he was awarded the Nobel Peace Prize in 1970." Peak oil as a behavioral problem 09/10/09   World "Reaching a peak in worldwide oil production has been largely discussed as a geological, economic, and political event. Missing from much of this discussion are behavioral aspects of peak oil. In the present paper I examine peak oil as a behavioral problem. At the outset the nature of peak oil is discussed, followed by a review of the projected date of the peak and the social and economic consequences of reaching a peak. Behavioral aspects of peak oil are then discussed, especially the challenges involved in responding effectively to a projected peak-oil future." Mixing solar with coal 09/04/09   World "A project that will add solar power to a coal-fired power plant could reduce the amount of coal required to generate electricity and dramatically cut the cost of solar power." The growth illusion 09/03/09   World "When investors pick the countries they want to back, they tend to be guided by economic growth prospects. The faster an economy grows, they reason, the faster corporate profits will grow in the country concerned, and thus the higher the returns investors will achieve. Alas, this is not the case." Our big chance 08/27/09   World "For Canada, a country that has spent the better part of 20 years nervously wringing its hands over its perceived inadequacies, the dramatic reversal over the past year has been striking. Our banks were once seen as lacking innovation; now world leaders hail the boring Big Five as being among some of the safest and most profitable banks in the world. We fretted that our economy was overly reliant on commodities; now our rocks, oil and gas are seen as a natural hedge against havoc in the manufacturing sector. We worried that Canada's strict mortgage rules were a drag on our housing market; now we can brag that we don't put people into homes they can't afford. Almost any way you look at it, Canada is uniquely positioned. So as other developed nations struggle, the question is: will we squander this once-in-a-generation opportunity or take advantage of our good fortune to punch above our weight?" 'Peak oil' is a waste of energy 08/25/09   World "A careful examination of the facts shows that most arguments about peak oil are based on anecdotal information, vague references and ignorance of how the oil industry goes about finding fields and extracting petroleum. And this has been demonstrated over and over again" It's still the one 08/24/09   World "Oil's very future is now being seriously questioned, debated, and challenged. The author of an acclaimed history explains why, just as we need more oil than ever, it is changing faster than we can keep up with." Cruel windfall 08/08/09   World "In modern economic thinking, peace and prosperity go hand in hand. However, there are good reasons why in pre-modern societies, the opposite relationship held true - war, disease, and urban death spelled high incomes. This column explains why Europe's rise to riches in the early modern period owed much to exceptionally bellicose international politics, urban overcrowding, and frequent epidemics." Why Japan isn't rising 08/06/09   World "Japan's rise literally from rubble into an industrial powerhouse is one of the greatest economic stories of the 20th century. But a slow response to the bursting real-estate and stock bubbles of the 1980s consigned the country to a decade of economic slumber from which it has yet to fully awake." The rule of law and the wealth of nations 08/01/09   World "Private factors thus provide the four elements of talent, capital, matchmaking, and accountability, and government sets these four basic rules for entry into and exit from certain activities, rights of investors, and the provision of a risk-free asset, the latter anchoring prices and negotiations." Fiscal ruin of the Western world beckons 07/23/09   World "No doubt Ireland has been the victim of a savagely tight monetary policy - given its specific needs. But the deeper truth is that Britain, Spain, France, Germany, Italy, the US, and Japan are in varying states of fiscal ruin, and those tipping into demographic decline (unlike young Ireland) have an underlying cancer that is even more deadly. The West cannot support its gold-plated state structures from an aging workforce and depleted tax base." Think again: Asia's rise 07/05/09   World "Don't believe the hype about the decline of America and the dawn of a new Asian age. It will be many decades before China, India, and the rest of the region take over the world, if they ever do." A tale of two depressions 06/24/09   World "Our Great Recession is every bit as global, earlier hopes for decoupling in Asia and Europe notwithstanding. Increasingly there is awareness that events have taken an even uglier turn outside the US, with even larger falls in manufacturing production, exports and equity prices." The story of 9 failed currencies 06/18/09   World "Rare are those instances in which entire economies are disrupted to the point - typically as a result of rampant inflation, or hyper inflation - that an entire form of currency is discarded, reformed or replaced. But it does happen." Buy an S.U.V., save the planet 06/02/09   World "Scientists and engineers are racing to develop technologies that will improve fuel economy and perhaps replace gasoline altogether. This is certainly to be applauded. But there may be an easier and more effective way to help wean ourselves off foreign oil and fight global warming. Interestingly, it involves not 21st-century technology but 28th-century technology - as in 28th-century B.C.E." Hasta la vista, forests. Wood is the new coal 06/02/09   World "Wood is becoming a hot commodity in a new low-carbon world. Power companies are burning more trees because the renewable fuel can be cheaper than coal and ignited without needing permits to release carbon dioxide, the main greenhouse gas blamed for global warming." Great Right North 05/25/09   World "Too often in the United States, Democrats reject cuts in taxes and spending because they consider them Republican causes. Yet in Canada, center-left governments implemented many of the reforms that made these impressive numbers possible. Perhaps we have something to learn from those "socialists" to the north." The great ethanol scam 05/25/09   World "More than one major transportation-based industry in America besides Detroit is on the ropes. For the fourth time in our history the ethanol industry has come undone and is quickly failing nationally. Of course it's one thing when Detroit collapsed with the economy; after all, that is a truly free-market enterprise and the economy hasn't been good. But the fact that the ethanol industry is going bankrupt, when the only reason we use this additive is a massive government mandate, is outrageous at best. Then again, the ethanol lobby and refiners have a solution to ethanol's failure in America: Hire retired General Wesley Clark as your point man and lobby the government to increase the amount of ethanol in our fuel to 15%. The problems with that proposition are real - unlike ethanol's benefits." Renewable energy - our downfall? 05/25/09   World "The government, under pressure from a disparate confederation of environmentalists and greens, have agreed to press ahead with a host of renewable energy sources, including wind, tidal and wave power. Yet, despite the vast sums of public money that will be allocated to these projects and the fundamental enormity of the decisions that have been made, there has been very little in the way of open debate on the subject. Like many aspects of today's governmental system, the powers that be appear to have made a decision about future energy production based upon image, spin and the number of votes the policy will capture, while ignoring the basic truths and science that should be the foundation-stone of any policy. Nobody has even debated the absolutely fundamental question of whether any of these energy generation systems actually work." Argentina: The superpower that never was 05/25/09   World "A short century ago the US and Argentina were rivals. Both were riding the first wave of globalisation at the turn of the 20th century. Both were young, dynamic nations with fertile farmlands and confident exporters. Both brought the beef of the New World to the tables of their European colonial forebears. Before the Great Depression of the 1930s, Argentina was among the 10 richest economies in the world. The millions of emigrant talians and Irish fleeing poverty at the end of the 19th century were torn between the two: Buenos Aires or New York? The pampas or the prairie? A hundred years later there was no choice at all. One had gone on to be among the most successful economies ever. The other was a broken husk." Energy myths and realities 05/16/09   World "I'm going to try to do something that seems impossible these days - and that's have an honest conversation about energy policy, global warming and what proposed 'cap and trade' regulation means for you, the generation that will have to live with the consequences of the policy choices we make. My goal is to inform you with easily verifiable facts - not hype and propaganda - and to appeal to your common sense." What if global-warming fears are overblown? 05/14/09   World "His most controversial argument is that the surface temperature readings upon which global warming theory is built have been distorted by urbanization. Due to the solar heat captured by bricks and pavement and due to the changing wind patterns caused by large buildings, a weather station placed in a rural village in 1900 will inevitably show higher temperature readings if that village has, over time, been transformed into small city or a suburban shopping district, Christy says." Getting real on wind and solar 04/24/09   World "Why are we ignoring things we know? We know that the sun doesn't always shine and that the wind doesn't always blow. That means that solar cells and wind energy systems don't always provide electric power. Nevertheless, solar and wind energy seem to have captured the public's support as potentially being the primary or total answer to our electric power needs." The incredible shrinking economy 04/02/09   World "To lose one decade may be regarded as a misfortune; to lose two looks like carelessness. Japan's economy stagnated in the 1990s after its stockmarket and property bubbles burst, but its more recent economic performance looks even more troubling. Industrial production plunged by 38% in the year to February, to its lowest level since 1983. Real GDP fell at an annualised rate of 12% in the fourth quarter of 2008, and may have declined even faster in the first three months of this year. The OECD forecasts that Japan's GDP will shrink by 6.6% in 2009 as a whole, wiping out all the gains from the previous five years of recovery." How Zimbabwe slew hyperinflation 03/23/09   World "Zimbabwe's wily street hawkers have finally found a use for the worthless 100-trillion-dollar banknotes that were issued here in January. They sell the bizarre banknotes as souvenirs to foreign tourists for $2 each. The currency with the never-ending string of zeroes is quickly fading into history, just two months after the latest notes were printed by the inexhaustible central bank. Also disappearing is Zimbabwe's phenomenal level of hyperinflation, which last year reached a stunning 89.7 sextillion per cent (a number expressed with 21 zeroes), making it the most extreme hyperinflation crisis of any country in modern times." Argentina downgraded 03/23/09   World "MSCI Barra, whose stock indexes are tracked by investors with $3 trillion in funds, downgraded the country to a 'frontier' economy from an 'emerging market' in February, citing its restrictions on foreign capital. That puts South America's second-biggest economy, after Brazil, in a category with Sri Lanka and Kazakhstan." Wall Street on the tundra 03/03/09   World "Iceland's de facto bankruptcy - its currency (the krona) is kaput, its debt is 850 percent of G.D.P., its people are hoarding food and cash and blowing up their new Range Rovers for the insurance - resulted from a stunning collective madness. What led a tiny fishing nation, population 300,000, to decide, around 2003, to re-invent itself as a global financial power? In Reykjavik, where men are men, and the women seem to have completely given up on them, the author follows the peculiarly Icelandic logic behind the meltdown." California's meltdown 02/21/09   World "California may still seem to be the dreamy land of movie stars and swimming pools, beautiful beaches and endless summer. But the reality - and perhaps the future - of the nation's largest state looks more like this gritty city on San Pablo Bay north of San Francisco, where past extravagance has collided with economic recession and the collapse of home values to push it into bankruptcy." How California became France 02/21/09   World "This week's deal likely won't keep the state in balance beyond 18 months, perhaps even fewer. "This budget will take us through 2010," says Karen Bass, the Assembly speaker, a Democrat from Los Angeles. "I don't know if it will hold." Some Democrats and Republicans privately say the best option may be failure. The rough scenario is fiscal insolvency, followed perhaps by federal receivership. No precedent or legal avenue exists for a state to reorganize its affairs under a form of Chapter 11 protection, but that striking suggestion sounds better by the day." For Japan, a long, slow slide 02/17/09   World "As the United States frets noisily about a recession, Japan is quietly enduring a far more fundamental economic slide, one that seems irreversible. This country, which got rich quick in a postwar miracle of manufacturing and alarmed Americans by buying up baubles such as Rockefeller Center, is steadily slipping backward as a major economic force." Do you have a crush on Canada? 02/11/09   World "For most Americans, save for hockey fans and comedians, Canada is scarcely on the radar. But the country's stock is quietly rising, as financiers and the media extol the solvency of its banking system - a tidy little fact that stands in sharp contrast to, well, just about everywhere else." Worthwhile Canadian initiative 02/11/09   World "The legendary editor of The New Republic, Michael Kinsley, once held a "Boring Headline Contest" and decided that the winner was "Worthwhile Canadian Initiative." Twenty-two years later, the magazine was rescued from its economic troubles by a Canadian media company, which should have taught us Americans to be a bit more humble. Now there is even more striking evidence of Canada's virtues. Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it's Canada. In 2008, the World Economic Forum ranked Canada's banking system the healthiest in the world. America's ranked 40th, Britain's 44th." Fish shares and sharing fish 02/05/09   World "With their lasting stake in the fishery, and through their close bonds of community, the Seri have approximated the sole owner: they have managed their resource for sustainable yield rather than short-term gain, and today, Infiernillo Channel harbors the richest shellfish beds in the region. The narrow channel is easy for the Seri to patrol. By contrast, the tribe's other fisheries, on the opposite side of Isla Tiburon, are open to the sea and therefore difficult to monitor. Consequently, those waters have remained accessible to all. And, as you might have predicted, the shellfish populations there have collapsed to levels comparable with other locations in the Gulf. The two sides of Isla Tiburn are thus like a case-control study in the benefits of secure ownership of a fishery." IBM to move laid off workers to India 02/03/09   World "The climate is warm, there's no shortage of exotic food, and the cost of living is rock bottom. That's IBM's pitch to the laid-off American workers it's offering to place in India. The catch: Wages in the country are pennies-on-the-dollar compared to U.S. salaries. Under a program called Project Match, IBM will help workers laid off from domestic sites obtain travel and visa assistance for countries in which Big Blue has openings. Mostly that's developing markets like India, China, and Brazil." Hugo crawls back 01/16/09   World "Expropriation hasn't worked so well. Chavez's state oil company, PDVSA, had virtually nothing left in its coffers after squandering $700 billion in oil earnings on political schemes like light bulb and milk factories. It needs $20 billion to develop its Orinoco Basin projects, which could produce 1.2 million barrels a day, but it can only do it with partners who have both capital and technology." Marbella's billionaire spent bribes 01/07/09   World "As an urban planning adviser in the sun- drenched Spanish resort town of Marbella, Juan Antonio Roca had after- tax income of less than 150,000 euros a year. When he was arrested for corruption in March 2006, police seized assets worth 2.4 billion euros ($3.4 billion), including a century-old palace in Madrid, a country estate equipped with a helipad overlooking the Rock of Gibraltar and a stud farm guarded by a tiger." Trickledown meltdown 12/28/08   World "In this very poor corner of Bangladesh, where rice farmers get by on household incomes of less than $1 a day, where the most popular mode of transportation is the pedal-rickshaw and where life doesn't seem to have changed for centuries, it's hard to believe that anyone could be affected by the crisis that has humbled Wall Street and Canary Wharf. But the credit crunch is the main topic of conversation in the rice paddies and village bazaars here. It is hard to find anyone, from vegetable sellers to floor sweepers, whose life has not been affected by the collapse of institutions in New York and London." The great unraveling 12/17/08   World "The stranger, a Western businessman, slipped into the chair next to me at an Asia Society lunch here in Hong Kong and asked me a question that I can honestly say I've never been asked before: 'So, just how corrupt is America?'" Suddenly vulnerable 12/13/08   World "In two respects, however, India has a big advantage over China in coping with an economic slowdown. It has all-too extensive experience in it; and it has a political system that can cope with disgruntlement without suffering existential doubts. India pays an economic price for its democracy. Decision-making is cumbersome. And as in China, unrest and even insurgency are widespread. But the political system has a resilience and flexibility that China's own leaders, it seems, believe they lack. They are worrying about how to cope with protests. India's have their eyes on a looming election." Imbalances threaten survival of liberal trade 12/07/08   World "In short, if the world economy is to get through this crisis in reasonable shape, creditworthy surplus countries must expand domestic demand relative to potential output. How they achieve this outcome is up to them. But only in this way can the deficit countries realistically hope to avoid spending themselves into bankruptcy." Are we watching the death of OPEC? 12/03/08   World "The plunge from $148 a barrel to $50 a barrel in less than five months has opened huge fissures in the Organization of Petroleum Exporting Countries. Some members, such as Iran and Venezuela, are desperate to raise oil prices so they can balance their national accounts. More-conservative members, such as Saudi Arabia, can balance their budgets even at current prices and have room to fear they will be the scapegoats if the global recession deepens." The next crisis -- Africa 11/20/08   World "The recent drop in oil and other commodity prices makes it almost a certainty that some unstable commodity-exporting nations will reach a crisis stage in the next few months. The only question is, which countries are likely to erupt first?" A sea of unwanted imports 11/20/08   World "Gleaming new Mercedes cars roll one by one out of a huge container ship here and onto a pier. Ordinarily the cars would be loaded on trucks within hours, destined for dealerships around the country. But these are not ordinary times. For now, the port itself is the destination. Unwelcome by dealers and buyers, thousands of cars worth tens of millions of dollars are being warehoused on increasingly crowded port property." An axis in need of oiling 10/23/08   World "In sum, Iran, Russia and Venezuela are all likely to be left short of cash - and facing a diminution in their international clout. 'Never confuse brilliance with a bull market,' goes a Wall Street saying. The leaders of the oily trio may have thought high oil prices were an adequate substitute for good governance. In many quarters, the difference is now painfully clear." Russia and the crisis 10/22/08   World "Dmitry Medvedev dreams of turning Moscow into a global financial centre, but he has an awful long way to go. For Russia.s markets have slumped. Even after recent one-day rallies, the dollar-denominated RTS index and the rouble-denominated MICEX index have shed around two-thirds of their value since mid-May (see chart). These falls are bigger than in any other emerging markets, dealing a blow to Kremlin claims that Russia is a safe haven from global financial turmoil." Why the ECB can't fix Europe 10/09/08   World "The European Central Bank joined the United States Federal Reserve and other major central banks in cutting key interest rates by half a point on Wednesday in a concerted move to stabilize financial markets and avert recession, but the ECB's power to stem the financial crisis in Europe is limited, economists say." Iceland takes over Kaupthing 10/09/08   World "'It's difficult to find any parallels to what's happening in Iceland in the industrialized world,' Jensen said. 'You'd have to look to emerging markets, and after the Asian crisis, for example, those economies contracted about 10 percent.' The debts of the Icelandic banking system are too big for the government to repay. 'There is no way that the Icelandic population can assume responsibility for the private debt' that the banks have built up, Haarde said yesterday." Stopping a financial crisis, the Swedish way 09/23/08   World "A banking system in crisis after the collapse of a housing bubble. An economy hemorrhaging jobs. A market-oriented government struggling to stem the panic. Sound familiar? It does to Sweden. The country was so far in the hole in 1992 - after years of imprudent regulation, short-sighted economic policy and the end of its property boom - that its banking system was, for all practical purposes, insolvent. But Sweden took a different course than the one now being proposed by the United States Treasury. And Swedish officials say there are lessons from their own nightmare that Washington may be missing." CEO murdered by mob of sacked Indian workers 09/23/08   World "Corporate India is in shock after a mob of sacked workers bludgeoned to death the chief executive who had dismissed them from a factory in a suburb of Delhi." Top-earning pirates 09/21/08   World "Depletion of fortune due to rum and wenches was not assessed, nor were divisions of treasure among the crew. Plunders were often split in equal shares, with the captain receiving double--not much of a premium for leadership. A good lesson to modern shareholders: The best way to achieve fair compensation and rule out golden parachutes is to have your leaders expecting murderous revolts if they hoard profits." Russian emergency funding fails to halt stock rout 09/17/08   World "Russia poured $44 billion into its three largest banks and halted stock trading for a second day in a bid to stem the most severe financial crisis since its devaluation and debt default a decade ago. The Finance Ministry extended the repayment period on loans available to OAO Sberbank, VTB Group and OAO Gazprombank to three months from one week. The benchmark Micex stock index plunged as much as 10 percent, taking its three-day decline to 25 percent, and brokerage KIT Finance said it's in talks with investors to sell a stake after failing to meet some obligations." What your global neighbors are buying 09/08/08   World "How people spend their discretionary income - the cash that goes to clothing, electronics, recreation, household goods, alcohol - depends a lot on where they live. People in Greece spend almost 13 times more money on clothing as they do on electronics. People living in Japan spend more on recreation than they do on clothing, electronics and household goods combined. Americans spend a lot of money on everything." The 65 mpg Ford the U.S. can't have 09/05/08   World "If ever there was a car made for the times, this would seem to be it: a sporty subcompact that seats five, offers a navigation system, and gets a whopping 65 miles to the gallon. Oh yes, and the car is made by Ford Motor (F), known widely for lumbering gas hogs." Clouds gather again over the Pampas 08/22/08   World "At 55% of GDP, Argentina's public debt is still large. But the cost of servicing it has been low, partly because of the tough restructuring Mr Kirchner imposed on bondholders. Even so, to service its debts, the government needs to find an extra $2.5 billion or so next year. It cannot tap the international capital markets, because it has still not settled with some bondholders nor its sovereign creditors in the Paris Club. Instead, it is relying on Hugo Chavez. This month Venezuela's president bought another $1 billion in Argentine bonds (taking his total purchases to $7 billion). The latest bonds pay interest of 15% - the same rate agreed by Domingo Cavallo, a former finance minister, in a notorious bond swap in 2001 on the eve of the collapse." The key to happiness is freedom not income 08/19/08   World "Off and on, usually provoked by the release of a new study, the media will turn to the question of happiness and incomes. While the Wall Street Journal has exhibited a tendency to tout research that shows that the rich are happier, the results are far less clear-cut. Once a certain income level has been reached (typically, enough to provide for a middle class standard of living in that society and allow one to accumulate a cushion for emergencies) more money does not produce much if any gains in happiness. And some findings have been under-reported in the US. For instance, while some studies have found that being in the top income group or having high educational attainment is correlated with higher levels of happiness, living in socially stratified societies leads to less satisfaction across all groups. And remember, Nigeria, hardly a bastion of wealth, has scored as the happiest country in a multi-year international survey. An article today in the Financial Times suggests that researchers may have been looking at the wrong axis in looking for a strong correlation between income and happiness. Roberto Foa (a researcher in the same international survey mentioned above) contends that freedom is a far more important factor than economic attainment." The Big Mac index 07/27/08   World "Many of the currencies in the Fed's major-currency index, including the euro, the British pound, Swiss franc and Canadian dollar, are overvalued and trading higher than last year's burger benchmark. Only the Japanese yen could be considered a snip. The dollar still buys a lot of burger in the rest of Asia too. China's currency is among the most undervalued, but a little bit less so than a year ago." European recession looms 07/15/08   World "The eurozone is tipping into a deeper downturn than America itself despite the tremors in the US mortgage industry, and may already be in full recession for the first time since the launch of the single currency." How Canada stole the American Dream 06/28/08   World "Believe it or not, we now have more wealth than Americans, even though we work shorter hours. We drink more often, but we live longer and have fewer diseases. We have more sex, more sex partners and we're more adventurous in bed, but we have fewer teen pregnancies and fewer sexually transmitted diseases. We spend more time with family and friends, and more time exploring the world." The hidden costs of fuel subsidies 06/07/08   World "Why should China keep domestic fuel prices at about half of the global average? The usual answers are to keep inflation in check and stave off social instability that could result if prices were to rise too quickly. But by distorting fuel prices, China is encouraging fuel consumption and discouraging the use of new energy. Since the Chinese still live in an $80-a-barrel oil environment, demand for anything from cars to chemical products will spiral higher and raise the risks of economic overheating. Increasing subsidies on fuel will crowd out more investment in other areas, such as education or health care, to name two possibilities." Why oil prices will tank 06/06/08   World "In a normal oil market, the cost of producing the last, most expensive barrel of oil needed to satisfy worldwide demand sets the price for every barrel the world over. Other auction commodity markets work much the same way. So even if Saudi Arabia produces at $4 a barrel, if the final, multi-millionth barrel required to heat houses and run cars costs $50, and is produced, for argument's sake, at a flagging field in West Texas, the world price is $50. That's what economists call the equilibrium price: It's where the price that customers are willing to pay meets the production cost, including a cushion, naturally, for profit or "the cost of capital." But today, the sudden surge in demand and the production bottlenecks have thrown the market radically out of balance." From communism to environmentalism 06/03/08   World "My deep frustration has been growing exponentially in recent years due to the facts that almost everything has already been said, that all rational arguments have been used and that global warming alarmism is still marching on. The whole process is already in the hands of those who are not interested in rational ideas and arguments. It is in the hands of climatologists and other related scientists who are highly motivated to look in one direction only because a large number of academic careers has evolved around the idea of man-made global warming. It is, further, in the hands of politicians who maximize the number of votes they receive from the electorate. It is also -- as a consequence of political decisions -- in the hands of bureaucrats of national, and more often of international, institutions who try to maximize their budgets and careers regardless of the costs, truth and rationality. It is in the hands of rent-seeking businesspeople who are -- given the existing policies -- interested in the amount of subsidies they receive and look for all possible ways to escape the positive, general welfare enhancing functioning of free markets. An entire industry has developed around the funds these firms are getting from the government." An old enemy rears its head 05/23/08   World "Even as America's economy teeters on the brink of recession and many European economies are slowing, central bankers in rich countries fear rising inflation. Yet the risks they face are smaller than those in emerging economies, where inflation has risen far more over the past year to its highest for nine years. There are also an alarming number of similarities between developing economies today and developed economies in the early 1970s, when the Great Inflation took off. Are the young upstarts heading for trouble?" The question of global warming 05/22/08   World "It is likely that biotechnology will dominate our lives and our economic activities during the second half of the twenty-first century, just as computer technology dominated our lives and our economy during the second half of the twentieth. Biotechnology could be a great equalizer, spreading wealth over the world wherever there is land and air and water and sunlight. This has nothing to do with the misguided efforts that are now being made to reduce carbon emissions by growing corn and converting it into ethanol fuel. The ethanol program fails to reduce emissions and incidentally hurts poor people all over the world by raising the price of food. After we have mastered biotechnology, the rules of the climate game will be radically changed. In a world economy based on biotechnology, some low-cost and environmentally benign backstop to carbon emissions is likely to become a reality." Dead end for free trade 05/17/08   World "The long-ago promise of the Canada-U.S. free-trade deal was about dismantling barriers - tariff and otherwise - along the world's longest undefended border. But those benefits are being slowly eroded as companies absorb ever greater costs - anything and everything to keep trade moving. Just-in-time inventory management has evolved into just-in-case. Companies are stockpiling inventory in both countries to cope with the increasingly unpredictable border, wiping out many of the efficiencies of integrated supply chains, according to recent studies by the Conference Board of Canada as well as the Canadian and U.S. Chambers of Commerce. Stockpiling isn't the only coping mechanism seeping into everyday business. Disturbingly, businesses are reverting to behaviour that was common before free trade, a trend that is eroding the benefits of Canada's open access to the U.S. market, the Conference Board concluded." Malthus, the false prophet 05/14/08   World "Given the fear that a new era of chronic shortages may have begun, it is perhaps understandable that the name of Thomas Malthus is in the air. Yet if his views were indeed now correct, that would defy the experience of the past two centuries." The wonder fish 04/21/08   World "Our oceans are being drained of food. Doctors tell us to eat more fish; it's good for the brain and good for the heart. We yearn for our weekly sushi fix. And increasingly so do our friends in China, India, and elsewhere in the developing world. To meet this growing appetite, commercial fishermen are scooping up everything that's edible (and a lot of what's not). Couple that trend with the effects of global warming, and the situation has become so dire that some scientists think seafood stocks will totally collapse by 2048." Hijacking the Hermitage Fund 04/07/08   World "Corruption, intimidation, robbery, violent assault, forgery, large-scale fraud. No, not the subject of the latest John Grisham novel, but sensational allegations, made public Apr. 4 by Hermitage Capital Management.until recently the largest foreign portfolio investor in Russia. In a detailed and damning report, titled Criminal Justice.Russian-Style, Hermitage alleges the fund's Russian subsidiaries have fallen victim to an elaborate con designed to defraud the fund of hundreds of millions of dollars. The most sensational part of Hermitage's allegations is that the attempted larceny was carried out with the direct connivance of officials in the Russian police. Hermitage alleges the police seized documents and equipment that were instrumental to the attempted fraud, which involved bogus court cases based on forged documents, the aim of which was to sue Hermitage subsidiaries for hundreds of millions of dollars. "The most shocking thing is not that there are corporate raiders in Russia who attempt to steal your shares," says Jamison Firestone, managing partner of Firestone Duncan, Hermitage's law firm. "The shocking thing is that the police worked hand-in-hand with them, and actually performed the theft of the documents so that the corporate raiders could then do their work."" Spanish property auction flop 04/04/08   World "House prices began their surge in 1998 spurred by falling interest rates as Spain prepared for euro membership. Spain has built about 5 million new homes since then, attracting immigrant labor from Eastern Europe and Latin America to fuel a boom that peaked in 2006. Now the turmoil in global credit markets is cutting demand. The world's biggest financial companies have reported about $232 billion in credit losses and writedowns since the start of 2007 and the credit shortage is filtering through to Spain." The clean energy scam 03/30/08   World "But several new studies show the biofuel boom is doing exactly the opposite of what its proponents intended: it's dramatically accelerating global warming, imperiling the planet in the name of saving it. Corn ethanol, always environmentally suspect, turns out to be environmentally disastrous. Even cellulosic ethanol made from switchgrass, which has been promoted by eco-activists and eco-investors as well as by President Bush as the fuel of the future, looks less green than oil-derived gasoline." Out of print 03/30/08   World "Few believe that newspapers in their current printed form will survive. Newspaper companies are losing advertisers, readers, market value, and, in some cases, their sense of mission at a pace that would have been barely imaginable just four years ago. Bill Keller, the executive editor of the Times, said recently in a speech in London, 'At places where editors and publishers gather, the mood these days is funereal' Editors ask one another, 'How are you?,' in that sober tone one employs with friends who have just emerged from rehab or a messy divorce.' Keller's speech appeared on the Web site of its sponsor, the Guardian, under the headline 'NOT DEAD YET.'" Shanghaied 11/22/07   World "The U.S. used to have absurdities like this--companies in effect declaring a profit from the rise in their own share prices. In the 1920s, that is. Fast-forward to Shanghai and the roaring 2000s. In two years the Shanghai Composite Index has quintupled and the Shenzhen Component Index has more than sextupled. Now China's combined market of 1,500 companies with A shares (the primary kind available on the mainland) is trading at 40 times earnings. Chinese companies' shares also have soared in Hong Kong and abroad, but not to the same degree. Circular ownership--with the potential for a pair of companies to prop up each other's share price and earnings--is not at all uncommon. "They actually support each other and increase the stock price. More and more companies are like this, particularly the big companies," says Xu Xianghua, a branch manager for First Capital Securities in Beijing." Global warming delusions 10/18/07   World "Instead, like fashions that took hold in the past and are eloquently analyzed in the classic 19th century book "Extraordinary Popular Delusions and the Madness of Crowds," the popular imagination today appears to have been captured by beliefs that have little scientific basis. Some colleagues who share some of my doubts argue that the only way to get our society to change is to frighten people with the possibility of a catastrophe, and that therefore it is all right and even necessary for scientists to exaggerate. They tell me that my belief in open and honest assessment is nave. "Wolves deceive their prey, don't they?" one said to me recently. Therefore, biologically, he said, we are justified in exaggerating to get society to change." Freedom, not climate, is at risk 06/15/07   World "As someone who lived under communism for most of his life, I feel obliged to say that I see the biggest threat to freedom, democracy, the market economy and prosperity now in ambitious environmentalism, not in communism. This ideology wants to replace the free and spontaneous evolution of mankind by a sort of central (now global) planning. The environmentalists ask for immediate political action because they do not believe in the long-term positive impact of economic growth and ignore both the technological progress that future generations will undoubtedly enjoy, and the proven fact that the higher the wealth of society, the higher is the quality of the environment. They are Malthusian pessimists." Globalization erodes product safety 06/14/07   World "Colgate's announcement Thursday that it found fake and potentially dangerous "Colgate"-branded toothpaste sold in some stores is the latest in a series of product scares that have recently spooked American consumers. More importantly, these incidents of counterfeit toothpaste, melamine-tainted pet food and toothpaste laced with anti-freeze imported from China are raising concern about the quality of food and other products that enter the U.S. and the overall safety of the global supply chain." Crouching fraud, hidden losses 03/12/07   World "China's accounting has historically been used to support state economic policies, explains Stephen Chipman, an expert in China's financial and accounting systems at accounting firm Grant Thornton. With the founding of the Communist People's Republic of China in 1949, the state became the sole owner of industries. The only economic entity was the state-owned enterprise. That meant businesses reported information according to a centrally planned economy, and China's accounting standards tended to give out paltry information, focusing mostly on an inventory of assets, with very little Western-like level of detail on things like debt, depreciation or returns on investment, Chipman says. On top of that, an accounting profession where accountants truly act as watchdogs also has yet to develop. "China is dealing with not only almost 50 years of atrophy in its financial reporting, but also 50 years without the development of an accounting profession," Chipman says." The global gusher 01/07/07   World "When Thailand's introduction of capital controls sent its stockmarket plunging a few days before Christmas, you could have been forgiven for thinking, 'Here we go again.' It is almost ten years since the start of the Asian financial crisis, when capital flight on a huge scale caused financial markets and economies in the region to collapse. The problem that Thailand and other Asian countries face today, however, is the exact opposite: how to stop capital flowing in." The reluctant briber 11/03/06   World "Meanwhile, although he no longer wants to do business in Russia, things are returning to normal in Ukraine. The team that ran the country before the revolution is back in power, and Ivan once again knows who, when and how much." A tale of two factories 09/14/06   World "To get a sense of how China's rise is playing out, Fortune went to two factories -one in China and one in the U.S. - that make the same product for the same company. Our conclusion: China's progress is impressive, and it will continue. That said, America's factories have strengths of their own: U.S. manufacturers have improved productivity at least 4% a year for the past decade. Although wages in Shanghai are rising sharply, labor is still comparatively cheap. But that is an advantage that goes only so far." The billionaire prince who owns Canada's treasures 07/17/06   World "But even in today's polarized world, US$24 billion can buy a lot of goodwill, and Alwaleed remains in the market. And there is certainly no shortage of distractions to feed his obsessive pursuit of the next deal, while he waits for his investments in peace and understanding to take hold. For one thing, there is hotel real estate to sell, lots of it. Perhaps some worth buying, too. He's still planning to issue shares in his company on the Saudi stock exchange. He recently bought a US$390-million stake in the Bank of China, spreading the reach of his international empire even further. And there has been talk that his good friend Rupert Murdoch may be ready to buy a stake in Alwaleed's Arabic media giant Rotana. He has even mused about an English-language cable station aimed at better representing the Islamic world to Americans." The case of the unpaid parking ticket 07/08/06   World "On a humbler scale, we all face the same choice. We can try to earn money by doing something useful, or we can try to steal or extort it from other people. A society where most people are doing something useful has a good chance of being rich; a society full of corruption will be poor. That is a glib enough explanation of wealth and poverty, but it is surely just the start of the story. What causes corruption?" Bolton v Gore 06/22/06   World "Two years ago, a Danish environmentalist called Bjorn Lomborg had an idea. We all want to make the world a better place but, given finite resources, we should look for the most cost-effective ways of doing so. He persuaded a bunch of economists, including three Nobel laureates, to draw up a list of priorities. They found that efforts to fight malnutrition and disease would save many lives at modest expense, whereas fighting global warming would cost a colossal amount and yield distant and uncertain rewards." The rich, the poor and the growing gap 06/18/06   World "All in all, America's income distribution is likely to continue the trends of the recent past. While those at the top will go on drawing huge salaries, those in the broad middle of the middle class will see their incomes churned. The political consequences will depend on the pace of change and the economy's general health. With luck, the offshoring of services will happen gradually, allowing time for workers to adapt their skills while strong growth will keep employment high. But if the economy slows, Americans' scepticism of globalisation is sure to rise. And even their famous tolerance of inequality may reach a limit." How accurate are your pet pundits? 06/07/06   World "Imagine your job as a media executive depends on expanding your viewing audience. Whom would you pick: an expert who balances conflicting arguments and concludes that the likeliest outcome is more of the same, or an expert who gets viewers on the edge of their seats over radical Islamists seizing control and causing oil prices to soar?" McCurrencies 05/27/06   World "When our economics editor invented the Big Mac index in 1986 as a light-hearted introduction to exchange-rate theory, little did she think that 20 years later she would still be munching her way, a little less sylph-like, around the world. As burgernomics enters its third decade, the Big Mac index is widely used and abused around the globe. It is time to take stock of what burgers do and do not tell you about exchange rates." Steady as she goes 05/09/06   World "All this explains why, in the words of Exxon Mobil, the oil production peak is unlikely "for decades to come". Governments may decide to shift away from petroleum because of its nasty geopolitics or its contribution to global warming. But it is wrong to imagine the world's addiction to oil will end soon, as a result of genuine scarcity. As Western oil companies seek to cope with being locked out of the Middle East, the new era of manufactured fuel will further delay the onset of peak production. The irony would be if manufactured fuel also did something far more dramatic - if it served as a bridge to whatever comes beyond the nexus of petrol and the internal combustion engine that for a century has held the world in its grip." A practical man 05/04/06   World "Unlike their Republican neighbours to the south, Canada's Tories are determined to maintain their predecessors' record of balanced budgets, stretching back eight years. They promise to rein in government spending, which showed signs of running away under the Liberals. Last year's entire C$8 billion ($7 billion) surplus will go towards paying down the national debt. From now on, C$3 billion will be set aside each year for debt reduction. That would reduce the ratio of public debt to GDP, already the lowest of any of the G7 large industrial economies, to 25% by 2014." Power without responsibility 04/28/06   World "Unions thus have a lot of power, but without being representative. Some suggest that this mis-match causes conflictual labour relations. In effect, the unions are defending the interests not of the many, but of the few." China's reality is both boom and gloom 04/19/06   World "A flight into Beijing these days begins the descent into a kind of hell. It's not just the smog, which is pervasive, gray and suffocating on an epic scale. It's not just the weather, which is unseasonably cold and windy. It's not just the sand, which is blowing in from inner Mongolia in thick, yellow sheets. It's not just the traffic, which is inert due to the stunning lack of major cross-town freeways. And it's not just the vibe of the city's residents and laborers, which is often foul and hostile amid the pollution and crowding. It's the sense of alienation and hopelessness that you get from so many of the kind and brilliant people who have grown up there, and who should have the greatest stake in its success." The Hermit Kings 03/31/06   World "Whether they are worth $200 million or $2 billion, they all share one thing: They would rather we weren't talking about them. But curiosity got the better of us. How did these individuals amass so much wealth while drawing so little attention? Who hired a PR manager just to keep his name out of the paper? Which real estate scion had a taste for Ferrari Testarossas? Who had his identity stolen and who plans to have his body cryogenically frozen? Inside, everything you need to knowat least everything we could dig upabout the most reclusive figures in Canadian business." Gloom in France 02/07/06   World "This year, for the first time, almost the entire proceeds of French income tax will go to pay interest on public debt. In his report, Mr Pebereau said that, on present trends, France's public debt will jump from 66% of GDP to 100% by 2014." Deep trouble 12/16/05   World "Nagle explains that the U.S. is compromised by the demands of security, environmental issues and other factors. This has had a serious impact on the pressing need to upgrade port infrastructures. For instance, the well-run South Carolina State Ports Authority is seeing a shortfall in federal funds promised versus those actually paid--and this authority is not alone." Europe's farm follies 12/09/05   World "But there is also a more general resistance to reform that reflects the special place of farming in the French imagination. Its importance runs deeper than agriculture's tiny 4% share of the workforce or its 3% share of GDP. It is not by accident that French politicians rush each year to the Paris Agricultural Fair to pose for the cameras with heaving bulls. Why are the French so infatuated by farming? And what would happen to French farming if subsidies were slashed?" Arab world, Iraq and al-Qaeda 11/30/05   World "As al-Qaeda scores own-goals in its backyard, many Arabs, including some Iraqis, are beginning to rethink their position on violence in the name of resistance" Held hostage in China 10/28/05   World "David Ji used a few good contacts in his homeland to build a billion-dollar business selling cheap DVD players in the U.S. Then he crossed a supplier--and disappeared." The sun also rises 10/08/05   World "The slow growth in productivity that makes OECD forecasters gloomy about Japan's potential was a consequence of the country's astonishing waste of capital during the 1990s, combined with a reluctance to cut jobs. Money was misallocated during the great stock and property bubble of the 1980s, but then even more was wasted in the next decade, as banks kept "zombie" companies alive and politicians raided the biggest pork barrel in history. Now that is past, even a modest improvement in the allocation of capital and the use of labour would boost returns and productivity. Reforms in corporate law and changes in the capital markets make it likely that the improvement will be better than modest. And, as workers become scarce again, further investment in information technology and other sorts of automation should boost productivity." The Caribbean and sugar 09/27/05   World "Four decades after independence, it is hardly surprising that colonial trade patterns are under threat. Caribbean economies do have a future, but a very different one, as service centres. As well as tourism and offshore finance, both of which could expand further, there are plenty of niches. A recent World Bank report noted that almost 70% of overseas medical graduates registered in the United States were trained in the Caribbean's 23 offshore medical schools. Some countries need help to make the switch from sugar and bananas. But the future need not be sour - provided that the Caribbean's politicians look to embrace it, rather than cling to the past." The myth of China Inc 09/01/05   World "Fears that Chinese firms are acting as the commercial arm of an expansionist state are thus belied by a more complicated and disorderly reality. The real reason to fear China's overseas expansion is quite different. Because Chinese firms have grown up in an irrational and chaotic business environment, they may export some very bad habits." Oil and the global economy 08/27/05   World "The fact that America's economy has been able to shrug off higher oil prices mainly as a result of a housing and mortgage bubble is hardly a comforting thought. What happens when house prices flatten, or even fall? Consumers will then feel the full force of dearer oil. Come to think of it, a further spike in oil prices could even be what pops the housing bubble, if it unsettles consumers enough. So far, the rising oil price has done little harm; but worse may well be on the way." For jihadist, read anarchist 08/18/05   World "Bombs, beards and backpacks: these are the distinguishing marks, at least in the popular imagination, of the terror-mongers who either incite or carry out the explosions that periodically rock the cities of the western world. A century or so ago it was not so different: bombs, beards and fizzing fuses. The worries generated by the two waves of terror, the responses to them and some of their other characteristics are also similar." Boom and bust at sea 08/18/05   World "China's astonishing rate of growth cannot last forever. Indeed, spot rates for bulk carriers in Asia recently hit a two-year low after falling by half from a peak in March as Chinese demand has cooled a bit. And the more slowly growing trade across the Atlantic is vulnerable to any slackening of economic activity in Europe or America. If growth and trade stumble while shipping lines are piling on extra capacity, the result could be empty holds, plunging shipping rates and rapidly sinking profits." After Fahd, Abdullah. But then? 08/06/05   World "With the death of Saudi Arabia's ailing, octogenarian King Fahd, his only slightly younger half-brother, Abdullah, takes over the desert kingdom. Though things may continue much as before in the short term, the new ruler will have to cope with strong - and conflicting - pressures for change" China severs link to dollar 07/21/05   World "China dropped its politically volatile policy of linking its currency to the U.S. dollar on Thursday, adopting a more flexible system based on a basket of foreign currencies that could push up the price of Chinese exports to the United States and Europe." America's great sorting out 07/14/05   World "America has a small problem with class - and a bigger one in its schools" Japan's economy: more mountains to climb 07/14/05   World "After privatising the post office and its related bank, which reforms should Japan attempt next?" The corporate savings glut 07/09/05   World "Companies in the main developed economies have switched, as a group, from being big borrowers to being net savers: ie, their profits exceed their capital spending. The total increase in companies' net saving in the past four years has been more than $1 trillion, 3% of annual global GDP and five times the increase in net saving by emerging economies over the same period." Outsourcing: Getting the measure of it 07/03/05   World "Then again, says the McKinsey Global Institute, if current demand continues, the supply of suitable labour in the popular cities of Prague and Hyderabad will run short by 2006 and 2008 respectively. The demand for engineers from Britain and America alone, it claims, will use up the suitable supply in all of China, India and the Philippines by 2011." Fast food and strong currencies 06/10/05   World "The Big Mac index, which we have compiled since 1986, is based on the notion that a currency's price should reflect its purchasing power. According to the late, great economist Rudiger Dornbusch, this idea can be traced back to the Salamanca school in 16th-century Spain. Since then, he wrote, the doctrine of purchasing-power parity (PPP) has been variously seen as a "truism, an empirical regularity or a grossly misleading simplification."" Lula's mid-term blues 06/03/05   World "Last month, Veja, a weekly magazine, published excerpts from a videotape showing a manager of the federal postal service taking a bribe. He claimed to belong to a bribe-collecting network headed by Roberto Jefferson, the boss of the Brazilian Labour Party (PTB), a member of the governing coalition. Mr Jefferson denies wrongdoing. The bribe-taker has since recanted. But allegations keep coming. Federal police are investigating charges that the state-owned reinsurance monopoly has funnelled money to a brokerage headed by a friend of Mr Jefferson." The frog and the ox 06/03/05   World "In reality, a weak Europe is much more of a threat to America's interests than a strong one. The no vote not only guarantees several more years of Eurodithering and introspection: it also makes it much less likely that Europe will be able to absorb Turkey, let alone Ukraine, anytime soon, if ever." Will the walls come falling down? 04/21/05   World "House prices have been growing at a breakneck pace in many developed countries. This has encouraged householders to keep spending even during the global slowdown. But now that housing markets are looking soft, consumers may be forced to retrench" Shaking up corporate Japan 03/23/05   World "Takafumi Horie, a 32-year-old internet entrepreneur, has shocked Japan's business establishment by positioning himself to gain control of Fuji TV, a big broadcaster. As takeover fever grips the country, will regulators come to the aid of the status quo?" Starkers 03/20/05   World "But what will happen if a significant portion of countries decided not to add to their dollar holdings? More than the dollar would weaken. Big foreign buyers of bonds have been keeping interest rates down, perhaps by one percentage point, as Alan Greenspan suggests. That would change, for a start. Without this support, the yield on the ten-year benchmark Treasury bond could rise to more than 5%, pushing up interest rates on mortgages. That, in turn, could prick America's house-price bubble and prompt a general deleveraging, with implications for economic growth both in America and elsewhere. Standard & Poor's, a rating agency, warned on Monday that a weak dollar would substantially increase concerns about credit quality." Global house prices: Still want to buy? 03/03/05   World "The unusual divergence between house prices and rents does not just affect investors; it also undermines the conventional wisdom that it is always better to buy a house, because "rent is money down the drain". Today in many countries it is much cheaper to rent than to buy." Where's my $58 million, Madame Wu? 02/01/05   World "So the lesson, perhaps, is that success in Chinese direct investment requires decades of commitment, deep government relationships, and superhuman effort. New regulations allow total foreign ownership in some industries, thus reducing the use of joint ventures, which Clissold describes as "incredibly difficult to manage because Chinese and Westerners don't think in the same way." The structural advantage of total ownership, however, is probably offset by the fact that, after 15 years and billions of dollars of capital, the low-hanging fruit is probably gone. There's no easy money left, and it wasn't that easy to begin with." First Chinese cars to hit U.S. shores 01/02/05   World "Malcolm Bricklin, the man behind the Yugo, to lead new import wave in 2007." Meritocracy in America 01/02/05   World "Thirty years ago the average real annual compensation of the top 100 chief executives was $1.3m: 39 times the pay of the average worker. Today it is $37.5m: over 1,000 times the pay of the average worker. In 2001 the top 1% of households earned 20% of all income and held 33.4% of all net worth. Not since pre-Depression days has the top 1% taken such a big whack." Keeping in with niche market leaders 12/26/04   World "One of the reasons why we do better than our peer group is that they think about diversification just in terms of country and sector. I try to think in terms of growth drivers you might have two companies in the same sector of the market that have completely different growth drivers." We are never prepared by what we expect 12/16/04   World "At the moment, the Japanese market cap is 9% of total market cap in the world. The US is 52% and the rest of Asia is 3.5%. So for 12.5% you get the whole of Asia's 3.6bn people will the fastest growing economies of China, Vietnam and India but for the US you have to pay 52% for a country that is economically doomed." Flimsy foundations 12/12/04   World "Calculations by The Economist suggest that house prices have hit record levels in relation to incomes in America, Australia, Britain, France, Ireland, the Netherlands, New Zealand and Spain. In other words, ratios of prices to incomes are now above levels that have proved unsustainable in the past. Taking the average ratio of house prices to incomes in 1975-2000 as a baseline, American house prices are now almost 30% overvalued." Crash landing coming for China 11/28/04   World "What we have witnessed in China is not about efficient markets, rational investors, or bell curves of the fairy tale land of financial theory. It's about rank speculation on the part of the crowd, with the People's Bank of China and the US Federal Reserve acting in key supporting roles as accomplices." Short haircuts all round 11/03/04   World "Besides, Argentina is a past master at bilking its creditors. In a recent IMF study, Kenneth Rogoff, Carmen Reinhart and Miguel Savastano estimate that it has spent more than a quarter of its history since 1824 either defaulting on its debt or restructuring it. The default at the end of 2001 followed those of 1989, 1982, 1890 and 1828. Each time investors returned, albeit at a price. Mr Lavagna will hope they display a similarly short memory this time. The world's capital markets can be bitten more than once, it seems, before they turn shy." Close, but no cigar 11/03/04   World "A good outcome would be a gentle but sustained fall in the dollar. A bad outcome would be a dollar crisis." Five key economic challenges for Bush 11/03/04   World "Bush, who did not veto one spending bill in his first term, campaigned on a pledge to cut the deficit in half over the next five years by growing the economy and limiting discretionary spending. That may not be easy. Many economists say that Bush's spending proposals, combined with his desire to make permanent the tax cuts of recent years, mean that the numbers simply don't add up." The wolf at the door 11/01/04   World "In the three years from 1985, the dollar fell by 50% against the other main currencies. Inflation and bond yields rose and, in October 1987, the stockmarket crashed. America's current-account deficit is now almost twice as big as it was then, so the total fall in the dollarand the fall-out in other financial marketscould well be larger. The wolf is licking his lips." China misconceptions 10/26/04   World "In the following Ad Hoc comment we review what we believe are some of the more common consensus misunderstandings about China. Granted, we might be very wrong. After all, when looking at China, one is forced to look at either the official government statistics, or the limited market data. And making educated guesses with the above data points are often just that: educated guesses!" Hudson's warmer bay 10/09/04   World "Global warming means Hudson Bay is now open to shipping an extra week a year. Some scientists predict that as soon as 2010 there could be a regular shipping service during the summer in the Arctic, and that by 2050 there will be a year-round sea passage to Hudson Bay." The dragon and the eagle 09/30/04   World "American consumers and Chinese producers have led a global boom. China is creating genuine wealth, but America's binge is based partly on an illusion, says Pam Woodall, our economics editor" Kyoto a-go-go 09/30/04   World "The Russian government has approved the Kyoto protocol. Once approved by the country's parliament too, the global climate-change treaty will come into effect. But what effect will it have?" Dead firms walking 09/24/04   World "Japan's unproductive service industries are holding back its improving economy from achieving even better performance" Roadblocks to small business curb growth 09/14/04   World "The report makes a devastating estimate of potential gains from regulatory reform. It split countries studied into four equal groups, ranked according to ease of doing business. In countries where it was least difficult to do business, the economy grew an average of 2.6 per cent a year over the past decade. At that rate, economies can double their size in 27 years. But in countries that make it hardest for entrepreneurs to operate, the growth rate was only 1 per cent, a snail's pace that takes the doubling time to 70 years, roughly three generations." The sun also sets 09/09/04   World "Never before have real house prices been rising so fast in so many countries" Safety matters 09/03/04   World "First they steal our jobs, then our credit-card numbers. Those seem to be the fears inspired by outsourcing back-office financial-services work to India. In both Europe and America, the argument that outsourcing costs jobs at home still has political resonance. But it is making way for another bogey: that India cannot offer the standards of privacy and data protection that consumers expect at home. Outsourcing is dangerous and perhaps even illegal." Consuming passions 08/22/04   World "As the American consumer tires, can shoppers in Europe, Japan and China take up the burden?" For richer or for poorer? 08/09/04   World "this may be politically convenient for Mr Putin: regional governors who cannot keep up with the payments will become unpopular, making it easier for the Kremlin to dislodge them. That is in line with the general trend of Mr Putin's federalism, which has been to put more of the burden for services on to the regions while concentrating more power and supervision at the federal level." Emerging markets, emerging risks 07/09/04   World "Investors are once again buying emerging-market debt. A perilous punt, if ever there was one" The fallacies of shrimp protectionism 06/29/04   World "Why is the U.S. shrimping industry in decline when U.S. shrimp consumption is on the rise? The reason, contend domestic shrimpers, is that foreign shrimp farms are dumping shrimp on the U.S. market." Institutions as the cause of growth 06/24/04   World "Economic institutions encouraging economic growth emerge when political institutions allocate power to groups with interests in broad-based property rights enforcement, when they create effective constraints on power-holders, and when there are relatively few rents to be captured by power-holders." Hair-raising 06/07/04   World "Australia's housing bubble could be the first to burst. It won't be the last" The march on Moscow 06/02/04   World "Caveat emptor is a phrase that might have been specifically invented for investors in Russia" Food for thought 05/28/04   World "The world economy looks very different once countries' output is adjusted for differences in prices" The bonds from Brazil 05/16/04   World "Though prices subsequently recovered a bit, emerging debt probably has further to fall. The Fed's drip-feed of low interest rates and investors' ravenous appetite for risk enabled many emerging countries and companies in them (notably, Russian firms) to borrow remarkably cheaply in the capital markets, despite a multitude of deep-seated problems." Citadels of dead capital 04/26/04   World "The American experience is very much like what is going on today in the Third World and the formerly communist countries: The official law has not been able to keep up with popular initiative, and government has lost control. Third Worlders are organized in modern-day claim clubs, and their governments have begun to give them preemption rights." Eastward ho! 04/17/04   World "Japanese consumer demand is picking up, wholesale prices are rising and the stockmarket is buoyant. Is the world's second-largest economy finally coming out of its deflationary spiral?" Behind the mask 03/19/04   World "Hailed as the business opportunity of the century, China is bound to disappoint. Sameena Ahmad examines the mismatch between excitable perception and sober reality" Haier's purpose 03/18/04   World "This attitude is widespread in China. Rather than focusing on a core business or dominating a few markets, as western, Japanese and South Korean managers have slowly learned to do, their Chinese counterparts quit any market where competition is rising, as so many other profitable opportunities beckon. Lack of accountabilitynot even Mr Zhang can say who really owns Haierand cheap loans from state banks encourage this trend. The result is firms that are broad but shallow, thinly-spread and managerially stretched. Sadly for Haier, that is the very opposite of a focused, global brand." Things you can drop on your foot 03/04/04   World "China needs them in spades, as it were, which is good news for Japan" The hungry dragon 02/20/04   World "Nowhere is the impact of China's growth clearer than in the world's commodity and raw materials industries. No industries will lose more if that growth slows" Wirtschaftsblunder 02/20/04   World "Why has the German economy performed so much worse than the rest of Europe?" A renewed force in Asia 02/18/04   World "A new economic force is rising in Asia. Growing at an annual pace of 7% in the last quarter of 2003, it left both the old guard of Europe and the big shot, America, for dust. With its exports surging by 17.9% (at an annualised rate) in the three months from October to December, its monetary authorities are struggling to keep its currency down. Meanwhile, its firms are scrambling to add capacity to meet the demands of customers at home and abroad: investment in fixed capital grew by 22% in the final quarter of 2003 (again, at an annualised rate)." Dollar drinking in the Last Chance Saloon 02/17/04   World "But if our policymakers are already crowding around the bar in the Last Chance Saloon, things could get very tricky indeed. We know they did the right thing in 1987. We know they would want to do the right thing today. But could they? Would they be able to reduce interest rates sufficiently to bail the markets out, to re-instill confidence. Or would investors take a look at the policymakers, see that they were in the Last Chance Saloon, and realise they simply lacked the ammunition to provide the solution?" Let the dollar drop 02/08/04   World "America must bear much of the blame for its failure to do anything to curb household and government borrowing and so boost saving. Its easy monetary and fiscal policies are now beginning to look reckless. The dollar's slide has rightly shifted some of the burden of economic adjustment on to other economies. Sooner or later, though, America will have to face up to its own responsibilities, too." Sickness or symptom? 02/05/04   World "Arguably, however, the ILO and others rightly concerned about child labour are looking at the wrong target. It will start to disappear, and faster, if poor countries pursue general policies that help them to grow more quickly, such as cutting tariffs and opening up more to foreign investment. Rather than forever sermonising, rich countries could do more to help eradicate child labour by themselves dropping trade barriers to imports from poor countries." Put down that tool 01/09/04   World "Anna Diamantopoulou, the European commissioner for employment and social affairs, smells a rat. Firms in other European countries have not made much use of opt-outs. But, she thinks, nasty British bosses may be forcing workers to sign opt-outs as a condition of taking a job. (Some Americans may actually want to work more than 48 hours, but surely no European would be so daft, seems to be her reasoning.)" Ditching the peace 01/02/04   World "Nine years ago, members of the World Trade Organisation agreed not to take each other to court over farm subsidies. But the "peace clause", as this agreement is known, expired on December 31st. Will its end mean the beginning of a trade war?" A faded green 12/07/03   World "How much further might the dollar fall? Predicting the future price of a currency is a mug's game. But there are good reasons to believe that over the medium term the dollar could drop a lot lower, especially against the euro. Whether that will have the desired effects, in reducing America's imbalances, or in causing the expected chaos in Europe's economies, is a different question." Scrapped 12/07/03   World "George Bush has announced the dismantling of America's tariffs on imported steel, while promising to shield domestic companies from dumping. The tariffs have done their job, he says. Have they?" Ripples from a Japanese bank collapse 12/04/03   World "The Japanese government's November 30 decision to nationalize the insolvent Ashikaga banking group has surprised investors who had expected a Resona-style bailout - in which shareholders weren't forced to take a haircut for the mess. The move means that Ashikaga shareholders' capital will be wiped out, leaving them with nothing, and the government will take 100 percent of the equity in the regional lender." I'd buy that for a dollar (and two dimes) 12/01/03   World "The euro is worth $1.20 for the first time in its history. That may hurt Europe. Will it help America?" Fed up with protectionism 11/22/03   World "The current-account deficit is benign, says Alan Greenspan, but protectionism is dangerous. America's garment makers do not agree. Its European creditors may be having second thoughts too" The dragon binges 11/21/03   World "Companies around the world, it seems, have caught China fever. When the fever breaks, there could be hell to pay." Sparks fly over steel 11/14/03   World "The looming trade war over America's steel tariffs may yet be averted thanks largely to an expected surge in global steel prices" Playing different games 11/10/03   World "Central bankers in Sydney and London share similar hopes and fears. On the one hand, their interest-rate decisions represent two votes of confidence in the world economy. America, an important trading partner for both countries, is growing strongly. Japan, the most important trading partner for Australia, is also showing signs of a durable recovery. With growth robust, the motivation for low interest rates is less obvious, and their disquieting consequences more apparent. When you make borrowing cheap, people do more of it. In Australia, consumer debt is growing by more than 20% per year. In Britain, total lending to individuals was 14% higher in September than it had been the year before." Vlad the impaler 10/31/03   World "This is not, however, George Bush's America; it is Vladimir Putin's Russia. The businessman, Russia's richest, is Mikhail Khodorkovsky, the chief executive and biggest shareholder of Yukos, Russia's largest oil company, who was spectacularly seized on October 25th aboard his own aircraft in Siberia. President Putin insisted that the arrest was a normal function of the country's judicial system, in which he neither could nor should interfere. But everybody knows that, in Mr Putin's Russia, the taking of such a big fish has nothing to do with business misdeeds, still less with justice, and everything to do with politics and the Kremlin's control. And that is why Mr Khodorkovsky's arrest, along with the rumoured departure of the Kremlin's chief of staff, Alexander Voloshin, one of Mr Khodorkovsky's sympathisers, are so ominous." The end of the Oil Age 10/24/03   World "Ways to break the tyranny of oil are coming into view. Governments need to promote them." Engine trouble 10/04/03   World "As Californians go to the polls, we investigate the condition of America's most dynamic and most troubled state" Voters can be such a nuisance 09/22/03   World "Sweden's rejection of the euro will sustain anti-euro opinion in Denmark and Britain (the union's other non-euro members) and makes it unlikely that any of the three will soon fall into line: the EU will therefore remain a multi-currency area for the foreseeable future. That is significant, but far more important is the fact that forthcoming referendums on the constitution now seem increasingly unlikely to go as governments would wish. It will take only one Sweden to block plans for a new constitution, and two or three might kill them." Ratings agencies see danger in yuan float 09/17/03   World "Credit-rating companies on Monday issued strong warnings that China should not let its currency appreciate or relax controls on the movement of large sums of money in and out of the country soon, as the United States has asked, saying that the Chinese banking system was not ready for the changes." Tequila sunset in Cancun 09/15/03   World "The world trade summit in Cancun, Mexico, has collapsed without agreement. Its fate may have been sealed seven years ago in Singapore" WTO entry helps China pull it off 08/24/03   World "Beijing can certainly teach the world how to swim with the sharks in Cancun without being eaten alive. Instead of buying more from American and European farms after joining the WTO, China has actually become an even larger net exporter of agricultural products in its very first year as WTO member." Different this time, maybe 08/23/03   World "Japan's economy has had everything in the past 15 years except a sustainable boom. Now, at least, Japanese stocks are enjoying a rally. The Nikkei 225 closed the week just below 10,300. The last time it spent a week above 10,000 was July of 2002. Of course, "Nikkei 10,000" is not much of a rallying cry for a stockmarket that once topped 38,000, but the index is still up about a third since April." Asia starts to gasp for energy 08/21/03   World "Across all of Asia, from India to China and south to Australia, a severe energy crunch is developing as construction of energy plants and transmission facilities lags behind growing industrial capacity and burgeoning private consumption, according to energy and market analysts." Lion cubs on a wire 08/18/03   World "Economic growth in Africa was dismal last year. At 3.2%, down from 4.3% in 2001, it barely kept pace with a swelling population. The culprits, according to a new report* by the United Nations, were a weaker global economy, drought and AIDS in southern and eastern Africa, fresh armed conflicts in the Central African Republic, Ctte d'Ivoire and Madagascar, and yet more madness in Zimbabwe." The poor are the solution, not the problem 08/18/03   World "Take the case of Egypt. My research team and I were invited to Egypt by the government to make an inventory of the poor's assets versus all the other sectors of the economy. We found that since the end of the Second World War the poor accumulated some $245 billion worth of assets, including real estate and small enterprises. How big is $245 billion? Fifty-five times bigger than all foreign investment in Egypt over the last two hundred years, including the Suez Canal and the Aswan Dam. Fifty times greater than all foreign aid received by Egypt. Thirty times greater than the Cairo Stock Exchange. So the poor are the solution. The problem is that they do not have a legal system that allows them to bring together capital, create new enterprises, leverage their assets, and cooperate on a global scale. The poor certainly were the solution in the United States, which was built by poor, entrepreneurial pioneers. And the formula has not changed in the last two hundred years." The promise of a blue revolution 08/10/03   World "Fish farming has a bad reputation. Its supporters argue that it promises to meet the growing shortfall as the world's wild fisheries become more and more exhausted. But its critics have the louder voice. They argue that farmed fish is fatty, dyed, polluting and stuffed with antibiotics. Moreover, they say that it is unsustainable. When a carnivorous fish-such as the salmon-is reared on a farm, it too must be fed with fish. And these fish must be caught in the wild, thus putting even more pressure on marine life, not less." Europe's population implosion 07/21/03   World "Europe's population is shrinking and greying-with grim consequences." Darkness falls on Tokyo 07/18/03   World "The ministry, which oversees the electricity industry, is gearing up for a power shortage that could leave Tokyo facing unprecedented blackouts this summer, when demand for electricity reaches its peak. The reason: Tokyo Electric Power (Tepco), the world's largest private electricity company, had to close its 17 nuclear reactors after it was caught last September falsifying safety records to hide cracks at some of its power plants. Three have now restarted, but it is unclear when the local authorities will allow others to do so." Fear of floating 07/13/03   World "Indeed, from this point of view, the Asian economies are supporting America's profligate habits. By buying American government securities they help finance America's large external deficit, hold down interest rates, and so sustain the boom in consumer spending and mortgage borrowing. This may benefit America in the short term, but it allows even bigger imbalances, in the shape of consumer debt and foreign liabilities, to continue to build. The eventual consequences for America-and the world economy-could be more painful." Germany's euro test 06/19/03   World "Whatever the economic arguments for Britain's joining the euro, the case for Germany's quitting looks stronger. The idea that Germany will do it is, of course, the stuff of fairy tales. However, the country's present predicament also has a fairy-tale feel, with the ECB in the role of the wicked witch who lured Hansel and Gretel into her gingerbread home with the aim of eating them. In the story by the Brothers Grimm, Gretel pushes the witch into the oven. In the real world, Germany is being roasted, and risks living unhappily ever after." The perils of a weak dollar 05/28/03   World "Yes, there could be a big upside. But it risks economic warfare and `beggar thy neighbor' policies. That's political trade, not free trade." Only the weak survive 05/20/03   World "Despite various protestations that the strong dollar policy is the same as it ever was, it's pretty clear that the Bush administration and the Federal Reserve are happy to see the greenback's decline." Painful side-effects 05/02/03   World "While the SARS outbreak seems to have peaked outside China, its economic effects continue to ripple across Asia and beyond." Horror stories 03/15/03   World "If the world economy does stumble, policymakers will have to act quickly. Starting from a position of ample global excess capacity, further sluggish growth, let alone a recession, could raise the risk of deflation in some countries. There is clearly a big chance of further falls in share prices: in its latest quarterly review, the Bank for International Settlements argued that, despite the war premium, America's stockmarket still looks overvalued relative to historical norms. After previous bubbles share prices have always become significantly undervalued before recovering. The economic and financial headlines could get worse before they get better." BoJ takes gamble to avert financial crisis 09/25/02   World "Japan's central bank is trying to shock the government and banks into action in a last-ditch gamble to avert a crisis in the country's financial system, a senior Bank of Japan official said on Tuesday." Telecoms troubles 09/23/02   World "The crash in the value of telecoms companies has produced corporate scandals in America, raised doubts about the probity of banks and government policies everywhere, and resulted in a collection of top executives abruptly losing their jobs. Now the telecoms fallout in Europe has also entangled the French and German governments into a growing political and financial mess." Japanese government bond auction fails 09/21/02   World "Investor confidence in Japan suffered another blow on Friday after a Y1,800bn auction of 10-year Japanese government bonds was undersubscribed for the first time in its history."	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