The Utter Unlikeliness of Call of Duty: Singapore [?!]

♠ Posted by Emmanuel in , at 9/30/2015 04:12:00 PM
Call of Duty: Singapore is a really dumb idea. I look forward to Call of Duty: Kirby's Apartment.
If you were going to set a fictional video game franchise concerning a terrorist attack somewhere, the very last place yours truly would think of is Singapore. It is a highly antiseptic society that has banned chewing gum. More seriously, Singapore is a country that, to its credit, I can honestly say has truly tried to be accommodating of all races and faiths. Yes, migrants are sometimes discriminated against...but by Singaporeans of all races and faiths who've had the privilege of getting there first instead of being of certain colors or creeds. Terrorism isn't usually spawned by such grievances.

So it was of some surprise to me that the latest installment of the Call of Duty franchise--concerning a terrorist attack--was set it Singapore 2065. Even more puzzling, they've used live blogging to promote the game, leading some impressionable netizens to believe the "attack" was real:
A "terror attack" has taken place in Singapore - all part of a controversial web campaign to launch the newest title from the popular Call of Duty video game franchise. Set in Singapore during the year 2065, Call of Duty: Black Ops III begins with a mission where players must investigate the "mysterious disappearance" of a CIA station.

Ahead of its worldwide release on 6 November, US-based games maker Activision launched a series of tweets, setting up the opening scene for a fictional attack in Singapore. While the tweets aimed to tease fans and also introduced new characters to the game, many social media users were unimpressed at the way things were playing out on Twitter, saying the scenario was in bad taste. 
Local media (read: government-friendly) are, unsurprisingly, blasting the PR stunt. See the Straits Times and Today Online. My complaint is not that the tweets were in bad taste. Rather, the scenario is rather implausible.

What's next, Call of Duty: Zurich?

French-Built Warships for Russia: Sold to Egypt

♠ Posted by Emmanuel in ,,, at 9/28/2015 02:50:00 PM
From scaring Russia's neighbors to fighting ISIS: a new role for the star-crossed Mistral-class warships.
I almost forgot to post about the continued travails of warships originally built by France for the Russians. With the outbreak of hostilities over Ukraine, the French government canceled the sale since the Mistral amphibious assault ships could be used to support Russian--how do we say it--excursions in neighboring countries. These warships are helicopter carriers that can also land troops during...adventures in others' territories. So, they have sat in French ports for a long time over what Russia will use them for nowadays. That is, until just recently when they were instead sold to Egypt of all countries:
Egypt will buy two warships that France originally built for Russia but refused to deliver because of Moscow’s role in the conflict in Ukraine, French President Fran├žois Hollande said...Egypt will pay €950 million ($1.06 billion) for the two Mistral class warships, French defense officials said, speaking on condition of anonymity. Russia agreed to pay €1.2 billion for the Mistrals, but the officials said the two contracts aren’t identical: Notably, France was supposed to help Moscow build future models of the ships in Russia. Transferring that capability isn’t part of the deal with Egypt, the officials said.

The vessels would add powerful capabilities to Egypt’s military arsenal, as President Abdel Fattah Al Sisi battles Islamist militant threats to his government in places such as the Sinai Peninsula and from across Egypt’s western border in Libya. For France, the deal closes an uncomfortable chapter in Mr. Hollande’s presidency that forced him to choose between cultivating Russia as a major customer of the French defense industry or severing ties because of Moscow’s support for pro-Russian rebels in Ukraine.
Actually, Egypt and other Arab governments have been moving closer to the Europeans for supplying their military equipment requirements. You can probably chalk that down to the United States' warmer relations with Iran. Plus, the US hasn't exactly cottoned up to the current Egyptian government which took the place of an elected (albeit Islamist) regime:
The accord is also a further sign that Egypt and other Arab governments have been moving to reduce their dependence on the U.S. as a military supplier. France has been eager to step in. Earlier this year, Egypt bought 24 Rafale fighter jets, made by France’s Dassault Aviation SA, AM -1.59 % for around €5 billion.
Using the warships for fending off ISIS seems to be a much less controversial purpose to put these warships to instead of, say, threatening former Soviet satellites (and Baltic states too). Moreover, selling the vessels to a Middle Eastern authoritarian regime instead of another in Europe hardly represents a step forward in rewarding "good governance."

At the end of the day, though, the ships had to be paid for somehow, in this instance by a (marginally) less odious buyer.

Pol Eco of Stats: World Bank's New $1.90 Poverty Line

♠ Posted by Emmanuel in , at 9/25/2015 08:17:00 PM
New targets require new measures of poverty, right?
There has been, in the memorable characterization of Robert Wade, a "political economy of statistics" concerning poverty and inequality. As standard-bearers of neoliberal, market-led globalization, the World Bank would of course claim that the world's decades-long towards putting faith in market mechanisms has resulted in a global reduction of both. Robert Wade begs to differ. Needless to say, methods of measuring these "bads" remain contentious.

There are of course all sorts of ways to measure poverty. For quite some time now, the World Bank has kept an easily-remembered shorthand of expenditures of less than $1.25 on a PPP basis. This, of course, was preceded by the famous $1/day standard before 2008. There are thus many complaints about this standard: sure $1 is a nice round number, but can such inter-country comparisons really be made even after adjusting for purchasing power?

Well, guess what: just as people were still arguing about the $1/day standard when the $1.25/day standard came along, the World Bank is now about to introduce a $1.90/day standard. As we transition from the Millennium Development Goals (MDGs) anchored on the $1.25 standard to the Sustainable Development Goals (SDGs) which replace the MDGs this year, I suppose the development experts came to the conclusion that we need a new international poverty line as well:

The World Bank is to make the most dramatic change to its global poverty line for 25 years — raising its measure by a half to about $1.90 per day — in a move likely to swell the statistical ranks of the world’s poor by tens of millions. The move from $1.25 would be the biggest revision since the World Bank introduced its $1 a day yardstick of global poverty in 1990...

The bank is expected to follow the event by shifting its poverty line to about $1.90 ahead of its annual meetings in Lima, Peru, in early October — a move likely to result in significant shifts in the estimated size and distribution of the planet’s poor. It is difficult to predict exactly how many more people will be defined as poor. However, when researchers at the bank tested a notional poverty line of $1.92 earlier this year, it led to a surge of 148m.

Most of the difference came in east Asia where the ranks of those falling below the poverty line almost doubled from 157m at the old $1.25/day measure to 293m. In Latin America, the result was an increase of 8m, or more than 25 per cent, in the number of poor to 37m, while in south Asia the ranks of the poor grew by 7m to 407m. Under that line, sub-Saharan Africa remained steady at some 416m.
Interestingly, there are now complaints coming from the right. If you assume that globalization has reduced inequality in recent years--and most orthodox economists would say it did--then why change the standard? The new accusation is that the World Bank would not have any work otherwise "helping" the newly (re-)classified folks qualifying as poor as per its mission of helping to eradicate poverty:
Angus Deaton, the Princeton economist and persistent critic of a poverty line that he argues has been misleading for years. “You’ve got a line that no one knows where to put it, PPPs that change, and underlying data that is bad,” he said. “It is sort of a statistical problem from hell.” The World Bank’s administering of the poverty line also carried a hint of conflict of interest, he said, as the bank’s main task was fighting poverty, and its very existence depended on its own poverty measures.

Mr Deaton added: “I think they have some institutional bias towards finding more poverty rather than less.” 
Talk about the political economy of statistics: from the left you have folks like Wade saying these measurements are bogus. On the right they say these statistics and bogus and self-serving.  There's just no pleasing some people.

If Global Markets are Right, Hillary's Next US President

♠ Posted by Emmanuel in at 9/23/2015 01:30:00 AM
With one tweet, Hillary Clinton wiped out billions and billions in drugmaker market capitalization worldwide.
Stock markets around the world are quite jumpy at the moment. Almost any news that can be negatively construed is amplified in such as environment. Take, for example, the hammering that global biotechnology and pharmaceutical stocks have taken since yesterday when Hillary Clinton tweeted about the need for price caps on the prices that these drug manufacturers can charge. Actually, she did not single out a Big Pharma firm but a small-fry entity.

Carnage has ensued in global stock markets-especially in Europe and the US where these drugmakers are concentrated:
Martin Shkreli, a former hedge fund manager who is now chief executive officer of Turing Pharmaceuticals AG, was called out by Democratic presidential candidate Hillary Clinton. Clinton tweeted that she would soon release a plan to combat the high cost of prescription drugs. Biotechnology stocks fell after her comment.

Clinton’s comment on Twitter sent the 144-member Nasdaq Biotechnology Index down 4.7 percent to 3,556.58 at 1:08 p.m. in New York, the biggest intraday drop since Aug. 24. Health-care stocks were the worst-performing subgroup on the broader Nasdaq index. "Price gouging like this in the specialty drug market is outrageous," Clinton tweeted at 10:56 a.m. "Tomorrow I’ll lay out a plan to take it on."
At any rate, you can see how utterly speculative these market moves are. First, Hillary Clinton is, at the moment, not an elected official in any capacity. She cannot drive legislation to limit drug pricing. Moreover, Barack Obama has already tried something similar but has been rebuffed by the industry. Second, the presupposition that she will have the ability to enact such legislation assumes she will attain some position of power. That is, she is the presumptive US president-in-waiting already according to these knee-jerk reactions...and will have a pro-drug reform Democratic majority in the legislatures to boot that Obama didn't have. Even then, it would take years and years and fighting with an immensely powerful industry to push such limits.

Anyway, the details promised the day before have been outlined:
One proposal would limit how much patients could have to spend out of pocket for drugs to $250 a month, or $3,000 a year. It’s an idea that builds on policy in the Affordable Care Act limiting total out-of-pocket medical spending to $6,600 a year for an individual, and $13,200 for a family. The idea could squeeze health insurers, as well, which provide drug coverage for patients and typically cover a portion of the costs.

Another item would make drugmakers spend a minimum amount on research and development, just as Obamacare forces insurers to spend a minimum percentage of their revenue on medical care. Clinton would also bar pharmaceutical companies from deducting drug ad spending as a business expense, for tax purposes, which she said in a statement announcing the policies would save the government “billions of dollars over the next decade.”
Prompt [surprise!] another round of stock selloffs today.

While the stock selloff makes no sense to me given the many logical leaps of faith you have to make for such legislation to become reality, something is clear to me nonetheless: With market-moving power like this, Hillary Clinton is the front-runner to be the next US president if you witness the fright she can inspire in a massive global industry.

9/25 UPDATE: Today, Friday, Missus Clinton's statement is still hammering biotech. Talk about a candidate's market power. 

From Bonds to Nukes: UK-PRC 'Special Relationship'?

♠ Posted by Emmanuel in , at 9/22/2015 06:49:00 PM
UK Chancellor George Osborne declares his country open for Chinese business.
The hoary notion of a US-UK 'special relationship'--one hegemon passing the baton to another it shares considerable socio-historical ties with--has been a constant one in the post-WWII order. As it adjusted to a new, then-unaccustomed role of second fiddle, the UK sought to maintain global influence by being close to #1. In this 'realist' mode of thinking, Britain may no longer be top dog, but it has the top dog's ear nonetheless.

China's rise presents an interesting challenge insofar as the PRC is socio-historically dissimilar to the UK. Will it enjoy as close a relationship nonetheless? We can endlessly debate whether China will overtake the US economically and politically in the next few decades, but this much is certain: the PRC already has an oversized role in global affairs--especially in Asia. So, it certainly makes sense for the UK and its skilled diplomacy to get on China's good books anyway. Aside from being a charter member of the Asian Infrastructure Investment Bank (AIIB), the recent visit of George Osborne to Britain occasioned more rapport-building.

First, the Chinese are set to issue dimsum bonds (RMB-denominated bonds issued outside the mainland) in London:
Beijing is to issue short-term debt in London, the first time it has done so abroad, in a move hailed by chancellor George Osborne as proof that Britain was becoming “China’s bridge into western markets”. Mr Osborne, on a visit to Beijing, said the move by the People’s Bank of China was another step towards his goal of making the City the principal offshore base for Chinese finance.
Second, the Chinese are seeking to link their stock markets with those of the the UK:
George Osborne on Tuesday played down fears over the state of China’s economy and confirmed his hope to link up the stock exchanges of Shanghai and London. Speaking at the Shanghai stock exchange, the chancellor said Britain and China would “stick together” and predicted the Chinese economy would continue to fuel global growth.

Mr Osborne said he wanted to see Chinese companies listing in London to create a deeper capital market to help them grow. “China needs a financial system that is truly global and there’s no better place to start than the global centre of finance that is the UK,” he said. A feasibility study to link the two exchanges has been launched and Mr Osborne said Britain should not fear greater links to the Chinese economy.
Third, the chancellor is encouraging the Chinese to help build nuclear plants in the UK:
With that in mind, the U.K. also announced a number of trade deals with China on Monday, including a £2 billion nuclear project. This will see China invest in the U.K.'s first government-guaranteed nuclear power station to be built in 20 years. The countries also agreed to two joint space programs, including one worth £24 million on remote sensing for agri-technology.

The U.K. has been among the keenest in the West to woo China and attracted nearly $12 billion of Chinese foreign investment in 2013—more than France and Germany combined—according to the Treasury. It was the U.K.'s sixth largest goods export market in 2014, up from 14th in 2003.
It may be smart geopolitics on the UK's part, but you have to wonder if all these actions will increase its leverage over the burghers of Beijing. With more commercial ties, it is possible since money's at stake. Then again, having established so many ties while turning a blind eye to other things China does that it does not find so desirable may send the opposite signal when push comes to shove.

A Catholic Counterpoint to Papal Capitalism-Bashing

♠ Posted by Emmanuel in , at 9/21/2015 01:30:00 AM
First Raul Castro, up next the Yanquis.
Pope Francis' visit to the Americas--he's in Cuba at the moment--has occasioned much thought among the power and money elites about how to deal with him. On one hand, he appears quite popular--more so than his immediate predecessor, the stern Benedict XVI. On the other hand, his broadsides against the excesses of capitalism haven't gone down easily in the heartland of capitalism, the United States. He is, after all, Argentinian, and their country has always perceived the visible hand of Estados Unidos in their affairs.

His US itinerary is quite full:
As the U.S. presidential campaign exposes contempt for elites and angst over the future, Pope Francis arrives for his first visit with plans to denounce gross inequality and planetary neglect. The message, delivered by the spiritual leader of 1.2 billion Roman Catholics during a six-day tour starting on September 22, will doubtless focus U.S. public discourse. Francis, 78, has stamped his humble personality on the papacy and has little time for diplomatic niceties.

Having called money “the devil’s dung” when it enslaves people, he seems likely to rattle politicians and business leaders in a country widely seen as the bastion of capitalism. “The pope says money is OK, capital is OK, but when money becomes a god, an idol, more important than man, that’s not OK - - whatever people in Wall Street think,” said Andrea Tornielli, author of “This Economy Kills,” on Francis’s economic thinking.

From a privileged pulpit -- embracing Congress, the White House, world leaders at the United Nations and about a million faithful at an outdoor mass -- the Argentine pope, the first from the Americas, is expected to condemn what he has called the “globalization of indifference,” especially toward the wave of desperate refugees from the Middle East. He is slated to give 17 speeches and homilies. The first pope to address a joint session of Congress, he will visit New York and Philadelphia, making pleas for a new world economy and urgent action on climate change.
Somewhat different from Tornielli, I am of the mind that money and capital are amoral, not good, and can be used for varied ends. Of particular concern to the pope are when money and capital are used to accelerate inequality and environmental degradation. Unless you're a WSJ op-ed section writer, I think many will find it hard to disagree with these beliefs. Indeed, Wall Street is embracing a (pro-capitalist) variation of it:
His criticisms haven’t deterred Wall Street executives from praising the pope’s leadership, humility and intellectual rigor ahead of the Argentine’s first trip to the U.S. Some said top financiers share many of his ideals, as well as his management style.

“When you look at some of the great business leaders on Wall Street, they demonstrate a lot of the same attributes the pope demonstrates,” said John Studzinski, a vice chairman at private-equity firm Blackstone Group LP who’s on the board of the St. Patrick’s Cathedral Landmark Foundation. “Very clear, strong convictions; strong views on leadership; can’t really be micromanaged; are very stubborn and tenacious, but at the same time are very good listeners and tend to surround themselves with good people.”
This "the pope's a great leader" angle is all well and good, but actually, there is a more sensible riposte to some of the more extreme perceptions that the pope is capitalism-bashing. The Acton Institute whose blog I have long linked to has often featured cogent analyses on how to reconcile Catholic faith with capitalism. Unsurprisingly, it's Acton Institute President Fr. Robert Sirico who adds necessary nuance to the false dichotomy of pro- or anti-capitalism. Yes, there are varieties of capitalism, and certain forms of it--such as promotion of unfettered consumption--represent its excesses instead of its definitive characteristics:
For those who view free markets as the source of global economic imbalances, Robert Sirico has a simple message: Capitalism should not be confused with unfettered consumption...

As the Pope prepares for a whistle-stop tour through the Northeast that will have him addressing a portion of the 70 million U.S. Catholics, his recent remarks have stoked a new debate about the morality of free markets. Does capitalist excess constitute the "dung of the devil" or a "subtle dictatorship" that can't be reconciled with widespread global poverty and a struggling working class?

Sirico, however, told CNBC in an interview that free markets are wrongly conflated with the urge to splurge on goods, or idolizing material wealth. Capitalism, Sirico insisted, is far more than that.
"The economic question with regard to morality is a subset of a broader theological question: Is human freedom compatible with religious beliefs?" said Sirico, the head the Acton Institute, a right-leaning think tank that studies the nexus between religion and liberty.

Sirico expressed broad agreement with the Pope on those left behind, but at the same time said laissez-faire capitalism and entrepreneurship is still the best way to address the challenges of poverty and economic need. "If you love the poor, it's not enough to have good intentions," he said. "You can wish the poor to have bread, but if you don't build bakeries and factories, the poor don't get it."
It's a modern-day version of giving a man the financial and human capital to fish, but it still works for me.

e-Frontiers: Germany vs US in the "Industrial Internet"

♠ Posted by Emmanuel in , at 9/18/2015 04:11:00 PM
On the face of it, the "industrial Internet" is something of an oxymoron. Industry implies manufacturing goods, whereas the Internet implies a weightless economy in which transactions are conducted online. However, there is indeed a competition brewing between two powerhouses in the business of making goods. You have Germany, the world's most renowned manufacturer, seeking to digitally enable its manufacturing base by incorporating Internet-based innovations that smooth out the supply chain, automatically prompt repairs and so on. Then, you also have the United States which is keen on bringing such innovations to the factory floor. GE, for instance, has estimated that the "industrial Internet" can add $10-15 trillion to global GDP.

Who will win? Germany has an arguable advantage in the industrial part, while the US has an advantage in the Internet part. Hence fears that US technology concerns may usurp German manufacturing prowess if Germans don't get to the "industrial Internet" ahead of the US:
“There’s great concern that a Google or an Apple might master the manufacturing world,” says Heinz-J├╝rgen Prokop, head of development at Trumpf, a family-owned maker of metalworking machinery that’s participating in a [German] program called Industrie 4.0. “It’s important that we try to do it ourselves while we still have the opportunity.”

Industrie 4.0’s alliance of companies, academics, and political leaders was launched by the German government two years ago. The idea was to encourage the small enterprises at the heart of the economy—what Germans call the Mittelstand—to embrace new technologies. Then last year, AT&T, Cisco Systems, General Electric, Intel, and IBM set up a similar initiative called the Industrial Internet Consortium, or IIC.
The goal is not to replace manufactures but again to smooth the process of manufacturing through the use of Internet-based technologies:
Both groups aim to make it easier for machines in factories throughout companies’ supply chains to communicate with one another. The goal: to reduce downtime by anticipating when a factory will have spare capacity or need replacement parts, for example. Built-in sensors will collect all manner of data to better allocate resources, helping manufacturers cut energy use by as much as 20 percent and labor costs by 25 percent, according to consultant McKinsey.

At stake is the health of German manufacturing, which employs 15 million people, about a third of the workforce. By 2020, Industrie 4.0-related projects will account for half of capital investment by German manufacturers, or some $45 billion, according to PricewaterhouseCoopers. Globally, investment in the industrial Internet will top $500 billion a year in 2020, up from $20 billion in 2012, researcher Wikibon estimates. To avoid falling behind, the “Mittelstand must maintain contact with the customer and not lose out” to software companies that might end up with valuable market data, says Volker Treier, deputy head of the German Chambers of Commerce & Industry.
Given the size of manufacturing in Germany's economy, it's arguably the party with more to lose. OTOH, the less manufacturing-intensive US has more to gain by devising such technologies ahead of the Germans.

Techno-Slander: Philippines Bans PRC Voting Machines

♠ Posted by Emmanuel in ,, at 9/17/2015 06:11:00 PM
Would the PRC have rigged voting machines sold to the Philippines? We won't know now.
Back when the United States had a much larger share of the world economy, every other conspiracy theory had the Americans involved in some form of treachery to impose its will on the world. For better or worse, the economic ascent of the arguably even more inscrutable People's Republic of China has resulted in quite a number of US conspiracy theories being replaced by PRC conspiracy theories.

As a large manufacturer of electronics, a cottage industry has been spawned around how China will implement its dastardly plans for world domination by using electronics it makes to either spy on or disrupt the users of these machines. By now everyone knows the story of Western governments--especially that of the United States--discouraging the use of servers made by the Chinese over "security" concerns. Also witness the reluctance to sell IBM's mainframe business to the Chinese who would presumably start using these devices for spying on foreign "customers".

This latest story probably takes the cake in the China paranoia sweepstakes: next year in 2016, the Philippines will hold its presidential election held every six years. Originally, the plan was to use Made in China voting machines. However, Philippine election officials believing that the Chinese are planning to sabotage these machines to take revenge over territorial squabbles the PRC has with the Philippines is the ultimate electronics-based conspiracy theory:
The Philippines said Wednesday it had shifted production of optical mark reader (OMR) machines for the 2016 presidential election from China to Taiwan due to fears that Beijing might "sabotage" the vote. Commission on Elections (Comelec) Chairman Andres Bautista said Wednesday the poll body has decided to transfer the manufacture of OMR machines from Suzhou, China to Taiwan “because of current conditions between the Philippines and China.”

During the hearing of the House committee on Suffrage and Electoral Reforms on government preparations for the 2016 elections, Comelec Commissioner Robert Lim alleged that there might be an attempt by China to possibly "sabotage" the country's 2016 presidential elections. "We don't want the complications. Another reason why we want all deliveries of machines by January, because we are anticipating the release of the arbitration decision [concerning the territorial dispute] that might affect the elections. So we don't want that, we want to avoid the complications," Lim said.

“I feel personally that the biggest threat to the 2016 elections is China.” There is a possibility that China will not release the OMR machines if the arbitration court rules in favor of the Philippines over the territorial dispute.
This is quite frankly idiotic. As the world's largest exporter of electronics, why would China risk destroying its international reputation to spoil the elections of a buyer? For once, I agree with the complaint made by Chinese authorities that it's totally groundless to suggest evil machinations of this sort:
China has rejected a suggestion from a Philippine election official that China might try to sabotage a presidential election in the Philippines next year, saying it was "sheer fabrication". The suggestion of Chinese meddling in the May election appeared to stem from a dispute between the neighbours over rival claims to parts of the South China Sea.

Elections Commission official Christian Robert Lim told legislators earlier that his agency had transferred production of vote-counting machines from China after intelligence reports that China planned to sabotage the elections because of the South China Sea dispute.

The spokesman at China’s embassy in the Philippines denied any such plan. "The so-called ‘attempt by China’ to ‘sabotage’ the 2016 elections is totally groundless and a sheer fabrication," the embassy spokesman, Li Lingxao, said in a statement. "China has always adhered to the principle of non-interference into other countries’ internal affairs."

Refugee Class Warfare: EU Favoring Syrians to Africans?

♠ Posted by Emmanuel in , at 9/13/2015 01:30:00 AM
The many forgotten Africans seeking European asylum.
The fate of Syrian refugees is making the headlines nowadays and raises questions about the future of pan-European migration policy. In a way it's a reprise of monetary policy, asking whether a singular migration regime suits countries varying in demographics, development, and the ability to welcome migrants. One of the notable things about Syrian refugees is that many of them are quite technology-savvy, with an article noting how adept they are at using smartphones to find their way if and when they reach Europe and to find relatives already there:
As thousands of refugees and migrants move across Europe, many are making use of technology in order to make their journey safer and share life-or-death information. The migrants, many of whom are from Syria, displaced by the civil war, as well as Afghanistan and Eritrea, are using smartphones to keep in contact with relatives and each other, while using GPS to find their way around Europe.

According to Paul Donohoe, from the International Rescue Committee (IRC), a large number of refugees have smartphones, which are proving to be a vital resource. "If they lose their phone, that's quite a challenge," explained Donohoe, speaking to CNBC. "They have to get a new one so they can communicate with their family."
Contrast their plight to that of Africans landing on Europe's shores. The conflicts that have driven them to foreign lands are no less violent, but media and world attention is more closely tracking the Syrian civil war. Actually, Africans are often worse off than the Syrians, with no cell phones or any possessions for that matter if and when they reach European shores. Is it racism that explains the difference? Some suggest this may be the case:
Far different from the Syrians clambering off boats in Greece, the Africans land in Sicily penniless and empty-handed. When I ask to see what they carried with them, most look puzzled, then point to the clothes on their back. “I arrived with nothing, not even my documents,” said Mandjo, 16, from Guinea, who fled when religious violence destroyed his village. What little he grabbed as he fled was lost to bandits along the way.

Now, the plight of African refugees like Mandjo risks getting lost amid the Syrian refugee crisis in Europe, aid officials say. “It’s important to us that Europe is now beginning to talk about opening their borders and welcoming refugees,” says Giovanna Di Benedetto of Save the Children in Sicily. “But it is not only Syrians who have to be welcomed.”

To underscore her point, Di Benedetto whips out her iPhone to show me photos of dead African infants whose bodies washed ashore on a beach off Zuwara, Libya on August 28, when their smugglers’ boat capsized. About 200 people drowned when the ship overturned.

Five days later, a photo on a beach off Bodrum, Turkey showed another dead toddler: Aylan Kurdi, a three-year-old Syrian boy. That image finally jolted EU leaders into action. “Syrians of course need help, but they are not the only ones,” Di Benedetto says. Shaking her head at the photos of dead African children on her phone, she says she wonders whether Aylan’s “white skin” made the difference.
The possibility would be saddening, but you cannot rule it out since societies have generally favored certain groups of migrants over others for a very long time, and modern Europe is probably not an exception. 

Brazil, From Losing Investment Grade to...IMF Bailout [?!]

♠ Posted by Emmanuel in ,, at 9/10/2015 08:34:00 PM
Roussef is probably nostalgic about her Marxist guerrilla fighter days right about now.
The seemingly inevitable just happened: after being hit hard by slumping global commodity prices, Brazil's sovereign debt has been downgraded back to below investment grade or junk status by Standard and Poor's. In 2008 Brazilian IOUs became investment grade; by 2015 it's yesterday once more. Add in the corruption case hounding the Rousseff leadership and all-around economic malaise to complete the rather dire picture. From building BRICs to stumbling blocks, it seems:
The Brazilian government’s sovereign debt rating has been cut to junk status by one of the major credit agencies, ratcheting up pressure on President Dilma Rousseff to find a way out of the country’s economic and political crisis. Standard & Poor’s said in a note on Wednesday night that Brazil’s hard-fought investment-grade status was gone and that its outlook on the country was negative, just as the nation entered recession and was expected to see an even worse 2016.

That means it will be far more expensive for the Brazilian government to tap international credit markets and that much investor money, such as mutual funds that only plough money into investment-grade nations, will automatically be yanked out of the country. S&P said that extreme political challenges for Rousseff “have continued to mount, weighing on the government’s ability” to shore up its finances as promised...

The downgrade, while widely expected, came earlier than many analysts forecast and arrives at a time of extreme volatility for the Brazilian economy, with inflation hovering around 10% and unemployment the highest it has been in decades. Additionally, Rousseff has almost no political backing, with her approval rating in single digits, the worst seen by any leader since the nation’s return to democracy three decades ago. S&P said that “the negative outlook reflects what we believe is a greater than one-in-three likelihood of a further downgrade due to a further deterioration of Brazil’s fiscal position”.
It now seems so long ago that Brazil had surmounted this seemingly regular lurch towards crisis. It was scheduled to host the World Cup and the Olympics to boot to show how times have changed. Apparently, many changes were just cosmetic. When the commodity surge receded, the same governance issues have reaffirmed themselves. How can it escape such a dire situation now? According to former Morgan Stanley man Stephen Jen, it's time for Brazil to turn back the clock in another way: take out an IMF bailout:
Stephen Jen has a proposal for Brazil to get out of the current economic mess: ask for a bailout from the International Monetary Fund. Not that Brazil needs the funding, said Jen, a former IMF economist. Latin America’s largest economy holds $371 billion in foreign reserves, almost 10 times the amount of the government’s foreign-currency debt.

But Brazil’s political system is in such disarray that the country can’t push through reforms needed to curb debt, tackle inflation and avoid more downgrades, according to Jen, the co-founder of London-based hedge fund SLJ Macro Partners LLP. Financial aid from the Washington-based IMF would require austerity measures such as tax increases and spending cuts, providing President Dilma Rousseff’s government with the political cover to implement unpopular measures needed to shore up the budget, he said.

“They cannot implement policies,” Jen said. “The whole system needs a cleanse. A quick way to bypass all these is to get the IMF. It’s a little wacky, but I think it makes so much sense.”
Strictly speaking, Brazil has built up substantial reserves over the years commodity prices were high, so there's little desperation for IMF loans. But, those reserves can go fast, and there is no guarantee for implementing political reform that the IMF would likely require for loan conditionalities.

Meesa Back!! Indonesia to Rejoin OPEC

♠ Posted by Emmanuel in , at 9/09/2015 08:28:00 PM
The once and future export industry of Indonesia?
This news item has to be one of the odder ones in a truly weird year: Having left the Organization of Petroleum Exporting Countries (OPEC) in 2008 because it had since turned into a net oil importer, Indonesia now wishes to rejoin OPEC. Has it become a net oil exporter once again? Well, no. So, it's odd that Indonesia would want to rejoin a group whose interests are opposite its own as a net importer. That is, why get together again with a cartel expressly formed to raise oil prices...when you're a net oil importer? On the face of it, it's not a welfare-enhancing move on Indonesia's part.

Go figure:
Indonesia is reactivating its membership of the Organization of the Petroleum Exporting Countries in December, OPEC said on Tuesday, which would add almost 3 percent to the group's oil output already close to a record high.

The southeast Asian country would be the fourth-smallest producer in the Organization of the Petroleum Exporting Countries ahead of Libya, Ecuador and Qatar, and bring the number of participants to 13 countries.

Indonesia was the only Asian OPEC member for nearly 50 years before leaving the group at the start of 2009 as oil prices hit a record high, and rising domestic demand and falling production turned it into a net oil importer.

In a statement, OPEC said Indonesia's request to reactivate its full membership was circulated to OPEC members and following their feedback, OPEC's next meeting on Dec. 4 will include the formalities of reactivating its membership.
Aside from lacking apparent self-interest in rejoining OPEC, Indonesia does not strictly meet the qualifications for being an OPEC member anymore:
Indonesia's status as a net importer had raised the question of whether it would return as a full member given that OPEC's Statute says any country with a "substantial net export of crude petroleum" may become a full member.  
It's baffling, to say the least, but there must be some underlying motive here that makes more sense that isn't apparent (yet). The FT, for instance, suggests that Indonesia is keen on re-building contacts with those who can help it revive its dwindling production in the near future.

Cool Runnings: Locating Data Servers in the Arctic

♠ Posted by Emmanuel in , at 9/07/2015 01:30:00 AM
A server farm in the Arctic is born.
Ever thought about where all that data you have on Facebook, Google, etc. is actually stored? The post title says it all about the shape of things to come: with so much data being stored in servers nowadays, the cost for keeping this kind of equipment from overhearing is an important consideration. Instead of keeping cloud servers in, say, hot Asian climates where cooling is necessary, many international technology firms heavily invested in data management are setting up shop where it's naturally cool--the Arctic. From CNN:
The sub-zero climes of northern Sweden are an unlikely outpost for the world's hippest tech firms. Temperatures have been known to plummet to a bone-chilling minus-40 degrees centigrade in the winter months, while the rural landscape is more commonly associated with the sparkling beauty of the northern lights than the humdrum back office of cloud computing.

But it's here, in the tiny sub-Arctic town of Lulea, that Facebook has operated a 30,000 square meter server farm since 2013 -- its first such facility outside the U.S. So content with the operation is the social media giant that it announced the creation a second data center in Lulea earlier this year.
Actually, the top of the world--or more precisely, Scandinavia--also offers fairly high "human capital" to keep these server farms operational, so that's another plus for investing there:
According to Malin Frenning regional head of telecoms firm TeliaSonera the region has plenty to offer big international companies despite its distant location. "There is a lot of (engineering) competence ... and good cooperation with the technical universities," Frenning said. On top of that, good transport links ensure its easily accessible by road and by air while solid infrastructure ensures business stability. 

TeliaSonera is currently laying down Skanova Backbone North, a 1,250-kilometer (776-mile) fiber cable that will serve mobile and communications networks as well as provide the digital infrastructure that data centers in northern Sweden require. "As far as we understand it this is one of the best places to establish data centers," Frenning added.
It promises to be a win-win situation for companies and Mother Earth: firms save on cooling in cold climates so less electricity is used for this purpose. Moreover, these places in several instances already generate much renewable electricity:
The attraction of the extreme north for many tech companies is both practical and environmental. Cold temperatures mean the high costs associated with air conditioning units used to keep servers cool can be drastically reduced. An abundance of renewable energy sources, meanwhile, ensures the large amounts of electricity required to power data centers is clean and environmentally friendly. Iceland, for example, currently meets 100% of its energy needs through geothermal and hydro-electric sources, according to independent energy sector analysts Askja Energy.

Northern Sweden is also blessed with a plethora of natural resources: Lulea has produced large amounts of hydro-electricity for well over a century. "The environmental impact (of data centers in the north of Sweden) is pretty much zero," said Anne Graf of the Node Pole, a regional trade body designed to attract investment into Lulea, Boden and nearby town Pitea.
With no real location penalty nowadays with fiber-optic networks spanning the globe, why not establish servers in the Arctic? The proportion of Internet-related energy consumption is set to rise, and this is one solution to the technical challenges that phenomenon poses.

Can G-20 Calm the Markets' Frayed Ends of Sanity?

♠ Posted by Emmanuel at 9/05/2015 04:12:00 PM

The G-20 countries are meeting amid no small amount of turmoil in global financial markets generally attributed to two causes: First, the United States looks set to increase policy interest rates for the first time since--wow, has it really been that long--2006. With the American economy not quite robust but doing better than most developed economies nonetheless, the first 0.25% hike may come as early as this month. Next, China has the opposite situation. Its economy is slowing despite having buoyed its stock markets to questionable effect since the start of the year. Put both together--uncertainty about whether the world's largest economy will increase rates and uncertainty about the real economic situation of China--and markets have not done too well as of late.

At the G-20 so far, we have the expected fireworks. Japan is bashing China over the bursting of a (Communist Party-inflated) bubble:
Zhou Xiaochuan, governor of China’s central bank, couldn’t stop repeating to a G-20 gathering that a bubble in his country had “burst.” It came up about three times in his explanation Friday of what is going on with China’s stock market, according to a Japanese finance ministry official. When asked by a reporter if Zhou was talking about a bubble, Japanese Finance Minister Taro Aso was unequivocal: “What else bursts?”

A dissection of the slowdown of the world’s second-largest economy and talk about the equity rout which erased $5 trillion of value was a focal point at the meeting of global policy makers in Ankara. That wasn’t enough for Aso, who said that the discussions hadn’t been constructive.
You also had the US warning China about rash moves towards depreciation to shore up exports:
There is a shared belief among the members of the Group of 20 leading economies in the need to "double down" against competitive currency devaluation and avoid it in both policy and language, a senior U.S. Treasury official said on Saturday.

Speaking to reporters on the sidelines of the G20 meeting of central bankers and finance ministers in the Turkish capital Ankara, the official said the final communique from the meeting was expected to address competitive devaluation, where countries attempt to drive down a currency to boost exports.

"You can make policy decisions that lead to competitive devaluation, (or) you can say things that lead to talking down a currency," the official said. "There is a shared sense that the G20 needs to double down on its principle that competitive devaluation is a bad thing."
After taking a lot of heat from Japan and the US, China together with other developing economies want some additional clarity on when the Fed will hike as capital outflows and weaker currencies affect them in expectation of Fed action:
World financial leaders will agree to calibrate and communicate monetary policy carefully to avoid triggering capital flight, but will not call an expected U.S. rate rise a risk to growth, a draft communique showed on Friday.

Many emerging market economies are concerned that when the U.S. Federal Reserve raises borrowing costs, investors will withdraw from other markets and buy dollar assets, weakening other currencies and creating turbulence as capital flees.

Officials from emerging markets wanted the communique from finance ministers and central bank governors of the Group of 20 biggest economies, meeting in Turkey, to say that a U.S. rate rise now would be a risk to growth. But the draft avoids such wording. 
So the G-20 will have something in the communique for everyone. China is not singled out for its intervention, while the US is not labeled a producer of instability with its impending rate hike. Still, if a little more transparency from China and the US is forthcoming, I believe it can contribute towards assuaging fears investors have this year. 

Prolly Dead: PRC's $23B Bid for US Micron Technology

♠ Posted by Emmanuel in ,, at 9/04/2015 01:30:00 AM
China out! Keeping Micron Technology "safe" from the Reds.
It is no real mystery as to why the Chinese remain keen on buying American technology firms. Having mixed success in product upgrading on their own, they are keen to acquire foreign knowledge--through outright purchase of US firms if necessary. However, the old canard of "national security" keeps being raised by American politicians that Chinese buying US technology concerns would lead to these equipment makers festooning products meant for the American market with all sorts of snooping devices. 

The irony, of course, is that Americans have been observed spying on Asians--including Japanese firms--and not necessarily the other way around. Ah well, to today's story: a few weeks back, state-owned Tsinghua Unigroup--founded by graduates of Tsinghua University like Silicon Valley firms were by Stanford/Berkeley alumni or Cambridge UK firms by alumni from that famed university--gave hints about buying US memory chip giant Micron. Apparently, the Chinese wanted to upgrade their memory chip-making abilities:
State-owned Tsinghua Unigroup is considering an approach for chipmaker Micron in what would be China’s biggest bid for a US company. Unigroup on Tuesday said that a deal was “still under discussion”, but Micron carries an enterprise value — equity plus net debt — of $23bn, making that the likely starting valuation for any offer.
It's illustrative that the largest Chinese purchase of a US firm is of a pork producer--not exactly the heights of technological sophistication. Give US politicians any whiff of a technology or energy bid from the Chinese and it's soon scuttled:
China’s biggest deal was the $7.1bn purchase of pork producer Smithfield by Shuanghui International, which was renamed WH Group.
The apparent interest in Micron comes after China’s efforts to improve its domestic chipmaking industry gained fresh impetus last year with the creation of a Rmb120bn ($20bn) state-backed fund to support deals and improvements in the sector. Ministers at the time said that having a world class domestic industry was strategically important to China’s competitiveness and to its IT security. Chinese chipmaking champions such as SMIC have for years competed with the likes of Taiwan’s TSMC but have failed to establish a reputation for equal quality...

China-backed deals have come unstuck in the past. In 2005, Washington blocked an $18.5bn offer from Cnooc, the state-owned oil major, for US crude group Unocal, on security grounds. Cnooc’s successful $15.2bn bid in 2012 for Canada’s Nexen remains the country’s biggest outbound deal.
Which brings us to more recent news that the bid--never officially declared anyway--looks dead in the water. From Doug Young of Forbes:
I wrote several weeks ago that a bid by China’s Unigroup to buy U.S. memory chip giant Micron Technology had become the victim of politics, and now it appears the deal is finally dead. Or at least it’s on life support, with little hope of resuscitation. That’s my interpretation, following the latest reports that say Unigroup’s chairman has given remarks that look quite pessimistic after returning to China from a last-ditch U.S. visit to try to save the deal.

This deal looked quite interesting when it was first reported back in July, and would have been worth some $23 billion, marking the biggest-ever acquisition of a U.S. company by a Chinese counterpart. But political sensitivities quickly surfaced due to Micron’s status as the biggest U.S. maker of memory chips used in most electronic devices and also in the defense industry.

The situation was further complicated by timing, since the U.S. is preparing for presidential elections next year and China is often an easy target for candidates to attack during that period. As the icing on the cake, Unigroup is also stigmatized by its close association with Tsinghua University, China’s leading science university that has close ties with Beijing and is often used for government-led programs to develop new technologies.

Perhaps the U.S. media have already dismissed this particular deal, since the latest reports were only carried in Chinese and were based on information from a second-hand source familiar with Unigroup Chairman Zhao Weiguo’s recent U.S. trip. Foreign media previously said that Unigroup officials were headed to the U.S. to try to salvage a deal, though this is the first report on the outcome.
My take is simple: Tsinghua Unigroup sent a few executives to float the idea of an acquisition of Micron stateside--especially among US policymakers. With all the "national security" BS rehashed in their faces, they decided the deal had next to no chance of going through. Besides, it would subject the Chinese corporation's leadership to intense scrutiny. So the idea's been canned for now.

CCP Mythology: KMT, Not Reds, Fought Japan in WW2

♠ Posted by Emmanuel in , at 9/02/2015 03:10:00 PM
Tanks, missiles, armored personnel carriers...and beautiful women on the march: it's PRC parade time.
If you repeat a lie often enough, then you have to sustain it through further deception thereafter. One of the most curious bits of hagiography for the People's Republic of China leadership is that they led the way in fighting the imperial forces of Japan during WWII. Like in the rest of Asia, it certainly wasn't a pleasant time for those under the boot of Nippon's "Greater East Asia Co-Prosperity Sphere." That is why, seventy years later, the Chinese Communist Party still feels a compelling need to reinvent history in their favor to paint themselves as liberators from those vile foreign invaders. That the Japanese treated everyone else horribly is beyond question, but the claim that the CCP was instrumental in defeating Japan does not bear simple scrutiny.

Tomorrow, PRC sympathizers the world over descend on Beijing for the 70th year commemoration of the end of WWII--and therefore Japanese occupation. The questionable bit is that it wasn't the no-good dirty Generalissimo Chiang Kai-shek who took the fight to Japan, but the communists. However, no self-respecting and impartial historian will support that view.
However, along with criticizing Japan, Xi and the PBSC also used the Victory Day celebrations to praise the CCP itself. As Shannon writes, the Victory Day holiday “also served as a celebration of the Chinese Communist Party’s role in defeating Japan — and more than that, in saving China from its century of humiliation…. Xi credited the CCP with spearheading the movement to unite all of China’s people in opposition to Japan. To Xi Jinping, the deciding factors in the war were the ‘great national spirit’ of the Chinese people — particularly, their patriotism — and the leadership of the CCP.”

None of this is particularly new. The CCP has long claimed credit for having tirelessly defended China from the Imperial Japanese army. This couldn’t be further from the truth, however[...]Japan’s invasion of China saved the CCP from Chiang Kai-shek and the KMT, and ultimately allowed Mao to defeat the KMT in the ensuing civil war. Indeed, by the end of 1934, the CCP was on the verge of extinction after KMT troops delivered another heavy blow to the Red Army in Jiangxi Province, which forced the Party to undertake the now infamous Long March to Xi’an in the northwestern province of Shaanxi. Chiang initially pursued the Communist forces, and would have almost certainly delivered a final blow to the CCP if war with Japan could have been delayed. As it turned out, Chiang was not able to put off the war with Japan any longer, and domestic and international pressure forced him to accept a tacit alliance with the CCP against Japan.

At the onset of the war, then, the CCP was not in any position to defend anyone from the formidable Japanese military. In fact, it wasn’t even in a position to defend itself from the KMT. The initial battles of the second Sino-Japanese War in southern China were the largest ones, and the KMT fought them alone.

This would be the trend of the entire war. As two scholars note, “From 1937 to 1945, there were 23 battles where both sides employed at least a regiment each. The CCP was not a main force in any of these. The only time it participated, it sent a mere 1,000 to 1,500 men, and then only as a security detachment on one of the flanks.There were 1,117 significant engagements on a scale smaller than a regular battle, but the CCP fought in only one. Of the approximately 40,000 skirmishes, just 200 were fought by the CCP, or 0.5 percent.”
The damning thing is that Chou En-lai admitted as much to the Russians: 
By the CCP’s own accounts during the war, it barely played a role. Specifically, in January 1940 Zhou Enlai sent a secret report to Joseph Stalin which said that over a million Chinese had died fighting the Japanese through the summer of 1939. He further admitted that only 3 percent of those were CCP forces. In the same letter, Zhou pledged to continue to support Chiang and recognize “the key position of the Kuomintang in leading the organs of power and the army throughout the country.” In fact, in direct contradiction to Xi’s claims on Wednesday, Zhou acknowledged that Chiang and the KMT “united all the forces of the nation” in resisting Japan’s aggression.
The mythology still resounds today as KMT veterans who actually fought the Japanese but did not decamp to Taiwan after the communist takeover have been treated very shabbily:
Chinese veteran Sun Yibai doesn’t have much time for the Communist Party’s claim to have led China to victory against Japan in World War II. “The Communist Party didn’t fight Japan,” said the sprightly 97-year-old, who once served as a translator with the storied Flying Tigers aviation brigade. “They made up a whole bunch of stories afterward, but it was all fabricated.”

That view challenges a basic premise underpinning this week’s lavish celebrations in Beijing of the 70th anniversary of Japan’s defeat: That Mao Zedong’s communists were the saviors of the nation, battling against Japanese forces that began occupying parts of China in 1931 before launching a full-blown invasion in 1937.

Veterans such as Sun have long found themselves on the wrong side of that narrative. Their service with the Kuomintang led to imprisonment, persecution and often death in the years after the 1949 communist revolution. Now mostly in their 90s, they’re living out their remaining years shunned and forgotten by all but a few who care to hear their stories.

“Nobody cares about veterans like me. Nobody cares. People just forget what happened in the past,” Sun said during an interview in his Beijing apartment, which is stuffed wall-to-wall with books and old photos.
In the economic sphere, you find parallels of this inherent urge to reinvent certain facts to make the Communists appear as saviors of all that ails China. With PRC-sourced turmoil roiling global markets, authorities have tried propping up their stock markets through cash injections late in the trading day to avoid the ignominy of their own people losing faith in the Communist leaders' ability to engineer bull markets out of deteriorating economic conditions:
Hopes that China's leaders would ensure a favourable backdrop in the stock market for Thursday's military parade proved to be wrong — despite yet another strong rally in the final minutes of Wednesday trading.

The Shanghai Composite notched a third straight decline just ahead of a four-day holiday weekend to commemorate the "victory of the Chinese people's war of resistance against Japanese aggression." With minutes to go the market entered positive territory, but then ended 0.2 per cent down. Still, that's a small loss compared to the 4.7 per cent decline early in the day.

Last week market participants and people familiar with the matter said the state intervened to provide a backdrop of rising markets when Beijing hosts the huge military parade on Thursday. For the past six sessions the Shanghai Composite staged a late-day rally, but each day this week the climb only dulled the overall damage.
I believe that market participants' discomfort also stems from the Communist's insatiable urge for reinvention: what if all these years and years of economic growth in China were just as fake as the Reds "defeating" the Japanese?