Showing posts with label International. Show all posts
Showing posts with label International. Show all posts

Thursday, March 28, 2013

Video: Slight Problem with the Cypriot Banking System Explained


The Australian humorists Clarke & Dawe offer a brief summary of the "slight" problem in the Cypriot banking system. The European Union's response has not yet fixed the problem, though it has resulted in a massive exodus of deposits held by foreigners. (Note to kleptocrats everywhere: if you put an entire nation's banking system on a bank holiday, it's best to make sure that bank holiday applies to the nation's foreign bank branches, too!) As of today, Cypriots are allowed to withdraw up to €300 a day of their own money.

Saturday, November 3, 2012

In the Fight: Episode 68


Episode 68 of In The Fight produced by the Defense Video & Imagery Distribution System. Here's their description of this half-hour show:
On this episode, service members head home after their final deployment to Afghanistan, a new Afghan organization looks to rid corruption from within its ranks, we meet a team tasked with responding to crises at American embassies, a group of combat engineers find themselves between a rock and a hard place, and an annual event aims to assist local veterans in need.

Friday, June 29, 2012

In the Fight: Episode 64


The Defense Video & Imagery Distribution System produced Episode 64 of In The Fight. Here's their description of this half-hour show:
On this episode, we see what it takes to execute a combat operation in Afghanistan, Soldiers are put through their paces to become members of the Afghan Special Forces, nineteen countries prepare for a multi-national exercise known as Eager Lion, progressive steps are being taken to change discrimination in Afghanistan, and an Afghan athlete prepares for the summer Olympics.

Thursday, May 17, 2012

The Serfdom of Iceland

Financial Post: Iceland needs our loonie:
In a globalized world, it is difficult to uphold international living standards when you are cut off from the rest of the globe. This is the situation facing Iceland following the collapse of the krona in 2008 and the resulting strict enforcement of capital controls. 
Icelanders can no longer travel freely; we are restricted to roughly €2,000 ($2,570) for travel expenses on each trip. We are restricted in terms of how much support we can give relatives studying abroad and we are completely banned from investing internationally. With the exception of those over 40 who were born on the eastern side of the Iron Curtain, no European has ever experienced such a situation.
That reminded me of an interesting post at Zerohedge about ancient Rome's nanny state:
Rome had its socialist interlude under Diocletian. Faced with increasing poverty and restlessness among the masses, and with the imminent danger of barbarian invasion, he issued... an edictum de pretiis, which denounced monopolists for keeping goods from the market to raise prices, and set maximum prices and wages for all important articles and services. Extensive public works were undertaken to put the unemployed to work, and food was distributed gratis, or at reduced prices, to the poor. The government – which already owned most mines, quarries, and salt deposits – brought nearly all major industries and guilds under detailed control. “In every large town,” we are told, “the state became a powerful employer, standing head and shoulders above the private industrialists, who were in any case crushed by taxation.” When businessmen predicted ruin, Diocletian explained that the barbarians were at the gate, and that individual liberty had to be shelved until collective liberty could be made secure. The socialism of Diocletian was a war economy, made possible by fear of foreign attack. Other factors equal, internal liberty varies inversely with external danger. 
The task of controlling men in economic detail proved too much for Diocletian's expanding, expensive, and corrupt bureaucracy. To support this officialdom – the army, the courts, public works, and the dole – taxation rose to such heights that people lost the incentive to work or earn, and an erosive contest began between lawyers finding devices to evade taxes and lawyers formulating laws to prevent evasion. Thousands of Romans, to escape the tax gatherer, fled over the frontiers to seek refuge among the barbarians. Seeking to check this elusive mobility and to facilitate regulation and taxation, the government issued decrees binding the peasant to his field and the worker to his shop until all their debts and taxes had been paid. In this and other ways medieval serfdom began.
Iceland is on the Road to Serfdom. Greece will soon join them as they exit the European Union. And, if we don't address our looming debt, we will too.

Sunday, February 5, 2012

In the Fight: Episode 59



The Defense Video & Imagery Distribution System produced Episode 59 of In The Fight. Here's their description of this half-hour show:
On this episode, a personal security detachment team transports high level personnel throughout Afghanistan, Afghan forces prepare for a transition of authority on the Afghan/Pakistan border, troops continue to help improve the lives of Afghan families, Airmen deliver more than just supplies to troops outside the wire, and sports returns to Libya in time for the 2012 Olympic Games.

Monday, December 26, 2011

How can an Insolvent China Bailout Europe?

ZeroHedge: China Insolvency Wave Begins As Nation's Biggest Provincial Borrowers "Defer" Loan Payments:

...here are the facts, from China Daily, and they speaks for themselves: "China's biggest provincial borrowers are deferring payment on their loans just two months after the country's regulator said some local government companies would be allowed to do so....Hunan Provincial Expressway Construction Group is delaying payment on 3.11 billion yuan in interest, documents governing the securities show this month. Guangdong Provincial Communications Group Co, the second-largest debtor, is following suit. So are two others among the biggest 11 debtors, for a total of 30.16 billion yuan, according to bond prospectuses from 55 local authorities that have raised money in capital markets since the beginning of November." So not even two months in and companies are already becoming serial defaulters, pardon, "loan payment deferrers?" And China is supposed to bail out the world? Ironically, in a world in which can kicking is now an art form, China will show everyone just how it is done, by effectively upturning the capital structure and saying that paying interest is, well, optional. In the immortal words of the comrade from Georgia, "no coupon, no problem."

Much has been made in the press of China bailing out Europe. I don't see how that's possible when China is dealing with its own default.

Monday, December 19, 2011

Policy Prescriptions for the European Economic Crisis


In Professor Anthony Sanders' testimony before the U.S. House Committee on Oversight and Government Reform Subcommittee on TARP, he outlines three main causes of the current European fiscal crisis: 1) excessive government spending leading to 2) excessive government debt coupled with 3) slow GDP growth.
Sanders also addresses how fiscal integration in Europe could affect the purchasing of U.S. Treasuries. Although Fed Chair Ben Bernanke recently announced that the Fed stands ready to provide further easing based on Eurozone risk, Sanders notes that the Fed and Treasury should save their bailout tools for the U.S. In fact, retirees and people living on fixed incomes will be further harmed by the Fed’s reaction to the Eurocrisis.
In addition to Fed operations, the International Monetary Fund (IMF) of which the U.S. is the largest stakeholder, is also active in the Eurozone bailout. The U.S. has a line of credit approved for an IMF crisis fund in the amount of $100 billion.
Sanders concludes his testimony by saying that the Eurozone's problems are structural, and cannot be solved by low interest loans and guarantees from the Fed and the IMF. The best way to protect U.S. taxpayers is to increase transparency at the Fed, take back the $100 billion line of credit at the IMF, and undertake spending cuts ourselves in order to reduce our deficit and massive debt loan.

Sunday, December 18, 2011

Financial Armageddon to begin in London

Media_httpwwwzerohedg_njprp
 

ZeroHedge: Psssst France: Here Is Why You May Want To Cool It With The Britain Bashing - The UK's 950% Debt To GDP:

While certainly humorous, entertaining and very, very childish, the recent war of words between France and Britain has the potential to become the worst thing to ever happen to Europe. Actually, make that the world and modern civilization. Why? Because while we sympathize with England, and are stunned by the immature petulant response from France and its head banker Christian Noyer to the threat of an imminent S&P downgrade of its overblown AAA rating, the truth is that France is actually 100% correct in telling the world to shift its attention from France and to Britain. So why is this bad. Because as the chart below shows, if there is anything the global financial system needs, is for the rating agencies, bond vigilantes, and lastly, general public itself, to realize that the UK's consolidated debt (non-financial, financial, government and household) to GDP is... just under 1000%. That's right: the UK debt, when one adds to its more tenable sovereign debt tranche all the other debt carried on UK books (and thus making the transfer of private debt to the public balance sheet impossible), is nearly ten times greater than the country's GDP.

Sunday, October 30, 2011

Understanding Europe's TARP: EFSF is an Empty Box

Zerohedge: An Empty Box Filled With Promises Of Money:

Some amusing weekend observations from TTMYGH's Grant Williams: "The EFSF is basically an empty box filled with promises of money - many of them from the very people who are most likely to need to borrow that same money. Should they need to borrow the money, they won’t be able to make good on their promises so there will be less money for them to borrow. Now the brain trust running Europe have decided, in their collectivewisdom, to applyleverageto thenon-existent money in the empty box that they have yet to actually borrow, so it can backstop even more of the hundreds of billions of Euros of sovereign debt issued by countries whose finances are in such dire straits that they either require the kind of robust growth that is hardly likely to materialize any time soon or the forgiveness by the holders of that debt of a large part of it....

Wednesday, September 28, 2011

Eurozone: Your Market Will Crash

From the YouTube Description:

 

In a scary and painfully frank interview a freaked out BBC interviewer is visibly shaken when market trader Alessio Rastani predicts that the "Market is Toast." Apparently there is nothing Euro governments can do.

Yemeni Political Activists Visit St. Louis


I was one of several bloggers and new media "experts" who met with a group of Yemeni journalists, bloggers, and activists in downtown St. Louis. Jim Hoft the Gateway Pundit, Ben Evans of the St. Louis Tea Party, and Brian Hook of the Missouri Journal were also there. The meeting was sponsored by the World Affairs Council and focused on the use of social media and blogging. With Yemen going through a great deal of turmoil, current events provided the context for our discussion about new media tools like facebook, twitter, Blogger/Blogspot, flickr, and YouTube.

News from Yemen was covered in the Financial Times today:
[Yemen's President Ali Abdullah] Saleh has survived at the helm of the Arab world’s most impoverished country for more than 30 years. Since an uprising erupted in Yemen in February as part of the wave of revolts sweeping the Arab world, he has repeatedly expressed support for a transfer of power proposed by Yemen’s Gulf neighbours while managing to scuttle the initiative at every turn.
During our discussion with the Yemenis today, one of them remarked that they have a saying: "whatever the president says, he does the opposite." That certainly seems to be the case with respect to the democratic reforms that activists and neighboring countries have advocated for.

Those activists have paid a heavy price for their protests. As this thirty second video illustrates, they sometimes come under automatic weapon fire (background story in Arabic). As I reported back in March, the Yemeni government has used gas on massed protesters.

The use of poison gas came up in our discussion today. I mentioned my belief that Iran was the source of a nerve agent used in Sana'a in March; however, the Yemenis rejected that idea. They pointed out that weapons including spent gas canisters were stamped "made in the USA". Truth is always the first casualty of war.

My original analysis was based on what I had seen on twitter and Internet news sources. At the time of the attack, someone tweeted that "one of the bottles of gases used in the attack on Tagheer square in #Sanaa is CN gas." Australia's Sky News reported the use of nerve gas and a Big Peace article reported on the symptoms of an alleged Iranian tear gas:
The Islamic regime in IRAN is using a new “tear gas” that renders those exposed into a state of semi paralysis and violent sickness. We want to reach out to chemical engineers of the world to help us identify the gas and how to defuse it? 
Symptoms include:
  • Severe nausea and vomiting (in some cases blood),
  • Semi paralysis,
  • Blurry vision.
The Wikipedia entry for CN gas notes:
...this compound irritates the mucous membranes (oral, nasal, conjunctival and tracheobronchial). Sometimes it can give rise to more generalized reactions such as syncope, temporary loss of balance and orientation. More rarely, cutaneous irritating outbreaks have been observed and allergic contact permanent dermatitis
At high concentrations CN has caused corneal epithelial damage and chemosis. It has also accounted for at least five deaths, which have resulted from pulmonary injury and/or asphyxia."
So there you have it: nausea, semi paralysis (syncope), and eye damage from CN gas quite possibly sold to the Yemeni dictator by the the United States. A safer tear gas (CS gas) has been available since at least World War II.

There's obviously an imbalance of power between the protesters and government forces, yet in a carefully worded condemnation last week, the Obama administration resorted to equivocation when it "called upon all parties to exercise restraint." The Yemenis that we met with pointed out the lopsided nature of this call for restraint since they had exercised restraint themselves. Many Yemenis have guns; however, they did not bring them to the protests.

The unrest back home obviously weighs on our visitors. One of them said that they will be called US agents when they return. They worry about their country and their fellow citizens as well fearing that assassinations and political killings will continue for sometime.

We asked them if there were national leaders for their revolution. They described a movement of many different groups that occupy the complete spectrum of political thought in Yemen, but share the same overpowering vision of riding the country of its dictator. Because of that, no one leader has emerged.

Much more from Jim Hoft at the first link below.

Monday, September 26, 2011

Jay Nixon's Central Plans Unravel in Moberly Missouri

St. Louis Post Dispatch: Chinese sweetener deal turns sour in Moberly:
By now, the SweetO plant on the edge of town was supposed to be up and running. It was supposed to be pumping out high-grade artificial sweetener by the truckload, paying nearly 200 people making $17.50 an hour, and serving as Exhibit A of how foreign — Chinese — investment could bring new life deep into the Missouri heartland.
Instead, the half-built plant sits idle, and the city could be on the hook for $39 million of the company's bad debt.
The collapse of the Mamtek deal has created problems in Jefferson City for politicians who supported this boondoggle. Chief among them is Missouri's Governor: Jay Nixon. The governor's official website touts the Mamtek deal and the 600 jobs it was suppose to create in the struggling town of Moberly. The announcement a year ago also includes this now ironic quote from Jay Nixon:
"At a time when too many American companies are shuttering their plants and moving jobs overseas, we are thrilled to have a global company creating hundreds of good manufacturing jobs right here in Missouri," Gov. Nixon said.  "These jobs will be a significant boost to Missouri's economy and our manufacturing sector, and they're another positive sign that our economy is beginning to move forward.  I am pleased that my administration was able to provide a competitive package of strategic economic incentives to help bring these jobs to Missouri."
Obviously, the absence of those jobs combined with an additional $39 million of debt will sadly extend the economic woes of Moberly. Missouri's state-level leadership needs to re-evaluate their economic principals, because they are making the same mistakes that cargo cult Keynesians at the Federal level are making. They are committing the fatal conceit which Hayek illuminated in this quote: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."
“Substantial concerns have arisen regarding the entity known as Mamtek International Ltd. and its proposed construction and operation of a manufacturing facility in Missouri,” Koster said. “The Attorney General’s Office is assisting Prosecuting Attorney Mike Fusselman and the Randolph County Prosecuting Attorney’s Office in reviewing this matter to determine whether any violations of Missouri civil or criminal laws have occurred. Our review of this matter will begin immediately.”
And Mamtek may have other casualties. The Source casts doubt on the pending Aerotropolis legislation in Jefferson City could be one victim:
...Nixon’s administration screwed the pooch so poorly with this China deal, can we really trust that he knows what he’s talking about when it comes to the China Hub project in St. Louis?
The stress of these deals is weighing on Nixon too. He appeared to lose it when talking with reporters last week:
Adding to Gov. Nixon's headaches is this report from the Columbia Tribune that Mamtek was suppose to entice Chinese investors to apply for a special EB-5 visa:
Mamtek US Inc. highlighted a little-known U.S. visa program as an added enticement to lure Chinese investors for the failed effort to build a taxpayer-subsidized artificial sweetener factory in Moberly.
On a Chinese-language investor website, Mamtek sought 15 people willing to put $500,000 each into the project. In return, investors would receive an EB-5 visa from the U.S. Citizenship and Immigration Service, good for bringing themselves and their entire immediate family — up to three generations — to the United States.
I think the US (and Missouri) should provide incentives for international entrepreneurs with proven records of success to come to this country. That's one realization of the American dream. The problem with Mamtek, is that it looks a bit too much like it was nothing, but a front for the Mamtek Regional Center. The Mamtek Regional Center is listed on the U.S. Citizenship and Immigration Services website as Missouri's only "Immigrant Investor Regional Center" (here's a screen grab):
Mamtek_uscis_immigrant_investo

Tuesday, September 20, 2011

Don't Expect China to Bailout Europe

Just last week the Financial Times was reporting: Italy turns to China for help in debt crisis:

Italy’s centre-right government is turning to cash-rich China in the hope that Beijing will help rescue it from financial crisis by making “significant” purchases of Italian bonds and investments in strategic companies.
Yesterday, Reuters reported: S&P cuts Italy ratings one notch, outlook negative:
Sept 20 (Reuters) - Standard and Poor's downgraded its unsolicited ratings on Italy by one notch to A/A-1 and kept its outlook on negative, a major surprise that threatens to add to concerns of contagion in the debt-stressed euro zone.
It seems odd to me that Third World China would be bailing out First World Italy, but if they were close to a deal, the ratings cut on Italy gives China an excuse to walk away.

Monday, August 22, 2011

EFSF: The Financial Fourth Reich

James G. Rickards (Tangent Capital) and James Turk, Director of the GoldMoney Foundation, talk about the European Central Bank's role in the crisis and how it is becoming increasingly politicised, in contrast with its predecessor of sorts -- the Bundesbank. They talk about the possible differences between Jean-Claude Trichet and his successor Mario Draghi. James Rickards explains how Europe is developing a common fiscal policy with a common Treasury, in the form of the European Financial Stability Facility (EFSF), which will dictate fiscal policy for many member countries in exchange for rescue funds.

Rickards comments about the EFSF functioning like the U.S. Treasury while being under the political control of Germany leads to the conclusion that, in a way, Germany is taking over European fiscal policy. Whether this is good for the continent or not remains to be seen. Germany's fiscal track record is better than other EU countries, so there's reason for optimism; however, the narrow interests of member states may undo the political union. The rise of this "Financial Fourth Reich" helps explain why Germans are not as upset with footing the bill for the Greeks as I would have expected them to be.

Saturday, August 20, 2011

Iran Jails Two Americans for Eight Years

 

Associated Press: Iran Sentences 2 American Men to 8 Years in Jail:

Two American men already held for two years in Tehran have been sentenced to 8 years each in prison on charges of espionage and illegal entry into Iran, state TV reported Saturday.

Friday, July 22, 2011

Building Finance on a Foundation of Moral Hazard

Breitbart: S&P renews US debt warning

S&P also reiterated that it could downgrade the US debt rating if politicians cannot reach a deal to raise the country's debt ceiling by August 2.
"We believe any additional stresses caused by a protracted standoff in the US would likely amplify already tense market conditions in Europe in light of significant fiscal imbalances in Greece, Portugal, and Ireland," the ratings agency said. 

Think about that for a minute. What Standard & Poors is saying is that fiscal restraint increases the risk rating of American securities (and the debt problems in Europe are our fault). We now live in a world where adding more debt reduces our risk of default. Clearly, our financial system is built on a foundation of moral hazard. That seemed to be confirmed in Europe on Thursday, too, where the EU adopted something a lot like our 2008 TARP bill. This tweet from @zerohedge illustrates the degree to which moral hazard rules the day:

France's Sarkozy says if there is any reaction from credit rating agencies, nation states will intervene with guarantees for banks, ECB

If anything's too big to fail, countries should be, but I've long thought that "too big to fail" is two words too long.

Tuesday, July 12, 2011

Video: Economist Murat Yülek on Turkey, Europe, and America

How bad is the Greek debt crisis? How will the U.S.'s inability to get its fiscal house in order impact rising countries such as Turkey? Economist Murat Yülek hails from Turkey and is a former Georgetown University professor and finance company CEO, who's worked with the International Monetary Fund, the World Bank, and the Islamic Development Bank.

In early July, Yülek sat down with Reason Foundation's Director of Economic Research Anthony Randazzo to discuss how the Greek and American situations may just make it harder for countries such as Turkey to fully liberalize their economies.

Monday, July 11, 2011

Italy Teeters on the Edge

The Atlantic: Euro in Crisis: Is the Italian Domino Falling?

If Italy goes, it's not clear that the rest of Europe can save them.  In the FT, Neil Dennis says people are talking about doubling the euro bailout fund to €1.5 trillion--or about three times the size of TARP.  And you may have noticed that the bailout fund has not actually stopped Greece's descent into debt madness.

Default looks more likely in the case of Greece. If a default there leads to large quantities of paper assets vanishing as they're written off, it becomes more likely that Italy and other European countries will follow suit. What might that look like?

Media_httpwwwzerohedg_lgavr

Debtmaggedon Arrives in Parts of Europe

NYTimes.com: Italian Debt Adds to Fears in Euro Zone:

Top European officials planned to meet on Monday to wrestle with threats to the currency union as fears mounted that Italy could become a victim of the debt crisis even as discussions stalled over a second bailout for Greece.

Meanwhile, Greece continues to have problems because of it's debt-driven austerity measures and there's rioting in Ireland. That leaves Portugal and Spain as the remaining two dominoes often referred to collectively as the PIIGS.

Sunday, July 3, 2011

Businesswoman to Lead Thailand

Media_httpwwwintellas_ldyfd

Reuters: Thai women cheer first female prime minister:

Yingluck Shinawatra, a 44-year-old businesswoman who wasn't even in politics two months ago, is poised to get the top job after the stunning election victory of Puea Thai (For Thais), whose de facto leader is her brother, fugitive ex-premier Thaksin Shinawatra.

Hopefully Yingluck will help transform Thailand which has reeled from political upheaval for several years. Many Thais are doubtful, though:

"It's obvious who she represents," said Puttasa Karnsakulton, a 37-year-old clothing shop owner.

Thaksin, a twice-elected prime minister who is now living as a fugitive from Thai justice in Dubai, has said he wants to come home, and one of Yingluck's policies is an amnesty for political offences.

"I can't accept it if having the first female prime minister means she'll come in to benefit one person. There are doubts in my mind that this is simply a woman in front of a man," Puttasa said.

If Yingluck is able to secure her brother's return to Thailand, I suspect that there will be a shaking out in the Puea Thai political party. I don't think it can handle two Shinawatras. She should plan her future political career with that in mind.