Big Ting!

The CLICO bank has just collapsed in Trinidad. More on this as I gather more information.
See article here

To this date, this makes the first Caribbean Bank to go belly bust since the global credit crisis. The Central Bank of Trinidad had to take control and implement a few insurance measures.

I always thought it would have been First Caribbean to go under first. They are heavy in commercial lending and have had over drafts out the wazoo. But, something had to happen.

Any Central Banker or Finance Minister worth his salt, had better double check their domestic sector for any exposure.

Jonas Brothers--for the Obama girls!

Here are the infamous Jonas Brothers, for the Obama girls. I had to go searching for them, but I actually like this tune "Burning up".

The Obama girls demanded that the Jonas Brothers come to the White House to visit them. LOL.....if I were them, I would make a similar request!

Power share flawed in Zimbabwe!

I must be on a roll today. There are several articles I wrote weeks, some even month's back, which either spoke to directly or, touched on issues now manifesting as problems, trends or "new" solutions.

What can I say!?!? Global View Today has it's hand on the pulse of the world.

The latest, is the failed power share in Zimbabwe between Mugabe's Zanu-PF and Morgan Tsvangirai's MDC party, in that the Zanu-PF under Mugabe would keep a hold of the Military and Tsvangirai would keep control of the police force.

Doomed to failure, as this WSJ article has pointed out as it has failed.
See article here

You can't leave warring political parties in control of different and, in some cases, opposite sides of their military regime! It would be doomed to fail because, war would ensue if people had access, and, legitimate access, to weapons.

Hate to say I told you so...but, I told you so!

Patently obvious!

Patent's have been dwindling as companies, cut spending on research.

Obvious, but still sad.
http://www.economist.com/daily/news/displaystory.cfm?story_id=13010068&fsrc=nwl

Remember my article on the stimulus plan a few weeks back, I asked that patent research be given special attention, if we are going to start on major investments in all business--new and proposed. Especially with a renewable energy focus, we must have patent simplification if we must have all of that environmental and non-traditional spending on items in this stimulus, that do not stimulate business at the core.
See article here:
http://globalviewtoday.blogspot.com/2009/01/stimulus-plan-really.html

If we are going to have a shift in focus to things other than the goods and services in the primary market and well beyond the alternative market, patent simplification should be high on the agenda and touted to aid the movement of entrepreneurs and scientists, into this new area.

But, it has not and it is one of the MANY inconsistencies with this American stimulus plan.

Lies and damn lies!

Pascal Lamy, the WTO Director that shouldn't be but is there anyways, has said in a speech that protectionism is not on the rise.
http://ictsd.net/i/news/bridgesweekly/38844/

You see, putting him back as WTO Director was a huge mistake. How can't all of these "stimulus packages" and "government re-investment plans", not be protectionism at the face of it?

This is something, the director did not go into. Blanket statements like this should not be made by a man so senior as he. Perhaps he had an "off" day?

An article in the Wall St. Journal, gives us some more information on current American protectionism and the possibilities of more.
http://online.wsj.com/article/SB123171020324471871.html

A fair assessment, considering the obvious stimulus plan and auto-bail out as well as TARP, which will shape global finance and the way businesses get funding.

Perhaps Lamy should read the Wall St. Journal a little more often!?!?

Paragons of Macro-Economic Virtue: China and Russia!!

What?!?!

This is what one would say, when someone was to say, imply, or, even suggest, the notion of China and Russia being paragons of macro-economic virtue.

However, this latest article in the FT about China and Russia, giving America a scolding on their macro-economic policies and about Wall St., says just that.
http://www.ft.com/cms/s/0/d0fac984-ed6e-11dd-bd60-0000779fd2ac.html

All's I can say is that booms and busts happen. Nothing much that any country can do about it. Chinese and Russian officials, are just a little upset that their own economies, are suffering because of the American bust--they want to control their own destiny and the only way that can happen, is if America wakes up and realizes that they {the US} should not be world super-power anymore and said countries, should be instead.

Fat chance!

What's really the issue is is that these leaders, Putin of Russia and Wen of China, need someone to blame it on and make it appear as if they are talking tough to who it matters the most--no better place than at Davos, at the World Economic Forum.

In any event, while I am too upset with the way the global economy is shaping out--have warned about this since at least August 2007-- I would prefer to take Chinese and Russian consultancy, with a grain of salt on macro-economic stability.

For one, is a Communist Dictatorship and the other, is a former Communist Dictatorship masquerading under the facade of democracy--pseudo-democracy, indeed.

Take your pick of which one is which!

Far East coming alive!

Well, when we talk about trade in the far east, we only talk about China and then India and Indonesia. However, India has agreed to sign onto a FTA with the ASEAN countries.

If completed, there will be a 17 billion people and $23 trillion dollar trade bloc.

Move over Europe!

http://ictsd.net/i/news/bridgesweekly/38836/

Hayekism...

Friedrich Hayek, the Nobel Prize-winning economist who said: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."

Don't know which book, but George F Will put it in his article I read today in the Washington Post.
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/28/AR2009012802939.html?wpisrc=newsletter

John Kay: Simple enough!

Nice article by John Kay in the FT today. It's about using your brain and quitting this over reliance on financial models that do not assess economic conditions, but rather, base performance on indicators on a quantitative basis, only. You have to understand the situations behind the numbers.

The LSE taught me that. In fact, I dare to say that quantitative and analysis is an oxymoron.
http://www.ft.com/cms/s/0/de074228-eca7-11dd-a534-0000779fd2ac.html

"The model seems to be in question. But the idea behind it – that careful diversification can combine good returns with low risk – is as valid as ever. The problem is that some supporters of that approach put too much blame on sophisticated modelling techniques at the expense of their own knowledge and judgment. Banks made the same error in their risk assessments: their value-at-risk models had similar structure and origins to those in portfolio planning.

Quantitative portfolio management relies on measures of correlations between asset classes. These historical correlations are not universal constants but the products of particular economic conditions. Unless you understand the behaviour that produced them, you cannot assess their durability. In 2007-08, assets that had been uncorrelated were strongly correlated and many portfolio managers were surprised when the diversification they sought proved illusory.

Underlying causal relations had changed, as they frequently do in business. In the new economy bubble of the 1990s, equities roared ahead while property languished. But during 2003-2008, the availability of underpriced credit, followed by its abrupt withdrawal, affected property and shares in similar ways. Anyone in the financial world knew these things: but computers, churning through reams of data, did not.

Asset classifications change their meaning. The alternative asset classes that yielded strong returns in the 1990s for Harvard and Yale were hedge funds and private equity. But the increase in the number of hedge funds and the volume of their assets meant that an investment in the sector – once a bet on an individual’s idiosyncratic skills – became more similar to a general investment fund. Hedge fund returns were therefore increasingly correlated with those of other investments."

Venezuela GDP increased by 4,8%!

The Venezuelan economy, increased by 4.8% in the third quarter of 2008. Off of the back of petroleum sales, without question.
http://www.bcv.org.ve/EnglishVersion/c4/index.asp?secc=pressreleases&Codigo=7408&Operacion=2&Sec=False

Reports are from the Central Bank of Venezuela. Other non-petroleum related economic activity grew as well. Especially personal services, which also, most likely, grew off of oil revenue and the value added petroleum had on the economy.

Surprising, manufacturing has also seen a boost.

However, the BOV states that the country's social programs, have had a good effect and because of this, all other sectors were able to grow and take value from other economic related activity.

I thought social programs and spending, were anathema, if not, opposite for growing an economy?

Perhaps there is a little bit of politics in the BOV stats? Maybe! However, Chavez has a way of winning elections.

Nuff said!

House to back stimulus plan?

What did we expect?
http://www.ft.com/cms/s/0/78fe2494-ecd1-11dd-a534-0000779fd2ac.html

Well....it's off to the senate, for a political battle. The senate will lose, but they will debate the hard facts about this stimulus package.

Senate Republicans will lose nothing. But, they will gain respect from their supporters and ordinary Americans, while they like Obama, still, do not like wasteful spending.

Nkunda arrested!

About time.
http://www.ft.com/cms/s/0/8fa414de-e98d-11dd-9535-0000779fd2ac.html

General Laurent Nkunda, is the Congolese Tutsi rebel leader, who has been fighting against government of Congo.

It was reported that he had aid from nearby Rwandan military and government officials, however, this report shows that there was a joint operation to take him down by both governments.

It is over and I am glad, the EU did not have to get "too" involved in this.

Stimulus Plan? Really!?!?!

I'm one who thinks that the new stimulus plan for the US being debated, is not as much of a stimulus plan but rather, it is a massive subsidy plan for Agriculture, the Environment and Education.

I would go further to say that this bill; " The American Recovery and Reinvestment Bill of 2009", is a little inconsistent with its objectives.

For example, if they were serious about stimulating renewable energy, they would have placed an emphasis energy efficient transport, ran by renewable energy in their section dedicated to transport. Also, they made reference to retrofitting Urban Development dwellings with new energy efficient means, so they know that it would be useful for transport as well.

Giving a subsidy to transport, as the document showed in title XII, without articulating transport with renewable energy as most of this bill seems to be centred around, defeats the purpose of allowing renewable energy to flourish all around and be a pillar of growth for the American economy. At least, it would be a little difficult for alternative energy to emerge as a real pillar, for America "right now"--something this stimulus plan is supposed to be for; "right now". Reason being that it would be difficult, because the gas and auto-mobile industry, have lobbied effectively against alternative energies, so, strengthening them, defeats the purpose of allowing alternative energy subsidies--wasting money.

To be fair however, this bill, should be entitled for all intents and purposes; "The Environmental and Education Subsidy Plan, 2009". The "stimulus plan", in my humble opine, does not actually deliver a meaningful stimulus plan. It just delivers an alternative energy subsidy, on top of the agricultural subsidies and increased 'special' funding for education.

There was hardly, or, very little, mention of small businesses assistance.

If you are serious about providing a stimulus, you would have made sure small businesses, got credible tax relief and very handsome subsidy programs along with patent and diversity programs. While they have a section dedicated to commerce, the funding for which, is pretty weak. In fact, compared to the other major headings, you would have missed any inclination to have a small business facility at all.

Now, a big issue bandied about is a 3k tax credit for employee's. However, how is this supposed to do to stimulate innovation--which the USofA, desperately needs? On top of that, how do you improve innovation, when patent making is not even mentioned? While they allow small business tax breaks for having two to three licences for business persons, it does not go far enough.

With this stimulus, seeing that America is the self proclaimed leader in the world, there should not be protectionist provisions like how we saw with the Agricultural subsidy program in this bill--which really is what it is. The WTO would have to take a hard look at this, if they truly care.
Defence got a very small bone in this, but not certainly tied heavily to new science in defence. This is keeping with the commitments on lowering defence systems as a Democrat mantra.

More importantly, the environment and issues related to the environment, got the lion's share of this stimulus package. The budget provisions are mentioned either directly, as in the title subjected to itself, or, snuck into other headings and sub-headings such as transportation and/or urban development.

I guess when president Obama said he will be investing in the future of Americans, he meant it.

Moreover, there is allot funding for funding the bureaucracy that will overseeing how the money will be doled out. In fact, bigger government would have been a no-brainer. If this is the case, they will have to re-invest the administration fee's after they have been rolled out this year--I know it won't be enough as government funding, never is adequate.

This was a good thing. But, will this monitor progress, rather than just be another agency to do basic administrative work? This would have worked far better, at the same time training people to do more introspective governmental services.

Furthermore, while state government's get 80 billion, out right. The 80 billion, is for education purposes, primarily and half of the other portion, is for the administration of this 80 billion. It's a total wash. We need to get people back to work, not back on their tail feathers in the classroom.

So much more things could have been done, if there wasn't so much politics involved in this stimulus plan. These house and senate democrat's that president Obama inherited, will get him into serious trouble. He had better re-evaluate this plan and include some real stimulus, or else he would be a president who spent allot, to get nothing.

Up to the minute US House document, here:http://appropriations.house.gov/pdf/RecoveryBill01-15-09.pdf

Summarized plan, here:http://beacheconomist.com/Appropriations_Stimulus_0115.pdf

My response to Martin Wolf at the FT.

Below this message, is a response I made to Martin Wolf over at the FT. This was in the Economist forum, where they don't allow "small fries" to respond to their FT blogs, unless it is really worth the salt and you can show some merit.

Basically, the blog is for senior economists, for us to watch them talk about the issues. I, in my Bahamian attitude, shunned the idea and wrote something anyways.

Can't stop me from articulating my point, aye? This is why I like my own blog!

See article here:Why Obama must mend a sick world economy
January 21, 2009
by Martin Wolf
http://blogs.ft.com/wolfforum/2009/01/why-obama-must-mend-a-sick-world-economy/#comment-43459

-------------------------------------------------------------------
Hi Martin,

I could not disagree with you more about the causes of this financial crisis. (which really is a lack in confidence to do business, rather than a lack of true credit and insurance to issuing credit--as world central bank's have stepped up to the plate)

The matter is and has always been false valuation and pricing. We have had a false global economy, fueled by false price inflation and, less directly, unfair dumping subsidies.
No one knows where the bottom of this financial crisis is, because no one knows what the real prices of things are and should be.

Also, the financial firms don't have trust in one another and other diverse large companies (like GE and GM), in the "free market", to, one the one side, give them true and fair valuation's on assets and assets that are "un-tainted" by the now toxic debt, which, in my mind, can never be recovered and the financial practice that led to it's confusion- shorting CDO's- should be banned for ever. But, on the other side, firms are not sure if they would be getting financing at a steady fair interest rate, because they are not sure which bank's are in deep red, from all out bankruptcy.

More relatively, before we had the bursting of the "bubble", we had sky rocketing home prices as well as other stocks and now, we have had a mass deflation of stocks and prices--whether demand was constant, induced or strong.

You can't even argue that the massive amounts of losses in housing, massive write downs and now, losses in stocks, was not due in part to falsely inflated asset prices--this is why the rating's agencies, took most of the blame in this mess as well and as well they should!

A typical example is in the oil market. When demand was going down, prices, kept on going up under false assumptions of the price of oil, fueled by false pricing mechanisms that, for all things, did not price on demand variables. There was and is no variable for "excess credit" in this equation at all--it was false pricing, to start with.

The other issues you mentioned, may have happened as a consequence, but, certainly, not anywhere near the root of the problem if we really would like to fix things!

Fixing things, in my humble opinion, starts with 1. regulating the derivatives market and 2. putting SOX type regulations on ratings agencies.

To all of this now, you have to thank Wall St., Old Broad St. and Canary Wharf, Tokyo, Brussels and China.

Best,

Youri
http://globalviewtoday.blogspot.com/

p.s.
You can get my relevant background, from my website profile at the left hand side of my blog.

President Barack Obama!

Needs nothing more added!

Youri

What is Corporate Governance?

In light of recent events with the Satyam company in India, with it's principal defrauding investors out of millions and running an accounting fraud comparable on scale to that of the Enron scandal, a good hard look at what exactly is corporate governance, for the sake of the Indians, should be explored as a way forward for this emerging market.

With this, since the Enron and the Worldcom scandals of the USofA, the idea of a better corporate governance, has gotten traction within the circles of governments and companies, world wide. However, to what extent is a good corporate governance structure feasible and to what extent is it economically efficient? Also, with the free market model of India, how much can the Indian's learn, or, unlearn, from the merits of current corporate governance models --or the lack there-of?


The most noted legislation on corporate governance in recent times was the Sarbanes Oxley Act, 2002, in response to the aforementioned scandals that hit the United States. The legislation laid out 11 articles; Public Company Accounting Oversight Board (PCAOB); Auditor Independence; Corporate Responsibility; Enhanced Financial Disclosures; Analyst Conflicts of Interest; Commission Resources and Authority; Studies and Reports; Corporate and Criminal Fraud Accountability; White Collar Crime Penalty Enhancement; Corporate Tax Returns and; Corporate Fraud Accountability.

The extent to which these points, mitigated any corporate fraud or malfeasance, is debatable. However, it must be noted that the amount of corporate frauds have in fact decreased.

On the other side of this, we have had smaller and more unique investor type frauds, which effect on a more personal level. The types of scandals that are characterized with the recent investor swindling by the one Bernie Madoff. And, also, less reported, is the unholy alliance between Washington politicians and lobbyist--something, which the SOX did not, or, could not, factor into this bill even if they really wanted to.

For obvious reasons, of course, penalizing, or, raising the risk for Washington bureaucrats, would have been met with extreme criticism and perhaps, blockages--to say the very least.

More importantly, a post analysis of SOX, has revealed interesting findings and has sparked debate, in regards to the effectiveness of SOX.

SOX, seen by many analysts, has pushed American investors and possible American investors, into the arms of the EU- the UK in particular. The alternative investment market regulators in the UK, which has exploded since SOX implementation, has given the implementation of the act credit for bringing investment from the USofA to the UK. Reports from respected institutions, have all been aligned with this cause and effect.

The suggestion's now, of what can be ascertained by this economic re-allocation in resources, is that; is Europe less governed by a high degree of corporate governance standards than that of the USofA?

Considering that the EU and in particular the UK, have been following the Anglo-Saxon model for capital markets and market economy, makes the analysis on this issue a little more complicated. However, there is a simple enough explanation to all of this. And, that is, the degree to which the European companies and governments, are socially, and, inherently, tied to that of their communities and the wider economy.

There already is, by all intents and purposes, a "built-in" social responsibility model of behaviour within the European Social Market Economy model that precedes any notion of corporate governance accountability standards.

Epitomized in their high welfare transfers on wider scale and not on individual average--as with the USofA's high transfer individual averages-- Europe, has been acting socially responsible to investors and to the wider economy they serve, as a matter of being. One may say, it is the way it is.

This, is to say, explicitly, that investors and CEO's, are a part of the social fabric.

This, while obvious, is often forgotten and high end investors, at the same time they have taken on an aura of majesticism, tied to their mastery of financial and business affairs.

In addition to this, higher tax and tax transfers, are a way of life in Europe, along with the high price of goods and services, on scale and per average, than that of the USofA.

All of this leads to the idea that, while, per capita and per country-- comparability to the USofA and any other European country per population scale--, Europe, has developed a keen sense of economic profit making, built on the Anglo-Saxon model of capitalism, but also, increased with it the idea of social welfare and programs, which benefit the country from the proceeds of all economic activity. From greater training, to higher umeployment benefits and training to the unemployed and, more acutely, family oriented programs such as health-care and very generous pension schemes that are patterned for not only the recipient, but, post death transfers to spouses in particular.

This is what underpins performance in regards to corporate governance and responsibility and, sets in place, a higher level of corporate responsibility on corporations in Europe; because, they serve too many, with too many in dependence in a greater way and, an already larger per average government, which also watches and depend's on the developments in the private market.

While this suggests that government corruption is a way of life in Europe and, in many instances, like Eastern Europe, Italy, France and to a lesser extent, the UK. The flip side of it is that while taking of little from the many does in fact take place by some, to the extent of which it is inherently pervasive and on massive scales where it corrupts the system, is not equitably comparable to the USofA--enough so for constituents, to lose faith in the system as one that takes too much, and returns to little. In fact, the relation to the kind of tolerance to what some may consider government corruption in Europe, is something for another discussion.

What has to be said now, is that any idea of enforcing and before that, legislating, corporate governance standards on business, must be precluded by an attachmed foreword on the importance to the greater society it serves.

It is common knowledge that he US social and free market model, seeks individuality, over that of the greater social need and good. This is what makes America strong on one end with individual freedoms and the right's to express one's self the way he or she sees fit. But, on the other end, leaves individuals detached from the society they serve and void of sound sense of duty and responsibility, to preserve the integrity of the social fabric and the institutions that uphold it as a collective. In a nut-shell, bi-partisanism is a way of life in the USofA. The conflict model for maintaing order, check's and balances, is what has held fast to the US social and market resolution institutions.

While this by no means is a plug for higher welfare transfers and even more taxes on business--as in fact, SOX, in effect, is a tax on business. And, also, by no means is this a plug for the US to move towards a more European Social Market model.

However, this is a plug for a greater cohesive responsibility, for all governments, to the extent that it ties in a greater amount of people into the economic success of what makes profit.

The calls, amidst the current bail-out packaging of the auto-industry, is that the industry was too important to fail because it is responsible for allot of other smaller, support industries, which may have gone under if the auto-bail-out was not awarded. While this was a good attempt, the initiative and calls to and for it, rings hollow if in fact a greater responsibility by the auto-industry in the US does not include more into it's structure and diversifies it's model, both production and transfer of payments, to include a a greater proportion to scale to what they have now.

In fact, as opposed to the financial bail-out, the US auto-industry, did not "need" an auto-bail-out. But, it wanted one, because the financial markets in the private market, had failed them and were going to fail them in the near future. So, they acted before a disaster did happen--it turned to it's government. That's responsive action.

This, moving forward, should be in the front plate of India post Satyam scandal. While making it to big to fail, would not be a panacea to the structural problems either. However, making it too big and too diversified to investors and the greater society, would make it infallible and synergies of investment support in cash and in kind, would bolster any company, industry or capital market, past bleak times.

That is what corporate governance is and is supposed to target.

It was just a matter of time...

...before Gordon Brown and the Labour Party, decided they were going to use Northern Rock for political purposes.

The up to the minute word I plunked from the blog site, Calculated Risk, states that the Telegraph, a British newspaper, is reporting that The Labour Party will be forcing their state owned bank, Northern Rock, to issue more mortgage loans.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/4285088/Banks-bail-out-Taxpayers-may-take-shares-in-Barclays-and-HSBC.html

Didn't they just nationalize Northern Rock because they were giving bad loans and was about to go under? Hence, the UK government had to bail them out by nationalizing it?

It took him long enough...UK elections are in 2009 before September. Count on it.

Where's the Obama stimulus plan?

I keep hearing about the Obama stimulus plan, but can not find it online or on any other economic forum, anywhere.

The figure is set at about $850 billion dollars over two years, from every other source I've read. However, no one has yet posted any draft or document about what it entails.

Something is a little wrong about that. How can you talk about something, if you don't share what it is you are talking about?

Someone show me the plan!!!

Youri

A cease fire...or a "cessation"!?!?

It appears as if there is a cease fire, being observed and I hope acted upon, between Israel and Hamas.

If you don't know already, Israel invaded the Gaza Strip late last year in an attempt to root out the terrorist elements in the Gaza Strip being aided by Hamas--the duly elected government.

Well, in my reckoning, considering that Hamas is being labeled a terrorist organization by many international organizations, including the USofA, rooting out terrorists, may be problematic, especially when Hamas is the elected government--surprisingly democratically-- of the Palestinians in the Gaza Strip.

Thus far, Israel has called for a cease fire: http://www.washingtonpost.com/wp-dyn/content/article/2009/01/17/AR2009011700592.html?wpisrc=newsletter

Hamas, has also called for a one week cease fire, although shortly after Israel said it would ease the tensions:http://www.ft.com/cms/s/0/d1c3bf8e-e570-11dd-afe4-0000779fd2ac.html

I guess Hamas had no other choice, as it was being totally obliterated by the Israeli forces. Better to call an end to it, when you know you really can't fight the battle on a sustained level.

But, will this be a true "cease fire" or just a "cessation in hostilities" (as some diplomats may prefer to label it). You decide!

However, considering that president elect Obama will be inaugurated this Wednesday (Jan 20th, 2009), it is odd that Israel, would call for a cease fire now--when they know the Obama administration, would probably not aid their campaign in the middle east the way the neo-con's or the Bush administration, would.

The Israeli's said it [the invasion] was about taking out Hamas and in particular, the terrorist's that were lobbing rockets into Israel. However, what has not been told, is that evacuated Jewish settlers who were once in the West Bank and the Gaza Strip, have been savagely attacking their Arab neighbours post evacuation--most likely, prompting the rocket attacks.

Israeli Prime Minster Ehud Olmert called the attacks by the Jewish settles on their Arab neighbours in the West Bank a "pogrom"...shortly afterwards, Israel started an attack on Gaza.

Time will only tell what will happen in the next few weeks. But, if this is the case that the Israeli's, are afraid of an Obama administration line against them, then, this invasion of the Gaza Strip showed cowardice and is wrought with deceit.

ECB cuts rate to 2%

http://www.ft.com/cms/s/0/0f1cc64c-e2f5-11dd-a5cf-0000779fd2ac.html

I like Trichet's style, he says he will never cut rates, then cuts rates and then, says, he is wary of taking them too low--keeping the crowd guessing, is a good thing.

Surprising the market, evoking a positive psychological response, works well--it balances out the short term speculators, and gives stocks a chance to rally amidst new and fresh capital with long term forecasts, optimistic about overall deterioration.

Lamy will get a second chance!

Well, Pascal Lamy, the ineffective Director of the WTO for the past 4 years, will waltz into a second term as director of that organization, unopposed, as no other candidate, filed papers by the time of the deadline of December 31st, 2008.

No other country thought of sending in a candidate for leadership of the organization. That's extremely odd and troubling. Perhaps the Doha Development Agenda, is more complex and more at a critical position, than the outsiders can bear to witness. And,. truly, you would need key people in place to keep the balance of the progress they have made--perhaps it's all for nothing.

That's a shame. This would have been a perfect time for a US or an Indian/Brazilian director, to help steer the organization past the Doha rounds' deadlock on subsidies on agriculture--more particularly the deadlock on that issue between those mentioned countries.

Also at the root of the subsidies issue, is the EU with the CAP (Common Agricultural Policy)

Lamy is a Frenchman. So, his blockage is peripheral and his presence, should send a signal that he is the reason why every one else cant move forward because of his apparent lack of sensitivities on the issue.

So, apparently, we will get Lamy again for another term. Sadly, the gains we had on the agricultural issue, can be credited more to Ambassador Falconer than he.

In any event....this is what we have for 2009 and beyond. I have little hope for the Doha as it stands now. Unless Falconer will have a greater say in the progress, with little or no political posturing by Lamy, this Doha is more of less moribund--especially with protectionism looming amidst this global economic crisis and, Obama not being keen on addressing the multi-lateral system the way a free marketeer would.

India has a fine little corporate scandal going on!

Here are some articles about what's happening now with the Indian outsourcing giant, Satyam.
http://www.ft.com/cms/s/0/b2c01b54-e274-11dd-b1dd-0000779fd2ac.html
http://www.ft.com/cms/s/0/457a5e62-e209-11dd-b1dd-0000779fd2ac.html

Mr Raju, the companies disgraced chairman who has an 8% stake in the company, is under heavy investigation.

The World Bank has barred the company from doing outsourced work with the bank for at least 8 years.

Here is a better Time line of the events.
http://www.ft.com/cms/s/0/24261f70-dcab-11dd-a2a9-000077b07658.html

It's not in depth, but it shows exactly the more salient points of this disaster.

Moreover, Mr. Raju has been "cooking the books" and creating a billion dollars worth of capital on its balance sheet, out of thin air.

The company is under government mandated auditing by Deloitte and KPMG auditors. PwC, the former auditing company, has been dismissed as obvious as it seems.

I guess the Indians are learning the free market system, well!

This is a prime example of good and relevant corporate governance models, must be implemented in the emerging economies to ward off such massive frauds such as this.

Stat Counter!

I guess all of you who read this blog--the ten of you--if that-- have probably noticed the stat counter on the right hand side of this page, right above the ratings gadget and the archived section of the posts.

I know it is a bit late to put a stat counter on the blog, since I have been in operation since last year November. I should have rounded up the stat counter to show how many times I think my blog has been peeked at, and use my profile visits as a guide.

But, I wanted to start at zero.

Just for your information!

Youri

The War shifts!

The war in the middle east--not the recent conflagration with Israel and Palestine. But, the real war in the middle east with the USofA and the rest of the Arab countries.

Contrary to what pundits would say that America is not doing (going to war with Arab countries), the fact of the matter is it is in fact a war with Arab and Islamic countries.

Now, the war and it's staring point from either side, is too confusing to unwrap. Too many emotions and mis-information's and mis-interpretations on what's bad, good or just or unjust on either side, to say that there is a definite agitator.

For example, Osama Bin-Laden has said that his actions and the actions of many of the Islamist's, are as a result of US imperial polices in the middle east. He has said that the monopolization of the middle eastern oil and the buying of middle eastern governments, like the Saudi Government and even with Saddam Hussein's Iraq at the time, are the types of polices he says has held the Islamic people back and under the foot of dictators and infidels.

On the other side, many US officials say that their recent position they find themselves in with Islamist's, start right there with the 9-11 attacks. In fact, if they were to tell the entire story, the attacks started with the bombing of the USS Cole and further back, the hostages being taken after the Islamic revolution in Iran in the late 70's.

But, many pro-America proponents blame Islamo-fascists in their attack on 9-11 as the gauntlet, being thrown down. Of course, this theory, neglects one simple fact that US engagement in the region, goes back to the second world war until now. This theory propounded in intellectual circles, is also lacking understanding in Islamic understandings on what constitutes and insult and oppression.

Here lies the problem with the US news media and the disconnect with officials as their extension, on how in fact did this mis-understanding--that has caused any lives-- came to be.

This, from my perspective, keeps Americans perpetually confused and angry with their politicians and news sources, while the war in the middle east against Arabs rages on. I say that, because, Arabs and Islamic fundamentalists, see this as a war against them and they have a right to feel so.

However, in recent times, and, right before our eyes, the war has shifted. The priorities has been shifting, ever since the troop surge success in the Iraq war. With also a change in president's in the US and changes in Secretary's of State, there is also a shift in tactic on engagement in the middle east.

So, here is what we have now:
1. Iraq is going to get less and less attention, as the troop surge worked.
2. Pakistan and their un-policed tribal area, is going to get focus (this is upon the last meeting with still Sen and new vice president Joe Biden with leaders from Pakistan, Afghanistan and Iraq)
3. The premium placed on the importance of a nuclear free Iran, by president elect Obama during his campaign stump having being quoted as "nuking Iran is an option" and Sec. of State elect Hillary Clinton, with her new approach to engagement in Iran at her senate confirmation hearing.

The war in the middle east is shifting right before our eyes. Priorities are being re-arranged. How will the world leaders manage this change, is beyond me. But, I do not expect for war in the middle east, to come to dead halt in the next few years.

Obama: Let Bush hand out the rest of the TARP funds!

You would be a fool if you were to let Bush hand you half of a problem. In fact, there is no reason why the Treasury, as it stands now, can't roll out the rest of the TARP funds they handed out--at least the first half of it--with no true oversight or way of assessing what they did with the TARP funds in the first place. They started it, so they should be able to finish it.

The reason why I take this position, because it looks painfully obvious that there is politics, being played in the financial markets. High rolling investment bankers and industrialists, were always conservative and roll with the GOP. This bail-out, handed out with ease to the financial markets, in relation to the more than stringent stipulations on bail-out for the auto industry, is proof to who's side Bush and the GOP lend their support to, first.

Now, the automobile industry got their bail out, at the last minute Bush gave it to them, with much wrangling on how it should be rolled out. The same did not happen to TARP, the same is not happening to TARP post first disbursement and the same is not happening with the second roll out to come. In fact, Obama ha asked for Bush to roll out the rest of it before he leaves office. Better that than you doing it yourself--then you are culpable for the entire kit and kaboodle.

Bush is one shrewd cat. If it fails and blows up in every one's face, both he and Obama are left to blame--he less that Obama, because he has the position of being forced to act, rather than for Obama, who is and will have to act after he receives new evidence on how the TARP is and has actually worked.

If it works out on the other hand, Bush will look smart for acting in the first instance and Obama, will look as if he is forced to follow conservative doctrine. That in itself, speaks volumes.

Obama is in a no-win situation with the TARP bail out. The best he can do, is simply, go along with what the bail-out plan was and then, add retro-active stipulations on transparency in how the money--owed to the US government--is to be retrieved and spent and how we have to monitor progress, moving forward. Hence, the new calls for newer ways of assessing economic sectors by he and his team.

So far, allowing Bush to roll out the rest of the TARP money, is the best and only bet Bush could have allowed Obama to have.

The end of the Free Market!

The Free Market Capitalism idea is dead as it is now. The multi-lateral system, also, is at a state of exhaustion with no clear form on how to move forward. I feel that the unabashed truth, would save allot of people thought time, in regards to trying to salvage back to form either of the two. But, for the sake of this article, the free market in regards to root level economic activity is gone. For good reasons, for many different reasons, as well.

Let's take a step back and look at what's happened. For one, the credit taps were turned off in the USofA and around the world, especially free market democracies. Analysts blamed the sub-prime mortgage exposure and the over-leveraging of sub-prime related trading activity, as the root cause of all of this. But, really and truly, does anyone expect us to believe that sub-prime derivatives- a widely opaque financial instrumentation- is the sole and root cause for banks to not extend credit? Even in light of healthy bank balance sheets, especially in the UK and the rest of Europe? Would, and, should, anyone really believe that is the case, considering the variety of other financially related instruments traded on a daily basis?

No. The free market, in this sense; lending or not lending and investing or choosing not to invest, has shown itself to be true. No one is forced to lend money to anyone under any circumstance. Thus, the free market prevailed! But, it is not the free market type of activity folks were accustomed too. Certainly, it is not the type of free market behavior, in sync with production and investment growth. The chances of the free market rearing its ugly head and for it, choosing to do what it wants to do with what it has, cannot be relied upon for everyone esle's benefit. Government, will have to do something about it. What an ironic cycle of events.

Same thing with employment, no one is forced to employ anyone at anytime if they don't want to. It would be wise to hire someone to do work for you, in order to provide certain economic value to your goods and services. However, employment, for anyone, is not a guarantee. It is a privilege and an opportunity to seize upon, but by no means is it a given. It simply can't be guaranteed to anyone, or, everyone at any time they choose. It's a myth.

Government has met it's match in regards to regulation, however. Governments' past have over taxed, over burdened, forced unfair operating practices and over regulated regular businesses like; the automobile industry by way of uncompetitive wages and safety standards; the clothing industry by way of high taxation on imports and exports; the commodities industries by way of linking them to subsidies and tax breaks, hurting us all and more recently; the software industry with levies, upon levies, on companies like Dell and Microsoft, forcing them to create and/or share their creations, in the means of anti-competition regulations, over taxation and fines on the basis of freeing up any form of monopolization said software companies may have, all in the attempt to subsidize government officials spending sprees.

In fact, the free market has been dead--or non existent-- for quite some time now. This time, with the financial industry--with their last movement of freedom (their unwillingness to lend at a time where the country and world needed it)--will cause more regulation to come. Reason why? It is unheard of and morally wrong that people, in a free market society, as many claim, can't get their hands on credit--money, in simple terms.

The political ramifications of such freedom, placed in the hands of a concentrated few individuals, is stark and the effects of not meeting the demands, are evident. The TARP (Trouble Asset Relief Package) laid out for the banking industry by Sec of the Treasury Hank Paulson, endorsed by the Bush administration and the US Congress (who were pulled into voting for it very sheepishly by their shameful display of lack of understanding of the issues, by the US Senate and the news media the second time around), has showed you the lack of resolve by current state legislators on how to treat the financial system. Basically, cow-towing to the banking industry's demands and threats, evidenced by a $350 billion dollar first half of the TARP bail out, with no delineation on how the money should be spent. To, now, not being forthcoming on how was that money spent. To, now, even more startling, unashamedly asking for more of the money, even when they have fritted away the first half of the bail out TARP funds, by consolidating other banks and not re-arranging their banking practices.

The big issue now for the new Obama administration, is how to go about curbing the influence of the financial sector on policy? For one, the Federal Reserve can't be a lender forever and now, even as a lender of last resort, runs the greater political and economic risk of creating a secondary market, making the current private and "free" market system null and void.

So, whether or not you think the "free-market capitalist system" is worth salvaging, or, the free market is dying, or, the free-market just died, or, the free market never was--fact of the matter is, in regards to business and economics, at least, the free market is no more. When or where it was no more, is of little consequence if we can ever unwind that position.

Live to lead another day!

This is the story behind the premier of the Turk's and Caicos Islands premier, Micheal Misick and his apparent escape from political noose--staying his execution, perhaps?


Premier Misick- if you have not heard the story before- is going through a messy break up and soon to be divorce, from his Hollywood actress wife, Lisa Rae-Misick, which, beforehand, sparked calls and scrutiny from the opposition party in the TCI for mismanagement and an overall dereliction of duties. All of this, being prompted by the lavish lifestyle the premier was leading with fancy, high profile trips, to and from from California, on a private jet, of all things.


The calls for, at least, a closer look into his public dealings, were heard loud and clear by the sovereign country, Britain, from their opposition leader, Floyd Seymour, the leader of the People's Democratic Movement (PDM). The PDM may be small in numbers, but they sure have allot of moxey.


Premier Misick's party MP's, Progressive National Party (PNP), have already signed a petition stating that they no longer support the beleaguered premier. They were, as reports indicated, set to give him the boot at their party's leadership convention, scheduled for last year December. However, premier Misick, has been given a stay of execution (of sorts), as the party pushed back the leadership convention to February, 2009. Hence, the premier is living to fight and lead, a few more days until that time and whether or not he should stay or leave, would be made certain. And, starkly, the premier, has not been sitting idly by while anti-Misick proponents sharpen their knives for a carving.

To this date, premier Misick has assembled a team of hot shot Bahamian lawyers. Most notably the chairman of the law council in the Bahamas, Mr. Wayne Munroe and, also, the former chairman of the Progressive Liberal Party (PLP), Mr. Raynard Rigby. I guess the premier feels justice, must and will come at a price, so, he is apparently more than willing to pay for it to the hilt. But, is it money well spent? Perhaps justice in the TCI from their Bahamian cousin's to the north, would not compute to actual tangible assistance in the British territory.

While the gravity of the situation, warrants an all star cast as the premier has assembled. The seriousness of it, from his own party members and then the opposition party officials as well as, now, the media, being driven against him with the people in TCI screaming more, more, more!!! Hot shot and pricey lawyers from anywhere in the world, will only part of his over all cost. Forget the jet-setting, lavish new lifestyle for a minute, there is also a direct political cost and consequence to be paid to and for the people of TCI--who have, by many reports, fallen out of love with the premier.

The real issue, is the issue of the political sentiment for change, overall, from "belonger's" in particular and, premier Misick, has not even come close to addressing that myriad laden issue.

From my first column about the premier's current crises, I received scores of emails from people on the island or from the island, who have just simply had enough. Not that it's all Misick's fault, but not even appearing to deal with the core issues, is enough to mount a mass protest against his leadership--above all else.

Now, I don't have a full appreciation of the entire socio-psycho fuel driving such sentiment, but, it's there and it's the nitro injected fuel agent to the vehicle of discomfort, driving the people in TCI to put pressure on all leadership. I can appreciate, however, the feeling of any group, city or company, going through that--the perfumes begin to smell like dead bodies; the food tastes like salty wet cardboard; the streets look dull and dingy and; your heart is perpetually grieved. The poison has spread. And, all of what's happening-- from the jet-setting to the administrators coming in from Britain-- made it spread much more than it needed to.

The formalities of political demagoguery and, posturing, by the opposition and persons within the PNP wanting to save their political careers as well as usurp power from any premier, is almost a given.

The calls of mismanagement, if brought up by anyone or thing in the country--considering how we know government's all over the world can never, ever, get it right-- is obvious. But, that is still no reason for Misick to even appear to jet-set and go all "Hollywood" on us, either. No hot shot legal advice from your cousins in the north, can solve your own political style and the way it is perceived, premier Misick. In fact, you need a PR firm, if anything. But, the truth is the truth--as the people see it. And, the truth is, the folks just not only do not like your leadership style anymore, but, are pissed with the entire scenario of how its unfolding, all at once.

That's the issue, premier Misick and, in addition to it, you, have apparently let the power bug bite you. It's simply too much, too soon, for folks to have to take this, from such a bright and promising individual like your self. To be caught up in management and political conflagrations, as the ones you are in right now, is too much to have to bear from the people who elected you.

So, my friendly advice to my "cousin" from the south, is; forget about the high priced Bahamian lawyers; forget about the rantings of Floyd Seymour and the PDM; forget about the impending messy divorce; forget about your own party members wanting your head on a platter for their own gain; forget about Britain and their forensic administrators (although you must make sure you have nothing illegal to worry about) and; lastly, forget about being premier in 2009. Simply, just step to the side. Live to fight, or, in this case, "lead", another day.

The damage you have done to the psyche of the people of TCI and the damage you caused to the moral confidence your party had in you, is enough to make you want to step to the side--for the good of it all.

MP's in your party, are going to lose their seat in the next election, unnecessarily, because of you. It's a given. Not only is the house in TCI too lop-sided, but for everything else, you, getting away with whatever it is the people in TCI thinks that you got away with, will cause a massive socio-political backlash. The political risks have been exacerbated. The thinking by folks, is that "it just doesn't 'feel' right!"

The only thing, really, you can and should do for the party, is to make sure they don't lose the government and that means, the poison injected into the body politic in the TCI, made apparently worse by your management style, has to be removed. It may not be fair, but its politics.

That's no offence, either. But, it's just how the people see you related to the "issues". Because, if you stay, I can almost certainly guarantee you, you, will cause a massive shift in power from the PNP to the PDM. It's that bad, I'm afraid.

So, save yourself and your party's leadership in TCI. Get out of the limelight and get back into your own constituency and hope that they, truly, take you back into their bosom as a man who made mistakes, but not inherently a horrible leader and person. You're still a relatively young man-- with leadership experience-- you "can" make a come back.

But, right now, with people frustrated in TCI and the global economy, making things much more uncomfortable, they will pay you and your party back ten fold in the next general election. You can, however, make the damage, for your sake, more manageable for your political future and the career's of your party's MP's.

To be totally frank- as it stands now- I don't see you, as leader of the PNP, winning the next election.

Live to lead another day, premier Misick!

Down with Blago!

Well, not exactly 'down' with Blago. But, I'm down with Blago! Down with his shtick and political gamesmanship-- a gamesmanship that has not been seen in decades in American politics, to this degree. To a political animal, like myself, this is quite a lovely spectacle. Only if there were not serious charges for Governor Blagojevich to answer, it would be a good show. But, corruption, even in Illinois, is a serious issue--especially since it went national, with the president elect called to answer.

Governor Rod Blagojevich, as you probably have heard by now, has been accused of trying to "sell", president elect Barack Obama's senate seat. There has been telephone conversations, taped by federal officials, where it can be explicitly heard that the Governor is looking to "cash in"on the senate seat, so to speak.

The telephone conversations are a bit gross to listen to. But, did he in fact mean in full context that he will sell the Obama senate seat? Were we getting the Governor in full context and meaning and also, took into consideration his flair for the obscene vernacular? These are the issues the Governor wants to raise and they are 1. The fact that he speaks like this all of the time and 2. He did not "actually and technically" exchange the seat for money.

What's weird is that generally, federal prosecutors, even when they don't have all of their ducks in a row, are always out in front and willing to talk about, or, take questions about why they can't go into detail with the case--media darlings, they are. But, the U.S. Attorney, Patrick Fitzgerald and his team, have been eerily silent on the matter. This raises more questions, especially when it is out of character for them not to "show out" and parade around the press meeting areas when they have a case, or when they feel that they can win--slam dunk, or not. Everyone knows, every single lawyer in the US Attorney's office is a "wanna be" politician. Hence, the vainglorious press conferences and profligate demagoguery to folks on the merit of criminal corruption and anything that gets them in front of the camera. This time, however, they moved too soon.

This raises an issue mentioned in the media when the Fed's finally came in and, as they would put it, "stopped the Governor from making a mistake". The Fed's used the old "intervention on the issue of possible intention", plank. Some folks in the media, especially on MSNBC and CNN, wondered if whether or not the Fed's moved too soon with no real case to prove? Over zealous was the Fed, as I would put it. But, in actuality, over zealousness, is a typical behavioral pattern of the personnel at the "Cinderella" department of the US federal government--who are [The US Attorney's Office] grossly over rated and I have the opinion that the FBI and US Marshall's, do a better job in fact finding, with out all of the political hoop-lah and fan fare as well as do much more in regards to bringing solutions to crisis situations.

My contention is, however; did in fact money change hands for this senate seat? Is there, also, a litany of other criminal activity by the Governor that coincides with him being labeled corrupt? This is the case the US Attorney's office has to make to the public. Or else, they would have caused this whole mess, all for nothing concrete--whether or not Governor Blagojevich is a corrupt politician, or not.

Now, if the case can't be proven--and from where I sit, the case is far from being proven and I feel this is a prime reason why Gov. Blagojevich took the fight-- what does this mean for his political future, which has given impetus for the Illinois state legislature, to take him onto impeachment proceedings--114 to 1 of the state legislature, voted in favour of impeachment-- prompting the Governor, to go out to a full court press conference, giving one of the more spectacular performances of a political lifetime. It was so brilliant and arrogant at the same time, that he could have won an Oscar hands down.

The issue now comes to; if the US Attorney's office does not have a case, then, the state legislature in Illinois, also, should not have a case. The precedent for impeaching a Governor, whether we like him personally or not, because we "think" he would have acted improperly in the future, is out right ludicrous and is not what America is about.

So, yes, I do believe Illinois politicians are using the negative press about their Governor, to sure up their own tainted image--one in which corruption and Illinois politics, are a way of life. The state legislature, as even the Governor admitted, did nothing out of character in regards to protecting their own image and political interests--if federal prosecutors, were to actually begin to "investigate" the matter rather than "speculate" on the matter, if whether or not he would do anything illegal, or not, we would have a resignation press conference, instead of the other way around.

I also do believe, they acted out of self interest and for their own political interests, in keeping issues status quo--the Governors, in most instances in the other states, are most reasonably hated by the legislature for different reasons. You can't please all of the people, all of the time and hence, the state legislature and the Governors mansion, are always at eternal odds if the Governor, has the power to sign, veto or amend anything that comes across his desk-- a look at what happened to former Governor of New York Spitzer when he fell out of favour up in Albany and what's happening now, perpetually, with Governor Schwarzenegger in California.

However, the issue moves on to, now, as it is seen that the Governor is apparently going to fight it all the way; what other tricks does the Governor have up his sleeve? The thought of more out of this spectacle, is enough to make a full fed terrier salivate.

Will the Governor, go on a state wide purge? Will the governor, shake up state staff? Will the Governor, open up investigation probes into corruption of other Illinois state representatives, up and down, rank and file? Will the Governor, find a way to say that president elect Obama, knows too well the Chicago machine in politics? Will the Governor, use dirty, down home political investigations to take the heat off of him? I am quite sure we can find more than a bevy of improper political activity in Illinois--some more serious than what Blagojevich attempted to do and certainly, nothing out of character with any state political machinery-- especially if we are to take the corruption ranking of Illinois, quite literal.

We've seen the Roland Burris senate appointment unfold and continually unfolding, which was a master stroke by the Governor, buying him some admirers and also buying him some time, politically and legally. We also saw this recent press conference, where the performance was beyond Oscar winning.

What will the Governor do next? I tip toe with anticipation, indeed!

What ever it is or will be, it is a show and in politics, the show means more than what the state legislators try to interpret as the law on any matter. What we can't forget with politics is that politics, is about what the people feel about the entire situation of what's going on the way the experience it. If they are willing to stick with their man, they will. If they choose to remember the good times, over the bad with their man, they will and there is nothing anyone can do about it

Hence, my ultimate conclusion that the Oscar winning performance of the decade in that of the Governor's post impeachment vote, in fact and quite directly, pandered to the people and the political sentiments of Illinoisan's--who, in fact, voted for Governor Blagojevich, not once, but, twice.

So, if they [federal prosecutors] can't prove a case of illegal activity, then Governor Blagojevich, politically speaking, isn't going anywhere!

Britain's stimulus plan examined PT 4--"Improving Public Services"

As promised, I am finishing my four part series on the British proposed stimulus plan, in the last pre-budget in November.

This part focuses on the part dedicated to the public services. The public services, as I mentioned in Part 1, would be critical to salvaging any measure of credibility in the Chancellor's office for fiscal prudence in this trying time.

I said that the public services, would have to be scaled back dramatically in light of all of this. This is unlikely to happen, but it had to be mentioned. The manner of tax credits and increased spending, would, or, rather, "should" have to come at a sacrifice of government direct spending. However, proponents of this higher spending, say that large budget deficits and greater debt, is nothing to be concerned with at this time. Funny they should say that as an issue to be discarded, as they do, in fact, put you in more debt.

More importantly, reforming public services would come as a result of this pre-budget in any event. For one stark example, the new ways and means to putting together a new and improved access to credit and public welfare, will, as a result, mean that some things will change to adapt to the new demands on certain areas.

Will this part of the pre-budget live up to expectations?

Let's see...

Pre-Budget report here...
http://www.hm-treasury.gov.uk/prebud_pbr08_repindex.htm

Chapter here...
http://www.hm-treasury.gov.uk/d/pbr08_chapter6_161.pdf

At the preface, the chapter said that it would primarily add more capital spending programs. No big dramatic thing to promote as every other government is doing it and has done it, post Keynes, in an attempt to stimulate spending and increase demand. Also, while they have admitted to job cutting to the tune of over 80k between 2004 and 2007, increases spending to job centre plus [their version of a government employment centre] to assist them with getting people back to work in the private sector.

Now is a perfect time for a firing freeze and I commend the Chancellor for this compassionate act as well as increasing employment subsidies, through the back door with job centre plus.

Moving right along however, this chapter does not ask the question of how this stimulus package, VAT cuts and all, will impact the functioning of the civil service? More importantly, what type of streamlined effect will the newer focuses, have on the labour force of the civil service? Will they, perhaps, move a few directors from the Labour Department to fill the void in the new council's set up for monitoring the effectiveness of the plans? Or, will they hire new folks from the private sector, to man government agencies that have in turn, soaked up other civil service employee's to fit the greater urgency and demand in other areas? Not addressed at all are these concerns and it will be a concern for effectiveness, monitoring transparency and at the same time, managing cost effectiveness of the government by having the right personnel, at the right time with the proper vetting, to oversee this very tenuous time.

Capital spending, is too broad and too bland to discuss. It's the same old Keynesianism. Nothing new and nothing to dramatic, as said. Also, budget deficit in all, and, considering that the UK has a better record on government procurement transparency, they will have the agencies in place to monitor pay to play! At least we hope so and for the Labour party's sake, they will not be riddled with scandal and sleaze, as a result of having their hands in the cookie jar, again!

Importantly over all, the Chancellor expects the value of the British pound to increase by 5 billion pounds over the next two years in relation to its spending targets on key areas which will impact government performance. This is their basis for all the the expanded government spending on health care and the synergies with that and education with the government debt. At the end of it all, it will be wort it-- he says.

While there is no connection, other than just the generalization that these two indicators will improve the value of the pound, what has to be considered as well the connection of the pound to what the main drivers are that affects it.

It is a common fact that the city, especially in regards to the financial services and management consultancies, affect the British pound. The city, pays for the top up benefits the folks in Wickam and Durham, enjoy today. A basis for saying the pound will be stronger, in regards to a value based spending program, when the current global economic crisis is hitting financial services world wide and now, hitting the wider economy, needs a little more explaining.

Now, I can see that providing better health care, would keep you with better workers. However, the city slickers, really and truly, don't need 'freer' health care. They, can readily pay for it. And, secondly, health care for new entrants, should not be a top heavy concern as younger people, do not have the chronic diseases that plague their older counterparts. So, health in this regard, is wasteful spending and more top up benefits to the poor class.

Education, is a key concern. And, one would have to see if the spending on education, would be geared towards beefing up the sophistication of the financial services. This is a given. Also, the UK, now with many reports from the leadership in parliament, are looking at strategic outcomes post crisis. One key outlook, is the need to be an exporter again, to gain more value to the pound against other currencies.

It is unlikely for this "new" export based economy, to emerge, let's say, next year when they value is to be realized as the pre-budget lays out. With higher debt and a loss in the financial services, with a weaker pound compared to the Euro, it is unlikely the 5 billion increased savings to balance out the huge spending, based on health care and education, will be reached. A better estimate to hand out, should be be no relative gain over such significant gain. In fact, they left themselves no wiggle room if things do in fact not shape out.

Lastly, I find it disingenuous, for the budget to suggest that it will increase spending and increase the value of the pound by enhancing output and also, put the UK in greater debt with greater spending over all in 2009-2010 all at the same time, giving no identifiable indicators on how to monitor performance as well as doing that in a time where there is no indicator to suggest when this global economic crisis will be over. There is just no connectivity to sure up these concerns, as critical as they are, and that impacting savings and value to the UK economy--even at the larger extent, as over that of the marginal.

I pray for a better solution to Britain. No doubt they will over power the situation, but at a time where emerging markets are increasing in power, the global power base is shifting and Britain, is the first causality due to it's exposure to debt and the old guards' way of doing business as usual.

In conclusion:

In ending this analysis, the pre-budget in Nov 2008 said allot, but went too shallow in delivering anything on how to go about showing us the way forward on a few issues. It is a good plug, with very sexy terms and exciting buzz phrases like "reducing VAT" and "capital spending" and other macro-economic terms. However, nothing much the UK can do to stave off the deficit, which it will be in for at least 3 to 4 years. At best. In fact, this budget, puts UK deeper into the hole.

But, the UK did something. And, did something quickly. Bank's seizing up in a capitalist society, is a no no. They did much better than Germany and the US, both larger economies and have greater economic power, but are heading the a crushing first half of 2009--with Germany, cruising for a crushing recession in 2009 with no recovery, seriously, until 2010.

This ends the pre-budget analysis and I hope all enjoyed.

See first three parts to the series here:
PT 1
http://globalviewtoday.blogspot.com/2008/12/britains-stimulus-plan-examined-pt1_10.html

PT 2
http://globalviewtoday.blogspot.com/2008/12/britains-stimulus-plan-examined-pt2.html

PT 3
http://globalviewtoday.blogspot.com/2009/01/britains-stimulus-plan-examined-pt3.html

Jagdish Bhagwati sounds alarm on Obama Trade Policy!!

I don't know why I have been so glued to the FT today, but today, the online edition seemed a little more meatier than the last few month's--probably due to the end of the year and the American elections, which solely dominated the news.

Now the FT has gotten back to form and this latest article in the comment section, by renown economist Jagdish Bhagwati of Columbia University, has sent out an official sound of alarm on Obama and his trade ambitions--or lack there of.
See article here:
http://www.ft.com/cms/s/0/bfd9e546-dda5-11dd-930e-000077b07658.html

If you would remember, I posted an alarm on Obama Trade last year November. One of the first posts of this blog. Well, I guess Mr. Bhagwati is making it a serious concern.
See blog entry here:
http://globalviewtoday.blogspot.com/2008/11/obama-on-tradewell-off-trade_07.html

We agree on agricultural subsidies and US labour unions and farm unions, having the back stop of the US government now led by Democrats.

There are two critical issues Mr. Bhagwati expounds upon now as a result of all he has witnessed. The first is the subsidies that the auto-bail out ended up in. Mr. Obama has supported the bail out and so do many of the democrats around him. This would be a subsidy in no other way and harms the multi-lateral trading system in regards to automobiles, unfairly giving US car companies a way to produce cars cheaper than their foreign counterparts and then, as he puts it, enacting countervailing duties, in effect, on automobile imports to the US as a consequence.

I have mentioned the auto-mobile subsidy before on another article here on this blog, as a point to note in regards to trade protection to the greater global economy amidst this global economic crisis. It is a subsidy and everyone knows it. It's been done, however.

Second point raised by Bhagwati, is the oncoming proliferation in bi-lateral agreements by the USofA. This was mentioned as a direct move forward by Obama in my article on his positions on trade mentioned in this blog entry. However, a critical issue Bhagwati raised is the call for "fair" trade by poorer developing countries, in effect, enacting US standard trade pacts for trade to the US and as a result, moving away from the generalized multi-lateral system where fair trade, is not a letter of the law WTO regulation.

As said, from the tone of the campaign stump, Obama, is not keen on this current global trading system and the US position within it.

Changes will come and you can compare my former blog entry, to that of Bhagwati, which gives a more up to the minute analysis, to how it has progressed and what to look out for and how to address it for a more free trading system.

Blogger gets it in South Korea!

Poor lad.
http://www.ft.com/cms/s/0/092a99ca-ddab-11dd-87dc-000077b07658.html

All he did was tell the truth the way he saw it.

Ah well, bloggers have it rough too, aye?

Does Blair hate Brown?

http://www.ft.com/cms/s/0/8b039386-dddb-11dd-87dc-000077b07658.html

Here is Tony Blair, who is out of the power structure of Downing Street of UK politics, saying that the UK's 'light touch' regulation, has in fact been very inadequate over the past few years. In fact, he states that it would have been a big political problem to implementing newer regulations which touched on stricter transparency in relation to capital requirements.

Why not stick a stake right through the heart of Gordon Brown, why don't you Mr. Blair?

Knowing the fact that Mr. Brown is now PM, suggesting that he was number to to you, while you were PM and knowing that he has a tremendous political stake in the matter and you don't--having left office--you put Brown at the centre of attention and the political backlash, which the city will impose on him on top of the growing economic dissatisfaction by the population in general.

Thank God the main economy, has less knowledge of High Street than High Street has of the main economy.

But, it was not a proper time for Blair to speak to government inadequacies on behalf of his leadership and then, mention Gordon Brown as a part player by admission, on his behalf no doubt, to their political conundrum on how to promote a better transparent and capital adequate city.

At this time, Gordon Brown's popularity took a tremendous boost amidst his leadership during the financial crisis. His government, was one of the first to respond and, respond with global solutions as well as enact domestic solutions.

This, should give the conservatives the type of firepower to use against the leadership of Blair, who's legacy, is now being managed by the current PM Gordon Brown. The Blair legacy is secure, in any event and does not need Brown or anyone, securing it for him.

This latest statement by Blair, may give an impetus for the Conservatives, to use that as a clarion call for all to get rid of labour and all of the rest of the Blair-ites!

Good one Blair. Way to shoot down Gordon Brown.

Palin needs to take a break!!

It's beginning to be a bit too much, to see Palin on the TV all the time--especially taking clips with the liberal media.

Her latest interview with Ziegler with the title "How Obama won the Election", is just a bit too much.

Palin fatigue? Yes. Just take a seat for about 6 months to a year, and then come back after you have observed the issues a little more.

She is already a star. Her name has star power. She is not going anywhere and folks like Olberman, know this.

Just take a break I say.....

Political breakdown in Zimbabwe!

Author's Chris Beyrer and Frank Donahue of the Washington Post today, could not have said it better!
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/07/AR2009010703077.html?wpisrc=newsletter

What will Obama and Zimbabwe's neighbors do about Mugabe.

It's just time to get tough and remove him Saddam style? Perhaps. I too am one who thinks that this should be at least in the top three options. However, will a removal by force make his party, the Zanu-PF, a para-military group by proxy?

I would ask for a complete military intervention, if I was sure the military would be on our side. There is no power vacuum and the opposition afterwards, the Zanu-PF, were to not turn out to be a military born faction, fighting for "freedom" post Mugabe!

Such is the issue. While Mugabe is a mutt with many fleas, taking him our by force may end up i a long term sustained war where they in-fighting may go on for years---with more casualties.

BOE cut's rate..Stock's rally!

The Bank of England cut rates again today and stocks have rallied today on the news.
http://uk.reuters.com/article/marketsNewsUS/idUKL843645920090108

Interbank lending has also gotten a little easier as well as Reuters has mentioned.

What does this have to do with the stimulus plan in the pre-budget of last year?
Will this affect the economy in a negative way?

I saw no purpose in cutting the rates this time, in any event. However, stocks have rallied in the midst of the cut.

But, stocks, have less to do with the real economy than does actual tax cuts and tax credits, as the pre-budget laid out.

I guess if there must be a stimulus, you can't leave out corporate UK.

Burris will be seated!

Nothing more that can be said about it. In fact, the Senate and the proponents who wanted him to not be seated--Sen Reid and Sen Durbin-- have no legal basis to not seat him.

Roland Burris, is the senate appointment made by embattled Illinois Governor Rob Blagojevich. 71 year old Burris was a former comptroller and Atty Gen. of the state of Illinois.

The main issue of contention by Reid, Durbin and Senators who agree with them--so they say--is that he has been appointed by the tainted Governor of Illinois. I think we all know about the troubles of the Governor of Illinois attempting to sell the senate seat of the now president elect Barack Obama.

The scene is embarrassing. It shows that the senate does not know the law. Also, it looks as if the senate are over-reaching their powers and trying to force Gov Blagojevich to choose who they want him to choose--or he would have to leave, if he does not.

I think Burris will be seated. He is not tainted. Gov. Blagojevich got away with it. Let it all die.

However, if I was Burris, I would not expect any assistance from my senate colleagues. This would make for an interesting choice on morals. For one, if they choose to not be civil to Burris, he does not have to be civil or cover up for any one's mistakes. He would be the ultimate loose cannon. He would have the right to vote on his morals and experience. I don't think Burris is morally bankrupt, because if he was, we would have heard it by now.

The Democrats have egg on their faces. They should just seat the man and let it be.

Refreshing Talent!

While we are in the midst of this current global economic downturn, the band still has to play on. The show must go on and, in this time, it can become very easy--even obvious because of how hectic things can become in managing your business-- to neglect critical "must do" things to maintain a sound and effective operation.

This is not an endemic curse on just private businesses, as Government's too are feeling the pressure on understanding what exactly must we do, now, to avoid a total collapse-- UBS and Ecuador in particular, are two entities of note that are struggling with managing the changes brought on by the challenges of this global economic crisis.

But, what "aren't" they doing, in the attempt to not only make due with what they are faced with now, but also, how do they implement "right now" policies, which may negatively affect long term viability and sacrifice future profits and growth, without doing just that?

It too -on the opposite side of the psychological reaction- can be very easy and tempting for hot shot managers and CEO's, to galumph towards building elaborate savings schemes around the refining of their operations and supply chains at the same overruling the practical objections of the finance director--who, at times of crisis, is always disregarded as a naysayer and someone, who does "not see the full potential of new age technology serving our cost cutting purposes". While it may be true, but, if the CFO is telling you that you don't have the money for even this week's salaries or utilities, then, by all means, understand that cost cutting does in fact have a cost--external and internal.

There are countless examples of organizations that sacrificed sales and marketing teams and end up putting focus on the reliance of their higher paying and more reliable customers, neglecting any form of relations with the prospective market. There are also countless examples, of organizations that cut down on unnecessary spending in utilities--electricity, telephone and now, going green and becoming fully computerized in the attempt to save money on stationary-- and lose sight of how to be progressive about doing what people actually pay you to do. People don't buy your products and services, because you can save $10 bucks a month on the heating bill. People also don't buy your products and services, if you don't go out there and attract them to the goods and services you have. Especially in a competitive market, focusing on word of mouth for your business--while it is a good approach--would leave you second best, all the time, to the person, who goes out and gets his customers.

To bring cost cutting closer to your staff, some organizations have forgone commissions and have cut back on hiring incentives. Slashing wages and allowing the market to do the other side of the slashing of wages for them. But, while it too can be said that a janitor does not need to make $80k a year, demoralizing your team, or, looking unattractive to prospective team members, can have disastrous consequences for an organization. Evaluating and then refreshing your talent about why do you have them there in that job in the first place, while at the same time, revaluing the roles they play currently, can be a better, over all solution, to slash and burn cost cutting techniques on staff.

Needless to say, some organizations have decided to cut staff at this down turn. This is a first and most obvious response in regards to managing human resources in times of financial difficulty. Other organizations have put in place hiring freezes. But, not only is the former policy, cold and to the point, but, in many instances, necessary if the company, for example, has three janitors making a total of $200k per year in the peak of the business cycle on a regular 9-5 hour week, where they would, now, only need two for $50k per year in the current slow season at a 9-5 work week. The latter, can be more of a strategic blunder by organizations--worse if they are to cut staff, while not replacing it with new, top and better talent, while at the same time, losing key individuals who are, at least we would hope so, knowledgeable about your business and the industry they represent at large.

While the example of the janitor making over $80k per year is a very crude one, this approach is taken to staff layoffs across the board and at disastrous results.

Often times, when you cut staff in a very high demand session of the labour market-- more persons laid off, increases the supply in labour and, effectively, puts more folks out there looking for opportunities for new employment-- you can easily push top talent, into the hands of your competitor at a much lower wage. The hand that helped you last month, can easily turn out to be the hand that puts the nail in your business casket in the next. One has to be very careful and manoeuvre lubriciously, when put in a position where you can send key talent to your competitor.

How do you treat staff at a time like this? Well, evaluation of your roles and talent and as a subsequence, refreshing your talent base, should be a priority for business and government.

Get it back to basics!

Getting it back to basics, does not mean however, does not mean scaling down and focusing your goods and services on your core, established market, entirely. But, get your team back to understanding what it is we are doing out here, in the first place--providing key and essential (if you may say so yourself) goods and services.

Not only would you use this time to have an extensive training and re-training of old and new staff--with the older staff, more than likely, administering the training at a very low impact time in the business cycle--but also, you cross train older talent into new roles, while at the same time, streamlining operations to fit the new lower demand. It will only help your organization, if you have a well diverse cross trained, team approach to operations.

If there must be a staff lay-off however, then, by all means, replace your old business model structure with a better more responsive organizational structure based on human resource flexibility. In other words - as business cycle busts are unpredictable at many times- make sure moving forward that your organization and your staff are recession proof.

In saying that, here are some key insights into making your operations better for human resource flexibility.

1. Re-create the short term consultancy package. Three to six month hiring positions are more competitive in a down turn than it is to bring on a full time person, with the idea of tenure in their mind. Long term contracts in a time of uncertainty, after you have laid off staff, is a no win for firms. For one reason, you lock in talent, especially if they were to go through the rigors of the government vetting process- who may at interview time, look employable. But, after you bought it, you own it.

Long term contracts are harder to negotiate and take longer to implement on the job at the same time, having the negotiation process take time away from your human resources training schemes, which should continue regardless, while also at the same time, taking up unnecessary time frames trying to lock in talent you have no idea of how their performance would be, after they are hired.

This gives the impetus to evaluating which roles can be put on shorter term basis, lowering long term labour cost and, at the same time, incentivizing staff to make it on to the full team. Also, at the same time, re-energizing a team in need of new ideas and incentivizing new staff into working for a permament spot on the team.

2. This is also not a bad time to offer stipend based sabbaticals, at half or even a quarter of the salaried price, to persons who have the resources to seek training at a time like this. Communications advancements, twitter, messenger and even Microsoft Office Groove, can make long distance sabbaticals a non factor if your employee can handle simple consultancy roles from their new location.

This would give your firm, post certification or leave, the critical outlooks in regards to diversity on your team. New and freshly lit brain matter, is key to getting an all around edge after the storm is over. The idea is to not let the economic woes, cripple your organization, to the extent where your slump is protracted and isoltaed to your firm, through lack of skilled and well rounded talent. This would also build up your team member's resolve, at the same time, building your entire team's resolve through assisting your employee with managing their personal difficult period--believe you me, it is bad for the employee's as well as businesses tend to forget that- and for that to be used on the job as a shared experience for all parties to take stock of.

With this, ultimately, you would cut salaries, and, more than likely, get a better and more equipped team member and overall team. While it would be a danger that the person will have more time to look for a better job. In a time like this, it is more than unlikely that they would--even though employers look for employed persons to poach off of other firms. But, at the same time, a freshly laid off worker, is more valuable than a person looking to double dip or hop the fence--as said earlier in this article, the new employer will gain a valuable employee who knows the industry, one that you mistakingly gave away to your competitor for half the price.

3. Take the full team approach to sales, customer service and business development. With the acknowledgement of a team leader or project manager with the last word, this is a time to use a full office approach to business development, sales and marketing. Give your customers the full experience, which will in turn build a stronger client relationship at the same time giving your ongoing cross training the practical experience it needs at low impact times.

With this third approach, I must warn you that having an identifiable project lead, promoted at the onset, would give the customer a feeling of satisfaction through the security that all of their consultations with other team members, are going to be implemented at the mere unilateral direction of a top, decision making person while at the same time, giving the appearance that their needs are being given full coverage and showing that your organization, has competent and professional peolle, at all levels, willing to work with them each step of the way.

4. Train, Train and Train some more. It can't hurt. Half of the successes in the battle is not winning, but it is the preparation for the next step--win, lose or draw. Once their is life there is opportunity. Training will not be wasted on the persons who receive it. Also, a good and trained staff at the organizations request and option, will build an organizations reputation as a company that takes care of it's employee's. It will work tremendously in building your organizations brand. After all, people do work in order to make their life's lot a little better.

In fact, if you offer training, team members, would evaluate themselves. The one's who can't or refuse to cut the old or new idea's of the business model, will be shown up at a time like this and make the personal choice of letting one go, less painful--they can't cut it and you know they can't cut it, so, why stay?

While your organizations CFO would be the first to ask you to please pull your head out of the clouds on daydream initiatives. It is your duty as a CEO or operations manager, to understand that the finance director has his role and that role is not based in managing employee's and evaluating talent. Such ubiquitously dreadful professional hubris, should be anathema at a time like this.

While the idea of a credit crisis, may sound like the finance directors problem. Fact of the matter is, the last person you need beating the truth into you, again and again and again, is a cocksure CFO on all money matters and one that's more than sure that the credit crisis was made entirely for him to solve, and solve alone, rather than you running your organization and obtaining critical, long term profit driven results.

If your company has made a single dollar in profit this time around compared to making $100 million the year before, or, even if your organization has adequate capital buffer's or surplus savings from previous years, it is critical that you understand the role your talent pool played in making each and every success and the role they will play in making your organization will be stronger at the end of it all.

Getting your team back to the basics, while anchoring them on core principles while taking streamlined approaches to delivering results, should be on the agenda at your next managers meeting.

Is Redwood just simple?

http://www.ft.com/cms/s/0/ccfacffe-d83e-11dd-bcc0-000077b07658.html

"John Redwood, the Tory MP, said this was proof the ban should be abandoned. 'Most of the reason why the share prices fell was because people who owned them wanted to get out of them.”'He warned that banks may need more taxpayers’ money this year unless the authorities relax their capital rules. "

John Redwood, Tory MP, should best keep his economic ideas out of the public domain.

That statement there, is the reason why there is so much of the stale status-quo that has plagued the financial markets for decades, to now, this seriously dangerous economic time.

The reason, Mr. Redwood, why investors abandoned various stocks, because, they were overpriced in the first place, due to GROSSLY incorrect price valuations that short selling produced.

Get it right, Redwood!