Persons have asked me about my articles. They have foremost asked about my content and where I find the information. That's a trade secret, I always say. But, others have expressed concerns over the content, to the extent that say that it may not apply to their situation. I always say; yes it does!
As you can imagine, countries, companies and individuals all over the world, experience the same types of issues and national conundrums. Their solutions vary from entity to entity, but the issue remains that we can all glean from examples, strategies and best practices from other companies and countries that have gone through the same issues.
Take for example what's been happening in Japan. Japan is an extreme case of a government- or a cabal for that matter- that as been in power for too long, which has led to private sector under performance from the added standpoint that there is an understanding and obeisance to external commitments over national development priorities, on top of the added pressures of internationalized monopolies which are in lock step with the political directorate. In addition to this, on the other hand, Japan is also prone to the selective proliferation of good and rosy economic information, just prior to national elections-- this proliferation of all good news at the cusp of a general election, is endemic world wide. Being keen on what's truly good news, must be taken into account.
To the last point first, because it's easier and quicker; if there ever was a good enough time for the ruling Liberal Democratic Party (LDP) in Japan to deliver some good news, it's now. National elections are slated for August 30th and the LDP, a party that has held power for the greater part of the last century, are behind in the polls.
Preliminary data released on Monday, as reported by the Financial Times (FT), showed gross domestic product expanded to a seasonally adjusted 0.9 per cent quarter on quarter between April and June, its first rise since the first quarter of 2008 and the equivalent of 3.7 per cent growth on an annualised basis.
The data or the FT didn't report all of what were the drivers for this growth, but have attributed the stimulus package implemented by current Prime Minister Taro Aso, as a likely source as additional public spending has increased by 8 percent, in a attempt to spur consumption. The issues of whether or not the stimulus package worked with regard to real private sector investment, is another issue.
Riding the wave of obvious economic discontent in Japan is Yukio Hatoyama, the new leader in the forefront for the opposition Democratic Party (DP). The DP is slated to all out win or change the dynamics of the upper and lower chambers in Japan, where change the next time around- through a quick early election after August 30th or whenever- a change will happen.
Some attribute the fall from favour with the ruling party to the bad economy. Others claim it's time for a change from a party that has been in power for the last 40 years. It may be a mix of both.
Including Prime Minister Aso, there were three prime minister's that served post Junchiro Koizume in 2006. This has been seen by many as a lack of unity in the LDP and especially through the reluctance for anyone to take the helm and keep it, amidst the challenges Japan faced and still face.
Japan's problems didn't start three years ago. In fact, Japan, while it is one of the top five largest economies, have had economic challenges in the past and never really sorted out the discrepancies and inefficiencies in their much globalized economy. The least of which is the balance of power in Asia.
With the increase in diminishing returns on Japanese goods in electronics to China and Singapore, to now, cars in India- in addition to their traditionally strongest competitors in Taiwan and South Korea- there just isn't a large enough international market, let alone a regional market, to peddle their wares aside from the United States, their major trading partner by taste and preference since the post war reconstruction and more certainly since the "Lost decade" in Japan in the 1990's.
These issues have added to a major collapse in the 1990's and the structural deficiencies were never truly fixed, as it appears. Also, their major export good, automobiles, were hit with voluntary export restraints by the USA in the 1980's, which certainly increased price of automobiles, but also put a damper on productivity and innovation. This lead to a surge in regional competitors as well as an over-reliance on other aspects of their national economy, which were not as viable as the automobile industry compared to the competitors in the region they allowed standing market access into Japan.
At this point, Japan is facing the same crisis that led to the asset price collapse that erased the gains they made financially, before the early 90's.
Due to Japan's compulsion to promote nominal prices over that of real market value prices as a way to spur domestic consumption during this current downturn, as it similarly happened prior to and during the 1990's by another mode, also at this time as I have aserted, Japan has also made external commitments with regard to international market access rules and most favoured national principles, simultaneously, which were deepened with and by the General Agreement on Tariffs and Trade (GATT) 1994, which too is also leading to another round of decreasing value on the Japanese way of life, stocks and their economic engine.
This complex web of economic mis-alignment has most certainly exacerbated the displeasure in the populace with the current ruling party as well as with the prime ministerial musical chair's game.
Just to give a most stark and recent comparison, currently the USA has been compared now to the Japan of the 1990's during that lost decade, where asset prices are having the same effect. Regardless of super-star status, the economy is and will further drag on the popularity of President Obama-- with the health care debate and Middle East wars, considered.
But more to the point and from a parallax position in relation to the economic issues with Japan, asset prices in the USA were overvalued due to the reliance on false nominal valuations in the market in the attempt to increase then current gains. Unfortunately this bubble popped, spurring deflationary pressure with no solution, other than through natural economic adjustments, with or without Federal Reserve/government intervention.
While the market sophistication in the developing world no where compares to what we have in the developed, the overall issue is that we all want to develop our lot in life. The overwhelming evidence for a best practice case of the value and way of life in developed countries, from health care to social amenities and infrastructure, is evident. If this requires that developing countries mimic certain aspects of success, I am most certainly for it.
If this also means avoiding, by all intents and purposes, mistakes others have made in the past, whether it was with inflated bubbles in real estate or company stocks, a lack of synergies with banking and private sector or the infrastructure that protects capital markets, then by all means let's all work for better solutions.
Wednesday, August 19, 2009
Saturday, August 15, 2009
In a dead news cycle...
Well, there are some issues out there to report. I have not been posting as much, bit part due to laziness and another due to a little boredom with what's been going on. But, some things out there bear some mention.
For one, my condolences to the people in China for being hurled out of their homes and injured during the Typhoon that hit last week. Over 1 million people have been displaced as rough estimates have it. At least things are getting better. A typhoon in Asia, 20 years ago, would have had 1 million people dead--not merely displaced. While we can't diminish the act of mother nature, we can only thank God that it was not worse.
The health care debate in the USA rages on. The need for reform is simple to me-- the majority of the people who are un-insured are between lower and lower middle class persons. Who are in the majority of the persons in the lower to lower middle class demographic? African Americans and Hispanics. Do you really expect an African American president to not attempt health care reform, seriously?
The major issue of contention is that some folks feel that they would lose their benefits. I don't think that's a real issue. Too bad politics has gotten in the middle of this debate. Grassroots and mid-term election politics at that. I say no more as I will allow the reader to connect the dots....
China lost it's case in the WTO over foreign media rights and control. Will they adhere to the ruling, is another issue. But, with the amount of piracy and controlled content on a multi-billion dollar industry in the West, media and film, China, cannot be allowed to control the goods market and control how much money is earned from their populace with regard to Western culture.
Tis all for now....
For one, my condolences to the people in China for being hurled out of their homes and injured during the Typhoon that hit last week. Over 1 million people have been displaced as rough estimates have it. At least things are getting better. A typhoon in Asia, 20 years ago, would have had 1 million people dead--not merely displaced. While we can't diminish the act of mother nature, we can only thank God that it was not worse.
The health care debate in the USA rages on. The need for reform is simple to me-- the majority of the people who are un-insured are between lower and lower middle class persons. Who are in the majority of the persons in the lower to lower middle class demographic? African Americans and Hispanics. Do you really expect an African American president to not attempt health care reform, seriously?
The major issue of contention is that some folks feel that they would lose their benefits. I don't think that's a real issue. Too bad politics has gotten in the middle of this debate. Grassroots and mid-term election politics at that. I say no more as I will allow the reader to connect the dots....
China lost it's case in the WTO over foreign media rights and control. Will they adhere to the ruling, is another issue. But, with the amount of piracy and controlled content on a multi-billion dollar industry in the West, media and film, China, cannot be allowed to control the goods market and control how much money is earned from their populace with regard to Western culture.
Tis all for now....
Wednesday, August 12, 2009
A tale of two countries, French Exceptionalism vs. German Stability!
The Organization for Economic Cooperation and Development (OECD) reports that the German economy is and will be going through tremendous difficulties over the next year. In their flagship economic outlook report for June, 2009, they report that in Germany the annual decline in GDP growth is projected to amount to around 6% this year.
France, in the same report, on the other hand, the group reports that Real GDP is projected to fall by about 3% in 2009, with the pace of contraction gradually diminishing through the year. The recovery in 2010 is likely to be slow, with output growing below potential rates throughout the year.
Why is France, a socialist democracy as widely understood (as much of an oxymoron as that sounds), further ahead in this crisis than that of Germany, an economic machine? Also, why is Germany, the third (or fourth depending on the organization reporting) largest economy in the world by country comparison and the largest, by far, in the EU, doing so poorly throughout this crisis?
Is this a case of French exceptionalism? Also, shouldn't the larger economy of that of Germany, suggest that they have more of a capitalist engine, especially when we factor in their population by size and comparison to their GDP?
Hardly is it exceptionalism some may argue on the French part. But, for argument's sake let's say that it is; does this so called exceptionalism actually mean full recovery from the financial crisis?
We can't answer that because we probably have the wrong question with the wrong premise. The question folks should ask is; was France as bad off as the other countries at the same time now and then in this crisis? The answer is no. France was the last European country show a decline in real GDP at the mid-way of the crisis. In fact, they were the only country as of late 2008 to have positive real GDP figures at 1.2%, aside from Germany who has of the start of 2009, began to drop like a stone with regard to productivity and employment.
While France boasts of having rolled out more of its fiscal stimulus- about 26 billion Euros- does this mean that the recovery will be higher than other countries? Perhaps not? Perhaps maybe!
The fact is that France is a heavy welfare state. But, on the other hand, they have responsive labour relations to employment than any other country- including the Nordic countries.
While other social democracies in the Northern Europe are have heavy welfare spending programs as is France, France also has a very vibrant private sector with a high amount of outward capital investment by nationals to compliment their state run benefits.
In fact, aside from the U.S., France, has one of the highest investor classes in the world with regard to outward foreign capital investment by nationals. As reported by the OECD by 2003, French companies invested 57.3 billion USD outside of France, ranking France as the second most important outward direct investor in the OECD, behind the United States (173.8 billion USD of outward FDI), but ahead of the United Kingdom (55.3 billion USD of outward FDI), Japan (28.8 billion USD of outward FDI), or Germany (2.6 billion USD of outward FDI).
While this also should indicate that France should have external variable exposure, to the extent that France has had its financial services sector exposed to US sub-prime debt is something France has not had to worry about. In fact, French firms have been insulated, much like Canada, away from sub-prime and US debt exposure. While, yes, Societe & General has had its issues with a rouge trader, this was an internal anomaly and the trader in question, was working outside of the general financial services protocol within his organization and, for that matter, normal French financial services regulations. When on the other hand, all countries that experienced extreme spillover effects from the US economic crisis were involved in the process as a matter of business as usual and nothing was seen as deleterious to the system when the collapse happened.
In the case of Germany with regard to financial exposure, their coordinated market economic model facilitates greater participation with unions and employee's as well as the social sector, which makes the consumer debt market not as lucrative as it is in other markets. While this too limited the exposure Germany had to external financial markets, this also means too that they don't have the structural capacity to expend and avenue's to absorb fiscal stimulus. Hence, the argument for German Chancellor Angela Merkel was that the fiscal stimulus from the European Central Bank was grossly lopsided within the Euro-zone because other countries had the ability to absorb and utilize the fiscal stimulus, while Germany had challenges with regard to the market net for financing and the facilities to put such fiscal stimulus to proper use.
Another important thing to note is that France can also feed itself. This is crucial. This means that they are not price takers and are not sending their hard earned money overseas, to purchase food items and don't have to at any time. Also, they are the price givers, meaning that they have a very wealthy European block as well as a middle east and Northern African block, which they supply.
France also has diversified its energy portfolio, having nuclear and other forms of energy aside form fossil fuels. While on the other side with Germany, they have shutting down civil nuclear power plants since 2000. This increases the demand on fossil fuels and due to the volatile nature of the oil market, this has worked against the German economy with the alternative energy sector still a non starter.
The French model has placed France as the best bet for coming out of this crisis faster and better, but probably not as fast as the USA and probably better than a heavily indebted Britain. While they will probably never have substantial real GDP growth comparable to the US in the long term, they will fair better than many and be sound in the short and long run.
So, while we bash France on its socialist tendencies, they really have a better- although not as transparent as we would like- system of governance, which has really evolved into a great state over the last century.
France, in the same report, on the other hand, the group reports that Real GDP is projected to fall by about 3% in 2009, with the pace of contraction gradually diminishing through the year. The recovery in 2010 is likely to be slow, with output growing below potential rates throughout the year.
Why is France, a socialist democracy as widely understood (as much of an oxymoron as that sounds), further ahead in this crisis than that of Germany, an economic machine? Also, why is Germany, the third (or fourth depending on the organization reporting) largest economy in the world by country comparison and the largest, by far, in the EU, doing so poorly throughout this crisis?
Is this a case of French exceptionalism? Also, shouldn't the larger economy of that of Germany, suggest that they have more of a capitalist engine, especially when we factor in their population by size and comparison to their GDP?
Hardly is it exceptionalism some may argue on the French part. But, for argument's sake let's say that it is; does this so called exceptionalism actually mean full recovery from the financial crisis?
We can't answer that because we probably have the wrong question with the wrong premise. The question folks should ask is; was France as bad off as the other countries at the same time now and then in this crisis? The answer is no. France was the last European country show a decline in real GDP at the mid-way of the crisis. In fact, they were the only country as of late 2008 to have positive real GDP figures at 1.2%, aside from Germany who has of the start of 2009, began to drop like a stone with regard to productivity and employment.
While France boasts of having rolled out more of its fiscal stimulus- about 26 billion Euros- does this mean that the recovery will be higher than other countries? Perhaps not? Perhaps maybe!
The fact is that France is a heavy welfare state. But, on the other hand, they have responsive labour relations to employment than any other country- including the Nordic countries.
While other social democracies in the Northern Europe are have heavy welfare spending programs as is France, France also has a very vibrant private sector with a high amount of outward capital investment by nationals to compliment their state run benefits.
In fact, aside from the U.S., France, has one of the highest investor classes in the world with regard to outward foreign capital investment by nationals. As reported by the OECD by 2003, French companies invested 57.3 billion USD outside of France, ranking France as the second most important outward direct investor in the OECD, behind the United States (173.8 billion USD of outward FDI), but ahead of the United Kingdom (55.3 billion USD of outward FDI), Japan (28.8 billion USD of outward FDI), or Germany (2.6 billion USD of outward FDI).
While this also should indicate that France should have external variable exposure, to the extent that France has had its financial services sector exposed to US sub-prime debt is something France has not had to worry about. In fact, French firms have been insulated, much like Canada, away from sub-prime and US debt exposure. While, yes, Societe & General has had its issues with a rouge trader, this was an internal anomaly and the trader in question, was working outside of the general financial services protocol within his organization and, for that matter, normal French financial services regulations. When on the other hand, all countries that experienced extreme spillover effects from the US economic crisis were involved in the process as a matter of business as usual and nothing was seen as deleterious to the system when the collapse happened.
In the case of Germany with regard to financial exposure, their coordinated market economic model facilitates greater participation with unions and employee's as well as the social sector, which makes the consumer debt market not as lucrative as it is in other markets. While this too limited the exposure Germany had to external financial markets, this also means too that they don't have the structural capacity to expend and avenue's to absorb fiscal stimulus. Hence, the argument for German Chancellor Angela Merkel was that the fiscal stimulus from the European Central Bank was grossly lopsided within the Euro-zone because other countries had the ability to absorb and utilize the fiscal stimulus, while Germany had challenges with regard to the market net for financing and the facilities to put such fiscal stimulus to proper use.
Another important thing to note is that France can also feed itself. This is crucial. This means that they are not price takers and are not sending their hard earned money overseas, to purchase food items and don't have to at any time. Also, they are the price givers, meaning that they have a very wealthy European block as well as a middle east and Northern African block, which they supply.
France also has diversified its energy portfolio, having nuclear and other forms of energy aside form fossil fuels. While on the other side with Germany, they have shutting down civil nuclear power plants since 2000. This increases the demand on fossil fuels and due to the volatile nature of the oil market, this has worked against the German economy with the alternative energy sector still a non starter.
The French model has placed France as the best bet for coming out of this crisis faster and better, but probably not as fast as the USA and probably better than a heavily indebted Britain. While they will probably never have substantial real GDP growth comparable to the US in the long term, they will fair better than many and be sound in the short and long run.
So, while we bash France on its socialist tendencies, they really have a better- although not as transparent as we would like- system of governance, which has really evolved into a great state over the last century.
Sunday, August 9, 2009
Consumer Credit still down...
Lastest G.19 Consumer credit data from the Fed. I guess growth does not have to be consumer credit driven. Well, we need to see trade figues for that....jobs are back up, or less than reported than the month of April. So, I guess we have a claim that things are moving back in the right direction.
But, if we want folks to spend to get the economy back in shape, shouldn't there be consumer credit growth as well?
http://www.federalreserve.gov/releases/g19/Current/
But, if we want folks to spend to get the economy back in shape, shouldn't there be consumer credit growth as well?
http://www.federalreserve.gov/releases/g19/Current/
Thursday, August 6, 2009
Can Craw-fishermen learn from OPEC?
Agriculture in the Bahamas, as a percentage, is roughly 2% of GDP. Within the agricultural sector, the fisheries sub-sector has been playing a particularly dynamic role, consistently accounting for more than 75% of total agricultural output and with the craw fish industry, yielding anywhere from $60 to $100 million dollars (USD) per year- or on average of about 85% of the value of all fisheries output. For a country with less than 400 thousand people and for a sector that employs less than 10 thousand, country wide, that's a considerable amount of wealth for persons in the fisheries sector.
To show you how important this industry is, the Economic Partnership Agreement (EPA) with the African-Caribbean and Pacific (ACP) countries and the European Union (EU), with regard to the base importance for the Bahamas, was focused on protecting the crawfish industry, among other issues.
Fish-houses and major exporters wanted an EPA for the express purpose of greater market access into the EU. Hence, they lobbied vigorously for the provisions that the EPA provided with regard market access. Pretty academic stuff, when we factor in that if the Bahamas didn't, they would be hit with import tariffs into the EU and our competition, would not. The actual benefit, overall, of the EPA is another discussion that can take up another page and one that will be argued at a later date.
Who generates the most wealth from the fishies sector however, is another story. You can make a pretty fair assumption that the processors and exporters make the most profit, as is the general rule with any agricultural production chain- the producers sell low and the processors and exporters, sell high.
But, regardless, fisher-folk can and should make a healthy, or, perhaps, make a mint, if they choose work together to combat the issues surrounding the current world economy and distortions surrounding their market.
Through speaking with local fisher-folk, they have indicated to me that they were receiving up to $14 per pound in 2006-2007 for crawfish. In 2008, they got, if possible, just about $7 per pound and this year, they started off at just about $6 per pound. That's a huge drop. With considerably high living standards in the Bahamas, fisher-folk have to now adopt and maintain practices they employ in the off season to ease their burden like; construction related work, various service related jobs that have no relation to the fisheries sector; i.e., clerking, transportation and leisure services... etc.
The best and most relative thing that could happen within the fisheries sector, with regard to the individual crawfisher folk, is for them to adopt a policy used by the cartel of oil producing countries, OPEC, and that is cut the supply of crawfish to artificially raise the price.
While this may sound weird to some, if we take into consideration the success of OPEC with controlling output, it may not sound so far fetched.
For one reason to cut prodcution, why would anyone go out to harvest the same amounts, with the same work load, with relatively high fuel prices and last year's equipment, to get less for their share of the work? Also, can you sustain the same harvest levels you had in 2006 today, in any event? So, if they were to harvest less and alternatively spend time perfecting the services they did in the off season, it would have an un-intended consequence of a stronger cross-training of fisher folk.
Secondly, when you cut the supply of any commodity- like oil or crawfish- the price automatically rises, if demand stays constant, because there is less to go around for a larger market. Even at current demand, if we were to cut the supply, for the same amount of people, all tastes considered, you can make a larger profit per catch and manpower. To be fair, crawfish will not go out of style and there will, by all intents and purposes, be a market for food, especially delicacies like lobster/crawfish.
To go even further, if an individual fisherman was harvesting over 150 lbs of craw-fish, at $14 per lb in 2006, and now he is harvesting the same amount for $6 per lb in 2009, then if he was to cut the supply to about $50 per lb, in a successful attempt to raise the price of his catch to $8 per lb, he still wins because the profit margin per lb has increased for less effort. Considering the fact that he uses less fuel and manpower to harvest and considering the effect of less crawfish to go around, he would have made a larger profit rather than going all out on expenses to get less for his effort.
Of course, this depends on crawfisher folk, coming together to agree on a base price. In fact, depends on crawfisher folk coming together, nation wide, all together. This also means that if they were to come together, the likelihood of someone circumventing the effort by going out to sell his catch for less than the agreed upon price, is bound to occur.
For the former, if a meeting of all fisher-folk were to be held to address this, then you have a case and a base to work from on some of the common challenges, like the decrease in value of crawfish per lb.
Also, for the latter, if an individual fisherman, were to go out of his way to circumvent the groups agreed upon price, it is solely up to him to want a lower price for more work. But, yet still, that one individual would not be in a position to affect the overall market price, if all of the other producers are in agreement on a set price and a set harvest and shared storage mechanism.
In addition, the relevant fisheries stake-holders should look into expanding their market base. Take for example the effect China and India has on global demand for energy. Since the emergence, of at least China, oil prices have risen and will stay beyond $40 per barrel just to adjust, permanently, to China's growing energy demand.
Before the emergence of these two emerging economies, oil could have very easily remained at $40 or less per barrel.
If fisher folk were to expand their markets, with perhaps the assistance of the exporters- which may not happen, but it is worth mentioning- they can decrease their supply by adding to the list, two to possibly, three, new customers, aside from the EU and the USA.
There are other issues, not based on reflections on the oil markets, fisher folk in the Bahamas and Caribbean wide can glean examples from. But, coming together to make better this terrible economic situation, is the first step. Meaningful dialogue to induce positive action on the bottom line for their families, is the other.
Who knows, perhaps there can be a Caribbean wide crawfish association, started right out of the Bahamas? One can only imagine!
Now that I’ve done my part, the next fisherman who reads this page, can contact me to pick up my kit of fish for my troubles.
To show you how important this industry is, the Economic Partnership Agreement (EPA) with the African-Caribbean and Pacific (ACP) countries and the European Union (EU), with regard to the base importance for the Bahamas, was focused on protecting the crawfish industry, among other issues.
Fish-houses and major exporters wanted an EPA for the express purpose of greater market access into the EU. Hence, they lobbied vigorously for the provisions that the EPA provided with regard market access. Pretty academic stuff, when we factor in that if the Bahamas didn't, they would be hit with import tariffs into the EU and our competition, would not. The actual benefit, overall, of the EPA is another discussion that can take up another page and one that will be argued at a later date.
Who generates the most wealth from the fishies sector however, is another story. You can make a pretty fair assumption that the processors and exporters make the most profit, as is the general rule with any agricultural production chain- the producers sell low and the processors and exporters, sell high.
But, regardless, fisher-folk can and should make a healthy, or, perhaps, make a mint, if they choose work together to combat the issues surrounding the current world economy and distortions surrounding their market.
Through speaking with local fisher-folk, they have indicated to me that they were receiving up to $14 per pound in 2006-2007 for crawfish. In 2008, they got, if possible, just about $7 per pound and this year, they started off at just about $6 per pound. That's a huge drop. With considerably high living standards in the Bahamas, fisher-folk have to now adopt and maintain practices they employ in the off season to ease their burden like; construction related work, various service related jobs that have no relation to the fisheries sector; i.e., clerking, transportation and leisure services... etc.
The best and most relative thing that could happen within the fisheries sector, with regard to the individual crawfisher folk, is for them to adopt a policy used by the cartel of oil producing countries, OPEC, and that is cut the supply of crawfish to artificially raise the price.
While this may sound weird to some, if we take into consideration the success of OPEC with controlling output, it may not sound so far fetched.
For one reason to cut prodcution, why would anyone go out to harvest the same amounts, with the same work load, with relatively high fuel prices and last year's equipment, to get less for their share of the work? Also, can you sustain the same harvest levels you had in 2006 today, in any event? So, if they were to harvest less and alternatively spend time perfecting the services they did in the off season, it would have an un-intended consequence of a stronger cross-training of fisher folk.
Secondly, when you cut the supply of any commodity- like oil or crawfish- the price automatically rises, if demand stays constant, because there is less to go around for a larger market. Even at current demand, if we were to cut the supply, for the same amount of people, all tastes considered, you can make a larger profit per catch and manpower. To be fair, crawfish will not go out of style and there will, by all intents and purposes, be a market for food, especially delicacies like lobster/crawfish.
To go even further, if an individual fisherman was harvesting over 150 lbs of craw-fish, at $14 per lb in 2006, and now he is harvesting the same amount for $6 per lb in 2009, then if he was to cut the supply to about $50 per lb, in a successful attempt to raise the price of his catch to $8 per lb, he still wins because the profit margin per lb has increased for less effort. Considering the fact that he uses less fuel and manpower to harvest and considering the effect of less crawfish to go around, he would have made a larger profit rather than going all out on expenses to get less for his effort.
Of course, this depends on crawfisher folk, coming together to agree on a base price. In fact, depends on crawfisher folk coming together, nation wide, all together. This also means that if they were to come together, the likelihood of someone circumventing the effort by going out to sell his catch for less than the agreed upon price, is bound to occur.
For the former, if a meeting of all fisher-folk were to be held to address this, then you have a case and a base to work from on some of the common challenges, like the decrease in value of crawfish per lb.
Also, for the latter, if an individual fisherman, were to go out of his way to circumvent the groups agreed upon price, it is solely up to him to want a lower price for more work. But, yet still, that one individual would not be in a position to affect the overall market price, if all of the other producers are in agreement on a set price and a set harvest and shared storage mechanism.
In addition, the relevant fisheries stake-holders should look into expanding their market base. Take for example the effect China and India has on global demand for energy. Since the emergence, of at least China, oil prices have risen and will stay beyond $40 per barrel just to adjust, permanently, to China's growing energy demand.
Before the emergence of these two emerging economies, oil could have very easily remained at $40 or less per barrel.
If fisher folk were to expand their markets, with perhaps the assistance of the exporters- which may not happen, but it is worth mentioning- they can decrease their supply by adding to the list, two to possibly, three, new customers, aside from the EU and the USA.
There are other issues, not based on reflections on the oil markets, fisher folk in the Bahamas and Caribbean wide can glean examples from. But, coming together to make better this terrible economic situation, is the first step. Meaningful dialogue to induce positive action on the bottom line for their families, is the other.
Who knows, perhaps there can be a Caribbean wide crawfish association, started right out of the Bahamas? One can only imagine!
Now that I’ve done my part, the next fisherman who reads this page, can contact me to pick up my kit of fish for my troubles.
Europe is so predictable!
The BOE and the ECB kept its rates steady today. Most likely in sync with inflationary expectations held by Bernanke over at the US Fed. This seems like coordinated international cooperation, indeed. Perhaps the only form we will see at this time...well, maybe the only type we really need or want, considering how competitive these three jurisdictions are.
The BOE is also expanding their Asset Purchase program, from 50 billion pounds to 175 billion pounds. I would like to see under what premise are they expanding this program and still have the nerve to keep rates as they are. They have added a provisional note to their notice, but this note only explains how they are going to do what they are doing and not enough of what is the reason behind it?
Well, the reason given is that bank's balance sheets still need repairing and they want to take off as many bad debt as they can from private banks, so that they can lend again. I am wondering however, if this is just for mortgage backed securities or has the BOE made a general sweep on what would be determined bad debt and given banks a free pass to clear their sheets--with an ongoing economic crisis, where not on mortgage related debt's are delinquent, but even regular consumer loans as well?
We need more clarification. The ECB is another issue and I am not quite sure what their policy is directed to. They have a bigger market and, perhaps, they are shotting in the dark. We will only have to wait and see.
The economy in the UK and the Euro-zone is in still a pretty sad state. The rates are pretty low at 1.5% for the BOE and 1% for the ECB. There has been no sign of uncontrollable inflation or inflation at all....housing is still weak and the construction sector, is still hampered by a lower than usual commercial real estate market.
The BOE is also expanding their Asset Purchase program, from 50 billion pounds to 175 billion pounds. I would like to see under what premise are they expanding this program and still have the nerve to keep rates as they are. They have added a provisional note to their notice, but this note only explains how they are going to do what they are doing and not enough of what is the reason behind it?
Well, the reason given is that bank's balance sheets still need repairing and they want to take off as many bad debt as they can from private banks, so that they can lend again. I am wondering however, if this is just for mortgage backed securities or has the BOE made a general sweep on what would be determined bad debt and given banks a free pass to clear their sheets--with an ongoing economic crisis, where not on mortgage related debt's are delinquent, but even regular consumer loans as well?
We need more clarification. The ECB is another issue and I am not quite sure what their policy is directed to. They have a bigger market and, perhaps, they are shotting in the dark. We will only have to wait and see.
The economy in the UK and the Euro-zone is in still a pretty sad state. The rates are pretty low at 1.5% for the BOE and 1% for the ECB. There has been no sign of uncontrollable inflation or inflation at all....housing is still weak and the construction sector, is still hampered by a lower than usual commercial real estate market.
Monday, August 3, 2009
Internet is down people...
Hi all,
I have been down for the last three days, due to technical difficulties. I'm on a remote PC, so still not up at home yet.
Just thought I would put up a FYI....
Read the archives.
Best,
Youri
I have been down for the last three days, due to technical difficulties. I'm on a remote PC, so still not up at home yet.
Just thought I would put up a FYI....
Read the archives.
Best,
Youri
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