Just when I thought I wouldn't have to witness it again in my lifetime, here we go once more. Those bloody Russians! They and their cold war! As if we didn't have enough trouble with BP, now we have to contend with the Russians. They are such noodniks! Why don't they just shlep their spies elsewhere? Why must it always be us?
A couple of decades ago they actually invaded Hollywood and managed to get into the motion pictures, forcing us to spend all our hard-earned money on tickets just to keep up with them. Now the matter is far more serious, because they catch us at a time when our commander-in-chief hasn't even begun his military training. On account of that, our old Portuguese allies are buying two submarines on credit from the Germans, in case we need their immediate help.
Unfortunately, this time the matter has assumed greater proportions. They are trying very hard to find out how to reduce interest rates to ridiculously low levels, entice banks and people to take unnecessary risks, create a housing bubble and then, in the end, print a whole lot of money to pay for it. The chutzpah! Just intolerable!
There is, however, one silver lining to this cloud. They are employing spies who use invisible ink, which is the stuff we used to play with when we were children. Otherwise they would have their ex-ally Fidel Castro shaking in his boots, too scared to go out from his room, just in case they tried to steal his secret recipe for turning Cuba into a tropical paradise, a land of riches and happiness.
Greetings from Vladivostok!
Wednesday, 30 June 2010
UNCERTAIN TIMES
You have read right. We live in uncertain times. And most of this uncertainty stems from the fact that governments all over the world have been interfering in the market place in a gigantic way, thus causing, as it would be expected, distortions of even more gigantic proportions. This, in turn, has led to an impossibility of accurately pricing assets and risks. As world economy has always rested on the solid rock foundation of confidence, people have become confused and have moved from greed mode to fear mode, which, deep down, are the only two feelings human nature is capable of experiencing in an inordinate and irrational way.
I, Seymour Levin, am no different from other people. In times of great uncertainty, I tend to turn to other people for sound advice in the hope that they are less muddled than what I am and have spotted something which I, in my myopic view of the world, have been unable to discern.
Now, I am not standoffish in any kind of way. I will listen to anybody who is well-meaning. So, when, last week, my electrician came around to carry out some very needed repairs, I unceremoniously decided to pick his brain. I sought his advice on where I should park my money. His unequivocal reply was US treasury notes and Japanese yen. Impulsively I replied that those were two of the countries with highest rate of debt to GDP and, besides, possibly the two most crowded trades on the planet.
In retrospective, I am sorry to have rushed into such a mindless response. He looked at me intensely and nodded gravely in a way that made me feel utterly ignorant, the way I normally feel when I go to the psychologist and he repeats what I have just told him – a total schlemiel.
Thereafter, I decided to go around the banks for advice. Guess what the common answer was? Exactly. US treasury notes and Japanese yen. Boy, are these financial analysts wired! Or maybe they have been talking to my electrician... I suppose I will never know.
I, Seymour Levin, am no different from other people. In times of great uncertainty, I tend to turn to other people for sound advice in the hope that they are less muddled than what I am and have spotted something which I, in my myopic view of the world, have been unable to discern.
Now, I am not standoffish in any kind of way. I will listen to anybody who is well-meaning. So, when, last week, my electrician came around to carry out some very needed repairs, I unceremoniously decided to pick his brain. I sought his advice on where I should park my money. His unequivocal reply was US treasury notes and Japanese yen. Impulsively I replied that those were two of the countries with highest rate of debt to GDP and, besides, possibly the two most crowded trades on the planet.
In retrospective, I am sorry to have rushed into such a mindless response. He looked at me intensely and nodded gravely in a way that made me feel utterly ignorant, the way I normally feel when I go to the psychologist and he repeats what I have just told him – a total schlemiel.
Thereafter, I decided to go around the banks for advice. Guess what the common answer was? Exactly. US treasury notes and Japanese yen. Boy, are these financial analysts wired! Or maybe they have been talking to my electrician... I suppose I will never know.
Tuesday, 29 June 2010
LET'S ALL HAVE A CONGRESS
I grew up believing that modern democracy was firmly based on the principle of the separation of powers. You know, Magna Carta, Habeas Corpus, Montesquieu and all that stuff that you only have to remember if you want to develop a forked tongue and make a successful career out of it.
Anyway, what I retained of it all was that the proper place for a person to be tried and found guilty or innocent, whatever the case, was a court of law, where one had the right to an attorney and the benefit of cross-examination.
Now I realise I must have been absent-minded the day that the teacher expounded the intricacies of the system, for recently, while watching a committee of the American Congress in session, I was stunned to observe that they can actually function like a court of law. With one difference: no recourse to cross-examination, which I suppose saves a lot of time. Evolution, you could call it.
At one point in time, the action became so intense that I felt sucked into the television set. Suddenly, there I was, all naked, just with my round spectacles and my yarmulke, in front of the Spanish Inquisition. The strangest thing was that the inquisitors did not speak Spanish and some of them looked distinctly Jewish like myself. And whenever I did not tell them what they wanted to hear, they just hurled abuse at me. So it went on for hours.
Some of the inquisitors should just be glad there is no SPCA for humans, otherwise they would be in a whole lot of trouble. That's for sure. Wouldn't it be more humane just to waterboard people? I'm no politician or lawyer, but that's just a thought.
After that I began finding the concept of modern democracy more and more difficult to understand. These days I even find it hard to distinguish between Obama and Osama. I always have to tell myself Osama is the one without the beard. Or is it the other way around?
Anyway, what I retained of it all was that the proper place for a person to be tried and found guilty or innocent, whatever the case, was a court of law, where one had the right to an attorney and the benefit of cross-examination.
Now I realise I must have been absent-minded the day that the teacher expounded the intricacies of the system, for recently, while watching a committee of the American Congress in session, I was stunned to observe that they can actually function like a court of law. With one difference: no recourse to cross-examination, which I suppose saves a lot of time. Evolution, you could call it.
At one point in time, the action became so intense that I felt sucked into the television set. Suddenly, there I was, all naked, just with my round spectacles and my yarmulke, in front of the Spanish Inquisition. The strangest thing was that the inquisitors did not speak Spanish and some of them looked distinctly Jewish like myself. And whenever I did not tell them what they wanted to hear, they just hurled abuse at me. So it went on for hours.
Some of the inquisitors should just be glad there is no SPCA for humans, otherwise they would be in a whole lot of trouble. That's for sure. Wouldn't it be more humane just to waterboard people? I'm no politician or lawyer, but that's just a thought.
After that I began finding the concept of modern democracy more and more difficult to understand. These days I even find it hard to distinguish between Obama and Osama. I always have to tell myself Osama is the one without the beard. Or is it the other way around?
LONGEVITY
There was a period in my life when I suffered from insomnia in a bad way. I would then sit up in bed and lazily switch on the television set. That's how I learnt that the Japanese from Okinawa get to be unbelievably old, on account of how rich their water is in coral calcium. I never actually rushed out to go and buy that particular product, because, in the advertisement, they never showed me a Japanese looking like a dry prune. When it comes to television, I am a bit of a sceptic, you could say. And I would not disagree with you.
Well, I am proud to ascertain that my hunch paid off. Now, I read that the Americans have outdone the Japanese and managed to make people live to incredible old ages, only comparable perhaps to what you can read in the Bible, if you are a pious man and you go to schul, that is. And, with their method, apparently you don't run the risk of developing hypercalcaemia.
Word has it that it is only in an experimental phase and then only for a selected few, but, as I understand it, if you are a swindler they actually manage to add a full 150 years to your natural life. Other crimes don't qualify, because in America they pride themselves on rewarding creativity.
I guess it's all part of the American dream. President Bush didn't actually stand on a pulpit and shout out that he had a dream, but, in his quiet unassuming way, he did. He had a dream in which he saw clearly that Saddam Hussein was hoarding up weapons of mass destruction. Thereafter he had another dream in which he had to go and save the marsh Shiites. And, you know, what is praiseworthy is that he followed his dream. Then he woke up and he was facing Shiite Iran waving nuclear power. Fortunately, in the end, he found a Kenyan to deal with the matter.
To get back to longevity. I have some reservations about it. I mean, when someone gets out of jail at the ripe age of 225 and you go and shake his hand, won't you find that his fingers feel a bit mouldy?
Well, I am proud to ascertain that my hunch paid off. Now, I read that the Americans have outdone the Japanese and managed to make people live to incredible old ages, only comparable perhaps to what you can read in the Bible, if you are a pious man and you go to schul, that is. And, with their method, apparently you don't run the risk of developing hypercalcaemia.
Word has it that it is only in an experimental phase and then only for a selected few, but, as I understand it, if you are a swindler they actually manage to add a full 150 years to your natural life. Other crimes don't qualify, because in America they pride themselves on rewarding creativity.
I guess it's all part of the American dream. President Bush didn't actually stand on a pulpit and shout out that he had a dream, but, in his quiet unassuming way, he did. He had a dream in which he saw clearly that Saddam Hussein was hoarding up weapons of mass destruction. Thereafter he had another dream in which he had to go and save the marsh Shiites. And, you know, what is praiseworthy is that he followed his dream. Then he woke up and he was facing Shiite Iran waving nuclear power. Fortunately, in the end, he found a Kenyan to deal with the matter.
To get back to longevity. I have some reservations about it. I mean, when someone gets out of jail at the ripe age of 225 and you go and shake his hand, won't you find that his fingers feel a bit mouldy?
Monday, 28 June 2010
THE WORLD IS ROUND
These days you can consider yourself lucky if you are able switch on your television set without being instantly hit on the head by a jabulani flying off some unexpected corner of your screen. So I suppose many of us will feel safer once this jabulani finds its rightful place in History, which is where it belongs.
Over the years I have heard anecdotal evidence that countries hosting events like the Olympics or the World Cup actually end up losing money. Lots of it. But, I must be honest, as I have never been given the opportunity to look at such final accounts, not even in their massaged form, I have not, until now, given the matter much thought.
Until today. I actually saw it in print that, when the grass has settled, so to speak, South Africa will have spent billions of rand that it will not recoup. One aspect that it is not being mentioned, though, is that the country doesn't have a vibrant and financially rich soccer league that can fill and justify the stadia that it built for the event. Thus, there will be no direct financial return from (and may the ANC forgive the pun) those white elephants that will eventually have to be left to rot until they finally crumble into dust.
Optimists contend that the World Cup will have had one ultimate benefit, that of rebranding the country. Rebranding it? As what? Switzerland? Norway? Perhaps Singapore? Unfortunately Aids will continue to ravage the populations, consequently placing a financial burden on the economy; unemployment will continue to grow uncontrolled; corruption will not stop rearing its ugly head; the mines will go on being hampered by power outages and strikes, and by having to mine deeper, thus making it more difficult for them to compete in the international commodity markets. And then there is crime. Lots of it. It was there before the World Cup, it has been there during, and it will be there after the final whistle has blown.
Sure, South Africans will be left with memories. Lots of them. And vuvuzelas. Lots of them. Happy blowing Mr. Zuma!
Over the years I have heard anecdotal evidence that countries hosting events like the Olympics or the World Cup actually end up losing money. Lots of it. But, I must be honest, as I have never been given the opportunity to look at such final accounts, not even in their massaged form, I have not, until now, given the matter much thought.
Until today. I actually saw it in print that, when the grass has settled, so to speak, South Africa will have spent billions of rand that it will not recoup. One aspect that it is not being mentioned, though, is that the country doesn't have a vibrant and financially rich soccer league that can fill and justify the stadia that it built for the event. Thus, there will be no direct financial return from (and may the ANC forgive the pun) those white elephants that will eventually have to be left to rot until they finally crumble into dust.
Optimists contend that the World Cup will have had one ultimate benefit, that of rebranding the country. Rebranding it? As what? Switzerland? Norway? Perhaps Singapore? Unfortunately Aids will continue to ravage the populations, consequently placing a financial burden on the economy; unemployment will continue to grow uncontrolled; corruption will not stop rearing its ugly head; the mines will go on being hampered by power outages and strikes, and by having to mine deeper, thus making it more difficult for them to compete in the international commodity markets. And then there is crime. Lots of it. It was there before the World Cup, it has been there during, and it will be there after the final whistle has blown.
Sure, South Africans will be left with memories. Lots of them. And vuvuzelas. Lots of them. Happy blowing Mr. Zuma!
ROBIN HOOD IN AUSTRALIA
Recently the world witnessed what can be conceived as possibly one the swiftest and most astonishing political resignations in recent history, that of Australian Prime-Minister Kevin Rudd. As news media would have it, Julia Gillard, his deputy, walked into his office and challenged him to a party leadership contest, upon which he simply answered “I quit”.
Now, if that is not mystifying, I don't know what is, for it is not in the power-hungry nature of the political animal to yield the reins of government, even if for reasons of gallantry. So, either Mr. Rudd is a very good soul, sensitive to the emotional needs of women, or a very a bad politician who, at his ripe age, has not yet begun to comprehend the most basic principle of the science, namely to mistrust even his own shadow.
More puzzling is the fact that, after such a wimpy response to Ms. Gillard, he is staying on in politics, with the prospect of being offered a post in next Labour cabinet.
Background to this palace drama: the proposed supertax on Australian mining groups, a topic of hot debate in the country for months now. The way matters were handled, one could only guess that Mr. Rudd, and indeed the Labour Party, must have misjudged the ease with which the matter could be implemented, the way governments all over the world expect their taxpayers to react: cough up and shut up.
Well, international miners in Australia are not normal taxpayers. So, one week you had Rudd defiantly vowing to go through with his proposal, and the next week swiftly disappearing into the sunset.
Magic? No. When the groups threatened to divert their future investments to other regions of the globe, the Labour Party realised that the matter was getting out of hand and that it was fast losing public support, which, in turn, might lead to its demise at the next general elections. As a result, it decided to undertake an exercise in damage control. Party strategists must have thought that, by giving government a feminine face, kid gloves and making a few concessions on the levels of taxation, they would be able to sweep the dirt under carpet.
They won't. For two reasons. Firstly, the Green Party is unlikely to give parliamentary support to a bill that waters down the original proposal. Secondly, international miners have already learnt their lesson and are aware that, should the Labour Party be re-elected for a further term of office, the matter is likely to come up even in a more virulent way. They will certainly make good on their threat. After all, why shouldn't they?
At a time when the economy in China is cooling down, when the Chinese are looking to lay their hands on all kinds of resources all over the world, primarily to become self-reliant, but also to get rid of some vast amounts of useless US dollars they hold, when immense mineral reserves are being discovered in Mongolia, the Australian supertax proposal can only be deemed to be the fruit of political bigotry or the result of economic ignorance. Australia risks sharing Mr. Rudd's fate: taking giant strides into the sunset.
As for the Australian dollar, put on your hard hats. At present, it seems be doing well on account of the interest rate differential, but is 4,5% enough to cover economic and political risks? I wonder.
Now, if that is not mystifying, I don't know what is, for it is not in the power-hungry nature of the political animal to yield the reins of government, even if for reasons of gallantry. So, either Mr. Rudd is a very good soul, sensitive to the emotional needs of women, or a very a bad politician who, at his ripe age, has not yet begun to comprehend the most basic principle of the science, namely to mistrust even his own shadow.
More puzzling is the fact that, after such a wimpy response to Ms. Gillard, he is staying on in politics, with the prospect of being offered a post in next Labour cabinet.
Background to this palace drama: the proposed supertax on Australian mining groups, a topic of hot debate in the country for months now. The way matters were handled, one could only guess that Mr. Rudd, and indeed the Labour Party, must have misjudged the ease with which the matter could be implemented, the way governments all over the world expect their taxpayers to react: cough up and shut up.
Well, international miners in Australia are not normal taxpayers. So, one week you had Rudd defiantly vowing to go through with his proposal, and the next week swiftly disappearing into the sunset.
Magic? No. When the groups threatened to divert their future investments to other regions of the globe, the Labour Party realised that the matter was getting out of hand and that it was fast losing public support, which, in turn, might lead to its demise at the next general elections. As a result, it decided to undertake an exercise in damage control. Party strategists must have thought that, by giving government a feminine face, kid gloves and making a few concessions on the levels of taxation, they would be able to sweep the dirt under carpet.
They won't. For two reasons. Firstly, the Green Party is unlikely to give parliamentary support to a bill that waters down the original proposal. Secondly, international miners have already learnt their lesson and are aware that, should the Labour Party be re-elected for a further term of office, the matter is likely to come up even in a more virulent way. They will certainly make good on their threat. After all, why shouldn't they?
At a time when the economy in China is cooling down, when the Chinese are looking to lay their hands on all kinds of resources all over the world, primarily to become self-reliant, but also to get rid of some vast amounts of useless US dollars they hold, when immense mineral reserves are being discovered in Mongolia, the Australian supertax proposal can only be deemed to be the fruit of political bigotry or the result of economic ignorance. Australia risks sharing Mr. Rudd's fate: taking giant strides into the sunset.
As for the Australian dollar, put on your hard hats. At present, it seems be doing well on account of the interest rate differential, but is 4,5% enough to cover economic and political risks? I wonder.
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