Brahm

Friday Outlook: Commodities, Global Markets

You hit it right this time! Most of the maladies we have been encumbered with can go away with something like the old Glass-Steagle in place again. However, you are also right that this will never happen. We have the best set of politicians (and surprisingly this "people's" administration) and lobbyists on K Street that Wall Street money can corrupt.

China: Recovery or Just Slightly Improved Data?

Trader Mark makes several ineresting points, and on quite a few provides interesting departures from the usual Wall Street hype and its peculiar tendency to misinterpret data. On China though Mark's observations are astute, though there may be departures on interpretation ofr China's mimicking the Greenspun era philosophy prevalent in the US.

Perhaps, the need for China to act the way Mark has outlined in loosening its fist and its monetary and fiscal policies is the the Communist Party's realization that a painful slowdown of the economy or collapse would trigger widespread revolt and disorder in China among the masses, which the Paqrty may not be able to face easily. At the other end, the Party and Government probably also realize that the spending spree from consumers in the US and Europe is perhaps over for a long time due to dubious retirement prospectss for the majority of Americans as a result of the recent economic tsunami in the West. So what better time to inflate the domestic Chinese economy, infrasatructure expansion, and consumption. Necessary for survival of the Party and the order in the face of constraints on China's exports for years to come. However, habits can't usually be given up easily, and Chinese masses, long trained to be thrifty, may not fully oblige immediaterly. So, my guess is China also will face lower growth prospects (in the 5 to 8% range) for quite awhile, and perhaps some unrest to boot from the working-class masses..

Obama's 'Aggressive Attitude' Towards China Is Nothing New

Many other nations, save for the US are not habituated to stand idly by. and watch the effects of China's manipulation of the RMB. They do slap on tariffs or bans on selected Chinese importswhich hurt their domestic industries.. The US has proven to be helpless on this manipulation because America has been profligate on its consumption for decades and has accumulated trillions of debt to foreigners/Asians as well as at home.

Tuesday Outlook: Commodities, Emerging Markets, More

David Fry presents excellent analysis as usual. However, dumping on the speaker ain't cute at all. Perhaps, dumping on the scrumptious crowd that implicitly said "She hurt our feelings and exposed our hypocrisy of the last 25 years of pinhead economics" is probably more to the point.

Russia's Too Risky - Barron's

To me it looks like Russia is no different than any other major orsuper power or colonialist. Dangerous? Perhaps so; depends on the beholder, or one's appreciation of history. The US did not tolerate even the Sandanistas in Nicaragua, except that the Sandanistas were not so much a Soviet lackey but in fact only local leftists fed up with corruption and authoritarian elites supported by the right wing barons tacitly backed by the US. Ditto in Cuba before Castro was squeezed by the US. What can one say about a small enclave subjected to "liberation" overnight in Granada? Perhaps, leftists and authoritarians of the Left variety, but n o more mendacious than any third world potentate!.

Then there was Vietnam cooked up by the US to be an international Communist conspiracy by Russia and Mao, and posing a threat and take-over of Southeast Asia by international communism. Less than one year after the conclusion of the Vietnam war, China and Vietnam (uncle Ho!) went at each other in a war that lasted a few weeks with before the Chinese withdrew with a bloody nose! There was 1500 years of history between China and Vietnam which was ignored by the conspiracy theorists in the US. This history of conflict and repeated attemtpts to subjugate Vietnam by the Chinese militated overwhelmingly against the conspiracy theoreticians of the USA hawks!
Yet, it did not prevent an American blunder, as bad as Iraq.

There are parallels from British and French colonial history in the Middle East and elsewhere in the the world.

Much of the foregoing prompts me to be skeptical about this drumbeat beating in the West against Russia. Russia is just asserting its interests on its borders. [Just like us with our Monroe Doctrine in the nineteenth and twentieth centuries!] Russia is not going to tolerate hostiler neighbours or influence/threats from distant powers on what it thinks its neighbourhood or sphere of influence. If it can help it! This is classic defence, and the way a major/super power always responds to those who threaten to upset the balances on its borders or perceived sphere of influence!