An excellent essay by Paul Krugman in 1994 cited by Jim Chanos about the underlying instability of state-driven economic model.
media.ft.com/cms/b8268ffe-7572-11db-aea1-0000779e2340.pdf
A CAUTIONARY FABLE
ONCE UPON a time, Western opinion leaders found themselves both impressed and frightened by the extraordinary growth rates achieved by a set of Eastern economies. Although those economies were still substantially poorer and smaller than those of the West, the speed with which they had transformed themselves from peasant societies into industrial powerhouses, their continuing ability to achieve growth rates several times higher than the advanced nations, and their increasing ability to challenge or even surpass American and European technology in certain areas seemed to call into question the dominance not only of Western power but of Western ideology. The leaders of those nations did not share our faith in free markets or unlimited civil liberties. They asserted with increasing self confidence that their system was superior: societies that accepted strong, even authoritarian governments and were willing to limit individual liberties in the interest of the common good, take charge of their economics, and sacrifice short-run consumer interests for the sake of long-run growth would eventually outperform the increasingly chaotic societies of the West. And a growing minority of Western intellectuals agreed.
Friday, June 17, 2011
Thursday, June 16, 2011
Lessons from the Asian Financial Crisis
Charles W.L.Hill
University of Washington
(China parallel highlights )
Asian Contagion
Between June 1997 and January 1998 a financial crisis swept like a brush fire through the "tiger economies" of SE Asian. Over the previous decade the SE Asian states of Thailand, Malaysia, Singapore, Indonesia, Hong Kong, and South Korea, had registered some of the most impressive economic growth rates in the world. Their economies had expanded by 6% to 9% per annum compounded, as measured by Gross Domestic Product. This Asian miracle, however, appeared to come to an abrupt end in late 1997 when in one country after another, local stock markets and currency markets imploded. When the dust started to settle in January 1998 the stock markets in many of these states had lost over 70% of their value, their currencies had depreciated against the US dollar by a similar amount, and the once proud leaders of these nations had been forced to go cap in hand to the International Monetary Fund (IMF) to beg for a massive financial assistance. This section explains why this happen, and explores the possible consequences, both for the world economy, and for international businesses?
The Universa approach to hedging tail risk
Elevated concern about extreme events has boosted interest in hedging tail risk, but this means turning conventional fund management on its head. Mark Pengelly talks to Mark Spitznagel, founder of hedge fund Universa Investments
Oscar Wilde once said expecting the unexpected shows a thoroughly modern intellect. After the biggest financial meltdown since the Great Depression, this is perhaps more true than ever. Having been caught out by the ferocity of the crisis, investors are now much more aware of the risks of extreme events – and the fact they seem to occur a little more frequently than many had thought.
Oscar Wilde once said expecting the unexpected shows a thoroughly modern intellect. After the biggest financial meltdown since the Great Depression, this is perhaps more true than ever. Having been caught out by the ferocity of the crisis, investors are now much more aware of the risks of extreme events – and the fact they seem to occur a little more frequently than many had thought.
Saturday, December 11, 2010
Jim Chanos:Investing Behind the Great Wall
Hedge fund pro and short seller Jim Chanos believes that China’s overbuilding and overdependence on new real estate, when the demand isn’t there, will cause the nation to eventually “hit a wall.”
CNBC: “The problem is that consumption as a percentage of Chinese economy has declined in the last 10 years, from 40 to 35%. It’s all real estate,” Chanos said.
source
CNBC: “The problem is that consumption as a percentage of Chinese economy has declined in the last 10 years, from 40 to 35%. It’s all real estate,” Chanos said.
source
Friday, September 3, 2010
The Anglo-Saxon Disease
The Yanks (Americans) have it. The "Brits" got it. EVen the Aussies "Down Under" caught it. Not, for most part, the Canadians. But the Japanese, the "Englishmen" (or at least islanders) of Asia had their own version. It was the Anglo- Saxon disease.
It started with property price risess in the above countries, that in turn were the result of loose global monetary policies. Property created a boom in its own industry, and a collateral boom in financing by consumers, who borrowed on rising property values to finance other consumption. These twin bubbles but the banks and lending companies at risk. Things got so bad that governments finally had to step in to bailout fhe financial insitutions. When this happened the problems of a sector became everybody's problem.
The property bubble affected Eastern Europe as well as Southeast Asia. But at its core, it seemed to have a partiuclar hold in Anglo-Saxon countries, which had a stronger notion of property rights than others. But property values run amok are like any other disease. Countries that live by property may also die by property.
source
It started with property price risess in the above countries, that in turn were the result of loose global monetary policies. Property created a boom in its own industry, and a collateral boom in financing by consumers, who borrowed on rising property values to finance other consumption. These twin bubbles but the banks and lending companies at risk. Things got so bad that governments finally had to step in to bailout fhe financial insitutions. When this happened the problems of a sector became everybody's problem.
The property bubble affected Eastern Europe as well as Southeast Asia. But at its core, it seemed to have a partiuclar hold in Anglo-Saxon countries, which had a stronger notion of property rights than others. But property values run amok are like any other disease. Countries that live by property may also die by property.
source
Sunday, August 29, 2010
Tony Robbins Is Warning That An Economic Collapse Is Coming
It seems like almost everyone is warning of a coming economic collapse these days. Do you remember Tony Robbins? He is probably the world's best known "motivational speaker" and his infomercials dominated late night television during the 80s and 90s. He was always urging all of us to "unleash the power within" and to take charge of our lives. Well guess what? Now Tony Robbins is warning that an economic collapse is coming.
In fact, he has issued a special video warning about what he believes is about to happen. Considering the incredible connections that he has at the highest levels of the financial world, it makes a lot of sense to consider what he is trying to warn us about. Robbins says that a "major retracement" is coming to financial markets and that the coming collapse is going to be a "painful process" as we go through it. Those familiar with Tony Robbins know that he always goes out of his way to stress the positive, so if even he is openly warning the public about a coming economic nightmare than you know that things are starting to get really, really bad out there.
The video that Tony Robbins published where he gives his economic warning is posted in two parts below. This is unlike any Tony Robbins video that you have ever seen before and it is absolutely jaw dropping....
Part 1:
Part 2:
So is Tony Robbins right about what is coming?
Yup.
An economic collapse is coming.
You need to get prepared.
For those not familiar with my previous articles, let's review just some of the reasons why America is headed towards an economic nightmare of unprecedented proportions....
The National Debt - The U.S. government has accumulated a national debt that is rapidly approaching the 14 trillion dollar mark. According to Democrat Erskine Bowles, one of the heads of Barack Obama's national debt commission, if we continue on the path we are on the U.S. government will be spending $2 trillion just for interest on the national debt by 2020.
State And Local Debt - Many of America's state and local governments may be in even worse financial shape than the federal government is. In fact, some state and local governments are in such a financial mess that they have starting cutting off even the most essential services.
Consumer Debt - The total amount of consumer debt that Americans have accumulated now stands at approximately 11.7 trillion dollars.
The Trade Deficit - The U.S. trade deficit has exploded to nightmarish proportions over the past two decades. Every single month tens of billions more dollars flows out of the country than flows into it. The rest of the world is literally bleeding us dry in slow motion.
No Jobs - Today it takes the average unemployed American over 8 months to find a job. The number of Americans receiving long-term unemployment benefits has risen over 60 percent in just the past year.
The Credit Crunch - The U.S. is experiencing a credit crunch unlike anything it has seen since the Great Depression. Lending has really, really dried up, but without loans our economic system cannot function properly.
The Housing Crisis - Even with mortgage rates at historic lows, a shockingly low number of Americans are buying houses. There has been a total collapse in home sales since the home buyer tax credit expired. At the same time, mortgage defaults, foreclosures and home repossessions by banks continue to set new all-time records.
Rising Bankruptcies - Nationwide, bankruptcy filings rose 20 percent in the 12-month period ending June 30th.
Rising Poverty - One out of every eight Americans and one out of every four American children are now on food stamps. Approximately 50 million Americans couldn't even afford to buy enough food to stay healthy at some point last year.
The Coming Pension Crisis - America is facing a pension crisis that is so nightmarish that it is almost impossible to adequately describe it. State and local government pension plans are woefully underfunded, dozens of large corporate pension plans either have collapsed or are on the verge of collapsing, Social Security is a complete and total financial disaster and about half of all Americans essentially have nothing saved up for retirement.
The Derivatives Bubble - Our financial system has become a gigantic gambling parlor and we have allowed a horrific derivatives bubble to develop that could destroy the entire world economy if it ever bursts. Nobody knows exactly how big the derivatives bubble is, but low estimates place it at around 600 trillion dollars and high estimates put it at around 1.5 quadrilliondollars. Once that bubble pops there simply will not be enough money in the entire world to fix it.
The Federal Reserve - The Federal Reserve has devalued the U.S. dollar by over 95 percent since 1913 and it has been used to create the biggest mountain of government debt in the history of the world. There are many economists who would argue that the Federal Reserve is at the very core of our economic problems.
As we get even closer to the economic abyss that we are racing towards, even more big names such as Tony Robbins will come forward with warnings.
The truth is that these problems did not develop overnight, and they are not going to be solved overnight either.
Perhaps our economic future is best summed up by this one statement that economist Paul Krugman recently made....
"America is now on the unlit, unpaved road to nowhere."
It would be great if I could write about America's bright economic future and the unlimited prosperity that is ahead for all of us, but that would be a lie.
We are headed for an economic collapse.
It is going to be painful.
It is time to get prepared.
http://www.infowars.com/tony-robbins-warns-economic-collapse-is-coming/
In fact, he has issued a special video warning about what he believes is about to happen. Considering the incredible connections that he has at the highest levels of the financial world, it makes a lot of sense to consider what he is trying to warn us about. Robbins says that a "major retracement" is coming to financial markets and that the coming collapse is going to be a "painful process" as we go through it. Those familiar with Tony Robbins know that he always goes out of his way to stress the positive, so if even he is openly warning the public about a coming economic nightmare than you know that things are starting to get really, really bad out there.
The video that Tony Robbins published where he gives his economic warning is posted in two parts below. This is unlike any Tony Robbins video that you have ever seen before and it is absolutely jaw dropping....
Part 1:
Part 2:
So is Tony Robbins right about what is coming?
Yup.
An economic collapse is coming.
You need to get prepared.
For those not familiar with my previous articles, let's review just some of the reasons why America is headed towards an economic nightmare of unprecedented proportions....
The National Debt - The U.S. government has accumulated a national debt that is rapidly approaching the 14 trillion dollar mark. According to Democrat Erskine Bowles, one of the heads of Barack Obama's national debt commission, if we continue on the path we are on the U.S. government will be spending $2 trillion just for interest on the national debt by 2020.
State And Local Debt - Many of America's state and local governments may be in even worse financial shape than the federal government is. In fact, some state and local governments are in such a financial mess that they have starting cutting off even the most essential services.
Consumer Debt - The total amount of consumer debt that Americans have accumulated now stands at approximately 11.7 trillion dollars.
The Trade Deficit - The U.S. trade deficit has exploded to nightmarish proportions over the past two decades. Every single month tens of billions more dollars flows out of the country than flows into it. The rest of the world is literally bleeding us dry in slow motion.
No Jobs - Today it takes the average unemployed American over 8 months to find a job. The number of Americans receiving long-term unemployment benefits has risen over 60 percent in just the past year.
The Credit Crunch - The U.S. is experiencing a credit crunch unlike anything it has seen since the Great Depression. Lending has really, really dried up, but without loans our economic system cannot function properly.
The Housing Crisis - Even with mortgage rates at historic lows, a shockingly low number of Americans are buying houses. There has been a total collapse in home sales since the home buyer tax credit expired. At the same time, mortgage defaults, foreclosures and home repossessions by banks continue to set new all-time records.
Rising Bankruptcies - Nationwide, bankruptcy filings rose 20 percent in the 12-month period ending June 30th.
Rising Poverty - One out of every eight Americans and one out of every four American children are now on food stamps. Approximately 50 million Americans couldn't even afford to buy enough food to stay healthy at some point last year.
The Coming Pension Crisis - America is facing a pension crisis that is so nightmarish that it is almost impossible to adequately describe it. State and local government pension plans are woefully underfunded, dozens of large corporate pension plans either have collapsed or are on the verge of collapsing, Social Security is a complete and total financial disaster and about half of all Americans essentially have nothing saved up for retirement.
The Derivatives Bubble - Our financial system has become a gigantic gambling parlor and we have allowed a horrific derivatives bubble to develop that could destroy the entire world economy if it ever bursts. Nobody knows exactly how big the derivatives bubble is, but low estimates place it at around 600 trillion dollars and high estimates put it at around 1.5 quadrilliondollars. Once that bubble pops there simply will not be enough money in the entire world to fix it.
The Federal Reserve - The Federal Reserve has devalued the U.S. dollar by over 95 percent since 1913 and it has been used to create the biggest mountain of government debt in the history of the world. There are many economists who would argue that the Federal Reserve is at the very core of our economic problems.
As we get even closer to the economic abyss that we are racing towards, even more big names such as Tony Robbins will come forward with warnings.
The truth is that these problems did not develop overnight, and they are not going to be solved overnight either.
Perhaps our economic future is best summed up by this one statement that economist Paul Krugman recently made....
"America is now on the unlit, unpaved road to nowhere."
It would be great if I could write about America's bright economic future and the unlimited prosperity that is ahead for all of us, but that would be a lie.
We are headed for an economic collapse.
It is going to be painful.
It is time to get prepared.
http://www.infowars.com/tony-robbins-warns-economic-collapse-is-coming/
Tuesday, August 24, 2010
The Six Human Needs
The Six Human Needs
Tony Robbins has identified six basic human needs and believes everyone is—or can be—motivated by their desire to fulfill these needs.
You may want to consider these needs when thinking about developing and delivering products and services to people. The question to ask is, "What need or needs does my product fulfill for my customer?"
1. Certainty/Comfort. We all want comfort. And much of this comfort comes from certainty. Of course there is no ABSOLUTE certainty, but we want certainty the car will start, the water will flow from the tap when we turn it on and the currency we use will hold its value.
2. Variety. At the same time we want certainty, we also crave variety. Paradoxically, there needs to be enough UNcertainty to provide spice and adventure in our lives.
3. Significance. Deep down, we all want to be important. We want our life to have meaning and significance. I can imagine no worse a death than to think my life didn't matter.
4. Connection/Love. It would be hard to argue against the need for love. We want to feel part of a community. We want to be cared for and cared about.
5. Growth. There could be some people who say they don't want to grow, but I think they're simply fearful of doing so—or perhaps NOT doing so. To become better, to improve our skills, to stretch and excel may be more evident in some than others, but it's there.
6. Contribution. The desire to contribute something of value—to help others, to make the world a better place than we found it is in all of us.
Action Point
Evaluate this list to better understand your personal motivations and examine which ones seem the most significant to you. Then, look at what you do to fulfill the needs of others. It will likely make a difference in what and how you do what you do. It also should make a difference in the way you describe and explain what you and your product can do.
Tony Robbins has identified six basic human needs and believes everyone is—or can be—motivated by their desire to fulfill these needs.
You may want to consider these needs when thinking about developing and delivering products and services to people. The question to ask is, "What need or needs does my product fulfill for my customer?"
1. Certainty/Comfort. We all want comfort. And much of this comfort comes from certainty. Of course there is no ABSOLUTE certainty, but we want certainty the car will start, the water will flow from the tap when we turn it on and the currency we use will hold its value.
2. Variety. At the same time we want certainty, we also crave variety. Paradoxically, there needs to be enough UNcertainty to provide spice and adventure in our lives.
3. Significance. Deep down, we all want to be important. We want our life to have meaning and significance. I can imagine no worse a death than to think my life didn't matter.
4. Connection/Love. It would be hard to argue against the need for love. We want to feel part of a community. We want to be cared for and cared about.
5. Growth. There could be some people who say they don't want to grow, but I think they're simply fearful of doing so—or perhaps NOT doing so. To become better, to improve our skills, to stretch and excel may be more evident in some than others, but it's there.
6. Contribution. The desire to contribute something of value—to help others, to make the world a better place than we found it is in all of us.
Action Point
Evaluate this list to better understand your personal motivations and examine which ones seem the most significant to you. Then, look at what you do to fulfill the needs of others. It will likely make a difference in what and how you do what you do. It also should make a difference in the way you describe and explain what you and your product can do.
Subscribe to:
Posts (Atom)