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JakilaTheHun (99.92)

The Hun's New Invasion, March 25th



March 25, 2010 – Comments (5)

It's been quite awhile since we've had a good ole' Hunnish invasion here on CAPS.  My apologies for that --- my time has been much more limited due to all the happenings in my personal life over the past few months.  This includes admission to a top-tier MBA program; which will hopefully land me a job in either real estate development or investment management.  

Enough about me, though, here's the news articles that have caught my attention this week.  This is a very China and healthcare-heavy episode:


--- China, Emerging Markets, and Google ---


Google's Decisions Signals Change in Western Business Approach to China

Link - Washington Post

Whether or not Google ends up being representative of the issues that companies have to deal with in China, it certainly does showcase the problems of doing business in a closed society with strict governmental controls.  China may not be the Soviet Union, but it's still guided by very similar philosophies.  


China and Russia are Eternal Emerging Markets

Link -Market Watch

Great article and the author's point is right-on.  There's a reason that many of the "emerging markets" seem to stay "emerging markets" for a very long period of time. Emerging markets stay "emerging" because they do not empower creative individuals and entrepreneurs.  Instead, they dis-empower them via corruption, limited access, lack of free speech and an unfree press, and arbitary policies.  Look ... things aren't perfect in America and unfortunately, we have corruption, too.  But we also have a lot of transparncy that tends to shed a light on nefarious happenings fairly quickly --- whereas, issues might go unnoticed for decades in China before the flaws become obvious to the public. 


China's Instructions on Google

Link - Washington Post

A not-so-subtle reminder that by investing in China, you are investing in a closed society that limits free expression. This is not meant to dissway anyone from investing there; rather, it's meant to emphasize the greater risks.  When you have officials who are preventing the public from learning about major happenings, it means there's much less knowledge in the system and more long-term problems will develop.  


Resistance Against North Korea Mounting

Link -Washington Post

Speaking of backwards closed societies, North Korea is almost a textbook case of the developmental problems associated with these types of governments.  China has its issues, but North Korea is just an outright nightmare.  I would not be surprised if there is a regime collapse in the next two decades and North and South Korea are re-united in the same way East and West Germany were at the end of the '80s. Personally, I'd much rather invest in South Korea than China.  I'd feel much safer.  


China's Currency: The Immovable Object

Link - The Economist

I strongly disagree with Avent's thrust in this article.   Avent argues that labeling China a "currency manipulator" will only make them more resistant to change and that we need to allow them to do this at their own pace.  Ok ... and what if that happens to be 60 years from now and the American economy is in shambles by then?  

Look, I don't like tariffs, but China is a mercantilist nation.  Let's stop beating around the bush --- they are manipulating trade and we are sitting back and doing nothing about it.  We're harmed one way or another and it's downright foolish to pussyfoot around this and 'just wait for China'.  China's not going to be happy until they overtake the US, which might not be for another 50 years.  

What we should do is set the tariff equal to the trade gap.  China has several mercantilistic tricks in its bag and its willing to exhaust all of them, so let's just be realists here and if the Chinese are going to operate on a mercantilistic trade policy, let's create a structure that punishes them for the trade gap.  This way, their incentive is to move towards free trade. 


China Trade Practices Responsible for 2.4 Million Lost Jobs in US

Link - Reuters

Interesting study.  Don't know the details of it or what the flaws might be, but I'd like to see more work on this.  


Roach Shows Little Understanding Versus Krugman

Link - Seeking Alpha

I've found that if there's anything popular in the financial blogosphere, it's Krugman bashing.  Every amateur nutcase in the world thinks that they ar ea genius and that Krugman is an idiot.  Well, I ignore that garbage.  Truth be told, sometimes Krugman is right and sometimes he's wrong --- just like every other human being on Earth.  And if there's anything Krugman is absolutely right on, it's China's currency manipulation.  

But enough about Krugman ... Howard Richman is the one of the most intelligent and well-informed economists/bloggers who writes about US-China issues.  This guy can go through a laundry list of every mercantilist measure the Chinese are employing, including the most recent move that is designed to force American companies to relocate their R&D in China.  


Google's Hong Kong Backdoor

Link -Wall Street Journal

This hasn't really worked for Google, but I don't think anyone expected it to.  All the same, they seem to be retreating to Hong Kong-only and pulling out of the rest of China.  


--- Health Care ---


Intelligent Conservatism and Its Absence

Link -Washington Post

Very excellent article on Wash Post about the lack of intelligent conservatism in America.  Aside from Pat Buchanan, Newt Gingrich, and maybe Ron Paul (minus his conspiracy theories), there really aren't that many intellectual conservatives out there.  Instead, the conservative movement has been overtaken by shock jobs like Rush Limbaugh and Glenn Beck. 

The problem with this is two-fold.  It means that the conservatives (via the GOP) make poor policy sense they aren't as concerned with reality as they are with rhetoric.  But it also means that the Democrats produce worser legislation because they aren't held accountable in their policies.  The GOP tends to just use a bunch of sensationalistic rhetoric ("death squads"), rather than focus on the actual problems of legislation.  Therefore, we all suffer as both parties create more dismal legislation.  There really needs to be a revival of intelligent conservatism in America.  


Reform's Great Unknowns

Link - Washington Post

Excellent article on just a few of the issues underlying the health care legislation.


Healthcare Reform and the Bottom Line">Link - Seeking Alpha

Another good article on the reform.

How Big is the Bill?

Link - WaPo

Ezra Klein looks at the size of the bill and concludes it barely puts a dent in healthcare. 


Mitt Romney Distances Himself from Healthcare Reform

Link - National Review

There's a lot of slime oozing from Congress these days and we saw a lot of it in both parties over the past few weeks.  But if you ask me who'se the slimiest creature emerging from this mess, it's none other than Mitt Romney.  

While the media has largely ignored this, Obama's health care legislation was modeled after the Massachusetts health care legislation of a few years back.  That bill has turned out to be a disaster in Massachusetts and may even partly explain why a Republican won the US Senate seat, despite the fact that Massachusetts is as solidly Democratic as one could imagine.  Mitt Romney was one of the big supporters of that legislation --- now he's suddenly trying to distance himself from the Federal version because he knows it will hurt his electoral prospects.  What a ball of slime!    


CBO Forecast Carries Big Uncertainities 

Link -Washington Post

One final healthcare-related article, about the CBO forecast.  


--- Other ---


Will Retiring Booomers Led to Worker Shortages in 2018?

Link -Wall Street Journal

Enough about health care for awhile.  Here's an interesting thesis being proposed:  that retiring boomers could ease unemployment over time and even create an employment shortage.  Believe it or not, I've actually considered this possibility before.  I'm not sure if this will come to fruition or not, but if nothing else, it's food for thought.  


Bloomberg Warns of Mass Layoffs in NYC

Link - ABC News

Copped this from CAPS' resident doom-and-gloomer, Alstry.  But it's interesting in that it showcases what the real-world manifestation of government fiscal crises that seem to be taking place all over the US and all over the world.  Bloomberg plans on mass layoffs and the MTA has already cut back on some routes.  I think some of the teacher layoffs are unavoidable, but personally, I think enacting roadway tolls would be better than cutting MTA service.  The roads are so heavily subsidized anyway, which is part of the problem.  

China's High Speed Rail Plans Dwarf American Initiatives 

Link - Seeking Alpha

Interesting article.  Actually, this is one thing I believe China is doing much better than America.  We seem to waste a lot of tax money on nothing and not much on important infrastructure, like high-speed rail.  The major benefit of high-speed rail is that it will help us ease off of oil, as it becomes more expensive as time passes. 


Why America is the Biggest Importer of Steel

Link -Seeking Alpha

Interesting article from one of my favorite steel analysts.  



Well, that's all for now.  These Hunnish News Invasions will probably be somewhat rare for the next few months, but there might be one every now and again. 

5 Comments – Post Your Own

#1) On March 25, 2010 at 12:17 PM, chk999 (99.97) wrote:

Congrats on the MBA program!

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#2) On March 25, 2010 at 12:48 PM, cashkid79 (93.37) wrote:

That is the most encouraging news I think actually, knowing there is still a focus on education and the furthering of it for those who truly care about these issues and want to help make a difference.

Liprie, TP

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#3) On March 25, 2010 at 5:50 PM, Tastylunch (28.71) wrote:

-This includes admission to a top-tier MBA program


keep at it man. I'm sure you will do great wherever you go.

thanks for the steel article, never seen that author before

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#4) On March 25, 2010 at 5:51 PM, Tastylunch (28.71) wrote:

oh and you might wish to network a little with checklist, sounds like he's getting into the CRE game


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#5) On March 29, 2010 at 11:29 AM, anchak (99.91) wrote:


Which program - Maryland or George Washington - you are up there aren't you?

I am guessing T Rowe Price will have a good analyst soon....good for me - I am an investor!

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