HISTORIAN AND SCHOLAR HARASSED BY INDIAN AUTHORITIES

A news release with the above title has come to my attention, which I include in its entirety below. Abuse of power by bureaucrats and politicians is a huge problem in India. My advice to Mr Nath is to start a movement aimed at eliminating such abuses.

NEWS RELEASE

HISTORIAN AND SCHOLAR HARASSED BY INDIAN AUTHORITIES

A respected South Asian military historian, scholar and author is being unjustly harassed, maligned and threatened by Indian authorities. Mr Ashok Nath is of Indian origin, has been based in Europe for the last thirty years and, earlier, served in an elite cavalry regiment of the Indian Army. He is the author of a monumental work on the history of the Indian and Pakistan cavalry, whose research and publication he has financed largely from his own resources. The work has been widely acclaimed - for example in the UK by Oxford University's eminent Professor of the History of War, Hew Strachan, by the Indian Military Historical Society, and by others.

The story begins in August 2000, when he purchased in Delhi a post-WWII George Cross medal group in good faith for his private collection, with documents and a video confirming its legal title.

To raise funds for his research on the next series of volumes he is writing, he decided to sell his medal collection, and offered the George Cross to a well known military auction house in London in 2009. The auction house, doing some research, discovered that the medal was listed as having been reported stolen and asked him for proof to the contrary, which he provided to its satisfaction and to the satisfaction of Scotland Yard to which the case was later referred.

For unknown reasons, the widow of the George Cross awardee denied selling the medal and reported that it had been stolen on a date well after it had been sold. This created a politically-motivated hue and cry in the Indian state of Himachal Pradesh. The local politicians instructed an official to secure the return of the medal so that they could claim credit for the return of the medal to the state.

The George Cross is not an antique according to Indian law, nor was it registered as a national treasure in India, so its sale was valid and there was nothing illegal about its being taken out of the country. It has been purchased in good faith with valid documents and there is indeed a video recording which demonstrates beyond a shadow of doubt that the medal was given by the widow, to the person who then sold it on.

The scholar is being bullied by threats, false charges and public maligning by the authorities. After voluntarily withdrawing the medal from the auction, he called for a thorough and impartial investigation, and has cooperated with the police, both in the UK and India. However, the Indian State police are known for being corrupt, and have been twisting evidence to suit their own agenda. He feels therefore that they cannot be trusted.

Harassment by Indian government officials is a sad reality in India. It is unacceptable that Indian authorities should seek to browbeat a European citizen who is pursuing his own scholarly interests. If the Indian authorities are allowed to get away with such actions it will be a sad day for collectors worldwide.

Mr. Nath can be contacted on telephone +373 22 73 20 23 or by email on: anath53[AT]gmail.com Sphere: Related Content

Best practice for Executives' decisions about Technology

Several years ago, I published a piece of research into the top 100 Company Boards and the relationship with technology-related matters. The results were "shocking but not surprising": none of the Boards had any definition for technology competence, and none of them assessed their own competence about technological matters. Moreover, very few of the Boards did anything to nurture or reward technology competence at Board level.

I regret to say that the situation does not appear to have changed much.

At least that is what I deduce from an excellent article which sets out what I regard as best practice in the matter of executive decisions about technology:
http://ethix.org/2007/02/01/executive-decisions-about-technology Sphere: Related Content

Where can you find the worst exhange rate in the world?

First, I should explain what I mean by the question. By "exchange rate" I mean: the rate for exchanging one currency into another. And by "worst" I mean: that which is most DISadvantageous to the customer.

So what is my nomination for the worst exchange rate in the world?

The See Buy Fly shop at Schiphol Airport in Amsterdam: I bought something worth Euros 5.75, and thoughtlessly proferred some Swiss Francs. I was charghed CHF 12.74 !!! Sphere: Related Content

How soon will India's growth rate exceed China's?

It is not clear that the Indian government is going to do much any time soon to change the things that impede growth in the country (think infrastructure, think bureaucracy and corruption....)

However, it is now clear that India's growth rate will, at some point, overtake China's growth rate.

The question is: when?

I think it oculd be as early as next year, and at the latest by 2015.

Why? Because in a slowing global economy, export-based "emerging economies" such as China's are going to be hit more than "emerging economies" which are not as much based on exports - e.g. India's.

Moreover, as China's economy slows and approaches India's rate of growth, investors' current risk-reward perception regarding the two countries will rapidly reverse, specially given the negative experiences of Western companies in China - which at least a few multinationals are beginning to express, having got fed up of the games that China has been playing.

And there is a further factor: China's "demographic dividend" is set to stabilise somewhere around 2015, while India's "demographic dividend" is set to continue expanding for perhaps 30 years longer. By around 2015 at the latest, that fact will begin to weigh on the calculations of investors.

Naturally, the above does not include scenarios such as political collapse in either country, which is possible if China and India do not make much more vigorous moves in the direction of human rights, democracy, genuine liberalisation, actual care for the environment and social justice, and so on.

At present, keeping growth going is a "no brainer" in both countries. But, even at present, what is not a "no brainer" is how to focus on human rights, democracy, genuine liberalisation, actual care for the environment and social justice, and so on, in such a way as to avoid disadvantaging the current elite too much.

That is not impossible.

However, it does require articulation, conceptualisation and, more important, implementation - which neither country has done in a sufficiently substantial way, so far. Sphere: Related Content

Further evidence that we are already in another bubble: U.S. Retail Sales

Why is the market still relatively so high when, following the disappearance of the temporary boost to incomes provided by government "stimulus packages", wages and asset income are low, revolving consumer credit is flat if not down, consumer confidence is pretty absent, and unemployment is up?

Is this not evidence of over-liquidity producing "animal spirits" (i.e. a bubble)?

For those who like to know such things, nominal retail sales fell for the second consecutive month in June, down 0.5% compared to the same month last year. This followed a 1.1% correction in May. Core retail sales—sales (excluding gasoline, building supplies and autos) remained more of less flat, with a negligible 0.2% gain, after being revised to marginally negative in May. Sphere: Related Content

Impact of the Recession on the US

The recession has added, over the last 2 years or so, some 2.4 million people to the category of people who may not be able to repay any new loans (and possibly some existing loans as well).

The total of such people in the US is now over 43 million people.

That's 25.5% of U.S. consumers!

The figures above have been produced by a credit-score firm, Fair Isaac, according to a report by AP.

So much for the US growth engine returning to full power any time soon - which has implications also for developing countries, specifically export-dependent countries such as China. Sphere: Related Content

It Can Be Done!

For all our encouragement, I post here a News Release that I have just received from a friend - and I do it because it shows that efforts to reform society still produce results, even though it still requires the willingness to stick out one's neck, to take risks and to be persistent. The following effort took 2 years on the part of 2 individuals - but just think of the benefits to thousands of poor workers right across the UK!:


"Health & Safety Investigation at BBC Television Centre will Oblige Retail Companies to Introduce Chairs for all Shop Till Workers

"Employers across Britain who refuse to provide chairs for their staff who work on sales tills may soon have to do so, following action taken by two Christian trade union activsts at the BBC's main broadcast studios at Television Centre in White City. The Health and Safety Executive have concluded an 8 month investigation into contract catering company, Aramark, who run the BBC teabar concessions used by newsroom journalists and technicians. In 2008 the company had ordered the removal of chairs from some of their catering outlets, obliging staff using the tills to stand for hours without a break. Following the refusal of BBC management to intervene, NUJ rep, David Campanale and BECTU activist, Brian Dale reported the matter to the HSE. The HSE inspector leading the inquiry has now told them that following their action, chairs will not only have to be restored to catering staff in the BBC, but in all retail and catering outlets across Britain, saying "the same principle applies to other workplaces."

"Andrew Verrall-Withers is the HSE inspector who led the inquiry. Together with the HSE Special Inspector for Ergonomics, Ed Milne, he established that caterers Aramark could not evade their legal duty to provide chairs for their staff, because of workplace regulations from 1992, which state that " If work can or must be done sitting, seats which are suitable for the people using them and for the work they do should be provided." (Workplace (Health Safety and Welfare) Regulations 1992, Reg 11 (3).

"Commenting on the outcome of the case, which could see chairs at till-points restored in thousands of retail and catering outlets, Brian Dale of the BBC BECTU branch, who attends the Community Church, Surbiton, said:

"'We wanted to speak up for those who were being exploited. As Christian trade unionists, we were angry at the injustice, especially as some till-staff were standing for 8 hour double-shifts. It took 2 years but the result now has national ramifications for similar workers exploited in the same way by their employers.'

"David Campanale also attends the Community Church and is NUJ Father-of-Chapel in BBC World News. He was given the news of the outcome of the inquiry by Andrew Verrall-Withers, who told him:

"'This was a very strange, frustrating but useful experience around the simple issue of whether Aramark would provide chairs for their staff. In the end, I had to take action against Aramark and to his credit, Chief Executive Andew May resolved this the moment it reached his level. I took the line that to get a result - when push came to shove - I was prepared to take this to court even if it risked £50,000 in court costs. I was prepared to prosecute over a chair. There was no chance I was going to walk away from doing this. I congratulate you for your effort. Would this outcome have happened without you? No. You have been the first cog turning in the machine.'"

"The BBC's Head Of Production Safety, Stephen Gregory, had told the NUJ last year he would not take action over enforcing the legislation as "Aramark are a sub-contractor and that BBC have no direct operational or management control". After a joint BECTU and NUJ petition organised by Brian Dale and David Campanale and signed by newsroom staff, presenters and technicians was ignored, the pair called in the HSE on behalf of their unions.

"According to Andrew Smith-Withers, the investigation has wide ramifications across a range of industries. An unwritten 'rule' had been sneaked in by companies such as Sainsburys, M&S and others that till-workers will not be provided with chairs if they 'only' stood up to 4 hours. He said this has now been scrapped as a result of the HSE's enquiry into practise at the BBC and that his conclusions about the law on provision of chairs will have to be observed nationally. Companies, he said, "cannot now choose not to provide chairs for their workers". "This enquiry", he said, "does establish a precedent across industry."

ENDS

More information:

Contact NUJ David Campanale 07873 625396

Contact HSE Andrew Verrall-Withers 07903830200

NOTES:
1. Workplace (Health Safety and Welfare) Regulations 1992, Reg 11 (3) :
"Workstations should be suitable for the people using them and for the work they do. ... If work can or must be done sitting, seats which are suitable for the people using them and for the work they do should be provided. Seating should give adequate support for the lower back, and footrests should be provided for workers who cannot place their feet flat on the floor.
http://www.hsebooks.com/Books/product/product.asp?catalog_name=HSEBooks&product_id=2938&MSCSProfile=3C79F0C7EA3162B289A6F3317CC124D8D9372B7BCC613DFB15516F472ACE5D05B40167B7595A971D5D42442B97426CA004C437E0958C35EF5716EC79B89EB0A53E81DD6BF7C649C0E594BDBB550

2. Research shows that complaints of aches or discomfort in the muscles and joints are common in supermarket cashiers - just as they are in many other occupational groups. Cashiers usually work part-time, yet they still get problems and some aspects of checkout work can contribute to these. Most cashiers will feel pain in their arms, legs or back at some time during a year. A few will feel some pain each day. Both back pain and neck/arm pain are common - over half of all cashiers will report one or both. More at H&S specialists: http://www.healthandsafety.co.uk/hscd.html Sphere: Related Content

"Economic Disaster to Strike Again Unless Governments Change Course"

Above is the sort of slogan which is now being popularised by right-wing "celebrities, personalities and authorities".

It is true that expansionary economic policies, which were called for by some global leaders last month, can lengthen the financial debacle which started in 2007 and which is not yet at an end.

It is also true that the G-20 participants who called for fiscal restraint are at lesat partially correct: governments cannot indefinitely and endlessles spend, nor can they infinitely expand money supply.

However, it was not government deficits and debts that caused the current crisis. It was the nature and current structure of the financial system. Specifically, it was "the Shadow Financial System" that caused the crisis.

So the problem is not what one commentator calls "the national howling we have seen against pension-fund reform in France or spending cuts in Greece and Spain". (Apparently, according to such commentators, governments can and should bail out rich stockholders when their stocks run into trouble, but governments should not do anything to help the poor).

The actual problem is rather that nothing substantial has been done so far about the shadow financial system, and nothing subtantial now looks as if it is going to be done any time soon.

Regretfully, the G-20, meeting in Toronto last month, copped out of any attempt to reform the system.

That is the real reason that we are seeing the economy teetering between mini-rallies and aversion to speculation, leverage and risk-taking.

Given time, governments are apparently hoping that the risk-takers will come back into the market.

If they do, there will be another real boom.

Follwed by another bust - which naturally therefore will be worse than the current one. Sphere: Related Content

Mary Kaldor on the role of the USA in the world

A friend draws my attention to a somewhat old piece written by this outstanding scholar: http://bostonreview.net/BR30.1/kaldor.php

He asks what I think of the article.

Here is my response:

"My points of disagreement with her relate to her apparent belief that anyone can bring about peace in the Middle East: apart from the Israelis and Palestinians themselves, who have rarely shown any great interest in peaceful co-existence, there are all the nearby and faraway powers who have a vested interest ....

And her notion of not American but multilateral interventions in support of individual and "“human security” is theoretically interesting, but unlikely to get very far in view of the fact that multilateralism has historically not got us very far in any conflict in the 60 years or so after WWII - the interests of nations are simply too diverse.

She is closer to what should be achievable globally when she speaks about global rules but, as the G-20 summit in Toronto demonstrated at the end of last month, even that is extremely difficult to achieve given the lack of commitment by political leaders to any real global leadership". Sphere: Related Content

Will the EU's "tough" new rules for bonuses actually reduce excessive risk-taking?

The brief answer is: No.

Why?

Because the bonus rules say nothing about how much risk is taken or the context in which it is taken. Nor do the rules limit the quantity of the bonuses that may be given!

The rules simply say that between 40 and 60 per cent of bonuses will have to be deferred for three to five years, and that half the bonus actually paid out will have to be paid in shares or in other securities linked to the bank’s future mid-term performance.

In addition to simply delaying a proportion of the bonus money getting to them (how much of a disincentive is that?) the move forces all EU financial services companies to link 20-30% of a year's bonus to medium-term performance of the companies concerned.

That percentage is too small to act as a material disincentive to excessive risk-taking in the short term.

Assuming the same overall bonus as earlier, all that the EU move means is that the immediate reward for risk-taking is going to be less now than it used to be, in terms of the proportion available to the person at the end of year concerned.

The only really good thing about the proposed legislation is that any banks bailed out by taxpayers are going to have to rebuild their capital first and repay those funds before being able to give any bonuses to employees.

The EU move may be only a very small move in the right direction but, unless that is matched by Asia and the USA, it will mean merely that the most mobile and brilliant of risk-takers will move to those locations. Sphere: Related Content

Ideas of what constitutes "prompt payment"

I have just had sight of a potential contract which offers, in case of overpayment to a party in Italy, a "prompt refund".

Well, having a penchant for asking awkward questions, I wondered "What constitutes 'prompt'?".

The answer was "180 days maximum".

!!!

However, I guess that is more prompt than never getting repaid at all :) Sphere: Related Content

A post from "Anonymous" says: "I say thank God for those entreprenuers and business people who take risks and conquer challenges that create jobs, jobs, and jobs. Rather than judge the motives of business people why not judge the fruit of what they produce and the impact on society. What about the large foundations that are founded by very successful business people? Perhaps there is the real answer as to what they value and why they work so hard to fulfill their pledge to shareholders. By the way, I am broke after trying to create a business but I hold no animosity to those who have been successful. Just a thought."

Dear Anonymous

Many thanks for your thought. The question of whether we should thank God or the entrepreneurs concerned is a moot one. And I find nothing to "judge" in the motivations of businesspeople, as the motivation is simple: to make money.

One hopes that they want to make money within the law. But the evidence worldwide is mixed.

Because businesses always seek to remake the law to suit themselves (the latest evidence of this is in today's newspapers, which report that companies from one sector are winning the battle to shape the new regulations which will govern that sector of business).

Note that the business which tries to influence laws and regulations so that laws and rules suit society as a whole is rare.

You also ask: "What about the large foundations that are founded by very successful business people?". Well, what about them? No doubt they do good. But they do good with money that may have been earned (as in the case of Andrew Carnegie, the first great "philanthropist" of modern times) by paying his workers and his suppliers less than he should have....

So in order to make a moral judgement, we have to look not only at the uses that the profit is being put to, but also at what that profit was originally made in a legal, ethical, humane and environmentally responsible way. Otherwise the consequences of the business activity as a whole generate more negative effects than positive ones.

Specially when one considers the lifestyle to which the business person or family treated themselves while running their business.

So there are many aspects to take into consideration.

Please note what I am NOT saying. I am NOT saying that there exists no single business which obtains its profits according to the criteria mentioned above. Only that such businesses are fewer than we would like to believe.

My commiserations that your business venture failed. But I hope that you will have the time and the inclination (and the advice, if that is relevant) to reflect on the reasons that your business collapsed, and that, having learned your lessons, you will go on to build one or more really successful businesses.

As someone who has been involved in business for some 30 years, I know that success takes extremely hard work and infinite attention to detail, combined the capacity to maintain an overall perspective of the business, as well as a wider sight of what is happening in politics, economics, society and technology. Not easy at all....

And yes, if you can create a successful business on a moral basis, live modestly and use your profits for the public good, you will have done a wonderful job. You will in fact belong to the real elite of the world - people such as the Quaker business families which originally built up Cadburys and Wrigleys and Rowntree and
Very best wishes Sphere: Related Content

"global warming’s six americas 2009" study by the Yale Project on Climate Change and George Mason University's Center for Climate Change Communication

A nationally-representative survey of American adults was conducted covering such topics as: climate change beliefs, attitudes, risk perceptions, motivations, values, policy preferences, behaviours, and underlying barriers to action

The analysis of the responses segmented the US public into six ("The Six Americas").

Each displays display very different levels of engagement with climate change, and the segments vary in size from 7% to 33% of the surveyed population.

The Alarmed (18%) are fully convinced of the reality and seriousness of climate change and are already taking individual, consumer, and political action to address it. The Concerned (33%) – the largest of the six Americas – are also convinced that global warming is happening and a serious problem, but have not yet engaged the issue personally. Three other Americas – the Cautious (19%), the Disengaged (12%) and the Doubtful (11%) – represent different stages of understanding and acceptance
of the problem, and none are actively involved. The final America – the Dismissive (7%) – are very sure it is not happening and are actively involved as opponents of a national effort to reduce greenhouse gas emissions.

My attention has been drawn to the survey (though it was published just over a year ago, and the actual interviews with surveyed respondents took place in Autumn 2008) in the context of the discussions surrounding the BP oil rig/ spill disaster.

Some people are suggesting that, as a result of the financial crisis, climate change has become very much LESS of a concern in the USA (at least in comparison to financial and employment issues). Others suggest that, as a result of the disaster, climate change and related environmental issues have become MORE prominent in public concern.

Time will tell - though, as always, surveys take a narrow slice to examine and in real life no doubt everything relating to the disaster will get mixed up with the public reaction to President Obama's handling of the issue politically, to whether whatever amount is finally given by BP is considered adequate, and the long-term consequences for the Gulf of Mexico and wider. Sphere: Related Content

The UK's "kill or cure" budget

George Osborne, the UK Chancellor (or Finance Minister) has asked that his first Budget be judged by two yardsticks: its success in reducing the deficit and the proof it offered to the nation that “we are all in this together”.

By the second yardstick, he will certainly fall short because it is widely acknowledged that his budget will disproportionately affect the poor and advantage the rich.

Whether he will be successful in the first (reducing the deficit) remains to be seen. The budget savagely cuts public spending, with most government departments threatened with a 25 per cent by 2014-15. Now that the government accounts for as much as 48% of GDP, that may slash perhaps as few as 50 thousand jobs or – depending on developments – overall unemployment rising as high as 3 million. The budget has welfare reductions and tax increases that grows every year until it hits £40bn in 2014-15. Briefly, this is one of the most drastic spending squeezes in any advanced economy since World War II.

In addition, consumption taxes will be raised (VAT will go up from next January to 20 per cent). That amounts to a UKP 5000 hit for the average family in the UK – though of course any flat tax hurts the poor much more than the rich.

On the other hand, income tax allowances will rise by £1,000 (taking an estimated 880,000 people out of the income tax system - though how many of them will still be in jobs is not clear), the basic state pension will increase in line with earnings from 2011, and £2bn will be spent on children in the poorest families.

Then there is the £2bn tax on banks, which will give him some additional income but I wonder if that will not further constrain the principal growth engine of the UK economy (financial services).

Oh and I should mention some measly measures that the Chancellor has taken which are meant to encourage small businesses.

As Mr Osborne is reported to have said: “Our policy is to raise from the ruins of an economy built on debt a new, balanced economy where we save, invest and export”. Saving and investing might perhaps be possible (though it is difficult to see how that will be within the reach of most people in the UK). What we can definitely say is that export will be a chimera, because the UK really manufactures very little and most of its professional services (which form the bulk of its exports) may be in less demand if one considers that the reputation of professional services derives partly from the overall success of the economy of which it is a part.

So will this budget signal “the start of a period of painfully slow growth, falling living standards, and prolonged high unemployment” (in the words of one commentator) or whether what we have is a "a reckless budget that pulls the rug out from under the economy” (as Harriet Harman, the acting Opposition Leader put it)?

At its best, it is an optimistic budget which leans heavily on inflation and interest rates remaining low – which is probably unrealistic given the volatility of the world economy.

The key matter is whether the budget can prevent a bond market crisis. In other words, it is not governments, nor is it voters, but rather bond market traders, who will eventuallydetermine whether or not the budget will be a success eventually – and that reaction will be based on the bond markets evaluation of whether the UK can create a successful recovery, which in turn depends at least partly on how the whole of the UK responds to the cuts and increased taxes.

Champagne, folks? Or Molotovs? Sphere: Related Content

In spite of the crisis, Americans continue to give to philanthropic causes

According to The Economist this week, a survey of charity donations in the USA reveals that inspite of the recession, charitable giving fell by only 3.2% to $304 billion last year after being adjusted for inflation. Though this was the biggest drop since 1974, most of the decrease was due to a 24% decline in charitable bequests.

That is of course a huge drop.

Was that due to the reduced value of the bequests as a result of the impact of the recession?

Or has something changed in the way people are making wills? Sphere: Related Content

UN Sanctions against Iran versus Israeli sanctions against Hamas

Interesting that the existing U.N. arms embargo against Tehran has now been beefed up with a cargo inspection regime.

An inspection regime for all cargo headed to North Korea has already been in place.

So why are so many people making such a noise against Israel's cargo inspection regime for all goods headed into (terrorist) Hamas-held territory? Sphere: Related Content

Regional tensions increasing

I see that the UK government has now reacted to President Obama's stinging attacks against BP with the suggestion that President Obama tones down the aggressive rhetoric or that might damage transatlantic relations.

Also that the US is blaming Europe for Turkey's opposition to UN sanctions against Iran. No less an official than Robert Gates has suggested that it is the EU's reluctance to admit Turkey as a member that could be pushing it away from the west. Nothing could be further than the truth. I have said for a very long time and on various platforms that the essential question is for Turkey to decide: there is a civil war on inside the country on the question of whether it is to be an Islamic state or a modern state. It used to be a much more secular state. Now it is increasingly an Islamic one. Once Turkey has decided that question properly one way or the other, then the EU (and other countries) have some basis on which a decision can be taken regarding the clubs to which it can and should be admitted.

Both the matters above are signs of increasing regional tensions, as countries (including the USA) look around for scapegoats.

Expect more such scapegoating, and more regional tensions - till world leaders realise the only sensible alternative, which is moving to minimum global rules for finance, economics, ecology and humaneness. Sphere: Related Content

The current European financial crisis

The immediate causes of the current European crisis lie not in Europe but in the economic and cultural leader of the world - the USA - though of course Europe was guilty of following that lead voluntarily:

– first, the USA removed the Glass-Steagall Act in 1999, allowing financial institutions to gamble with money not only from the rich (as had been the case till then) but also to gamble with money from ordinary people, municipalities and nations;

– second, the USA refused to register "big deals", and allowed them to be combined with the possibility of unlimited leverage, resulting in a "shadow" (or "black") economy which ballooned unbelievably: the value of all the goods and services produced in the world GDP is something like US$60 trillion, but the most conservative estimate of the size of the shadow economy at the start of the crisis was 610 trillion, though the most authoritative estimate was 1,200 trillion (BIS), while the highest estimate that I saw put together by experts was 1,440 trillion. However, as it is a "shadow", who knows? And who knows where the effects of that shadow will erupt next? That is why it explodes unexpectedly in different places whether that be Lehmann Brothers or Goldman Sachs or Iceland or Greece. That is why we have the current discussions about "re-regulation", and the questions are: will the new regulations be the right ones, will they be sufficient, and will they avoid being unnecessarily onerous? Incidentally, many people (including myself) were writing and speaking on these matters from the 1990s on, but who wanted to listen?

However, the deeper causes of the crisis are spiritual, political and cultural: the choice made in the 1980s, in the name of productivity, modernity and progress, to privilege the rich rather than act justly for the poor: all possible profit went to the providers of capital, and there was no real rise in wages for workers while giving them the illusion of greater spending power by creating a balloon in the availability and price of housing, and making it easy for people to borrow against that - in other words, the provision of credit/ loans to encourage people to consume more than they were actually earning, while persuading people that greed is good, that there is no such thing as society, that the problem is the government, that lack of rules will make it easier for the economy to flourish, and that it is desirable to take huge risks (with slogans such as: "no risk no fun" and "no pain, no gain"). This high-risk political and cultural gamble worked extremely well for three decades or so since the 1980s (and particularly after the fall of the Berlin Wall), producing more apparent wealth than the world had ever seen in the entire history of the world before that. But when the consequences of the system eventually struck, it produced what is already the second biggest economic collapse in history – and we are of course not yet anywhere near the end of the crisis (all that has happened is that a "floor" has been put under the crisis by the billion-dollar bailouts provided by governments), and the worst may be yet to come because governments themselves are now near-bankrupt while the creation of the "floor" has increased the ballooning of the shadow financial system. In other words, governments may be unable to do anything about the coming consequences without becoming bankrupt themselves. For example, it remains to be seen whether EU governments will be able to raise the proposed Euros 440 billion for the new European Financial Stability Facility Company.

So what are we to say about the way the crisis is being handled?

1. Real solutions do need to be put in place:

a. those that are being thought of (such as the examination of the incentive and reward systems in the biggest companies, the creation of transparency by the registration of all deals, the Volcker rule which would effectively reinstate the Glass-Steagall Act, banning of "naked short selling" or speculation, the elimination of the "too big to fail" syndrome", and the introduction of bank taxes (at least in the EU – though, ideally, globally); and

b. those that are not yet being taken seriously (counter-cyclical provisioning, complementary currencies, transparency of the finances of governments).

Note that the current "rescue packages" further penalize the average person: David Cameron, the UK Prime Minister, just launched today (Monday 7 June) a campaign to prepare Britain for an era of "public sector pain", hoping to prepare the ground for decisions that will "affect our economy, our society – indeed our whole way of life"; a proper rescue package would, instead (or alongside this), reinstate taxation of the rich. Getting to that point, and to genuinely addressing the crisis will require a spiritual and cultural transformation.

2. The best way forward for the European (and indeed global) economy is by global rules that enable a genuinely free market to be created around the world: taxation of commercial broadcasting and narrowcasting in order to enable public service broadcasting and narrowcasting to be able to play its proper role, the banning of research by private companies so that all intellectual property belongs to the public, no subsidies by any government for any activity, minimum pay for workers around the world, minimum standards for health, safety, pensions, and environmental care, and a guaranteed minimum standard of living for everyone in the world (two pairs of clothes, one square meal a day, minimum housing appropriate for the weather, minimum education for children, and minimum health care). Instead of the current tilt of the global economy towards those parts of the world that have no proper standards (for example, in environment, health and safety), such global rules would provide a global level playing field in which there can be genuinely free competition across nations in agriculture, manufacturing, robotics and other innovative and creative technologies which might enable us to address global poverty, the diseases of the poor, the boredom of the average worker, and the anomie of the rich. Sphere: Related Content

At a recent conference, an American asked me if it is safe to drink water from the normal cold water water taps in homes and hotels in Switzerland.

I replied that the rule of thumb is that in every country which went through the Protestant Reformation, one can indeed drink water from the tap.

Not only that, in every country which went through the Protestant Reformation, politics are as clean as the streets, there is a reliable fire service and system of medical care, good schools and universities, scientific and technological progress, care for the poor and a relatively large and prosperous middle class.

With the decline of the influence of the Reformation, trains no longer always run on time in Switzerland, and the educational and medical systems are slowly declining. Fraud is on the increase in companies, and law and order are gradually breaking down in society. Once the rot sets in, it is difficult to reverse.

Even the time-table that one prints out from the internet site of the railway company (SBB) is no longer accurate - e.g. it claims that there is a bus number 113 that takes one from Interlaken West to Beatenberg. No such bus number exists, nor has any such number existed for some time. The right number for the bus is 1.

So even the information one gets from official sources is no longer reliable.

Switzerland will probably never become like China, but it seems to aspire to becoming like India or Africa - unless the moral, ethical and social influence of the Bible is brought back into Switzerland.

But the sad thing is that even most Christians here do not understand that. So it falls to Hindus such as myself to point out such elementary things. Sphere: Related Content

Should Israel have attacked the Gaza-bound ships?

Well, should the ships have been sailing towards Gaza in the first place?

If people think they can test Israeli resolve to protect itself, by simply having civilians on board ship in the manner usual to Islamist terrorist organisations, the people concerned are simply idiots and do not know what they are dealing with.

So what should be done to get civilian supplies through to the poor people of Gaza?

Take up the Israeli offer of civilian supplies to be delivered to Ashdod, from where Israel guarantees that all humanitarian cargo would be taken to the people of Gaza under international supervision.

Since the people who organised the ships that sailed towards Gaza did not take up the Israeli offer, it is clear that their agenda has nothing to do with delivering civilian supplies to Gaza.

Their agenda is rather to score political points against Israel at the cost of human lives.

The people who gave their lives knew that they might have to do so, and they are best compared to people who wish to commit suicide. Sphere: Related Content

Article by Mr Promise Hsu on the best-seller, THE PURITAN GIFT: RECLAIMING THE AMERICAN DREAM AMIDST GLOBAL FINANCIAL CHAOS

The following piece is posted here by kind permission of the author, Mr Promise Hsu. It was originally publishe in Mandarin in VISTA magazine, March 8-17, 2010
and translated from Mandarin Chinese into English by Stephanie Schubmehl

HOW THE BIG CORPORATIONS LOST THEIR WAY
By Promise Hsu
• The Toyota scandal
• The financial meltdown
• The rise of the United States, Japan, and China

What ties these world-shaping events together? Thanks to a lifetime of globe-spanning inquiry, two elderly Brits may have the answer.

“It is critically important for China to distinguish good capitalism from bad”, the 80-year-old William Hopper tells our reporter. With his brother Kenneth, 83, William has been creating a buzz in business and management circles, thanks to their 2007 book, The Puritan Gift: Triumph, Collapse and Revival of an American Dream, named by the Financial Times one of that year’s Top Ten Business Books.

For its 2009 reissue in paperback, the book was re-titled The Puritan Gift: Reclaiming the American Dream Amidst Global Financial Chaos. Not surprisingly, the financial crash has boosted interest this book. In an article for the magazine Strategy+Business, British management guru Charles Handy hailed the new version of The Puritan Gift as one of the top leadership books of 2009. According to Handy, leadership was in short supply in the year-long aftermath of the crisis on Wall Street and the Hoppers’ book served as an ideal reminder of where the business world truly stood.

In the January 2010 Harvard Business Review, executive editor Sarah Cliffe described it as “this astonishing book about American managerial culture.” She added, “I’ve never read a business book that packed so much information, history, and insight into one compact volume.”

Older brother Kenneth, once a department head at Procter & Gamble, has decades of industrial and management consulting experience under his belt. Younger brother William, an investment banker, has served in the European Parliament. The insights their book has to offer, though, are not simply a product of their professional lives. More importantly, the brothers are seeking an ultimate solution to the chaos that has engulfed the corporate and business sectors.

Today the Hoppers are busier than ever, constantly updating their blog, fielding lecture and interview requests, and corresponding with readers. Between February and March 2010, William was blogging almost daily. One item that caught his attention was Toyota CEO Akio Toyoda’s acknowledgment before a U.S. Congressional hearing that the company had “lost its way during a period of rapid growth.” The apology came as no surprise to William. He says Japan’s corporate sector began to lose its way years ago, when it retreated from the corporate system and workplace values imported during the U.S. occupation (1945–1952). “That,” William says, “was good capitalism.”

As for the bad kind, the brothers blame post-war American business schools, particularly after the 1970s. As curricula became dominated by “financial engineering,” profit and performance were prioritized before all else.


A Foreseeable Crisis

When the book’s first edition came out three years ago, William and Kenneth made a point of raising concerns about Toyota. They believed the automaker -- like Sony, Hitachi, Mitsubishi, Panasonic and other Japanese brands once synonymous with quality -- was losing its focus. As William points out, the evidence was emerging long before the brothers completed their book in 2006.

According to James P. Womack, who made a name for himself studying Toyota’s “lean production” practices, the carmaker’s troubles began in 2002. That was the year Toyota rolled out plans to expand its share of the global market from 11 percent to 15 percent. Womack derided the scheme as “just driven by ego,” calling the 15 percent goal “totally irrelevant to any customer.”

William Hopper’s analysis goes a step further. Back in 1993, he says, U.S. auto analyst Maryann Keller was already admonishing Toyota to take a long, hard look in the mirror. Keller’s book criticized Toyota for trimming vital “middle management” positions even as headquarters tightened its control company-wide. A top-down, hierarchical approach replaced what had been a bottom-up, participatory managerial culture; attention to detail and quality suffered as the company’s expansion picked up speed.

Many management experts would stop there, but, for the Hoppers, Toyota is only an example. They have a much broader vision. The Toyota scandal, the achievement and shattering of the American Dream, good and bad managerial cultures, the global financial crisis -- at first glance, it is difficult to see what any of these has to do with a book titled The Puritan Gift. Take a moment to think about what the title is saying, however, or engage more closely with the authors, and the connections become clear. What’s more, this book touches on many aspects of the globalized world we live in -- and more importantly, on our own individual lives.

In a sea of information, history, and concepts, the Hoppers seek the answer to a single question: what factors create a work environment that promotes well-being? In other words, why and how do people work? This is a fundamental question, because without such an environment, no company can experience sound growth. Some, like Toyota, may enjoy a moment of glory, but it will not last.

And so the Hoppers take their readers on a journey across centuries of history. One important conclusion they reach is this: the factors most conducive to the sound, sustained development of a work environment originate with a singular worldview -- one handed down from a group of migrants who left Europe for North America more than 400 years ago.

They were known as Puritans: a people who believed in stripping away man-made conceits and giving oneself over to the will of God. This God was supremely powerful, and as the word of God revealed to mankind, the Bible was the final arbiter in all matters. Puritans crossed the Atlantic in droves during the early seventeenth century, spurred on by their opposition to the way religion was practiced in England and throughout Europe. In North America, they intended to create a new homeland, one that would allow them to do God’s work.

As the Hoppers see it, this endeavor essentially laid the foundation for the modern free-market society. The values inherited from the Puritans are sharply distinct from those of other peoples and places. Despite their relatively small numbers, the influence of the Puritans is felt everywhere from education (they founded the Ivy League schools of Harvard, Yale and Princeton) to organizational management (the Presbyterian Church, republican government, the parliament, the board of directors). Here the authors would seem to be crossing into historical or even theological territory, which may come as a surprise for those accustomed to more traditional business fare. But the Hoppers have much more to show their readers.

The factors most conducive to the sound, sustained development of a work environment originate with a singular worldview—one handed down from a group of migrants who left Europe for North America more than 400 years ago.


Why Do People Work?

Both in their eighties, the brothers believe that the sustained, healthy development of a work environment is a product of spiritual and historical traditions. They learned this first-hand, which may be why the autobiographical portions of their book are so engaging. Kenneth and William are the sons of a chemist. Trained as an engineer, the youthful Kenneth went to work for a branch of Procter & Gamble after a colleague of their father’s touted it as the best-run industrial firm in the U.K.

Kenneth found himself fascinated by P&G’s workplace culture, which contrasted sharply with his experiences in two British firms. Despite the company’s complex structure, decisions on points of detail were handled with great efficiency.
That experience planted the seeds for the book Kenneth would complete at the age of 80. He wanted to find out what was going on in the world. Later, Kenneth’s professional life became what amounted to an extended global tour of workplace cultures. Working in Ireland, he witnessed the rebirth of the Irish economy. He also watched continental Europe rebuild itself after World War-II. In the United States, he had the chance to observe the Golden Age of the American corporation. And he was in Japan as that nation was shaping itself into the world’s second-largest economy.
Throughout his long working life, Kenneth occasionally took time to write about his experiences, whether for newspapers or academic journals. Later, he planned to integrate these pieces into a single work, but health problems prevented him from completing the project. Fortunately, his brother William helped put the book back on the agenda. William’s experience as an investment banker on both sides of the Atlantic, and as a member of the European Parliament, served to broaden Kenneth’s outlook.

He also introduced Kenneth to a friend who would prove critically important to the brothers’ work: Peter F. Drucker, a pioneer in modern management theory. In a letter dated October 3, 1983, Drucker expressed his eagerness to read Kenneth’s forthcoming book, which he intended to order from the publisher as soon as it came out. Kenneth still has the letter. As it turned out, the book would not be completed until after Drucker’s death in 2005. Kenneth still regrets that his friend, who dedicated his life to bettering society, never saw the book in its final version.

Aside from his friendship with the brothers, Drucker contributed indirectly to The Puritan Gift by making a pivotal introduction. It was through Drucker that the Hoppers met three American engineers who had played a central role in Japan’s postwar reconstruction. This gave them the opportunity to examine Japan’s transformation and offered a new perspective on the United States.

Part of the blame for Japan’s corporate crises lies with the curriculum that has dominated American business schools since the 1970s. To an even greater degree, this helped bring about the sub-prime mortgage crisis in the U.S. & Europe.
Another friend whose help shaped The Puritan Gift was American management guru W. Edwards Deming. Deming, too, had helped rebuild Japan after the war, and he is still remembered in the Japanese business world for his role in convincing manufacturers to prioritize the pursuit of quality management.

In the course of discussions with these eyewitnesses and their own work in Japan, the brothers formed a conclusion: it was thanks to the influence of Puritan values that Japan had been able to develop its impressive postwar line-up of quality brands. Furthermore, the social changes that later swept the so-called Asian Tigers and the Chinese mainland signified the spread of these values.

William’s recent blog commentary on the Toyota scandal revisits territory covered in the new edition of the book. The current scandal, he says, is actually a reflection of a much larger crisis, one aspect of which is the decline in “middle management” mentioned earlier. As the Hoppers see it, Japan began to turn away from Puritan values in the 1990s, when many young Japanese were setting their sights on an American MBA degree -- one of them being Akio Toyoda, the face of Toyota’s younger generation, who was 26 when he graduated from a Massachusetts business school in 1982. In contrast to older generations, they had little first-hand knowledge of the industries they were working in.

Part of the blame for Japan’s corporate crises, the Hoppers argue, lies with the curriculum that has dominated American business schools since the 1970s. To an even greater degree, this helped bring about the sub-prime mortgage crisis in the U.S. and Europe. These failures, they go on to explain, began when business education departed from its original Puritan ethos. To a typical Puritan, work was not simply a way to earn a living, to amass wealth, or to display one’s talents; rather, it was a “vocation” or “calling.”

Central to the concept of “vocation” is the idea that people do not work for themselves, or because they have no choice but to work. They do so in order to fulfill a God-given mission, for the good of themselves and of others. As for human needs, the Creator has promised to provide for all those who do His work. Just as the historical influence of the Puritans has spread into every industry, the blessings of this all-powerful Creator extend far beyond what any individual can conceive. Toyota was fixated on becoming the world’s biggest automaker; Wall Street was busy amassing paper wealth through complex feats of “financial engineering.” Viewed in this light, they have been straying farther and farther from their roots.


The Cult of the Business School

Over recent decades, the authors write, business education has lost sight of its own values; as education became increasingly focused on landing a decent job, the big questions were shunted aside. Aware only that the subject was gaining in popularity, students and their instructors had no intrinsic motivation which would tell them why they ought to work, giving rise to professional managers whose only goal was making money.

The Hoppers have dubbed this phenomenon “the Cult of the (so-called) Expert”. Cults, in one form or another, have wrought havoc throughout history. In the political sphere, they have been known to threaten popular wisdom, and the same holds true for economics. Of course, as the Hoppers acknowledge, the business school did not create this cult in and of itself. But as educational institutions, business schools -- along with the entire university system -- are responsible for molding new generations of professionals.

The problem is with the notion that a prestigious business degree is an instant ticket to the top -- when in fact, any job at all presents an opportunity to develop expertise. The dot-com bubble, the Enron scandal and now an epic financial crisis have given the business world a wake-up call. Goldman Sachs, for instance, reduced the proportion of MBA graduates among its new hires in 2000, from 75 percent to 25 percent. The consulting firm McKinsey is also recruiting fewer MBAs.

But it isn’t just the corporate world that’s in trouble, according to Kenneth and William. Corporations are only one facet of society. The Toyota scandal and the Credit Crisis, for example, have something in common. As companies began sacrificing quality in favor of performance and rapid growth, there were insiders who recognized that something was gravely wrong. Yet they failed to bring their concerns to management’s attention, or failed to make management take them seriously. For a worker to deliver bad news directly to a superior requires uncommon courage; character of this sort is rooted in an individual’s fundamental attitude toward work, which in turn is rooted in prevailing social mores.

The Hoppers support a view that Peter F. Drucker came to hold in his later years: fixing the corporate sector will require a society-wide revival of spiritual values. Just as it took nearly two centuries to establish the United States, such a revival will not happen overnight. It took the Hoppers a lifetime simply to write their book. But perhaps their story is cause for optimism: late in their lives, they have given us an extraordinary gift. The Hopper brothers have never forgotten that a society, once it has managed to achieve prosperity, must decide where to turn next. Sphere: Related Content

Private-sector employees versus Government employees

In the USA, it has been fashionable to hit out against government for a very long time.

Sadly, in spite of its intellectual brilliance, McKinsey is captive to that old fashion - at least according to the evidence of a report that it published a few months ago, titled "Improving worker performance in the US government": http://tinyurl.com/344jsjr

According to the article in the McKinsey Quarterly,
"The US federal government lags well behind the private sector in a number of important organizational-performance measures, particularly in fostering employee engagement, talent management, and accountability, a McKinsey survey finds. But the federal government enjoys relative strengths in the elements that deal with the heart of an organization. Government managers—more so than their private-sector counterparts, the survey found—understand and embrace the direction and vision of their organizations and are motivated to make a difference"

On the other hand, according to the same survey, fewer private-sector managers than federal government managers understand and embrace the direction of their organizations (55% versus 60%) and are motivated to make a difference through their work (63% versus 70%).

I should have thought that McKinsey of all organisations would know that excellence in speed, safety and fuel efficiency are not really that useful from the perspective of getting to your destination, if you are going in the wrong direction. Sphere: Related Content

US-China 2nd "Strategic and Economic Dialogue"

The US media would like us to believe that the talks are starting more or less positively, with the news items titled, for example, "China strikes conciliatory note".

Nothing could be further than the truth. The Chinese leadership realises its weak position, and wants to do nothing that will upset the applecart. The US leadership does not understand this, and has done nothing to push China towards any real move that will either benefit the US or the people of China.

1. For example, China has "vowed to spur domestic demand" but China has been vowing to do this ever since the crisis started some 2 years ago. Result so far: zero.

2. China has indulged in more or less equally long-standing talk of the yuan being reformed provided it is done in a way that is " independent, controllable and gradual". ("Indpendent is Chinese code for "don't push us". "Controllable" is Chinese code for "provided it doesn't lessen the hold of the Communist Party in China". And "gradual" is Chinese code for "Don't expect any substantial change").

3. Similarly, when China says that it is working to resolve the concerns of foreign companies about its "indigenous innovation" program that basically cuts foreign companies out of doing technology innovation-related business in China, that is code for "keep looking, because you will look for a long time to see any resolution".

4. What China wants is high-tech exports from the US, on the pretext that this would help balance the US trade deficit - but the correction in the deficit would be relatively small, and it would come at the cost of selling out any possibility of long-term advantage for the US economy over the Chinese economy - in other words, the short-term benefit would come at the cost of permanent long-term disadvantage to the US economy.

5. Neither, it appears, will the US get any movement out of China on North Korea, in spite of the North Koreans sinking a submarine belonging to South Korea.

&. To Beijing's statement that Taiwan is a part of China and that the US should not be selling arms to Taiwan, the Obama administration provided no riposte - at least not in public.

So far, I make that 6 to China, 0 to the USA. Sphere: Related Content

Obama on track for financial reform

Now that the Financial Oversight Bill has been voted through the U.S. Senate, it is time to consider the situation.

Of course there exist TWO versions of US financial reform, the version that was passed by the Senate last week and the version that was passed earlier by the House.

President Obama's administration can cherry-pick which bits they like of which Bill, through the U.S. process that attempts to smooth the differences between the two Bills and present a single version.

Apparently, the President's administration prefers the Senate's version for its treatment of consumer protection, of the too-big-to-fail syndrome, and of the management of systemic risk.

The Obama administration does not like a provision in the House's Bill that seeks to exempt auto dealers from the supervision of the consumer protection agency. Republican senators have a touching concern for the red tape that a consumer protection bureau would create too much red tape - clearly, Republicans are more concerned by the red tape that would result than they are concerned about the protection of consumers. Naturally, it would be better to have consumer protection without red tape. There are simple means of doing so (e.g. banning loans for simple consumption, allowing loans only for investment) but neither of the US parties seems interested in simple solutions. So, as the choice is between consumer protection with red tape, or no consumer protection at all, every sensible person will prefer, even at the cost of red tape, the protection of consumers.

On the other hand, the administration prefers the way the Senate version requires banks to spin off their derivatives trading - though the Treasury has indicated that it is open to a compromise that would permit banks to trade in derivatives as long as those activities were kept separate from deposit-insured banks. How this can be done is difficult to imagine. So XYZ Bank will keep its deposit-taking activities separate from its derivative trading activities, let's say by having two different legal entities within the same overall house - let's call that XYZ House.

Now, will the market/share price of XYZ House be dependent only on its deposit-taking activities? Clearly, the market would not be that stupid, and the market/share price would also be dependent on XYZ's derivative trading activities. Since the volumes and margins involved in derivatives trading are usually many times those involved in deposit-taking, clearly the market- and share-price of XYZ House would be much more dependent on its derivatives trading subsidiary. In effect, therefore XYZ House would be an investment bank with a small deposit-taking function. The investment bank would make huge losses or profits (that's the nature of investment banking), while the deposit-taking function would profit a much smaller steady income. Since the whole matter of whether or not to separate the functions of investment banking and deposit-taking was being discussed as a result of the crisis, which made it clear that one factor causing the crisis was the merging of investment banking and deposit taking, it is not clear how the "division" of the two activities within the same house sorts out the problem. In fact, a glance at European companies, which DO separate the activites should show that the division is not, and has not been, a solution at all.

Summary: the Obama administration has chosen the right options - those that are moral, ethical, just and humane.

Let's hope that the President's administration has the gumption now to drive these through. Sphere: Related Content

Stupid research on the Internet and Happiness

http://www.time.com/time/health/article/0,8599,1989244,00.html

This makes me think of another piece of research:
people who drink moderately are happier than people who don't drink at all; but people who drink to excess are much happier than people who drink moderately; and happiest of all are people who are permanently drunk. Sphere: Related Content

Explanations for the generation-long over-optimism on the part of equity analysts :

According to Harvard Business Review's "The Daily Stat", reporting research by McKinsey, equity analysts have been over-optimistic for a generation:

"For the past quarter century, equity analysts' earnings-growth estimates have been almost 100% too high. Their overoptimistic projections have generally ranged from 10% to 12% annually, compared with actual growth of 6% (excluding the spike in growth from 1998–2001).... Only in strong-growth years such as 2003 to 2006 did forecasts hit the mark".

Neither McKinsey nor HBR explore why this may be so.

I suggest three possibilities:

1. That there is something personally wrong with most equity analysts (only over-optimistic people are attracted to the profession)

2. That there is something the matter with the way they are educated (their education programmes them to be over-optimistic)

3. That there is something awry with the way they are compensated (they are paid for being optimistic, and penalised for being pessimistic or even realistic).

Any other explanations, anyone? Sphere: Related Content

Crunch point in the US debate on financial reform

So the Democrats in the US Senate failed yesterday to muster enough votes from their own party to cut the long-lasting debate and move to voting on the final bill itself.

Is that a good thing or a bad one?

Neither.

It simply means that we are at crunch point regarding what sort of bill will eventually be put to the vote.

In other words, whether all the debates of the last year or so, will produce a reform that is worthwhile or will have been simply a lot of huffing and puffing with no worthwhile change.

On one hand, the delay gives more time for banks to continue lobbying senators; on the other hand, it provides an opportunity for the bill to be toughened .

The most significant toughening lies in Senator Cantwell's amendment that would reinstate the Glass-Steagall Act, so that commercial banking is once again separated from investment banking - which would once again prevent the sort of gambling that took place with ordinary people's pension and other money as well as with the national money of countries such as Greece and Iceland, and with the money of hundreds of municipalities and American and other states that are now therefore either insolvent or on the brink of bankruptcy. Sphere: Related Content

Meeting distortion with distortion

At the Annual Dinner organised by the Confederation of British Industry (CBI), the UK Chancellor (Finance Minister) George Osborne is reported to have declared that the aim of the new UK government "is to create the most competitive corporate tax regime in the G20, while protecting manufacturing industries.”

Here we go again! Which nation will devalue its currency most? Which government will give away the most as subsidies? Which government will tax least? Has the stupidity of such moves not become apparent to all people with common sense yet?!

As long as these "national competitive" policies are followed, we will continue to program the global economy for the sorts of crises that we have seen increasingly since the commencemnet of a global economy (which I date from the fall of the Berlin Wall).

What we need is a global level playing field devoid of subsidies, with much greater currency competition (including many more complementary currencies), with equal taxation and the same provisions for financial regulation, health, safety, environmental responsibility, and minimum guaranteed standards of living for human beings (which I put forward for discussion as: one square meal a day, two sets of clothing suitable for the weather concerned, and minimum adequate shelter).

It is only then that we will have a genuinely free global market. Those who argue for anything less are not real free marketers at all. Sphere: Related Content

Bravo Merkel!

German Chancellor Angela Merkel's move to ban financial gambling (betting on shares and bonds that are not owned, also called "naked short selling") is absolutely the right step.

Even though it would have been better to take the whole of the Eurozone with her, when it became clear that the Eurozone as a whole would not move, Chancellor Merkel has bravely walked ahead alone.

Let others gamble if they want to - and suffer the consequences.

Let those who do not want gambling of the sort that led us into the current crisis join Germany in banning this kind of casinoism.

Though why is the ban on only the 10 most important stocks/Eurozone sovereign bonds and CDS? Why not on all of them? And what about gambling on commodities?

Let those who really believe that prices are going to go up or down buy or sell the actual stocks or bonds or commodities, and not simply gamble on them in financial casinos. Sphere: Related Content

Why the Iranian deal with Turkey and Brazil is and should be welcome

Though the US has announced new multinational sanctions against Iran, which I also welcome given the lack of transparency in Iran, that is a separate matter from the Iran-Turkey-Brazil (ITB) deal.

Under the ITB agreement, Tehran will ship 1,200 kilos (just over half of its supposed uranium stockpile) to Turkey, where it will be enriched under internationally-transparent arrangements to the level necessary for use in radiation therapy and other medical applications.

Iran usually touts, as an explanation for the huge amount of uranium enrichment it carries out, the need for such nuclear medical and other “peaceful research”.

However, if all of Iran's intentions were peaceful, why would it so fiercely resist international inspection? Sphere: Related Content

Another round to common sense

The decision by the new UK Chancellor (or Finance Minister), George Osborne, to avoid tangling with the new EU-wide rules for regulating hedge funds and private equity firms is another victory for common sense.

Though not all is looking rosy on the US front (which needs to be watched closely), the next round in the EU will be the debate in June over plans to create an regulatory system for EU financial services as a whole.

My view continues to be that a patchwork of national or regional (EU) regulatory systems does not make sense, and that we ought to move to a global regulatory system.

However, national and regional systems may be a necessary step in that direction.

Meanwhile, without transparency, the best-designed regulatory systems will fail. So the essential battle continues to be whether or not we will have accounting systems that provide transparency (see my review of the book Unified Financial Analysis by Dr W. Brammertz and others).

I agree of course that rules and regulatory systems (and even transparency) by themselves will not prevent people who are determined to do so from obfuscating and cheating, and that therefore the renewal of morality, and the evaluation of the moral standards of the key players in the financial system remains key to everything.

Which is why it is so distressing that financial services providers continue to resist integrating ethical evaluations even for new recruits.

As I pointed out elsewhere, someone who recently completed his doctoral dissertation on a topic related with this broad field wrote to me as follows:

"Though I was able to graduate, the story of my dissertation is largely the story of research that never took place.... I approached (more than two dozen) banks and investment funds with a proposal to do ethics related research, and was consistently turned down. In my dissertation defense, I compared myself to a fly trying to get through a glass windowpane, (but) the financial world remained forever on the other side."

The parentheses above are mine.

As far as I can work out, his research started at the height of the boom, and he persisted with his efforts to do the research till well after the bust.

Was the refusal of the banks and funds to co-operate with the research mere cussedness, or did the banks and funds know that they should not be letting any research get done on the ethics in their companies? Well, that was then...

Now we are in a new world of transparency and re-regulation. Is this not the right time for ethical testing to be introduced into recruitment for all companies? Sphere: Related Content

On US drone attacks and "American aggression"

On the Independent Institute (USA) website discussing this topic, there is the following:

"Have U.S. drone attacks in Pakistan put Islamic terrorist groups on the run--or have they instead weakened U.S. security by creating more enemies eager to attack American targets? John O. Brennan, the White House's chief counterterrorism advisor, recently defended the drone attacks, claiming that they have degraded the capability of anti-U.S. terrorist groups. In contrast, Independent Institute Senior Fellow Ivan Eland argues that the drone attacks have helped to radicalize Islamists, both strengthening them politically in Pakistan and increasing the likelihood of attacks against Americans in retaliation....It failed to dawn on Brennan that the terrorist attacks wouldn't be occurring in the first place without aggressive U.S. behavior in Islamic lands"

This is simple-minded. Of course there is US "aggression" in many places, some justified and some unjustified. But the question in this particular matter is: what is the definition of "US aggression" according to Islamists?

If it is, as appears to be the case, the existence of Israel, and the existence of US military bases in the Middle East (particularly Saudi Arabia), then it is clear that the US can never stop "aggressing", and that the US will therefore always be under attack by Islamists.

That is what is not understood by those who deride Huntington's thesis regarding the clash of civilisations.

The very ntion of free speech, for example, is anathema to Islamists, as is the very existence of secular states such as India, or Maoist states (such as Nepal) or pseudo-Marxist states such as China.

Islamists will always seek some particular example of excess or wrong on the part of the governments of these countries in order to gain our sympathy. But they will never be satisfied simply by the acknowledgement or correction of excess or wrong on the part of non-Islamists (whether notionally Muslim or otherwise).

What Islamists seek is the imposition of their version of civilisation on the whole of the world. So if universities stop teaching courses on Islam that do not follow the Islamist version, will that satisfy Islmists? No. If Israel stopped existing, would that satisfy Islamists? No. If the US withdrew all its military bases from Saudi Arabia and every other country outside the US, would that satisfy the Islamists? No. Islamists will be satisfied only when their version of Islam is imposed by force on the whole world.

If we do not understand that, we are living in a dream-world that has nothing to do with reality. Sphere: Related Content

American versus Indian philanthropy

Bain & Co reports that, in spite of the number of the super-wealthy in these countries, charitable giving in India and China is just 0.6% and 0.1% of GDP respectively - of which only about 10% comes from individuals, with the rest provided by governments and foreign organizations.

In other words, the super-rich in India contribute only 0.06% of GDP as philanthropy.

Compared to China, where the super-rich give about six times less (only 0.01% of GDP), India looks very good.

But the world's greatest private giving comes from the U.S., where it is 2.2% of GDP. And nearly three-fourths, or 1.155% of GDP, is given by individuals!

In other words, comparatively, American individuals give away nearly 20 times more than we Indians give. Sphere: Related Content

Rounds One and Two to the Public; Round Three to Big Finance

I am not sure whether a day of global mourning should be announced.

The Brown-Kaufman amendment, which would have limited the size and leverage of the largest banks, was defeated in the Senate.

What was galling was not merely the defeat but the size of the defeat: 33-61.

So that was Round Three.

In Round One, a 93-5 majority passed the bi-partisan Dodd Shelby Amendment which dropped the possibility of a $50 billion industry-supported fund to cover the cost of unwinding a firm and ensure shareholders and unsecured creditors bear losses when the government liquidates a business.

In Round Two, a 96-1 majority voted in the Boxer Amendment to bar use of taxpayer funds to rescue failing financial companies (as I have written earlier, what matters is the exact wording of these amendments, and I have not yet had the opportunity of looking at these).

So winning Rounds One and Two was good news; losing Round Three was bad news. Now there is nothing to stop the tendency of the largest players to gobble up smaller banks. There is already a trend toward oligopoly...

However, what is even more important is Round Four: the Kanjorski amendment, which allows the preemptive break up of large financial institutions that – for any reason – pose a threat to financial or economic stability in the United States. The only flaw in the Amendment is that it empowers regulators to do so, rather than instructing the immediate breakup of the six largest banks in the USA which do in fact right now pose such a threat.

If you are a US citizen or know any of the Senators, write and encourage them to do the right thing: approve the Kanjorski amendment, preferably in the tighter form referred to in the preceding para. Sphere: Related Content

The battle now underway in the US Senate

So the finance reform bill is being debated, with voting expected to start today on certain non-controversial clauses.

The main bill is apparently nearly 1,600-pages (I haven't seen them yet!) but it was developed over six months of negotiation between the Democrats and the Republicans.

The very first amendment is expected to be proposed by Democratic Senator Barbara Boxer.

She wants to add a clause or phrase saying that no "taxpayer funds" can be used in future to bail out financial institutions.

This is an idea likely to gain support from both parties.

But the key question is going to be the definition of "taxpayer funds", since money paid by taxpayers is only a very small part of government funding (even if that part provides the base for everything else that the government does).

There are numerous ways which do not involve the direct use of taxpayer funds (e.g. bonds, derivatives, government guarantees/ directives/ nods and winks - as in China!) which would have an effect similar to the actions that were taken by governments to rescue banks at the height of the crisis.

The specific words and the definitions are the therefore the things to watch, in order to determine whether the legislation will be full of holes or (more or less) solid. Sphere: Related Content

Pssst...want an organ transplant?

Apparently, organ transplants are available in a number of Chinese government military hospitals.

There are no receipts and no medical paperwork.

One gets a call from China when an organ is available. One must go immediately. One is picked up in a van from the airport....

The cost is approximately £70,000.

Who do the organs come from?

Why the secrecy?

Why the lack of paperwork?

People who need the transplants do not ask questions.

But do not some questions need to be asked on behalf of those who have provided the organs by dying - or being killed? Sphere: Related Content

IMF proposes two new taxes on all banks and financial services companies

In view of the "too big to fail" syndrome, whether taxes are really the right way to organise the financial sector is a different question, but I will comment on one aspect of the IMF's proposal (two global taxes on financial institutions: a financial-stability contribution on bank LIABILITIES (except deposits, which come under the purview of deposit insurance schemes and are already taxed) in addition to a levy on bank EQUITY).

The IMF has proposed that the tax might be charged initially at a flat rate, changing over time to a charge according to the riskiness and size of the institution concerned.

The flat rate will either be so small as to bother no institution or, more likely, will bother smaller organisations (and therefore disproportionately institutions in smaller countries) more than larger ones.

Conversely, whenever the IMF wants to change the system to a variable rate, the larger organisations are more likely to protest and to seek to obstruct the move to a variable rate.

So the flat tax may be a political calculation that if the wedge is very thin right now, no one is going to protest too much, and the contributions can be ramped up over time.

The contribution should be looked at as a sort of insurance fee. Though in my view it would be much better to leave the job entirely to insurance or reinsurance companies (with insurance and reinsurance companies insuring each other), I recognise that it is the State which is the insurer of last resort and so it is right for the insurance fee to go to the State, provided the State keeps the money in a separate fund, with the adequacy of the contribution being evaluated from time to time either by a quango or by outside advisers.

The good thing is that the IMF wants the taxes to apply to the entire financial sector so as to avoid tempting organisations to change legal form in order to escape the net. Sphere: Related Content

Western Centres for Islam and Democracy

I am most puzzled to find one Center for the Study of Islam and Democracy included in a list of organisations that stand for Democratic Capitalism.

"Islamic democracy" is of course an oxymoron but this is not understood in the West, and Western individuals, organisations and govrnments unfortunately do not merely tolerate but actually promote and even finance such organisations!

Islam cannot accommodate democracy, since it has always been and will always be a theocracy modelled by the Prophet Mohammad and controlled by the Ulema (religious scholars). No real Muslim will accept the principles of democracy since that would allow a Kaffir (unbeliever) to hold political power - an anathema to Islam.

A "liberal muslim" is by definition not a "real muslim" since s/he rejects the model provided by the Prophet Mohammad as well as the essential teaching that Islam makes no distinction between the State and the "Church" of Islam.

The objective of Islam is always to take control of politics in order to re-arrange society in accordance with Islamic precepts including the lower level assigned to women and the even lower level assigned to unbelievers (e.g. not being able to serve in the defence forces or in high civil, business or political office) as well as having to pay a special tax.

As I am from the second-largest Muslim country in the world (India), I am well acquainted with "very good Muslims" who are caught between their desire to be "very good Muslims" and seeing the way their minority is treated in a more truly secular democracy (India) versus the way that Islamic societies conduct themselves as a whole as well as the way that minorities are treated in Islamic societies.

I am not saying that India treats Muslims and other minorities perfectly, merely that inspite of its inadequacies India makes a better job of treating its minorities according to its ideals and that, if India did treat minorities fully in accordance with democratic capitalist ideals, no one would have anything to complain about; whereas the more that Muslim societies treat minorities according to Islamic principles, the more genuine democratic capitalists will be offended and shout for the removal of those principles.

However, I should say that the same criticism applies, though perhaps nowadays not quite as strongly, to the Roman Catholic Church, since that is in principle also theocratic, because Roman Catholicism was at least as deeply shaped by Islam ss it was by the some of the teachings of Jesus: the Pope is like the Caliph, and the equivalent of the Ulema is the College of Bishops - though the political sway of Roman Catholicism extends only to the Vatican while the political sway of Islam reaches to many countries (that is compensated of course by the religious influence of Romanism which reaches many more people, even though Roman Catholics may not realise that Romanism has never repudiated its right to have an army, for instance). In Romanism, as in Islam, there is plenty of contradiction between the ideals that are professed for public consumption versus the principles on which the religion is really run - and therefore the realities of the religion.

Nazism was, in its structure, quite like the Roman and Islamic religions - and many modern Hindu and Buddhist organisations are, regretfully, developing towards similar structures.

The alternative remains truly democratic and secular societies - which are threatened by the sort of debased capitalism that we have seen in the last 30 years. Sphere: Related Content

Why people of faith should stay away from the "Christian Equity Index"

First what the Index is, and then my comments on it.

There are many financial indexes of this sort, some claiming to be ethical, some claiming to be Islamic, this one claiming to be Christian, and so on.

Are such indexes having an impact? Yes, though perhaps not yet as much of an impact as the originators of these indexes hope. But it is early days yet. The first major such indexes started only in the 90s, though there is an older tradition of them, going back at least to the days of apartheid.

Most such indexes take the top-performing companies and subject them to some sort of "screen" in order to eliminate those deemed unsuitable on the basis of certain criteria, for example: pornography, weapons, tobacco, gambling, usury and/ or environmental damage. In other words, only the most profitable of the largest companies avoiding these sorts of things are allowed to be included in the Index.
So investors are saved the trouble of having to screen each company themselves. They simply decide which of the above criteria are important for them, find which of the indexes shares their criteria, then investors can simply lean on the the work done by the screeners who produce that particular index.

However, there is a danger in leaning too heavily on such Indexes: one needs to be vigilant regarding whether the criteria are in fact being followed. For example, most so-called "Islamic" companies do not really eschew usury, they simply find one way or another around it. In the case of the so-called "Stoxx Europe Christian Index", its major difference from the criteria mentioned above is that it adds birth control to the list. In view of that, it is astonishing to find GlaxoSmithKline on the list of companies approved by what is really a Roman Catholic Index, given that GlaxoSmithKline Lamictal, Elogen, Yaz and perhaps other birth control pills.

But why do I say that "people of faith should stay away" from this Index, whether it is Christian or Roman Catholic? Because the Index claims that it includes only those companies whose revenues derive from sources approved "according to the values and principles of the Christian religion".

Leaving aside what is meant by "the" Christian religion (there is no such thing, as Eastern Orthodox, the Roman Catholic, Jehovah's Witnesses, Christian Science, Mormons, and various others all claim to represent "the" Christian religion), there is the question of what the "values and principles" of the religion are, and whether these are adequately represented by the criteria of this particular Index.

In my view, the "Christian Index" is a trivialisation and a travesty, because it leaves out what the Bible calls "the larger matters" of social justice and environmental care.

Most important of all, in typical Roman Catholic fashion, the Index simply "baptizes" the existing economic order and financial system, without any clear standard on the basis of which the system as a whole can be evaluated. For example, the Index bypasses the requirement of relationships which, if nothing else, is central to the teaching of the Bible from the very first chapters of Genesis right to the end of Revelations.

For a much more Biblical approach to the matter of investing, see resources from the Jubilee Foundation, for example "Beyond Capitalism: Towards a Relational economy" http://www.jubilee-centre.org/document.php?id=346&topicID=3. See also: http://www.citylifeltd.org and http://www.creditaction.org.uk.

I conclude that an Index that can reliably be used by people of faith has yet to be invented.

Meanwhile, the best thing to do is to investigate the many businesses that you know personally which are being run by people of faith, and invest in those of them that do meet, in your view, whatever criteria you deem appropriate for an ethical business. Sphere: Related Content

My twins' novels now in Dutch (Nederlands)

My 21-year old twins' series of three fantasy novels, set in their created world called Calaspia, has been translated from the original English and is now being published in Dutch (or Nederlands, as the language is called) by Wereldbibliotheek.

The first volume, DE SAMENZWERING VAN CALASPIA, should be available from next week (see below). The 2nd novel should be available in Dutch in about six months, and then the 3rd.

The first novel is available also in German and Italin; volume 2 is already available in German, vol 3 will be published in German in the Autumn.

Other translations are being considered/ sought.

The twins are now at work on their SECOND SERIES, which will be based in India, and their Agent is looking for the main publisher for that, we hope in the UK and/or USA.

The twins' website is: www.twins.guptara.net

---------- Forwarded message ----------


Today the Dutch edition of CONSPIRACY OF CALASPIA has arrived at our publishing house! The books are beautiful, we will send you two copies a.s.a.p.

We are also finishing our website. We hope you like it!

The book looks even better in "real time", because the "yellow" letters are actually gold and shiny.

DE SAMENZWERING VAN CALASPIA will be in the book stores by next week.

All the best & have a nice weekend!

Eveline & all the other collegues at Wereldbibliotheek Sphere: Related Content

Lecture in Dubai, 5th of May, "The Global Economic Crisis: Is it Past? And what of the Future?"

I argue that the crisis is not past; it is simply that a floor has been put under it by the extraordinary measures that were undertaken. The floor itself comes under threat, and then further measures have to be taken. Meanwhile, the very existence of the floor builds up its own pressures. The future is uncertain, and will feature even greater uncertainty from Europe and the USA right around to China. However, it is still possible to put sensible solutions in place that will produce a global framework for finance and industra, for ecology and humane development. And I put forward key proposals for discussion.

From 7.30 pm to 9.30 pm, at Traders Hotel, on the corner of Abu Baker, Al Siddique & Salah Al Din Road

The event is kindly sponsored by The International Indian magazine/ Expat Media International, and is therefore free of charge. However, you need a (free) ticket to get in. Please ring 265 9888. Sphere: Related Content

The Milesa nd More Frequent Traveller Programme of the Star Alliance Airlines Group

I suggested to Miles and More that it was unnecessary, and embarrassing for members of their frequent flyer programme, to have the experience of being turned away, as I was, at the SAS Lounge in Copenhagen, because of differences in the rules applied by Lounges belonging to different members of the Star Alliance. In other words, according to the rules, I am to be admitted to Lounges run by Austrian, Lufthansa, and Swiss but I am NOT to be admitted to Lounges run by other members of the same Star Alliance, such as SAS.


The following is the response that I received:

Dear Professor Guptara,

Thank you for your email.

As a Miles & More Frequent Traveller card holder you have access to the Lufthansa Business Lounges on production of a valid boarding pass issued on Lufthansa, a Star Alliance partner or a Lufthansa airline partner for the same date and airport of departure.

For SWISS Business Class Lounges and Austrian Airways Business Lounges you need to produce a valid boarding pass issued by our Star Alliance partners for the same date and airport of departure.

However, please understand that we have no influence on the rules and regulations set by other airlines, e.g Scandinavian Airlines, regarding the access to their lounges.

The latest information concerning the benefits of the Miles & More Frequent Traveller status can be found on our website www.miles-and-more.com > The programme > Status and Privileges > Miles & More status levels > The main benefits in brief.

Sincerely,
Your Miles & More Service Team


Here is the response that I have sent to them:

Dear Members of the Miles and More Service Team

Many thanks for your message.

However, I had not asked for information regarding the rules for the use of Lufthansa and Swiss Business Lounges.

What I asked was that you take action to harmonise the different rules and regulations set by your so-called "Partner Airlines", as these differences lead to embarrassment to your passengers. If you have no influence on the rules and regulations set by "other" airlines, why do you have them as Partners in the Star Alliance system? Clearly, the "Alli ance" is meaningless if everyone is free to set their own rules, regulations and standards!

I understand that the Miles and More Service feels unable to do anything about this because this is a matter that is beyond the competence of the Service Team.

However, it is not beyond the competence of the Service Team to raise this matter with the top management of the Alliance.

So my question is: have you, as the Service Team, raised this matter with the top management of the Star Alliance?

Yours sincerely

Prabhu Guptara Sphere: Related Content

Obama fails to soften derivatives reform opposition

That's the headline in today's FT (http://tinyurl.com/y4at5ka) regarding President Obama's meeting with Republican leaders to discuss financial regulatory reform.

The story reports that "the meeting did nothing to improve the tone of an increasingly bitter debate".

Does President Obama really expect turkeys to vote for Christmas? Sphere: Related Content

Swiss Efficiency

The family is in the middle of buying a car (not my favourite activity!).

My son, who has organised everything, told me that we needed to go to the Office which issues the licence plate for the car.

We went this morning and, as I had certain other things to do, wanted to be in and out as early as possible.

The office was supposed to open at 8.00 a.m.

We arrived at 7.55 a.m.

Only to find that, this being Switzerland, SIX other people were ahead of us in the queue!

We had to go to one window to hand in papers et al, and then to another window to actually collect the licence plates.

However, we were out of the office at 8.02 a.m., licence plates in hand.

Long live Swiss efficiency! Sphere: Related Content

China and Oil...

First, I must make clear that I like Chinese and Iranians as people (in fact, I find it difficult to dislike almost any person!). However, I find some of the policies of these (and other) governments not designed to produce freedom and prosperity for their own peoples - let alone for the world as a whole.

So, while I can comprehend the politics at http://tinyurl.com/yyecu9c,
I can't see how China can really have 850,000 barrels superfluous to its own requirements!

What is really going on?

I am enquiring - and, if I come up with an answer, will write again. Sphere: Related Content

Pluralism, Inclusivism, Exclusivism - and Roman Catholicism

A friend sends me a thoughtful piece on Pluralism, Inclusivism, and Exclusivism and asks my view also of Vatican II.

Here is my response:

The piece you attached is a good one, though it focuses on relgions.

So far as I can see, all religions are essentially institutions that work and even fight for their own power, riches and glory (they may do a certain amount of good and a certain amount of harm on the way, but that is incidental).

Vatican II was an interesting experiment for the Roman Church but, as with Chairman Mao's "Let a thousand flowers bloom and a thousand schools of thought contend", it was overtaken by events and by later orthodoxies - in the case of China, by the new orthodoxy of the market and, in the case of the Roman Church, by the old orthodoxy which was brought back by Pope John Paul II.

The current focus of the world on the question of child sexual abuse by Roman Catholic priests and the way that matter is handled will prove much more significant than Vatican II for the future of the Roman Church.

What makes the Roman Church different from other Churches is its claim to be the final arbiter of what is or is not acceptable to God, with the Pope as "Christ's Vicar on earth", and therefore able to determine definitively all matters of faith when he speaks in council ("ex cathedra").

So far as I can see, Jesus the Lord came to earth precisely because of the absolutism, impropriety, inadequacy and corruption of religion - but some who claimed to be his followers made a religion out of what should be a simple matter of a direct relationship with him without reference to priests, popes, churches and the rest. Sphere: Related Content

Ecology and Science as the New Religions of our time

Most interesting: http://tinyurl.com/ybtp7v7 Sphere: Related Content

The latest on Black Money

Guess the three jurisdictions holding the largest non-resident deposits in the world?: The United States holds over $2 trillion, while the United Kingdom, and the Cayman Islands each hold over US$1.5 trillion in private, foreign deposits.

That's according to the latest paper from Global Financial Integrity (www.gfip.org), titled "Privately Held, Non-Resident Deposits in Secrecy Jurisdictions".

Written by Ann Hollingshead, the paper finds that these deposits have been increasing markedly since meaningful data collection efforts began in the 1990s, with current totals standing just under US$10 trillion.

That is, over half of the world's "private, foreign deposits" is, from the smallest to the largest of the three top "secrecy locations", in the Cayman Islands, the UK and the USA.

So who's going to be the first to go after the USA? Sphere: Related Content

The revolution in Kyrgysztan

Kyrgyzstan has less than 6 million people and a per capita income of something like USD 1000. Surprisingly, the differential between rich and poor is "moderate" (latest Gini available (2003) is 30.3). "Only" a third of the population lives below the poverty line.

On all three counts (population, income and Gini) that is a better situation than many other countries in the world.

As Kyrgyzstan was less intolerably governed compared to some other countries, it will not be surprising to see other countries erupt. Sphere: Related Content

There are many kinds of speculation

I see that U.S. Home Prices are rising.

The S&P/Case-Shiller 20-city Composite Index, indictes that U.S. home prices rose for the eighth consecutive month in January 2010 - on a seasonally adjusted basis, by 0.3% month-to-month.

But what was actually expected was a 0.3% decline!

Why was a decline expected? Because of all the housing sector data in recent months, including home sales which show declines ranging from slight to notable.

So why the confounding rise, albeit marginal, in house prices?

Simple: house sellers are putting prices up to test the willingness of buyers to pay more.

Just what I too would do if I had one or more houses to sell.

In fact, all offer prices are a kind of speculation....

But some kinds of speculation are harmless or even beneficial, whereas other kinds of speculation harm the market. Sphere: Related Content

The Reminimbi is BOTH undervalued and overvalued

China's tragedy is twofold.

The first fact is that China's currency is undervalued from a global perspective and it is therefore coming under increasing pressure to revalue it (upwards). As the undervaluation is deliberate (in order to make exports cheaper), the international pressure is understandable. Whether international pressure is going to succeed is a different matter. It may not even be appropriate for the pressure to succeed, given the following.

The second fact, however, is that China's currency is overvalued from a domestic perspective. The Remnimbi's purchasing power inside China is weak (i.e. there is a huge amount of inflation that is disguised or hidden).

So should the Remnimbi revalue or devalue? In fact, it needs to do both. But the Chinese government cannot afford to do either. If it revalues its currency externally, its exports will become more expensive and therefore reduce, becoming perhaps the straw that breaks its back. Meanwhile, the nakedness of the Chinese emperor will become clear to all as its balance of trade suddenly swings to the red in the next few weeks. The elaborate game that China has been playing to make its exports appear larger than they are, will be exposed.

On the other hand, if China moves to bring the value of its currency into line with internal reality, its own people will find that the illusion so carefully maintained will disappear. As a result, China could find its already-great internal pressures growing intolerable.

As such contradictions come home to roost, pray for China's leaders. The decisions they are making right now will make the difference for China's future - and the world's. Sphere: Related Content