Readers will be aware that I regard Christianity as hopelessly corrupt (along with all religion). However, I do recognise that even within organised religion there are particular organisations or individuals who truly attempt to find and follow God.
Here is the story of one such organisation. I do not know it personally. But all that I have read about it, by enemies or by more or less objective observers, confirms this to be the case.
I am publishing the following, because the last mention that I can track of this group in the general press is from a while ago.
Shouwang is but one of numerous rising house groups in China. But its story may have shown how an originally obscure Bible study group could not only survive in a (seemingly) hostile environment but also thrive and go on to make a big difference to ever more individuals and the wider world
The Meaning of Shouwang
by Promise Hsu
Towards the end of his lifetime in this world, Peter Drucker famously said more than once, "The most significant sociological phenomenon of the first half of the 20th century was the rise of the corporation. The most significant sociological phenomenon of the second half of the 20th century has been the development of the large pastoral church - of the mega-church. It is the only organization that is actually working in our society."
When Drucker, often called “the father of the modern management”, made the observation at the turn of the century, his eyes were largely on the United States. A little more than ten years later, the two most significant sociological phenomena Drucker highlighted are becoming increasingly - perhaps quite surprisingly - evident in the world’s largest economy behind America.
Since the late 1970s when China initiated the reform and opening-up policy, companies have become one of the most significant parts of the Chinese society that touch plenty of people’s lives. To a considerable extent, the rise of the corporation - both state-owned and privately held enterprises - contributed to the rise of China.
The private sector is even more notable. It has accounted for most of China’s economy. However, in the early stage of the reform and opening-up era, private businesses were still not universally recognized. Before that, China’s government had not allowed private firms to exist at all for most of the time since the People’s Republic of China was founded in 1949. Anyone would risk one’s life if he or she did private enterprises.
If the spectacular growth of private companies in China was beyond the expectation of many people, the development of large pastoral churches came as a much bigger surprise. Private companies were once viewed by China’s government officials as what belongs only to what they call “capitalism” or “the Western capitalist countries”. Now, they have regarded the private economy as an “important component” of the socialist market economy. Compared to private businesses, large pastoral churches seem even more foreign to China. Are they really growing in popularity in China?
The answer is yes. Indeed, from early April 2011 on, Shouwang Church, a large pastoral church in the Chinese capital of Beijing has begun dominating the international headlines. Almost all the major global media have been following what was unfolding concerning the church. Among them are Reuters, The Associated Press, Agence France-Presse, BBC, CNN, NPR, The New York Times, Wall Street Journal, The Washington Post, Time, The Daily Telegraph, Guardian, Al Jazeera, South China Morning Post, and both the Chinese and English versions of the Global Times, a daily newspaper operating under the official Chinese ruling Communist Party newspaper, the People’s Daily.
Over the past few years, there have already been various reports about the rise of Christianity in China. A classic is Jesus in Beijing: How Christianity is Transforming China and Changing the Global Balance of Power. It was first published in 2003 when David Aikman, its author and former Beijing Bureau Chief of Time magazine, wrote that “the number of Christian believers in China, both Catholic and Protestant, may be closer to 80 million than the official combined Catholic-Protestant figure of 21 million.” In contrast, some estimates show that there were only about 800-thousand Christians in China in 1949 and some two million in the late 1970s.
In 2011, it is still hard to know for sure how many Christians in China. An official census published in 2010 reckoned the number was approximately 23 million. Other calculations have ranged from 40 million to 130 million. According to God is Back: How the Global Revival of Faith is Changing the World, China probably has close to 100 million Christians and will soon have the world’s largest Christian population. The book, published in 2009, was written by John Micklethwait, Editor-in-Chief of The Economist, and his colleague, Adrian Wooldridge.
Yet, as Aikman pointed out in Jesus in Beijing, “in numerical terms they were still a small minority...but they were being noticed, and they kept turning up in the most unexpected places.” The Christians Aikman met across China were farmers, businesspeople, students, scholars, artists and even government officials.
Now, it is not only that Christians could be found from almost all walks of life in China but that like private companies, the non-state-owned churches - what is called “house churches” - many go to are beginning to grow into an “important component” of the Chinese society. According to Li Fan, Director of the World and China Institute, a Beijing-based non-governmental think tank, house churches have become the most powerful non-governmental organization in China. Li Fan reckoned that all over China, house churches had nearly one million worship and meeting places where the participants might account for 1/3-1/2 of China’s NGO population.
Shouwang Church is only one of those numerous house churches scattered across China.
Since April, more than 30 house churches in Beijing alone have declared to show their solidarity with Shouwang by holding prayer meetings. Some of them are also large pastoral churches. And on May 11th, pastors or co-workers of nearly 20 house churches in six Chinese cities delivered their signed petition to the National People’s Congress, China’s top legislature to investigate the government’s crackdown on Shouwang Church based on the country’s Constitution that enshrines the liberty of faith. But the story of Shouwang may have shown how an originally obscure Bible study group could not only survive in a (seemingly) hostile environment but also thrive and go on to make a great deal of difference to ever more individuals and the wider world.
The current global media spotlight centers around the worship or meeting place of Shouwang Church. Since April 10th 2011, the church has been forced to worship outdoors for twelve consecutive Sundays. Before that, the Shouwang congregation of about one thousand people had gathered in a conference hall of the Old Story Club in the northern urban area of Beijing for more than a year. But according to Shouwang Church, the owner of the rented venue was under mounting pressure from the government. In March, Shouwang planned to rent a conference hall of a hotel in the northwest of the city. However, the church said some relevant government agencies again interfered and prevented it from renting the new premises.
During the past thirteen Sundays, numerous uniformed and plainclothes police officers were sent to a public square at Zhongguancun, known as "China's Silicon Valley", in Beijing’s northwestern district of Haidian. That is where Shouwang worshippers were supposed to gather. Hundreds of people of the Shouwang congregation were detained. The time ranged from a few hours to 24 or 48 hours. They worshipped, including reading the Bible, singing hymns and praying, after being loaded on to buses or put into police stations. Some people who were free went to the local police stations waiting for the release of their fellow Shouwang congregants. Many others have been under house arrest for various periods of time. Almost all the church’s main co-workers have been under house arrest for the whole or much of the time since the evening of April 9th. Some church members have lost their jobs or rented homes or both. Some others were threatened to lose either one - or both. Many of them are young professionals in different fields, for example, in companies, NGOs and universities.
Easter Sunday April 24th 2011 was the third time the Shouwang parishioners held outdoor worship. More than 30 people were rounded up and herded onto buses or police cars when they worshiped in or near the square at Zhongguancun. Like the first two Sundays, they were then sent to local police stations. They were asked to leave their names and contact information and give a guarantee of not attending the outdoor worship again. Some declined to make any pledge and some others simply told the police that they would continue to worship outdoor next Sunday. Some of them have been detained two or three times. More than half were released later in the day. But the rest, all in the eastern district of Chaoyang, gained freedom after having to stay at the police stations for 24 or 48 hours.
On May 1st, over 30 people including two children and their mothers were detained when they were at Zhongguancun for outdoor worship or taken away from their homes. The children and their mothers were released later in the day and so were other ten people. Once again, the rest of them were freed after 24 or 48 hours.
On May 8th, at least 15 people were taken to about ten different police stations across Beijing. All except one got freedom later in the day or by the early next afternoon. Hu Jian, a Shouwang church member, was not released after 48 hours in custody. The police station said he was sent back to his Hukou (household registration) place. They refused to say where he was. The Hubei provincial office in Beijing said they did not know this. The central Hubei Province is where Hu Jian’s household is registered. After previous detentions, 26-year-old Hu Jian had already been forced to quit his job as an instructor at KindyROO, an international school for children under three years old. He also lost his place to stay because he lived at the school office.
Later on May 10th, a roommate of an apartment Hu Jian stayed at for a couple of weeks before May 8th received a phone call from Hu Jian. He said he was sent to an office of Hubei’s capital of Wuhan in Beijing from the police station earlier that day. The office was asked by the police officers to buy a train ticket for Evan's return to Hubei. They could not get a ticket and will try and buy one the next day. The police officers confiscated Hu Jian's identity card and told him later that they could not find it. They asked Hu Jian to go to Hubei to apply for a new one.
Hu Jian later told one of his English fellowship co-workers of Shouwang Church on the phone (a Wuhan office worker's) that he wanted to go and see his parents and his maternal grandmother and also wanted to get a rest after a month when he attended all the five Sunday outdoor worships and was detained four times. He, with an almost-60-year-old police officer who is a section chief of Wuchang(a district of Wuhan) Public Security Bureau based in Beijing's Wuhan office, took a train to Hankou Railway Station in Wuhan at about 9:10 in the evening of May 11th. More than 20 Shouwang congregants were at Beijing West Railway Station to see Hu Jian off. They prayed hand in hand and sang a hymn at a waiting hall of the railway station. Hu Jian and the police officer arrived in Wuhan the next morning. The Wuhan's Beijing office bought two hard sleeper tickets for them. They later went to Jingzhou, Hu Jian’s hometown in Hubei. After having lunch, the police officer returned to Wuhan. Hu Jian said he might be back to Beijing and try to find a new job in about a month. It was the first time that the authorities sent a Shouwang congregant back to the hometown because of attending outdoor worship. Two local police officers visited Hu Jian’s home asking about the basic information of his family on May 16th, four days after he returned home. He was back in Beijing in mid-June and was detained for a few hours after attending the June 12th outdoor worship.
On May 15th, some 13 Shouwang parishioners were taken to police stations. They were freed later in the day or the next day. On May 22nd, at least 27 people, including an elderly woman in her 8os and a two-year-old child, were detained. Most were released in the same day except one who was not able to return home until the next afternoon. On May 29th, 22 congregants were detained. Like the previous Sunday, most were freed later in the day and one got freedom on Monday. On June 5th, 20 people were detained including two from other churches with one from the Three-Self’s Haidian Church. 16 were released later in the day and the other four were freed by the next noon. On June 12th, 17 people were arrested. Among them, three were taken to the basement at a Haidian police station where they wanted to visit a Shouwang member who was already detained. Police officers accused two of them of stealing. All got freedom in the same day except one who wasn’t released until the next afternoon. On June 19th, 13 Shouwang congregants and a member of New Tree Church were imprisoned and all were freed before the midnight. On June 26th, 15 people were detained and all were released in the same day.
On June 27th, Wang Chuanliang, a Shouwang member, was sent back to his hometown in the eastern province of Shandong by Haidian’s Dongsheng Police Station and the Shandong provincial office in Beijing. It was the second repatriation since Shouwang began the outdoor worship on April 10th. It was the same Dongsheng Police Station that sent back Hu Jian, another Shouwang parishioner, to his hometown in the central Hubei Province in May. Hu Jian returned to Beijing almost a month later and continued to attend outdoor worship and thus was detained every Sunday since then.
At about 5 o’clock in the afternoon of June 27th, three police officers from Dongsheng Police Station and Haidian Public Security Bureau detained Wang Chuanliang in a market where he was getting a mobile phone fixed. He was handed over to a Shangdong office based in the capital and was sent back to his hometown in the evening. The Shouwang parishioner was forbidden to use his mobile phone.
Only in the next morning was he able to send a text message to his fellow church members about his expulsion. He was sent to his parents’ home at noon. His identity card was confiscated and he was warned not to return to Beijing before July 1st, which is the 90th anniversary of the founding of China’s ruling Communist Party. Local village officials were asked to watch over him.
In a weekly bulletin about outdoor worship issued on June 28th, Shouwang Church lodged a protest against and condemnation of the eviction. It considered “the forced expatriation by Dongsheng Police Station and Haidian Public Security Bureau has constituted a complete contempt for and a flagrant violation of the law in effect depriving a citizen of any guarantee of the most basic of foundational existential rights.”
On July 3rd, 19 people were detained. Most were freed later in the day but a couple were held at Longyuan Police Station in the northern district of Changping till the early hours of the next day. Also in the early morning of July 4th, two other Shouwang congregants were forced to move out of their newly-rented apartment rooms because of the mounting pressure on the landlord from Balizhuang Police Station in the eastern Chaoyang District.
Over the past thirteen Sundays, many other Shouwang members were confined to their homes. On the Easter, a young couple asked the police to drive them to the Zhongguancun square. The police agreed. They sang hymns, read the Bible and prayed in the police car. They also gave the police officers a copy of the Bible and an autobiography about how a Chinese biologist became a Christian and his views about Christianity and science. The police car moved around the square. After the young couple finished worship, the police officers drove them home. The young couple shared their experience with fellow Shouwang members through the church’s online forum, which was shut down in mid-April but resumed later. The forum was closed again in the second week of June. Many Shouwang congregants resorted to Google buzz, a micro-blogging site, for keeping informed.
Into the seventh week since the outdoor worship began, local police officers asked some church members not to attend Shouwang’s evening prayer meetings, which have been held on weeknights at a rented place of New Tree Church at Zhongguancun. Pastors and other co-workers of New Tree Church and a number of other house churches in Beijing and some other cities of China shared their sermons in the evening prayer meetings. Into the ninth and tenth week, some Three-Self Church people were sent to police stations asking the detained parishioners to leave Shouwang Church and join them or put an end to the outdoor worship. In its weekly bulletin on outdoor worship issued on June 14th, Shouwang’s governing committee quoted the apostle Paul’s letter to the Romans in the New Testament, “Who are you to judge someone else’s servant? To his own master he stands or falls. And he will stand, for the Lord is able to make him stand.” (Romans 14:4)
It was not the first time that Shouwang Church made global headlines. In November 2009 when the US President Barack Obama just wrapped up his first visit to China, The Wall Street Journal ran an opinion piece entitled “The China President Obama Didn't See”. It was about Shouwang’s first indoor worship after having to meet outdoor for two
successive Sundays. That was the first time the Shouwang congregation held an open-air service. They were evicted from an office space in northwest Beijing’s Huajie Mansion that the church had rented for three and a half years. On November 1st 2009, about five hundred people worshiped near the gate of a suburban park in northwest Beijing during a snowstorm, which was the earliest to hit the Chinese capital in more than two decades. A week later, some seven hundred worshipers met at the same place. But the chief pastor was prevented from going there for giving a sermon.
The chief pastor is Jin Tianming. In 1993, he and his bride began a Bible study group in their small home. A year later, they rented a room of a house near the west gate of Tsinghua University in northwest Beijing. In 1991, Jin Tianming graduated from Tsinghua, a leading institution of higher learning in China. He became a Christian the previous year when he was invited to attend a worship meeting. That was a year after the 1989 Tian’anmen Square democracy movement crackdown, which turned out to be an unexpected help in Jin Tianming’s spiritual journey where he eventually lost faith in any worldly wisdom. At that time, he was named Jin Yongkui who was born into an ethnic-Korean peasant family in northeast China’s Heilongjiang Province in 1968. His new given name of Tianming means “the coming of dawn”.
In 2002, 34-year-old Jin Tianming was ordained as a pastor by Pastor Xie Moshan or Moses Xie, a Chinese house church leader who died on June 30th, 2011 and had been imprisoned for more than 20 years between 1950s and 1970s because of refusing to join the government-owned Three Self church. By the year 2005, Shouwang, which means “watching”or “to keep watch”, had more than ten fellowships. At that time, the church decided to apply to register with the government. But in 2006, authorities rejected Shouwang’s application asking it to join the Three-Self.
Also in 2005, Shouwang Church began to rent office buildings for the Sunday worship. And a year later, Shouwang started forming an integrated church out of different fellowships across the city. According to an open letter issued by the church in mid-April 2011, “these were part of Shouwang’s efforts to become a transparent and open church and also a mega-trend of the house church growth in China in a new era.” In another letter to the congregation issued in late March 2011, the church’s governing committee also made it clear that “under the leadership of the vision of ‘a city on a hill’, Shouwang Church has gradually grown into a holistic Christian community that is open to the general public.”
But by 2007, Shouwang remained almost unknown to the broader society. It was already arguably one of the largest house churches in Beijing. That year, it began publishing Xing Hua or Almond Flowers, a quarterly church magazine. One of its earliest issues had a special report on Shouwang’s registration process publicizing all the major documents about it. That gained attention from other house churches and those who were following China’s Christianity. The Almond Flowers magazine - “an almond tree” in Hebrew shares the same pronunciation of “watching” in Hebrew (see Jeremiah 1:11-12) - have gradually become well-known among house church readers.
It was the issue of worship or meeting place that has given rise to Shouwang Church being known in the general public. Like almost any other house church, the Shouwang congregation has faced the issue of survival from the moment it was established. The most serious direct crackdown came on May 11th 2008 when the armed forces broke into Shouwang’s Sunday worship in a rented office space. They ordered the church to put an end to the worship. But it continued. All the three services from morning to afternoon were held as usual. Many worshippers were asked to leave their names and contact information. It came in the run-up to the Beijing Olympics. That was also just a day before the massive earthquakes struck Sichuan and neighboring regions in southwest China.
Shouwang amazingly survived the clampdown. Yet, the church realized that the pressure on the landlords of the facilities it rented was a weak point in both the survival and further growth of the congregation. It had been forced out of the previous rented venues. And in 2008, it faced another eviction. The church established a group in an effort to solve the problem by purchasing a permanent place for worship. Then, the church’s governing committee came up with a blueprint for purchasing a permanent worship site. After the church’s main co-workers and the representatives of the church members approved the blueprint, Shouwang formally launched the purchasing project in March 2009.
In late October that year, Shouwang moved out of the Huajie Mansion. During the ensuing period of time when the two Sunday services were held outdoors, the church handed in a letter to Beijing’s religious affairs authority. It made a proposal to solve the problem of worship place by resorting to putting the premises on record. The authority once again asked Shouwang to turn to the Three-Self church.
By the end of 2009, Shouwang paid about 27 million yuan or some four million US dollars for the second floor of the Daheng Science and Technology Tower in northwest Beijing’s Zhongguancun area. The fund was from the offering of the Shouwang congregation and other contributors to buy a permanent worship place. Authorities once again interfered and the property developer has refused to hand the key over to the church.
Before that, Shouwang’s governing committee agreed to the government representatives’ promise to allow the church to return to indoor worship. In a further statement about outdoor worship issued in mid-April 2011, the governing committee explained that they “believed the wish that it would be good for the government to have more time in solving the problem of worship place.” After that, Shouwang went through a number of difficulties having to change worship facilities. The change of premises came to a halt in early 2010 when Shouwang began to rent a conference hall at the Old Story Club, which is a part of the state-run broadcaster, China Central Television. Yet, authorities kept on interfering. In early April 2011, like before, Shouwang moved out of the leased venue. And the rest is history.
For now, it is not known when the outdoor worship will end. Shouwang stated that “as long as the church has a guaranteed worship space, the premises it has already purchased in particular, the church will immediately return to worshiping indoors just like it was in November 2009”. In his pastoral letter sent on April 23rd 2011 that was the Easter Eve, Pastor Jin Tianming, who has been under house arrest, reaffirmed the stand on outdoor worship: “The ‘outdoor’ in the outdoor worship is not a means to an end but a stand: it is a stand when we face our Lord of glory and the authorities, I believe the stand itself is a kind of worship before the only true God who is the only head of the church, and in this particular period of time, it is a worship that is even more precious than any hymn or sermon and would much more please God.”
This Easter Sunday also marked the 100th anniversary of Tsinghua University, Pastor Tianming’s alma mater and also the Chinese President Hu Jintao’s. The pastor was supposed to attend the 20th anniversary reunion with his Tsinghua classmates on Good Friday, which Christians remember as the day that Jesus Christ was crucified. But the police forbade him to go. A day before Good Friday, Pastor Tianming went to a hospital with an escort of four police officers. A less-than-two-year-old daughter of the young couple who are also Shouwang Church members fell from a high-rise early that day and died after being rushed to hospital. Another pastor, Zhang Xiaofeng, also asked to visit the couple but was refused.
In an article published on Google buzz, later that day, Elder Liu Guan wrote about his response to the unexpected death of the toddler. He said he once again choked with tears when he prayed with his son in the evening. He also recalled how a recent mid-night prayer had helped him overcome his fear of leaving his wife, his children and his aged parents if he was put into prison. He came to believe more than ever that God would surely take good care of all his loved ones. He said in that night he finally keenly understood what it meant by “I have been crucified with Christ and I no longer live, but Christ lives in me.” (Galatians 2:20)
Elder Sun Yi also has been under house arrest. He is the chief editor of Shouwang’s Almond Flowers magazine and a professor at People’s University, another leading institution of higher education in China. In an article sharing with his magazine co-workers, Sun Yi said three fellow church members came to see him on a mid-April Saturday afternoon. Since they were not allowed to enter Sun Yi’s home, they met and chatted with the elder on a corridor.
Then, somewhat to the elder’s surprise, the three visitors suggested praying together. Beside them were a police officer and three other men who were sent to stand guard over Sun Yi. They prayed for the church. And they prayed for the people who were just on the watch. When finishing the prayer, Elder Sun Yi opened his eyes and saw one of the four guards smiling at him and the three visitors. “Though three other people’s eyes buried in the newspapers, I know their hearts have already been touched”, wrote Sun Yi. Later that day, Pastor Jin Tianming and another pastor, Li Xiaobai, were taken to the police stations. Elder Sun Yi heard the news and sensed he might be taken away in the same night. But thanks to the afternoon prayer, he felt huge relief. After that prayer, he said he had emerged from the shadow of any potential threat. More police officiers did not come that night. He remained under house arrest.
The two pastors were released later. Pastor Tianming returned home the next morning. Pastor Xiaobai and his wife were freed at midnight. Before becoming Christians, the couple were engineers working at some leading global IT companies. During the first outdoor worship in April, they were detained at a local police station and were not released until 48 hours later.
During the first three Sundays since the outdoor worship began, Pastor Xiaobai has sent his Sunday sermons to his fellow Shouwang members. The latest was on Easter. He continued with the Book of Esther in the Old Testament to illustrate God’s unfailing salvation of his people. Towards the end of his Easter sermon, Pastor Xiaobai said the ground for faith and hope and love remained in the Lord Christians trusted in: “Jesus Christ is the same yesterday and today and forever. Do not be carried away by all kinds of strange teachings. It is good for our hearts to be strengthened by grace”. (Hebrew 13:8-9)
The choice of Esther for giving Sunday sermons in the period of outdoor worship is symbolic. Prior to being forced out of the previous rented premises in early April, Shouwang’s Sunday sermons had been around the Acts of the Apostles for a few months. That is about the beginning and expansion of the Christian church. And Shouwang was planning to plant churches in other parts of the city or the country. The Book of Esther tells a story of how God delivered the Jewish people from a genocide in Persia plotted by the empire’s highest official. The immediate reason for the plot was that a Jew in the Persian capital refused to kneel down and pay honor to the highest official.
In the case of Shouwang, the issue of worship place is a reflection of a deeper struggle over the legality of the non-state-owned church in China. The government under the atheist Communist rule of course does not want any independent religious organization to exist and expand. But more than 30 years after the reform and opening-up policy was put in place, it looks impossible for the authority to control everything. It has considerably shifted its ground on economy having to allow the non-state-owned companies to exist and expand. Now, it is increasingly faced with the continued rise of the non-state-owned churches, which it has long considered only belongs to “the Western culture”.
Will there be an Esther who can help deliver Shouwang and other house churches from the crackdown? If history is any guide, the possibility is not unreal despite both who and how could be anyone’s guess. Even more than a decade into the reform and opening-up era, the Chinese government was still chained to its ideology that market economy was restricted to “the Western capitalist countries”. It was Deng Xiaoping, China’s de facto leader in the 1980s-90s who admonished his colleagues to halt splitting hairs over “whether it is surnamed socialist or capitalist”. He said “the policy is okay if it works”. His insistence on the economic reform paved the way for the further expansion of private enterprises and the official recognition of private property. In fact, this has gone on to help grow house churches making them possible to rent or even own places for worship.
If the current government leaders could carry on with this part of Deng Xiaoping’s theory, they would probably help usher in the continued rise of China. They would see a newer China where some truly respected schools, universities, research institutes, hospitals and philanthropic foundations could grow out of house churches or those church-goers, like it has been in the global church history. In fact, Shouwang Church has planned to open a theological seminary. Pastor Song Jun, who is a historian of the Christian church and ancient Chinese religions, was supposed to be responsible for the institution. Currently, Shouwang has already had a Sunday school. For many years, it has helped educate hundreds of children of Shouwang members. It’s Li Enping, the wife of Pastor Tianming, who has been in charge of the school.
Apart from publishing the Almond Flowers magazine, Shouwang has its own library. Its director is Elder You Guanhui, who was in the same class with Elder Sun Yi when they pursued their PhD studies of Christianity in the late 1990s at Peking University, another top institution of higher learning in China. Elder Guanhui leads a publishing company that has helped introduce to the Chinese readers a series of Christian classics, including John Calvin’s Institutes of the Christian Religion, Augustine’s The Harmony of the Gospels, and John Foxe’s The Book of Martyrs. Even after the outdoor worship began in April, the company continued to publish the Chinese translation of more books with G. K. Chesterton’s Heretics and Orthodoxy and D. H. Williams’ Retrieving the Tradition and Renewing Evangelicalism: A Primer for Suspicious Protestants coming out in May and June respectively.
If the rise of private companies means creating and producing ever richer material products and services without the interference from the government, the rise of house churches could mean creating and producing ever richer spiritual products and services without the interference from the government. For top management thinkers like the late Peter Drucker who was also a Christian, the free enterprises and pastoral churches combined could help people find a fuller meaning as human beings whom, according to the Bible, God created in his own image. It seems hard for the Chinese government leaders to thoroughly ignore the fact that the growth of both private businesses and house churches in China had taken place long before it was known when they would gain official approval. This might indicate that the growth of both institutions came from a deep and universal longing for becoming free, creative, caring, connected, humble and responsible beings. Once their country starts opening up, they would keenly learn to do it, sometimes at any price.
For now, it seems crucial for the Chinese government to make more sense of what the church is. On the bright side, numerous detentions and arrests of the Shouwang Church congregants might have provided golden opportunities for the police officers and their leaders to know more about Christians and their faith at first hand. They might have found it strange when they read a Shouwang’s Q&A fact sheet like this one: “What if the police arrest me because of my participation in outdoor worship? Do not resist, let them take us away, just like a lamb to the slaughter. In our hearts, we know that we gather here to worship; and for the sake of worship, we will pay the price. We believe in what the Lord has said: ‘Blessed are those who are persecuted because of righteousness, for theirs is the kingdom of heaven.’ ”
Once they detain or arrest those Christians, they would see and hear how those people behave and speak. A police told a Shouwang co-worker who visited a police station in the east Chaoyang District where a church member was detained for 48 hours that he and his colleagues were taught not to hit back when beaten and not to answer back when insulted. The church co-worker said that was what God asked his people to do. A deputy chief of the Olympic Village police station told a Shouwang parishioner who was detained on May 15th that he would believe in Christianity after retired. The Shouwang member gave the police officer a copy of a booklet entitled “Why I Live” and was freed later in the day.
Another Shouwang member is a pianist of the choir. She was under house arrest for more than two weeks after being detained for a number of times. On a rainy night, a police officer knocked on her door asking if she could leave the door open so that he might hear the music. A little more than 20 minutes later, other listeners joined the police officer, including his wife, their son and daughter-in-law. The pianist and her mother sang hymns for them. After seeing them moved by the songs, they briefly told them how to read the Bible. Whenever the police officer was on duty, the pianist would give him and his family members some copies of the hymnal and sang hymns for them. One night, the police officer again knocked on her door. The pianist said the piano pedals did not work so that she could not play that night. “No playing?! Feel that something is lost...”, said the police officer disappointedly outside. At times, the police officer and his family members would ask, “Is there God? Where is God?” The pianist responded, “But why is it that you felt the hymns very pleasant? Didn’t you feel that your heart was moved? That’s just what God placed in your heart!” They fell silent and seemed lost in thought.
Of course, it might be equally significant for the house church members to further figure out what the government officials think and do. After ever more communication, they might develop a better understanding of why the government was still so hostile to the house church and if possible, what could be done to help them change their views. Some Shouwang parishioners said the police officers knew almost nothing about the church. Some police officers did not say “Shouwang Church” but “Shouwang Religion or Shouwang Sect”. Some claimed Jin Yongkui was “the Founder of Shouwang Religion” and he wanted to own the place Shouwang had bought. On such occasions, Shouwang congregants would help the police officers correct the mistakes saying Shouwang was a Christian church and Jin Tianming (Jin Yongkui) was the founding pastor of Shouwang Church. For his part, Pastor Jin Tianming reaffirmed his stand in his May 22nd sermon sent to Shouwang members by emails that the enemy of the church was not the government nor anyone else of “flesh and blood” but “the spiritual forces of evil in the heavenly realms”.
A few weeks or months might be still too short to solve the decades-old problem. As a matter of fact, there have been different opinions about the Shouwang governing committee’s decision to worship outdoors even within the house church. Some people held that the church could worship as separate groups indoors (since Shouwang currently has dozens of family Bible study groups and fellowships) and some others warned that it was too sensitive to hold outdoor services at present when what was called “Jasmine Revolution” was spreading from North Africa to Asia. On May 31st, the Shouwang governing committee sent emails to church members announcing Pastor Song Jun, Minister Jiang Lijin, Deacons Ji Cheng and Yuan Yansong left Shouwang Church due to disagreements over outdoor worship. For more than once, the Shouwang governing committee has issued open messages explaining the outdoor worship decision. In a letter, they said, “we ask the Lord to preserve the unity of our church, that despite of our different viewpoints, we may still be able to submit to and bear with one another.”
As for how long the outdoor worship will last, Shouwang Church said that if the problem of worship place could not be solved, they would continue to worship outdoors until Christmas 2011. They would reassess the situation and devise new plans for the coming year. That means Shouwang seems to have been prepared for a longer road ahead. In the history of the Christian church, a year or even a decade would not be a long time. But the next few months or even the next few weeks might witness another turning point for the church in a country whose ancient name is, surprisingly, “God’s Land”.
Sphere: Related Content
Thursday, July 21, 2011
Wednesday, July 20, 2011
The irrelevance of "bank resolutions" and "surcharges"
One should ignore the consultation paper issued by the FSB (Financial Stability Board) on how the large banks could be dissolved in case of a crisis.
Note that the FSB likes to avoid using the word "dissolved", and prefers to use the weasel word "resolved" - a very good instance of modern American double speak.
But why should the FSB paper be ignored? Because its implementation is set so far in the future that it is irrelevant to the problems that are going to engulf the global economy well before then.
Equally irrelevant is the FSB scheme to apply a "surcharge" starting somewhere between January 2016 and the end of 2018 to twenty eight "globally systemically important banks" (G-SIBs), identified on the basis of "scores" that may be fixed some time by January 2014 which, in turn, will enable national laws to be framed by something like January 2015. In any case, the scheme requires the approval of the G20 - and if that does approve the scheme at its summit in November, the scheme will not become fully effective till the end of 2018 (!). So we can be sure that the FSB, the Bank for International Settlements and the G20 anticipate no crisis for the next seven years!!!
Anyway, why is this "surcharge" scheme irrelevant? Not merely because the FSB is not going to "charge" anything (let along "surcharge" anybody) - it is only going to require these 28 big banks to hold slightly more capital than they do at present (and that is what is called, in inflammatory language, a "surcharge").
No, the reason why the "surcharge" is irrelevant is because there is no evidence that holding capital of between 1 and 2.5% more than that currently required is going to "stabilise" these banks at all.
Recall that UBS (the bank for which I worked then) had MORE than that as an additional capital buffer at the time it ran into trouble due to the global crisis.
I cannot argue that the extra buffer did not help at all, but the fact remains that the extra buffer did not prevent UBS from getting into a desperate situation where the combined efforts of the Swiss government and Singaporean and other wealthy institutions were required to rescue it.
Has the FSB has done any homework on why, at the time of the crisis, UBS was not helped by having a buffer of MORE than that they are now thinking of requiring of these G-SIBs? Not to my knowledge....
Nor am I aware of any other research on which the so-called "scores" are based, and which determine the banks are to be classified as G-SIBs. The score consists equally of five factors: size, cross-border activity, interconnectedness, complexity and substitutability. The five factors do make sense. But does it make sense to weight them all equally? Who knows?!
Worse, no one seems to care, in the rush to placate two opposed lobbies: on one hand, taxpayers who continue to bear the liability of bailing out these massive banks when they fail, and on the other hand, the owners and managers of these banks who resist having any additional capital while continuing to have state guarantees in exchange for paying the state absolutely nothing.
Ahy 28 banks rather 20 or 30? Or 10 or 50? Again, the number is based on no research. Merely political fudgery.
To console us, we are told that a wider sample of 73 large banks will be kept under review. Is 73 some sort of magic number? Or is the number based on some research? No, it isn't. Political fudgery again.
BTW, the FSB is anxious for us to know that a one percentage point increase in capital at the big banks will dampen economic growth by 0.17 to 3.17 basis point per year over a four-year implementation period. Note that the FSB does not tell us whether the capital increase will make for any stability.
Why is the FSB so keen to tell us the effect of its "surcharge" on growth (something which is not its responsibility)? Why is it not at all keen to discharge its responsibility and tell us the degree to which its proposals will actually stabilise the financial system? Because it can calculate the former (or have it calculated), while it has no means of calculating the latter. The FSB simply does not know and cannot know whether its proposals will make a blind bit of difference to global financial stability.
That is why the FSB and all its works so far are a sham. Sphere: Related Content
Note that the FSB likes to avoid using the word "dissolved", and prefers to use the weasel word "resolved" - a very good instance of modern American double speak.
But why should the FSB paper be ignored? Because its implementation is set so far in the future that it is irrelevant to the problems that are going to engulf the global economy well before then.
Equally irrelevant is the FSB scheme to apply a "surcharge" starting somewhere between January 2016 and the end of 2018 to twenty eight "globally systemically important banks" (G-SIBs), identified on the basis of "scores" that may be fixed some time by January 2014 which, in turn, will enable national laws to be framed by something like January 2015. In any case, the scheme requires the approval of the G20 - and if that does approve the scheme at its summit in November, the scheme will not become fully effective till the end of 2018 (!). So we can be sure that the FSB, the Bank for International Settlements and the G20 anticipate no crisis for the next seven years!!!
Anyway, why is this "surcharge" scheme irrelevant? Not merely because the FSB is not going to "charge" anything (let along "surcharge" anybody) - it is only going to require these 28 big banks to hold slightly more capital than they do at present (and that is what is called, in inflammatory language, a "surcharge").
No, the reason why the "surcharge" is irrelevant is because there is no evidence that holding capital of between 1 and 2.5% more than that currently required is going to "stabilise" these banks at all.
Recall that UBS (the bank for which I worked then) had MORE than that as an additional capital buffer at the time it ran into trouble due to the global crisis.
I cannot argue that the extra buffer did not help at all, but the fact remains that the extra buffer did not prevent UBS from getting into a desperate situation where the combined efforts of the Swiss government and Singaporean and other wealthy institutions were required to rescue it.
Has the FSB has done any homework on why, at the time of the crisis, UBS was not helped by having a buffer of MORE than that they are now thinking of requiring of these G-SIBs? Not to my knowledge....
Nor am I aware of any other research on which the so-called "scores" are based, and which determine the banks are to be classified as G-SIBs. The score consists equally of five factors: size, cross-border activity, interconnectedness, complexity and substitutability. The five factors do make sense. But does it make sense to weight them all equally? Who knows?!
Worse, no one seems to care, in the rush to placate two opposed lobbies: on one hand, taxpayers who continue to bear the liability of bailing out these massive banks when they fail, and on the other hand, the owners and managers of these banks who resist having any additional capital while continuing to have state guarantees in exchange for paying the state absolutely nothing.
Ahy 28 banks rather 20 or 30? Or 10 or 50? Again, the number is based on no research. Merely political fudgery.
To console us, we are told that a wider sample of 73 large banks will be kept under review. Is 73 some sort of magic number? Or is the number based on some research? No, it isn't. Political fudgery again.
BTW, the FSB is anxious for us to know that a one percentage point increase in capital at the big banks will dampen economic growth by 0.17 to 3.17 basis point per year over a four-year implementation period. Note that the FSB does not tell us whether the capital increase will make for any stability.
Why is the FSB so keen to tell us the effect of its "surcharge" on growth (something which is not its responsibility)? Why is it not at all keen to discharge its responsibility and tell us the degree to which its proposals will actually stabilise the financial system? Because it can calculate the former (or have it calculated), while it has no means of calculating the latter. The FSB simply does not know and cannot know whether its proposals will make a blind bit of difference to global financial stability.
That is why the FSB and all its works so far are a sham. Sphere: Related Content
Sunday, July 17, 2011
The future of the independence of Central Banks
Only a few countries have Central Banks that are independent of the control of their governments.
The European Central Bank (ECB) was one of the first.
Now that the ECB's Trichet says bank will not back any default Greek bonds, putting him in conflict with the German Chancellor's position, the future independence of this Central Bank will come into question.
My central thesis remains that the European Union will either have to become much more financially consolidated (which everyone will resist as hard and as long as they can) OR the Euro will break up.
The question is: how long will the EU's citizens be happy to continue paying for an unconsolidated financial system, and how long can the EU afford to keep paying for it?
The choices are clear to everyone. No one likes to have to choose between these alternatives, as the cost of either alternative is huge: on one hand, the choice of an unconsolidated financial sysetem which needs to be paid for - and on the other hand the further loss of sovereignty involved in financial consolidation.
As long as the global economy continues to be down, the need for the choice will press ever more strongly - with the pressure points moving from one weak economy (e.g. Greece) to another (e.g. Portugal or Spain or Ireland or Italy or....).
If and when the global economy booms again, the need to choose will become that much less strong.
No doubt, therefore, everyone at the centre of the raging storm is praying that the global economy will boom - but prayer also requires actions - and, in the current case, no one seems prepared to be willing either to introduce a complementary currency or to go for financial consolidation or to break up the Euro.
So we will blunder along in this costly fashion for as long as our political and financial masters can do so, because the status quo (in spite of its disadvantages) represents the fudge that best suits all the actors involved.
But that fudge is coming under pressure with the ECB's declaration, and with the markets' having too much money and few places to put it profitably at the level of risk involved. Sphere: Related Content
The European Central Bank (ECB) was one of the first.
Now that the ECB's Trichet says bank will not back any default Greek bonds, putting him in conflict with the German Chancellor's position, the future independence of this Central Bank will come into question.
My central thesis remains that the European Union will either have to become much more financially consolidated (which everyone will resist as hard and as long as they can) OR the Euro will break up.
The question is: how long will the EU's citizens be happy to continue paying for an unconsolidated financial system, and how long can the EU afford to keep paying for it?
The choices are clear to everyone. No one likes to have to choose between these alternatives, as the cost of either alternative is huge: on one hand, the choice of an unconsolidated financial sysetem which needs to be paid for - and on the other hand the further loss of sovereignty involved in financial consolidation.
As long as the global economy continues to be down, the need for the choice will press ever more strongly - with the pressure points moving from one weak economy (e.g. Greece) to another (e.g. Portugal or Spain or Ireland or Italy or....).
If and when the global economy booms again, the need to choose will become that much less strong.
No doubt, therefore, everyone at the centre of the raging storm is praying that the global economy will boom - but prayer also requires actions - and, in the current case, no one seems prepared to be willing either to introduce a complementary currency or to go for financial consolidation or to break up the Euro.
So we will blunder along in this costly fashion for as long as our political and financial masters can do so, because the status quo (in spite of its disadvantages) represents the fudge that best suits all the actors involved.
But that fudge is coming under pressure with the ECB's declaration, and with the markets' having too much money and few places to put it profitably at the level of risk involved. Sphere: Related Content
The decline of the work ethic in the West
Following the decline of the influence of the Bible, it was expected that the work ethic would also decline.
This is now empirically the case: research by a team led by Laura Wray-Lake of Claremont Graduate University finds that the proportion of U.S. high school seniors who say they'd work if they had enough money to live comfortably has declined from 78% to 70% over three decades.
The proportion who say they'd be willing to work overtime has dropped from 90% to about 83%.
The results are from an annual survey of thousands of high school students from 1976 through 2005, the most recent year for which figures are available.
See: http://yas.sagepub.com/content/early/2010/09/21/0044118X10381367 Sphere: Related Content
This is now empirically the case: research by a team led by Laura Wray-Lake of Claremont Graduate University finds that the proportion of U.S. high school seniors who say they'd work if they had enough money to live comfortably has declined from 78% to 70% over three decades.
The proportion who say they'd be willing to work overtime has dropped from 90% to about 83%.
The results are from an annual survey of thousands of high school students from 1976 through 2005, the most recent year for which figures are available.
See: http://yas.sagepub.com/content/early/2010/09/21/0044118X10381367 Sphere: Related Content
Censoring discussion in British schools
I was somehow under the strange impression that schools were meant to encourage intellectual curiosity, discussion, and enbaling children to make up their own minds about all sorts of things.
Apparently not: http://www.barnabasfund.org/Christian-teacher-reprimanded-in-UK-for-explaining-religion.html
What SHOULD be the policy in regard to any subject? Surely to present different points of view, so that children can assess for themselves the merits and demerits of the various possible positions on the subject?
For example, in the above case, there could and should have been encouragement not only for the teacher to present her own point of view, but for there to be the presentation of the point of view that they are the same, that they are antagonistic, that the matter is irrelevant to modern life, and so on.
Instead this school has chosen to try to stifle discussion, debate and intellectual curiosity.
Why does this school think it exists?
Should it not be closed down so that students can go to another school which does serve the purposes for which schools were created? Sphere: Related Content
Apparently not: http://www.barnabasfund.org/Christian-teacher-reprimanded-in-UK-for-explaining-religion.html
What SHOULD be the policy in regard to any subject? Surely to present different points of view, so that children can assess for themselves the merits and demerits of the various possible positions on the subject?
For example, in the above case, there could and should have been encouragement not only for the teacher to present her own point of view, but for there to be the presentation of the point of view that they are the same, that they are antagonistic, that the matter is irrelevant to modern life, and so on.
Instead this school has chosen to try to stifle discussion, debate and intellectual curiosity.
Why does this school think it exists?
Should it not be closed down so that students can go to another school which does serve the purposes for which schools were created? Sphere: Related Content
Saturday, July 16, 2011
Why everyone in the world should support the appointement of Elizabeth Warren to the USA's new Consumer Financial Protection Bureau
All the elite propaganda has been focusing on the "growth" of China and the supposed takeover of the world by that country.
However, as the last (and still-continuing) global crisis demonstrates, when America sneezes, the world catches a cold.
So, though Stephen Richter argues that the EU now leads the world in terms of consumer protection (which it IS), it would be much more helpful for global consumer protection if the US had proper consumer protection.
That is why everyone in the world should urge all their US friends to promote the appointment of Elizabeth Warren to the US's new Consumer Financial Protection Bureau. Sphere: Related Content
However, as the last (and still-continuing) global crisis demonstrates, when America sneezes, the world catches a cold.
So, though Stephen Richter argues that the EU now leads the world in terms of consumer protection (which it IS), it would be much more helpful for global consumer protection if the US had proper consumer protection.
That is why everyone in the world should urge all their US friends to promote the appointment of Elizabeth Warren to the US's new Consumer Financial Protection Bureau. Sphere: Related Content
Accounting rules and environmental concerns
As Reuters reports http://www.reuters.com/article/2011/07/14/accounting-idUSL6E7IE1KH20110714
there is a sort of "co-opetition" going on between the accounting rules pushed by the United States versus those pushed by the IASB (international Accounting Standards Board)
For those of us concerned about creating rules that are just, neither set of rules is satisfactory.
What is needed is (a) minimum global standards of health, safety, pensions, and minimum living standards on a PPP basis, and (b) legal requirement to pay for the replacement of any environmental resource that is utilised by each company, so that the net impact on the environment is neutral.
Without (a) and (b), we will have the continuation of an existing set of incentives for investors to prefer companies which unethically but legally keep their environmental and social externalities off-balance sheet.
This damages all human beings while benefiting these investors - in other words, existing rules (whether those of the USA or those of the IASB) benefit the rich by hurting everyone, but disproportionately those who are poor. Sphere: Related Content
there is a sort of "co-opetition" going on between the accounting rules pushed by the United States versus those pushed by the IASB (international Accounting Standards Board)
For those of us concerned about creating rules that are just, neither set of rules is satisfactory.
What is needed is (a) minimum global standards of health, safety, pensions, and minimum living standards on a PPP basis, and (b) legal requirement to pay for the replacement of any environmental resource that is utilised by each company, so that the net impact on the environment is neutral.
Without (a) and (b), we will have the continuation of an existing set of incentives for investors to prefer companies which unethically but legally keep their environmental and social externalities off-balance sheet.
This damages all human beings while benefiting these investors - in other words, existing rules (whether those of the USA or those of the IASB) benefit the rich by hurting everyone, but disproportionately those who are poor. Sphere: Related Content
Saturday, July 09, 2011
re: "medium is the massage"
A friend asks about McLuhan's phrase "the medium is the massage" or "the medium is the message" (the former was the title of his most famous book, though that might have been a printer's error, which he accepted as it threw a different and wholly interesting light on the question): I have often wondered whether McLuhan was not influenced by the analogous debate about "means and ends": some people start with the "end" they want to achieve (say, climbing Mt Everest) and then focus on what "means" will best enable them to get there. Others point out that the "means" we choose determine what end we will reach - and that these cannot always be determined in advance, in spite of getting all the detailed information possible. In "practical" things, the former seems the best way of proceeding. In "moral" matters, the latter is preeminent. However, the question is: is there any real difference between "practical" and "moral"? In fact, therefore, we have look at where means will in all probability lead us, AND we have also to look at where we want to end up, to check whether the means we choose will enable us to reach the destination we desire, and whether the destination we desire will be best reached by means "A" or "X". Possibly, McLuhan had this debate somewhere in his mind, when he examined the nature of the impact of the media on humanity. Most debate was focused on the CONTENT of the media. However, he was equally interested in the effect of the media AS media, in the same way as Jacques Ellul was interested in the effect of technology AS technology (not merely in the effects of specific technologies). By the way, if you don't know the work of Ellul, he is certainly worth getting to know as the pre-eminent thinker on that subject....
Sphere: Related Content
Friday, July 08, 2011
The battle for the soul of Islam heats up
There has always been a sort of civil war within Islam (at least so far as I can make out), and this is now heating up.
On one hand are the majority of peace-loving and law-abiding muslims who want to get on with their own lives, and consider their religion a matter of their own personal relationship with their God
On the other hand are those, as in Al Qaeda and Hizb ut-Tahrir, who are committed to a more radical, extreme or "pure" form of Islam, for example: http://www.smh.com.au/national/muslims-obligated-to-resist-democracy-say-radicals-20110703-1gxfw.html#ixzz1RJgIdX7G Sphere: Related Content
On one hand are the majority of peace-loving and law-abiding muslims who want to get on with their own lives, and consider their religion a matter of their own personal relationship with their God
On the other hand are those, as in Al Qaeda and Hizb ut-Tahrir, who are committed to a more radical, extreme or "pure" form of Islam, for example: http://www.smh.com.au/national/muslims-obligated-to-resist-democracy-say-radicals-20110703-1gxfw.html#ixzz1RJgIdX7G Sphere: Related Content
Further examples of declining regulatory and moral standards in the USA
I have, in the past, mentioned how securitisation was created by the US Government, and how the cultural basis for the revocation of the Glass-Steagall Act (by initially occasional, and later systematic, enablement or encouragement to flout the existing law) was laid by US politicians, legislators and regulators.
This pattern started, predictably, shortly after the decline of commitment to the Bible (from the 1950s and 1960s).
For the latest revelation of another example of that pattern, see: http://www.nytimes.com/2011/07/08/business/in-shift-federal-prosecutors-are-lenient-as-companies-break-the-law.html?_r=1
As Dr Mangalwadi argues in his latest publication, THE BOOK THAT MADE YOUR WORLD: HOW THE BIBLE CREATED THE SOUL OF WESTERN CIVILISATION (Thomas Nelson, just published), there will be no reversal of that trend till there is a renewed cultural commitment to the Biblical values of truth, justice and right-living. Sphere: Related Content
This pattern started, predictably, shortly after the decline of commitment to the Bible (from the 1950s and 1960s).
For the latest revelation of another example of that pattern, see: http://www.nytimes.com/2011/07/08/business/in-shift-federal-prosecutors-are-lenient-as-companies-break-the-law.html?_r=1
As Dr Mangalwadi argues in his latest publication, THE BOOK THAT MADE YOUR WORLD: HOW THE BIBLE CREATED THE SOUL OF WESTERN CIVILISATION (Thomas Nelson, just published), there will be no reversal of that trend till there is a renewed cultural commitment to the Biblical values of truth, justice and right-living. Sphere: Related Content
Thursday, July 07, 2011
unethical behaviour of British train companies
British train companies are now routinely continue selling tickets for journeys on specific services even beyond the point where it is abundantly clear that there is insufficient space for more passengers.
In the past, unless you booked a seat, tickets were sold on the basis that it was your luck whether the train was empty or over-full, since there was little that could predict how full a train was going to be.
However, now that all sales are computerised, it is perfectly possible to predict more or less exactly (let us say within 5%) how full a train, and indeed a particular coach within a train, is likely to be.
In spite of that, British train companies now oversell by perhaps as much as 100% the space available - rather, to be precise, they continue selling tickets regardless of whether or not space is available. In other words, they fulfil demand, but take no responsibilty for providing the service sold.
If this trend continues, Britain may come to find that passengers are forced to sit on top of train roofs or hang on to the sides of trains - much as passengers do in most parts of the third world.
Britain has already joined the ranks of the third world in many areas, but train travel is one area where it can keep clear of that unflattering comparison - if train companies, regulators and/ or legislators so decide. Sphere: Related Content
In the past, unless you booked a seat, tickets were sold on the basis that it was your luck whether the train was empty or over-full, since there was little that could predict how full a train was going to be.
However, now that all sales are computerised, it is perfectly possible to predict more or less exactly (let us say within 5%) how full a train, and indeed a particular coach within a train, is likely to be.
In spite of that, British train companies now oversell by perhaps as much as 100% the space available - rather, to be precise, they continue selling tickets regardless of whether or not space is available. In other words, they fulfil demand, but take no responsibilty for providing the service sold.
If this trend continues, Britain may come to find that passengers are forced to sit on top of train roofs or hang on to the sides of trains - much as passengers do in most parts of the third world.
Britain has already joined the ranks of the third world in many areas, but train travel is one area where it can keep clear of that unflattering comparison - if train companies, regulators and/ or legislators so decide. Sphere: Related Content
Tuesday, June 28, 2011
An idiotic post, this time from no less a firm than McKinsey
The actual item is titled: "How the growth of emerging markets will strain global finance" and is available at: http://e.mckinseyquarterly.com/105845d9dlayfousubmvaymqaaaaaa7vxpx3slu6teiyaaaaa
The basic argument is that all the theoretically-required new roads, ports and other infrastructure projects in developing countries will need a huge amount of of money: something like USD 24 trillion, in fact.
As a result, by 2030, we will see global savings decline, argues the McKinsey Global Institute, because of the reduction in household saving rates which generally has taken place in mature economies at least for the last three decades; and we have an ageing global population, as well as China’s apparent attempts to rebalance its economy toward increased consumption.
Therefore, the amount of capital available will fall short of demand to the tune of $2.4 trillion-slowing global GDP growth by one percentage point a year.
So businesses and investors must adapt to a new era in which capital costs
more and most of it goes to the world’s developing regions, argue McKinsey.
This is nonsense: supposition is piled upon supposition, till the whole superstructure not only teeters but collapses.
Consider that the whole argument is based on the following:
- China will succeed, at least to some degree in encouraging consumption. That assumes that there is no political problem in China till 2030. A fair assumption?
- the reduction in household saving rates, which has taken place in mature economies in the extraordinary last three decades, will continue; is it safe to believe that Americans, for example, have learnt nothing? The evidence is that they are already saving more after the 2007 crash
- all the theoretically-required new roads, ports and other infrastructure projects in developing countries will come off the drawing boards; rather, if capital is not available, and if growth rates decline, or if there are political problems, these plans will ossify on the drawing boards
- we are in for "a new era in which (most) goes to the world’s capital goes to developing regions"; if global growth rates decline (as the consensus now is, at least for the foreseeable future), then it is doubtful whether the current craze for emerging market risk will continue; as one of my senior colleagues used to say: "Emerging markets are markets from which it is difficult to emerge in an emergency". Lenders will demand even more of a premium from emerging markets, which they may not be in a position to afford. Sphere: Related Content
The basic argument is that all the theoretically-required new roads, ports and other infrastructure projects in developing countries will need a huge amount of of money: something like USD 24 trillion, in fact.
As a result, by 2030, we will see global savings decline, argues the McKinsey Global Institute, because of the reduction in household saving rates which generally has taken place in mature economies at least for the last three decades; and we have an ageing global population, as well as China’s apparent attempts to rebalance its economy toward increased consumption.
Therefore, the amount of capital available will fall short of demand to the tune of $2.4 trillion-slowing global GDP growth by one percentage point a year.
So businesses and investors must adapt to a new era in which capital costs
more and most of it goes to the world’s developing regions, argue McKinsey.
This is nonsense: supposition is piled upon supposition, till the whole superstructure not only teeters but collapses.
Consider that the whole argument is based on the following:
- China will succeed, at least to some degree in encouraging consumption. That assumes that there is no political problem in China till 2030. A fair assumption?
- the reduction in household saving rates, which has taken place in mature economies in the extraordinary last three decades, will continue; is it safe to believe that Americans, for example, have learnt nothing? The evidence is that they are already saving more after the 2007 crash
- all the theoretically-required new roads, ports and other infrastructure projects in developing countries will come off the drawing boards; rather, if capital is not available, and if growth rates decline, or if there are political problems, these plans will ossify on the drawing boards
- we are in for "a new era in which (most) goes to the world’s capital goes to developing regions"; if global growth rates decline (as the consensus now is, at least for the foreseeable future), then it is doubtful whether the current craze for emerging market risk will continue; as one of my senior colleagues used to say: "Emerging markets are markets from which it is difficult to emerge in an emergency". Lenders will demand even more of a premium from emerging markets, which they may not be in a position to afford. Sphere: Related Content
Argentina, here I come! Or: a possibly apocryphal fact regarding Victoria Ocampo
As I have to travel to Latin America (actually, only Argentina) later this year for the first time in my life, I am doing the occasional sally into Argentinian history (I did look at this briefly some years ago, but I'm afraid my memory needs refreshing, now that I am retired!).
One item of information (possibly apocryphal)that I have come across is that when the family of the novelist Victoria Ocampo used to undertake their annual visit to Paris, they used to take 2 Argentinian cows with them, so that they could enjoy good quality Argentinian milk, rather than the thin version they could buy in France!
Possibly, this is a story put about by the Argentinian farm lobby in order to increase the reputation of Argentinian milk and beef (primarily beef, I am afraid, which is supposed to be of the absolutely best quality in the world).
But possibly this is a true story: rich families from Latin America had legendary lifestyles.
More interesting stuff on Argentina as I discover it... Sphere: Related Content
One item of information (possibly apocryphal)that I have come across is that when the family of the novelist Victoria Ocampo used to undertake their annual visit to Paris, they used to take 2 Argentinian cows with them, so that they could enjoy good quality Argentinian milk, rather than the thin version they could buy in France!
Possibly, this is a story put about by the Argentinian farm lobby in order to increase the reputation of Argentinian milk and beef (primarily beef, I am afraid, which is supposed to be of the absolutely best quality in the world).
But possibly this is a true story: rich families from Latin America had legendary lifestyles.
More interesting stuff on Argentina as I discover it... Sphere: Related Content
Shocking report from the UK's Financial Services Authority
The UK's Financial Services Authority (FSA) has gone public with the shocking accusation that the UK's banks have failed to strengthen processes to limit money laundering, in spite of having had 9 years in which to do so.
The FSA report is titled "Banks’ management of high money-laundering risk situations:
How banks deal with high-risk customers (including politically exposed persons), correspondent banking relationships and wire transfers".
According to the report, UK banks are making profits at the risk of being involved in money laundering. There are serious weaknesses in banks' systems and controls and a willingness to turn a blind eye to profitable business relationships with high-risk customers and regimes. Around three quarters of the bank's reviewed by the FSA - including the majority of major banks - failed to take adequate measures to establish the legitimacy of the source of their customers' wealth and the source of the funds to be used in the business relationship. So "it is likely that some banks are handling the proceeds of corruption or other financial crime".
Well, the FSA may bluster all it wants but it is only when institutions that persistently go the wrong way are disciplined that things are going to improve.
The good news is that two banks have already been referred to enforcement. More may follow. Sphere: Related Content
The FSA report is titled "Banks’ management of high money-laundering risk situations:
How banks deal with high-risk customers (including politically exposed persons), correspondent banking relationships and wire transfers".
According to the report, UK banks are making profits at the risk of being involved in money laundering. There are serious weaknesses in banks' systems and controls and a willingness to turn a blind eye to profitable business relationships with high-risk customers and regimes. Around three quarters of the bank's reviewed by the FSA - including the majority of major banks - failed to take adequate measures to establish the legitimacy of the source of their customers' wealth and the source of the funds to be used in the business relationship. So "it is likely that some banks are handling the proceeds of corruption or other financial crime".
Well, the FSA may bluster all it wants but it is only when institutions that persistently go the wrong way are disciplined that things are going to improve.
The good news is that two banks have already been referred to enforcement. More may follow. Sphere: Related Content
Monday, June 27, 2011
To wear or not to wear the burqa
Carnita Matthews from Woodbine, Sydney, apparently a Muslim woman, accused of lying about police trying to tear her burqa off, avoids jail because her identity couldn't be proved.
Another Muslim woman, a defendant in France, in the first trial under the "burqa ban" law is sent home from the trial – for wearing a burqa!
So now all that is necessary to escape the law in these countries seems to be to have a sex change operation (if necessary) and declare oneself to be a Muslim.
But beware: both of these are irreversible (so far as I am aware, at present - the first biologically, and the 2nd under sharia law which effectively bans anyone leaving the Muslim fold because the penalty for that is death).
BTW, several supporters of Mrs Matthews are reported to have attacked cameramen following the decision and jostled the police, while Mrs Matthews’ lawyer is reported to have defended their actions saying, “They are obviously happy with the result and are expressing it in a way that is culturally appropriate to them”.
Here's an idea: why should newly sex-changed now-Muslim women not start a new custom that would now be even more "culturally appropriate": burn the courts. Sphere: Related Content
Another Muslim woman, a defendant in France, in the first trial under the "burqa ban" law is sent home from the trial – for wearing a burqa!
So now all that is necessary to escape the law in these countries seems to be to have a sex change operation (if necessary) and declare oneself to be a Muslim.
But beware: both of these are irreversible (so far as I am aware, at present - the first biologically, and the 2nd under sharia law which effectively bans anyone leaving the Muslim fold because the penalty for that is death).
BTW, several supporters of Mrs Matthews are reported to have attacked cameramen following the decision and jostled the police, while Mrs Matthews’ lawyer is reported to have defended their actions saying, “They are obviously happy with the result and are expressing it in a way that is culturally appropriate to them”.
Here's an idea: why should newly sex-changed now-Muslim women not start a new custom that would now be even more "culturally appropriate": burn the courts. Sphere: Related Content
The best liberal wisdom regarding the situation of the US in the world economy
is to be found in THE LAST ECONOMIC SUPERPOWER by Joseph P. Quinlan (recently published). Here is an excerpt from it: http://www.theglobalist.com/StoryId.aspx?StoryId=9194
As I say, this is the best that contemporary LIBERAL wisdom has to offer.
However, like most other assessment of global trends, it simply takes current trends and projects them forwards, without considering whether (and if so, what) may derail those trends.
For example, there is nothing here about whether China can continue to maintain at least 8% real growth while keeping inflation in check, nothing on whether Brazil will ever move out of the category of "a most promising country" (a category of which it has been a member since the Sixties to my recollection), whether Russia will continue to be politically stable (what happens if Putin dies - or, worse, falls sick?), whether Indian will finally start including the majority of its population in its "shining growth" or will fall victim to a revolt of the masses at the increasing gap between the rich and the scandalously poor....
For some reason, liberals focus on the right things that are being done by emerging nations (and it is of course right that that should be done) but do not focus on the wrong things that have been done by Anglo-American-style financial capitalism (which do need to be taken into account) - as well as the prospects for the US, UK and other Western countries to return to sanity - and what effect that may have on global economics.
As I write this, global regulators (led of course by the USA and other Western countries) have just agreed minimum capital requirements, including larger capital requirements for "systemically important" financial institutions. Of course, this still has to be okayed by the G20 and, deficient though the measure is (see my earlier posts on this topic), it is better than nothing. And if it is start of more sensible regulations to come, then it would be excellent. Naturally, the reverse if regulation stalls without creating a sufficiently comprehensive global framework for all aspects of financial services, money supply, and so on.
Meanwhile, with commodity prices falling sharply, and global growth set to be slow for the foreseeable future, the question is whether the huge Chinese bet on commodities will pay off or will itself create problems for the country. Sphere: Related Content
As I say, this is the best that contemporary LIBERAL wisdom has to offer.
However, like most other assessment of global trends, it simply takes current trends and projects them forwards, without considering whether (and if so, what) may derail those trends.
For example, there is nothing here about whether China can continue to maintain at least 8% real growth while keeping inflation in check, nothing on whether Brazil will ever move out of the category of "a most promising country" (a category of which it has been a member since the Sixties to my recollection), whether Russia will continue to be politically stable (what happens if Putin dies - or, worse, falls sick?), whether Indian will finally start including the majority of its population in its "shining growth" or will fall victim to a revolt of the masses at the increasing gap between the rich and the scandalously poor....
For some reason, liberals focus on the right things that are being done by emerging nations (and it is of course right that that should be done) but do not focus on the wrong things that have been done by Anglo-American-style financial capitalism (which do need to be taken into account) - as well as the prospects for the US, UK and other Western countries to return to sanity - and what effect that may have on global economics.
As I write this, global regulators (led of course by the USA and other Western countries) have just agreed minimum capital requirements, including larger capital requirements for "systemically important" financial institutions. Of course, this still has to be okayed by the G20 and, deficient though the measure is (see my earlier posts on this topic), it is better than nothing. And if it is start of more sensible regulations to come, then it would be excellent. Naturally, the reverse if regulation stalls without creating a sufficiently comprehensive global framework for all aspects of financial services, money supply, and so on.
Meanwhile, with commodity prices falling sharply, and global growth set to be slow for the foreseeable future, the question is whether the huge Chinese bet on commodities will pay off or will itself create problems for the country. Sphere: Related Content
Saturday, June 25, 2011
How NON-serious is the Chinese government about fighting corruption?
This can be judged by asking whether anyone in their senses would authorise webstie for the purpose in which only a maximum of 1,000 people could make a complaint at the same time?http://www.blogger.com/img/blank.gif
No wonder the website crashed shortly after launching: www.bbc.co.uk/2/hi/asia-pacific/8117297.stm
This is inspite of the Chinese knowing that their web activities are monitored and that they are liable to prosecution - and intimidation.
An earlier version of the official nationwide tip-off system apparently generated 20,000 reports of official abuse in 2008.
What happened to that version of the system cannot be traced - at least by me at present! Sphere: Related Content
No wonder the website crashed shortly after launching: www.bbc.co.uk/2/hi/asia-pacific/8117297.stm
This is inspite of the Chinese knowing that their web activities are monitored and that they are liable to prosecution - and intimidation.
An earlier version of the official nationwide tip-off system apparently generated 20,000 reports of official abuse in 2008.
What happened to that version of the system cannot be traced - at least by me at present! Sphere: Related Content
Tuesday, June 21, 2011
Hernando de Soto and the "destruction of economic facts"
Hernando de Soto, who I regard as a valued colleague, recently published a piece on the relationship between the rise of the West and the establishment of economic facts and records, and on the other hand, the relationship between the current http://www.blogger.com/img/blank.gifdecline of the West and the devaluation or ignoring of economic facts (click HERE to read the article in BusinessWeek: )
I left off commenting on the article, as I was due to see Hernando a few days ago.
Last week, I put it to him that the destruction of economic facts, to which he so tellingly draws attention, is related to the rejection of the notion of truth in philosophy and the social sciences (and now even in the physical sciences!), and the resulting post-modernism and amorality of our cultural leaders.
For any improvement in the situation, for any return to economic facts and "public truth", there has to be also a cultural return to the commitment to truth in public life as a whole (philosophy, social sciences, physical sciences, media, politicians, cultural icons....)
He was intrigued and said he would explore that chain of thought, which he had not thought about till then. Sphere: Related Content
I left off commenting on the article, as I was due to see Hernando a few days ago.
Last week, I put it to him that the destruction of economic facts, to which he so tellingly draws attention, is related to the rejection of the notion of truth in philosophy and the social sciences (and now even in the physical sciences!), and the resulting post-modernism and amorality of our cultural leaders.
For any improvement in the situation, for any return to economic facts and "public truth", there has to be also a cultural return to the commitment to truth in public life as a whole (philosophy, social sciences, physical sciences, media, politicians, cultural icons....)
He was intrigued and said he would explore that chain of thought, which he had not thought about till then. Sphere: Related Content
Wednesday, June 15, 2011
Watch the propaganda war
The USA's Federal Deposit Insurance Corp has decided to hold big banks to the same minimum capital standards that community banks must meet. Surprise!!!
So the big banks have launched a propaganda salvo, arguing that the new capital standards will hinder lending and put them at a competitive disadvantage.
Putting big banks on the same footing as community banks creates for the big banks a competitive disadvantage? Who are they trying to fool?
And the availability of all the capital that they have had since the government decided to support the big banks does not seem to have enabled them to lend any astonishingly great amount so far.
"We're for higher capital standards, but we want to ensure that the banks have the ability to make loans," Scott Talbott, senior vice president of government affairs at The Financial Services Roundtable is reported to have said. But why should anyone believe that putting big banks on an equal footing with community banks for capital requirements is going to make the blindest bit of difference to the lending activities of big banks? Sphere: Related Content
So the big banks have launched a propaganda salvo, arguing that the new capital standards will hinder lending and put them at a competitive disadvantage.
Putting big banks on the same footing as community banks creates for the big banks a competitive disadvantage? Who are they trying to fool?
And the availability of all the capital that they have had since the government decided to support the big banks does not seem to have enabled them to lend any astonishingly great amount so far.
"We're for higher capital standards, but we want to ensure that the banks have the ability to make loans," Scott Talbott, senior vice president of government affairs at The Financial Services Roundtable is reported to have said. But why should anyone believe that putting big banks on an equal footing with community banks for capital requirements is going to make the blindest bit of difference to the lending activities of big banks? Sphere: Related Content
Tuesday, June 14, 2011
New evidence that the 2007 crisis is not over
According to an Associated Press study, 60% of the states in the USA are having trouble with budgets as well as with revenue. Their general-fund budgets are still below 2007 levels, and they have not been able to bring spending to the levels before the recession.
In fact, 50 states are down 5% in revenue from fiscal 2008.
In many cases, the states are struggling - and are trying to cope by firing policemen, firemen, bureaucrats and even teachers and university professors.
Whether many of these States are in a better position than Greece remains to be seen.
One shudders to think what the real position is in China - it is shielded only by how difficult it is to look inside that apparently-gold box. Sphere: Related Content
In fact, 50 states are down 5% in revenue from fiscal 2008.
In many cases, the states are struggling - and are trying to cope by firing policemen, firemen, bureaucrats and even teachers and university professors.
Whether many of these States are in a better position than Greece remains to be seen.
One shudders to think what the real position is in China - it is shielded only by how difficult it is to look inside that apparently-gold box. Sphere: Related Content
What is the right approach to "regulatory arbitrage"
First, what is "regulatory arbitrage"? That is simply the tendency for companies to seek to move activities to locations where regulation is less stringent.
Since the start of the 2007 global crisis, one problem dogging improvied legislation and regulation anywhere is the suspicion, or threat, or regulatory arbitrage - in other words, if rules are too strict in say the USA, industries may move their activities to Latin America or Africa or Europe...
There are several ways around the problem of "regulatory arbitrage".
The most sensible system is of course to have global rules for global markets, so the question of regulatory arbitrage does not arise.
The next best is to build into the national regulations themselves the forbidding of regulatory arbitrage, keeping in mind that it is easier to talk of moving house than it is to actually move house.
The worst possible thing is to try, as Rep. Michael Grimm, R-N.Y., is apparently doing, to simply put off the implementation of the few and relatively weak new rules that have been put in place to govern at least part of the derivatives market which was so implicated in causing the crisi, and which is so implicated in the current yo-yoing of the global economy.
Putting off a cure does not help a disease. Sphere: Related Content
Since the start of the 2007 global crisis, one problem dogging improvied legislation and regulation anywhere is the suspicion, or threat, or regulatory arbitrage - in other words, if rules are too strict in say the USA, industries may move their activities to Latin America or Africa or Europe...
There are several ways around the problem of "regulatory arbitrage".
The most sensible system is of course to have global rules for global markets, so the question of regulatory arbitrage does not arise.
The next best is to build into the national regulations themselves the forbidding of regulatory arbitrage, keeping in mind that it is easier to talk of moving house than it is to actually move house.
The worst possible thing is to try, as Rep. Michael Grimm, R-N.Y., is apparently doing, to simply put off the implementation of the few and relatively weak new rules that have been put in place to govern at least part of the derivatives market which was so implicated in causing the crisi, and which is so implicated in the current yo-yoing of the global economy.
Putting off a cure does not help a disease. Sphere: Related Content
What to watch in valuing banks and other financial services institutions
Michael Krimminger, the chief counsel of the USA's Federal Deposit Insurance Corp., has said that all SIFIs (systemically important financial institutions) need to have workable plans in place for unwinding themselves if necessary, or they might need to restructure. "Ultimately, a SIFI could be required to restructure its operations if it cannot demonstrate it is resolvable in an orderly manner under the Bankruptcy Code," Mr. Krimminger is apparently going to tell a House Financial Services subcommittee.
What he will be telling them is simply the law as it stands at present.
The question is whether the House subcommittee will want to weaken the law by encouraging SIFIs to ignore or evade the law, or whether the subcommittee will seek to have that that provision actually implemented, for example by setting a deadline for all SIFIs to present such "resolution plans" for evaluation.
If the decision is to move in the second and more sensible direction, then the market will watch what plans are presented by which SIFI, or (if the submission is secret - as it should be), which plans pass muster and which do not.
Plans that do not pass muster should mean that the particular SIFI will either have to submit a revised plan that does pass muster, or be required to begin its breakup more or less immediately.
In some cases, a few cases a breakup will reduce the value of the SIFI but in other cases a breakup will increase value in the SIFI, so far as shareholders are concerned. Sphere: Related Content
What he will be telling them is simply the law as it stands at present.
The question is whether the House subcommittee will want to weaken the law by encouraging SIFIs to ignore or evade the law, or whether the subcommittee will seek to have that that provision actually implemented, for example by setting a deadline for all SIFIs to present such "resolution plans" for evaluation.
If the decision is to move in the second and more sensible direction, then the market will watch what plans are presented by which SIFI, or (if the submission is secret - as it should be), which plans pass muster and which do not.
Plans that do not pass muster should mean that the particular SIFI will either have to submit a revised plan that does pass muster, or be required to begin its breakup more or less immediately.
In some cases, a few cases a breakup will reduce the value of the SIFI but in other cases a breakup will increase value in the SIFI, so far as shareholders are concerned. Sphere: Related Content
Banking industry to take new rule to court
When I was educated, I was taught that the job of courts was to implement the law, and not question it. Now it was always clear that sometimes "interpretation" of the law has in practice occasionally meant "interpreting it out of existence" or "interpreting the law to mean something quite different". But this has been rare or at least infrequent till now.
Now it looks as if, in the US, banks are going to be asked to decide whether a law sets market rates that are "too low". So the most important thing to see is: whether courts will accept this invitation to increase their own power yet more (the question of what actual limits they set is secondary).
But let me give you the background: the financial services industry has been opposed, as you might expect, to the Federal Reserve's proposed limit on debit card transaction fees. Having thrown everything in their power at the Fed and lost the argument with the expert authorities (as it appears), the banks are now waiting only for the issuance of the actual wording of the rule before they take the matter to the courts (which have of course much less expertise on financial and economic matters).
The argument is best summerd up as follows: The government should not set the price for the use of debit cards as "most prices in our economy are set by the market and that arrangement works pretty well" (in the words of a recent editorial in Bloomberg).
Bloomberg seems to have forgotten that it was the removal of too many rules that led market forces into the 2007 global crisis from which we have not yet escaped.
Just as "good fences make good neighbours", so "good rules make good markets".
In the guise of arguing that a specific rule is not good, industries really want once again to argue that we need no rules at all.
You might have thought that the crisis had taught us all some basic lessons about markets and rules. But of course industry lobbyists and CEOs are paid to try to bend rules in their favour.
You can make far more money by bending a rule in your favour, than you can by playing according to rules that are fair for card issuers as well as for card users. Sphere: Related Content
Now it looks as if, in the US, banks are going to be asked to decide whether a law sets market rates that are "too low". So the most important thing to see is: whether courts will accept this invitation to increase their own power yet more (the question of what actual limits they set is secondary).
But let me give you the background: the financial services industry has been opposed, as you might expect, to the Federal Reserve's proposed limit on debit card transaction fees. Having thrown everything in their power at the Fed and lost the argument with the expert authorities (as it appears), the banks are now waiting only for the issuance of the actual wording of the rule before they take the matter to the courts (which have of course much less expertise on financial and economic matters).
The argument is best summerd up as follows: The government should not set the price for the use of debit cards as "most prices in our economy are set by the market and that arrangement works pretty well" (in the words of a recent editorial in Bloomberg).
Bloomberg seems to have forgotten that it was the removal of too many rules that led market forces into the 2007 global crisis from which we have not yet escaped.
Just as "good fences make good neighbours", so "good rules make good markets".
In the guise of arguing that a specific rule is not good, industries really want once again to argue that we need no rules at all.
You might have thought that the crisis had taught us all some basic lessons about markets and rules. But of course industry lobbyists and CEOs are paid to try to bend rules in their favour.
You can make far more money by bending a rule in your favour, than you can by playing according to rules that are fair for card issuers as well as for card users. Sphere: Related Content
To create US jobs, the US corporate lobby wants to sink the USA to the level of Greece
The current level of understanding among corporate leaders in the US regarding the concept of "strategy" is, I'm afraid, desperately poor.
As evidence consider the following:
Job creation needs a "strategic view" to succeed, according to Jeff Immelt, chairman and CEO of General Electric, and Ken Chenault, chairman and CEO of American Express.
Both of them are also on the President's Jobs and Competitiveness Council.
They say: "By making it easier to visit the U.S. through improved visa processes, we can win back market share in travel and tourism and create hundreds of thousands of jobs".
First, let's ask whether "improving visa processes" will not also make it easier to enter the US, and will therefore increase security risks once again.will increased tourism create "hundreds of thousands" of jobs? So it will require a massive propaganda job on the part of the US Administration to convince its population that that "improved visa processes" do not mean greater threat to security - and all the expenditure of time, effort and money on the propaganda will be instantly undone by just one bomb or attack of any other sort (do note, by the way, that the Chinese and/or some other government is still hacking away at the computer facilities of corporations, organisations such as the IMF, and defence establishments).
Second, increased tourism will certainly restore some thousands of jobs that have been lost as a result, since 9/11, of the creation of the Big Brother State in the USA. And if tourism really booms, then of course several thousand more could be added.
But could tourism alone create "hundreds of thousands" of jobs?
I am sceptical.
How many motels and hotels can you have?!
Think too: How many countries are competing to be tourist destinations?
Finally, the "strategic vision" of Immelt and Chenault for the US seem to boil down to financial innovation and tourism, so the question is: can an economy rely on financial innovation and tourism alone for the bulk of its jobs, without any manufacturing?
There are of course countries that rely on financial innovation and tourism.
Countries such as Greece.
Their problems are now too well known to be repeated here.
But at least we now know the exact level to which the corporate lobby in the President's Jobs and Competitiveness Council wants to sink the USA. Sphere: Related Content
As evidence consider the following:
Job creation needs a "strategic view" to succeed, according to Jeff Immelt, chairman and CEO of General Electric, and Ken Chenault, chairman and CEO of American Express.
Both of them are also on the President's Jobs and Competitiveness Council.
They say: "By making it easier to visit the U.S. through improved visa processes, we can win back market share in travel and tourism and create hundreds of thousands of jobs".
First, let's ask whether "improving visa processes" will not also make it easier to enter the US, and will therefore increase security risks once again.will increased tourism create "hundreds of thousands" of jobs? So it will require a massive propaganda job on the part of the US Administration to convince its population that that "improved visa processes" do not mean greater threat to security - and all the expenditure of time, effort and money on the propaganda will be instantly undone by just one bomb or attack of any other sort (do note, by the way, that the Chinese and/or some other government is still hacking away at the computer facilities of corporations, organisations such as the IMF, and defence establishments).
Second, increased tourism will certainly restore some thousands of jobs that have been lost as a result, since 9/11, of the creation of the Big Brother State in the USA. And if tourism really booms, then of course several thousand more could be added.
But could tourism alone create "hundreds of thousands" of jobs?
I am sceptical.
How many motels and hotels can you have?!
Think too: How many countries are competing to be tourist destinations?
Finally, the "strategic vision" of Immelt and Chenault for the US seem to boil down to financial innovation and tourism, so the question is: can an economy rely on financial innovation and tourism alone for the bulk of its jobs, without any manufacturing?
There are of course countries that rely on financial innovation and tourism.
Countries such as Greece.
Their problems are now too well known to be repeated here.
But at least we now know the exact level to which the corporate lobby in the President's Jobs and Competitiveness Council wants to sink the USA. Sphere: Related Content
Sunday, June 12, 2011
I don't often publish anything very personal here, but
as it was my mother's 10th death anniversary recently, and as my 22 year old son, Suresh, has written the best of any of us for the occasion, I thought some of you might like to see it.
My mother (his grandmother) was always "Ammachi" to my children.
Here is what he wrote:
When I think of Ammachi I can't think of many happy positive memories
Mainly I think of suffering
But when I consider all Ammachi went through I am amazed
Amazed that despite - or through - suffering, she fought, she lived, she laughed, she loved
Now I find myself appreciating that strength
Realising how admirable it is
And praying that in whichever hardships I go through in life,
I can do so following her legacy:
going through suffering walking with Jesus, giving thanks at all times,
unwavering in thankfulness, hopefulness, and faithfulness
I can understand why she loved the psalms,
when I thought them a repetitive cry,
oscillating between joy and tragedy
But they are full of the raw emotions of life.
Universal, human truths given meaning and purpose by Godly presence
And so it was with Ammachi.
The presence of God gave her life, in all its fulness - the ups and the downs - a meaning and purpose that transcended any mere human thoughts, and made all suffering bearable beyond any mere human well-wishing. Sphere: Related Content
My mother (his grandmother) was always "Ammachi" to my children.
Here is what he wrote:
When I think of Ammachi I can't think of many happy positive memories
Mainly I think of suffering
But when I consider all Ammachi went through I am amazed
Amazed that despite - or through - suffering, she fought, she lived, she laughed, she loved
Now I find myself appreciating that strength
Realising how admirable it is
And praying that in whichever hardships I go through in life,
I can do so following her legacy:
going through suffering walking with Jesus, giving thanks at all times,
unwavering in thankfulness, hopefulness, and faithfulness
I can understand why she loved the psalms,
when I thought them a repetitive cry,
oscillating between joy and tragedy
But they are full of the raw emotions of life.
Universal, human truths given meaning and purpose by Godly presence
And so it was with Ammachi.
The presence of God gave her life, in all its fulness - the ups and the downs - a meaning and purpose that transcended any mere human thoughts, and made all suffering bearable beyond any mere human well-wishing. Sphere: Related Content
Thursday, June 09, 2011
Finally, light on why oil markets are suffering from "irrational exuberance" again
In his daily roundup of academic news ("whether Serious, Sublime, Surreal or otherwise"), Kevin Lewis of the US publication, National Affairs, reports the following research by Tamir Levy of Netanya Academic College and Joseph Yagil of Haifa University, Israel.
Air pollution affects mood, which affects stock prices:
Average daily returns on stock indexes for days with unhealthy air-pollution levels range from −0.45% to −0.26%, while on good days, returns are positive, ranging from +0.04% to +0.06%.
Well, what can I say?
Only that the air must be PARTICULARLY healthy at present. Sphere: Related Content
Air pollution affects mood, which affects stock prices:
Average daily returns on stock indexes for days with unhealthy air-pollution levels range from −0.45% to −0.26%, while on good days, returns are positive, ranging from +0.04% to +0.06%.
Well, what can I say?
Only that the air must be PARTICULARLY healthy at present. Sphere: Related Content
Wednesday, June 08, 2011
The markets have gone even madder than usual
Those of us who were brought up on the dogma that markets are always right (at least in the long run) are having a harder and harder time sticking to the faith.
Consider that OPEC's current infighting and disunity is supposed to mean the end of the quota system by which different countries have agreed how much oil they are going to produce.
That in turn means that Saudi Arabia and its allies are going to produce more than they did - which in turn means that the others too are going to produce more than they did - which will have the immediate consequence that the supply of oil will increase - which should of course mean a significant reduction in the price of oil.
But what has actually happened? The reverse! The oil price has actually shot up!!!
So much for faith in markets. Sphere: Related Content
Consider that OPEC's current infighting and disunity is supposed to mean the end of the quota system by which different countries have agreed how much oil they are going to produce.
That in turn means that Saudi Arabia and its allies are going to produce more than they did - which in turn means that the others too are going to produce more than they did - which will have the immediate consequence that the supply of oil will increase - which should of course mean a significant reduction in the price of oil.
But what has actually happened? The reverse! The oil price has actually shot up!!!
So much for faith in markets. Sphere: Related Content
Tuesday, June 07, 2011
Defense spending versus spending on humane and environmnental purposes
Recently, I was speaking at an international conference in China on the topic "Creating a Culture of Sustainability". During the Q&A session which followed, one of the participants questioned whether the measures I propose are not "too expensive".
My answer was that the cost would be very little when compared to the cost of all the unnecessary spending in the world, for example on war-preparations alone.
I did not have the figures in hand at the time, so I provide them now for China (as I was in China at the time; however, similar points could be made for each nation in the world).
The Chinese government's published 2011 military budget is about US$91.5 billion. That is the second largest in the world, and has gone up by just shy of 13% of the budget for 2010, when it was US$77.95 billion.
However, that is simply the figure published by the Chinese government, and we know that not everything that any government says can be trusted, so government statements always have to be checked against the statements of independent observers or at least other observers.
In 2010, the US Department of Defense's annual report to Congress on China's military strength estimated the actual 2009 Chinese military spending at US$150 billion, while the Stockholm International Peace Research Institute (SIPRI) estimated that Chinese military spending for 2009 was US$ 100 billion.
However, those sorts of dollar figures do not give us an accurate idea of what is involved. In 2003, the last year for which this sort of comparison is possible for me at present, the Chinese government's published budget was less than US$ 25 billion. In terms of purchasing power parity, SIPRI's estimate was that the figure was equal to US$ 140 billion in terms of what could be provided with that monehttp://www.blogger.com/img/blank.gify in China versus what it would cost to provide the same in the USA. If we ignore Chinese inflation, we could say that real Chinese spending on defense is scheuled to be, in PPP terms, something like 500 billion US dollars in this year alone.
Meanwhile, you might like to note that, according to a report last year from a task force from one of China's top universities, Tsinghua, spending on internal security nationwide is equal to the official defence budget and is expanding much faster.
Put those figures together, and you see that Chinese security spending is approximately US dollars one trillion - more or less as much as the US, when everything is taken as a whole. For the US, see Robert Higgs, “Defense Spending Is Much Higher Than You Think,” The Beacon, April 17, 2010, available here: here Sphere: Related Content
My answer was that the cost would be very little when compared to the cost of all the unnecessary spending in the world, for example on war-preparations alone.
I did not have the figures in hand at the time, so I provide them now for China (as I was in China at the time; however, similar points could be made for each nation in the world).
The Chinese government's published 2011 military budget is about US$91.5 billion. That is the second largest in the world, and has gone up by just shy of 13% of the budget for 2010, when it was US$77.95 billion.
However, that is simply the figure published by the Chinese government, and we know that not everything that any government says can be trusted, so government statements always have to be checked against the statements of independent observers or at least other observers.
In 2010, the US Department of Defense's annual report to Congress on China's military strength estimated the actual 2009 Chinese military spending at US$150 billion, while the Stockholm International Peace Research Institute (SIPRI) estimated that Chinese military spending for 2009 was US$ 100 billion.
However, those sorts of dollar figures do not give us an accurate idea of what is involved. In 2003, the last year for which this sort of comparison is possible for me at present, the Chinese government's published budget was less than US$ 25 billion. In terms of purchasing power parity, SIPRI's estimate was that the figure was equal to US$ 140 billion in terms of what could be provided with that monehttp://www.blogger.com/img/blank.gify in China versus what it would cost to provide the same in the USA. If we ignore Chinese inflation, we could say that real Chinese spending on defense is scheuled to be, in PPP terms, something like 500 billion US dollars in this year alone.
Meanwhile, you might like to note that, according to a report last year from a task force from one of China's top universities, Tsinghua, spending on internal security nationwide is equal to the official defence budget and is expanding much faster.
Put those figures together, and you see that Chinese security spending is approximately US dollars one trillion - more or less as much as the US, when everything is taken as a whole. For the US, see Robert Higgs, “Defense Spending Is Much Higher Than You Think,” The Beacon, April 17, 2010, available here: here Sphere: Related Content
A senseless tax on big financial institutions
At the height of the crisis, it became clear that there are some banks that are "too big to fail".
That means that these institutions have, in effect, a guarantee that the government will rescue them, since they are so large that a bankruptcy of that size would be intolerable because of the impact financially and socially (i.e. on unemployment).
In such a situation, there are two principal options that make sense:
1. Force or incentivise the institutions to break up, or
2. Socialise the banks (put them in government ownership - on the grounds that, as citizens must pay for any bankruptcy, it is citizens who should benefit from the profits made by such an institution)
Instead of these logical options, the global body responsible for banking supervision, The Basel Committee, proposed a capital surcharge of 3 percentage points on major banks.
You could think of this as a sort of insurance premium.
Two questions arise in relation to this: (a) on what ground is the 3% suggested: political or actuarial - in other words, is 3% too little or too much?; and (b) if the 3% surcharge goes to the government, does it end up in the government's general account to be frittered away on whatever the government fancies at any time, or is it put into a special account, so that it is clear at every point how much money is avaiable for any necessary rescue?
The answers to these questions are clear: (a) 3% is a figure that is snatched out of the air and has no logical or actuarial basis, and (b) the money collected by means of the surcharge will not be put into any special account and will indeed be frittered away.
In spite of all the above, now that Basel has pronounced on the issue, national governments will tend to go along.
The US Federal Reserve has apparently just come out in support of the proposal. When Fed Governor Daniel Tarullo recently discussed the proposed surcharges, observers interpreted his statement to mean they could be as high as 7 percentage points. My view is that this is mere politicking: it is unlikely that the eventual figure will be much higher than three per cent.
However, till the matter is settled, financial institutions will play safe - and are wise to do so. Sphere: Related Content
That means that these institutions have, in effect, a guarantee that the government will rescue them, since they are so large that a bankruptcy of that size would be intolerable because of the impact financially and socially (i.e. on unemployment).
In such a situation, there are two principal options that make sense:
1. Force or incentivise the institutions to break up, or
2. Socialise the banks (put them in government ownership - on the grounds that, as citizens must pay for any bankruptcy, it is citizens who should benefit from the profits made by such an institution)
Instead of these logical options, the global body responsible for banking supervision, The Basel Committee, proposed a capital surcharge of 3 percentage points on major banks.
You could think of this as a sort of insurance premium.
Two questions arise in relation to this: (a) on what ground is the 3% suggested: political or actuarial - in other words, is 3% too little or too much?; and (b) if the 3% surcharge goes to the government, does it end up in the government's general account to be frittered away on whatever the government fancies at any time, or is it put into a special account, so that it is clear at every point how much money is avaiable for any necessary rescue?
The answers to these questions are clear: (a) 3% is a figure that is snatched out of the air and has no logical or actuarial basis, and (b) the money collected by means of the surcharge will not be put into any special account and will indeed be frittered away.
In spite of all the above, now that Basel has pronounced on the issue, national governments will tend to go along.
The US Federal Reserve has apparently just come out in support of the proposal. When Fed Governor Daniel Tarullo recently discussed the proposed surcharges, observers interpreted his statement to mean they could be as high as 7 percentage points. My view is that this is mere politicking: it is unlikely that the eventual figure will be much higher than three per cent.
However, till the matter is settled, financial institutions will play safe - and are wise to do so. Sphere: Related Content
Why are markets slowing right now?
There are of course many reasons. An over-inflated market in China which is slowing down affecting sentiment regarding all emerging markets; governments coming to the end of the money they have permission to plough into the biggest institutions; the challenges for the Euro; the feeling that commodity prices may be already too high and equity and bond prices likewise....
Well, let's take a step back to consider another important factor:
One of the most important pieces of legislation passed by the Obama administration is the Dodd-Frank Act (sometimes called the Frank-Dodd Act).
If implemented according to the schedule set down in the Act itself, it would go a substantial way towards sorting out the crisis which started in 2007.
However, because of vigorous blocking action by the Republicans, and lack of will on the part of the Administration, there is almost no chance of the implementation commencing on schedule.
More than 100 new rules are supposed to take effect On July 16, but regulators do not seem to have finalised them, or at least have not yet announced them.
The result has been uncertainty for financial institutions as well as the players in the global shadow economy (no bad thing, the latter). Sphere: Related Content
Well, let's take a step back to consider another important factor:
One of the most important pieces of legislation passed by the Obama administration is the Dodd-Frank Act (sometimes called the Frank-Dodd Act).
If implemented according to the schedule set down in the Act itself, it would go a substantial way towards sorting out the crisis which started in 2007.
However, because of vigorous blocking action by the Republicans, and lack of will on the part of the Administration, there is almost no chance of the implementation commencing on schedule.
More than 100 new rules are supposed to take effect On July 16, but regulators do not seem to have finalised them, or at least have not yet announced them.
The result has been uncertainty for financial institutions as well as the players in the global shadow economy (no bad thing, the latter). Sphere: Related Content
Sunday, June 05, 2011
US unemployment and its relationship with NAFTA/ WTO
So it is official.
According to the Head of the Agency that compiles unemployment statistics in the US, the poor US payrolls data for May reflect a “general weakening in job growth” rather than any temporary distortion.
As I have argued earlier, employment in the US is highly unlikely to improve sustainably as long as the US subscribes to NAFTA and WTO agreements that create a playing field tilted against the US.
NAFTA and WTO agreements systematically privilege countries that pay less attention to environmental and human concerns.
Why?
Because it is cheaper to produce in countries that neglect, and so do not have to pay for, environmental and human concerns.
The result is that it is economically beneficial for production to migrate to such countries from countries such as the USA that pay at least marginally more attention to environmental and human concerns.
That is why employment is not going to return to the US and Europe as long as they subscribe to treaties such as NAFTA and WTO that neglect environmental and human concerns.
In other words, creating a level playing field, in which all countries are equally obliged to pay some minimal attention to environmental and human standards, is in the best interests of all countries. Sphere: Related Content
According to the Head of the Agency that compiles unemployment statistics in the US, the poor US payrolls data for May reflect a “general weakening in job growth” rather than any temporary distortion.
As I have argued earlier, employment in the US is highly unlikely to improve sustainably as long as the US subscribes to NAFTA and WTO agreements that create a playing field tilted against the US.
NAFTA and WTO agreements systematically privilege countries that pay less attention to environmental and human concerns.
Why?
Because it is cheaper to produce in countries that neglect, and so do not have to pay for, environmental and human concerns.
The result is that it is economically beneficial for production to migrate to such countries from countries such as the USA that pay at least marginally more attention to environmental and human concerns.
That is why employment is not going to return to the US and Europe as long as they subscribe to treaties such as NAFTA and WTO that neglect environmental and human concerns.
In other words, creating a level playing field, in which all countries are equally obliged to pay some minimal attention to environmental and human standards, is in the best interests of all countries. Sphere: Related Content
In the best tradition of double-talk
People of my age recollect quite clearly the venerable tradition of double-talk by
Nazi and Communist regimes.
For example, the Soviet agency "Pravda" (that word is the Russian for "Truth") was an excellent organ of Soviet propaganda which paid no attention to any objective truth.
Chinese naval vessels were named "Peace Number 1", "Peace Number 2" and so on during Mao's time (are they still?).
It is in that excellent tradition of obfuscation that General Liang Guanglie, China’s defence minister, has rejected criticism that his country was acting belligerently in the South China Sea. In his view, and in the view of the Chinese government, China is pursuing a policy of ‘peaceful rise’.
By that, the world should understand that China wants to impose its wishes on the rest of the world, and that the only way to have peace is for the world not to stand in China's way. In other words, if the world wants to avoid having China totally imposing its will on the world, the only way seems to be war.
Well, I think it totally inappropriate that the waters are often called the South China Sea - in all international discussions, the waters should be called the South East Asian Sea.
So the South East Asian Sea has claims by all the nations that border it - the other nations involved being Taiwan, the Philippines, Malaysia, Brunei, Indonesia and Vietnam.
Given the geography of the area it seems to me clear that the strongest claims to the Spratly Islands are by the Philippines, Malaysia and Vietnam. Sphere: Related Content
Nazi and Communist regimes.
For example, the Soviet agency "Pravda" (that word is the Russian for "Truth") was an excellent organ of Soviet propaganda which paid no attention to any objective truth.
Chinese naval vessels were named "Peace Number 1", "Peace Number 2" and so on during Mao's time (are they still?).
It is in that excellent tradition of obfuscation that General Liang Guanglie, China’s defence minister, has rejected criticism that his country was acting belligerently in the South China Sea. In his view, and in the view of the Chinese government, China is pursuing a policy of ‘peaceful rise’.
By that, the world should understand that China wants to impose its wishes on the rest of the world, and that the only way to have peace is for the world not to stand in China's way. In other words, if the world wants to avoid having China totally imposing its will on the world, the only way seems to be war.
Well, I think it totally inappropriate that the waters are often called the South China Sea - in all international discussions, the waters should be called the South East Asian Sea.
So the South East Asian Sea has claims by all the nations that border it - the other nations involved being Taiwan, the Philippines, Malaysia, Brunei, Indonesia and Vietnam.
Given the geography of the area it seems to me clear that the strongest claims to the Spratly Islands are by the Philippines, Malaysia and Vietnam. Sphere: Related Content
The current state of the world's shadow financial system
Remember my post on this subject on May 12?
Apparently, the size of the shadow financial system continues to balloon.
According to one source, unregulated global OTC derivatives alone amount to USD 600 trillion (to provide a comparison, the total amount of regulated financial trading is about three trillion a day).
Though various rules have been proposed and discussed by global, US and European legislators and regulators, hardly any have been finalised.
The G20 ministers set a deadline for full implementation of reforms by the end of 2012, but not a single country is, less than 18 months from that deadline, in any position to comply with that deadline.
In spite of the problems affecting the Euro, reform of the global monetary system is not even being discussed any more, as far as I can see. Led by the US, most countries in the world, continue to print money in unjustifiable quantities, and interest rates continue to be unhealthily low.
So we have unrealistic and increasing asset, commodity and equity prices - specially in emerging countries such as Brazil, Russia, India and China; correlation of supposedly diverse asset classes; leverage in the global financial system; and inter-dependency between the world’s biggest financial institutions as well as elimination of middle-sized financial institutions.
Watch out for a yet another bursting of the bubble, this time the bubble that has been created since 2008 or so. Sphere: Related Content
Apparently, the size of the shadow financial system continues to balloon.
According to one source, unregulated global OTC derivatives alone amount to USD 600 trillion (to provide a comparison, the total amount of regulated financial trading is about three trillion a day).
Though various rules have been proposed and discussed by global, US and European legislators and regulators, hardly any have been finalised.
The G20 ministers set a deadline for full implementation of reforms by the end of 2012, but not a single country is, less than 18 months from that deadline, in any position to comply with that deadline.
In spite of the problems affecting the Euro, reform of the global monetary system is not even being discussed any more, as far as I can see. Led by the US, most countries in the world, continue to print money in unjustifiable quantities, and interest rates continue to be unhealthily low.
So we have unrealistic and increasing asset, commodity and equity prices - specially in emerging countries such as Brazil, Russia, India and China; correlation of supposedly diverse asset classes; leverage in the global financial system; and inter-dependency between the world’s biggest financial institutions as well as elimination of middle-sized financial institutions.
Watch out for a yet another bursting of the bubble, this time the bubble that has been created since 2008 or so. Sphere: Related Content
Watch out for theft via Social Networking Sites' Terms and Conditions
I get a certain quantity of mails from friends (in addition to spam of course) inviting me to join this or that social networking site.
Well, I can hardly keep up with the ones to which I already belong!
But I regularly check out new sites (as I want to keep an eye on tech developments, for professional reasons).
Having checked out this particular site, I must say my increasing concern about the sorts of Terms and Conditions such sites ask you to sign has reached breaking point
That is why I share with you here my response to my friend:
dear Christoph
many thanks
but have you actually read their terms and conditions?
apart from paying them a subscription fee, you give away to them the copyright in anything you post on their system!
that means, technically, that if a large institution, say UBS, were to post something on chamber.com, they would find that their logo and the information they posted did not belong to them any more
in the case of UBS, they would certainly dispute that and, being so big and powerful, would probably end up being able to retain their logo etc.
but I am not sure that smaller entities would be able to retain their logos, ideas and concepts
here is the relevant bit of their terms and conditions: "License and warrant for your submissions: You do not have to submit anything to us, but if you choose to submit something (including any User generated content, ideas, concepts, techniques and data), you must grant, and you actually grant by concluding this Agreement, a nonexclusive, irrevocable, worldwide, perpetual, unlimited, assignable, sublicense able, fully paid up and royalty free right to us to copy, prepare derivative works of, improve, distribute, publish, remove, retain, add, and use and commercialize, in any way now known or in the future discovered, anything that you submit to us, without any further consent, notice and/or compensation to you or to any third parties"
so I would stay as far away from them as possible
best
P Sphere: Related Content
Well, I can hardly keep up with the ones to which I already belong!
But I regularly check out new sites (as I want to keep an eye on tech developments, for professional reasons).
Having checked out this particular site, I must say my increasing concern about the sorts of Terms and Conditions such sites ask you to sign has reached breaking point
That is why I share with you here my response to my friend:
dear Christoph
many thanks
but have you actually read their terms and conditions?
apart from paying them a subscription fee, you give away to them the copyright in anything you post on their system!
that means, technically, that if a large institution, say UBS, were to post something on chamber.com, they would find that their logo and the information they posted did not belong to them any more
in the case of UBS, they would certainly dispute that and, being so big and powerful, would probably end up being able to retain their logo etc.
but I am not sure that smaller entities would be able to retain their logos, ideas and concepts
here is the relevant bit of their terms and conditions: "License and warrant for your submissions: You do not have to submit anything to us, but if you choose to submit something (including any User generated content, ideas, concepts, techniques and data), you must grant, and you actually grant by concluding this Agreement, a nonexclusive, irrevocable, worldwide, perpetual, unlimited, assignable, sublicense able, fully paid up and royalty free right to us to copy, prepare derivative works of, improve, distribute, publish, remove, retain, add, and use and commercialize, in any way now known or in the future discovered, anything that you submit to us, without any further consent, notice and/or compensation to you or to any third parties"
so I would stay as far away from them as possible
best
P Sphere: Related Content
Sunday, May 29, 2011
The elimination of the middle classes continues in the West
I see from the FT this morning that Heads of FTSE 100 companies took home median earnings of 32 per cent more last year, while workers suffered the most prolonged squeeze in real wages since the 1920s. For more details, CLICK
Sphere: Related Content
Hope for those fed up with Spam
A single commercial spam campaign can generate as many as 3 messages for every person on Earth. And it takes 12.5 million spam e-mail messages to sell $100 worth of Viagra - according to research cited by The New York Times (click) though actually published some years ago by a team of computer scientists at two University of California campuses. Apparently, it was these scientists who coined the term, “spamalytics” to describe their study or analysis of spam.
So why does all this now suddenly represent hope against spam?
Not because the scientists are pinning their hope on spammers coming to see that spam is not a very efficient or effective way to sell stuff.
But because their most recent study of nearly a billion spam messages, and commitment of several thousand dollars on purchases from spammers, reveals that there is a “choke point” that can be used to throttle spam.
That “choke point” is money.
Apparently "95 percent of the credit card transactions for the spam-advertised drugs and herbal remedies" are handled by just three financial companies — one based in Azerbaijan, one in Denmark and one in Nevis (West Indies).
Many of us have discovered that there is no technology solution that really works against spam, in spite of Bill Gates himself having assured us many years ago that technology solutions would be quickly found against spam.
We can also now be sure that there is no market solution to the problem of spam.
As in so many other matters, there are only two solutions:
1. voluntary action on the part of Visa/ Mastercard/ other credit cards companies/ financial institutions such as the ones in Azerbaijan, Denmark and St Nevis, OR
2. legislation and/or regulation.
So if you are fed up with spam:
(a) write to your credit card company asking why it does not act to choke spam, given the research;
(b) write to your MP, asking her/him to initiate suitable legislation;
(c) write to the relevant regulatory body or bodies in your country, asking them to introduce suitable regulation
AND GIVE EACH OF THEM THIS LINK TO THE STORY. Sphere: Related Content
So why does all this now suddenly represent hope against spam?
Not because the scientists are pinning their hope on spammers coming to see that spam is not a very efficient or effective way to sell stuff.
But because their most recent study of nearly a billion spam messages, and commitment of several thousand dollars on purchases from spammers, reveals that there is a “choke point” that can be used to throttle spam.
That “choke point” is money.
Apparently "95 percent of the credit card transactions for the spam-advertised drugs and herbal remedies" are handled by just three financial companies — one based in Azerbaijan, one in Denmark and one in Nevis (West Indies).
Many of us have discovered that there is no technology solution that really works against spam, in spite of Bill Gates himself having assured us many years ago that technology solutions would be quickly found against spam.
We can also now be sure that there is no market solution to the problem of spam.
As in so many other matters, there are only two solutions:
1. voluntary action on the part of Visa/ Mastercard/ other credit cards companies/ financial institutions such as the ones in Azerbaijan, Denmark and St Nevis, OR
2. legislation and/or regulation.
So if you are fed up with spam:
(a) write to your credit card company asking why it does not act to choke spam, given the research;
(b) write to your MP, asking her/him to initiate suitable legislation;
(c) write to the relevant regulatory body or bodies in your country, asking them to introduce suitable regulation
AND GIVE EACH OF THEM THIS LINK TO THE STORY. Sphere: Related Content
Thursday, May 26, 2011
Interested in the current state of the global civil war?
Then read, in today's FT, the piece titled: "Basel III break for banks in EU". Apparently the draft agreement offers an insurance loophole that ‘violates the global pact’
Read more >>
http://link.ft.com/r/6NPSBB/D4MERX/CRIC/40HIMN/26H5A5/KI/t?a1=2011&a2=5&a3=27 Sphere: Related Content
Read more >>
http://link.ft.com/r/6NPSBB/D4MERX/CRIC/40HIMN/26H5A5/KI/t?a1=2011&a2=5&a3=27 Sphere: Related Content
Tuesday, May 17, 2011
More interesting but useless research from an economist
A researcher at Florida Gulf Coast University demonstrates that in deeply corrupt countries such as Congo, incidences of corrupt practices actually enhance economic growth. In his view, this may be because it helps companies sidestep onerous rules.
Actually in "deeply corrupt countries" too-onerous rules as well as whimsical administrations exist precisely to make it necessary to bribe before anything, legal or illegal can be done (actually, there may be very little that is "legal").
So, in such countries, there is NO other way of doing business than by bribery et al.
Since growth is the byproduct of economic activity, naturally there would be NO growth if no one paid any bribes and no business got done.
The researcher has, however, a category of "less extreme corruptness", which he calls "average endemic corruption". In such countries, by his calculation, a one-standard-deviation increase in corrupt incidences depresses per-capita GDP growth by 0.12 percentage points.
The conclusion to be reached from his research appears to be, on the face of it, that if you want to be corrupt and to have economic growth at the same time, it is better to be extremely corrupt than to be averagely corrupt.
That is of course nonsense. The level of growth in a "deeply corrupt" country is very much lower than in an "averagely corrupt" country. In other words, the degree of lack of growth of a country is directly linked to how corrupt it is.
That startling fact does not need research.
In fact a lot of research nowadays tends to labour the obvious.
Which is what is bound to happen when university professors are rated by university administrations 80% on how much they publish, and only 20% on how well they teach as well as on how much else they do (e.g. organise academic conferences).
This philosophy of university administrations results in what is called the "publish or perish" syndrome. That produces a lot of publications, but because the "quality" of the research is assessed on technical criteria, you get a lot of "top quality" research which adds very little to the sum of non-obvious or useful human knowledge. Sphere: Related Content
Actually in "deeply corrupt countries" too-onerous rules as well as whimsical administrations exist precisely to make it necessary to bribe before anything, legal or illegal can be done (actually, there may be very little that is "legal").
So, in such countries, there is NO other way of doing business than by bribery et al.
Since growth is the byproduct of economic activity, naturally there would be NO growth if no one paid any bribes and no business got done.
The researcher has, however, a category of "less extreme corruptness", which he calls "average endemic corruption". In such countries, by his calculation, a one-standard-deviation increase in corrupt incidences depresses per-capita GDP growth by 0.12 percentage points.
The conclusion to be reached from his research appears to be, on the face of it, that if you want to be corrupt and to have economic growth at the same time, it is better to be extremely corrupt than to be averagely corrupt.
That is of course nonsense. The level of growth in a "deeply corrupt" country is very much lower than in an "averagely corrupt" country. In other words, the degree of lack of growth of a country is directly linked to how corrupt it is.
That startling fact does not need research.
In fact a lot of research nowadays tends to labour the obvious.
Which is what is bound to happen when university professors are rated by university administrations 80% on how much they publish, and only 20% on how well they teach as well as on how much else they do (e.g. organise academic conferences).
This philosophy of university administrations results in what is called the "publish or perish" syndrome. That produces a lot of publications, but because the "quality" of the research is assessed on technical criteria, you get a lot of "top quality" research which adds very little to the sum of non-obvious or useful human knowledge. Sphere: Related Content
Monday, May 16, 2011
Why did the West rise, and why is it falling?
I am delighted to hold in my hand a copy of a book that was sent to me for pre-publication review: Dr Vishal Mangalwadi's THE BOOK THAT MADE YOUR WORLD (just published by Thomas Nelson, USA).
From childhood, I have wondered what made the West so rich and influential.
Having investigated this in a disorganised way over several decades, I am stunned by Dr Mangalwadi's systematic, clear, and easily-understandable explanation.
Every person who wants to understand the modern world must read this book - though I disagree profoundly with some of the details of what he writes.
The book goes beyond the usual and totally unsatisfactory explanations of accident, "muggins' turn", fate, weather, geography, guns, steel, and rationality.
THE BOOK THAT MADE YOUR WORLD explains not only what made the West great, but also why it is failing.
Reading this volume will also, by implication, clarify what needs to be done to steer globalisation away from its current volatility, vulnerability and unfairness.
If you wish to help build an environmentally-responsible, stable, prosperous, and humane world, then this book is essential reading. Sphere: Related Content
From childhood, I have wondered what made the West so rich and influential.
Having investigated this in a disorganised way over several decades, I am stunned by Dr Mangalwadi's systematic, clear, and easily-understandable explanation.
Every person who wants to understand the modern world must read this book - though I disagree profoundly with some of the details of what he writes.
The book goes beyond the usual and totally unsatisfactory explanations of accident, "muggins' turn", fate, weather, geography, guns, steel, and rationality.
THE BOOK THAT MADE YOUR WORLD explains not only what made the West great, but also why it is failing.
Reading this volume will also, by implication, clarify what needs to be done to steer globalisation away from its current volatility, vulnerability and unfairness.
If you wish to help build an environmentally-responsible, stable, prosperous, and humane world, then this book is essential reading. Sphere: Related Content
Thursday, May 12, 2011
The limits of mainstream economics
Last week, I was at a lecture by one of the top economists in Germany, whose presentation was completely demolished by the first participant from the floor, who said that he was amazed that the entire presentation had nothing on the shadow financial system which is many times the size of the economy as described in the presentation; and that, if the shadow economy had been taken into account, none of the presentation's conclusions stand.
Interestingly, the presenter had absolutely nothing to say in relation to the participant's statement, beyond small-facedly conceding.
Raghuram Rajan is one of the top economists in the USA, famous for his book, “Fault Lines: How Hidden Fractures Still Threaten the World Economy” - which, you might imagine, has more to say on the subject.
Instead, he focuses on what he sees as the three big challenges that led to the economic crisis and still threaten the health of the global economy:
1. credit creation outpacing the American population's income growth,
2. the commitments to building up external savings with exports by many emerging markets, and
3. the fragility associated with the resulting large capital flows.
Again, nothing on the shadow financial system and its pro-cyclicality.
I haven't heard a top economist from India or another developing country in the last week, but I would guess that the situation is no better there.
Till mainstream economists learn to take the shadow financial system into our discipline, mainstream economics will continue to be irrelevant to real life. Sphere: Related Content
Interestingly, the presenter had absolutely nothing to say in relation to the participant's statement, beyond small-facedly conceding.
Raghuram Rajan is one of the top economists in the USA, famous for his book, “Fault Lines: How Hidden Fractures Still Threaten the World Economy” - which, you might imagine, has more to say on the subject.
Instead, he focuses on what he sees as the three big challenges that led to the economic crisis and still threaten the health of the global economy:
1. credit creation outpacing the American population's income growth,
2. the commitments to building up external savings with exports by many emerging markets, and
3. the fragility associated with the resulting large capital flows.
Again, nothing on the shadow financial system and its pro-cyclicality.
I haven't heard a top economist from India or another developing country in the last week, but I would guess that the situation is no better there.
Till mainstream economists learn to take the shadow financial system into our discipline, mainstream economics will continue to be irrelevant to real life. Sphere: Related Content
Thursday, May 05, 2011
Something objective on Bin Ladin and the Al Qaeda
There have been numerous appreciative comments (for which many thinks to everyone!) on my post regarding Bin Ladin
However, several have asked whether I might reflect more objectively or at least less personally on the future of the Al Qaeda
Well, the first thing I should say is that I know nothing about Al Qaeda and Bin Ladin beyond what I have read in the newspapers (I am not much of a TV man, and prefer radio if I have to have some broadcast medium).
Having shared that caveat, I should say that anyone who shares three characteristics is bound to be a leader, in any country and in relation to any cause: (a) gives away his money, (b) lives a simple lifestyle, and (c) is a good public speaker.
Bin Ladin qualified on all three grounds, I think, though I have no means myself of judging how good a speaker he was, as Arabic is not one of my languages.
Being a leader is naturally a different matter from being a competent leader - and that is a much more difficult matter to judge, because competence in leadership derives from a rather more complex mix of factors.
So, what does the death of Bin Ladin mean for Al Qaeda and related movements?
There has been a general decline in their appeal over the last few years, and Bin Ladin's death could strengthen that tendency.
But Bin Ladin's death could, instead, reverse that tendency, depending on who steps in to lead the movement. If it is really someone like Awlaki, who is reputed to be the brain behind the most damaging attacks staged by Al Qaeda, then there are the following considerations:
a. Bin Ladin was Saudi, Awlaki is Yemeni - and Yemen is not Saudi Arabia.
b. Bin Ladin came from an extremely rich family and gave away his wealth. Not the case with Awlaki (so far as I know)
c. No idea about Awlaki's lifestyle, but that is just evidence that he is not known for it.
d. What he is known for is his apparently "intellectual" sermons. Assuming they are as effective as is claimed, Awlaki's legacy will depend on how he is able to leverage this single source of appeal.
Naturally, if he is able to recruit lots of people and then guide them into successful actions, it is possible that he might eventually come to rival Bin Ladin in reputation.
But I hope that will not be the case, given the general Arab turn away from this sort of nonsense as that only ends up bringing disrepute to Islam. Sphere: Related Content
However, several have asked whether I might reflect more objectively or at least less personally on the future of the Al Qaeda
Well, the first thing I should say is that I know nothing about Al Qaeda and Bin Ladin beyond what I have read in the newspapers (I am not much of a TV man, and prefer radio if I have to have some broadcast medium).
Having shared that caveat, I should say that anyone who shares three characteristics is bound to be a leader, in any country and in relation to any cause: (a) gives away his money, (b) lives a simple lifestyle, and (c) is a good public speaker.
Bin Ladin qualified on all three grounds, I think, though I have no means myself of judging how good a speaker he was, as Arabic is not one of my languages.
Being a leader is naturally a different matter from being a competent leader - and that is a much more difficult matter to judge, because competence in leadership derives from a rather more complex mix of factors.
So, what does the death of Bin Ladin mean for Al Qaeda and related movements?
There has been a general decline in their appeal over the last few years, and Bin Ladin's death could strengthen that tendency.
But Bin Ladin's death could, instead, reverse that tendency, depending on who steps in to lead the movement. If it is really someone like Awlaki, who is reputed to be the brain behind the most damaging attacks staged by Al Qaeda, then there are the following considerations:
a. Bin Ladin was Saudi, Awlaki is Yemeni - and Yemen is not Saudi Arabia.
b. Bin Ladin came from an extremely rich family and gave away his wealth. Not the case with Awlaki (so far as I know)
c. No idea about Awlaki's lifestyle, but that is just evidence that he is not known for it.
d. What he is known for is his apparently "intellectual" sermons. Assuming they are as effective as is claimed, Awlaki's legacy will depend on how he is able to leverage this single source of appeal.
Naturally, if he is able to recruit lots of people and then guide them into successful actions, it is possible that he might eventually come to rival Bin Ladin in reputation.
But I hope that will not be the case, given the general Arab turn away from this sort of nonsense as that only ends up bringing disrepute to Islam. Sphere: Related Content
Tuesday, May 03, 2011
Osama Bin Laden
As you can imagine, I had and still have very mixed thoughts and feelings on hearing the news of the killing of Bin Laden
You may know that my sister was killed because she happened to be in the wrong place at the wrong time (the US Embassy at the time it was bombed by one of Bin Laden's followers)
I might be expected to feel at least some sense of satisfaction or relief or something like that - but I don't.
Trying to analyse why, I have the following reflections:
1. My master told me to love my enemies, not kill them. That has implications for what I am to do and feel if someone who is only indirectly my enemy is killed by some other party unrelated to me. Of course "everyone who takes the sword will also die by the sword". So it was probably inevitable that Bin Laden would go in some manner like this, but I regret very much the fact that he was killed by US forces in this particular way.
2. As I understand it, under US law, a "wanted" person, after arrest, is supposed to be tried in court before judgment is passed and the person is released or sent to prison or execution, depending on the evidence: how come there was no trial in Bin Laden's case?
3. The hyping of terrorism has become a means of devaluing, degrading, eroding and reducing civil liberties - isn't it time now to re-examine the whole business of how governments and media have been handling the question of terrorism? Terrorism has a terrible impact on a few, but the state of civil liberties is gradually becoming insufferable for everyone.
4. Terrorism can only be confronted by addressing its root causes in Koranic teaching/ propaganda which has emanated from Saudi Arabia over decades, and which the West has tolerated in exchange for geo-political arrangements which enable oil to flow from Saudi Arabia to the West. In other words, the West's enjoyment of its standard of living is, at present, inextricably linked with its allowance of the sort of propaganda/ teaching which has led, and still leads, to terrorism. That devilish bargain needs to be modified so that we oppose the lack of intellectual and spiritual freedom in Saudi Arabia, Pakistan and other such countries, which should told clearly that that kind of Islamism, terrorism and Sharia law has no place in civilised societies. Moreover, that any country that practices Sharia law will not be traded with nor supported in any way. Countries that practice Sharia law should be regarded as pariahs, and their leaders regarded as criminals under international law.
5. Now that the people of the Middle East are themselves rejecting their regimes, or at least requiring them to change in line with the values of liberty and equality if not fraternity, perhaps we will see people from the Middle East and other parts of the world opposing more vigorously the interpretation of the Koran that leads to terrorism and Shariah law.
6. Democratic regimes in the Middle East may well be more Muslim than the current tyrannical regimes. But democratic regimes, however Muslim, will eventually learn that Islamism leads only to cultural decline, and that openness and liberty are the only values that lead to continued development, while equality and fraternity are the only bases on which a globalising civilisation can continue to be built.
7. The passing of Bin Laden can be the end of an era - or it can mean merely a continuance of the sort of unsatisfactory disorder that we have at present. Which way things go will depend on which choices we make. Clarity about the values for which we stand is more necessary now than ever before. Sphere: Related Content
You may know that my sister was killed because she happened to be in the wrong place at the wrong time (the US Embassy at the time it was bombed by one of Bin Laden's followers)
I might be expected to feel at least some sense of satisfaction or relief or something like that - but I don't.
Trying to analyse why, I have the following reflections:
1. My master told me to love my enemies, not kill them. That has implications for what I am to do and feel if someone who is only indirectly my enemy is killed by some other party unrelated to me. Of course "everyone who takes the sword will also die by the sword". So it was probably inevitable that Bin Laden would go in some manner like this, but I regret very much the fact that he was killed by US forces in this particular way.
2. As I understand it, under US law, a "wanted" person, after arrest, is supposed to be tried in court before judgment is passed and the person is released or sent to prison or execution, depending on the evidence: how come there was no trial in Bin Laden's case?
3. The hyping of terrorism has become a means of devaluing, degrading, eroding and reducing civil liberties - isn't it time now to re-examine the whole business of how governments and media have been handling the question of terrorism? Terrorism has a terrible impact on a few, but the state of civil liberties is gradually becoming insufferable for everyone.
4. Terrorism can only be confronted by addressing its root causes in Koranic teaching/ propaganda which has emanated from Saudi Arabia over decades, and which the West has tolerated in exchange for geo-political arrangements which enable oil to flow from Saudi Arabia to the West. In other words, the West's enjoyment of its standard of living is, at present, inextricably linked with its allowance of the sort of propaganda/ teaching which has led, and still leads, to terrorism. That devilish bargain needs to be modified so that we oppose the lack of intellectual and spiritual freedom in Saudi Arabia, Pakistan and other such countries, which should told clearly that that kind of Islamism, terrorism and Sharia law has no place in civilised societies. Moreover, that any country that practices Sharia law will not be traded with nor supported in any way. Countries that practice Sharia law should be regarded as pariahs, and their leaders regarded as criminals under international law.
5. Now that the people of the Middle East are themselves rejecting their regimes, or at least requiring them to change in line with the values of liberty and equality if not fraternity, perhaps we will see people from the Middle East and other parts of the world opposing more vigorously the interpretation of the Koran that leads to terrorism and Shariah law.
6. Democratic regimes in the Middle East may well be more Muslim than the current tyrannical regimes. But democratic regimes, however Muslim, will eventually learn that Islamism leads only to cultural decline, and that openness and liberty are the only values that lead to continued development, while equality and fraternity are the only bases on which a globalising civilisation can continue to be built.
7. The passing of Bin Laden can be the end of an era - or it can mean merely a continuance of the sort of unsatisfactory disorder that we have at present. Which way things go will depend on which choices we make. Clarity about the values for which we stand is more necessary now than ever before. Sphere: Related Content
Retirement presents
At my retirement party yesterday, some of the participants very kindly gave me some presents.
I found the presents fascinating, in terms of what the generous folk thought I might need or like.
Among the presents were:
- wine (I don’t usually imbibe, but I can always find good uses for it!),
- chocolate (great, but not as yummy as Indian sweets!),
- a bottle of jam made of fruit found only in Brazil (most interesting!),
- a CD of music by Bryn Hawroth and another by Barry Maguire (both favourites),
- a fairy figure (must investigate what this is or is supposed to symbolize or do),
- a copy of his book by the author himself (autographed, lovely!),
- a comic novel, and a thriller in English.
The last two, presumably, because, in retirement, I am going to lack both fun and thrills. Sphere: Related Content
I found the presents fascinating, in terms of what the generous folk thought I might need or like.
Among the presents were:
- wine (I don’t usually imbibe, but I can always find good uses for it!),
- chocolate (great, but not as yummy as Indian sweets!),
- a bottle of jam made of fruit found only in Brazil (most interesting!),
- a CD of music by Bryn Hawroth and another by Barry Maguire (both favourites),
- a fairy figure (must investigate what this is or is supposed to symbolize or do),
- a copy of his book by the author himself (autographed, lovely!),
- a comic novel, and a thriller in English.
The last two, presumably, because, in retirement, I am going to lack both fun and thrills. Sphere: Related Content
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