About Edward Hugh

Edward 'the bonobo' is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

Festive Spirits?

Well even though today is a holiday in many EU states, there is nothing particulary festive about the atmosphere. All eyes are on the commodity markets to see what is going to happen to oil prices. The consequences of a flawed Iraq play are gradually coming to be recognised, and even the ridiculous demise of a ‘restyled’ Berlusconi doesn’t seem to offer the entertainment value it once might have.

Go on David, tell me, I’m being too gloomy!

We have reached a turning-point in international politics as well as in Iraq. President George W. Bush is widely seen to have gambled on Iraq and lost. The impact of that loss goes well beyond Iraq. The US has not been defeated in battle and is unlikely to be so but it can no longer impose its will on Iraq because it lacks the moral authority to do so.
Lawrence Freedman, Financial Times

Overproduction Crisis in Brussels

This wouldn’t be the first time. Now, however, it’s not milk or potatoes that are at issue, but words.

An acute difficulty of excess verbiage has lead Neil kinnock to crack down and order that in future no Commission report should be more than 15 pages long, except in undefined rare circumstances. This compares with the present average of length of 32.

The reason for this change unfortunately is not the arrival of sound sense, but rather that of 10 new members.

Officials at the European Commission produce a mountain of jargon-laden reports every year, some of them incomprehensible in any language.”

I’m not sure if verbal apoplexy is a fatal condition, or merely chronic: I shall have to check.

Be Careful When You Choose Your Password

I have no comment on this extremely preoccupying situation except to advise that you choose your passwords very carefully indeed:

CBS reported on Thursday that Berg was questioned by FBI agents who discovered he had been interviewed before because a computer password he used in college had turned up in the possession of accused Sept. 11 conspirator Zaccarias Moussaoui.”

Equally preoccupying is the question I feel now compelled to ask myself: have these people gone completely mad?

“NAJAF, Iraq (Reuters) – U.S. forces intensified their war against Iraqi cleric Moqtada al-Sadr on Friday, for the first time sending tanks into Najaf’s vast cemetery to blast guerrilla positions among its tombs.”

If you want to know why I see it like this, Juan Cole – who knows a hell of a lot more than I do about Islamic customs – also puts it a hell of a lot better than I could: here, here, here.

My own view is that Muqtada has now won politically and morally. He keeps throwing Abu Ghuraib in the faces of the Americans. He had his men take refuge in Najaf and Karbala because he knew only two outcomes were possible. Either the Americans would back off and cease trying to destroy him, out of fear of fighting in the holy cities and alienating the Shiites. Or they would come in after Muqtada and his militia, in which case the Americans would probably turn the Shiites in general against themselves. The latter is now happening.”

I don’t care what Sufouk told them the Americans are most unwise to engage in major combat in Karbala so close to Husain’s tomb. They make themselves look like Yazid. If they, or whoever is reading this, don’t know who Yazid is, then they have no business being in Iraq, much less in Karbala.”

Also see this Washington Post article.

The people authorising all this would seem to have no values which they hold sacred, the astonishing thing is that they imagine others don’t either, and that them remaining in this ignorance will have no significant military and political consequences. Fear and respect are not the same thing at all. A war like the one we are supposed to be waging on terrorism will not be won through fear, only by our winning respect. At the moment all we are doing is putting up ‘own goals’ on the scoreboard.

I don’t know which makes me feel more afraid: seeing all this chaos unfolding before my eyes, or the thought that US electors might vote in November that this is a ‘just fine’ way of doing things.

Postcript: People often make the inevitable comparisons between what is happening now and the war in Vietnam. I may be corrected, but I never recall having the sense of ‘ethical anarchy’ during that war that I have now. Brutal and atrocious things may have happened then, but the sense of ‘out of controlness’ seems much greater now. Equally it seems to me to be one thing to appear to show contempt for the political ideology of another people and quite another to appear to reveal the same contempt for their most sacred religious beliefs.

Postscript 2: people may be right to say that this war was not about petroleum. But it is right there in the middle. And we have a global economy which is hanging precariously on a very thin thread which depends on every metre of advance – or retreat – made by those tanks.

Getting Worse Until Things Improve

The Financial Times reports today on Deutsche Telekom’s first quarter results. The expected fall in the domestic fixed-line business was compensated for by a 12 per cent rise in revenues on the part of T-Mobile. A big part of this increase is due to the fact that they added a record 1.2m net new mobile subscribers in the US. Also helpful was their strong UK showing where they are now challenging to take the number one slot.

The one blemish on the report card: Germany. The fixed line T-Com section saw a 6% decline in sales, whilst T-mobile was reported as showing a disappointing drop in margins, “ascribed to one-off effects, increased marketing spend and the feeble German economy”.

James Golob, an analyst at Goldman Sachs, said: “The mobile business accounts for nearly all of our medium-term earnings and sales growth forecasts – and, of that, half is related to the performance in the US.” The German mobile figures “raised concerns that the sudden drop in margins could represent a trend that could last for as long as the weakness in the German economy continues.”"

Unfortunately, if I am right about the German economy, this means there could be a long, long wait ahead of us.

Something Is Worrying Me

Well clearly a lot of things are worrying me, many of them right now associated with the grizzly images of human suffering and degradation (both those which are intensely individual and those which are collective and for that seemingly more anonymous) which we cannot avoid contemplating day in day out. Against these images words seem powerless. All I am left with is silence.

So you will forgive me if in place of the big worries which we must all be feeling I share with you some seemingly more trivial ones. In this case the starting point would be an issue which has arisen about the state of the European biotechnology industry. Strange as it may seem, as well as struggling to get through the ‘hell’ that is today today, we could also usefully spare some time thinking about the ‘heaven’ of tomorrow: or what the future might be like when we eventually get there.
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More Than Meets The Eye

This may seem to be a story about goings-on in a far distant land, but then again some of the implications may arrive a lot nearer home than we may like to admit. Most of you will have noticed that in recent days the press has been full of material about a Japanese pensions scandal. Without getting bogged-down in the minutiae, the key point seems to be that various politicians haven’t exactly been paying their dues. Now where’s the big deal in this you might ask………. well the problem is that a not insignificant number of Japanese citzens already believed before the scandal broke that the fund wouldn’t live to see the day when current contributions could be recovered in the form of benefits.

Now they have simply discovered that many of those responsible for running the thing have also come to the same conclusion….
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Everything It Appears To Be?

The revelation yesterday that the EU was planning to offer to eliminate its agricultural export subsidies in an attempt to revive progress in the Doha world-trade round may not be all it appears to be. Astute readers of my post yesterday on China’s global impact may have noted the following:

“In the first place the Common Agricultural Policy, whose funds have long been directed to supporting farmers from prices which were considered to be too low, may find them increasingly committed towards protecting urban consumers from the consequences of world foodstuff prices which are considered to be too high. In the process the whole debate about farm subsidies may take a new and unexpected turn”.

Believe it or not I actually wrote this before the announcement. If this is right, the new and unexpected turn is not a matter of generousity, but of a changed reality (like half-empty grain silos across the planet). Cancelling subsidies may be no great sacrifice since there may not be too many to cancel: the CAP fund allocation can be eaten-up keeping the price of bread and other staples down.

All Along The Watchtower

There must be some way out of here,” said the joker to the thief

Not in Namangan Viloyati (Uzbekistan) you’d have thought there wasn’t. But again I am obviously wrong. Man – sorry person – hole covers have been disappearing all over the Namangan region according to this link-up I’ve just discovered with the Argus.

The global watchtower at work again. If you want to know what globalisation 3.0 is all about, then here you have it. But I don’t know which of the two is the more symbolically significant detail: the scrap metal dirty dealings in Chust or the tooing-and-frowing of this little meme.

Grainy Problems

Have you checked the manhole covers in your street lately? Maybe it would be a good idea to take a quick look: just in case. The reason this might be an advisable course of action is that hot on the heels of those other two Asian scare stories ? Sars, and chicken flu ? comes a new one: manhole-cover theft. The latest to be hit was the UK city of Gloucester, where a sudden wave of ?heavy-metal crime? left the city?s streets with 40 top-less manholes. But this unusual craze has in fact had a global reach, with cases stretching from Milwaukee, to Taegu in South Korea to Shanghai, China. And the cause of it all: rising metal prices as the needs of Chinese industrialisation and development hit the realities of a supply constrained world. In fact while China previously exported much of its steel to the US, it is now buying up US scrap metal for its own steel consumption. As a result worldwide scrap metal prices have almost doubled in the last 6 months, and it is this price explosion which has produced the sudden surge in activity on the manhole front.
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3G Update

Well following my post last week about Vodaphone and 3G in Europe there seems to be more news today that backs-up the argument questioning the economic viability of the thing.

Firtsly shares of NTT DoCoMo, the world’s No. 2 mobile-phone and the leading 3G operator, just had their biggest one-day drop ever after the company said operating profit may drop 25 percent and sales may fall (by 2.5%) this year on more competition in Japan.

Meantime Investment bank Nomura are predicting that Hutchison Whampoa could walk away from its loss-making 3G mobile business by end 2006. Their analyst reckons HW could rack-up operating losses of about $2.7 billion this year simply on the 3G operation alone.

Normura failed to see how Hutchison 3G (H3G) can achieve an economic return on capital and value the company at a negative HK$63 billion. “Our Hutchison Whampoa estimates include an assumption that the company walks away from its 3G ventures by the end of the full year of 2006,” James said.

The survival of 3 Italia was also called into question despite signing up the highest number of 3G subscribers among Hutchison’s 3G business. The company announced in March that it had 453,000 customers in Italy.

Obviously the DoCoMo situation is not all down to 3G, and in some ways it could be declared a success: DoCoMo had 3.05 million 3G users at the end of March 2004 compared to 330,000 a year earlier. However finding a realistic pricing model to extract revenue seems to be a problem, and they have now announced that they will be offering unlimited mobile internet on their 3G FOMA service for a monthly flat fee of 3,900 yen. At current rates that is about a manageable 29 euros a month. Which would be fine for a lot of users, but then you have to subtract the downside: all those ADSL customers who may decide to switch over. As I said, great idea, but the economics are far from clear.

If we don’t succeed, we run the risk of failure.”
J Danforth Quayle