The Economist has a timely, and very sobre assessment, of the state of the Chinese company (or should that be the Chinese state company, in any event Howard French has posted the entire piece, just in case we get link-rot), Brad Setser has a very well argued post on how China effectively seems to be continuing to operate a dollar peg (“Rather than pegging at 8.28, China is now seems to peg at 8.095-8.11″), and Asia Pundit Myrick has an excellent round-up of the general state of the argument in the ongoing ‘China Soft or Hard Landing’ debate.
Category Archives: Europe and the world
Another Ripple
From the AP via CNN:
Anti-flood measures will be reviewed in all Dutch regions below sea level in light of Hurricane Katrina’s aftermath to ensure they would be adequate in an emergency, the government said Sunday. …
The government is planning to spend $3.7 billion over the next ten years on new projects against the threat from river floods, in addition to the $620 million spent annually on maintaining the current system in the country.
Can’t remember where I read this, but one report said that until the mid-20th century, Dutch dikes were built to withstand a 100-year flood. After a serious event, they decided to raise the standard to a 10,000-year flood. I don’t know if that’s even possible to calculate, but it sure sounds good.
Europe Does Its Bit
Apart from the human tragedy dimension, the events which are unfolding in and around New Orleans will have an economic impact which in a globalised world can ripple through each and every economy. Fears that gasoline shortages could produce a recession in the US are going the rounds. James Hamilton of Econbrowser probably has the best coverage (here and here) while Dave Altig at MacroBlog is following the debate around the blogs (here, and here). Personally I’m taking a this is serious but lets keep calm view.
As Econbrowser argues the real problem is not with crude prices as such, but with the more short term issue of gasoline prices at the pump. The big problem is that the US has a large strategic crude reserve, but no gasoline reserve, while we, here in Europe, do have large stocks of gasoline. So it was a welcome surprise to open the FT in my browser this morning and read this report:
“European countries were on Thursday preparing to release emergency stockpiles of petrol as the US confirmed that some refineries hit by Hurricane Katrina would remain shut for several months. Earlier US officials had estimated the closures at only one to two weeks…..
Germany has assured the IEA that it would release stocks if asked to participate if needed. Germany holds the largest number of barrels of petrol in public storage. These extra barrels could hit the markets within one or two days. France, Spain and Italy also have large emergency gasoline reserves.”
And now AP has just reported that Germany is about to send supplies, while earlier Reuters had a similar story from Spain.
The City Of New Orleans
While I was setting up a live sparring match between George W Bush and Tim Worstall over at New Economist I realised that George made his original provocative remarks on a show called Good Morning America. This put me back in mind of an old Steve Goodman song (Arloe Guthrie or Willy Nelson version, it’s the same to me), called City of New Orleans which has been going the rounds in my head over the last 24 hours. So, since I’m helpless to do very much for those poor folks stuck in all that water, here’s at least a little tribute.
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A Certain Irony
In a post back in May about the bloody repression in Uzbekistan I noted that Crooked Timber’s John Quiggin was suggesting that US troops should be withdrawn immediately (I didn’t agree if you read the post). Well he seems to have got his way, and the reasoning behind the Uzbekistan parliament decision is of course interesting. The parliament has backed a government order which gives the United States six months to vacate the Karshi-Khanabad airbase. The suggestion is that this order is not entirely unconnected with the U.S. decision to join international demands for an independent investigation into May’s bloody crackdown.
While I’m up posting on Uzbekistan,
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Homophobia and Minority Rights
My recent post on identity and Amin Maalouf seems to have drawn an absolute blank here, even though I personally consider the points he raises to be at the heart of the WoT and related issues. Over in Canada, Randy McDonald has picked up the thread, and relates Maalouf’s ideas to the issue of homophobia, taking as his starting point the recent execution of two young men in Iran for what appears to have been their sexual orientation:
I was saddened, though not altogether surprised, when Ikram Saeed recently commented that criticizing those Muslims who believed that their religion requires the ritualized torture-killings of non-heterosexuals is an act of racism. I say “not altogether surprised,” since Ikram had earlier commented that people victimized under shari’a law were “wimpy” if they lacked the capital–social, economic, political–that they needed to escape. This sort of morally blind privatization of public goods that ends with the privatization of human rights, the kind of process that reduces rights from universal goods to things that you can have only if you were lucky, serves bigots’ ends quite nicely.
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Yoghurt With Soda Anyone?
Well, this about beats the lot of them. Yesterday the shares Groupe Danone SA went through the roof on rumours of a takeover by PepsiCo Inc. Dominique de Vil-pin also went through the roof:
“Prime Minister Dominique de Villepin said Danone was “among the jewels of our industry”…. “We plan to defend France’s interests,” Villepin said after a cabinet meeting at his official Matignon residence, although he insisted he was “not commenting on any rum“.
Jewels of French industry… defend France’s interests, well readers might be surprised to learn that Danone originated in Catalonia after local entrepreneur Isaac Carasso brought the formula for Bulgarian yoghurt back to Barcelona and set up shop in 1911. As the encyclopaedia entry notes:
“Ten years later, the first French factory was built, but during WWII, (Isaac’s son) Daniel moved the company to New York, where Dannon Milk Products Inc. was founded. In the United States, Daniel changed the brand name to Dannon to sound more American. Then in 1958, the company returned to Paris, where its headquarters are located today“.
My interpretation is that if Vil-pin is defending any French interests here, then they would be imperial ones. Possibly another example of how some still consider the Tractat dels Pirineus a licence to do and say what they want.
Out of Balance
The expression ‘global imbalances’ has become somewhat fashionable of late. But what exactly are these imbalances, and why are they important. The IMF in its most recent World Economic Outlook draws attention to two of them:
The (current) expansion has become less balanced. Growth has been stronger than expected in the United States, where the ?soft spot? proved more moderate than previously thought; in China, where activity remains buoyant despite tightening measures; and in most emerging market and developing countries. In contrast, growth in Europe and Japan has been disappointing, reflecting?to different extents? faltering exports and weak final domestic demand.Global current account imbalances have widened. The U.S. current account deficit is estimated at a record 5.7 percent of GDP in 2004, with the effects of the depreciation of the U.S. dollar to date offset by continued strong domestic
demand relative to its trading partners and higher oil prices. This is matched by current account surpluses in emerging Asia, Japan, the oil-producing countries in the Middle East and the Commonwealth of Independent States (CIS), and?to a much lesser extent? the euro area.
Well here we have two of the more obvious of those famed ‘imbalances’ – imbalances in growth and in trade accounts – but are there more of them?
The Low-Fertility Trap
I suppose by-now every right thinking and reasonably well read adult knows what the ‘poverty-trap’ is, even if most of us aren’t too clear about what there is to do about it. Being stuck in one of these traps could be thought to be like being stuck in a (not necessarily very deep) well with a slimy surround wall. The more you struggle to get out, the harder it gets: your strength disippates, and the walls get to be even more slippery. This could also be called a negative feedback loop.
Well now there is the suggestion that something similar may exist in the world of fertility. As Wolfgang Lutz suggests in this power point presentation, the critical level may be 1.5. No society which has fallen below this level has -to date – returned above it. (Many thanks here to commenter CapTvK who sent me the link).
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The Human Costs Of War
Controversy continues to surround the problem of assessing non-combatant casualties in time of war. The Swiss based Graduate Institute of International Studies has just published its latest annual small arms survey where it suggests some 39,000 Iraqis have been killed as a direct result of combat or armed violence since the start of the war.
The most relevant part of the report is probably chapter nine “Behind the Numbers: Small Arms and Conflict Deaths” – where, in addition to Iraq, other recent warzones like Guatemala, Peru, the Democratic Republic of the Congo (DRC), Kosovo, Afghanistan, and Sudan are also assessed. (A chapter summary is available here).
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