Wall Street v. Wall Street

Here we are again, on the eve of massive asset bubbles purges. And as always (see for instance "Mondialisation : du "free market" au "fair market" - 20070726, "This is not a financial crisis" - 20080711*):

• This is not a financial crisis, but a crisis of finance. 
• This is not an economic crisis, but a crisis of economics. 
• This is not a political crisis, but a crisis of politics. 

Which means, as always, that:

• we will not solve anything by rejecting finance, economy, and politics - that's exactly what brought us the rise of extremism and populism, Brexit, or of course Trump.
• we must to the contrary embrace finance, economy, and politics - at their core, starting from  their definitions, exposing smokescreens and impostures, demanding transparency and accountability.

So what happened after Lehman? Further desertion by people with basic notions of economics, or at least traces of common sense (I won't even mention 'moral compasses'). If it weren't for the A.I. algorythms and high-frequency trading that amplify and perpetuate the illusion, the most blatant bubbles would have probably alreaday burst years ago.

DJI chart (2nd biggest component after Boeing, Goldman Sachs weighs 11.6 times more than GE)

Nasdaq - better real/virtual ratio than before the dotcom crisis, but Apple (14.6% of the index, 4.9% of the DJI) and co will eventually meet reality.

Politicians? They totally surrendered. Back in 2009, they still had the power to change things by injecting tens of billions of dollars, and by passing a few legal safeguards - but now governments are weaker than ever, and they let their agenda be set by the very firms they bailed out without actually purging the system. 

Exhibit A: Goldman Sachs, who were instrumental in frauds leading to major crises (e.g. betting against toxic assets they helped create, or forging figures with the Greek government), are now stronger than ever, and still runnig the show (Steven Mnuchin, Gary Cohn, Mario Draghi, Robert Zoellick, Jose Manuel Barroso...). They aim at becoming the alpha and omega, or rather the Alphabet of finance since, like google, they're investing massively in A.I. to comfort their leadership.

Beyond this caricature, our financial systems rejected finance as an enabler for the economy. Not just Wall Street against Main Street, but ultimately Wall Street against Wall Street*. Emboldened by impunity (except maybe in Iceland, that lone country where The People put corrupt politicians and banksters in jail), these guys prolonged the bailouts with a wonderful invention, Quantitative Easings: after emptying governmental chests, they simply decided to print money for themselves - officially to fuel the economy, but actually to improve already indecent balance sheets, and to widen wealth (and reality) gaps in abyssal proportions. They brought back derivatives, fantasy league ratings, or gambling, and they're gutting Dodd-Frank like they gutted Glass-Stiegel.

What happened after Lehman was Lehman on steroids.

What happens next is for history books. 

And if by 'miracle' these guys manage to prevent the fall until after the Mid-term elections, all bets are off.

blogules 2017
Since 2003, nonsensical posts about noncritical issues in nonenglish (get your blogules transfusion in French)
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* also 'the ultimate stage of free market is the negation of the market' ("Le stade ultime du libéralisme, c'est la négation du marché (le déni d'économie continue") - 20110302) 

50+20 - Relearning Economics

You already know* how I consider this crisis:
- at the root, this is not a financial crisis but a crisis of finance, this is not an economic crisis but a crisis of economics
- past ideologies are not the solution, we need a sound, pragmatic approach, and a restoration of economics as it ought to be defined**: not the science of wealth, but the comprehension of a system or an activity, be it an individual, a society, a company, a living organism... Again, "we shall win over nowadays depression only by opening ourselves up to economy, not by trying to elude it because we forgot what it means for the future of this planet". Again, finance is a means, not an end. Again, no equation is relevant if it doesn't consider humans and the environment.

Of course, business and economics should be taught accordingly.

I wasn't surprised to see my old school ESSEC (the "think different" side in the Coca Cola - Pepsi war of French business schools) among the promoters of the "50+20" initiative (50plus20.org), which seeks the education and development of globally responsible leaders, the enablement of business organizations to serve the Common Good, and the transformation of business and the economy...

Can you spot Stephane, Heyonn and Don in this video aired at the 3rd Global Forum for Responsible Management Education on 15 June 2012? Tip: we were facing the sun and Inwangsan, with the Gyeongbokgung behind us (if you can't see the landmarks, we could enjoy the sun):



50+20 Agenda: Management Education for the World - Launch Video (720p).

blogules 2012
Since 2003, nonsensical posts about noncritical issues in nonenglish (get your blogules transfusion in French)
NEW: join blogules on Facebook!!!

* see among other posts "This is not a financial crisis", or in French: "Le stade ultime du libéralisme, c'est la négation du marché (le déni d'économie continue)", "Mondialisation : du "free market" au "fair market""...
** see "define: economy"

North Korea's lost Won

This is not Pyongyang's first reevaluation, but it's the first time the regime acts so recklessly in that matter.

The population was granted one week to replace their old wons with the new and improved currency. Failure to do so would leave them with almost worthless notes (1 new NK won = 100 old NK won).

Officially, the aim of the game is to crack down abuses from people perverted by capitalism, or at least the little of it which made its way into what was left of the local economy. No one will come with a lot of money without good explanations.

But the actual profiteers of NK's corrupt system (in particular the nomenklatura) already changed their cash into US dollars or Chinese yuans, well ahead of the announcement. The only victims will be those who will opt for transparency.

This measure follows closings of parallel markets, safety valves for populations every day more left to their own devices... or rather lack of.

According to South Korean medias, the country would be on the verge of revolt, and streets littered with old bank notes deliberately torn in the middle of Kim Jong-il's portraits. Military forces received the order to shoot at sight anyone who tries to escape the last Stalinian paradise.

If Pyongyang authorities really want to accelerate takeover from China*, that's a smart move...

blogules 2009 - also on blogules V.F. ("La Coree du Nord evalue mal les effets de sa reevaluation") and on Seoul Village ("North Korea's lost Won")

* see "KIM Jong-il's bridge to nowhere"

News biorhythms and the future of newspaper

Before the introduction of printing in Europe by Guthenberg, people would travel for books. Then books could multiply, move and reach different readers in different locations. Now you don't even need paper and anyone can consult any priceless ancient manuscript from anywhere without fear of damaging it*.

Earlier this year, there was a exhibition in the library of Florence's Convento di San Marco on the process of book making, featuring beautiful objects and illuminations. I remember thinking, as I moved from one marvel of patience to another, about how people would look at a newspaper press a few years from now.

Doesn't it already seem like a black and white scene from Citizen Cane ? The journalist getting his scoop, writing it down, submitting it to the chief editor, the prints running like crazy, a headline splashing on a newstand, yelled by a street vendor...

Scenes from last millenium.

The future of newspaper definitely looks like "more news and less paper".

Many players are folding their last issues, and folding, period. The sector had been looking for new business models for years when depression struck, precipitating bankruptcies in an already fragile ecosystem.

Sourcing, writing, editing, printing, distributing, advertising... now it's less a linear value chain than a shape shifting value cloud. But there's still value out there, be it in relevance, ergonomy, utility, actionability, exclusivity, analysis / insights / advice, local, reassurance, trust, fun... or why not, the quality of the paper (actually, that's the reason why there's still a thriving market - readers and advertisers - for certain magazines).

Likewise, brands are more often scattered among media, platforms, authors, journalists, and contributors who can even be anonymous members of a popular online forum. With a high churn rate because things and people tend to come out of fad more quickly by the day. Any local newspaper can get its 15 Warholian minutes of fame because say, their cute kitten rescued from a fire in Armpit, TN has been over-retwitted as a scoop of michaeljacksonian magnitude.

Reading has become a multimedia experience with pop-ups, background music, rollover images... you start reading an article and end up watching a movie while purchasing virtual pop-corn for your tamagotchi.

Sometimes, the article you're reading is being edited under your very eyes. Like that page devoted to post-elections unrests in Iran on HuffPost, or DemConWatch's SuperDelegate list, which I consulted about every other minute last year.

News and hoaxes are everywhere, and each individual has what I call his or her own "News BioRhythm" : depending on the context you consume more or less but you somehow have to be fed at certain moments of the day.

The future of newspaper ? The term will more often cover the medium instead of the media brand : you won't be talking about the NYT nor the WSJ, but about your favorite epaper smartphone application, your favorite dedicated device (ie your Kindle, your foldable screen...), where you chose to consult the news.

We all have tools to arrange our own newspapers, but that's not necessarily what you want nor need. I started with My Yahoo! around 1995-96 but quickly switched to a more pervasive browsing mode. There are usually about 30 sites always on on my screen - half of which about news, news gathering, or keeping track of news I read.

I know, I have a problem with my NBR... I should twit my shrink about it (he takes only $13.59 + taxes per character).


* These days, you should fear more for your dutifully purchased ebook (see "Kindle's Total Recall")

American Banks Post TARP, Stress, Disorder : I.O.U. Holdings

Signs of the times :

* Taliban consultants from the Boston SWOT Valley cling to their regressive vision of economy : "we don't understand what's happening, we are the ones who planted IEDs and we are the ones treated for PTSD"

* A.I.G. is still hesitating for its new name : "A.I.U. Holdings sounds nice, but I.O.U. Holdings would make more sense".

* Barack Obama is looking for a Swine Flu czar : "how about John McCain ? Somehow, it's about fighting pork. John would just need some training to search nosemarks beyond earmarks".

* The GOP wants Arlen Specter back : "we'll do whatever it takes, even hiring Sarah to build this ultimate bridge to nowhere".

* Chrysler and GM shall survive, but Nardelli remains a little bit nervous : "I feel comfortable with Italian backers and stronger trade unions, and I love the designer shoes they offered me. I get the idea behind the material used (steel), but I'd rather have them branded 'Jimmy Choo' than 'Jimmy Hoffa'".

Geithner Takes Bullet, Bullet Spares Buck Obama

CNN's Ali Velshi cornered Geithner on the AIG bonus scandal : the Treasury not only knew about risks of bonuses to be awarded but prevented Sen. Chris Dodd from adding a clause to minimize them*.

Tim takes the blame raher unconvincingly : he uses the first person for the legally binding part of his job ("It's my responsibility, I was in a position where I didn't knowabout those sooner, I take full responsibility for that"), swiches to the second person for the future "now let's fix it" section ("In any case, we're going to go back and try to recoup the payments that were already made we had no legal ability to block at that time"), but keeps his distances with the third parties who actually dunnit : "The people doing this, the Fed and the Treasury people, are workingvery closely together".

"They, the People" of the Treasury, won't like this, Tim.

You just caught a bullet for your boss.

The previous day, Barack Obama changed his tune regarding the AIG mess : OK I'm angry but look, the buck stops here, I'm responsible.

The bullet stopped before reaching the buck, and I'm glad Geithner took it. From the beginning, this man was Obama's poorest pick.



* "Geithner: Treasury Pushed For Bonus Loophole (VIDEO)" (HuffPost - 20090319)

Lobby Dick Tries To Retire, Fails To Retract

As the newly reformed League of Justice (D.C. Serious Comics) consider putting behind bars the Supervillains who disgraced America over the past 8 years, one of their most abject leaders resurfaces.

Last time we saw The Evil Doctor Cheney, he was pitifully escaping with his master Victor von Dumb in an helicopter. Their lair had just been raided by Captain America, who even humiliated von Dumb in public with his most powerful weapon ; a loud and concise X-ray speech exposing the imposter. The hero then threw this protective shield over the nation : "We reject as false the choice between our safety and our ideals".

It's hard to tell whether von Dumb will ever recover from his wounds. Somewhere deep into the darkest swamps of Amerika, The Rover is probably trying to revive his creature. D.C. Serious Comics declined to comment, but a sequel could be in the making under the title "Amerika Doomed : The Legacy".

We do know for sure the man known as Lobby Dick is still alive. Yesterday, he even rose from his armchair to deliver a "State of the Union with John King" address on CNN.

The Anchorman's hulk of a body was protected by a 8-inch adamantium-reinforced glass table, but for good measure King cast a few spells on The Creepy Veep, using quick hand gestures on his Magic Screen : as some of the Supervillain's most shameless moments were instantly brought back to life, there was no chance anyone in the audience could misinterpret his snarl for a friendly smile.

King first asked Doc Dick what he thought about Captain America's first weeks in power :
- "This League of Justice is dangerous : they are changing the very definitions of democracy, justice, freedom, science... cancelling all the much needed reforms we brought to the dictionnary over the last eight years. Next thing you know, even listening to Rush Limbaugh will be considered cruel and unusual punishment".
- "Well... isn't it already, I mean technically ? And what do you think about the use or abuse of the new superpower called Stimulus ?"
- "You sometimes do need a stimulus to get things going. For instance, when I don't get an answer or when I get an answer that I don't like, electroshocks can prove useful. But this Stimulus is a joke. Let's be clear : this country needs bullets, not bullet trains. Tax cuts for the rich, ax cuts for the poor. And a nationwide pipeline network".
- "... connected with new oil fields in Alaska, I presume ?"
- "Nah... oil should keep circulating on trucks, gas-guzzling trucks doing circles, virtuous circles. This country needs pipelines for water."
- "Pardon me... did I hear "water" ?"
- "You did. Getting water all across the nation is a major challenge for this millenium : we want to democratize waterboarding - no child left behind."
- "But that's insane !"
- "Yeah. Look how poor John McCain lost his bearings... I'm sure he refuses to promote waterboarding because Arizona is too dry."
- "Wasn't it because he was tortured in Vietnam ?"
- "That's a question of vocabulary. There was no CNN at the Hanoi Hilton back then, talk about cruel and unusual punishment..."

King offered the criminal an opportunity to redeem himself : "come on, Doc, now that your ruling days are behind you, now that you have nothing to lose... why not confess that you could have done or said things a better way ?"

Hissing and shrugging, von Dumb's sidekick refused to retract :
- the collapse of the Twin Towers ? "The DemoTeam did it, we tried to save Freddie and Fannie, but this infamous gang deliberately refused to strip them from their most dangerous powers when it was still possible"
- the Deficit ? "yet another creature from the DemoTeam - we found the fingerprints of The Dude all over it. Plus we had to reprint all procedure manuals... and by the way, do you know how much it costs to build a soundproof torture chamber ?"
- the Big Bang ? "We were caught in a global tempest and had to cope with the same crisis as our allies - rumors that the crisis originated from our own labs, our very homes, are bold lies"
- Shock and Awe ? "My only regret : the CIA didn't do their job and provided us with poor intel... but luckily enough, I was there to correct them and forge the case for the invasion of Iraq. Going at a Supervillain was the right thing to do. Everybody is definitely better off now, don't you think ? Iraq has ceased to exist as a united nation, Persia has recovered its Superpower status, new enemies keep popping up from all over the planet... more than ever, this World needs Amerika."

- "And how about The Scoot ?"

The Dark Lord's face turned even more somber as The Anchorman mentioned the case that almost tore the Doc Cheney - von Dumb couple apart in the last throes of their assault on democracy : "Victor and I slightly disagreed on that one, granted. I think it has something to do with my partner's hypocrisy. That's probably the reason why he keeps hiding his true fundamentalist face behind a mask of compassion. But make no mistake : he is as dangerous as I am."

Big 3's Slim Fast solution

US automotive industry is dead because, in spite of decades of decay, it decided to stick to "US automotive industry" instead of switching to "global mobility services".

Ford being Ford, only GM and Chrysler are openly talking about bankruptcy* in what looks like a slim-fast solution before a merger of equals (obese couch potato dummies lacking a vision for the future) : "just give us some cash, we'll deliver green cars as soon as we can and oh... if you don't mind we'll deliver a few pink slips even sooner".

Flint survivor Michael Moore wants**, like most Americans, the US to put money in sustainable transportation infrastructures, and to pull the plug for dumb, dumber and dumberer, to which I answer "which plug, Mike ? Isn't it time to install one ?"


* see for instance "GM, Chrysler Said to Consider Bankruptcy to Get U.S. Bailout" (Bloomberg 20081204)
** see my e-mail box, in the spam section : "Saving the Big 3 for You and Me ...a message from Michael Moore" (20081203), somewhere between an ad for blue chips (take a blue pill and recover your lost highs on Wall Street) and a message from a desperate whitehousewife ("take my advice, O Great Bama, and please pardon my sins for I don't want to go to jail. Yours Truly, Karl Rove").

Next stop - destroy Unidentified Financial Objects

This financial meltdown doesn't come as a surprise. Everybody knew something had to be done before it was too late. The surprise was to see how deep in the hole the people in charge would remain in denial and inaction*.

Sure, the US Presidential campaign didn't help. Sure, no one in charge wanted to be blamed for crying "fire" first, and igniting the panic movement. But this farcically suicidal ballet of leaders pretending to control the situation was a disgrace for democracy worldwide.

The first quick fixes are being applied to prevent the bleeding from overflowing too much, but the said bleeding has yet to stop.

The first "global" plays of the day are being broadcast - mere tactical moves with equally insignificant impact.

Megamergers in the financial sector are under way... with not so glamour bargain shopping tags all over.

Some national institutions are crying uncle, and I don't think minor league stock exchanges and currencies will make sense in the medium term.

Some crisis are like onions. They make you cry and they stink, but furthermore they have layers. This is one of those moments when you should try peeling off a few of them.

I don't mean "deregulate", to the contrary, but "keep it smart and simple", make oversight easier by removing black boxes, blowing up smokescreens, and destroying Unidentified Financial Objects.


* see "This is not a financial crisis"

Debate # 2 : XXIst Century wins

In a dull re-run of the previous debate*, McCain lost one of his last chances of changing the dynamics of his erratic campaign.

Even on his own turf (Town Hall format), and even with the help of Tom Brokaw (the ultimate loser tonight : he didn't even prevent the Senator of Arizona from reaching across the aisle and shaking hands with a member of the audience), McCain lost.

Condemned to control himself in front of the camera (which did catch some angry moments in the background, though**), stuck to XXth century role models (clumsily courting Reagan fans), and XXth century solutions that are not solutions (like Tina Fey's Palin plegdes to "fix it" in every sentence, he keeps saying "I know how to" without actually telling how), McCain lost.

Claiming a "vision of the future" but exposing a vision of the past while the next President set the pace for the next century, McCain lost.

Referring to other people's ideas while the next President articulated views that resonated in everybody's minds, McCain lost.

Moreover, Barack Obama won. Against the XXth century's last presidential candidate, he smacked grand slam homeruns on economy and health care, but he also claimed Iraq, Iran and Afghanistan (leaving only "tiny" Georgia to Sakash's pal)***. 

Tonight, many Americans must feel even more comfortable with such a Commander in Chief.

McCain ? His "vision of the future" doesn't point to the White House. If he truly wants to save the country, he must first win the McCainistan war and second lose the November elections.

* see "Debate # 1 : McCain didn't lose, and President Obama spared him" 

** watch him grab his chair in the background while Obama's speaking. The chair didn't break and that's the only difference with Amy Poehler / Hillary during Fey's first SNL stunt.

*** in the process, great admissions on "I don't understand" (... why invade Iraq instead of fighting terrorists where they actually were) or "Government intrusion" (... to crack down big corporation abuses) - funny : we didn't even hear once the word "maverick" tonight...

McCain's Golden Jet Wings

Those "Golden Parachutes" are things from the past.

I pledge to replace them with Fusionman's "Golden Jet Wings".

The Washington Dodgers

Meet the Washington Dodgers : Bush-McCain-Palin

Rookie Sarah Palin proved a perfect match for the "franchise" : she refuses all kind of accountability and expects voters to trust her in a few weeks.

George W. Bush was the first to join the roster, during the Vietnam war. Ever since, he kept breaking all Sluggish Average records, smacking budgets well over the fence. His trademark home run ? Crawling back to Crawford, TX, and from there signing the orders for thousands of coffins to be sent to Iraq.

While Bush avoided Vietnam, John McCain was stuck there, playing for a very different team. But this All Star favorite faded into an opportunist, ready to sell himself to his former enemies. He is now a proud Dodger and refuses to face the press, the facts, his rival Obama, and ultimately History.

Now John McCain wants to skip the debate, a "time out" in the middle of the financial crisis. What kind of leader cries Uncle so clumsily ? Why not say "sorry, my staff can get back to you but as far as I'm concerned, I can't handle several problems at the same time" while you're at it ?

This is no time for cowardice and denial : it's time to face the problems, the nation and History.

The only truly presidential leader remains available on every front : Obama keeps his cool and authority, and he firmly reminds his opponent that this is the very best moment for voters to know exactly where the candidates stand on key issues.

I guess the campaigns should modify the debate agenda : domestic and economic issues should be coped with this friday instead of foreign issues.

Do You Cash Straight Talk Express ?

McCain is regaining some ground in the polls (45-49 vs 44-50 yesterday according to Gallup), but remains groundless as far as economics are concerned.

His glorious plan can be summed up in two sentences :

1- "less Government but more oversight and less regulation in order to fix a fundamentally sound economy in crisis"

2- "Obama did it : this un-American Muslim terrorist married a witch who couldn't even offer him 7 houses and 13 cars, and he is friends with people who actually understand economics"

Well. According to today's New York Times (20080922) : "Senator John McCain’s campaign manager was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations, current and former officials say".

Ouch. Do you cash Straight Talk Express ?

Movin'on to Sarah Palin : how did the Cheney with lipstick try to recover from a week where she lost 8 positive points and gained 4 negative points ? She visited a conservative spot in Florida, drew a crowd of tens of thousands (even better than in Colorado Springs, CO, a fundamentalist's heaven). Recited lines from The Bullet for 20 minutes, took or answered no questions.

No interviews
No investigations
No subpoenas
No direct debate with Biden (where were the Dems on that one ?*)
...

How on Earth can millions of decent human beings still consider voting for this ticket ?


* FYI, the full (vice-) presidential debate(s) schedule :
. Prez debate #1 (Foreign policy) : 20080926 at Ole Miss in Oxford, MS - Jim Lehrer (PBS)
. Veep debate (all issues except Troopergate, Pentecostal doomsday scenarios, Bridges to Nowhere...) : 20081002 at Washington University in Saint Louis, MO - Gwen Ifill (PBS)
. Prez debate #2 (Town hall style questions from the public and the web) : 20081007 at Belmont University in Nashville, TN - Tom Brokaw (NBC)
. Prez debate #3 (Domestic policy) : 20081015 - Hofstra University in Hempstead, NY - Bob Scheiffer (CBS)

I can't wait to have my staff get back to me and introduce me to economics

Collapses in Wall Street and Alaska

The fundamentals of the McCain-Palin ticket sound as good as those of the US economy...

The Palin Imposture :

- a "Maverick" shaking DC... with Cheney's neocon agenda and Bush's theocon agenda

- an "independent" reaching across the aisle... but firing anybody who disagree with her

- an agent of change... who doesn't even believe in Evolution

- in favor of investigation... but not of subpoenas

- ready to protect the country... but running Alaska from an unprotected Yahoo! account

- ...

Q "Well John, don't you think it's time to accept you're not good at casting people fit for the job ?"

A "I haven't changed my mind: I think... I'll have my staff get back to you"

PS / bonus : for the road, Fey / Palin's premiere at SNL with Poehler / Hillary :

Carbon wingprint

Airlines are lucky. They only pay once for the fuel they use and not for their impact on the environment. For the moment.

US Airlines are unlucky, but they deserve it because they've been focusing on short term financials for too long. Their fleets are ageing, their services reduced to the minimum, and their only answer to oil price hikes has been to charge extras for luggages, water, pillows, and blankets. I'm sure they're considering pay per view movies (as part of their business plans for Airbus A380 private suites ?).

Someday these guys will charge for the oxygen you breathe on board and for your contribution to the plane's carbon "wingprint". Double Global Warming Charge.

I'm definitely expecting more from airlines and plane manufacturers. Improving fuel efficiency is one thing but one of their major contributors to greenhouse effect is actually water : the longlasting tracks they leave on otherwise blue skies.

Honda and Toyota have been focusing on fuel efficient but private airplanes. This is more about extending the automobile sphere than reducing the aerial one. Yet newcomers are welcome.

This is not a financial crisis

This is not a financial crisis but a crisis of finance.
This is not an economic crisis but a crisis of economics.
This is not a strategic crisis but a crisis of strategy.


Listening to Henry Paulson or Ben Bernanke is quite depressing. Not because of the news they carry but because of their absolute lack of vision. Along with the crowd, they postponed the realization of the crisis* in a comical state of denial : look back at the past year and tell me what's been said and done. A total waste of time and money, which will make reforms even costlier. And we are far from having seen it all (ie masses of small stock exchange gamblers in China, real estate bubble in Korea, global wake-up call for "real economy"...).

I haven't heard of any strategic measure for years and key decision makers are only talking about tactics. Yes, there are rumors of a reform in the monitoring and the regulation, but I'm not certain this casting is up to the task. Especially since such rumors started years ago.

A consensus will eventually emerge from a free market to a fair market**, but no one is actually tackling the issue. The world leaders have other fishes to fry... starting with our planet : the G8 members unanimously decided to start curbing their CO2 dogs circa 2050, when Dubai have the same chances of hosting the Winter Olympic Games as Sapporo.

Think tanks ? They are basically lobbying groups. And right now, conservative think tanks are focusing on how to ignite a war in Iran**... while left now, liberal think tanks are focusing on how to impeach Rove / Cheney / Dubya (too little, 4 years too late).

Analysts ? Even the few independent ones are struggling for relevance.

The thing is capitalism died when the Soviet Union collapsed : deprived of the last supervillain, Superman grew lazier and fatter, forgot how to fly and used his X-ray vision only for despisable reasons. Meanwhile, John and Jane Smith became the new superheroes. Because all of a sudden, superpowers became mainstream : the web abruptly shrunk all time-, distance-, and information-gaps, putting them on par with the best financial gurus*. Overwhelmingly, "commoners" have swarmed all the "expert"'s favorite spots. There are no more safe havens, nor profitable niche markets, even off market (stock exchanges have lost their status of key indicators, bubbles also struck the private equity arenas...). There is no speed limit, only a succession of bubbles in an ocean of microbubbles.

Posting 10-20% yields makes a living, not a life. And finance as the aim of the game is over.

Winning against misery, that's a life. Not to be confused with winning against poverty : what is the point in making hundreds of million people pass a certain revenue threshold if you confront them with new unbearable challenges ?

Winning against underdevelopment, that's a life. Not to be confused with posting high GNP growth. Think supranational, smart infrastructures, pooling limited ressources and sharing world class education and health care experts.

Winning against desertification, that's a life. But the sound, microcultural, African way... not to be confused with the suicidal, Dubai way (earning big on desert lands in the short term, losing bigger in the long term).

Luxury is about doing whatever you want whenever you want with whomever you want. Not about purchasing when you can what everybody wants.

---
* and the reality of the ineluctable recession (see "The end of financial safe havens" - 20070303)

---
* see "Mondialisation : du "free market" au "fair market" (20070726) and the utterly awful self-translation below :

"Globalization is first about incredible shrinking gaps that used to be key in economics : gaps in time, space, level of information... the sector which used to benefit the most from those gaps logically dominated the last few years. But finance is meeting a crisis. Not a financial crisis, but a crisis of finance as the aim of the game.

Speculation thrives upon gaps in time, space and knowledge, and speculators are among the first to embrace innovations in transports or communications, but such tools have become commodities and the number of speculators exploded. Nowadays, the bulk of speculators are non-experts, like those Chinese pensioners sipping tea and chit chatting in now countless shareholders parlors. In this new Far East like everywhere across the World, speculative niches pop up and pop out one by one, and experts can't find any safe spot to plant their tents. The loss of influence of traditional stock exchanges and the Gold Rush for private equities illustrate as much the aversion for irrationality and the need to de-virtualize economics. But even at that level, frontiers are melting and bubbles are inflating.

An "elite" of experts kind of manages to survive : I call "instant players" these creatures fitted for life in unstable environments which roam more frequently on the Thames than the Yellow river. They are very good at burning : money, bridges between friends and reality, cocaine on spoons, and ultimately their own wings.

It's become obvious for a couple of years now : there is too much greedy money in too many hands for the suicidal rush to last much longer.

This young millenium is looking for clues at the root, browsing through pages written by great economists from past centuries. The answer won't come from Adam Smith or Karl Marx but somehow, for economics to restore its own dignity, it needs to review its fundamentals (capital, value, means and aims...) and go much further.

Many signs let us envision the emergence of a consensus on the diagnostic, similar to the one reached about global warming. Economics are about the impacts of human activity anyway, and theoretically they should take into account all environments, all ecosystems... not to mention the fact that there again, diversity and evolutivity are key to survival.

In economics like in environmental studies, major improvements are more likely to come from recent converts, those who resisted to evidences in order to maintain priviledges instead of embracing the future and its opportunities.

Most movements denouncing globalization are "against" and don't offer solutions. Alter-globalization activists often recommand the end of economics and thus the end of mankind, that global parasite which will kill the planet before it finds a new spot to colonize.

A consensus will emerge on more pragmatic basis : a market economy that would be open but regulated and based on mutual respect. A "fair market" rather than a "free market". A global market because globalization requires a global approach of our ecosystem as a whole, but we are far from there. And in this transitional period where free trade fanatics are pointed out, protectionism is back. Far beyond what is needed and sometimes a rather subtle way.

For instance, the Bush Administration are supposedly promoting free trade across the globe but their politics are basically multi-bilateral and self-centered, systematically blocking all multi-lateral attempts : after "less UN, more Coalition of the Willing", after "less Geneva, more Abu Ghraib", after "less Kyoto, more Alaska drilling", they delivered "less WTO, more FTAs". The said "Free Trade Agreements" being as "free trade" as the Patriot Act was "patriotic" : asymetrical, full of exceptions, and by nature protectionist, these FTAs can sound profitable for the States but only in the short term, and only for Dubya's base of "haves and have-mores".

Paradoxically, this strategy illustrates the negation of globalization because it means the refusal of a global approach to globalization. Drawing a parallel with today's crisis within each of the great monotheist religions (see "Universal Declaration of Independence from fundamentalism"), the wise thing to do is not to fuel extremists of all sides by accepting their fake "war of civilizations", but to respectfully reach beyond the frontiers and collaborate on what brings us together, and to be ready to make concessions in order to eradicate collectively the most fundamental injustices."

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** see "Iran : who wants war and why" - 20070925

Bloomberg : it's the economy, stupid !

Copyright Stephane MOT 2008 - blogules.com

White blogule to a globalized globalization

(answer to the question "Is globalization a good thing?")

The XXth Century is well over, but some people feel like going back to the XIXth (Adam or Carlito, pick your fave). I'm confident about the emergence of a XXIst century approach more adapted to what's at stakes.

"Thanks" to key globalization enablers (communications, information, travel...), time and space have dramatically shrunk, allowing what I call "instant players" to grab the bulk of the value worldwide. Finance grew omnipotent and blind, means becoming aims. But obviously, the party is almost over : there is far too much greedy money and players around, and disruption niches grow thinner and thinner. Our economies definitely need to adopt a sounder tempo and I guess it won't take as much time as people think. I'm sure a general consensus will soon emerge on the diagnostic, just like it did for global warming. Well beyond the financial dimension, Economy (human activity) shall regain some decency.

Most anti-globalisation protesters are purely "anti", most "altermondialism o/ altermondialization / alterglobalization" labels only recommand the end of economics (and ultimately the end of mankind as a global parasite). Only a few propose sound and pragmatical approaches.

I believe in a regulated and fair market economy. Open, but sustainable. Global, because globalization demands the switch towards a comprehensive approach of the whole ecosystem, humans and nature included. WTO is not bad in itself, it is just as necessary and fragile as the UN.

In this transitional period, protectionism is definitely back, and well beyond what is needed (because some countries, among the weakest, do need some protection), and sometimes a rather subtle way. For example, Bush pushes a multi-bilateral, US-centric globalization, refusing all international / multilateral approaches : less WTO, more FTAs (NB : same logic as "less UN, more Abu Ghraib" or "less Kyoto, more Alaska drillin'"). All these "Free Trade Agreements" have some kind of protectionist and unbalanced flavor. They may sound positive for the US economy, but only in the short term, and only for Dubya's base of "Haves and Have-mores".

Paradoxically, this strategy reflects a denial of globalization = the refusal of a global approach of globalization.

White, red and pink blogules to the World in 2020

The CER (Centre for European Reform ) and Accenture recently waged a debate about the World in 2020, partly fueled by Mark Leonard's essay "Divided world: The struggle for supremacy". The democracy vs autocracy divide sounds a little bit white vs black to me, and I may add a few other key structural changes within :
- America enjoying good demography dynamics but becoming more monolithic, more focused on itself, welcoming fewer influences from abroad. Growing old a different way.
- At the opposite of this Mainland Amerika, China is embracing its own diversity. Chinese imperialism is no more about spreading a unique monolithic model but about a much smarter pervasiveness, leveraging on all minorities instead of crushing cultural diversity (ie China intends to build the core of Koreanhood on its very soil, claims the Koguryo cultural heritage, and position the Korean peninsula as a motherland's satellite).
- What I call "Asianitude" keeps growing. Asian countries developping intra-asian relationships beyond the traditional bilateral relationships with Western countries, students and executives moving from places to places, a common ground and cultural identity, a sense of belonging to the same community at the individuals level...
- The Korean moment. Surrounded by ambitious giants (and a Japan dangerously returning to ultra nationalism and Showa-style fascism), seen as the herald of cultural diversity for other Asian nations, Korea has to cope with the collapse of North Korea. In what I call the Albania scenario, the people who used to live in a quasi sect are totally unprepared for a market economy : con men and gurus get the bulk of the values they received as a kick start in a new world.
- The turn of the millenium rise of fundamentalism (Christian in the US and Eastern Europe, Jewish in Eretz Israel and Islamist everywhere) may last if democracies keep electing leaders who put religion at the top of their not so hidden agendas (the collapse of Iraq, the rise of Iran as the regional threat, and the boost to fundamentalists across the globe were not collateral damage but the very aim of Bush's game). And while terrorists trained in Iraq blossom on new urban and suburban playgrounds, al Qaeda survivors and wannabes focus on rural Asia, Africa and South America.