Milton Friedman discussion

[Casey Lartigue, Jr.]

Greetings, all!

After the discussion this Sunday August 3, why not join a forum I am hosting and speaking at on the 102nd anniversary of Milton Friedman's birthday.

The speakers: Marcus Cole of Stanford University Law School; Chung-Ho Kim of Yonsei University; and Casey Lartigue of the Atlas Network.

August 3, 2014, from 2-5 pm, at Hanwori Hall
Contact C...@post.harvard.edu with questions.

This event is free and open to the public.

5,000 won suggested donation for the Teach North Korean Refugees project.

● Directions: By subway, arrive at Gwanghwamun subway, exit 2. Walking in the direction of the US Embassy, turn right. Walk straight, you will see the fire station there. Look at it, there will be a side door. Take the elevator to the 4th floor.

Freedom Factory flyer http://freedomfactory.co.kr/bbs/bbsDetail.php?cid=globalAffairs&idx=4268

Facebook invite page https://www.facebook.com/events/1495426420671812

[Casey Lartigue, Jr.]

Greetings, all!

This is a reminder about Sunday's discussion about Milton Friedman's ideas. For those of you going to the Sunday discussion group, please join my event after that. I will be discussing his idea of school vouchers and my role in helping to create a program for low-income children in Washington, DC.

I just came across a video of myself from 11 years, when I was in the middle of that battle.

For those of you who have met me, you'll see that I haven't changed much in 11 years.^^ I hope I will be able to say that again in another 11 years...

www.c-span.org/video/?178395-6/school-vouchers

Casey

Freedom Factory flyer http://freedomfactory.co.kr/bbs/bbsDetail.php?cid=globalAffairs&idx=4268

Facebook invite page https://www.facebook.com/events/1495426420671812

[김은영]

Dear all 

 

It would be good to join Casey's "party"  after the Sunday session which I recall from last year was extremely impressive :)

the topics are as follow.

 

Best Regards,

Sophia

 

http://www.economist.com/news/americas/21610296-argentina-has-defaulted-again-deal-its-creditors-not-out-question-no

 

http://www.economist.com/news/business/21608637-joe-kaeser-transforming-siemenss-structure-changing-its-culture-will-be-harder-fixing

 

Argentina’s debt saga

No movement

Argentina has defaulted again. But a deal with its creditors is not out of the question

Aug 2nd 2014 | Buenos Aires | From the print edition

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DISAPPOINTMENT, melodrama, and a faint glimmer of hope. The ingredients of the latest instalment of Argentina’s legal stand-off with its “hold-out” bondholders were painfully familiar. The disappointment came late on July 30th, when Argentina entered into default for the eighth time in its history (see chart). The melodrama came courtesy of Axel Kicillof, the economy minister, railing against Thomas Griesa, the New York court judge whose ruling precipitated this moment. And the hope is that a settlement remains possible.

 

In this section

• No movement
• I, the Supreme
• Plategate
• Whose hand on the tiller?
• Correction

Reprints

Related topics

• Argentina

The country’s previous default, when it reneged on $81 billion in debt in 2001, is the source of its latest one. Most of its creditors exchanged their defaulted debt for new securities in two restructurings that took place in 2005 and 2010. But a few creditors took a different path. They scooped up the cheap defaulted debt in order to chase payment of full principal plus interest in the New York courts, under whose law the original bonds were written.

 

Led by NML Capital, a hedge fund, a group of these hold-outs—Mr Kicillof and his boss, President Cristina Fernández de Kirchner, prefer the term “vulture” funds—won an order barring Argentina from paying its exchange bondholders unless it also coughed up the $1.3 billion plus interest they wanted. That meant Argentina either had to deal with the hold-outs or stop paying the exchange bondholders, and thereby tip into default again.

The Argentine government refused even to meet the hold-outs in person until July 29th, the day before a grace period on a payment to exchange bondholders expired. The government claimed it could not pay the hold-outs without triggering a Rights Upon Future Offers (RUFO) clause contained in the restructured bonds. This clause, which expires at the end of the year, states that the country cannot voluntarily offer a better deal than the one it gave in its 2005 and 2010 exchanges without extending the same deal to all creditors. Not true, responded the hold-outs, who argued no judge would interpret a court-ordered payment as voluntary.

In the event, face-to-face negotiations, held in New York, yielded no breakthrough. The language afterwards was harsh. Mr Kicillof held to the official line that Argentina cannot be in default if it is willing to pay its obligations to the exchange bondholders. In a belligerent press conference, he cast doubt on the mental state of Judge Griesa; the integrity of the mediator appointed to oversee negotiations; and the objectivity of international credit-ratings agencies (one of whom, Standard & Poor’s, has downgraded Argentina’s foreign-currency debt). NML, for its part, said that the mediator had proposed many creative solutions and that Argentina had chosen to default.

And yet hope remains. As the two sides were meeting, rumours swirled that a group of private Argentine banks might rally together to buy up NML’s claim and then negotiate a deal with the government that would involve payment after the expiry of the RUFO clause. Tantalisingly, Mr Kicillof said that, although the government had not reached an accord with the hold-outs, a non-governmental settlement remained possible. “A solution between private actors wouldn’t be weird to me,” he said. Some speculated that it suited Mr Kicillof to be seen not to have any part in a third-party deal, in order not to trigger the RUFO clause. Daniel Pollack, the court-appointed mediator, said that he would remain on hand to help reach a deal.

If an accord is made and Argentina is quickly pulled out of default, the effects may be muted. Standard & Poor’s decision could easily be undone, for example. That might also help avert the possibility of claims for immediate payment, triggered by “cross-default” clauses, from all the country’s foreign-law bondholders, not just the ones governed by New York law.

The international ramifications of default are also expected to be slight. Argentina has been locked out of international capital markets for 13 years; its debt under foreign law amounts to a bit over one-third of what it was in 2001.

But the costs to the country will rise the longer it remains in default. “The situation might not be cataclysmic, but defaulting was still the worst decision the government could have made,” says Maximiliano Castillo of ACM Consultants. The country may have got used to doing without access to external financing, but its foreign-exchange reserves have been shrinking, and the economic boost it received in the 2000s from rising commodity prices will not be repeated. It needs to borrow to grow.

The government is aware of this. In the past few months it has scrambled to resolve disputes with the International Centre for the Settlement of Investment Disputes (ICSID); the Paris Club, an informal group of government creditors; and Repsol, a Spanish oil firm whose stake in YPF, the state oil firm, it expropriated in 2012. A default will undo this progress.

The fear now is that the need to print money to finance its deficits will further spur inflation, putting the exchange rate under renewed pressure. Add in the likely jolt to consumption from default, and the recession that the country entered earlier this year will only deepen. Abeceb.com, a consultancy, is predicting that Argentina will contract by 3.5% in 2014; if the country had avoided default the projection was of a milder tightening of 1.5%.

 

 

 

 

Siemens

Fixing the German dynamo

Joe Kaeser is transforming Siemens’s structure; changing its culture will be harder

Jul 26th 2014 | MUNICH | From the print edition

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LONG-LIVED companies can change radically over time. Nokia, for example, began in 1865 as a pulp mill; recently it sold its mobile-phone business to Microsoft (see article) and now it mainly makes networking equipment. By contrast, Siemens has been quite consistent. The Economist first wrote about the company in 1868, when it joined a consortium to build a telegraph cable from Britain to Russia and India. In an 1882 article about another tech boom—the spread of electric lighting after the perfecting of the dynamo—we noted that Siemens was hedging its bets by making both alternating- and direct-current ones. To this day, when asked to sum up his firm’s business in a word, Joe Kaeser, its chief executive, says, “electrification”.

Mr Kaeser is nonetheless hoping to remake Siemens, at least partly. After electrification, he likes to add two more words: automation and digitisation. The engineering giant is to focus on doing these three things profitably. Businesses that do not fit these criteria will be fixed or sold.

In this section

• Fixing the German dynamo
• Shake, rattle ‘n’ roll
• Unwarranted
• Cloud lifting
• Pure, cheap and a bit dull
• Unplugged and unproductive

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• Siemens

 

The reconfiguration of Siemens is a big project. The company employs 360,000 people in dozens of countries, and its position at the heart of Germany’s industrial economy makes change at home sensitive. It manufactures everything from hearing aids to gas turbines, from trains to software. Analysts wonder if it is in too many businesses. It is not doing so badly—analysts reckon that its operating margin is about 11%. But it suffers from comparison with its American archrival, GE, whose industrial side had an operating margin in the most recent quarter of 15.5%.

Mr Kaeser’s predecessor, Peter Löscher, was brought in from outside in 2007 to clean up after a bribery scandal. He strove to hit a target of increasing annual revenues by around half, to €100 billion ($135 billion). Siemens began taking orders it could not complete on time and on budget, and missing profit targets. Last July the supervisory board showed Mr Löscher the door and put Mr Kaeser—who had been involved in many of the big decisions as chief financial officer—in his job.

Mr Kaeser is liked by analysts, and unlike Mr Löscher he is a longtime Siemensianer, having joined in 1980. He faces three tasks: to slim the company’s bureaucracy, fine-tune its portfolio and execute projects better. He has made a big start on the first and some progress on the second. The third will take the most time.

At times Siemens conforms to a German stereotype of valuing process at the expense of results. So, in May, Mr Kaeser began a reorganisation. Under his predecessor there were six layers of bureaucracy between the managing board and the project leader on a billion-dollar contract. Mr Kaeser is simplifying things by merging the group’s 16 divisions into nine, and removing an intermediate layer in which the divisions were grouped into four sectors. This will affect 11,600 jobs, though Mr Kaeser was annoyed when he announced this only for it to be reported that they would all be cut. He hopes to redeploy many of the workers concerned, though some will have to go—the reorganisation is part of a billion-dollar savings plan—and Mr Kaeser has yet to satisfy either nervous staff or impatient analysts by being more precise.

Siemens’s health-care business, which makes body scanners and other hospital equipment, will gain a special, mostly independent status. It is the most profitable of the four former sectors, but has the fewest synergies with the electrification-automation-digitisation chain. Mr Kaeser has raised the possibility of listing it separately. Andreas Willi of JPMorgan, a bank, thinks this a canny move, relieving Siemens of part of the “conglomerate discount” that markets impose on sprawling companies, but letting the company wait for the most profitable time to list it.

Train departures

Elsewhere in the portfolio, Mr Kaeser says frankly that almost €15 billion of Siemens’s revenues, about 18% of the total, come from businesses making no profits. The electricity-transmission side is struggling, but cannot be sold if Siemens is to be present in the whole electrification chain. The train rolling-stock business has also been under pressure; it seems more dispensable. Some strong businesses will go, too: airport logistics, parcel handling and hearing aids are doing well, but do not fit the vision.

In June Siemens (alongside Mitsubishi Heavy Industries of Japan) lost a contest with GE to buy parts of Alstom, a French rival in turbines and rail. Some analysts saw the offer as defensive, improvised and complex. But one says that Mr Kaeser assured him privately, “I know what I’m doing,” hinting that he did not necessarily want to win the deal. Partly because the Siemens-led alternative was on the table, GE had to make concessions, and ended up in a complex set of joint ventures, in some cases with the meddling French state as a partner. Asked about his motives, Mr Kaeser says: “At any given point in time in the process I was always focused on doing the best for Siemens—whatever that means,” allowing himself a grin.

Still, Siemens lost an opportunity to bulk up its turbines business by absorbing part of Alstom’s. So, how else might it now seek to grow? Mr Kaeser concedes that the company slept through the revolution in shale oil and gas. But a trimmer Siemens will have capital to spend on developing things like pumps for oil exploration and gas-liquefaction terminals. Mr Kaeser says that more gas turbines will be sold next year in North America than in the next ten years in Europe. So, surprising observers, he has hired an experienced but relatively little-known American, Lisa Davis, from Shell to run the revamped energy division, and has based her in Houston.

Trimming and adding are all well and good, but Siemens must also improve its operations. Here another German stereotype, of efficient execution, does not apply. The company is innovative (spending 5.7% of revenues on research and development, a figure GE’s industrial side has been striving to catch up with) but its poor execution of projects has been a millstone dragging down profitability. Whether in trains or offshore wind, expensive and embarrassingly public problems have resulted in a series of special charges, one of which was a €287m hit for failures in a transmission-grid project in Canada earlier this year. According to Ben Uglow of Morgan Stanley, another bank, Siemens’s contract losses, writedowns, restructuring and other charges have totalled $34.5 billion since 2001, knocking huge dents in profits (see chart).

 

Those familiar with the firm say that when problems have surfaced, engineers have been afraid to report them to the higher-ups, instead continuing to throw time and money at them. Some analysts believe the earlier bribery scandal made a once-entrepreneurial company more inclined to nervous, process-oriented box-ticking. Mr Kaeser says that he wants to turn that around, giving managers “ownership”, rewarding them for reporting problems early while punishing them for letting things get out of control. A fancy new database by SAP, another German technology firm, will give Siemens executives an instant look into almost any project the company is working on. Such transparency is necessary—but not sufficient.

Cultural change is needed if Mr Kaeser’s reorganisation and portfolio improvements are to do Siemens any good. The company is not in crisis, as he rightly said when he took over. But it could clearly do better. The problem is that what it most needs to do is the hardest for the boss to decree. The markets gave Mr Kaeser a nine-month honeymoon in the form of a rising share price after he became boss, but that is over. Now they are waiting to see whether he can make the company run as efficiently as the machines it makes.

 

 

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[Casey Lartigue, Jr.]

Thanks so much, SophiaQueen!

Casey

[Casey Lartigue, Jr.]

Thanks to Sophia, Anna and Greg for coming out to the discussion yesterday! It was pleasant to see members of this discussion group smiling--most of the time--during the event.^^

Special thanks to Sophia, for joining the second consecutive year.

According to the Korea Herald, I will be recording a live TV show this Friday, for anyone who is interested in joining.

Casey

http://caseyandyeonmi.com/

On Fri, Aug 1, 2014 at 6:20 AM, 김은영 <sophia...@naver.com> wrote:

Dear all 

 

It would be good to join Casey's "party"  after the Sunday session which I recall from last year was extremely impressive :)

the topics are as follow.

 

Best Regards,

Sophia

 

 

-----Original Message-----

[Serena Park]

Dear there, 

I picked 2 articles for this Sunday's discussion! ,, I hope I don't overwhelm you with length of articles. 

Looking forward to seeing you!

Ciao, 

Serena, 

http://www.economist.com/news/leaders/21610264-all-its-military-might-israel-faces-grim-future-unless-it-can-secure-peace-winning?fsrc=scn/fb/wl/qanda/winningbattle

http://hbr.org/2014/07/the-rise-of-the-chief-marketing-technologist/ar/1

Israel

Winning the battle, losing the war

For all its military might, Israel faces a grim future unless it can secure peace

Aug 2nd 2014 | From the print edition

HAMAS has ruled Gaza since 2007 and there is not much to admire. The Islamist party is harsh, narrow-minded and intolerant of dissent. Its charter is anti-Semitic. It fires rockets into Israeli territory and builds tunnels under it to kill or kidnap Israeli soldiers. It knows that the Israeli attacks it provokes will kill hundreds of Palestinian civilians, which will garner sympathy around the world. It is also weaker than it was, for it is now losing the military battle against Israel.

By contrast Israel is the most successful state in the Middle East. It is the region’s only true democracy—a hub of invention, enterprise and creativity. Israel has overwhelming firepower in the fight in Gaza. Most of its people are united behind their soldiers and have the firm backing of America’s Congress. Yet, though Israel is winning the battle, it is struggling in the war for world opinion (see article). That matters in part because Israel is a cosmopolitan trading country that looks to its American ally for security, but also because Israel needs to hear some of what its critics are saying.

Anti-Semitism: a very light sleeper

A generation ago, Israel had the best of the argument with Yasser Arafat’s Palestine Liberation Organisation, in many ways a less vile outfit than Hamas. Young Europeans spent their gap years on kibbutzim. The Western world cheered when Israeli commandos rescued Jewish hostages from the terminal building in Uganda’s Entebbe airport in 1976.

But as the occupation of Palestinian territory has dragged on, sympathy has seeped away. In a poll published in June, before the destruction of Gaza, the citizens of 23 countries put the balance of those who think Israel is a good or bad influence on the world at minus 26%, ranking it below Russia and above only North Korea, Pakistan and Iran. A growing number of Europeans call Israel racist (with the sinister flourish that Israelis, of all people, should know better). And even in America, where a solid majority backs Israel, the share that thinks its actions against the Palestinians are unjustified has risen since 2002 by five percentage points, to 39%. Among 18- to 29-year-olds, Israel is backed by just a quarter.

Many Israelis, and their most fervent supporters in Congress, see today’s hostility as the culmination of a long process of demonisation, double standards and delegitimisation. They have a point. Holding a country to high standards, as Israel’s critics do, can be a compliment—yet against Israel, morality is often used as a cudgel. The common slur that Israel is an apartheid state ignores the fact that Israel’s minorities, such as the Druze, Arabs and Bahais, are protected by the country’s independent courts—including the highest, which has a sitting Arab Israeli judge. The “BDS” campaign to impose boycotts, encourage divestment and introduce sanctions calls not just for an end to the occupation of the West Bank and for equal rights, but also for the right of return of all Palestinian refugees—in other words, for the erosion of Israel as a Jewish homeland. Protests in France against the fighting in Gaza led to attacks on synagogues and Jewish-owned businesses.

No wonder that many Israelis feel that the world is against them, and believe that criticism of Israel is often a mask for antipathy towards Jews. But they would be wrong to ignore it entirely. That is partly because public opinion matters. For a trading nation built on the idea of liberty, delegitimisation is, in the words of an Israeli think-tank, “a strategic threat”. But it is also because some of the foreign criticism is right.

Please, hear them

That begins with the scale of the violence in Gaza. Some 1,400 Palestinians have died in the past few weeks, compared with 56 Israeli soldiers and four civilians. Even allowing for Hamas’s brutality, no democracy should be happy with a military strategy that results in the death of so many children (let alone the crass claim from Israel’s ambassador to Washington that its soldiers deserve a Nobel peace prize). The destruction is driving support towards Hamas and away from the moderate Palestinians who are Israel’s best chance for peace.

But more than that, Israel needs to hear what its critics say about the need for a two-state solution, which remains the only one that will work. Time is not on Israel’s side. Palestinians may already outnumber Israelis in the lands they share. Without two states, Israelis and Palestinians will be left with one that contains them both. The risk for Israel is of either a permanent, non-democratic occupation that disenfranchises Palestinians, or a democracy in which Jews are in a minority. Neither would be the Jewish homeland with equal rights for all that Israel’s founding fathers intended.

America’s secretary of state, John Kerry, has made a Herculean effort to forge peace between the Israelis and the Palestinians along the lines of two states for two peoples. When the talks broke down, a few months ago, he blamed Israel’s settler lobby. That outraged right-wing Israelis. And now the left has joined in the derision because he proposed a ceasefire in Gaza that Israelis thought favoured Hamas. But Mr Kerry is right. If Israel continues to build settlements in the occupied territory, it will gobble up land that would belong to an independent Palestinian state, making peace harder to reach.

The same goes for what appears to be Israel’s strategy towards both Gaza and the West Bank. Having created a huge open-air prison in Gaza, Israel remains committed to a blockade that contains Hamas—but also ensures that ever more Palestinians grow up angry. On the West Bank, Israel’s prime minister, Binyamin Netanyahu, has gone backwards: he has said that Israel cannot relinquish security control of the West Bank for fear of Islamist attack. That implies an intention to consolidate the occupation, thus withdrawing all hope from Palestinian moderates. The West Bank would be likely to explode too, then, while the demographic clock ticked on.

For all the blood and misery in Gaza, Mr Netanyahu will soon have a chance to show he has heard the critics. Having won his battle, he could return to the negotiating table, this time with a genuine offer of peace. Every true friend of Israel should press him to do so.

The Rise of the Chief Marketing Technologist

by Scott Brinker and Laura McLellan

Artwork: Markus Linnenbrink, EVERYWHEREALLTHETIMEEVERYTHING, 2009, epoxy resin, pigments, 20" x 39" x 82" 

Marketing is rapidly becoming one of the most technology-dependent functions in business. In 2012 the research and consulting firm Gartner predicted that by 2017, a company’s chief marketing officer would be spending more on technology than its chief information officer was. That oft-quoted claim seems more credible every day.

A new type of executive is emerging at the center of the transformation: the chief marketing technologist. CMTs are part strategist, part creative director, part technology leader, and part teacher. Although they have an array of titles—Kimberly-Clark has a “global head of marketing technology,” while SAP has a “business information officer for global marketing,” for example—they have a common job: aligning marketing technology with business goals, serving as a liaison to IT, and evaluating and choosing technology providers. About half are charged with helping craft new digital business models as well.

Regardless of what they’re called, the best CMTs set a technology vision for marketing. They champion greater experimentation and more-agile management of that function’s capabilities. And they are change agents, working within the function and across the company to create competitive advantage.

Before we describe the role in detail, let’s consider the forces that gave rise to it.

In a digital world, software is the chief means of engaging prospects and customers. A marketing team’s choice of software and how to configure and operate it, along with how creatively the team applies it, materially affects how the firm perceives and influences its audience and how the audience sees the firm.

As digital marketing and e-commerce increasingly augment or replace traditional touchpoints, the importance of mastering those capabilities grows. Digital marketing budgets are expanding annually at double-digit rates, and CEOs say that digital marketing is now the most important technology-powered investment their firms can make.

This rise in digital budgets is not merely a migration of spending from traditional to digital media. A growing portion of marketing’s budget is now allocated to technology itself. A recent Gartner study found that 67% of marketing departments plan to increase their spending on technology-related activities over the next two years. In addition, 61% are increasing capital expenditures on technology, and 65% are increasing budgets for service providers that have technology-related offerings.

The challenge of effectively managing all this technology is daunting. There are now well over 1,000 marketing software providers worldwide, with offerings ranging from major platforms for CRM, content management, and marketing automation to specialized solutions for social media management, content marketing, and customer-facing apps. Relationships with agencies and service providers now include technical interfaces for the exchange and integration of code and data. And bespoke software projects to develop unique customer experiences and new sources of advantage are proliferating under marketing’s umbrella.

To continue reading, register now or purchase a single copy PDF.

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Scott Brinker is the chief technology officer at ion interactive. Follow his blog at chiefmartec.com. Laura McLellan is a research vice president at Gartner, where she focuses on marketing strategies.

[Anna Lee]

Hello, 

Long holidays weekend finally came to us! Maybe you all have a plan but.. just in case if you don't, please come and join us Sunday Discussion. Topics are per below.. or maybe you want to print out attached PDF files.  

If there is any update on coming Sunday meeting, I will show up again in your mail box.  ^^ 

See you guys! 

1. http://www.economist.com/news/europe/21611141-vladimir-putin-pretends-he-can-make-russia-self-sufficient-and-strong-how-lose-friends?spc=scode&spv=xm&ah=9d7f7ab945510a56fa6d37c30b6f1709

2. http://www.bbc.com/news/world-africa-26835233

Russia and the West

How to lose friends

Vladimir Putin pretends that he can make Russia self-sufficient and strong

Aug 9th 2014 | MOSCOW | From the print edition

• 

Proudly alone

“ISOLATION”, “consolidation” and “self-reliance” are different terms used among Moscow’s political and business elite to mean the same thing. In the face of international sanctions occasioned by its support of the rebels in eastern Ukraine and its earlier annexation of Crimea, Russia is preparing to pull inward. It is hunkering down for a long period of diplomatic antagonism and economic hardship.

That process appears to be accelerating. On August 6th the Kremlin responded to Western pressure by announcing that it will ban or reduce agricultural imports from countries imposing sanctions on Russia. The tensions in eastern Ukraine are rising. Ukrainian forces have, in effect, closed off the rebel stronghold of Donetsk through a campaign of often-indiscriminate shelling. If it falls to Kiev, then the pro-Moscow insurgency will lose its potency.

In this section

• Tyrant or steadying hand?
• Preaching a new German gospel
• How to lose friends
• A country awaits
• Shrinking again
• High-class errand boys

Reprints

Related topics

• Russia
• Politics
• Vladimir Putin
• Government and politics
• World politics

Mr Putin may be tempted to salvage his credibility by sending in Russian troops on the pretence of a “humanitarian” operation. According to NATO, 20,000 Russian soldiers have amassed at the border. They are engaged in live-fire drills involving fighter aircraft and bombers—the sort of manoeuvres that have presaged invasion before. Even if troops do not cross the border, the confrontation between Russia and the West looks set to continue through the rule of President Vladimir Putin and, perhaps, beyond.

By increasing his support of the rebels after the crash of flight MH17 last month, Mr Putin has shown that he values his own understanding of Russia’s historic destiny more than the economic well-being of his country and its global reputation. He is making a risky bet that challenging the architecture of the post-cold-war order will reap its own rewards and make up for a drop in living standards.

It is a mistake to think of Mr Putin as “mercantile”, says a Duma deputy from the pro-Kremlin United Russia party. Rather, he is an “historical figure” set on establishing Russia as a self-sufficient centre of power. Mr Putin told his security council last month that “Russia is fortunately not a member of any alliance”, which he presented as a “guarantee of our sovereignty”.

The new antagonism between Russia and the West will not be a battle between superpowers; for one thing, today’s Russia lacks an ideology with appeal beyond its borders. In an interview with The Economist last month, America’s president, Barack Obama, said that the challenges Russia presents are “effectively regional”.

The Kremlin proudly claims it will aim to replace Western goods and services with domestic ones, for instance in high-tech parts for the arms industry. Import substitution could work if manufacturers weren’t running at near-full capacity and in dire need of new investment, which will be in shorter supply as foreign financing shrinks. The country’s $173 billion in sovereign-wealth funds, built up over years of windfall profits from oil sales, will be drawn down to stabilise the rouble and pay off the debts of state banks and firms. “It won’t kill us, but it will create problems,” says the United Russia deputy.

Mr Putin will have to push the country’s financial resources to their limit if he wants to fulfil the promises on social spending he made when he returned to the presidency in May 2012. (At the time Russia forecast its GDP growth at 5% a year; the IMF now predicts GDP growth for this year at just 0.2%.) Mr Putin has already proposed the introduction of a 3% sales tax as a way of filling holes in regional budgets. The government has also announced it will siphon off private pension-fund contributions to the federal budget, prompting a deputy economic-development minister to declare he was “ashamed” of the move. He was fired the next day.

Such problems have not yet hurt Mr Putin. Indeed, he is more popular than ever and his propaganda apparatus is proving to be highly effective. A poll released this week by the Levada Centre, a think-tank in Moscow, shows that 74% of Russians have a negative view of America, the highest number in Russia’s post-Soviet history. The showdown with the West over Ukraine has allowed for a “powerful discharge of frustration” built up over years since the Soviet collapse, says Lev Gudkov, director of the Levada Centre. And now that Mr Putin knows relations with the West are spoiled no matter what, he may be prepared to up the ante again.

Why Ebola is so dangerous

Health care workers are among those most at risk of catching Ebola

Continue reading the main story

Ebola outbreak

• Mapping the outbreak
• The ethics dilemma
• Fear factor
• On the front line

The Ebola outbreak in West Africa is the world's deadliest to date and the World Health Organization has declared an international health emergency as more than 1,000 people have died of the virus in Guinea, Liberia, Sierra Leone and Nigeria this year.

What is Ebola?

Ebola is a viral illness of which the initial symptoms can include a sudden fever, intense weakness, muscle pain and a sore throat, according to the World Health Organization (WHO). And that is just the beginning: subsequent stages are vomiting, diarrhoea and - in some cases - both internal and external bleeding.

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The current outbreak is the deadliest since Ebola was discovered in 1976

The disease infects humans through close contact with infected animals, including chimpanzees, fruit bats and forest antelope.

It then spreads between humans by direct contact with infected blood, bodily fluids or organs, or indirectly through contact with contaminated environments. Even funerals of Ebola victims can be a risk, if mourners have direct contact with the body of the deceased.

This molecular model shows the parts of the Ebola virus scientists are studying in the hopes of finding drugs that will slow the spread of the disease

The incubation period can last from two days to three weeks, and diagnosis is difficult. The human disease has so far been mostly limited to Africa, although one strain has cropped up in the Philippines.

Healthcare workers are at risk if they treat patients without taking the right precautions to avoid infection. People are infectious as long as their blood and secretions contain the virus - in some cases, up to seven weeks after they recover.

World Health Organization guidance on Ebola

In pictures: Battling Ebola in West Africa

Where does it strike?

Ebola outbreaks occur primarily in remote villages in Central and West Africa, near tropical rainforests, says the WHO.

Bushmeat - from animals such as bats, antelopes, porcupines and monkeys - is a prized delicacy in much of West Africa but can also be a source of Ebola

It was first discovered in the Democratic Republic of Congo in 1976 since when it has affected countries further east, including Uganda and Sudan. This outbreak is unusual because it started in Guinea, which has never before been affected, and is spreading to urban areas.

From Nzerekore, a remote area of south-eastern Guinea, the virus has spread to the capital, Conakry, and neighbouring Liberia and Sierra Leone.

A man who flew from Liberia to Lagos in July was quarantined on his arrival and later died of Ebola - the first case in Nigeria. One of the nurses who treated him and an official who came into direct contact with him have since died.

The medical charity Medecins Sans Frontieres (MSF) says the outbreak is "unprecedented" in the way the cases were scattered in multiple locations across Guinea, hundreds of kilometres apart, and says it is a "race against time" to check people who come into contact with sick people.

Ebola: Mapping the outbreak

Ebola: Why is it this disease we fear?

Can cultural practices spread Ebola?

Ebola is spread through close physical contact with infected people. This is a problem for many in the West African countries currently affected by the outbreak, as practices around religion and death involve close physical contact.

Hugging is a normal part of religious worship in Liberia and Sierra Leone, and across the region the ritual preparation of bodies for burial involves washing, touching and kissing. Those with the highest status in society are often charged with washing and preparing the body. For a woman this can include braiding the hair, and for a man shaving the head.

Strict precautions must be observed when burying those who have died of Ebola

If a person has died from Ebola, their body will have a very high viral load. Bleeding is a usual symptom of the disease prior to death. Those who handle the body and come into contact with the blood or other body fluids are at greatest risk of catching the disease.

MSF has been trying to make people aware of how their treatment of dead relatives might pose a risk to themselves. It is a very difficult message to get across.

All previous outbreaks were much smaller and occurred in places where Ebola was already known - in Uganda and the DR Congo for example. In those places the education message about avoiding contact has had years to enter the collective consciousness. In West Africa, there simply has not been the time for the necessary cultural shift.

The virus detective who discovered Ebola

What precautions should I take?

Avoid contact with Ebola patients and their bodily fluids, the WHO advises. Do not touch anything - such as shared towels - which could have become contaminated in a public place.

Washing hands and improving hygiene is one of the best ways to fight the virus

Carers should wear gloves and protective equipment, such as masks, and wash their hands regularly.

The WHO also warns against consuming raw bushmeat and any contact with infected bats or monkeys and apes. Fruit bats in particular are considered a delicacy in the area of Guinea where the outbreak started.

In March, Liberia's health minister advised people to stop having sex, in addition to existing advice not to shake hands or kiss. The WHO says men can still transmit the virus through their semen for up to seven weeks after recovering from Ebola.

Fighting the fear and stigmatisation surrounding Ebola is one of the greatest challenges health workers face.

But health workers themselves are becoming scared of treating patient, and are demanding better protective clothing when exposed to patients.

Ebola has already claimed the lives of dozens of doctors and nurses in the Ebola-hit region, including Sierra Leone's only virologist and Ebola expert, Sheik Umar Khan.

This has put a further strain on the health services of these West African states, which have long faced a shortage of doctors and hospitals.

Profile: Dr Sheik Umar Khan

Saving lives on the Ebola front line

No handshakes, no sex

What can be done if I catch it?

You must keep yourself isolated and seek professional help. Patients have a better chance of survival if they receive early treatment.

The current outbreak is killing between 50% and 60% of people infected

There are no vaccines, though some are being tested, along with new drug therapies. The WHO ruled in August that untested drugs can be used to treat patients in light of the scale of the current outbreak.

Patients with Ebola frequently become dehydrated. They should drink solutions containing electrolytes or receive intravenous fluids.

MSF says this outbreak comes from the deadliest and most aggressive strain of the virus.

The current outbreak is killing between 50% and 60% of people infected.

It is not known which factors allow some people to recover while most succumb.

--
Best Regards,
Anna Lee

[Casey Lartigue, Jr.]

Hi Anna,

I couldn't make it this week and the same with 8/24, but I am planning on being there on 8/31.

In addition to other topics offered by others, I will be ready to discuss and cuss about the following on 8/31:

1) Is it ethical to travel to North Korea for tourism?

http://www.youtube.com/watch?v=7Y0y_RBlmC8

2) Korea's "Justice Trap"

http://freedomfactory.co.kr/bbs/bbsDetail.php?cid=liber&wcode=1329&idx=4158

Casey

[김은영]

Hi all,

Attached please find the articles and come and join us  this coming Sunday.

And

Casey, you are always more than welcome and I am looking forward to the end of the Aug. when he will show up with controvercial topics as always kk.

 

Best regards,

Sophia

 

time: 9:30~11:30 am

location    * coffee place in Sinchon station #7. just besides Grand Mart( Coffeenie)

http://www.economist.com/news/finance-and-economics/21613310-bank-america-shells-out-end-litigation-tied-financial-crisis-goodbye

 

http://www.economist.com/news/business/21612147-case-outsourcing-company-boards-replacing-board

Bank settlements

Goodbye to all that

Bank of America shells out to end litigation tied to the financial crisis

Aug 23rd 2014 | NEW YORK | Finance and economics

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[Update (2.30pm GMT): Bank of America has agreed to pay $16.65 billion to settle the mortgage probe.] 

In this section

• 
  

BANK OF AMERICA’S shares fell a bit, early on August 20th, before an unexpected bounce in the afternoon left them up for the day. The jump would be of little moment but for the event that provoked it—a report that it was, as The Economist went to press, on the verge of agreeing to pay a staggering $17 billion to resolve claims from the financial crisis tied to the sale of mortgage-backed securities that defaulted.

The penalty amounted to more than 10% of the company’s market capitalisation. It probably stemmed in large part from actions taken by another firm, Countrywide, a rival it took over during the financial crisis and whose business was tied to the government-backed and government-influenced housing-finance agencies. The government eagerly blessed the union, much as it had encouraged JPMorgan Chase to take over struggling rivals which landed it, eventually, with similarly whopping fines.

 

In theory, all this could have provoked investor anger rather than joy. But in reality, a deal has long been expected and a pending resolution is a relief. The prospect of endless litigation and the distraction and risks that came with it had weighed heavily on the company’s operations and its share price.

And although the overall number is huge by any measure, there were mitigating factors. The most important is a widespread belief that the scope of payments would be calibrated to avoid harming the bank’s solvency, thus quashing the beginnings of panic. There was also optimism that wrapped into the $17 billion price tag was a form of ceasefire, covering not only the issues linked to mortgage-backed securities but others as well, known and unknown, tied to the financial crisis. And, either cynically or cleverly, many suspected that the headline number might be a touch misleading.

Buried in the terms will no doubt be money set aside for politically favoured causes, such as reducing mortgage payments for struggling homeowners and other consumer relief. That, in theory, would be advantageous in the bank’s dealings with the vast regulatory structure overseeing finance. It might even provide something of a competitive advantage. If true, at least some of what appears to be a massive punitive payment should be considered not merely a cost, but also an investment.

 

 

Schumpeter

Replacing the board

The case for outsourcing company boards

Aug 16th 2014 | Business

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CORPORATE boards are among the most important institutions in capitalism. Their job is to police the relationship between shareholders who own companies and managers who run them. This means keeping an eye out for managerial incompetence and fraud. It also means standing back and offering strategic advice on hiring new managers or buying competitors.

Yet their record might politely be described as mixed. The first decade of the 21st century produced an embarrassment of dismal oversight, from the Enron and WorldCom scandals of 2001-02 to the financial crisis of 2007-08. “I actually don’t think risk management failed,” said Larry Fink, the boss of BlackRock, an investment firm. “I think corporate governance failed, because…the boards didn’t ask the right questions.”

In this section

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Problems have been widespread and deep-rooted. Chief executives have packed boards with cronies: Michael Eisner’s board at Disney once included the former headmistress of his children’s school and the man who designed his house. They have sidelined critics: when a member of the Bank of America’s board criticised the CEO’s compensation in 2000 she was dropped.

The past decade has seen several attempts to bring boards up to date. In America the Sarbanes-Oxley act (2002) and the Dodd-Frank act (2010) forced companies to appoint more independent directors and disclose more information about compensation. Good-governance advocates have pressed companies not just to choose white men as directors, and to publish more data so shareholders can make better informed decisions. But big companies continue to make extraordinary appointments: in 2011 IAC, a media conglomerate chaired by Barry Diller, appointed Chelsea Clinton, then a 31-year-old graduate student, to its board. And some magic bullets have proved to be blanks. Everyone thinks independent directors make better board members but there is no academic evidence to prove it. When Lehman Brothers went bankrupt, eight of its ten directors were independents.

These reforms have left the basic problem untouched. Companies have almost always been admirably ruthless when it comes to reinventing themselves. They have experimented with every imaginable organisational form and have contracted out everything from manufacturing to strategy-making. Yet when it comes to boards they have been astonishingly conservative.

Boards are almost exactly as they were a hundred years ago: a collection of grey eminences who meet for a few days a year to offer their wisdom. They may now include a few women and minorities. There may be a few outsiders. But the fundamentals remain the same. Board members are part-timers with neither the knowledge nor the incentives to monitor companies effectively. And they are beholden to the people they are supposed to monitor. Boards are thus showcases for capitalism’s most serious problems: they are run by insiders at a time when capitalism needs to be more inclusive and are dominated by part-timers at a time when it needs to be more vigilant about avoiding future crises.

In the May edition of the Stanford Law Review Stephen Bainbridge of the University of California, Los Angeles, and Todd Henderson of the University of Chicago offer a proposal for fixing boards that goes beyond tinkering: replace individual directors with professional-services firms. Companies, they point out, would never buy legal services or management advice from people only willing to spare a few hours a month. Why do they put up with the same arrangement from board members? They argue for the creation of a new category of professional firms: BSPs or Board Service Providers. Companies would hire a company to provide it with “board services” in the same way that it hires law firms or management consultants. The BSP would not only supply the company with a full complement of board members. It would also furnish it with its collective expertise, from the ability to process huge quantities of information to specialist advice on things such as mergers.

Messrs Bainbridge and Henderson argue that this would require only a simple legal change but could revolutionise the stick-in-the-mud world of boards. It would replace today’s nod-and-a-wink arrangements with a market in which rival BSPs compete. It would create a new category of professional director. And it would allow BSPs to exploit economies of scale to recruit the best board members, introduce more rigorous training programmes and develop the best proprietary knowledge. Now, even the most diligent board member can only draw on his or her experience. BSPs would be able to draw on the expertise of hundreds. This would increase the chances that corporate incompetence will be corrected, corporate malfeasance found out and corporate self-dealing, in the form of inflated pay, countermanded.

Back to the drawing board

There are objections to the Bainbridge-Henderson plan. It might deny companies the insights of genuine outsiders—people with a record of producing industry-changing ideas. The very professionalism which will make BSPs better monitors of corporate performance might make them too conservative when advising on strategy. There could be conflicts of interest if, say, rival firms used the same BSP. But all professional-service firms (such as management consultants) have such problems—and ways of dealing with them. The idea might also deprive big shareholders of a chance to nominate board members. These problems could be overcome by creating a hybrid system in which the BSP filled a majority of board positions and a minority were reserved for others. Corporate boards have always been one of the weakest parts of the capitalist system—collections of cuckolds, in Ralph Nader’s phrase. Messrs Bainbridge and Henderson have come up with an intriguing idea for keeping companies from straying.

 

[Casey Lartigue, Jr.]

Thanks, Sophia! Please say such things about me in a letter of recommendation.^^

But... it turns out that my schedule has changed for 8/31, that I will need to be in about 4 different places Sunday morning/early afternoon... If I could clone myself, I would...

Casey

Check it out!

Radio Free Asia interview: 케이시 라티그 물망초학교 국제자문

http://www.rfa.org/korean/weekly_program/rfa_interview/rfainterview-08252014095755.html

Tourism to North Korea [North Korea Today(feat.Casey & Yeonmi)] (sub.korean)

http://www.youtube.com/watch?v=7Y0y_RBlmC8

Kkotjebi in Bloom [North Korea Today(feat.Casey & Yeonmi)] (sub.korean)

http://www.youtube.com/watch?v=GQ1TmfUHR4Q

--

[김은영]

Greetings all,

 

Surely you are striving to get back to work after a long break.

Many topics we need to address this Sunday, a bit late notice though.

Just show up and have fun.

 

Regards,

Sophia

 

 

 

 

 

http://www.economist.com/news/briefing/21615603-effective-sanctions-have-always-been-hard-craft-too-smart-half

 

http://www.economist.com/news/world-week/21617068-politics-week

The economic battleground

Too smart by half?

Effective sanctions have always been hard to craft

Sep 6th 2014 | From the print edition

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Not lovin’ it

 

WHEN Russia annexed Crimea in March, Western leaders hoped that carefully crafted “smart” financial sanctions, directed at Vladimir Putin’s inner circle, plus some old-fashioned embargoes, for instance of high-tech equipment, might persuade him not to invade eastern Ukraine. Or at least, given that they had no stomach for stronger options, they said that was their hope.

Either way, the response has so far been in vain. Sanctions have hurt the Russian economy, but they have had no discernible effect on Mr Putin’s military strategy. Instead, Russia has imposed counter-sanctions of its own, halting food imports and closing local branches of McDonald’s, ostensibly on public-health grounds.

In this section

• Reversal of fortune
• Too smart by half?

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Related topics

• Imports
• European Union
• Iran
• Trade
• Imports and exports

 

The European Union has been the weak link in the West’s response. It is a much more important trading partner for Russia than America is. This gives it more potential leverage, but the higher level of trade means some members’ economies are very closely intertwined with Russia’s—making it hard to reach the unanimous decisions necessary for sanctions to be imposed. The EU stance toughened after pro-Russian forces in eastern Ukraine shot down a Malaysian airliner in July. More individuals were targeted and new measures deprived Russian state-owned banks of their access to long-term financing in Europe’s capital markets. This has led some of those banks to tap central-bank reserves in order to plug funding gaps.

European officials this week proposed another round of sanctions. America is also preparing a new batch of measures. Neither set of sanctions has yet been made public. America has been bolder than the EU, but it is keen to co-ordinate moves so as to present a united front.

Judith Lee, a sanctions expert with Gibson Dunn, a law firm, believes America now accepts that the pick-off-the-cronies approach has not worked on its own, and that its next move (with or without Europe) is likely to include blocking the property and accounts of entire sectors of the Russian economy—both assets held in America and those parked offshore with American intermediaries. Her multinational clients are working on contingency plans that would allow them to switch quickly to non-Russian suppliers and banks should such sanctions arise. These plans are “generally well advanced,” she says. “There’s been plenty of forewarning.”

There is room for stronger action on the financial front, too. Rather than being aimed at specific banks, today’s asset freezes and financing restrictions could be stretched across the entire banking industry. The new European proposals, which will be agreed on, or not, at a meeting on September 5th, fall short of such ambition, but they do call for the ban on raising funds in European markets to be extended to Russian state-owned defence and energy companies as well as banks, and for the maturity of debt affected to be reduced from 90 days to 30, which applies more pressure. Prohibitions on purchases of Russian debt would be extended to include syndicated loans as well as corporate bonds, though not sovereign debt.

The options paper containing the proposals also floats the idea of actions which would hit sporting and cultural events, including the 2018 football World Cup Russia is slated to host, though this will not be in the latest package.

A dramatic move would be to turn the global clearing system into a tool of sanctions by blocking Russia’s access to the SWIFT network, which is the arterial system for international bank-to-bank payments. This idea, touted by Britain, would make life very difficult for all Russia’s internationally active companies. Although SWIFT is a private institution, owned by member banks, it is vulnerable to government pressure: in 2012 America successfully leant on it to block payments to and from Iranian banks. Doing the same to Russia might convince Western banks to cut their remaining ties to the country. Already compliance departments are urging extreme caution on their moneymakers, fearful of incurring the huge penalties that come with flouting American sanctions policies. Such a move, though, would risk destabilising finance beyond Russia. It would also encourage Russia and other countries to explore alternative cross-border payments systems, lest similar sanctions be used more widely in the future.

Targeting Russia’s energy sector is another option. Oil and gas make up 70% of Russia’s $515 billion annual exports and over half of the federal budget. Hawks say this makes it look like Iran. In 2012 the EU banned imports of Iranian oil and made it difficult to insure ships carrying Iranian oil. Oil exports fell by 60% and in 2013 Iran came to the negotiating table.

But Europe did not depend on Iranian oil. By contrast, Russia supplies about a quarter of the EU’s gas: Lithuania, Estonia, Finland and Latvia are dependent on it. The EU thus has no interest in boycotting Russian energy supplies; they are seen as a weapon in Russia’s hands, not in Europe’s. Günther Oettinger, the EU’s energy commissioner, says he is no longer ruling out “worst-case scenarios” for energy security.

There are other ways to target Russia’s energy sector. Amrita Sen of Energy Aspects, a consultancy, points out that Russia is highly dependent on Western technology. Last month Washington imposed controls on items used for exploration or production of Russian oil and gas. The measures could, over the long term, damage Russia’s ability to exploit its reserves in the Arctic. But such moves are unlikely to change Mr Putin’s mind today.

The second biggest sector of the Russian economy, by exports, is arms. There the likely effect of sanctions is small. Although it is the second-biggest weapons exporter in the world, Russia has few European clients and sells almost no kit to America. The defence equipment it imports it could mostly produce at home. Among the exceptions are warships, two of which it has on order from France. On September 3rd the French put the sale on hold.

The West also has to weigh the cost of Russian retaliation. European food producers are currently being offered financial support to cushion the blow of Russia’s import ban, which has deprived them of a €6.6 billion ($8.7 billion) market. According to the speaker of Russia’s upper house, lawmakers have “a very serious package” of countermeasures in the aerospace and engineering industries ready if sanctions are ratcheted up. Russia might ban the import of cars and restrict its airspace.

Most of these measures seem likely to hurt Russian consumers more than Western producers. However, as long as the Kremlin can pin the blame on the West, Mr Putin is unlikely to suffer. But the resultant shortages will provoke higher inflation. The Bank of Russia aims for inflation of 5%: in July it hit 7.5%.

For every Iran a Cuba

If the past is a guide, though, the West’s measures against Mr Putin can at very best expect only a partial success. The history of economic sanctions is far from glorious (see chart). The combination of financial, oil and shipping sanctions against Iran is held up as an American sanctions-policy success—most often by America itself. However, Iran’s decision to negotiate may be down to domestic concerns, including social pressure for change that was building before any sanctions were imposed. In any case, Iran has given little ground in talks and its rhetoric has hardened of late. America recently slapped sanctions on more than 25 firms and people it views as still helping Iran’s nuclear programme.

 

Earlier episodes offer even less encouragement. The decades-old embargoes on Cuba and North Korea have failed to topple their regimes. UN-backed sanctions against Iraq restricted its access to arms, but caused immense suffering. The role of sanctions in ending apartheid in South Africa is still hotly debated. Some argue that the trade and sports boycotts (and, later, financial sanctions) were crucial in bringing change, others that they delayed it by hardening attitudes among the white minority.

Even if sanctions do not achieve their immediate goals, though, there are still two good reasons to impose them, according to Daniel Drezner of Tufts University in Massachusetts. First, they force aggressors to factor the growing costs of escalation into their decision-making. It is possible that Mr Putin would have acted even more aggressively, had sanctions not been imposed. Second, sanctions can be used as a bargaining chip to be conceded later, when the other side is coaxed into talks.

And further economic sanctions may still weaken Mr Putin’s regime even if they do not change his behaviour. So far the sanctions against his cronies have not touched on the interests of most Russians, while the Kremlin’s ban on food imports has not materially affected Mr Putin’s core voters. But that will change if economic pain increases. Business confidence is low, the rouble has lost 10% of its value since the start of the year and the economy is barely growing. Capital flight is rampant: an influx of Russian money has reportedly prompted Hong Kong’s monetary authority to intervene in currency markets so as to curb the rise of the Hong Kong dollar. If Russia’s economy continues to weaken, Mr Putin may yet find himself constrained. Or so the West hopes.

 

 

 

Politics this week

Sep 13th 2014 | From the print edition

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In a televised address Barack Obama laid out his strategy to destroy the operations of Islamic State in Syria and Iraq. He promised to launch air strikes in Syria for the first time and send a further 500 military advisers to Iraq. Since the beheading of two Americans by IS, public opinion has turned hawkish: most Americans now favour military action. See article

Hassan Abboud, the head of a less extreme Syrian Islamist faction, was killed in a bomb blast, along with 11 other leaders of his group, dealing a blow to Islamist forces that are battling against both the Assad regime and IS.

In this section

 

 

Iraq’s new prime minister, Haider al-Abadi, formed a government that is intended to be more inclusive than the one run by his predecessor, Nuri al-Maliki, whose sectarian policies led to disaffection by Sunnis and contributed to the rapid advances by IS. The new government includes members of Iraq’s Sunni and Kurdish minorities.

Although he flexed the White House’s executive muscle over IS, Mr Obama went limp on his promise to take executive action on immigration reform. He said he would do nothing until after November’s mid-term elections. See article

Detroit reached a tentative agreement with Syncora, one of its biggest creditors. It must be approved by the judge who is overseeing a hearing into the city’s bankruptcy plan, which seeks to balance the interests of lenders and pensioners.

Bob McDonnell, the Republican governor of Virginia until January this year, was found guilty of accepting gifts from a businessman in return for political favours.

Fingers crossed

A ceasefire between Ukraine and pro-Russian rebels held despite some violence. Ukraine’s president, Petro Poroshenko, introduced a bill to give the separatists more autonomy while maintaining Ukraine’s regional integrity. The EU adopted fresh sanctions against Russian state-owned energy companies, but delayed their implementation. See article

Dutch investigators released a report into the MH17 crash over Ukraine on July 17th, concluding that the plane broke apart because a “large number of high energy objects” penetrated it, but stopping short of confirming that it was a surface-to-air missile.

 

Opinion polls suggested the Scottish referendum on independence on September 18th was now too close to call. The three leaders of Britain’s main political parties rushed to Scotland to urge voters to say no, and offered the promise of new tax and spending powers. Many big companies, including Royal Bank of Scotland, warned that they would move their operations to England if Scots vote to secede from the United Kingdom. See article

Jean-Claude Juncker, the new president of the European Commission, announced the portfolios for his commissioners. One surprise was that a Briton, Lord Hill, got the job of overseeing the financial-services industry. A former French finance minister, Pierre Moscovici, was given the economics portfolio just as his successor announced that France would yet again miss its budget-deficit targets. See article

Powering up

More than three years after an earthquake and tsunami led to a meltdown at the Fukushima Dai-ichi nuclear plant, the nuclear regulator in Japan hasdeclared that a nuclear plant is safe to operate. After the disaster, all 48 of Japan’s operable reactors were shut down. Two reactors at the Sendai plant on the southern island of Kyushu may now start up again if the local authorities agree.

At least 65 Islamist militants were killed when Pakistani jets attacked a base in the tribal lands of North Waziristan, the armed forces claimed. Nearly 1m people have been displaced since an army offensive began in June.

China decided to send a battalion of 700 troops to South Sudan to protect oilfields, in which China has big investments. They will be under the command of the UN but it is the biggest deployment of Chinese combat troops abroad on such a mission.

A many-headed Hydra

American officials confirmed that one of its air strikes killed Ahmed Abdi Godane, the leader of the Shabab, the Islamist group causing mayhem in Somalia and beyond. His death may cause a splintering of the Shabab as different factions emerge. See article

America said it was “deeply concerned” by the sedition charges laid against a newspaper editor by the government of Botswana after his journal claimed the president had been involved in a traffic accident. Botswana is one of the few African countries ranked highly on freedom indices; its high court asked the government to explain itself.

South African prosecutors handed over audio recordings to the opposition Democratic Alliance that relate to a decision in 2009 to drop corruption charges against Jacob Zuma, who was elected president later that year. The opposition said the tapes support its call for a judicial review. See article

 

The Ebola virus continued to spread across west Africa. In Liberia the virus is spreading exponentially, according to the WHO; the government said that Ebola posed a threat to the country’s “national existence”. In Sierra Leone the authorities planned to impose a nationwide lockdown for three days in an attempt to stop its spread. See article

More trouble for Dilma

A former executive at Petrobras, Brazil’s state-owned oil firm, alleged a huge kickback scheme in which politicians skimmed money from Petrobras contracts in return for supporting the government in congressional votes. All those named in local media reports have denied wrongdoing. See article

A bomb exploded near a packed metro station in Santiago, injuring ten people, some of them seriously. Bombs have gone off in the Chilean capital for years, but most have been small and detonated at night. See article

The strains on Venezuela’s economy became clearer as the year-on-year inflation rate rose to 63.4% in August. The figures were the first to be released since May. 

A Canadian expedition announced that it had found one of the ships led by Sir John Franklin on his ill-fated 1845 expedition to chart the Northwest Passage. The ships, HMS Terror and HMS Erebus, became stuck on the ice; their crew abandoned them only to die of disease and starvation. See article 

[Anna Lee]

Hello All, 

It's HOT Friday, I hope all of you have fantastic plan for tonight and show up on Sunday with fun stories to share. Here is this week's article to discuss together. See you on Sunday! 

1. The Rise and Rise of Xi Jinping 

http://www.economist.com/news/leaders/21618780-most-powerful-and-popular-leader-china-has-had-decades-must-use-these-assets-wisely-xi

2. Scotland's referendu  Britain Survives 

http://www.economist.com/blogs/blighty/2014/09/scotlands-referendum  (PDF attached)

 

The rise and rise of Xi Jinping

Xi who must be obeyed

The most powerful and popular leader China has had for decades must use these assets wisely

Sep 20th 2014 | From the print edition

• 

THE madness unleashed by the rule of a charismatic despot, Mao Zedong, left China so traumatised that the late chairman’s successors vowed never to let a single person hold such sway again. Deng Xiaoping, who rose to power in the late 1970s, extolled the notion of “collective leadership”. Responsibilities would be shared out among leaders by the Communist Party’s general secretary; big decisions would be made by consensus. This has sometimes been ignored: Deng himself acted the despot in times of crisis. But the collective approach helped restore stability to China after Mao’s turbulent dictatorship.

Xi Jinping, China’s current leader, is now dismantling it. He has become the most powerful Chinese ruler certainly since Deng, and possibly since Mao. Whether this is good or bad for China depends on how Mr Xi uses his power. Mao pushed China to the brink of social and economic collapse, and Deng steered it on the right economic path but squandered a chance to reform it politically. If Mr Xi used his power to reform the way power works in China, he could do his country great good. So far, the signs are mixed.

In this section

• Xi who must be obeyed
• How to fix Obamacare
• Chasing a rolling snowball
• Too reliant on the few
• Paris via Montreal

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Related topics

• China

Taking on the party

It may well be that the decision to promote Mr Xi as a single personality at the expense of the group was itself a collective one. Some in China have been hankering for a strongman; a politician who would stamp out corruption, reverse growing inequalities and make the country stand tall abroad (a task Mr Xi has been taking up with relish—seearticle). So have many foreign businessfolk, who want a leader who would smash the monopolies of a bloated state sector and end years of dithering over economic reforms.

However the decision came about, Mr Xi has grabbed it and run with it. He has taken charge of secretive committees responsible for reforming government, overhauling the armed forces, finance and cyber-security. His campaign against corruption is the most sweeping in decades. It has snared the former second-in-command of the People’s Liberation Army and targeted the retired chief of China’s massive security apparatus—the highest-ranking official to be investigated for corruption since Mao came to power. The generals, wisely, bow to him: earlier this year state newspapers published pages of expressions of loyalty to him by military commanders.

He is the first leader to employ a big team to build his public profile. But he also has a flair for it—thanks to his stature (in a height-obsessed country he would tower over all his predecessors except Mao), his toughness and his common touch. One moment he is dumpling-eating with the masses, the next riding in a minibus instead of the presidential limousine. He is now more popular than any leader since Mao (see article).

All of this helps Mr Xi in his twofold mission. His first aim is to keep the economy growing fast enough to stave off unrest, while weaning it off an over-dependence on investment in property and infrastructure that threatens to mire it in debt. Mr Xi made a promising start last November, when he declared that market forces would play a decisive role (not even Deng had the courage to say that). There have since been encouraging moves, such as giving private companies bigger stakes in sectors that were once the exclusive preserve of state-owned enterprises, and selling shares in firms owned by local governments to private investors. Mr Xi has also started to overhaul the household-registration system, a legacy of the Mao era that makes it difficult for migrants from the countryside to settle permanently in cities. He has relaxed the one-child-per-couple policy, a Deng-era legacy that has led to widespread abuses.

More muscle needed

It is still far from clear whether Mr Xi’s economic policies will succeed in preventing a sharp slowdown in growth. The latest data suggest the economy is cooling more rapidly than the government had hoped (see article). Much will depend on how far he gets with the second, harder, part of his mission: establishing the rule of law. This will be a central theme of the annual meeting next month of the Communist Party’s Central Committee. The question is whether Mr Xi is prepared for the law to apply to everyone, without fear or favour.

His drive against corruption suggests that the answer is a qualified no. The campaign is characterised by a Maoist neglect of institutions. It has succeeded in instilling fear among officials, but has done little to deal with the causes of graft: an investigative mechanism that is controlled entirely by the party itself, a secret system of appointments to official positions in which loyalty often trumps honesty and controls on free speech that allow the crooked to silence their critics.

Mr Xi needs to set up an independent body to fight corruption, instead of leaving the job to party investigators and the feuding factions they serve. He should also require officials to declare all sources of income, property and other assets. Instead, he has been rounding up activists calling for such changes almost as vigorously as he has been confronting corruption. In the absence of legal reform, he risks becoming a leader of the old stripe, who pursues vendettas in the name of fighting wrongdoers. That will have two consequences: there will be a new wave of corruption, and resentments among the party elite will, at some point, erupt.

Mr Xi is making some of the right noises. He says he wants courts to help him “lock power in a cage”. Reforms are being tinkered with to make local courts less beholden to local governments. But he needs to go further by abolishing the party’s shadowy “political-legal committees”, which decide sensitive cases. The party should stop meddling in the appointment of judges (and, indeed, of legislators).

The effect of such reforms would be huge. They would signal a willingness by the party to begin loosening its monopoly of power and accepting checks and balances. Deng once said that economic reform would fail without political reform. Mr Xi last month urged foot-dragging officials to “dare to break through and try” reform. China’s leader should heed his own words and those of Deng. He should use his enormous power for the greatest good, and change the system.

THE Union flag will still fly. By a margin of 55% to 45%, and on a vast 86% turnout, Scots voted to stick with the United Kingdom on September 18th. Thereby they ensured the continuation of the nation state that shaped the modern world, one which still retains great capacity for good. They also preserved the British identity which over a third of Scots, English, Welsh and Northern Irish consider of primary importance. Had around 200,000 more Scots answered “Yes” to the question “Should Scotland be an independent country”, these precious attributes would have been damaged, or destroyed, and Britain with them.

A rush of support for the Yes Scotland campaign in the fortnight before the vote had made that outcome eminently possible. A poll for YouGov had put the separatists in front; and though the latest polls pointed to a win for the No side, they suggested it would be by little more than the margin of error. As it turned out, the final result, though it would have seemed amazingly close only a month ago, was never in much doubt.

Beginning with tiny Clackmannanshire, a deprived fief of the separatist Scottish National Party (SNP) in central Scotland, which declared for the union at 1.30am, the No vote held up surprisingly strongly in most of Scotland’s 32 councils. The Gaelic-speaking, SNP-voting Western Isles delivered another early snub to the separatists. Dundee—dubbed by the SNP’s leader, and Scotland’s first minister, Alex Salmond, as the “Yes City”—gave him a rare victory, but on a relatively low turnout, of 79%, and by a narrower-than-expected margin. In Angus and Mr Salmond’s own Aberdeenshire, the Yes campaign suffered defeats in the SNP’s heartland. When, at around 4.30am, mighty Glasgow delivered only a modest win for the Yeses, with 53% of the vote, the verdict was clear.

As news of the early results filtered through to the venerable George Square in Glasgow, a gathering-point for the Yes camp’s most vehement supporters (“Our Tahrir Square”, some call it), a crowd wearing kilts and draped with the sky-blue Saltire hushed their chanting, but only a bit. They exuded the loyal defiance of a football crowd in adversity; it helped that the pubs were open all night, an arrangement that had caused local trepidation. “We know what’s happening in Glasgow tonight,” muttered a woman working at a supermarket checkout on the edge of the square, “A wild party or a riot”. It was a reasonable fear: a minority of Yes campaigners have behaved thuggishly at times during a protracted, two-year referendum campaign. Yet there were few incidents of violence. Perhaps few Scots, whether leaning to Yes or No, had any energy left for a fight.

The campaign had been gruelling, especially on the Yes side. Though designed and steered by the SNP, the Yes Scotland banner was carried by many different groups—including Radical Independence, Women for Independence and the Scottish Greens—many of them locally based, and all hugely motivated. By any measure, they outgunned the cross-party Better Together campaign, knocking on more doors, delivering more leaflets, placing more advertisements in newspapers and on billboards. In Dundee, Glasgow and even genteel Edinburgh, blue “Yes” stickers are everywhere; stepping in off a Glasgow street, your correspondent discovered two stuck beneath his shoe.

By contrast, purple “No, thanks” badges, advertising Better Together’s prim slogan, are hard to find. Yet on the day of voting, thousands of unexpected unionist volunteers were reported to have turned out, across Scotland, to help get out their vote. 

This points to the likeliest of three possible explanations for the late hardening of the unionist vote: a determined rallying of unionists, startled by the previously unimagined possibility of a Yes triumph and costly bifurcation. They received additional encouragement from the second possible reason, a belated and tempestuous entry into the campaign by Gordon Brown, the former Labour prime minister.

Having previously played little role in Better Together, Mr Brown has emerged over the last fortnight as the charismatic, positive and forceful voice of unionism it had previously lacked. Whether lacerating the Yes side’s wishful, or mendacious, predictions for an independent Scotland’s economic prospects; or glorifying the benefits of scale and co-operation that lie in the current arrangement, often using Biblical rhetoric, Mr Brown gave a glimpse of a brilliance that was seldom evident during his time in 10 Downing Street. His final turn of the campaign, delivered to a packed-out Glaswegian audience, was the speech of his life.

The nationalists, he fulminated, without notes or teleprompter, were promising “an economic minefield where problems could implode at any time, an economic trapdoor down which we go, from which we might never escape.” Have none of it! he cried. Embrace, instead, “the Scotland of Adam Smith and John Smith, the Scotland of civility and compassion, the Scotland of comradeship and community.” 

In addition, Mr Brown relayed a panicked response to the late Yes surge from Westminister, a promise of further devolution to the Scottish Parliament, which was the third possible explanation for the strengthened No vote. This also led to his successor, David Cameron, the Conservative prime minister, and his rivals, Ed Miliband, leader of the Labour Party, and Nick Clegg of the Liberal Democrats, scurrying north, in an emergency mission to promise these powers and protest their love for the Scots. Opinion polls suggest this made little difference to the vote; indeed, Mr Cameron’s hasty dash may even have done damage. Outside a polling booth in Inveraray, an 18th-century new town in Argyll, and seat of the ultra-unionist clan Campbell, one voter suggested she had been dissuaded from voting No because of it. “It made me think there was something funny going on,” she said. “It made me think Cameron was after something.” So thinks the Scottish street of distant, high-handed Westminster, a disdain that Mr Salmond has richly capitalised on.

Mr Cameron has sworn to begin cross-party negotiations on the promised new powers on September 19th, even as hangovers throb through the Yes and No camps. Already, all three party leaders have pledged to increase Scotland’s powers to raise income and other taxes, and it is hard to see how they could renege on this. That would be the death of their parties in Scotland. It would also turn the current clamour for independence into a deafening roar. Yet the outcome of the cross-party talks are unlikely to be so swiftly or easily deliverable as they made out, in their pledge to Scottish voters—not least because of the demands for new English powers, in Westminster and the regions, that it has elicited back home.

So the negotiations will be fraught; and new constitutional arrangements may not emerge, as Mr Cameron and the rest have promised, ahead of the next general election, due in nine months. But emerge they must, because Britain depends on it. A million Scots have just voted to quit the union, even in the knowledge that this would probably make them poorer. Only a strong turnout by Scottish pensioners—the only age-group thought likely to have voted mainly for the union—foiled them. This, on a night of huge relief for most Britons, is truly shocking. It means the British nation state has survived; yet it remains on life support.

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[Serena Park]

Hi there!

I am sending you 2 of those articles for this Sunday discussion!

Then, I hope to see you!!

The Economist explains

How online advertisers read your mind

http://www.economist.com/node/21618157/print

Alibaba vs. Amazon: Who Will Win the Global E-Commerce War?

http://www.forbes.com/sites/forbesleadershipforum/2014/09/22/alibaba-vs-amazon-who-will-win-the-global-e-commerce-war/

[Serena Park]

오늘 기사 내용중 나온 native advertising 관련 잼있는 링크 보내드립니다. 

http://adage.com/article/the-media-guy/watch-john-oliver-s-hilarious-attack-native-advertising/294448/

[김은영]

Greetings all,

 

Pleasant  days with beautiful sunlights are going on one after another including this coming Sunday I hope.

Just come and share your insights over the issues we are going to deal with.

Anybody instrested  is welcome at Coffeenee in Shinchon at around 9:30

 

Please attanched you find the articles.

Best regards,

 

Sophia

 

 

 

 

 

http://www.economist.com/news/finance-and-economics/21623708-weakening-productivity-casting-doubt-sustainability-chinas

http://www.economist.com/blogs/blighty/2014/10/palestine

 

Free exchange

Unproductive production

Weakening productivity is casting doubt on the sustainability of China’s growth

Oct 11th 2014 | From the print edition

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THE growth of China’s economy is staggering: it produced $9.5 trillion-worth of goods and services in 2013, nearly three times more than in 2007. But has that growth come simply from deploying more labour and capital? Or did total factor productivity (TFP)—the efficiency with which those two inputs are used—also increase? China’s future growth hinges on the answer.

A period of high growth does not necessarily involve a rise in productivity. The more people there are in employment, and the more factories and roads there are for them to use, the bigger an economy will be. But those workers and roads may not be put to good use. As long as the amount by which labour and capital grow outpaces any fall in productivity, GDP will still increase.

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Growth of this sort, however, can last only so long. Neither labour nor capital are infinite. In the long run, improving the productivity with which they are used is the magic ingredient for any economy, the only path to sustainable growth. Hence the concerns about China. A series of estimates published this year have all suggested that productivity is flagging.

At the pessimistic end of the range is Harry Wu, an economist who has devoted much research to the shortcomings of China’s official economic data. He finds that since 2007 TFP has actually been a drag on the economy, denting growth by about 0.9 percentage points a year. At the more optimistic end, researchers at the World Bank think TFP added nearly three percentage points a year to growth from 2000 to 2010—but even they reckon that is 40% lower than in the 1990s. In between these two estimates are Jianhua Zhang, Chunxia Jiang and Peng Wang, two of whom are with the People’s Bank of China. They conclude that productivity increased just 1.5% a year between 1997 and 2012.

As these diverging estimates suggest, overall productivity growth, despite being central to economics, is frustratingly difficult to pin down. It cannot, after all, be seen. When comparing two workers with the same job in the same company, it is easy to determine which one produces more. For economies, such apple-to-apple comparisons are not possible. Instead, economists get at TFP by subtracting the change in capital and labour deployed from the change in overall output. The difference (known as the Solow residual, after Robert Solow, the economist who pioneered this method) reflects the contribution of productivity to growth. In this way, the unseen becomes visible.

But the process requires several accounting somersaults. Assumptions are needed about, among other things, the size of the capital stock, the rate of capital depreciation and the level of workers’ education. Mr Wu does not trust official GDP figures and so constructs his own. Because his estimate of average annual growth for 2008-12 (6.5%) is dramatically lower than the official figure (9.3%), his calculations yield a negative Solow residual. Productivity, in other words, appears to have gone into reverse.

This conclusion looks too gloomy. For one thing, there are problems with Mr Wu’s own numbers. He relies on a selective sampling of official data and applies far-reaching yet apparently arbitrary adjustments to them, assuming, for instance, that reforms in the 1990s added only 1% to services growth. Many other economists see problems with Chinese data—lumpy growth figures are often smoothed, for instance—but not enough to justify such extensive revision, especially during the past decade when there has been a proliferation of data from China’s trading partners that can be used to verify the Chinese numbers.

But even the more sanguine estimates from the World Bank and the researchers at the central bank reveal a worrying trend in terms of TFP. It may still be positive but it has slowed, and quickly at that. All agree that a massive accumulation of capital, rather than any improvement in the efficiency with which it is used, has become the dominant engine driving China’s GDP.

In search of lost growth

How worrying is this? Some slowdown in productivity is only natural after three decades of rapid growth. The World Bank calculates that the reallocation of both labour and capital from farms to factories and from state-owned firms to private enterprise accounted for nine-tenths of TFP’s contribution to growth in 2000-10. But as the private sector grows and ever more workers flood to the cities, the returns from this are bound to diminish.

There is another, more worrying factor behind the deceleration in productivity, however: bad lending and investment decisions. Financial development, handled well, should promote growth by improving the allocation of resources. But the researchers from the central bank find a strongly negative correlation in China between growth in lending and in TFP. That is an indication that state-owned banks, which still dominate China’s financial sector, are not disbursing enough credit to the country’s most deserving companies. And the economy is consuming more and more capital. China’s incremental capital-output ratio (ICOR), a measure of how much investment it takes to achieve each percentage point of growth, rose to 5.4 in 2012 from 3.6 over the preceding two decades, according to the World Bank. Japan, South Korea and Taiwan were far more efficient during their high-growth phases, with ICORs of 2.7-3.2.

Perhaps this should not be surprising. The Chinese government has warned about overcapacity in scores of industries from steel to textiles. Heavy capital spending gins up growth when factories are built, but it also shows up in the data as weak productivity if the factories are only partly used. Nevertheless, it is still alarming. The Communist Party has long pledged to make China’s economy more efficient. The data on TFP show that it is struggling to do that. Accumulating productive capacity is easier than putting it to productive use.

 

 

 

Blighty

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Palestine

A state of things to come

Oct 13th 2014, 23:49 by Bagehot

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THE Israeli government might try to take solace in the low turnout—only half of British MPs showed up to debate a motion proposing to recognise Palestine as a state on October 13th. Yet their verdict was overwhelming: the motion was carried by 274 to 12.

As a backbench motion, the coalition government, which asked its ministers to abstain during the vote, can choose to ignore it. But as an indication of where British, and European, sympathies increasingly lie on this issue, it will be profoundly unsettling for Benjamin Natanyahu, Israel’s prime minister.

 

The main opposition Labour Party—including its leader, Ed Miliband, who has Israeli relatives and has visited Israel as Labour’s leader—supported the motion. So did the Liberal Democrats, the government’s junior partner, which has long advocated recognising Palestine. And on the Conservative side, which has traditionally been more sympathetic to the Jewish state, the motion also received some striking backing.

Richard Ottaway, the veteran Tory chair of Parliament’s influential foreign affairs select committee, said Israel’s recent decision to expand its settlements in the West Bank had persuaded him to break a lifelong habit of staunch pro-Israeli support. “Looking back over the past 20 years, I realise now Israel has slowly been drifting away from world public opinion. The annexation of the 950 acres of the West Bank just a few months ago has outraged me more than anything else in my political life. It has made me look a fool and that is something I deeply resent.”

“In normal circumstances” Mr Ottaway said he would have opposed the motion, because the Palestinian refusal to recognise Israel was fit to disqualify it from statehood. But, he said, “such is my anger with the behaviour of Israel in recent months that I will not be opposing this motion. I have to say to the government of Israel: if it is losing people like me, it is going to be losing a lot of people.”

The vote in the House of Commons follows an announcement from Sweden’s new centre-left government on October 3rd that it intends to recognise Palestine. Around 130 countries have already done so; Sweden would be the first longstanding EU member to follow suit on Palestine’s behalf.

Recognition from Britain, given its historical role in Israel’s birth and closeness to America, would be a much bigger fillip for the Palestinian cause. Given that Mr Miliband is currently the bookies’ favourite to win next year’s general election, and probably then rule in tandem with the Lib Dems, that has never looked so likely.