Intertwined Global Capitalism

Quite a few countries are facing the sovereign debt crises. There may be no way out other than default in some countries.

Some argue that the U.S. banking system, if all loans were marked-to-market, is insolvent. Greece and Portugal along with other countries are on the verge of bankruptcy.

Global capitalism is so intertwined that some countries’ insolvency could have grave ripple effects worldwide.

Many countries are caught in a dollar trap. How long will the USD hold the reserve currency status? What would happen if the gulf countries dropped their dollar peg?

Ponzi international banking has affected many parts of the globe. It is well known that the GS has been involved with the Greek financial affairs.

Will reality ultimately have its way?

Concerns over Rising Sovereign Debt Defaults in the Eurozone and Elsewhere

Roubini says rising sovereign debt leads to higher inflation or government defaults.

From Bloomberg:

Nouriel Roubini, the New York University professor who forecast the U.S. recession more than a year before it began, said sovereign debt from the U.S. to Japan and Greece will lead to higher inflation or government defaults.

“The thing I worry about is the buildup of sovereign debt,” said Roubini, a former adviser to the U.S. Treasury and IMF consultant, who in August 2006 predicted a “painful” U.S. recession that came to fruition in December 2007. If the problem isn’t addressed, he said, nations will either fail to meet obligations or see faster inflation as officials “monetize” their debts, or print money to tackle the shortfalls.

Roubini, who teaches at NYU’s Stern School of Business, told attendees at the Beverly Hilton hotel that “Greece is just the tip of the iceberg, or the canary in the coal mine for a much broader range of fiscal problems.”

Greece “could eventually be forced to get out” of the 16- nation euro region, said Roubini in a Bloomberg Television interview yesterday. That would lead to a decline in the euro and make it “less of a liquid currency,” he said. While a smaller euro zone “makes sense,” he said, “it could be very messy.”

“Eventually, the fiscal problems of the U.S. will also come to the fore,” Roubini said during the panel discussion. “The risk of something serious happening in the U.S. in the next two or three years is going to be significant” because there’s “no willingness in Washington to do anything” unless forced by the bond markets.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aEv_4Sp6xERU&pos=3

It‘s not just Greece, Spain, Portugal, Italy, or the U. K. Switzerland holds as much Greek debt as France does.

http://www.guardian.co.uk/business/2010/feb/11/greece-debt-france-switzerland

Of course, concerns over the sovereign debt crisis are not limited to the Europe. The U.S. and Japan are in the same boat as discussed before.

Downgrades of Spain, Greece and Portugal

Europe’s fourth largest economy Spain had its credit rating downgraded on Thursday 24 hours after Greece and Portugal were lowered.

The rating downgrade is not a surprise to those who have understood the macroeconomic picture.

The timing seems to be an interesting factor.

How would things unravel from here? Will global wide quantitative easing begin?

What would be the role of the IMF, along with the EU?

Who is the largest contributor to the IMF?

China Set to Pour Another 4 Trillion into Its Economy

China is launching another 4 trillion yuan stimulus.

From Bloomberg:

China will announce in August a new stimulus package of possibly 4 trillion yuan ($586 billion), the China Business newspaper reported on its Web site, citing unidentified sources.

The plan, from China’s National Development and Reform Commission, will likely cover nine industries including information technology and new energy, the report said.

http://www.bloomberg.com/apps/news?pid=20601089&sid=ajsv6gEJ15Nw

China is the world’s third largest economies. It is the largest creditor holding the U.S. debt, thereby having huge foreign reserves to draw from.

If its recovery is well under way, why they are propping up its economy through stimulus packages again?

Its yuan-USD peg might have been their strategic choice for survival, yet why the Chinese have fueled bubbles in the first place?

The answer to that question is complicated and requires the bigger picture to understand.

There seems to be two camps regarding the Chinese situation: Regardless of bubbles, its future growth will allow it to soak up some of the bubbles; Its economy is bound to crash somewhere down the line.

In any case, history has shown that the government’s intrusive meddling with markets doesn’t end well.

The Bubble Economy Vs. The Productive Economy

A bubble can be characterized as an asset inflation which doesn’t generate wealth. Inflation in stock and house prices is a typical example. This asset inflation does not produce tangible goods.

The bubble economy enriches those who are good at rigging the system, while kicking the real creators of wealth such as engineers and innovators to the curb. Throughout the boom-bust cycle, so much wealth has been wasted.

Asset inflation coupled with reckless public spending leads to massive amounts of debts as the cases of Japan and the U.S have shown. In an environment where too much debt requires to be written off or worked off, businesses are sitting on their balance sheet without expanding.

Innovation and production are at the heart of a productive economy. I emphasized the importance of innovation in creating jobs and wealth on numerous occasions. There is contribution or demand on the labor pool in a productive economy. The productive economy contributes to the elevation of lower classes’ income by providing them with real jobs.

Who is most responsible for the bubble economy? In order to get the real productive economy back on track, this question begs to be answered.

Employment Disparity between the Higher and Lower Income Groups in the U.S.

A study on unemployment rates for different income brackets was recently released by Northeastern University’s Center for Labor Market Studies.

http://www.clms.neu.edu/publication/documents/Labor_Underutilization_Problems_of_U.pdf

The study points out that the poor are suffering from depression level unemployment.

Boeing CEO Jim McNerney also mentioned this study in his speech entitled “Maintaining a Competitive Edge in Today’s Global Economy” at Northwestern University.

From his speech:

The Center analyzed the labor conditions faced by income-grouped U.S. households during the fourth quarter of 2009.

In the face of one of the worst economic environments in memory, those in the highest income groups had nearly full employment levels, with just a 3.2 percent unemployment rate for households with over $150,000 in income and a 4 percent rate in the next-highest income group of $100,000-plus.

The two lowest-income groups — under $12,500 and under $20,000 annually — faced unemployment rates of 30.8 percent and 19.1 percent, respectively.

http://www.boeing.com/news/speeches/2010/mcnerney_100219.html

It seems to be obvious that people in lower income brackets are faring much worse than the higher end of the spectrum in this downturn.

One thing to keep in mind is that in the U.S. labor-based manufacturing industries have been replaced by service sectors to a considerable extent. This may be one of the reasons behind unemployment disparity between the two groups. Why and how has industry shift happened? The underlying problems go much deeper than what it may appear to be.

Roubini Predicts Quantitative Easing Will Be Resumed

Roubini, an NYU economics professor, predicts quantitative easing goes on.

From MoneyNews:

The Federal Reserve is likely to resume quantitative easing after reversing it some in recent months, says star economist Nouriel Roubini.

The Fed expanded its balance sheet by leaps and bounds to fight the financial meltdown starting in 2008, buying securities and making loans on very easy terms.

That move is known as quantitative easing.

“Chances are they (Fed officials) are going to resume quantitative easing, because if they’re going to have a back-up in mortgage rates or in 10-year Treasury yields, the last thing the Fed can afford in an election year is have a crowding out of the housing recovery.”

“The Fed is (likely) going to eat its own words and resume quantitative easing directly or indirectly,” Roubini said.

http://moneynews.com/StreetTalk/Roubini-Fed-Resume-Quantitative/2010/04/23/id/356656

What Has Happened Since Korea’s 1997 Financial Crisis and Japan’s Decade-Long Recession?

Korea experienced a major financial crisis in 1997, which shook up the entire economy. Japan has gone through a decade-long recession.

Japan’s economy and Korea’s economy have several aspects in common: state-led, export-dependent economy, big business-centered industrial structure, and so on.

While the U.S. facing serious property/credit bubbles couldn’t have picked a worse time for economic contraction, Korea and Japan was blessed with a global economic boom, so they could export.

Japan and Korea has been dependent on exports to the U.S. since it has been the world's largest consumer. Now that the U.S. economy is in bad shape and its over-indebted consumers are losing the purchasing power, their export-dependent economies are at risk.

As in Japan, Korea’s public sector debt burden is increasing. While Japan is well known for its domestic savings, Korea’s household debt is quite worrisome.

Japan did almost everything the U.S. is employing such as quantitative easing, propping up asset prices through artificial means, and fiscal stimulus during their lost decades. And yet, where are they now? They are facing swollen public debt, shrinking domestic market and a declining population.

Corporate borrowing was the major culprit of Japan’s crisis. It skyrocketed in the 1980s using property and stock portfolios as collateral. As Richard Goo, a chief economist at Nomura Research Institute puts it, “in order to repair their balance sheets, private sector moves away from profit maximization to debt minimization.”

As in Japan, corporate borrowing in Korea was one of the main causes of the 1997 financial crisis. Some major Korean corporations including Samsung are reportedly sitting with cash on their balance sheets. They seem to take their lesson.

It is appalling that the core problems facing the U.S., Japan, and Korea are quite similar: debts, asset bubbles, and misallocation of resources.

Of course, macro economic reality affects businesses and consumers. Big business is building up cash on balance sheets while small business is starving for capital. Consumers with contracting income are becoming more cautious with their spending, so domestic demand is shrinking.

As I pointed out on numerous occasions, the 1997 financial crisis could have been a blessing in disguise for Korea. This is true for Japan.

William Black’s Testimony to the U.S. Congress on Lehman’s Failure

Mr. Back calls for the need to recognize bad loans and need for openness about a bank’s actual condition.

http://www.youtube.com/watch?v=3-HTylLzXu8&playnext_from=TL&videos=ZP-t0s2D4IM&feature=sub

Why Is It So Hard to Hold Wall Street Accountable?: The Financial Oligarchy in the U.S.

Simon Johnson and James Kwak discuss the root of the U.S. financial problems and what needs to be done to fix them on Bill Moyer’s Journal on PBS.

BILL MOYERS: And you say that these this oligarchy consists of six megabanks. What are the six banks?

JAMES KWAK: They are Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo.

BILL MOYERS: And you write that they control 60 percent of our gross national product?

JAMES KWAK: They have assets equivalent to 60 percent of our gross national product. And to put this in perspective, in the mid-1990s, these six banks or their predecessors, since there have been a lot of mergers, had less than 20 percent. Their assets were less than 20 percent of the gross national product.

BILL MOYERS: And what's the threat from an oligarchy of this size and scale?

SIMON JOHNSON: They can distort the system, Bill. They can change the rules of the game to favor themselves. And unfortunately, the way it works in modern finance is when the rules favor you, you go out and you take a lot of risk. And you blow up from time to time, because it's not your problem. When it blows up, it's the taxpayer and it's the government that has to sort it out.

BILL MOYERS: So, you're not kidding when you say it's an oligarchy?

JAMES KWAK: Exactly. I think that in particular, we can see how the oligarchy has actually become more powerful in the last since the financial crisis. If we look at the way they've behaved in Washington. For example, they've been spending more than $1 million per day lobbying Congress and fighting financial reform. I think that's for some time, the financial sector got its way in Washington through the power of ideology, through the power of persuasion. And in the last year and a half, we've seen the gloves come off. They are fighting as hard as they can to stop reform.

BILL MOYERS: And you say they continue to hold the global economy hostage?

JAMES KWAK: Exactly. Because what's happened- what we learned in 2008 were certain institutions are so big and so interconnected that if they were to fail, they would cause systemic shocks throughout the economy. That's essentially what happened in September 2008 when Lehman Brothers collapsed. And what's remarkable, and I think what essentially proves the point of our book is that almost two years later, nothing has changed.

http://www.pbs.org/moyers/journal/04162010/watch.html

Will Greece Default?

Greece appears to be saved for now, but will they default? Some experts argue that it is only a matter of timing. They are not at all out of the woods. Who is next? Is Portugal next in line? Spain, Italy and Ireland are on the radar as well. If it were just Greece, the problem wouldn’t be so bad.

From the Financial Times:

The European Union finally agrees a bail-out, and the much-predicted rally of Greek bonds turns into a rout. A week later, spreads on Greek bonds had reached their highest levels since the outbreak of the crisis. The financial markets have recognised that, bail-out or no bail-out, Greece is in effect broke.

The bail-out prevents a default this year, but makes no difference whatsoever to the likelihood of a subsequent default. Just do the maths: Greece has a debt-to-gross domestic product ratio of 125 per cent. Greece needs to raise around €50bn ($68bn, £44bn) in finance for each of the next five years to roll over existing debt and pay interest. That adds up to approximately €250bn, or about 100 per cent of Greek annual GDP.

To avoid long-run insolvency, Greece will need to find a way to stabilise the debt-to-GDP ratio. This would in turn require a multi-annual deficit reduction plan and a programme of structural reforms to raise the potential growth rate. The Greek government has so far presented a one-year plan to cut the deficit from 13 per cent of GDP to about 8.5 per cent. While this sounds ambitious, it is not very credible, as it is based heavily on tax increases, with no structural reforms.

But even if the Greek government were to present a credible long-term stability plan, the risk of default would remain high. This means that some form of debt restructuring is unavoidable. Restructuring is a form of default, except that it is by agreement. It could imply a haircut – an agreed reduction in the value of the outstanding cashflows for bond holders. The Brady bonds of the late 1980s, named after Nicholas Brady, a former US Treasury secretary, worked on a similar principle. An alternative to restructuring would be a debt rescheduling, whereby short and medium-term debt is converted into long-term debt. This would push the significant debt rollover costs to well beyond the adjustment period.

The Myth of Asian Economic Development and Innovation Model

What is interesting to note is that Japan, Korea, and China show similar features of development path economy-wise and technology-wise

All three countries have valued high tech development in the course of economic growth. They have also depended on exports and purchased the U.S. treasuries.

They also demonstrate signs of asset bubbles and massive government interventions including heavy government directed investment. They all have bad loan problems.

Japan enjoyed high export growth, high personal savings and high standards of living in 1980s. Then their economy has stagnated for two decades. Their asset prices plummeted, resulting in an 85% decline in real estate and stock market prices.

Korea is facing many challenges as well including structural unemployment and increasing sovereign/household debts.

China seems to be in similar boat. While their economy appears to continuously grow and to move up the value added food chain, they have many potential problems such as the yuan/USD peg and property bubble.

Japan and Korea have become high tech powerhouse in some areas, and China is fast accumulating its technological capacity. Yet, regardless of specifics, all these countries face tremendous challenges.

Technological competence is critical in growing and sustaining economy since it is an important means for creating wealth.

And yet, it alone is not sufficient. It has to be coupled with other forces to foster the productive economy. The cases of Japan, Korea, and China have demonstrated this.

The Asian economic development and innovation model shouldn’t be analyzed in a vacuum.

Some lessons drawn from the Asian experience:

-The Asian innovation model should be understood in the overall economic/political/social contexts: for instance, why they have rigorously built their technological base; why much of their technological competence is owned by big corporations.

-The state-led economic model has been both positive and negative forces for innovation.

-Their export-dependent model which has been a driver for their technological accumulation and hard currency earnings should be also analyzed in relation to international politics and global economics as well as their domestic economic structure and political dynamics.

- The overall health of economy including public and private debt loads affects their innovation apparatus. Although they have built the robust technological/manufacturing base, dissonance between finance and manufacturing sectors could impede their innovation competence.

-The global forces can’t be excuses for policy failures and corporate mismanagement.

The Driving Froces of the Real Economy

Where can we find drivers of jobs in an environment where overcapacity is a problem in many sectors? Recovery or not, weak consumer spending will last for some time. A decline in consumption would lead to further job loss.

Any country should foster innovation and entrepreneurship since they are engines of creating wealth and jobs. Innovation in certain areas such as energy harnessing technologies and biotechnology has promising future.

A country shouldn’t offshore its production as the U.S. has shown the painful ramifications of it.

We live in a global economy. Global wage arbitrage is happening and competence in technology is becoming more common. Given this trend, we should focus on what is possible.

In the meantime, if we look at what Japan has undergone for the last two decades and the U.S. is currently facing, the core problems such as bubbles and debts should be resolved since they don’t create wealth, but waste or destroy it.

What Matters Most?

One wants to stay informed and know what is going on. As Epictetus put it, “Only the educated are free.”

Yet sometimes one can’t help but feel that understanding the current state of affairs around the globe is too much to bear.

Many who have comprehended the nature of current reality are concerned where we are headed.

Times like this, again, make us think of what is life and what is nothingness.

What makes life worthwhile? What matters most?

Hope we keep our wit, courage, and integrity, regardless of systemic problems facing us.

“Let us love each other in the way that God wishes” Leon Bloy

Is JPMorgan Paid for Borrowing?

Could any entity get paid to take money?

From NakedCapitalism:

We know that JPMorgan is not substantially increasing lending anytime soon. And we also know that banks are recapitalizing courtesy of a steep yield curve and near zero rates, what I would call free money. What I didn’t know is how free these funds truly were. An investor friend pointed out something curious buried deep in JPMorgan Chase’s financial report from Q1 2010, namely that they were effectively paid five basis points to borrow money.

As of Q1 2010, JPMorgan Chase was being paid to borrow $271 billion.

www.nakedcapitalism.com/2010/04/jpmorgan-gets-paid-to-borrow-271-billion-from-the-government.html

How Is This Time Different?

It is interesting to see that many countries have adopted economic measures (e.g., fiscal stimulus and low interest rates) Japan has employed over the last two decade.

Yet, what one has to keep in mind is that this is a very different world than Japan has lived in. Japan alone has been a balance sheet recession, as a chief economist Richard Koo at Nomura Research Institue put it. But this time things are quite different.

Perhaps we may be seeing the credit ball squeeze across borders. In a way, the entire world has participated in this over-indulgence. The debt crisis in Greece may be a preview of what is to come.

Many parts of the world may have to see a private sector deleveraging some countries have already experienced and a public sector deleveraging as well at some point.

Is the sovereign default risk inevitable?

The U.S. vs. Japan: Who Is in a Direr Situation?

From the CIA factbook:

Japan External Debt = $2.13 Trillion
Japan Reserves = ~$1 Trillion

US External Debt = 13.45T
US Reserves = 75b

Who faces a direr situation?

Who in each country would suffer most from this debacle?

Japan’s Sovereign Debt and Korea’s Economy Resembling Japan’s

Japan is the world’s second largest economy. Its sovereign debt is mounting.

Are we taking the right lessons from Japan’s now two decade deflation?

Nomura securities warn on Monday that Korea could experience a Japanese-style bubble since Korea’s economy resembles Japan’s bubble economy in the late 1980s. The report asserts that Korea could face a bubble if the Bank of Korea misses the timing for a rate hike.

From AFP:

Greece's debt problems may currently be in the spotlight but Japan is walking its own financial tightrope, analysts say, with a public debt mountain bigger than that of any other industrialised nation.

Public debt is expected to hit 200 percent of GDP in the next year as the government tries to spend its way out of the economic doldrums despite plummeting tax revenues and soaring welfare costs for its ageing population.

Based on fiscal 2010's nominal GDP of 475 trillion yen, Japan's debt is estimated to reach around 950 trillion yen -- or roughly 7.5 million yen per person.

Japan "can't finance" its record trillion-dollar budget passed in March for the coming year as it tries to stimulate its fragile economy, said Hideo Kumano, chief economist at Dai-ichi Life Research Institute.

"Japan's revenue is roughly 37 trillion yen and debt is 44 trillion yen in fiscal 2010, " he said. "Its debt to budget ratio is more than 50 percent."

Without issuing more government bonds, Japan "would go bankrupt by 2011", he added.

Despite crawling out of a severe year-long recession in 2009, Japan's recovery remains fragile with deflation, high public debt and weak domestic demand all concerns for policymakers.

Japan was stuck in a deflationary spiral for years after its asset price bubble burst in the early 1990s, hitting corporate earnings and prompting consumers to put off purchases in the hope of further price drops.

Its huge public debt is a legacy of massive stimulus spending during the economic "lost decade" of the 1990s, as well as a series of pump-priming packages to tackle the recession which began in 2008.

Continued deflation could further worsen Japan's fiscal health because of less tax revenue and more stimulus spending, stirring fears over big tax hikes, which in turn weigh on demand and again reinforce deflation, analysts said.

http://rawstory.com/rs/2010/0411/risk-japan-bankrupt-real-analysts

Brain Drain and Reverse Brain Drain

Since talent is everything in the high tech industries, any countries with the high tech base have been concerned about averting brain drain and augmenting reverse brain drain. The question is: why some countries have been successful with the reverse brain drain policy and practices and why some countries experience a brain drain to other countries?

In order to come up with new growth engines or replace the imported goods with locally-produced goods (Korea still has high trade deficit in electronic parts and components), Korea (any other country for that matter) needs top notch talents. The reverse brain drain of R&D manpower from abroad led by the government first and followed by the private sector in the 1980s was an effective tool to absorb advanced technological knowhow. The reverse drain policy and practices in Korea was successful and still continues to some extent, but many of them have left due to various reasons.

As I recently pointed out, China sees the increased reverse brain drain since opportunities are there for the qualified engineers, although we don’t know how long this trend would last.

In order to ward off brain drain and reverse the brain drain, several factors should be taken into account. The overall economic fundamentals, excellent engineering schools and social infrastructure (e.g., stable political system and solid educational system for their kids) are among them.

It is ironic that even though the Korean put so much emphasis on education in general, Korea still lags behind the West in terms of the level of engineering education.

Why do the top U.S. high tech firms not hire foreign Ph.D.s from emerging countries? Why do foreign students who got their Ph.D.s at the top engineering schools in the U.S. still prefer to stay with the American high tech firms in most cases, while this may soon change? Why is there the lack of interest of U.S. students in pursuing Ph.D. in engineering?

Again, innovation apparatus doesn’t exist in isolation.

Is Bigness a Good Thing or a Bad Thing?

Bigness is one of the culprits which have caused the major problems facing many economies.

It has distorted the economy in many aspects through various apparatus including dubious collusion between state and business and useless spending.

It is true that Korea was able to rapidly build its industrial base by nurturing scale-intensive industries. So in a sense some may argue that big business-centered industrial structure promoted by the state was necessary to accelerate economic growth. And yet, we have learned the upsides and downsides of the state-led economy many Asian countries have adopted. All in all, it has significant limits. Excessive government interventions do more harm than good. While chaebols have contributed to the economic development of Korea, the concentration of economic power in the hands of a few chaebols has affected the overall health of the Korean economy in a negative fashion both at the macro and micro levels.

If one looks at the U.S. economy, it seems that big financial institutions, big businesses, and big government have been responsible for what the U.S. has become and where it is going.

Bigness has impeded innovation and fair competition, which sustains a healthy economy.

Unfortunately, bigness persists and seems to keep growing.

We may have to live the consequences.

Korea’s Sovereign Debt Hits a Record High

Korea’s sovereign debt rose to a record high of 359.6 trillion won last year. The national debt per capital stood at 7.37 million won, up 1 million won from the previous year.

Dr. Roubini, who is known as Dr. Doom, recently discussed this issue on his blog.

Geithner Defers Action To Label China a Currency manipulator

The U.S. policy makers have postponed a decision on whether to label China a currency manipulator.

Any contention between the U.S. and China from trade imbalance to currency manipulation may need to be understood in the broader context of their policy undertakings and their consequences such as China’s industrialization and expansion processes and the U.S.’s credit-fuelled overconsumption.

Why has China bought the U.S. treasuries in the first place and why are they buying less? In exchange for being the biggest lender to the U.S., what has China gained? Who is benefiting most from this process?

It appears that the U.S. can’t just blame China for its systemic failure, resulting in the loss of the productive economy.

From Bloomberg:

U.S. Treasury Secretary Timothy F. Geithner delayed a scheduled April 15 report to Congress on exchange-rate policies, sidestepping a decision on whether to accuse China of manipulating the value of the yuan.

Geithner in a statement yesterday urged China to move toward a more flexible currency and said a series of meetings over the next three months will be “critical” to bringing policy changes that lead to a stronger, “more balanced” global economy. The delay comes as Chinese President Hu Jintao is scheduled to visit Washington for a nuclear summit April 12-13.

The Treasury chief faces demands from Congress to label China a currency manipulator for keeping the value of the yuan little changed from about 6.83 to the dollar for almost two years. Geithner is instead betting that China will take steps on its own in the next several months to strengthen its currency, analysts said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=azQRzn_a9eP8&pos=1

Easter, the late Father Lee, and God's love

“And the angel said to the women, ‘Do not be afraid. I know that you are looking for Jesus of Nazareth who has been crucified. He is not here, for he has risen, just as he foretold.”

Matt 28: 5-6

Father Lee, you know I was going to see you at the hospital on the last day of December, but your older sister suggested not coming since you were in severe pain.

I didn’t expect you to pass away so soon. I regret not going to see you.

You know I talked to John this week. He is so bright, but frustrated, and you know why. I told him to pray hard. I know he is trying.

I really want to help him out. I want him to be happy and to grow intellectually and spiritually while staying in Korea.

I told John I will tape-record my piano playing and give the tape to him the next time we meet. I practice the piano at least half an hour every day. You know I didn’t play the piano for the two decades. Yet somehow it is all coming back. I hope you can listen to it (Chopin, Beethoven, Mozart, Schubert's pieces) as well.

You can see what’s been going on around the world.

It is still hard for me to comprehend how some people get so greedy and thirsty for power.

You know I’m concerned about the ultimate geopolitical conflict, which may involve Korea.

The current situation makes us rethink of what is life and what is nothingness.

I know that when all else fails, God’s love endures.

We all miss you dearly.

A documentary on the late Father Lee Tae Suk will be aired on KBS on April 11th.

Besides being a priest, he was a medical doctor, musician, and educator who devoted his life to the noble causes in Africa.

Paper Entrepreneurs Winning Over Product Entrepreneurs

Dr. Reich’s article echoes a similar assertion that the fire economy has beaten the real economy.

From Reich’s article:

Paper entrepreneurs — trained in law, finance, accountancy — manipulate complex systems of rules and numbers. They innovate by using the systems in novel ways: establishing joint ventures, consortiums, holding companies, mutual funds; finding companies to acquire, “white knights” to be acquired by, commodity futures to invest in, tax shelters to hide in; engaging in proxy fights, tender offers, antitrust suits, stock splits, spinoffs, divestitures; buying and selling notes, bonds, convertible debentures, sinking-fund debentures; obtaining government subsidies, loan guarantees, tax breaks, contracts, licenses, quottas, price supports, bailouts; going private, going public, going bankrupt.

Product entrepreneurs — engineers, inventors, production managers, marketers, owners of small businesses — produce goods and services people want. They innovate by creating better products at less cost.

For an economy to maintain its health, entrepreneurial rewards should flow primarily to product, not paper.

http://robertreich.org/post/491676652/the-paper-entrepreneurs-are-winning-over-the-product