From Zero Hedge:
While Kyle Bass notably remarks that pinpointing the end of a 70-year debt super-cycle is naive, the combination of the resurgence of nationalism (impacting trade with China) and the dreadful impact of the earthquake/tsunami (drastically changing Japan's supply chain) has secularly shifted Japan's trade balance for the worst at a time when the current account is already negative. "They are all in denial," Bass notes as the government has failed to deal with its problems over the last 20 years. Simply put, Japan needs a Schumpeterian 'creative destruction' moment instead of the constant rolling of debts and expanding of government balance sheets to paper over the cracks. The 'moment' feels like it is now, he notes, expanding that "JPY could hit 200," as they lose control; following two decades of volatility-smoothing, the chance of a disorderly collapse are high. Critically, he fears, "the social fabric of Japan will tear," as with one-third of the nations at retirement age, the fallout from the policies of Abe-Kuroda could cause them to "lose 30-50% of their life savings." What is perhaps even more concerning, he adds, "you are starting to see the central banks not trust each other." At a certain point in time, "nationalist interest takes over the global [G7] kumbaya," and that is occurring now. "The insidious nature of a runaway inflation is that it bankrupts the middle class... leading to social unrest globally."
http://www.zerohedge.com/news/2013-04-07/kyle-bass-japanese-retirees-will-lose-half-their-life-savings
Monday, April 8, 2013
"Livid" Top Chinese Economists Call BOJ Decision "Monetary Blackmail", Demand "Currency War" Retaliation
From Zero Hedge:
The Chinese Central Bank has so far stoically endured the monthly injection of $85 billion in boiling hot money for the past seven months, lovingly delivered by the inhabitants of the Marriner Eccles building, even if it meant a proportionate hawkish response which has pushed the Shanghai Composite red for the year, and having to deal with a property market that is on the verge of another inflationary blow off top. But while the PBOC will grudgingly take this kind of monetary abuse from Bernanke, now that it has to deal with another de novo created $70+ billion in monthly central bank liquidity (poetically called Carry-O-QE by Deutsche's Jim Reid), this time coming from that loathed neighbor and one time invader across the East China Sea, China won't take it any more. As the SCMP reports, "Many of China's top economists are livid at what they view as an effective currency devaluation by Japan and are calling on the People's Bank of China to retaliate by weakening the yuan to defend itself in what they see as a new currency war."
As for countries hating Japan's guts right now, China may have to wait in line: if there is one country that has to be truly livid at Japan it is South Korea, whose net exports account for nearly 60% of its GDP. So yes: the next currency war salvo will come most likely not from China, which is already caught between a rock and a hard place, but from Seoul, where the perfect storm of a totally nutjob neighbor to the north has emerged just in time for Japan to do everything in its power to crush its economy.
http://www.zerohedge.com/news/2013-04-07/livid-chinese-economists-call-boj-decision-monetary-blackmail-demand-chinese-central
The Chinese Central Bank has so far stoically endured the monthly injection of $85 billion in boiling hot money for the past seven months, lovingly delivered by the inhabitants of the Marriner Eccles building, even if it meant a proportionate hawkish response which has pushed the Shanghai Composite red for the year, and having to deal with a property market that is on the verge of another inflationary blow off top. But while the PBOC will grudgingly take this kind of monetary abuse from Bernanke, now that it has to deal with another de novo created $70+ billion in monthly central bank liquidity (poetically called Carry-O-QE by Deutsche's Jim Reid), this time coming from that loathed neighbor and one time invader across the East China Sea, China won't take it any more. As the SCMP reports, "Many of China's top economists are livid at what they view as an effective currency devaluation by Japan and are calling on the People's Bank of China to retaliate by weakening the yuan to defend itself in what they see as a new currency war."
As for countries hating Japan's guts right now, China may have to wait in line: if there is one country that has to be truly livid at Japan it is South Korea, whose net exports account for nearly 60% of its GDP. So yes: the next currency war salvo will come most likely not from China, which is already caught between a rock and a hard place, but from Seoul, where the perfect storm of a totally nutjob neighbor to the north has emerged just in time for Japan to do everything in its power to crush its economy.
http://www.zerohedge.com/news/2013-04-07/livid-chinese-economists-call-boj-decision-monetary-blackmail-demand-chinese-central
Sunday, April 7, 2013
People Not In Labor Force Soar By 663,000 To 90 Million, Labor Force Participation Rate At 1979 Levels
From Zero Hedge:
Things just keep getting worse for the American worker, and by implication US economy, where as we have shown many times before, it pays just as well to sit back and collect disability and various welfare and entitlement checks, than to work .The best manifestation of this: the number of people not in the labor force which in March soared by a massive 663,000 to a record 90 million Americans who are no longer even looking for work. This was the biggest monthly increase in people dropping out of the labor force since January 2012, when the BLS did its census recast of the labor numbers. And even worse, the labor force participation rate plunged from an already abysmal 63.5% to 63.3% - the lowest since 1979! But at least it helped with the now painfully grotesque propaganda that the US unemployment rate is "improving."
People not in labor force:
Labor participation rate:
Things just keep getting worse for the American worker, and by implication US economy, where as we have shown many times before, it pays just as well to sit back and collect disability and various welfare and entitlement checks, than to work .The best manifestation of this: the number of people not in the labor force which in March soared by a massive 663,000 to a record 90 million Americans who are no longer even looking for work. This was the biggest monthly increase in people dropping out of the labor force since January 2012, when the BLS did its census recast of the labor numbers. And even worse, the labor force participation rate plunged from an already abysmal 63.5% to 63.3% - the lowest since 1979! But at least it helped with the now painfully grotesque propaganda that the US unemployment rate is "improving."
People not in labor force:
Labor participation rate:
Linus Torvald: I Will Not Change Linux to Deep Throat Microsoft
From Jesse's Cafe:
This is not a d**k-sucking contest," says Linux's benevolent overlord.by Jon Brodkin
Feb 26 2013
The Linux kernel development process may welcome all those who love open source software and have the right coding chops, but one man remains the ultimate authority on what does and doesn't go into Linux—and he isn't afraid to let everyone know it.
The rants of Linux creator Linus Torvalds often become public through the Linux Kernel Mailing List archive. That's the open source way, and it gives us a glimpse into the thinking of the people behind one of the world's most widely used technologies.
The latest example comes from an argument between Torvalds and other Linux developers over whether the Linux kernel should include code that makes it easier to boot Linux on Windows PCs. This goes back to Microsoft requiring that PCs designed to run Windows 8 use UEFI firmware with the Secure Boot feature enabled.
This has complicated the process of booting Linux on PCs that shipped with Windows 8, but it hasn't prevented people from doing so. There are workarounds, but some people are looking for a solution in the Linux kernel itself...
http://jessescrossroadscafe.blogspot.kr/2013/04/linus-torvald-is-not-joining-microsoft.html
This is not a d**k-sucking contest," says Linux's benevolent overlord.by Jon Brodkin
Feb 26 2013
The Linux kernel development process may welcome all those who love open source software and have the right coding chops, but one man remains the ultimate authority on what does and doesn't go into Linux—and he isn't afraid to let everyone know it.
The rants of Linux creator Linus Torvalds often become public through the Linux Kernel Mailing List archive. That's the open source way, and it gives us a glimpse into the thinking of the people behind one of the world's most widely used technologies.
The latest example comes from an argument between Torvalds and other Linux developers over whether the Linux kernel should include code that makes it easier to boot Linux on Windows PCs. This goes back to Microsoft requiring that PCs designed to run Windows 8 use UEFI firmware with the Secure Boot feature enabled.
This has complicated the process of booting Linux on PCs that shipped with Windows 8, but it hasn't prevented people from doing so. There are workarounds, but some people are looking for a solution in the Linux kernel itself...
http://jessescrossroadscafe.blogspot.kr/2013/04/linus-torvald-is-not-joining-microsoft.html
Kyle Bass: "Japan Will Implode Under Weight Of Their Debt"
From Zero Hedge:
As the fast-money flabber-mouths stare admiringly at the rise in nominal prices of Japanese (and the rest of the world ex-China) stock prices amid soaring sales of wheelbarrows following Kuroda's 'shock-and-awe' last night, it is Kyle Bass who brings these surrealists back to earth with some cold-hard-facting. Out of the gate Bass explains the massive significance of what the Japanese are embarking on, "they are essentially doubling the monetary base by the end of 2104."
It is a "Giant Experiment," he warns, but when you are backed into a corner and your debts are north of 20 times your government tax revenue, "you're already insolvent." Simply put, Bass says they have to do something and they have to something big because they are "about to implode under the weight of their debt." For a sense of the scale of the BoJ's 'experimentation', Bass sums it up perfectly (and concerningly), "the BoJ is monetizing at a rate around 75% of the Fed on an economy that is one-third the size of the US!"
What they are trying to do is devalue the currency to attempt to become more competitive while holding their rates market flat - the economic zealots running the world's central banks believe they can live in that Nirvana - and Bass believes that is not the case, as they will lose control of rates, since leaving the zone of insolvency is impossible now. His advice, "if you're Japanese, spend! or take it out of your country. If you're not, borrow in JPY and invest in productive assets." Do not be long JPY or Japanese assets as he concludes with the reality of Japan's "hollowed out" manufacturing industry and why USDJPY is less important that KRWJPY.
http://www.zerohedge.com/news/2013-04-04/kyle-bass-japan-will-implode-under-weight-their-debt
As the fast-money flabber-mouths stare admiringly at the rise in nominal prices of Japanese (and the rest of the world ex-China) stock prices amid soaring sales of wheelbarrows following Kuroda's 'shock-and-awe' last night, it is Kyle Bass who brings these surrealists back to earth with some cold-hard-facting. Out of the gate Bass explains the massive significance of what the Japanese are embarking on, "they are essentially doubling the monetary base by the end of 2104."
It is a "Giant Experiment," he warns, but when you are backed into a corner and your debts are north of 20 times your government tax revenue, "you're already insolvent." Simply put, Bass says they have to do something and they have to something big because they are "about to implode under the weight of their debt." For a sense of the scale of the BoJ's 'experimentation', Bass sums it up perfectly (and concerningly), "the BoJ is monetizing at a rate around 75% of the Fed on an economy that is one-third the size of the US!"
What they are trying to do is devalue the currency to attempt to become more competitive while holding their rates market flat - the economic zealots running the world's central banks believe they can live in that Nirvana - and Bass believes that is not the case, as they will lose control of rates, since leaving the zone of insolvency is impossible now. His advice, "if you're Japanese, spend! or take it out of your country. If you're not, borrow in JPY and invest in productive assets." Do not be long JPY or Japanese assets as he concludes with the reality of Japan's "hollowed out" manufacturing industry and why USDJPY is less important that KRWJPY.
http://www.zerohedge.com/news/2013-04-04/kyle-bass-japan-will-implode-under-weight-their-debt
"When I saw him I fell at his feet as though dead. Then he placed his right hand on me and said: ‘Do not be afraid. I am the First and the Last. I am the Living One, for I was dead, and look, now I am alive for all time. I hold the power over death and the grave. Write, therefore, what you have seen, what is now and what will be."
Revelation 1:17-20
Revelation 1:17-20
Thursday, April 4, 2013
BOJ to Pursue Qualitative and Quantitative Easing - Double Their Monetary Base; BOJ QEases: Kuroda's "Shock And Awe" Post-Mortem From Goldman And SocGen
From Jesse's Cafe:
Along with most monetary enthusiasts I was anticipating a significant announcement from the BOJ two day policy meeting this week, and this seems to be it. They are going with an aggressive set of both qualitative and quantitative easing with the express intention of weakening the Yen and creating monetary inflation.
Japan will be firing up their industrial policy using the weaker yen to create more foreign demand for their goods to make up for the slack domestic demand based on their declining demographics.
As you may recall, Japan has been unable to stimulate their economy despite spending rather significant sums on infrastructure and other stimulus projects. The lack of reform in their fairly well entrenched and pervasive crony capitalist keiretsu structure, which one might say is about a half step removed from outright feudalism, has resisted all their best attempts at livening things up.
And the declining demographics of an island nation that discourages immigration is certainly no help either. But I would not discount the tax that corruption and inefficiency plays in dampening GDP growth, post bubble. Corruption creates inefficiency, fraud, and malinvestment, always and everywhere. Just ask China.
This major policy shift to inflation may help to explain the relentless hammering of the precious metals, which are the only rival currencies that cannot be doubled by the stroke of a bureaucrat's keyboard.
Look for more competitive devaluations from other countries, both explicit and implicit. This is the more conventional aspect of the currency war, and is a perennial favorite of the political class.
The more secular aspect is the seismic shift of the US dollar reserve currency regime which has been in place since the end of WW II. That bit of monetary exotica will make this currency war one to remember.
From Zero Hedge:
Earlier this morning the BoJ introduced a comprehensive change to its monetary policy framework. The asset purchasing program will be merged with the outright JGB purchase program (rinban), and JGB purchases will be expanded to include all maturities, including 40-year bonds. The pace of JGB purchases by the BoJ will be accelerated to ¥7trn per month from just under ¥4trn currently (on a gross basis), and purchases of ETFs and J-REITs will also be increased. The main operating target for money market operations was changed to a monetary base control (a quantitative index) from the uncollateralized overnight call rate.
Along with most monetary enthusiasts I was anticipating a significant announcement from the BOJ two day policy meeting this week, and this seems to be it. They are going with an aggressive set of both qualitative and quantitative easing with the express intention of weakening the Yen and creating monetary inflation.
Japan will be firing up their industrial policy using the weaker yen to create more foreign demand for their goods to make up for the slack domestic demand based on their declining demographics.
As you may recall, Japan has been unable to stimulate their economy despite spending rather significant sums on infrastructure and other stimulus projects. The lack of reform in their fairly well entrenched and pervasive crony capitalist keiretsu structure, which one might say is about a half step removed from outright feudalism, has resisted all their best attempts at livening things up.
And the declining demographics of an island nation that discourages immigration is certainly no help either. But I would not discount the tax that corruption and inefficiency plays in dampening GDP growth, post bubble. Corruption creates inefficiency, fraud, and malinvestment, always and everywhere. Just ask China.
This major policy shift to inflation may help to explain the relentless hammering of the precious metals, which are the only rival currencies that cannot be doubled by the stroke of a bureaucrat's keyboard.
Look for more competitive devaluations from other countries, both explicit and implicit. This is the more conventional aspect of the currency war, and is a perennial favorite of the political class.
The more secular aspect is the seismic shift of the US dollar reserve currency regime which has been in place since the end of WW II. That bit of monetary exotica will make this currency war one to remember.
DailyFXYen Weakens as BoJ Introduces Qualitative and Quantitative Easing
By Christopher Almeida
04 April 2013 05:10 GMT
THE TAKEAWAY: The Yen weakened as the Bank of Japan introduced Qualitative and Quantitative Monetary Easing including an increase of JGB purchases.
At the end of the two day meeting, the Bank of Japan announced that they were introducing a ‘Quantitative and Qualitative Monetary Easing’ program with an aim to achieve the price stability target of 2 per cent in two years. The Bank announced that it will now use ‘monetary base control’ in pursuing quantitative monetary easing which involves carrying out market operations that will expand the monetary base by 60-70 trillion Yen per year.
The Bank will also increase Japanese Government Bond purchases as well as increasing the average remaining maturity of about 3 years to 7 years. As a result of these, the Japanese Central Bank has decided to terminate the Asset Purchase Program with the outstanding purchases being absorbed into the JGB program.
In their statement, the policy makers stated that Japan’s economy was showing signs of a pickup with overseas economies seen to be growing at moderate paces. Despite the year on year rate of change of the CPI for Japan being negative recently, the Bank sees that indicators are suggesting a rise in inflation expectations...
Rest of the article with Yen Chart here.
Financial Timeshttp://jessescrossroadscafe.blogspot.kr/2013/04/bank-of-japan-to-double-their-monetary.html
Bank of Japan to double monetary base
By Ben McLannahan in Japan
April 4, 2013 6:05 am
Haruhiko Kuroda has announced his arrival as governor of the Bank of Japan by introducing a “new phase of monetary easing”, doubling Japan’s monetary base through aggressive purchases of long-term government bonds and risk assets.
Read the entire article here.
From Zero Hedge:
Earlier this morning the BoJ introduced a comprehensive change to its monetary policy framework. The asset purchasing program will be merged with the outright JGB purchase program (rinban), and JGB purchases will be expanded to include all maturities, including 40-year bonds. The pace of JGB purchases by the BoJ will be accelerated to ¥7trn per month from just under ¥4trn currently (on a gross basis), and purchases of ETFs and J-REITs will also be increased. The main operating target for money market operations was changed to a monetary base control (a quantitative index) from the uncollateralized overnight call rate.
Wednesday, April 3, 2013
Remembering the 45th Anniversary of Martin Luther King's Last Speech
From Jesse's Cafe:
Martin Luther King's Last Speech
3 April 1968, Church of God in Christ, Memphis, Tennessee
On 4 April 1968, Dr. Martin Luther King, Jr. was assassinated.
Martin Luther King's Last Speech
3 April 1968, Church of God in Christ, Memphis, Tennessee
On 4 April 1968, Dr. Martin Luther King, Jr. was assassinated.
"O Jerusalem, Jerusalem, you who kill the prophets and abuse those whom God has sent as messengers to you.http://jessescrossroadscafe.blogspot.kr/2013/04/remember-45th-anniversary-of-martin.html
How often I have longed to gather your children together, as a hen gathers her young under her wings. But you would not let me.
As you willed, your house is now yours, but is made desolate.’”
AFP: North Korea Says It Has Final Approval For Nuclear Attack On US; Will Globalists Use North Korea To Trigger Catastrophe?
Fom Zero Hedge:
AFP: North Korean Army has approval to launch "mercilesss" nuclear strike on U.S. involving possible use of "cutting edge" nuclear weapons
— Sky News Newsdesk (@SkyNewsBreak) April 3, 2013
http://www.zerohedge.com/news/2013-04-03/north-korea-says-it-has-final-approval-nuclear-attack-us
From Zero Hedge:
Whenever discussion over North Korea arises in Western circles, it always seems to be accompanied by a strange mixture of sensationalism and indifference. The mainstream media consistently presents the communist nation as an immediate threat to U.S. national security, conjuring an endless number of hypothetical scenarios as to how they could join forces with Al-Qaeda and attack with a terroristic strategy. In the midst of the latest tensions with the North Koreans, I have found that most people are barely tracking developments and that, when confronted by the idea of war, they shrug it off as if it is a laughable concept. “Surely” they claim, “The North is just posturing as they always have," creating a social and political atmosphere surrounding our relations with the Asian nation that places both sides of the Pacific in great danger. The skeptics argue that we will never get to this point, though, because North Korea has brandished and blustered many times before, all resulting in nothing. We see recent events being far different and more urgent than in the past. All that is needed to instigate an event on the Korean Peninsula are tightened sanctions.
http://www.zerohedge.com/news/2013-04-03/guest-post-will-globalists-use-north-korea-trigger-catastrophe
AFP: North Korean Army has approval to launch "mercilesss" nuclear strike on U.S. involving possible use of "cutting edge" nuclear weapons
— Sky News Newsdesk (@SkyNewsBreak) April 3, 2013
http://www.zerohedge.com/news/2013-04-03/north-korea-says-it-has-final-approval-nuclear-attack-us
From Zero Hedge:
Whenever discussion over North Korea arises in Western circles, it always seems to be accompanied by a strange mixture of sensationalism and indifference. The mainstream media consistently presents the communist nation as an immediate threat to U.S. national security, conjuring an endless number of hypothetical scenarios as to how they could join forces with Al-Qaeda and attack with a terroristic strategy. In the midst of the latest tensions with the North Koreans, I have found that most people are barely tracking developments and that, when confronted by the idea of war, they shrug it off as if it is a laughable concept. “Surely” they claim, “The North is just posturing as they always have," creating a social and political atmosphere surrounding our relations with the Asian nation that places both sides of the Pacific in great danger. The skeptics argue that we will never get to this point, though, because North Korea has brandished and blustered many times before, all resulting in nothing. We see recent events being far different and more urgent than in the past. All that is needed to instigate an event on the Korean Peninsula are tightened sanctions.
http://www.zerohedge.com/news/2013-04-03/guest-post-will-globalists-use-north-korea-trigger-catastrophe
Holland: "An Economy On The Brink"
The once rich country like the Netherlands is in trouble. Korea is in the danger zone as well, as pointed out. Given the economic indicators, Korea doesn't have much time left to turn things around.
From Zero Hedge:
Infamous for little boys plugging holes with their fingers and grown-ups plugging their mouth with their foot (D-Boom), it seems Holland, Berlin's most important ally in the goal of greater fiscal discipline in Europe, has fallen into an economic crisis itself. As Spiegel reports, the once exemplary economy is suffering from huge debts and a burst real estate bubble, which has stalled growth and endangered jobs.
The statistics make for some worrisome reading: no nation in the euro zone is as deeply in debt as the Netherlands, where banks have a total of about €650 billion in mortgage loans on their books; consumer debt amounts to about 250% of available income - by comparison, in 2011 even the Spaniards only reached a debt ratio of 125%; unemployment is on the rise; consumption is down; and growth has come to a standstill.
The trouble for Holland is that despite their proclamations of the need for Fiscal conservatism, even EUR46 billion in austerity measures are apparently not enough to keep the nation's deficit within the EU debt limit. The Dutch were long among Europe's most diligent savers, and in the crisis many are holding onto their money even more tightly, which is also toxic to the economy, as "one of the main problems is declining consumption."
The nationalization on SNS in February brought this reality home and as Spiegel reports, "there is no end to the crisis in sight."
Source: Spiegel
http://www.zerohedge.com/news/2013-04-02/holland-economy-brink
From Zero Hedge:
Infamous for little boys plugging holes with their fingers and grown-ups plugging their mouth with their foot (D-Boom), it seems Holland, Berlin's most important ally in the goal of greater fiscal discipline in Europe, has fallen into an economic crisis itself. As Spiegel reports, the once exemplary economy is suffering from huge debts and a burst real estate bubble, which has stalled growth and endangered jobs.
The statistics make for some worrisome reading: no nation in the euro zone is as deeply in debt as the Netherlands, where banks have a total of about €650 billion in mortgage loans on their books; consumer debt amounts to about 250% of available income - by comparison, in 2011 even the Spaniards only reached a debt ratio of 125%; unemployment is on the rise; consumption is down; and growth has come to a standstill.
The trouble for Holland is that despite their proclamations of the need for Fiscal conservatism, even EUR46 billion in austerity measures are apparently not enough to keep the nation's deficit within the EU debt limit. The Dutch were long among Europe's most diligent savers, and in the crisis many are holding onto their money even more tightly, which is also toxic to the economy, as "one of the main problems is declining consumption."
The nationalization on SNS in February brought this reality home and as Spiegel reports, "there is no end to the crisis in sight."
Source: Spiegel
http://www.zerohedge.com/news/2013-04-02/holland-economy-brink
미래도 창조도 없는 R&D…결론 뻔한 안전빵 연구만; 콸콸콸 새는 '혈세 연구비'
매일경제로부터:
#1. 한 정부 출연 연구소의 A연구원은 세라믹 재료의 강도를 3년간 30% 높여 신소재 개발을 한다는 목표로 연구과제를 수행했다. 연구 도중 그는 세라믹 강도를 높이기보다 전기적 성질을 개선하면 더 좋은 결과를 낼 수 있다는 것을 알았다.
하지만 세라믹 강도 향상에 매달릴 수밖에 없었다. 당초 정한 계획대로 하지 않으면 실패한 과제가 될 수 있어서다. 그는 "3년 동안 매년 강도 10%, 20%, 30% 개선이라는 중간 목표를 달성하지 못하면 연구가 중단될지 몰라 도중에 연구 방향을 바꿀 수 없었다"고 했다.
#2. 국내 사립대에서 박사 후 과정을 밟고 있는 B씨는 실험이 상당 부분 진행된 연구를 토대로 정부에 연구개발(R&D) 과제를 신청했다. 성공을 담보하기 위해서였다. B씨는 "국내는 물론 외국도 어느 정도 진행된 과제를 신청하는 게 관행"이라며 "다만 우리는 실패는 있을 수 없다는 전제를 깔고 간다"고 했다.
그는 "실패하면 돈을 받는 연구자와 돈을 준 정부기관 모두 무능하다는 낙인이 찍혀 다음 과제를 따는 게 사실상 불가능하다"면서 "우리나라의 R&D 성공률이 높을 수밖에 없는 이유"라고 지적했다.
`성공률 사실상 100%`. 우리 정부가 예산을 지원하는 국가연구개발과제는 거의 백발백중의 성공률을 자랑한다.
산업통상자원부 등에 따르면 2011년 정부 R&D 과제의 성공률은 무려 97%에 달했다. 연구자들에게 `실패`는 거의 없는 셈이다.
국내 연구자들의 뛰어난 결과는 어떻게 나온 걸까. 그 이면에는 우리 정부 R&D의 비효율이 자리 잡고 있다. 국내 연구자들 사이에는 `성공이 보장된 연구` `논문을 위한 연구` 관행이 광범위하게 퍼져 있다.
연구자들은 과제 수행 결과물이 실패로 결론 나면 최대 3년간 정부과제를 신청할 수 없게 된다. `실패 낙인`에 따르는 불이익이다. 이를 피하려고 안전한 연구에만 매달린다. 그러다 보니 창의적이고 모험적인 연구는 `가물에 콩 나듯` 한다는 게 과학기술계의 중론이다.
반면 과학기술 선진국인 미국과 유럽은 과제 성공률이라는 개념 자체가 없다. 얼마나 도전적인 연구를 했는지, 얼마나 새로운 가치를 창출했는지를 들여다보는 정도다. 따라서 실패에 대한 부담이 크지 않다.
우리 연구자들의 이 같은 `안전빵 연구`는 박근혜 정부가 화두로 내세운 창조경제와 정면으로 배치된다. 창조경제를 위해서는 새로운 것을 발견하고 창출해내는 R&D가 강화돼야 한다.
특히 국가 R&D를 어떻게 운영하느냐에 따라 `패스트 폴로어`에서 `퍼스트 무버`로 옮겨가느냐가 결정된다. 그러나 지금처럼 도전적 연구를 기피하게 만드는 제도로는 퍼스트 무버로의 전환은 물론 창조경제도 요원하다는 지적이다.
우리나라 R&D 성공률이 지나치게 높다는 지적이 일자 산업통상자원부(옛 지식경제부)는 2015년까지 성공률을 60%로 낮춘다는 목표를 세웠고 실제로 지난해 성공률은 88%로 떨어졌다.
성공률 100%도 비정상적이지만 정책적 판단에 의해 불과 1년 사이에 실패율이 10%포인트가량 떨어지는 것도 `코미디` 같은 일이다.
기초연구의 품질이 떨어지고 있는 것은 이와 무관치 않다.
한국과학기술기획평가원(KISTEP)은 지난해 `기초연구사업 특성과 논문 질의 상관관계 분석 및 시사점` 보고서에서 "정부 지원 기초연구 투자와 논문 성과는 양적으로 팽창했지만 질적 수준은 오히려 저하되는 추세"라고 평가했다.
정부 자금의 `대기업 쏠림`도 나타난다. 정부 R&D 예산 가운데 대기업 지원 비율은 2002년 3.1%에서 지난해 9.4%로 3배가량 뛰었다. 반면 중소기업은 같은 기간 13%에서 12%로 줄어들었다. 자금력이 풍부한 대기업에 많은 정부 자금이 투입되는 게 옳은 건지 따져봐야 한다는 지적이 나오는 이유다.
일선 연구현장에서 정부 자금을 `눈먼 돈`으로 여기는 사례도 허다하다. 연구자들이 인건비나 출장비를 부풀리기도 하고 중소 벤처기업이 정부 자금으로 연명하기도 한다.
오세정 기초과학연구원장은 "R&D 자금을 더 늘리는 것도 좋지만 주어진 자금을 효율적으로 쓰는 게 중요하다"면서 "정부와 민간의 R&D 역할 분담을 명확히 하고 정부 R&D는 실패할 가능성이 높은 분야와 기초과학 투자 비중을 늘려야 한다"고 지적했다.
http://news.mk.co.kr/v3/view.php?sc=30000001&cm=헤드라인&year=2013&no=251267&relatedcode=&sID=402
매일경제로부터:
정부 지원을 받아 특허기술 이전업무를 하는 모 기관에 근무했던 P씨는 정부에서 발표하는 기술이전 실적을 믿지 않는다.
정부에서 `건수`를 늘리라는 요구가 오면 담당 직원은 평소 알고 지내던 기업에 특허기술을 사갈 것을 부탁하고 그 대가로 용역보고서를 맡기는 등의 방법으로 보답을 해준다는 것이다. 그는 "기술이전 실적을 보면 같은 `등장인물`이 그 기업과 연관성이 없는 다른 기술까지 사가는 경향이 있다"면서 "특허기술로 사업실적이 별로 없는 경우에는 이 같은 거래가 있었다고 보면 된다"고 말했다.
#1. 한 정부 출연 연구소의 A연구원은 세라믹 재료의 강도를 3년간 30% 높여 신소재 개발을 한다는 목표로 연구과제를 수행했다. 연구 도중 그는 세라믹 강도를 높이기보다 전기적 성질을 개선하면 더 좋은 결과를 낼 수 있다는 것을 알았다.
하지만 세라믹 강도 향상에 매달릴 수밖에 없었다. 당초 정한 계획대로 하지 않으면 실패한 과제가 될 수 있어서다. 그는 "3년 동안 매년 강도 10%, 20%, 30% 개선이라는 중간 목표를 달성하지 못하면 연구가 중단될지 몰라 도중에 연구 방향을 바꿀 수 없었다"고 했다.
#2. 국내 사립대에서 박사 후 과정을 밟고 있는 B씨는 실험이 상당 부분 진행된 연구를 토대로 정부에 연구개발(R&D) 과제를 신청했다. 성공을 담보하기 위해서였다. B씨는 "국내는 물론 외국도 어느 정도 진행된 과제를 신청하는 게 관행"이라며 "다만 우리는 실패는 있을 수 없다는 전제를 깔고 간다"고 했다.
그는 "실패하면 돈을 받는 연구자와 돈을 준 정부기관 모두 무능하다는 낙인이 찍혀 다음 과제를 따는 게 사실상 불가능하다"면서 "우리나라의 R&D 성공률이 높을 수밖에 없는 이유"라고 지적했다.
`성공률 사실상 100%`. 우리 정부가 예산을 지원하는 국가연구개발과제는 거의 백발백중의 성공률을 자랑한다.
산업통상자원부 등에 따르면 2011년 정부 R&D 과제의 성공률은 무려 97%에 달했다. 연구자들에게 `실패`는 거의 없는 셈이다.
국내 연구자들의 뛰어난 결과는 어떻게 나온 걸까. 그 이면에는 우리 정부 R&D의 비효율이 자리 잡고 있다. 국내 연구자들 사이에는 `성공이 보장된 연구` `논문을 위한 연구` 관행이 광범위하게 퍼져 있다.
연구자들은 과제 수행 결과물이 실패로 결론 나면 최대 3년간 정부과제를 신청할 수 없게 된다. `실패 낙인`에 따르는 불이익이다. 이를 피하려고 안전한 연구에만 매달린다. 그러다 보니 창의적이고 모험적인 연구는 `가물에 콩 나듯` 한다는 게 과학기술계의 중론이다.
반면 과학기술 선진국인 미국과 유럽은 과제 성공률이라는 개념 자체가 없다. 얼마나 도전적인 연구를 했는지, 얼마나 새로운 가치를 창출했는지를 들여다보는 정도다. 따라서 실패에 대한 부담이 크지 않다.
우리 연구자들의 이 같은 `안전빵 연구`는 박근혜 정부가 화두로 내세운 창조경제와 정면으로 배치된다. 창조경제를 위해서는 새로운 것을 발견하고 창출해내는 R&D가 강화돼야 한다.
특히 국가 R&D를 어떻게 운영하느냐에 따라 `패스트 폴로어`에서 `퍼스트 무버`로 옮겨가느냐가 결정된다. 그러나 지금처럼 도전적 연구를 기피하게 만드는 제도로는 퍼스트 무버로의 전환은 물론 창조경제도 요원하다는 지적이다.
우리나라 R&D 성공률이 지나치게 높다는 지적이 일자 산업통상자원부(옛 지식경제부)는 2015년까지 성공률을 60%로 낮춘다는 목표를 세웠고 실제로 지난해 성공률은 88%로 떨어졌다.
성공률 100%도 비정상적이지만 정책적 판단에 의해 불과 1년 사이에 실패율이 10%포인트가량 떨어지는 것도 `코미디` 같은 일이다.
기초연구의 품질이 떨어지고 있는 것은 이와 무관치 않다.
한국과학기술기획평가원(KISTEP)은 지난해 `기초연구사업 특성과 논문 질의 상관관계 분석 및 시사점` 보고서에서 "정부 지원 기초연구 투자와 논문 성과는 양적으로 팽창했지만 질적 수준은 오히려 저하되는 추세"라고 평가했다.
정부 자금의 `대기업 쏠림`도 나타난다. 정부 R&D 예산 가운데 대기업 지원 비율은 2002년 3.1%에서 지난해 9.4%로 3배가량 뛰었다. 반면 중소기업은 같은 기간 13%에서 12%로 줄어들었다. 자금력이 풍부한 대기업에 많은 정부 자금이 투입되는 게 옳은 건지 따져봐야 한다는 지적이 나오는 이유다.
일선 연구현장에서 정부 자금을 `눈먼 돈`으로 여기는 사례도 허다하다. 연구자들이 인건비나 출장비를 부풀리기도 하고 중소 벤처기업이 정부 자금으로 연명하기도 한다.
오세정 기초과학연구원장은 "R&D 자금을 더 늘리는 것도 좋지만 주어진 자금을 효율적으로 쓰는 게 중요하다"면서 "정부와 민간의 R&D 역할 분담을 명확히 하고 정부 R&D는 실패할 가능성이 높은 분야와 기초과학 투자 비중을 늘려야 한다"고 지적했다.
http://news.mk.co.kr/v3/view.php?sc=30000001&cm=헤드라인&year=2013&no=251267&relatedcode=&sID=402
매일경제로부터:
서울 사립대 A교수는 2년째 정부 연구비 중 일부를 슬쩍 빼돌려 미국에 유학 중인 자녀에게 보낸다. 매달 100만~200만원을 빼돌리고 있다. 정부에서 받은 연구비를 개인 돈이나 다름없이 사용하고 있는 셈이다.
A교수는 3~4년 전 정부 R&D 과제를 많이 맡았던 때는 이보다 더 많은 돈을 착복했다. A교수는 인건비 부풀리기, `연구비깡` 등 다양한 수법을 활용한다.
3명이 참여하는 사업에 4명의 연구자를 신청한 뒤 남는 인건비를 착복하고, 실험 재료를 사지 않았으면서도 산 것처럼 업자와 꾸민 뒤 현찰을 주고받기도 한다. A교수와 함께 일한 적이 있는 B박사는 "연구자금을 빼돌리는 수법은 무수히 많다"고 했다.
정부 R&D 자금이 사실상 `눈먼 돈`으로 전락했다. 감독과 감시가 소홀한 틈을 타 개인적으로 유용하거나 횡령하는 등 도덕적 해이가 사라지지 않고 있다. 연구비를 빼먹는 수법도 다양해지고 있다.
경남에 있는 한 대학에서 석사과정을 밟고 있는 C씨는 요즘 후회가 이만저만이 아니다. 연구실이 국비로 운영될 뿐만 아니라 학생 지원도 좋다고 해서 연구실에 들어갔는데 실상은 정반대였다.
정부 R&D 자금 일부가 교수 개인 용도로 사용되고 있어서다. 실험실에 배치된 뒤 같은 은행의 통장을 2개 발급받은 뒤 하나는 연구실 총무를 맡은 대학원생에게 제출했는데 그 통장으로 들어오는 연구 보조금은 교수가 따로 사용했다. C씨는 "학점과 졸업이 걸려 있어 모른 체할 수밖에 없다. 국민 세금이 교수의 탐욕을 채우는 데 쓰이고 있다"며 울분을 토했다.
이 같은 불법적 행태는 교수와 학생, 연구소와 연구원 모두가 `공범`으로 참여하기 때문에 좀처럼 적발되지 않는다.
대학 연구실의 한 박사는 "처음에는 학생들 불만이 크지만 지도교수의 눈 밖에 나면 졸업이 힘든 것을 알기 때문에 이제는 모두 그러려니 하는 분위기가 됐다"고 실토했다. 그는 "영수증이나 인건비 내역 등을 보면 정상적으로 연구를 수행하는 것처럼 보이기 때문에 내부 고발자가 나타나지 않는 이상 찾아내기 힘들다"고 덧붙였다.
교수가 `연구비깡`으로 자금을 빼먹자 학생들도 아무런 죄의식 없이 똑같은 수법을 사용하고 있다. 한 사립대학 이공계 연구실의 박사과정 4년차 K씨는 "연구비깡을 통해 노트북컴퓨터를 구입한 적이 있다"며 "연구비 유용과 관련한 문제가 터졌을 때만 조심하면 된다"고 했다. 그는 "그나마 요즘은 과거에 비해 연구비깡 사례가 점잖아진 편"이라고 말했다.
감사원은 2011년 국가 R&D사업 관리실태 감사를 통해 △인건비 과다지급 △구입하지 않은 기자재를 구입한 것으로 허위증빙서류 제출 △연구기자재 구입비 증빙서류의 이중제출 등 다양한 형태의 연구비 불법 사례를 지적한 바 있다.
이른바 `좀비기업`도 R&D 자금을 빼먹는 존재다. 자체 제품과 매출이 거의 없이 정부 연구개발자금으로 회사 인건비와 운영비를 충당하는 기업이다. 이런 기업들은 정부 R&D의 평가지표에 능통해 손쉽게 과제를 따낸다는 분석도 있다. 한 벤처기업 사장은 "매출이 별로 없어도 회사를 계속 굴려야 하기 때문에 정부 R&D 자금을 받아내야만 하는 형편"이라고 전했다.
특허기술의 민간기업 이전에도 허수가 많다.
A교수는 3~4년 전 정부 R&D 과제를 많이 맡았던 때는 이보다 더 많은 돈을 착복했다. A교수는 인건비 부풀리기, `연구비깡` 등 다양한 수법을 활용한다.
3명이 참여하는 사업에 4명의 연구자를 신청한 뒤 남는 인건비를 착복하고, 실험 재료를 사지 않았으면서도 산 것처럼 업자와 꾸민 뒤 현찰을 주고받기도 한다. A교수와 함께 일한 적이 있는 B박사는 "연구자금을 빼돌리는 수법은 무수히 많다"고 했다.
정부 R&D 자금이 사실상 `눈먼 돈`으로 전락했다. 감독과 감시가 소홀한 틈을 타 개인적으로 유용하거나 횡령하는 등 도덕적 해이가 사라지지 않고 있다. 연구비를 빼먹는 수법도 다양해지고 있다.
경남에 있는 한 대학에서 석사과정을 밟고 있는 C씨는 요즘 후회가 이만저만이 아니다. 연구실이 국비로 운영될 뿐만 아니라 학생 지원도 좋다고 해서 연구실에 들어갔는데 실상은 정반대였다.
정부 R&D 자금 일부가 교수 개인 용도로 사용되고 있어서다. 실험실에 배치된 뒤 같은 은행의 통장을 2개 발급받은 뒤 하나는 연구실 총무를 맡은 대학원생에게 제출했는데 그 통장으로 들어오는 연구 보조금은 교수가 따로 사용했다. C씨는 "학점과 졸업이 걸려 있어 모른 체할 수밖에 없다. 국민 세금이 교수의 탐욕을 채우는 데 쓰이고 있다"며 울분을 토했다.
이 같은 불법적 행태는 교수와 학생, 연구소와 연구원 모두가 `공범`으로 참여하기 때문에 좀처럼 적발되지 않는다.
대학 연구실의 한 박사는 "처음에는 학생들 불만이 크지만 지도교수의 눈 밖에 나면 졸업이 힘든 것을 알기 때문에 이제는 모두 그러려니 하는 분위기가 됐다"고 실토했다. 그는 "영수증이나 인건비 내역 등을 보면 정상적으로 연구를 수행하는 것처럼 보이기 때문에 내부 고발자가 나타나지 않는 이상 찾아내기 힘들다"고 덧붙였다.
교수가 `연구비깡`으로 자금을 빼먹자 학생들도 아무런 죄의식 없이 똑같은 수법을 사용하고 있다. 한 사립대학 이공계 연구실의 박사과정 4년차 K씨는 "연구비깡을 통해 노트북컴퓨터를 구입한 적이 있다"며 "연구비 유용과 관련한 문제가 터졌을 때만 조심하면 된다"고 했다. 그는 "그나마 요즘은 과거에 비해 연구비깡 사례가 점잖아진 편"이라고 말했다.
감사원은 2011년 국가 R&D사업 관리실태 감사를 통해 △인건비 과다지급 △구입하지 않은 기자재를 구입한 것으로 허위증빙서류 제출 △연구기자재 구입비 증빙서류의 이중제출 등 다양한 형태의 연구비 불법 사례를 지적한 바 있다.
이른바 `좀비기업`도 R&D 자금을 빼먹는 존재다. 자체 제품과 매출이 거의 없이 정부 연구개발자금으로 회사 인건비와 운영비를 충당하는 기업이다. 이런 기업들은 정부 R&D의 평가지표에 능통해 손쉽게 과제를 따낸다는 분석도 있다. 한 벤처기업 사장은 "매출이 별로 없어도 회사를 계속 굴려야 하기 때문에 정부 R&D 자금을 받아내야만 하는 형편"이라고 전했다.
특허기술의 민간기업 이전에도 허수가 많다.
정부 지원을 받아 특허기술 이전업무를 하는 모 기관에 근무했던 P씨는 정부에서 발표하는 기술이전 실적을 믿지 않는다.
정부에서 `건수`를 늘리라는 요구가 오면 담당 직원은 평소 알고 지내던 기업에 특허기술을 사갈 것을 부탁하고 그 대가로 용역보고서를 맡기는 등의 방법으로 보답을 해준다는 것이다. 그는 "기술이전 실적을 보면 같은 `등장인물`이 그 기업과 연관성이 없는 다른 기술까지 사가는 경향이 있다"면서 "특허기술로 사업실적이 별로 없는 경우에는 이 같은 거래가 있었다고 보면 된다"고 말했다.
Ron Paul: "The Great Cyprus Bank Robbery"
From Zero Hedge:
Remember that under a fractional reserve banking system only a small percentage of deposits is kept on hand for dispersal to depositors. The rest of the money is loaned out. Not only are many of the loans made by these banks going bad, but the reserve requirement in Euro-system countries is only one percent! If just one euro out of every hundred is withdrawn from banks, the bank reserves would be completely exhausted and the whole system would collapse. Is it any wonder, then, that the EU fears a major bank run and has shipped billions of euros to Cyprus? The elites in the EU and IMF failed to learn their lesson from the popular backlash to these tax proposals, and have openly talked about using Cyprus as a template for future bank bailouts. This raises the prospect of raids on bank accounts, pension funds, and any investments the government can get its hands on. In other words, no one's money is safe in any financial institution in Europe. Bank runs are now a certainty in future crises, as the people realize that they do not really own the money in their accounts. How long before bureaucrat and banker try that here?
http://www.zerohedge.com/news/2013-04-02/ron-paul-great-cyprus-bank-robbery
Remember that under a fractional reserve banking system only a small percentage of deposits is kept on hand for dispersal to depositors. The rest of the money is loaned out. Not only are many of the loans made by these banks going bad, but the reserve requirement in Euro-system countries is only one percent! If just one euro out of every hundred is withdrawn from banks, the bank reserves would be completely exhausted and the whole system would collapse. Is it any wonder, then, that the EU fears a major bank run and has shipped billions of euros to Cyprus? The elites in the EU and IMF failed to learn their lesson from the popular backlash to these tax proposals, and have openly talked about using Cyprus as a template for future bank bailouts. This raises the prospect of raids on bank accounts, pension funds, and any investments the government can get its hands on. In other words, no one's money is safe in any financial institution in Europe. Bank runs are now a certainty in future crises, as the people realize that they do not really own the money in their accounts. How long before bureaucrat and banker try that here?
http://www.zerohedge.com/news/2013-04-02/ron-paul-great-cyprus-bank-robbery
Do You Belive China's GDP Numbers?
Again, China is Korea's largest trading partner.
From Mish's blog:
Last year China’s official growth rate was 7.8%, above the 7.5% target but the lowest number in many years and far lower than the more than 10% growth rates China had generated for the past two decades.
But even with the lower growth numbers throughout the year economists were puzzled by evidence that the economy was in fact growing more slowly than the official numbers suggested. Energy consumption in China, for example, usually grows more quickly than GDP, but surprisingly, in 2012 energy usage grew by only 5.5%, well below the official growth rate of 7.8%. Other indicators also indicated that growth may have been lower than the official numbers suggested.
While some of the sell-side economists still insist that China’s growth remained high and healthy enough, in fact among independent economists who specialize in the Chinese economy, both among Chinese and foreign economists there has been growing skepticism. A consensus is developing that China grew by less that 7.8% in 2012. For example Stephen Green at Standard Chartered, one of my favorites of the sell-side economists, refigured his numbers and guesses that instead of 9.3% for 2011 and 7.8% for 2012 (the official numbers), actual growth might have been 7.2% for 2011 and 5.5% for 2012. Other economists are suggesting even lower numbers, closer to zero.
I don’t have my own estimates because it seems to me that all of these attempts to measure economic growth are actually measuring economic activity, which may itself overstate growth. If you spend $100 million each on two separate bridges, one of which is actively used and the other rarely used, the official measures will have them contributing the same amount to GDP, even though the former creates real value and the latter does not. In either case if you then adjust the overall GDP numbers downwards by examining electricity usage, cement consumption, and so on, as the likes of Stephen Green do, you may end up with a more accurate estimate of economic activity, but you still treat the two bridges as contributing the same amount.
It isn’t until you write down the debt associated with the second bridge that you end up with a more meaningful measure of GDP. Of course this makes the whole process very confusing and it is hard to compare different estimates. It isn’t always clear how these estimates are reached, but as far as I can tell nearly all, if not all, of the downward revisions provided by various skeptical economists are still measures of economic activity, and do not include estimates for debt write-down associated with unnecessary investment.
There have been so many articles in the Chinese and foreign press about problems in the banking system that I won’t bother going through the topic much more except to note that Beijing cannot tolerate rapid credit growth and it cannot tolerate slow GDP growth. The problem is that it can only choose both or neither. There are no other options.
As credit concerns continue to rise, expect Beijing eventually to bite the bullet and stamp down on debt, in which case expect GDP growth rates to drop much, much more, in fact to well below anything we saw in 2012. The question is not whether this will happen, but when. Once Beijing is confident enough about its grip over vested interests and the consensus has developed within the leadership, growth rates will drop very sharply.
So this is probably why former Premier Wen is warning about the difficulty China faces in reforming the economy – a warning that he and Premier Li have made many times before but never more shrilly.
I have said often enough that we will be able to judge how resolute Beijing is and how capable of overcoming vested interests by how quickly credit growth is constrained and, with it, GPD growth. I expect to see high GDP growth (close to 8%) in the first half of the year but, if Beijing is able to move quickly, I expect growth to slow significantly in the second half.
If GDP growth does not slow, I will be worried about how long it takes the new leadership to get their arms around the problem that they clearly recognize (although perhaps still underestimate). The signals so far are good. Growth may be slowing even quicker than I had originally anticipated.
http://globaleconomicanalysis.blogspot.kr/2013/04/do-you-believe-chinas-gdp-numbers.html
From Mish's blog:
Last year China’s official growth rate was 7.8%, above the 7.5% target but the lowest number in many years and far lower than the more than 10% growth rates China had generated for the past two decades.
But even with the lower growth numbers throughout the year economists were puzzled by evidence that the economy was in fact growing more slowly than the official numbers suggested. Energy consumption in China, for example, usually grows more quickly than GDP, but surprisingly, in 2012 energy usage grew by only 5.5%, well below the official growth rate of 7.8%. Other indicators also indicated that growth may have been lower than the official numbers suggested.
While some of the sell-side economists still insist that China’s growth remained high and healthy enough, in fact among independent economists who specialize in the Chinese economy, both among Chinese and foreign economists there has been growing skepticism. A consensus is developing that China grew by less that 7.8% in 2012. For example Stephen Green at Standard Chartered, one of my favorites of the sell-side economists, refigured his numbers and guesses that instead of 9.3% for 2011 and 7.8% for 2012 (the official numbers), actual growth might have been 7.2% for 2011 and 5.5% for 2012. Other economists are suggesting even lower numbers, closer to zero.
I don’t have my own estimates because it seems to me that all of these attempts to measure economic growth are actually measuring economic activity, which may itself overstate growth. If you spend $100 million each on two separate bridges, one of which is actively used and the other rarely used, the official measures will have them contributing the same amount to GDP, even though the former creates real value and the latter does not. In either case if you then adjust the overall GDP numbers downwards by examining electricity usage, cement consumption, and so on, as the likes of Stephen Green do, you may end up with a more accurate estimate of economic activity, but you still treat the two bridges as contributing the same amount.
It isn’t until you write down the debt associated with the second bridge that you end up with a more meaningful measure of GDP. Of course this makes the whole process very confusing and it is hard to compare different estimates. It isn’t always clear how these estimates are reached, but as far as I can tell nearly all, if not all, of the downward revisions provided by various skeptical economists are still measures of economic activity, and do not include estimates for debt write-down associated with unnecessary investment.
There have been so many articles in the Chinese and foreign press about problems in the banking system that I won’t bother going through the topic much more except to note that Beijing cannot tolerate rapid credit growth and it cannot tolerate slow GDP growth. The problem is that it can only choose both or neither. There are no other options.
As credit concerns continue to rise, expect Beijing eventually to bite the bullet and stamp down on debt, in which case expect GDP growth rates to drop much, much more, in fact to well below anything we saw in 2012. The question is not whether this will happen, but when. Once Beijing is confident enough about its grip over vested interests and the consensus has developed within the leadership, growth rates will drop very sharply.
So this is probably why former Premier Wen is warning about the difficulty China faces in reforming the economy – a warning that he and Premier Li have made many times before but never more shrilly.
I have said often enough that we will be able to judge how resolute Beijing is and how capable of overcoming vested interests by how quickly credit growth is constrained and, with it, GPD growth. I expect to see high GDP growth (close to 8%) in the first half of the year but, if Beijing is able to move quickly, I expect growth to slow significantly in the second half.
If GDP growth does not slow, I will be worried about how long it takes the new leadership to get their arms around the problem that they clearly recognize (although perhaps still underestimate). The signals so far are good. Growth may be slowing even quicker than I had originally anticipated.
http://globaleconomicanalysis.blogspot.kr/2013/04/do-you-believe-chinas-gdp-numbers.html
Tuesday, April 2, 2013
Cash Cow: Of the 50 Largest US Companies, Who has the Cash? Who has the Debt?
From Mish's blog:
Here's the question of the day: How much actual cash is on hand at corporations?
Fed by glowing reports from sell-side analysts, most investors are unaware that except for a handful of companies, there is no cash, only debt. Even counting short-term investments there is surprisingly little cash on hand.
Courtesy of Mike Klaczynski at Tableau Software please consider the latest update to my periodic "Cash Cow" interactive report.
The data for this sheet is from Yahoo!Finance. Scroll over any of the bars (not the company name) to see more details.
Cash is a liability not an asset for banks, so I left off financial corporations in the default map. Certainly the $277 billion in cash on hand at Bank of America is not a sign of genuine strength or profitability.
As you can see, actual cash on hand at non-financial corporations is a net negative $850 billion.
Five Cash Cows With Genuine Cash
The grand total of actual available cash (at the five companies that have any) is $39.71 billion.
http://globaleconomicanalysis.blogspot.kr/2013/04/cash-cow-of-50-largest-us-companies-who.html
Here's the question of the day: How much actual cash is on hand at corporations?
Fed by glowing reports from sell-side analysts, most investors are unaware that except for a handful of companies, there is no cash, only debt. Even counting short-term investments there is surprisingly little cash on hand.
Courtesy of Mike Klaczynski at Tableau Software please consider the latest update to my periodic "Cash Cow" interactive report.
The data for this sheet is from Yahoo!Finance. Scroll over any of the bars (not the company name) to see more details.
Cash is a liability not an asset for banks, so I left off financial corporations in the default map. Certainly the $277 billion in cash on hand at Bank of America is not a sign of genuine strength or profitability.
As you can see, actual cash on hand at non-financial corporations is a net negative $850 billion.
Five Cash Cows With Genuine Cash
- Apple (AAPL) $16.15 Billion
- Chevron (CVX) $8.03 Billion
- Google (GOOG) $7.57 Billion
- Qualcomm (QCOM) $4.26 Billion
- Amazon (AMZN) $3.70 Billion
The grand total of actual available cash (at the five companies that have any) is $39.71 billion.
http://globaleconomicanalysis.blogspot.kr/2013/04/cash-cow-of-50-largest-us-companies-who.html
Korean Government Offers Cuts In Tax, House Supply To Boost Property Market
From Yonhap:
The government on Monday announced a set of measures aimed at revitalizing the country's sluggish real estate market, including tax breaks for first-time homeowners and a cut in supply of new homes to keep prices from falling.
The measures are the first of their kind under the Park Geun-hye administration, which came into office late February, but they mark a complete turnaround from the previous policy where the government sought to curb housing prices by increasing supply.
"The government will break with its earlier stance of suppressing demand and expanding supplies that was adopted during a phase of price hikes, and seek to ensure an early recovery of the housing market through tax and financial incentives, along with relaxation of its regulations and its involvement in the market," the Ministry of Land, Infrastructure and Transport said in a press release.
http://english.yonhapnews.co.kr/business/2013/04/01/78/0501000000AEN20130401010651320F.HTML
The government on Monday announced a set of measures aimed at revitalizing the country's sluggish real estate market, including tax breaks for first-time homeowners and a cut in supply of new homes to keep prices from falling.
The measures are the first of their kind under the Park Geun-hye administration, which came into office late February, but they mark a complete turnaround from the previous policy where the government sought to curb housing prices by increasing supply.
"The government will break with its earlier stance of suppressing demand and expanding supplies that was adopted during a phase of price hikes, and seek to ensure an early recovery of the housing market through tax and financial incentives, along with relaxation of its regulations and its involvement in the market," the Ministry of Land, Infrastructure and Transport said in a press release.
http://english.yonhapnews.co.kr/business/2013/04/01/78/0501000000AEN20130401010651320F.HTML
Monday, April 1, 2013
Kim Jeong-hoon, Former Cabinet Office Candidate, Criticizing Change-Averse Forces of Korea: "마녀사냥에 낙마" 김종훈, WP에 격정 기고
Some of Kim's remarks on chaebols (e.g., chaebols moving its manufacturing offshore) and the state of the Korean economy echo what I have pointed out on this blog. If he really cares for Korea, the country of his birth, he could have proposed some constructive suggestions as to how Korea can address the underlying structural problems keeping the Korean SMEs from being more globally competitive and an approach he would have taken to contribute to a paradigm shift in the Korean economy by implementing the idea of a "creative economy" in this article published in Washington Post. That would have been his real contribution and manifestation of his pride in his Korean heritage.
From Washington Post:
I was honored recently to be asked by South Korean President Park Geun-hye to lead a new wing of the government. She confided to me that although I was a U.S. citizen, I had the right experience and the know-how to launch the Ministry of Science, Information, Communication, Technology and Future Planning. We would be charged with bringing about a paradigm shift in Korea’s economy.
For all its achievements as an “Asian tiger,” South Korea faces profound challenges. Lacking natural resources, the country forged an export-led economy based on its hard-working people and their indefatigable industry. But outward appearances mask a nagging weakness. For instance, the top 10 Korean conglomerates account for 80 percent of the country’s gross domestic product but employ less than 6 percent of the workforce. Why? Because they move production overseas to remain price-competitive or to placate trading partners. Unemployment is worryingly high, especially among college graduates. Furthermore, the durability of the South Korean miracle is threatened by rising economic prowess of much bigger neighbors such as India and China.
In response to this challenge, the president has pledged to nurture a “creative economy” that will boost globally competitive small and medium-size businesses by leveraging science and communication technologies in a way that generates good jobs for young people at home — not to replace the export-focused big corporations but to complement them.
http://www.washingtonpost.com/opinions/jeong-kim-a-return-to-south-korea-thwarted-by-nationalism/2013/03/29/fa674336-97f8-11e2-814b-063623d80a60_story.html
연합뉴스로부터:
이중국적 논란 등으로 전격 사임한 김종훈 전 미래창조과학부 장관 내정자는 31일(현지시간) 미국 유력 일간 워싱턴포스트(WP)에 실린 기고문에서 자신의 낙마에 대해 서운함과 아쉬움을 나타냈다.
김 전 내정자는 '새로운 세상의 오래된 편견'(Old prejudices in new world)이라는 제목의 글에서 사임 과정을 소개한 뒤 "현재 (한국의) 정치적 환경과 기업 환경에서는 `아웃사이더'(outsider)인 내가 장관직을 수행할 수 없다는 게 명백해졌다"며 사임 이유를 설명했다.
그는 또 한국이 `아시아의 호랑이'로 고속성장한 데 대해 자부심을 느낀다면서도 한국의 10대 재벌기업이 국내총생산(GDP)의 80%를 차지하지만 이들의 고용 규모는 전체의 6%에도 못 미치는 등 내부적으로는 문제가 많다고 설명했다.
그러면서 한국은 가격경쟁력 유지 등을 위해 생산시설을 외국으로 옮기고 있고, 대학 졸업자 실업률이 지나치게 높고, 중국과 인도 등 이웃국가들의 부상으로 위협받고 있다고 진단했다.
From Washington Post:
I was honored recently to be asked by South Korean President Park Geun-hye to lead a new wing of the government. She confided to me that although I was a U.S. citizen, I had the right experience and the know-how to launch the Ministry of Science, Information, Communication, Technology and Future Planning. We would be charged with bringing about a paradigm shift in Korea’s economy.
For all its achievements as an “Asian tiger,” South Korea faces profound challenges. Lacking natural resources, the country forged an export-led economy based on its hard-working people and their indefatigable industry. But outward appearances mask a nagging weakness. For instance, the top 10 Korean conglomerates account for 80 percent of the country’s gross domestic product but employ less than 6 percent of the workforce. Why? Because they move production overseas to remain price-competitive or to placate trading partners. Unemployment is worryingly high, especially among college graduates. Furthermore, the durability of the South Korean miracle is threatened by rising economic prowess of much bigger neighbors such as India and China.
In response to this challenge, the president has pledged to nurture a “creative economy” that will boost globally competitive small and medium-size businesses by leveraging science and communication technologies in a way that generates good jobs for young people at home — not to replace the export-focused big corporations but to complement them.
http://www.washingtonpost.com/opinions/jeong-kim-a-return-to-south-korea-thwarted-by-nationalism/2013/03/29/fa674336-97f8-11e2-814b-063623d80a60_story.html
연합뉴스로부터:
이중국적 논란 등으로 전격 사임한 김종훈 전 미래창조과학부 장관 내정자는 31일(현지시간) 미국 유력 일간 워싱턴포스트(WP)에 실린 기고문에서 자신의 낙마에 대해 서운함과 아쉬움을 나타냈다.
김 전 내정자는 '새로운 세상의 오래된 편견'(Old prejudices in new world)이라는 제목의 글에서 사임 과정을 소개한 뒤 "현재 (한국의) 정치적 환경과 기업 환경에서는 `아웃사이더'(outsider)인 내가 장관직을 수행할 수 없다는 게 명백해졌다"며 사임 이유를 설명했다.
그는 또 한국이 `아시아의 호랑이'로 고속성장한 데 대해 자부심을 느낀다면서도 한국의 10대 재벌기업이 국내총생산(GDP)의 80%를 차지하지만 이들의 고용 규모는 전체의 6%에도 못 미치는 등 내부적으로는 문제가 많다고 설명했다.
그러면서 한국은 가격경쟁력 유지 등을 위해 생산시설을 외국으로 옮기고 있고, 대학 졸업자 실업률이 지나치게 높고, 중국과 인도 등 이웃국가들의 부상으로 위협받고 있다고 진단했다.
Cyprus Parliament President Says "No Future" Under Troika, Calls For "Iceland" Solution
From Zero Hedge:
Just last week Yiannakis Omirou, Cypriot House of Representatives President, was calling for the nation to accept it is "time for responsibility" as they progressed towards a final solution; and yet today, as Cyprus' Famagusta reports, he believes the 'Troika-imposed' responsibility will, "turn Cyprus into a colony of the worst possible type." His 'Icelandic' solution is to "leave the Troika and EMS behind," to ensure "national independence, national sovereignty, moral integrity, and economic independence." He may have a point; judging from the chart below of the Troika's poster-child Greece, relative to Iceland, things are not going so well. As Omirou ominously concludes, "if we remain bound by the Troika and the memorandum Cyprus’ destiny is already foretold and there will be no future."
http://www.zerohedge.com/news/2013-03-31/cyprus-parliament-president-says-no-future-under-troika-calls-iceland-solution
Just last week Yiannakis Omirou, Cypriot House of Representatives President, was calling for the nation to accept it is "time for responsibility" as they progressed towards a final solution; and yet today, as Cyprus' Famagusta reports, he believes the 'Troika-imposed' responsibility will, "turn Cyprus into a colony of the worst possible type." His 'Icelandic' solution is to "leave the Troika and EMS behind," to ensure "national independence, national sovereignty, moral integrity, and economic independence." He may have a point; judging from the chart below of the Troika's poster-child Greece, relative to Iceland, things are not going so well. As Omirou ominously concludes, "if we remain bound by the Troika and the memorandum Cyprus’ destiny is already foretold and there will be no future."
http://www.zerohedge.com/news/2013-03-31/cyprus-parliament-president-says-no-future-under-troika-calls-iceland-solution
Australia And China To Enable Direct Currency Convertibility
From Zero Hedge:
A month ago we pointed out that as a result of Australia's unprecedented reliance on China as a target export market, accounting for nearly 30% of all Australian exports (with the flipside being just as true, as Australia now is the fifth-biggest source of Chinese imports), the two countries may as well be joined at the hip.
Over the weekend, Australia appears to have come to the same conclusion, with the Australian reporting that the land down under is set to say goodbye to the world's "reserve currency" in its trade dealings with the world's biggest marginal economic power, China, and will enable the direct convertibility of the Australian dollar into Chinese yuan, without US Dollar intermediation, in the process "slashing costs for thousands of business" and also confirming speculation that China is fully intent on, little by little, chipping away at the dollar's reserve currency status until one day it no longer is.
Why is this so very critical? For the simple reason that the free lunch the US has enjoyed ever since the advent of the US dollar as world reserve currency, may be coming to an end as other, more aggressive alternatives - both fiat, and hard-asset based - to the USD appear. And since there is no such thing as a free lunch, all the deferred pain the US Treasury Department has been able to offset thanks to its global currency monopoly status will come crashing down the second the world starts getting doubts about the true nature of just who the real reserve currency will be in the future.
A month ago we pointed out that as a result of Australia's unprecedented reliance on China as a target export market, accounting for nearly 30% of all Australian exports (with the flipside being just as true, as Australia now is the fifth-biggest source of Chinese imports), the two countries may as well be joined at the hip.
Over the weekend, Australia appears to have come to the same conclusion, with the Australian reporting that the land down under is set to say goodbye to the world's "reserve currency" in its trade dealings with the world's biggest marginal economic power, China, and will enable the direct convertibility of the Australian dollar into Chinese yuan, without US Dollar intermediation, in the process "slashing costs for thousands of business" and also confirming speculation that China is fully intent on, little by little, chipping away at the dollar's reserve currency status until one day it no longer is.
Why is this so very critical? For the simple reason that the free lunch the US has enjoyed ever since the advent of the US dollar as world reserve currency, may be coming to an end as other, more aggressive alternatives - both fiat, and hard-asset based - to the USD appear. And since there is no such thing as a free lunch, all the deferred pain the US Treasury Department has been able to offset thanks to its global currency monopoly status will come crashing down the second the world starts getting doubts about the true nature of just who the real reserve currency will be in the future.
Top 4 Conglomerates' Wealth Grows Faster Than Smaller Competitors
Unless the underlying structural problems are addressed, this gap will grow.
From Yonhap:
Profits and sales of South Korea's top four business groups have grown much faster than their smaller competitors over the past five years, a report showed Monday, indicating a further concentration of wealth in a small number of top-tier conglomerates.
According to the report by the Fair Trade Commission (FTC), the four -- Samsung, Hyundai Motor, SK and LG -- saw their combined net profit account for 79.8 percent of the total racked up by the country's 30 largest conglomerates this year. This is up from 70.5 percent tallied in 2009.
http://english.yonhapnews.co.kr/business/2013/04/01/0501000000AEN20130401007700320.HTML
From Yonhap:
Profits and sales of South Korea's top four business groups have grown much faster than their smaller competitors over the past five years, a report showed Monday, indicating a further concentration of wealth in a small number of top-tier conglomerates.
According to the report by the Fair Trade Commission (FTC), the four -- Samsung, Hyundai Motor, SK and LG -- saw their combined net profit account for 79.8 percent of the total racked up by the country's 30 largest conglomerates this year. This is up from 70.5 percent tallied in 2009.
http://english.yonhapnews.co.kr/business/2013/04/01/0501000000AEN20130401007700320.HTML
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