In a tangled world, there are geopolitical concerns between the East and the West.
Of course the geopolitical dynamic is playing out among the Asians as well.
According to foreign media outlets, the third Trilateral Summit Meeting involving Korea, Japan and China over the weekend failed to induce China to take a hard-line stance against North Korea regarding the Cheonan incident.
Monday, May 31, 2010
Sunday, May 30, 2010
Higher Education Bubble
Korea is not immune from this conundrum.
From The New York Times:
Like many middle-class families, Cortney Munna and her mother began the college selection process with a grim determination. They would do whatever they could to get Cortney into the best possible college, and they maintained a blind faith that the investment would be worth it.
Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college, and affording the full monthly payments would be a struggle. For much of the time since her 2005 graduation, she’s been enrolled in night school, which allows her to defer loan payments.
This is not a long-term solution, because the interest on the loans continues to pile up. So in an eerie echo of the mortgage crisis, tens of thousands of people like Ms. Munna are facing a reckoning. They and their families made borrowing decisions based more on emotion than reason, much as subprime borrowers assumed the value of their houses would always go up.
Meanwhile, universities like N.Y.U. enrolled students without asking many questions about whether they could afford a $50,000 annual tuition bill. Then the colleges introduced the students to lenders who underwrote big loans without any idea of what the students might earn someday — just like the mortgage lenders who didn’t ask borrowers to verify their incomes.
Ms. Munna does not want to walk away from her loans in the same way many mortgage holders are. It would be difficult in any event because federal bankruptcy law makes it nearly impossible to discharge student loan debts. But unless she manages to improve her income quickly, she doesn’t have a lot of good options for digging out.
http://www.nytimes.com/2010/05/29/your-money/student-loans/29money.html?src=me
From The New York Times:
Like many middle-class families, Cortney Munna and her mother began the college selection process with a grim determination. They would do whatever they could to get Cortney into the best possible college, and they maintained a blind faith that the investment would be worth it.
Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college, and affording the full monthly payments would be a struggle. For much of the time since her 2005 graduation, she’s been enrolled in night school, which allows her to defer loan payments.
This is not a long-term solution, because the interest on the loans continues to pile up. So in an eerie echo of the mortgage crisis, tens of thousands of people like Ms. Munna are facing a reckoning. They and their families made borrowing decisions based more on emotion than reason, much as subprime borrowers assumed the value of their houses would always go up.
Meanwhile, universities like N.Y.U. enrolled students without asking many questions about whether they could afford a $50,000 annual tuition bill. Then the colleges introduced the students to lenders who underwrote big loans without any idea of what the students might earn someday — just like the mortgage lenders who didn’t ask borrowers to verify their incomes.
Ms. Munna does not want to walk away from her loans in the same way many mortgage holders are. It would be difficult in any event because federal bankruptcy law makes it nearly impossible to discharge student loan debts. But unless she manages to improve her income quickly, she doesn’t have a lot of good options for digging out.
http://www.nytimes.com/2010/05/29/your-money/student-loans/29money.html?src=me
Good Government vs. Less Government
From the Baseline Scenario:
My primary contention below is that many of these measures used in the composite Heritage Index have nothing to do with less government, and a lot more to do with good government. It is these measures of good government that correlate to economic growth and drive the overall correlation between the “Freedom Index” and positive outcomes. Secondarily, I will argue that many of the other items in the index (like investment freedom) are not causes of growth, but rather outcomes of growth.
http://baselinescenario.com/2010/05/27/heritage-index-good-government-vs-less-government/
My primary contention below is that many of these measures used in the composite Heritage Index have nothing to do with less government, and a lot more to do with good government. It is these measures of good government that correlate to economic growth and drive the overall correlation between the “Freedom Index” and positive outcomes. Secondarily, I will argue that many of the other items in the index (like investment freedom) are not causes of growth, but rather outcomes of growth.
http://baselinescenario.com/2010/05/27/heritage-index-good-government-vs-less-government/
Friday, May 28, 2010
On North Korea
From Zero Hedge:
North Korea warns of “all out war”.
http://www.zerohedge.com/article/so-much-reconciliation-north-korea-warns-all-out-war-press-conference
North Korea warns of “all out war”.
http://www.zerohedge.com/article/so-much-reconciliation-north-korea-warns-all-out-war-press-conference
Samsung’s Big Bet On Chip and LCD
Samsung announced last week it would spend 26 trillion won (about 22.5 billion USD) this year on its chip, flat screen and R&D.
According to financial times, Samsung’s investment budget will be bigger than those of Intel, IBM and Sony combined.
The chairman Lee Kun-hee said in a ceremony at its new chip plant in Hwasung “Although the global economy is still uncertain and business conditions are expected to change rapidly, we have to increase investment and hire more people to take global business opportunities.”
Samsung has a good track record in betting on risky investments before.
Yet the current global economic situation is quite different from the past. We would assume that Samsung knows demand on the consumer side is dwindling worldwide for now and it would seem very unlikely that the U.S. would go on a debt-fuelled consumption binge. There is policy tightening all over the world, stimuli impacts fading. Where do they see a rise in demand for their chips and LCDs rising? Does Samsung see demand would rise in a certain area where we hope it doesn’t happen?
As for new business investment, again they know they need to go beyond a fast follower strategy and have invested in it accordingly for some time, yet they haven’t seen any fruitful outcome. As the chairman Lee admits, they have a long way to go in their new business undertaking.
On the other side of the coin, it would be a real progress for the Korean high tech sector if SMEs come up with the innovation and the Korean government provides them with incentives and infrastructure to take risks in new endeavor in a meaningful sense.
According to financial times, Samsung’s investment budget will be bigger than those of Intel, IBM and Sony combined.
The chairman Lee Kun-hee said in a ceremony at its new chip plant in Hwasung “Although the global economy is still uncertain and business conditions are expected to change rapidly, we have to increase investment and hire more people to take global business opportunities.”
Samsung has a good track record in betting on risky investments before.
Yet the current global economic situation is quite different from the past. We would assume that Samsung knows demand on the consumer side is dwindling worldwide for now and it would seem very unlikely that the U.S. would go on a debt-fuelled consumption binge. There is policy tightening all over the world, stimuli impacts fading. Where do they see a rise in demand for their chips and LCDs rising? Does Samsung see demand would rise in a certain area where we hope it doesn’t happen?
As for new business investment, again they know they need to go beyond a fast follower strategy and have invested in it accordingly for some time, yet they haven’t seen any fruitful outcome. As the chairman Lee admits, they have a long way to go in their new business undertaking.
On the other side of the coin, it would be a real progress for the Korean high tech sector if SMEs come up with the innovation and the Korean government provides them with incentives and infrastructure to take risks in new endeavor in a meaningful sense.
Thursday, May 27, 2010
Living in Historic times
Quite a few financial experts warn us of what’s coming later this year and thereafter. Some contend the U.S. has the last bullet left. Agree or not, we seem to live in historic times for sure.
Watching what’s been going on around the globe sometimes makes us feel helpless and want to ask God if he’s going to let it happen like this.
And yet, the whole situation makes us appreciate once again how precious our lives are and realize how grateful we should be every day.
Two comments from Mish’s blog:
Dr. Evil says:
By now I would think we all would realize that we have no say. There is no longer a republic. This is so obvious that it should not even need to be pointed out. We are now without any real money (a crime) are directly taxed (a crime) have had most of our rights turned into privilages (a crime) and yet no one seems to even notice. Protests, petitions, voting does nothing. After the bailouts you would think we would "get it" but no, we keep going down the same pointless road. Lts face it the globalists have won - so much so that we wll not even aknowlege they exist and have enslaved us. If you want to keep on doing the same thing for another 20 years that you did for the last then please go ahead - you will get the same result
Rebel Farmer says:
Dr Evil, everything you say is true. And sometimes this knowledge immobilizes me. And the knowing that I can't do anything about it sometimes makes a little tear form up in my eyes. Then I get a grip on my emotions. Yes, I know it is futile, but I still call my congress critters at least once a week. I sign the petitions and send the emails. Some day there will be enough of us for the inevitable revolution. I have to stay sane and engaged until that day comes.
Watching what’s been going on around the globe sometimes makes us feel helpless and want to ask God if he’s going to let it happen like this.
And yet, the whole situation makes us appreciate once again how precious our lives are and realize how grateful we should be every day.
Two comments from Mish’s blog:
Dr. Evil says:
By now I would think we all would realize that we have no say. There is no longer a republic. This is so obvious that it should not even need to be pointed out. We are now without any real money (a crime) are directly taxed (a crime) have had most of our rights turned into privilages (a crime) and yet no one seems to even notice. Protests, petitions, voting does nothing. After the bailouts you would think we would "get it" but no, we keep going down the same pointless road. Lts face it the globalists have won - so much so that we wll not even aknowlege they exist and have enslaved us. If you want to keep on doing the same thing for another 20 years that you did for the last then please go ahead - you will get the same result
Rebel Farmer says:
Dr Evil, everything you say is true. And sometimes this knowledge immobilizes me. And the knowing that I can't do anything about it sometimes makes a little tear form up in my eyes. Then I get a grip on my emotions. Yes, I know it is futile, but I still call my congress critters at least once a week. I sign the petitions and send the emails. Some day there will be enough of us for the inevitable revolution. I have to stay sane and engaged until that day comes.
Wednesday, May 26, 2010
Deflation vs. Inflation
Many of us are well aware of the whole inflation/deflation debate.
We know the current state of the global economy. We also know what governments and central banks around the globe have been doing. We know what has been driving the worldwide equity markets. We know what’s been going on in the private sector as well.
For the next 6 months or so, we would seem to face the deflationary trend globally. As for inflation, let’s just worry about it later.
Let’s remember how grateful we are for being able to live every day to the fullest.
We know the current state of the global economy. We also know what governments and central banks around the globe have been doing. We know what has been driving the worldwide equity markets. We know what’s been going on in the private sector as well.
For the next 6 months or so, we would seem to face the deflationary trend globally. As for inflation, let’s just worry about it later.
Let’s remember how grateful we are for being able to live every day to the fullest.
Subscribe to:
Posts (Atom)