Can Mary Barra match this?

The FT printed a poem by Li Shufu, chairman of Geely and Volvo, today:

Winter goes, spring arrives.  We quietly bury ourselves in work.
Don't argue, don't make noise.  Support Chinese brands.
Winds from Europe and America, waves from Japan and Korea.
       Why revere foreign things?
Chinese cars fly even higher. Fight bravely for a decade to make great changes.

(translated by Tom Mitchell)

The beatings will continue until morale improves: businesses lack animal spirits.

In the General Theory, Keynes pointed out that the psychology of businessmen is actually quite fragile. That is why that once they were scared (e.g. by the crash and depression) it was hard to get them investing again. "Animal spirits," according to Keynes, had to be nurtured and encouraged or they would not appear. He actually said that making new investments is usually irrational and that a mood of unrealistic optimism is needed for this to occur.

Those in government seldom understand this. They think business people are raring to go at all times and that restraining, not encouraging, them is the best policy. The truth is that businesses all over the world are now sitting on their hands and reacting to demand rather than anticipating it. They are dispirited.  Increasingly anti-business policies around the world are making the situation worse. Negative psychology is the big risk of recession/depression today.

Will Zimbabwe's central bank emerge as the world's most effective?

Perhaps. It centrainly has less scope to harm its citizens than does the Fed, for example.  

From Reuters:

Zimbabwe appoints banker Mangudya new central bank governor


Sun Mar 23, 2014 7:18pm IST
* Mangudya is CEO at Zimbabwe's largest bank by assets

* RBZ influence diminished after adopting foreign currencies

* Central bank gets $100 million for inter-bank market

HARARE, March 23 (Reuters) - President Robert Mugabe has appointed banker John Mangudya to head the Reserve Bank of Zimbabwe (RBZ) at a time when the central bank's power and influence have greatly diminished, finance minister Patrick Chinamasa said on Sunday.

The southern African country ditched its local currency in 2009 in favour of the U.S. dollar, leaving the RBZ unable to set interest rates or bail out troubled banks.

An economist by training, Mangudya is chief executive at CBZ Holdings, the country's largest banking group by assets. He takes over from Gideon Gono, who put the RBZ printing press into overdrive to keep pace with hyper-inflation.

"I can confirm that the president has appointed John Mangudya as the new governor of the Reserve Bank of Zimbabwe," Chinamasa told Reuters.

Mangudya worked for the central bank as an economist for 10 years until 1996 before joining the African Export-Import Bank (Afrexim) as its manager for southern Africa.

His five-year term will start on May 1.

Zimbabwe was plagued by acute shortages of foreign currency and basic goods at the height of its decade-long economic crisis and inflation spiked to 500 billion percent in 2008.

By that time, funding for most government departments was coming via the central bank, and official government records show that it added $500 million in debt during Gono's tenure.

Mangudya will take over at a time when the central bank is seeking to establish an inter-bank market for the first time in five years.

The Afrexim bank gave the RBZ a $100 million loan on Saturday to set up the market, which allows the central bank to set an overnight accommodation interest rate that would act as the benchmark for market rates.



The central bank in January published an interest rate range guide for the money market to try and rein in large disparities in deposit and lending rates that it said were squeezing liquidity. (Reporting by MacDonald Dzirutwe; Editing by Sonya Hepinstall)

The Golden Years: Presidents and Prime Ministers in Retirement

The weekend FT states that Bill Clinton made $89 million giving speeches between 2001 and 2011. (If this is true, that's a lot of speeches.) Clinton is quoted as saying, "I never had money until I got out of the White House, but I've done reasonably well since."

The article is mainly about Blair, who is also doing "reasonably well."

Anthropomorphic inspirational thought of the day

Reserved humor

At today's Brookings Institution colloquium, Prof.Bernanke was drole. Everyone is mentioning this one: "When we were trying to convince Congress to pass TARP, one congressman told me that his constituents were split on the matter: 'Half are saying no and the other half are saying hell no.'"


That's fairly funny, but he later said something funnier: "The problem is that many things that work in practice don't actually work in theory."

Destructive effects of US QE on Australia and Canada

If QE stabilized weak economies like the US, then it also inflated to dangerous levels healthy ones like Canada and Australia.

Lincoln

From the Bank Credit Analyst:

Outlook For Canada And Australia
january 7, 2014 by bca research


It is widely known that both Canada and Australia avoided the banking/housing meltdown and their fiscal position is much better than in most other developed economies. However, there are no grounds for complacency in either case.



In both countries, house prices have continued to climb in recent years with the result that household debt-to-income ratios now exceed the levels reached in the U.S. before the housing market fell apart. Debt burdens are especially worrying in Canada. Both economies also have high exposure to commodities and the gloss has long disappeared from that sector. We are not predicting a collapse in either Canada or Australia in 2014, but any growth improvement over the coming year is likely to be relatively modest.

In terms of equity market performance, both markets are commodity dependent. There is a case for a cyclical bounce in commodities as global growth improves. Thus, Canadian and Australian stocks may enjoy a reversal of some of their recent severe relative underperformance. However, these markets also are vulnerable to investors downgrading their long-run commodity price expectations, even if there is a cyclical bounce. We recommend staying underweight.