It's a drag

Greece's public sector wage bill has fallen from €24 billion in 2009 to €16 billion in 2013, according to today's FT. Now that's what I call austerity!

Good news from the Duchy of Grand Fenwich

The IMF calculates that Luxembourg receives one tenth of the world's foreign direct investment, through "letter box corporations." The fees on this flow make it the richest country in Europe. Now the former pm is now to become the president of the European Commission. One comment of a tax specialist: "This isn't a poacher turned gamekeeper, it looks more like the poacher in charge of the gamekeepers."

Is China about to hit a wall?

China's debt/gdp has risen from 147% at the end of 2008 to 251% at the end of June. The US and the UK are 280% and Japan is 415%. What would be China's growth rate were the ratio to be stable rather than rising?

The very best hypocrites always sound sincere

EU has failed to add to Russian sanctions following the airplane disaster, despite a push by the UK, which was criticized by Jean-Christophe Cambadelis, head of the French Socialist Party, who said, "This is a false debate waged by hypocrites.  When you see how many [Russian] oligarchs have sought refuge in London, David Cameron should start by cleaning up his  own back yard." (In the FT today)

Henry Kaufman says the business cycle is dead

Henry Kaufman (remember him? Dr Doom of the 1970s?) wrote an oped in the FT yesterday, "Markets and the Fed have to practise a new dance," suggests that we might not see economic cycles in the future, but "selective intervention" by the Fed. I suppose he means, although does not explicitly say, that business cycles will be replaced by carefully modulated boom and bust cycles. Puzzling it is, both what he means and why he wrote this essay.

I wonder if we should welcome a replacement of normal market forces with Fed decision-making.

Assets of big banks get really big. Deutsche, Barclays, HSBC, BNP exceed $2.5 tn each.

I could hardly believe this graphic in the FT yesterday. Despite increased capital requirements, slow lending growth, and write-offs, the assets of the big banks have been growing by leaps and bounds: Barclays was up 500% in the 10 years ending 2012, for example, to $2.5 trillion.

Is this why they're invading the USA?

Latin America has the highest crime rates in the world. Honduras has the highest murder rate in the world. It has 90.4 murder/100,000/year. (So everyone in Honduras has a one in ten chance of being murdered in any ten year period?) London, which had 112 murders in the past year, would have had 7,500 with Honduras' rate. Economist 7/12/2014

As we speak:

Embassies of Japan and Korea are hosting joint meetings of Japanese and Korean companies to encourage them to team up to counter increasing Chinese investment in Russia. Is this in keeping with our sanctions?

Water, water everywhere. . .

There is an interesting article on water in the FT (Wednesday, p9) on water. The top ten countries for freshwater, both surface water and groundwater, account for 60% of world's fresh water: 

 
Brazil - 12.1%
Russia - 9.3%
USA - 7.8%
China - 6.8%
Canada - 6.2%
Colombia - 5.4%
Indonesia - 4.7%
Peru - 3.7%
India - 3.5%
Myanmar 2.8%

India and China have problems, particularly India, with only 1/2 as much water as China. But will Colombia, Peru and Myanmar become to water what the Middle East is to oil? By far the biggest use of fresh water by humans is for irrigation (2/3rds of total.) All efforts at conservation other than limiting irrigation will have marginal impacts. It would be better to address supply than demand, since irrigation is, as Martha Stewart would say, "a good thing."