Weekend Links – 28.11.2015

Exporting Arizona water to the Arab desert by stealth.

China selling US Treasuries is tightening enough says Barry Eichengreen, if China buying Treasuries was easing monetary conditions early in the 2000s. Sad and flawed logic. Context has changed.

​China matters and if it slows, it will hurt the world. Amen to that. China services growth, even if true, is little solace to the RoW.

Only myth it explodes is the credibility of the author.

​Thomas Fazi in Roubini Economonitor writes a good note on why QE in Europe has failed. Wants helicopter drop.​

Public Sector Net Borrowing in the UK raises in October. UK economy, in more ways than one, is an unsustainable bubble. Cameron got lucky in May.

Cult of shareholder value cannibalising corporations in North America.

CALPERS lowers its expected investment return to 6.5%. Still too high.

A Saudi Rial de-peg is a ‘Black Swan’ bet for 2016. Fair enough.

Rafael Behr’s reaction to James Corbyn’s reactions to Paris shootings is worth reading.

A brief history lesson on the roots of Islamic terror by David McWilliams.

Wall Street Journal on the buyback boom in US stocks. Some good statistics for 2015.

This Quint.com story says Dadri (India) was personal killing converted into a communal incident.

Portugal government rejects demand for more guarantees by the President.

German member of ECB Executive Board rejects the case for more QE by ECB in December, publicly.

“India is the only country trying to become a global economic power with an uneducated and unhealthy labour force” – Amartya Sen. Curious minds want to know what he did about the problem for ten years when he had unrivalled access to the government from 2004 to 2014.

How Citigroup overlooked money laundering for years in its Mexico operations. A long ‘Bloomberg Markets’ story.

Professor William Lazonick wrote this open letter to Tim Cook of Apple in October 2014. Still worth reading. Apple’ Share Buyback since then suggests that Tim Cook took Carl Icahn more seriously than he did William Lazonick.

Volkswagen admitted a second illegal device in about 85000 Audi engines.

China could suffer from a banking crisis, argues Andrew Colliers of Orient Capital Research.

Raymond Zhong writes a good review of Kaushik Basu’s book

I liked the last bit about the label of ‘responsible power’ in this review of Bharat Karnad’ book by Shiv Shankar Menon, India’s former National Security Advisor. Clearly, China has not fallen into the trap of being a ‘responsible power’.

Turkey downs a Russian fighter plane – this could be big.

2016 could be an unforgettably long year for investors – my MINT column on Tuesday (24th November)

The Central Board of Direct Taxes (CBDT) in India is fixing long-standing transfer pricing issues.

Swiss Canton Ticino bans burqas in public places

Super Traffic cop at Sholinganallur junction in Chennai

Ridham Desai of Morgan Stanley very upbeat on India. Probably, too upbeat.

Clive Crooks’ review of John Kay’s book, ‘Other people’s money’. In the process, commends Alan Blinder’s book.

Corporate fraud in India compared to other EM nations. Not looking good.

David Keohane at FT Alphaville has a great post on China GDP growth statistics with Goldman Sachs putting its number at 5%.

David Keohane has another good post on the prospect of a maxi China devaluation in 2016. Rates it low, with caveats.

A delightful article on how an idealist compromises with the State in China.

Monetary Authority of Singapore (MAS) visualisation on Asian corporate leverage as it changed from 1995 to 2014. Bubble size being bigger for India than China is not credible.

What is missing in AirBnB investor presentations? Any mention of bottom-line. Revenue multiple of more than 30 times! Unlikely to end well for investors.

President of India gives his assent to Madhya Pradesh Labour Reforms. More important than the intolerance debate.

Izabella Kaminska says yuan inclusion in the SDR basket (decision due on Nov. 30) does not make it a global reserve currency. Quite so. It is a step and it is a hoped-for step. Reality could be different.

Mozambique’s transformation halted in its tracks by the slump in commodity prices. Sad.

In India, 263 million people in the farm sector and 600 million people, in total, depend on it still. Not going to be easy to pull them out of it. Check with Raymond Zhong of Wall Street Journal.

Dharminder Kumar’s article on Punjab is worth a read despite its leaps of logic and conclusions. While on Punjab, perhaps, this should be read too.

S.S. Tarapore warns against lowering interest rates too much in India. He has a point.

‘India Today’ writes that the NDA Government in India has ended the transfer posting regime. Nice and heart-warming read. Necessary but not sufficient condition for improving State capability.

There’s a direct connection between the sectors highlighted in China’s five-year plans and the businesses that suffer security breaches in the US.

Louis Vuitton closing several stores in China – 20% less stores by mid-2016.

China’s ‘national team’ owns 6% of the national stock market. Note the comment about corporate earnings at the end of the article.

The moral hazard of Chinese bond bailouts characterised as China having thousands of mini central banks! Related post on the ‘nuttiness in Chinese corporate bond market’.

What Shanxi – China’s ‘coal kingdom’ – symbolises now. ‘Economist’ takes a despondent view of the situation. China made it in ‘manufacturing’ unlike India. But, at what cost? Can it transition to services? Similarly, can India transition back to manufacturing? A step it missed. Both have very long odds. Hence, worth a small bet each?

Bibek Debroy exposes Manmohan Singh’s inconsistencies on the usefulness of the Planning Commission. Perhaps, Arun Maira’s book is worth a read. That said, it is hard to feel sympathy for Manmohan Singh’s vaunted integrity or admiration for his competence. Both appear to have been vastly overrated.

Brahma Chellaney presents a very cogent evidence on the Western complicity in the rise of Islamic terror. Is it changing? No evidence yet.


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