Just wondering, after the U.S. carmaker bailout got rejected, seemingly pushing General Motors and Chrysler into bankruptcy. When Lehman Brothers declared bankruptcy after failing to secure a government rescue, that event battered economic confidence and moved the slowdown into a full-blown recession. I suspect GM and Chrysler together are more important than one mid-size investment bank. While their failures won't come as such a surprise, they will still be sufficient to drag the world economy even further down, at a time when it's already pretty low. I'll be morbidly fascinated to see what happens when the US stockmarket opens in a few hours.
Even with this grim outlook, I can't blame the U.S. Republicans for opposing the rescue. It must be tough choosing between between likely economic depression and certain crony capitalism. When did the American economy become unable to handle bankruptcies, anyway? And why?
It's also interesting to consider the geopolitical ramifications. Cars will still be made in the US, but in a few years most of the factories will probably be subsidiaries of foreign companies. All the automotive design and research will happen elsewhere, eroding American manufacturing. Maybe that's already the case, thinking about which companies got petrol-electric hybrids to market first. I suppose the U.S. is still a leader in aerospace and software.
On a more parochial note, I wonder which company will acquire Holden, GM's still-viable Australian subsidiary?
Friday, December 12, 2008
Thursday, December 4, 2008
Boutique Rats
There was an amusing article in the paper today, about a plan to reintroduce Australian bush rats to a posh Sydney suburb. There's more native vegetation now than in the period immediately after European settlement when the land was cleared, so the bush rats might be able to make a comeback. Only in Mosman would people worry about having a better class of rat.
The ecologists even speculate that the bush rats might displace the introduced black rats, but that's where I beg to differ. The native animals might thrive in the bushland and it would be great if they did, but my money's on the black rats in the residential areas.
The ecologists even speculate that the bush rats might displace the introduced black rats, but that's where I beg to differ. The native animals might thrive in the bushland and it would be great if they did, but my money's on the black rats in the residential areas.
Sunday, November 30, 2008
Up in the Sky
Venus and Jupiter have been approaching one another in the evening sky, with their closest pairing tomorrow. However I've missed out on watching them move together over the last week because it's been so cloudy. Until tonight, when the weather was clear at the right time of day.
This is the sort of fairly routine planetary conjunction that comes around once or twice a year. Normally I'd just glance up with mild interest, but I'm really appreciating it after the earlier anticipation.
It was the second interesting celestial sight of the day: in the afternoon I saw an A380 aircraft for the first time. I liked the way that its double-decker structure created a bit of a face at the front of the plane, with the "forehead" of the second storey sitting above the "nose" of the cone. Better than the boring standard tube of a typical midsize plane, although not quite as cute as a 747. It has a partial second storey which also creates a face shape at the front but then slopes down halfway along the plane in a way that reminds me of a dolphin.
This is the sort of fairly routine planetary conjunction that comes around once or twice a year. Normally I'd just glance up with mild interest, but I'm really appreciating it after the earlier anticipation.
It was the second interesting celestial sight of the day: in the afternoon I saw an A380 aircraft for the first time. I liked the way that its double-decker structure created a bit of a face at the front of the plane, with the "forehead" of the second storey sitting above the "nose" of the cone. Better than the boring standard tube of a typical midsize plane, although not quite as cute as a 747. It has a partial second storey which also creates a face shape at the front but then slopes down halfway along the plane in a way that reminds me of a dolphin.
Thursday, November 13, 2008
Ambigous Australian-ness
I'm enjoying a quiet evening at home, cooking some Anzac biscuits and drinking beer that I won betting on the cricket with a friend at work. It would be very Australian, except that I backed India and my workmate settled our bet with a six-pack from the Czech Republic ...
Wednesday, November 5, 2008
No You Can't
I had a few Australian friends express delight at today's US election result, and a string of celebratory status updates from all my friends on Facebook, but I just can't get that enthusiastic. Sure Obama will be an improvement on Bush and a better choice than McCain, but I'm not convinced that election results have much of an impact.
In this case I'm particularly cynical, because even before it begins there are so many obvious ways for Obama's presidency to fail:
In this case I'm particularly cynical, because even before it begins there are so many obvious ways for Obama's presidency to fail:
- He'll have to deal with a nasty recession and the US' relative decline. These tough times will be a particular problem for Obama, as his supporters have high expectations that everything will improve and won't be prepared for a year or two of deterioration.
- Obama didn't adjust any of his programs or give any hint that things would have to be different when US finances took a remarkable turn for the worse 6 weeks ago. Now he'll have to break a whole host of election promises and lose all credibility and influence in his first few months.
- Obama promises to step up the war in Afghanistan, which has disaster written all over it. What's the strategic objective there? Transforming the society to be more pro-Western looks even less likely than in Iraq. Maybe the US wants to prop up the friendly Tajik/Uzbek/Hazara government against the Pushtuns, but that government will never control the country if it still needs American assistance after 7 years. The US would be better off withdrawing now before sinking deeper into another hopeless quagmire.
Thursday, September 18, 2008
Thoughts on Financial Turmoil
I've been following the latest developments in the financial crisis with some interest this week, and trying to work out what they mean. Surely credit will be tight enough to cause a fairly big recession in the developed world over the next couple of years, but it's a bit harder to judge the longer term effects. Still, here goes.
Presumably there will be much tighter regulation of the financial sector. In other industries companies are mostly competitors, so that the remaining companies are strengthened when a firm goes bankrupt. In finance the competing banks are also counterparties to a whole range of deals, and a corporate collapse actually weakens the remaining entities. It's an amusing paradox that you have to limit competition in the capital distribution system, which is really the heart of a capitalist economy, but there you go. The countries with loose lending standards, weak capital requirements and innovative financial firms (US, UK) have been the source of the upheaval, to the extent that their governments are having to bail out the market and take over large chunks of it. Better to have stricter rules to begin with.
Tighter financial regulation will be a good thing, but will probably encourage excessive government intervention in other parts of the economy. This could really look attractive if some of the Asian economies remain strong over the next few years e.g. China, Singapore, Korea. That could hold everybody back by limiting useful competition and creative destruction in industries other than finance. Not to mention that widespread government control of the economy would encourage repressive politics as well.
On a geopolitical level I see the present crisis hastening the end of the United States' global dominance. The American economic system was recently seen as effective and capable, albeit somewhat harsh, but now it's seen as the source of all the problems. The United States will be weakened as the rest of the world doesn't invest in its economy to the extent that it has over the last 2 decades. I think China will take over as the obvious superpower around 2020, whereas I used to think that would happen some time in the 2030s. I'm not looking forward to the transfer of world leadership from a democratic government to an autocratic government, but it's starting to seem inevitable.
Presumably there will be much tighter regulation of the financial sector. In other industries companies are mostly competitors, so that the remaining companies are strengthened when a firm goes bankrupt. In finance the competing banks are also counterparties to a whole range of deals, and a corporate collapse actually weakens the remaining entities. It's an amusing paradox that you have to limit competition in the capital distribution system, which is really the heart of a capitalist economy, but there you go. The countries with loose lending standards, weak capital requirements and innovative financial firms (US, UK) have been the source of the upheaval, to the extent that their governments are having to bail out the market and take over large chunks of it. Better to have stricter rules to begin with.
Tighter financial regulation will be a good thing, but will probably encourage excessive government intervention in other parts of the economy. This could really look attractive if some of the Asian economies remain strong over the next few years e.g. China, Singapore, Korea. That could hold everybody back by limiting useful competition and creative destruction in industries other than finance. Not to mention that widespread government control of the economy would encourage repressive politics as well.
On a geopolitical level I see the present crisis hastening the end of the United States' global dominance. The American economic system was recently seen as effective and capable, albeit somewhat harsh, but now it's seen as the source of all the problems. The United States will be weakened as the rest of the world doesn't invest in its economy to the extent that it has over the last 2 decades. I think China will take over as the obvious superpower around 2020, whereas I used to think that would happen some time in the 2030s. I'm not looking forward to the transfer of world leadership from a democratic government to an autocratic government, but it's starting to seem inevitable.
Saturday, September 13, 2008
Mild Amusement from Council Elections
Today was local council election day. After checking the results in my current municipality on the ABC website, I had a look at a few other places where I have some connection. Rather a waste of a time, but I had to smile at the following:
- Turnout seems to be 60-65% in most districts, even though voting is compulsory. Obviously a lot of people go ahead with their regular weekend plans and treat the $50 fine as an additional expense.
- In the area where I grew up (Blue Mountains council, 4th ward) the Liberal Party ticket was Fiona Creed, Graeme Creed, Michael Creed. I guess family dinners double as party branch meetings.
- In the area where my parents currently live (Oberon council), there are 9 councillors to be elected from 3540 electors. That's about one elected official per 400 voters, and there must be even less populated areas than Oberon.
- For example, the 2015 person electoral roll of Bogan Shire Council. That's the actual name, I'm not referring to Sutherland. Can you imagine being introduced as the Mayor of Bogan Shire?
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