Veteran Nations

Wed, 2009/11/11 - 4:01pm | Your editor

As Vivian noted in an earlier posting, today is the anniversary of the end of World War I. The US marks it as Veterans' Day, while other countries commemorate Remembrance Day or Armistice Day. Whatever the name, the point is to remember and honor the sacrifice of those who served in their countries’ armed forces.

Speaking of wars, at least one reader took offense at my posting last week relating my experience in Bosnia. Please note it was not written by Vivian but by Frida Ghitis. I wrote it and take responsibility for that and all my columns.

As a short hand, I wrote that the Bosnian War was stopped by the Americans. A former Canadian soldier did not like that, and I apologize to readers from countries that participated in the Bosnia operation. Indeed, a large number of countries did join in. The point, however, in a piece about the relative influence of American currency and American power, was that Bosnia was not a place where we saw American power decline; quite the opposite. Europe failed to take decisive action and it took a US-led NATO operation followed by US mediation at Dayton to end the war. Read more »

From the River Vlatava

Tue, 2009/11/10 - 8:01pm | Your editor

Curves in all the right places mark the Czech Capital where I am spending a few days floating on the River Vlatava in what is called a Botel.

The city is gorgeous, with a huge Castle and an old city full of high Gothic and Baroque buildings including a half dozen synagogues, but now no Jews to fill them. Luckily I have found a combination bagel store and Internet cafe run by a bunch of Israelis to file for you for Memorial Day. It marks the beginning of what used to be Chekoslovakia, one of the bits of Europe created after the Kaiser was removed from power. It took the Versailles treaty to get all the ducks in a row. But before that, a new Germany was created, on Nov. 9, 1918 with the abdication  of the Kaiser and the birth of the Weimar Republic. Yesterday was the anniversary.

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Dateline Berlin

Mon, 2009/11/09 - 11:01am | Your editor

I met political science professor Hartmut Mayer of Oxford University at my husband's Oxford reunion held in Berlin. The conferences were at the Berlin U. School of Business, formerly the East German parliament, decorated with stained glass windows depicting happy workers dancing and feasting. In Warsaw they converted the former Communist Party HQ into a stock exchange.

Amidst the festivities last weekend over the fall of the Berlin Wall (on what Germans call 9/11, in 1989), Mayer and I talked about the sour notes. Grumbles against heartless capitalism, globalization, and non-German governments, particularly the Obama Administration, were audible from the Left Party, trades unions, and grumbly Berliners.

The complaints came over the unraveling of the complex joint venture whereby Magna of Canada, a Russian automaker, and the German State would take over Adam Opel AG, the German car-maker. Last week, the board of Opel's owner, General Motors, flush with $50 bn in US subsidies, vetoed the arrangement. Read more »

From Bosnia to Burlington

Fri, 2009/11/06 - 10:17pm | Your editor

I spent almost two decades at CNN, first covering economics and business news,  then traveling the world, covering world affairs in the days when founder Ted Turner still owned the network. Turner, the visionary billionaire, had banned the word “Foreign” from our lexicon. We could not say the F-word on the air or in internal communications. He was serious about it. We could be fined $50 for violating a rule aimed at nudging us to do away with the “Us and Them” view of the world.

Still, there was no getting away from global divisions. Everywhere I landed with my trusted American passport in hand I would carry a pile of US dollars to pay our bills in war zones, revolutions or presidential summits. Everyone preferred muscular dollars.

Then I arrived in Bosnia in the mid-90s. When I tried to place greenbacks in my Bosnian driver’s hand he drew back and looked up at me. “Don’t you have Deutsche Marks?” he asked. This was one war zone where the people did not want American money. Read more »

From Mudlark Manor

Thu, 2009/11/05 - 7:21pm | Your editor


Greetings from Mudlark Manor beside the River Thames where we are spending the night before flying off to Berlin. We will go from a country where stimulus spending for saving the UK banking sector continues to demand huge amounts of government cash to one where the newest government plans to get rid of its deficit.

Germany can do this one of two ways: raising taxes or cutting spending. It is not certain which way the Merkel govt will spring, but either tactic risks derailing the German economy. Fiscal virtue sounds better than it would be in fact during the present crisis.

Just because there are indications of a recovery and fluffy stock markets does not mean that growth is assured. And in the major battered economies there is no risk of inflation yet. Really. Truly. Read more »

Thar's Gold in Them Thar Hills

Wed, 2009/11/04 - 7:24pm | Your editor

Financial markets got a jolt on Tuesday after learning that India purchased an eye-popping 200 metric tons of gold from the IMF, with a value of $6.7 bn.

Gold prices climbed to $1080/ounce with investors and central bankers worrying that this was one more sign of the impending end of the US dollar’s reign as the world’s reserve currency of choice. If central banks around the globe decide to dump the greenback, the dollar would undoubtedly experience a disastrous drop, with consequences for the global economy, for the US and, of course, for many of our dollar-denominated holdings.

The Reserve Bank of India issued a terse statement saying the move was “part of the Reserve Bank’s foreign exchange reserves management operations.” Like other holders of US currency, the RBI worries not only about the recent slide in the dollar, but also about Washington’s Himalayan-sized national debt. The towering debt makes it hard to see across the economic horizon.

The question now is whether the dollar will continue its slide and gold will keep scaling new heights. Read more »

Yield Funds

Tue, 2009/11/03 - 4:46pm | Your editor

The prospect of a journey to Berlin and eastward concentrates the mind. I am of the generation that in elementary school had to hide under the desk in case there was a nuclear attack on Manhattan, to “escape” the fallout. I remember the Wall going up, and it coming down.

Tomorrow I take off for Berlin via London, and then on to Prague where I've never been. We are going to Berlin for my husband's Oxford Reunion taking place there to fete the 20th anniversary of the fall of the Wall. I cannot imagine a U.S. college holding a reunion in a foreign city, but apparently there are over 1000 German Oxford graduates.

While I am flying and railroading around Europe, Frida Ghitis will be in charge of the newsletter. I will try to contribute as well but I do not know if it will work.
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Moscow Market Views

Mon, 2009/11/02 - 6:58pm | Your editor


From Moscow, Eric Kraus writes on last week's stock market reversal. He says of the earlier rise: “priced in was a classical V-shaped US economic recovery – given the fundamentals, about as likely as snow in August. In this latter case, a series of disappointments can be expected, with considerable havoc still to come.”

But explaining the reversal last week, he postulates that “markets may have begun to price in the imminent end to fiscal/monetary stimulus”. Read more »

Emerging Markets Debate

Fri, 2009/10/30 - 2:36pm | Your editor

China launched its new Nasdaq clone today and 28 stocks began trading in Shenzhen. The former Growth Enterprise Market (GEM) is now called ChiNext. On Day I trading in all 28 newly-listed shares was suspended because their prices all at least doubled.

Immediately, pundits started musing about the risks of a bubble. “It shows the immaturity of the Chinese market. Everybody is out for a quick profit, without considering the actual worth of the company. The risk is that all the money will go into the GEM [ChiNext] board,” Francis Lun, general manager at Fulbright Securities, told Bloomberg. Read more »

Thursday Bookstore: Niall and Arcadi

Thu, 2009/10/29 - 6:51pm | Your editor

In the end, the Financial Times Conference never addressed the question of the future of capitalism nor indeed what capitalism may be. Most talks were USA oriented with a lot of futurology, so long-term most of the audience will have died of old age before anyone can tell if the forecasters were right.


The best paper was about US banking recovery, by Chairman Don Ogilvie of Deloitte's Center for Banking Solutions, and it was v. gloomy. The worst was an airbrush job on US insurance regulation.

The exceptional star turn was a dialogue between FT economics writer Martin Wolf and the ever-present ever-quotable Prof. Niall Ferguson. It was part of a continuing series and a bit hard for outsiders to follow, even ones like me who have met and read both men. Read more »