13:37 ET
Stocks
Yesterday, the S&P 500 and the DJIA reached their lowest level since July 23. Today, both have been trading steadily below yesterday's close. At the end of the day, the FTSE100 managed to pare earlier losses. Major American, European and Asian markets fell today, continuing yesterday's trend.
Currencies
After reaching a 15-year high, the yen is being closely monitored by Japan's central bank although no specific action has been mentioned.
Commodities
Oil continues to fall for the fifth straight day. Gasoline futures reached a five-week low. Gold continues to rise and has reached its highest for a month. Floods in Pakistan are making sugar prices climb since 200,000 acres of cane were destroyed.
Patrick Signoret and Georgina Lara
Showing posts with label North Korea. Show all posts
Showing posts with label North Korea. Show all posts
12 August 2010
09 August 2010
Power and Policy Team Update (English)
UK budget cuts
Budget cuts in Great Britain, $130 billion over the next five years, have been labeled by a UK think tank as the “longest, deepest sustained period of cuts to public services spending since World War II.” (Hat tip: NYT.)
North Korea
Tensions escalated between North and South Korea as the North fired more than 100 rounds of artillery in response to war drills performed by the South last week. (Read about it in the LA Times.)
Iran
This LA Times article describes how China, Russia, India and Turkey are seizing opportunities in Iran and are undermining the sanctions imposed on Iran by the West. “Efforts by the United States and its European allies to build a united front to halt Iran's nuclear program are facing increasingly bold resistance from China, Russia, India and Turkey…”. Sanctions took effect on July 1st.
Patrick Signoret and Isabel Gil
Budget cuts in Great Britain, $130 billion over the next five years, have been labeled by a UK think tank as the “longest, deepest sustained period of cuts to public services spending since World War II.” (Hat tip: NYT.)
North Korea
Tensions escalated between North and South Korea as the North fired more than 100 rounds of artillery in response to war drills performed by the South last week. (Read about it in the LA Times.)
Iran
This LA Times article describes how China, Russia, India and Turkey are seizing opportunities in Iran and are undermining the sanctions imposed on Iran by the West. “Efforts by the United States and its European allies to build a united front to halt Iran's nuclear program are facing increasingly bold resistance from China, Russia, India and Turkey…”. Sanctions took effect on July 1st.
Patrick Signoret and Isabel Gil
03 August 2010
Power and Policy Team update (English)
Italy no-confidence vote on Wednesday
The vote will be a test to see if Berlusconi’s ruling coalition can survive the defection a breakaway faction of 33 members (Gianfranco Fini and his new Future and Liberty group). It’s not clear what the result will be. The motion was brought by opposition parties, not by the breakaway faction, and the Future and Liberty group considers itself center-right (same as ruling government coalition).
(FT)
U.S. Fed considers “symbolic shift”
The Wall Street Journal reports that the Fed is considering a “modest but symbolically important change in the management of their massive securities portfolio “ in a meeting next week, in the wake of a slowdown in growth. It might use the cash it receives fom mature mortgage-bond holdings to buy new mortgage or Treasury bonds, instead of allowing its portfolio to slowly shrink. Here is the complete article.
Koreas
North Korea continues to threaten the South with retaliation, in response to a series of war drills planned by the South to start on Thursday. These exercises are considered by the North as a direct military invasion. (NYT)
Pakistan and Afghanistan
According to the Pakistani president, the war against the Taliban is being lost. The international community, he said, has failed to win hearts and minds. These declarations were made just before his visit to the UK, with whom relations are tense after the accusations following the document leaks, which accused Pakistan of playing a double game in the Afghan war, and David Cameron’s cozy visit to India. (The Guardian)
Patrick Signoret and Isabel Gil
The vote will be a test to see if Berlusconi’s ruling coalition can survive the defection a breakaway faction of 33 members (Gianfranco Fini and his new Future and Liberty group). It’s not clear what the result will be. The motion was brought by opposition parties, not by the breakaway faction, and the Future and Liberty group considers itself center-right (same as ruling government coalition).
(FT)
U.S. Fed considers “symbolic shift”
The Wall Street Journal reports that the Fed is considering a “modest but symbolically important change in the management of their massive securities portfolio “ in a meeting next week, in the wake of a slowdown in growth. It might use the cash it receives fom mature mortgage-bond holdings to buy new mortgage or Treasury bonds, instead of allowing its portfolio to slowly shrink. Here is the complete article.
Koreas
North Korea continues to threaten the South with retaliation, in response to a series of war drills planned by the South to start on Thursday. These exercises are considered by the North as a direct military invasion. (NYT)
Pakistan and Afghanistan
According to the Pakistani president, the war against the Taliban is being lost. The international community, he said, has failed to win hearts and minds. These declarations were made just before his visit to the UK, with whom relations are tense after the accusations following the document leaks, which accused Pakistan of playing a double game in the Afghan war, and David Cameron’s cozy visit to India. (The Guardian)
Patrick Signoret and Isabel Gil
30 June 2009
What does North Korea want? An interview with Jenik Radon.
(For Spanish, scroll down)
It's quarterly forecast time at TransEconomics, which means time to revisit the geopolitical assumptions that embed our forecast for the global economy and its impact on Mexico.
To that end, this morning I called my friend Jenik Radon, Adjunct Assistant Professor of International and Public Affairs at Columbia University, and left a simple message on his voice mail: "Jenik, this is Jenny. What does North Korea want?"
Jenik's answer came in a subsequent phone interview.
Jenny, you've asked a very hard question. North Korea cannot be analyzed in traditional terms and accordingly does not act in any traditional way. It has proven to be unpredictable in its actions, and thus there is no clarity as to its goals. It's one thing to shoot a missile, another to conduct a nuclear test, and a third thing altogether to threaten to aim a missile at Hawaii. This does not make sense.
What do I read in this? Not any specific goals but a statement: "We are here. We can stand up. We want attention and we will get it—as a player equal to all. So don't disregard us. No one can dictate to us." Status seems to be the prime motivator. Certainly economics is not.
Moreover it must always be kept in mind that, although North Korea is dependent on China, North Korea is neither interconnected to nor engaged with the rest of the world. As long as China is willing to tolerate unconventional behavior, this gives North Korea a sense of security.
So this is not about money? North Korea's aim is not extortion but attention getting?
Precisely.
Can you expand on North Korea's relationship with China? How does it affect North Korea's behavior?
North Korea can behave this way only as long as its main benefactor does not really object. Until North Korea's May 25 nuclear test, China, although periodically annoyed by North Korean actions, had not seriously objected.
So perhaps my original question should have been, what does China want?
Before I answer that, note that China voted with the United States this time on the National Security Council. That was highly unusual. Stunning. China's tolerance clearly has limits, and North Korea this time went too far.
Now to your question. China gains a few things from North Korea's actions. One is a way to signal feelings to Japan. Japan has still not apologized for Nanking and the commission of other World War II atrocities. Until remorse is shown by Japan, China and Japan cannot be true friends.
In short, as long as North Korea really only annoys Japan, North Korea acts within some sort of limits.
Second, it prevents a unified Korea, which eventually would be stronger nation than today's divided one.
Granted, that would take time. Look at how long it is taking East and West Germany to re-integrate fully, and West Germany was much wealthier than South Korea is today.
In the case of the Koreas, the gap is not just economic. It's also cultural. I reckon it would take 50 years for the two cultures to come together. Think of the extreme isolation of the North and the lack of the development of any functioning economic system in the North. Sadly, one need only look at how difficult it has been for North Korean refugees to integrate into the social and economic systems of South Korea.
But China takes the long view. One Korea in the long view would be a strong economic neighbor and and competitor. So two Koreas are better than one.
China of course should view it differently. You are only as strong as your weakest link. And an unpredictable and poor neighbor, here North Korea, is simply a weak link and is costly. It weighs on, burdens, China’s relations with the USA, and forces China’s to guard its borders to prevent a rush of millions of hungry refugees.
Third, through continuous efforts such as the Six-Party Talks, China can pursue a peace policy that deflects attention from the two-China issue: Taiwan – Mainland China.
What's the downside for China?
China likes foresight and predictability. This explains its recent loss of patience with North Korea. China now needs to worry that North Korea could become even more unpredictable.
Any thoughts on Kim Jong-woo, Kim Jong-il's apparent successor?
He'll likely take over as head of state but won't have much control at first. Real control will rest in the hands of his mentor in the old oligarchy, Jang Song-taek.
Thank you, Jenik.
My pleasure.
¿Qué quiere Corea del Norte? Una entrevista con Jenik Radon
Es temporada de pronósticos trimestrales en TransEconomics, lo que significa que es momento de revisar los supuestos geopolíticos en que se arraigan nuestras proyecciones para la economía global y su impacto sobre México.
Por eso llamé esta mañana a mi amigo Jenik Radon, Profesor Asistente Adjunto de Asuntos Internacionales y Públicos de la Universidad de Columbia, y dejé un mensaje sencillo en su contestadora: “Jenik, soy Jenny. ¿Qué quiere Corea del Norte?
La respuesta de Jenik vino en una entrevista telefónica más tarde.
Jenny, has hecho una pregunta muy difícil. Corea del Norte no se puede analizar en términos tradicionales y tampoco actúa de manera tradicional. Ha demostrado ser impredecible en sus acciones, y por lo tanto sus metas no son claras. Una cosa es lanzar un misil, otra es conducir una prueba nuclear, y todavía otra completamente distinta es amenazar con apuntar un misil hacia Hawaii. Esto no tiene sentido.
¿Qué es lo que veo en esto? No una meta específica, sino una declaración: “Aquí estamos. Nos podemos hacer notar. Queremos atención y la obtendremos, como participantes iguales a los demás. No nos desdeñen. Nadie puede mandar sobre nosotros.” El estatus parece ser la principal motivación. la economía ciertamente no lo es. Además siempre debemos tener en mente que, aunque Corea del Norte depende de China, no está interconetada o comprometida con el resto del mundo. Mientras China esté dispuesta a tolerar su conducta, Corea siente cierta seguridad.
¿Entonces no se trata de dinero? ¿La intención de Corea del Norte no es extorsionar, sino obtener atención?
Precisamente.
¿Puedes explicar con más detalle la relación entre Corea del Norte y China? ¿Cómo afecta al comportamiento de Corea del Norte?
Corea del norte se puede comportar así mientras su principal benefactor no ponga objeciones. Hasta la prueba nuclear del 25 de mayo, China mostraba periódicamente molestia por las acciones de Corea del Norte, pero no las había objetado seriamente.
Quizás mi pregunta original debió ser, ¿qué quiere China?
Antes de que responda eso, nota que China votó en el mismo sentido que EUA en el Consejo de Seguridad. Esto fue inusitado. Para quedarse perplejo. La tolerancia de China claramente tiene límites, y esta vez Corea del Norte fue demasiado lejos.
Ahora respondo tu pregunta. China gana algunas cosas por las acciones de Corea del Norte. Una de ellas es un medio para enviar señales a Japón. Japón no se ha disculpado por la masacre de Nanking y por cometer otras atrocidades durante la Segunda Guerra Mundial. China y Japón no se pueden llevar verdaderamente bien mientras Japón no muestre remordimiento.
En pocas palabras, mientras Corea del Norte sólo moleste a Japón, puede actuar dentro de ciertos límites.
En segundo lugar, evita que Corea se unifique, lo que eventualmente conduciría a una nación más fuerte que la dividida.
Es cierto que tomaría tiempo. Mira cuánto le ha tomado a Alemania reintegrarse completamente, y Alemania Occidental era mucho más rica que Corea del Sur.
En el caso de las Coreas, la brecha no es sólo económica, sino también cultural. Estimo que tomaría unos 50 años que las dos culturas se unificaran. Piensa en el extremo aislamiento del Norte y el escaso desarrollo de cualquier sistema económico funcional. Tristemente, uno sólo tiene que ver cuán difícil ha sido para los refugiados norcoreanos integrarse en los sistemas social y económico de Corea del Sur.
Pero China tiene visión de largo plazo. Una Corea en el largo plazo sería un vecino económicamente fuerte y un competidor. Entonces dos Coreas son mejor que una.
Por supuesto que China debería ver esto de otra forma. Una cadena es sólo tan fuerte como el más débil de sus eslabones. Y un vecino impredecible y pobre como Corea del Norte no es sino un eslabón débil y costoso. Pesa en las relaciones de China con EUA, y obliga a China a resguardar sus fronteras para evitar la entrada de millones de refugiados hambrientos.
En tercer lugar, a través de esfuerzos continuos como las pláticas entre seis naciones, China puede seguir una política de paz que desvíe la atención del asunto de las dos Chinas: Taiwán y la China continental.
¿Cuál es la desventaja para China?
A China le gusta la visión a futuro y que las situaciones sean predecibles. Esto explica por qué perdió la paciencia con Corea del Norte recientemente. China ahora necesita preocuparse por que se Corea del Norte se vuelva todavía más impredecible.
¿Tienes algún pensamiento sobre Kim Jong-woo, el aparente sucesor de Kim Jong-il?
Es probable que tome el cargo de jefe de estado pero que no tenga mucho control al principio. El verdadero control quedará en manos de su mentor de la vieja oligarquía, Jang Song-taek.
Muchas gracias, Jenik.
Fue un placer.
It's quarterly forecast time at TransEconomics, which means time to revisit the geopolitical assumptions that embed our forecast for the global economy and its impact on Mexico.
To that end, this morning I called my friend Jenik Radon, Adjunct Assistant Professor of International and Public Affairs at Columbia University, and left a simple message on his voice mail: "Jenik, this is Jenny. What does North Korea want?"
Jenik's answer came in a subsequent phone interview.
Jenny, you've asked a very hard question. North Korea cannot be analyzed in traditional terms and accordingly does not act in any traditional way. It has proven to be unpredictable in its actions, and thus there is no clarity as to its goals. It's one thing to shoot a missile, another to conduct a nuclear test, and a third thing altogether to threaten to aim a missile at Hawaii. This does not make sense.
What do I read in this? Not any specific goals but a statement: "We are here. We can stand up. We want attention and we will get it—as a player equal to all. So don't disregard us. No one can dictate to us." Status seems to be the prime motivator. Certainly economics is not.
Moreover it must always be kept in mind that, although North Korea is dependent on China, North Korea is neither interconnected to nor engaged with the rest of the world. As long as China is willing to tolerate unconventional behavior, this gives North Korea a sense of security.
So this is not about money? North Korea's aim is not extortion but attention getting?
Precisely.
Can you expand on North Korea's relationship with China? How does it affect North Korea's behavior?
North Korea can behave this way only as long as its main benefactor does not really object. Until North Korea's May 25 nuclear test, China, although periodically annoyed by North Korean actions, had not seriously objected.
So perhaps my original question should have been, what does China want?
Before I answer that, note that China voted with the United States this time on the National Security Council. That was highly unusual. Stunning. China's tolerance clearly has limits, and North Korea this time went too far.
Now to your question. China gains a few things from North Korea's actions. One is a way to signal feelings to Japan. Japan has still not apologized for Nanking and the commission of other World War II atrocities. Until remorse is shown by Japan, China and Japan cannot be true friends.
In short, as long as North Korea really only annoys Japan, North Korea acts within some sort of limits.
Second, it prevents a unified Korea, which eventually would be stronger nation than today's divided one.
Granted, that would take time. Look at how long it is taking East and West Germany to re-integrate fully, and West Germany was much wealthier than South Korea is today.
In the case of the Koreas, the gap is not just economic. It's also cultural. I reckon it would take 50 years for the two cultures to come together. Think of the extreme isolation of the North and the lack of the development of any functioning economic system in the North. Sadly, one need only look at how difficult it has been for North Korean refugees to integrate into the social and economic systems of South Korea.
But China takes the long view. One Korea in the long view would be a strong economic neighbor and and competitor. So two Koreas are better than one.
China of course should view it differently. You are only as strong as your weakest link. And an unpredictable and poor neighbor, here North Korea, is simply a weak link and is costly. It weighs on, burdens, China’s relations with the USA, and forces China’s to guard its borders to prevent a rush of millions of hungry refugees.
Third, through continuous efforts such as the Six-Party Talks, China can pursue a peace policy that deflects attention from the two-China issue: Taiwan – Mainland China.
What's the downside for China?
China likes foresight and predictability. This explains its recent loss of patience with North Korea. China now needs to worry that North Korea could become even more unpredictable.
Any thoughts on Kim Jong-woo, Kim Jong-il's apparent successor?
He'll likely take over as head of state but won't have much control at first. Real control will rest in the hands of his mentor in the old oligarchy, Jang Song-taek.
Thank you, Jenik.
My pleasure.
¿Qué quiere Corea del Norte? Una entrevista con Jenik Radon
Es temporada de pronósticos trimestrales en TransEconomics, lo que significa que es momento de revisar los supuestos geopolíticos en que se arraigan nuestras proyecciones para la economía global y su impacto sobre México.
Por eso llamé esta mañana a mi amigo Jenik Radon, Profesor Asistente Adjunto de Asuntos Internacionales y Públicos de la Universidad de Columbia, y dejé un mensaje sencillo en su contestadora: “Jenik, soy Jenny. ¿Qué quiere Corea del Norte?
La respuesta de Jenik vino en una entrevista telefónica más tarde.
Jenny, has hecho una pregunta muy difícil. Corea del Norte no se puede analizar en términos tradicionales y tampoco actúa de manera tradicional. Ha demostrado ser impredecible en sus acciones, y por lo tanto sus metas no son claras. Una cosa es lanzar un misil, otra es conducir una prueba nuclear, y todavía otra completamente distinta es amenazar con apuntar un misil hacia Hawaii. Esto no tiene sentido.
¿Qué es lo que veo en esto? No una meta específica, sino una declaración: “Aquí estamos. Nos podemos hacer notar. Queremos atención y la obtendremos, como participantes iguales a los demás. No nos desdeñen. Nadie puede mandar sobre nosotros.” El estatus parece ser la principal motivación. la economía ciertamente no lo es. Además siempre debemos tener en mente que, aunque Corea del Norte depende de China, no está interconetada o comprometida con el resto del mundo. Mientras China esté dispuesta a tolerar su conducta, Corea siente cierta seguridad.
¿Entonces no se trata de dinero? ¿La intención de Corea del Norte no es extorsionar, sino obtener atención?
Precisamente.
¿Puedes explicar con más detalle la relación entre Corea del Norte y China? ¿Cómo afecta al comportamiento de Corea del Norte?
Corea del norte se puede comportar así mientras su principal benefactor no ponga objeciones. Hasta la prueba nuclear del 25 de mayo, China mostraba periódicamente molestia por las acciones de Corea del Norte, pero no las había objetado seriamente.
Quizás mi pregunta original debió ser, ¿qué quiere China?
Antes de que responda eso, nota que China votó en el mismo sentido que EUA en el Consejo de Seguridad. Esto fue inusitado. Para quedarse perplejo. La tolerancia de China claramente tiene límites, y esta vez Corea del Norte fue demasiado lejos.
Ahora respondo tu pregunta. China gana algunas cosas por las acciones de Corea del Norte. Una de ellas es un medio para enviar señales a Japón. Japón no se ha disculpado por la masacre de Nanking y por cometer otras atrocidades durante la Segunda Guerra Mundial. China y Japón no se pueden llevar verdaderamente bien mientras Japón no muestre remordimiento.
En pocas palabras, mientras Corea del Norte sólo moleste a Japón, puede actuar dentro de ciertos límites.
En segundo lugar, evita que Corea se unifique, lo que eventualmente conduciría a una nación más fuerte que la dividida.
Es cierto que tomaría tiempo. Mira cuánto le ha tomado a Alemania reintegrarse completamente, y Alemania Occidental era mucho más rica que Corea del Sur.
En el caso de las Coreas, la brecha no es sólo económica, sino también cultural. Estimo que tomaría unos 50 años que las dos culturas se unificaran. Piensa en el extremo aislamiento del Norte y el escaso desarrollo de cualquier sistema económico funcional. Tristemente, uno sólo tiene que ver cuán difícil ha sido para los refugiados norcoreanos integrarse en los sistemas social y económico de Corea del Sur.
Pero China tiene visión de largo plazo. Una Corea en el largo plazo sería un vecino económicamente fuerte y un competidor. Entonces dos Coreas son mejor que una.
Por supuesto que China debería ver esto de otra forma. Una cadena es sólo tan fuerte como el más débil de sus eslabones. Y un vecino impredecible y pobre como Corea del Norte no es sino un eslabón débil y costoso. Pesa en las relaciones de China con EUA, y obliga a China a resguardar sus fronteras para evitar la entrada de millones de refugiados hambrientos.
En tercer lugar, a través de esfuerzos continuos como las pláticas entre seis naciones, China puede seguir una política de paz que desvíe la atención del asunto de las dos Chinas: Taiwán y la China continental.
¿Cuál es la desventaja para China?
A China le gusta la visión a futuro y que las situaciones sean predecibles. Esto explica por qué perdió la paciencia con Corea del Norte recientemente. China ahora necesita preocuparse por que se Corea del Norte se vuelva todavía más impredecible.
¿Tienes algún pensamiento sobre Kim Jong-woo, el aparente sucesor de Kim Jong-il?
Es probable que tome el cargo de jefe de estado pero que no tenga mucho control al principio. El verdadero control quedará en manos de su mentor de la vieja oligarquía, Jang Song-taek.
Muchas gracias, Jenik.
Fue un placer.
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