Category: News

We’re back in Paris. The flight on Air France was long, but not disagreeable. It was even better in the First Class cabin. Not that we were in it. But we were curious about the people who were.

Usually, on the Air France flight from Washington to Paris, you see a few rich people. You also see some people you wonder about. Typically, there is an African diplomat…or a hack bureaucrat from an international agency. Sometimes you will see a hip-hop star…or a fashion model. Or just someone who lucked into an upgrade.

But on the flight from Beijing, the people traveling in first class were almost all Chinese. We could not tell for sure, but they didn’t have that dull, stuffed-shirt look of politicians and aparatchiks. Instead, they looked like real entrepreneurs…real business people…people who probably paid for their tickets themselves.

Here in Paris, the weather is warm. Everywhere you look, people are out at sidewalk cafes. Life is very pleasant in Paris…refined…stylish…

.but where’s the excitement? The novelty? The growth? The innovation?

There’s something missing… It feels a little old… A little depasse…a little like yesterday’s news…a little stale…

.like, soooo 20th century…

The buildings here are old. The money here is old too. In China, everything is new. New buildings. New roads. New money everywhere.

We’re always wondering how the world works. How can a nation of 1.3 billion people under control of the Communist Party become the most dynamic, most capitalistic, most success-oriented race in the world? How can they grow their capital wealth at 3 to 10 times the rate of the US – when America is supposed to be the “most flexible and most sophisticated” economy in the world?

You’ll remember that Wall Street claimed to be using its derivatives and other math-heavy, fancy-pants products to make the economy safer while speeding up the rate of growth. It claimed to be way ahead of the rest of the world in its ability to raise and allocate capital. To hear the nation’s leading economists and Wall Street banks tell the story, allocating capital to its highest, most efficient uses is what makes an economy grow. That’s capitalism right? Using capital to make people richer. So, who are the world’s best capitalists? Surely the people with the most experience at it, right? And the people who got Nobel Prizes for describing how it works, right? And the people with the most capital…the most skills…the biggest market…and the greatest success record in history, right?

So how is it possible that people who just discovered capitalism 20 years ago could do a better job of it than Harvard grads motivated by million-dollar bonuses? How could a smart guy, with the best financial education that money could buy, with hundreds of years of capitalism behind him, backed by a government that professes to want to help him and flanked by almost unlimited capital, technology, and expertise, fall right on his face? How did so many winners turn into losers?

We’ll have some ideas on the subject later in the week.

Back to the markets…

Stocks bounced on Friday. The Dow rose 125 points following a big drop on Thursday. Gold lost ground too – down $12.

US stocks are now down about 3% for the year. The markets are deflating…

Don’t expect to find out by reading the market commentary in the mainstream press!

Journalists, commentators and the financial authorities are busily misunderstanding everything. According to the weekend analyses, last week’s downturn was a reaction to bad news from Europe. They claim it’s all the fault of the dumbo Europeans, who can’t get their act together. They created a jacked-up common currency – the euro – but never unified their economic and fiscal policies. So many of the member states got in trouble. And now the others are reluctant to bail them out. And the risk is that either the strong nations drop out of the euro, or the weak nations are kicked out. Either way, the whole thing could collapse in a heap.

Europe has a problem. But at least it’s out in the open. Everyone can see what is going on.

But that’s not why stocks fell. We don’t know why they fell. But we know it wasn’t just because investors were nervous about what is going on in Euroland.

The commentators and financial authorities have misunderstood everything…

.from what caused the crisis of ’07-’09…

.to what good the bailouts achieved…

.to what is happening in the markets today.

Tim Geithner, for example, is quoted in the weekend press telling the whole world that the ‘recovery will continue despite problems in Europe.’

He does not seem to realize that the recovery is not real…and that problems in Europe are really no different from problems in the US…

The problem is too much debt – in Europe, Japan and the US. The bailouts add trillions in new debt. This is not a way to solve the problem. It is a way to make it worse.

There are emerging economies. And there are ‘submerging economies,’ says our old friend Jim Davidson. The economies of Japan, the US and Europe are sinking under debt. All the slick Wall Street products merely added more debt to the private economy. Now, central banks and central governments are adding more public debt, too.

Markets will react to the fundamental problem – no matter what the pundits and politicos say. They will mark down asset prices in the debt-burdened economies… The Great Correction is at work.

And more thoughts…

An update from the Emerald Isle, from our own Irish gem, Ronan McMahon. Ireland has been leading Europe by pledging deep cuts in the public budget. With a much lower government debt than the US, Ireland could still save itself. So far, the Irish have gone along with the ‘austerity’ measures with good humor. That may be changing:

“I really hope Ireland can hobble along (re below) but it seems to be looking more and more like a best case scenario. We ran the largest deficit in euro land last year. Tax revenues continue to tank this year. The banks need another 20-30bn, which could bring this year’s deficit north of 30% if the cash is dished out this year. The government proudly told us when they started giving Anglo [a major Irish bank] cash that it was ‘off book’ so it was ok. Now Europe is insisting it’s booked the year it’s paid. That’s why last year’s deficit numbers were revised up in March of April.

“We took our first doses of medicine but the mood is changing. There was a mini riot outside the Dail (parliament). The police held the line…ironic given that there have been quite militant murmurings of action from within their representative body. Another dose of medicine is due in the next budget. Another 3bn in cuts needs to be found (although the EU are now looking at our books to see if we need to shave more). This time it won’t be so easy to find or to cut.

“NAMA (our bad bank) seems to be insolvent from the get go, and may need to be recapitalized. Not even a single euro of interest is being paid on a huge chunk of the loans it has taken over. Our economy is completely out of whack. Big multinationals are doing well making chips to keep your computer running or stents to keep your heart running or little blue pills to keep other parts running. But, in total they only employ about 100,000 people.

“The public sector is bloated and horrifically expensive.

“Exporters to the UK, or retailers north of a line between Dublin and Galway have been living a nightmare with sterling weakness… Many have just disappeared. For the past 8 years the service sector was pretty much based on us selling houses to each other. Everyone had a ton of money…the bricklayer, the mortgage broker, the solicitor, the realtor, the BMW sales man, the stockbroker… That’s all gone.

“The residential real estate tidal wave hasn’t hit yet. Banks are ratcheting up interest rates in line with their cost of money. People will start walking away from their homes as they loose their jobs. Emigration is back…

“It’s pretty bleak. Hopefully we can hobble until we find the bottom of the rainbow.”

Regards,

Bill Bonner
for The Daily Reckoning Australia

Similar Posts:

• It’s the Little Economies that Have Trouble
• Obama Plans to Do Away With Ireland’s Tax Advantage
• European Governments of the Eurozone are Separately Responsible for Their Euro-debt
• Emerging Markets Are Still a Buy
• Stock Markets were Down Friday in Europe

Hollywood’s “tremendous amount of interest” in adapting Mass Effect into a movie has finally paid off. As reports would have it, Legendary Pictures has officially picked up the rights to film it.
 
 
 
 

On Lancia’s official website, several pictures were posted of known cars such as the Fulvia Coupe and Granturismo Stilnovo alongside some unfamiliar coupes. The designs originate from Fiat Group’s Centro Stile in-house design division while there are also proposals for the replacement of the five-door Ypsilon. But don’t set your hopes on seeing these vehicles on the road soon as Lancia may not bring any of these into production as the carmaker as it has been known to withhold them in the past.

[source worldcarfans via autoblog.it]

Source: Car news, Car reviews, Spy shots

by Julian Ku

Actress Mia Farrow has a scathing op-ed in the WSJ today denouncing Obama’s Sudan policy. The crus of her critique is that Obama is not pushing hard to send Bashir to the ICC.

Last week U.S. Special Envoy to Sudan Scott Gration told the Senate Foreign Relations Committee that although he remains supportive of “international efforts” to bring Sudanese President Omar al-Bashir to justice, the Obama administration is also pursuing “locally owned accountability and reconciliation mechanisms in light of the recommendations made by the African Union’s high-level panel on Darfur.”

Mr. Bashir is indicted by the International Criminal Court (ICC) for war crimes and crimes against humanity, but the African Union Panel on Darfur has clearly aligned itself with Khartoum. One panel member, former Egyptian Foreign Minister Ahmed Al Sayed, said in an interview with an Egyptian newspaper, “The prosecution of an African head of state before an international tribunal is totally unacceptable. Our goal was to find a way out.”

The African Union panel is led by former South African President Thabo Mbeki, who in 2008 dismissed the ICC indictment, saying that it is “the responsibility of the Sudanese state to act on those matters.” Then, late last year his panel proposed a counter initiative to the ICC in the form of a hybrid, Sudan-based court with both Arab and African judges to be selected by the African Union.

But all this is moot since Mr. Bashir swiftly rejected Mr. Mbeki’s proposal. Perversely, Mr. Gration has now thrown U.S. government support to a tribunal that does not and probably will never exist. Even if it did, the “locally owned accountability” he refers to is not feasible under prevailing political conditions, as any Sudan-based court will be controlled by the perpetrators themselves.

Farrow has a point about the sketchy effectiveness of the AU’s mechanism. Moreover, it is hard to reconcile the Obama administration’s support for the AU panel in light of the ICC Statute, which doesn’t (I believe) permit substitutions like this.

On the other hand, I just don’t understand why Farrow and activists like her believe that the ICC trial of Bashir will end up somehow ending the suffering in Sudan.  Essentially, she is arguing that only regime change can solve the problems here.  But she is proposing the removal of Bashir without any political mechanism to replace him and to prevent someone worse from coming to power (e.g. an occupation force).  The Obama policy is realistic (although perhaps not exactly legal).  Farrow’s faith in the ICC as something that can bring peace to Sudan is deeply misplaced

Carmakers could be exposed to a barrage of consumer lawsuits if the US Supreme Court agrees that an accident victim’s family can file a suit against Mazda Motor Corp. over the type of seatbelts fitted in a 1993 MPV minivan.

To decide on this matter, the justices will have to revisit the scope of a 2000 decision that indicated that federal law protects carmakers from claims under state product-liability law that they should have switched more quickly to add air bags. In fact, the lower courts that considered the issue concluded that seatbelt-design suits are similarly barred.

For the Supreme Court to mull over this case is unusual but then again, the justices are doing so at the request of US Solicitor General Elena Kagan, whom President Barack Obama has since nominated for the court.

Kagan said that lower courts “repeatedly have over-read” the 2000 ruling to mean that federal safety regulations for seatbelts prohibit consumer lawsuits that attempt to hold the carmakers to higher standards. She reasoned that the lower courts’ view is inconsistent with that of the National Highway Traffic Safety Administration, which sets motor vehicle safety standards.

The argument is focused on the use of two-point seatbelts (lap belts without a shoulder strap). Before 1989, the NHTSA allowed these two-point seatbelts in some minivan seats. Three-point belts were required in 1989 but only for the outboard seats (those next to a window).

[via autonews – sub. required]

Source: Car news, Car reviews, Spy shots

John Gruber is a fan of the Apple-Google war …

Daring Fireball: Post-I/O Thoughts 

… It’s exciting, vicious, fun to watch, and ultimately should prove to be excellent news for consumers. Competition drives innovation and innovation raises the bar for everyone. And the bar, for smartphones, is rising quickly.

Like any great rivalry, there are striking differences between the two competitors. Apple and Google are jostling to shift the comparison between the two platforms to their very different strengths. Apple’s strengths: user experience, design, consistency. Google’s strengths: the cloud, variety, permissiveness..

Me? Not so much.

I have made two big vendor bets for my family and me in the past decade. Yes, Google and Apple. Google made me smarter, Apple provided us a relatively hassle free personal computing solution. When I bought my 3G iPhone I experienced the perfect union of the technology giants of 2007.

Then it all came apart. The Apple-Google war sucks. There’s nothing fun about it for me.

I have large Apple investments, but if I were single I’d go with Google, drop the iPhone, and run Chrome on my Macs. Yes, I love the elegance of the iPhone, but Google delivers the services I really need for my mobile life – and to be personally productive. Google is sometimes a bit evil, but Apple is the Singapore of computing. Efficient, but ultimately tyrannical.  Bereft of Google, Apple is now running with Facebook. Talk about embracing the Dark Side of the Force.

I’m not single though. I have three children, one dog, and today’s my 24th wedding anniversary. Google does not get families, Google does not, not, not get children. (I think the Gmail EULA has a teen or young adult age cutoff.) I could live with the rough edges of the gPhone (though my dental grinding would be expensive), but my family could not.

There’s no way I’m supporting two platforms. Apple’s FairPlay DRM allows up to five users per app or product — we’re a family of five. That’s a big advantage for Apple.

So I can’t leave Apple. On the other hand, I can’t live without Google and Apple’s boy-toy Facebook is a bizarro clone of 1990s Microsoft.

So I get hit from both sides. Each time I use Google’s crummy, miserable, slow, balky HTML 5 web 2.0 Google Voice app I take a bullet. (Gruber sings the praise of iPhone web apps. I bet he doesn’t use Google Voice on the iPhone.)

I don’t have a solution. Anyone wanna find a bar with bad country music and drink bad whiskey?

I start each day by working out, but today, I made an exception –- I woke up and tuned into the live feed of TechCrunch Disrupt. I was hoping to see what one of my favorite Silicon Valley people had to say — John Doerr, who somehow has a way of encapsulating an era, a trend or a combination of technologies with just a few succinct words.

I mean this is the guy who uttered the memorable (and very true, in hindsight) lines such as “the largest legal creation of wealth on the planet“ or “The old economy was about monopolies; the new economy is about competition.” And who can forget: “I have never paid so much for so little,” following his investment in Google.

This is also the man who invested in market-making startups such as Sun Microsystems, Intuit, Genentech, Symantec, Amazon.com, Netscape, Google and more recently, Bloom Energy. He was due to talk about the third wave, Michael Arrington had hinted in a post — and in light of the fact that he was the driving force behind @Home, the company that jump-started the broadband revolution — I was more than a little excited to hear what he had to say.

So I made myself a nice cup of peach-flavored white tea and sat down to watch the conversation Doerr was having with Charlie Rose, another one of my favorite people. Watching two people I admire that much talk about the future was so exciting that I forgot to call my parents, who were leaving to make their way over to the U.S. Oops!

What I got was a commercial for social gaming startup, Zynga, which Doerr described by saying: “We invested in Zynga 20 months ago, and it’s the fastest-growing venture we’ve ever had.” Then came his thesis about the third wave:

I think we’re on the verge of a third great wave of innovation. The first was the microchip and the PC in the early 80s. The second wave was 1995: the Internet. Marc Andresseen brought Netscape Navigator to the world. Then Amazon came. Then in 1999 we saw the 15th search engine called “Google.”

This third wave is social, mobile, new commerce. We don’t have a name for it yet. We could be on the verge of reinventing the web. It’s people, it’s places, it’s relationships. It’s exciting.

These smartphones change everything. They’re always connected, always on. It’s a powerful new platform. 85 million iPhones and iPod touches – we’re there. And now we have the iPad. It took just 28 days to sell a million of them. It’s not a big iPod. It’s a new paradigm. Imagine 10 years forward.

That was the extent of what he had to offer; even in a subsequent follow-up interview with TechCrunch TV he had little to add. But Social, Mobile and New Commerce — that doesn’t add up to the third wave of anything. That’s just the natural evolution of the Internet. It was obvious in 2002 that due to a growing number of broadband connections, more edge touch points (mobiles, laptops, connected televisions) and more people on the web, the Internet revolution, which began in 1995 — with Doerr providing the fertilizer — would continue to gain scale.

It was also obvious that more people and more always-on connections at higher speeds would mean more opportunities. Social — thanks to a determined kid named Mark Zuckerberg — is now part of the Internet fabric. More than 500 million have already signed on to be part a part of his social networking site, even despite the company’s privacy-related shenanigans.

Mobile? We’ve been a mobile society for the past few years — the iPhone only added fuel to the fire lit by the rollout of 3G networks in the middle of this decade. And new commerce? That’s an idea the South Koreans and the Japanese have been mucking around with since the 90′s and lately the Chinese. Zynga might be the darling today, but virtual currencies and gifts have been around an awful lot longer than that.

So if Social, Mobile and New Commerce are the third wave, we are way past the prediction stage. We’re already riding it. What comes next? That’s what I want to know. Especially from the one man whom I’ve have always counted on as being able to see the future better than everyone else.

P.S.: If you have thoughts about the next evolution of the web, leave a comment or feel free to drop me an email with your thoughts.

From GigaOM Pro: As Zynga Profits From Personal Data, Other Opportunities Abound and Is an iPhone- and Android-Only World the Best We Can Do?

Today I’m excited to announce the release of a major update to our Digital Asset Management evaluation research stream

Rough sketches like this are one of the first steps in creating animated movies like Pixar’s Toy Story 3. Wired took a look at how 49,516 such rough, vague sketches were used to create detailed scenes like this: More »










Toy Story 3 – Animation – Movies – Arts – Toy Story Series

A new cloud-based application called PhoneTell was announced today that allows you to see Caller ID info from any caller in the world, even if you do not have the information stored in your contacts list.

Along with this pretty cool feature, PhoneTell also gives you the ability to set some different response messages to incoming phone calls.

From the press release:

Managing High-Quality Connections While on the Move

It happens to you every day; you’re at lunch, in an important meeting or on another call when your phone rings, and it’s just NOT a good time.  But you would still like to acknowledge and respond to your caller.  This is when you most appreciate PhoneTell.  Here are some situations where PhoneTell would come in handy!

• You’re having lunch with an important client and get a call from the nanny.  You simply click on PhoneTell, which instantly sends a text saying, “I can’t talk right now, but text me or call again if this is urgent.”
• Your newly-licensed teenager is driving and receives a call from a friend.  He simply clicks on PhoneTell and a text is sent instantly saying, “I’m driving; can’t talk right now.  Will call you back.”
• You’re in an important meeting and get a call from a headhunter who has an update on a new career opportunity.  With one click, you send him an SMS saying, “I can’t talk now, but will call you back in 30 minutes.” You can even tell PhoneTell to remind you with the caller’s phone number, so you are sure to connect.

You’re at a movie when you receive a call from the doctor’s office.  You’ve been waiting for test results, but it would be rude to answer in the theatre.  With PhoneTell, you can instantly send a message saying, “I can’t talk right now, but please call me back in an hour.”

PhoneTell is available for Android Handsets rocking a 2.0+ version of Android, and is a free download available in the Market now. Give it a try and leave feedback on the app in the comments!

Might We Suggest…

• Storing Apps on SD the Froyo Way
  

  We all rejoiced when we heard that in Froyo, Android would officially implement a way to store…

Just released tonight is Free Music Ringtones, from the fine gentleman who brought you Flashcards. The app does precisely what the title implies: provides a nearly unlimited number of free ringtones for your Palm Pre or Pixi. How does it create this magic? By plugging into the open iTunes feeds to give you access to the previews that iTunes provides for every song.  Clever, clever! 

The result is a gigantic database of 30 second previews you can download, save, and set as your ringtone on your webOS phone.If you can’t decide on the song you want, the app also gives you quick links to the current top hits.

Go get it, everybody. Official app thread is here, big ups to spdsktr, aka James Harris!

The Slipknot bassist Paul Gray found dead this morning in his room at the Town Plaza hotel  in Urbandale, Iowa, found by a local hotel worker.

The 38-year old founding member known as “The Pig” or “#2” of Slipknot played for the entire career of the band up to this point, but Gray had certain rough times regarding drugs and alcohol abuse.

There were no certain  details as to how Paul Gray die. There were no evidence or signs of foul play, but there are plans for an autopsy tomorrow. Also, there were indications of drug overdose, reported from a source.

A great loss for his wife Brenna, as they were expecting a child this year, as announced by his mySpace page. As for the fans of the Grammy-Award winning rock band Slipknot,  Paul Gray will surely be missed.

Related posts:

1. Paul Gray Dead- No More Slipknot Bass Player: Farewell Slipknot Bassist!
2. Corey Haim Dead Of Apparent Drug Overdose – Former Star of “The Lost Boys”
3. Obama Cheating Scandal Update: Vera Baker and Barack Obama… An Obama Affair

At this point in the debate over the resource super profits tax, Wayne Swan must be praying for a European banking crisis. It would be a welcome external whipping boy for a local share market sell-off. And it developed into a full blown sovereign debt and liquidity crisis, it would give the government a convenient excuse to shelve the tax altogether until after the election.

The challenge of today’s Daily Reckoning is two-fold, then. First, what the heck is actually going on in Europe? Second, is the super profits tax really just a gimmick that allows the government to claim it’s putting the budget back into surplus ahead of schedule, while avoiding any of the tough “austerity” measures that European governments are forced to make?

But first, to Spain! Markets in Europe and America tanked overnight again and the euro weakened against the dollar. Investors still aren’t sure – or have no idea – if the EU $1 trillion rescue package actually solves the big debt problems in Europe, or merely kicks the can down the road. A little can kicking can buy you some time, though, so it’s not entirely a bad thing.

In Spain, a bank in Cordoba owned by the Catholic Church – CajaSur – was seized by Spain’s central bank after refusing a merger. Standard and Poor’s estimates it will take €35 billion to rescue Spain’s banking sector from a decade-long binge on housing lending. According to Bloomberg, housing loans account for half the assets of the Spanish banking sector.

Hey! That sounds familiar. Over half of Australian banks’ local lending is to the housing market. But of course, Spain had an irrational boom in property prices driven by credit and bank lending. Australia has a genuine property boom, singular in the world in that it’s been driven by immigration, a housing shortage, a cultural preference for owing large sums of money to banks for long periods of time.

By the way, the above comments were ironic. You know how we feel about the housing market here, built as it is on bedrock of debt. But if you want to read something truly surreal that borders on the Kafkaesque, check this out.

If you don’t have time to read the story, it’s about a new interest-only-and-forever mortgage product from ING Direct. The loans, in theory, would have no fixed term and absolutely zero requirement that you ever pay down the principal. In theory, according to ING CEO Don Koch (who wants to become your mortgage partner for life), the loans are a great idea for Australia. Why?

“People are needlessly being denied the chance to buy a property while prices spiral rapidly out of their reach,” Koch says. “There is an urgent need to provide more affordable options and borrowers should be able to choose whether they want to repay the capital, or not… It has worked fantastically in Europe as a way for people to get home ownership and build wealth throughout their lives. It just requires a change in mindset about how you live with debt…Some won’t like carrying a mortgage for so long but, for a lot, this will make home ownership cheaper.”

But is it really home ownership…if you don’t’ actually own anything?

It sounds like this is just out and out speculation on higher house prices. You borrow big from the bank because you reckon you can sell and bank a capital gain in a short period of time. You get all of the benefits of home ownership without actually owning a home. And you get all of the capital gains associated with rising house prices without having to make a large down payment or pay any principal.

Let’s just throw this out there as a question…isn’t this sort of product designed for people who want to speculate on house prices? And doesn’t it leave the borrower with a large liability to the bank, in perpetuity? And could you think of a better way to destroy a bank’s balance sheet over time than loading it up with these kinds of loans?

Don’t worry! With the help of you, the Australian tax payer, the Australian Office of Financial Management is happy to keep buying the mortgage-backed bonds sold by Australia’s non-bank lenders. The AOFM has funded nearly $8.7 billion in various mortgage backed securities issued by non-traditional lenders in the name of keeping smaller lenders competitive in the mortgage market.

Right.

But back to the problem banks in Spain. “Many of them are half bankrupt,” Rafael Pampillon tells Bloomberg. He’s the chief of economic analysis at the IE Business School in Madrid. He says the problem Spanish banks, “have loans to property developers and mortgages that have turned toxic.” European and Spanish authorities are hoping that more solvent banks with deposits as assets can take over the toxic banks and “dilute” the risk.

There is a fine line between inoculating yourself against a virus…and introducing it into your system so it can kill you, isn’t there? That said, we’re not biologist…nor are we a Spanish banking authority. Gracias a dios!

The bigger picture is that distrust among European financial institutions over solvency seems to be growing, not dissolving. Three month Libor rates rose. And in plainer terms, risk aversion is the new black. Everyone’s doing…or not doing it actually.

For a country with a large foreign net debt and which is historically an importer of capital to finance, say, major mining projects, the prospect of another crisis in capital markets would be a worry. But not here. She’ll be right mate!

To be fair, and utterly serious, there is no evidence we have seen yet of Australian banks getting squeezed by a higher cost of foreign capital, much less cut off. But as mentioned yesterday, with over $150 billion in debt to roll over, there’s a lot of borrowing to do. And if it’s at higher costs than expected, it could crimp economic growth.

The larger issue is that nearly half of Australia’s net foreign debt – the total level of near 60% of GDP – is owned by institutions in the UK and the US. And $581 billion of Australia’s foreign debt is owned by private sector financial corporations (see the bottom of page 60.) Worse still, nearly $500 billion in foreign debt has a maturity of 90 days or less, meaning any large and sustained disruption to global credit markets would require some kind of local solution.

Local solution? That would again mean government guarantees of big bank borrowing. And if there is a phase two of the credit crisis and it’s worse than phase one, one wonders if you’d see debt monetisation right here in Australia. Would the central bank be forced to print money to buy corporate or housing debt for which there was no international market? Hmm.

What would that do to the Aussie gold price?

Finally, in the midst of all these theoretical questions about how Australia will fare in a future credit crisis, there is the second question we began the day with: was the Resource Super Profits Tax just a gimmick to paper over a big hole in the government’s budget and “pay” for increased super and a corporate tax cut?

Who knows at this point? But it’s clear that some elements of the tax policy were designed by people who have never run a mining company. Not that we have either, mind you. But we’ve been around them for awhile and understand something of the private sector. And in the private sector, you generally don’t invest in projects that you expect to fail. Nor do creditors lend you money on the basis that you might fail.

The government’s offer to subsidize 40% of losses on marginal projects is supposed to make marginal projects more economic. The government argues that these projects will be taxed at a lower level thanks to the ability to offset losses, and thus will encourage mining investment in marginal projects.

Just what we need! More marginal, low-profit resource projects!

A miner – indeed no entrepreneur – goes into business to make a marginal profit. He goes into business to make a big profit, knowing full well that everything is against him. The marketplace abhors a huge profit margin the way nature abhors a vacuum. Profits are a signal to other competitors to come in and provide a good or service at a cheaper price or in a better way.

The innovative entrepreneur captures big initial profits by taking big initial risks. His risk ends up benefitting everyone by luring other producers in. The end result for consumers is an industry or goods and services that didn’t exist before. That is a social benefit which does not accrue to a corporate bottom line.

In any event, in a world where public sector salaries are higher, the only real reason to stay in the private sector is that you have a business you want to be in and believe you can make more doing in that way. There are other more ethical and philosophical reasons too, of course. But the government inviting itself to be your partner in business is like a stranger inviting himself into your marriage bed.

He says it will subsidise your love-making on nights where you have poor performance, saving your marriage from trouble. And on magical nights, he’s …uh…just along for the ride. Because your marriage bed is in his jurisdiction, he’s entitled to his fair share of your marital bliss. And please scoot over would you? You’re hogging the doona.

Granted, there is a difference between a spouse and a non-renewable natural resource. Although now that we type that, we are less sure about it than when we first thought about it. But in our metaphor above, where the government intrudes into a pre-existing, consensual, private relationship, it’s pretty clear who’s getting.

Dan Denning
for The Daily Reckoning Australia

Similar Posts:

• Government Sponsored Enterprise Debt and Australian Banks, a Ticking Time Bomb?
• Government Pretending Debt-fueled Spending is the Same as Growth
• Corporate Debt is Just One Aspect of the National Debt Problem
• Foreign Investment in Australia, How Much is Too Much?
• Borrowing and Paying Back in a Foreign Currency

Square Enix producer David Hoffman sure can’t contain his excitement over the other title that they’re teasing about. Another gung-ho stat appeared on his Twitter, still raving about “Project X”.
 
 
 
 

With his apparent decision to abandon his U.S. Senate bid in the face of the Linda McMahon juggernaut, will Simmons seek a return to the cozy confines of the 2nd Congressional District?

The world’s largest browser based games network, Mochi Media, is announcing that they will be launching a Flash 10.1 based site that will allow Froyo users to play 25 browser based games on launch.

From the press release:

The site, m.mochigames.com will feature more than 25 games and will be available upon the release of Google’s next version of Android (“FroYo”) phones. The site features mobile-optimized versions of puzzle game Biomass, card game Magic Towers Solitaire and strategy game Wheekling, as well as other puzzle, strategy and shooter games

This is an exciting development as we near the time that Flash is finally going to be a viable reality for Android users, and a MAJOR leg up on iPhone users who will not be able to use flash based sites. The site mentioned above is live now, so those Nexus One owners who have already gotten Froyo should be able to play the games there. Leave some comments and let me know how it works! As I am still rocking the G1, so I am relying on you all to let me know how awesome it is!

Might We Suggest…

• Flash Player 10 Coming to Android in October
  Adobe’s Flash Player 10 is coming to Android, officially.  No more speculation or hoping… we are a ‘go’ for launch.

  During a recent earnings call for Adobe, President and CEO Shantanu Naraye annou…

"Healing may not be so much about getting better, as about letting go of everything that isn't you – all of the expectations, all of the beliefs – and becoming who you are." ~ Rachel Naomi Remen

Today, I would like to introduce Gail Konop Baker.   Gail and I crossed paths recently.  In that crossing, I experienced both her generous heart and a bit of her "story".  Her story is one of challenge, of hope, and of a realization of what truly matters in life.  In her early forties, Gail was diagnosed with breast cancer.  From that, she has built herself back up.  In that process, and as part of the journals she kept during those days – a book, Cancer Is A Bitch, was written.

As you think about your life, and wherever you are in that…read along as you experience part of Gail's life. We never know what fully lies in front of us…

1. Tell us a little bit about who “you” are (family, career, any special life experiences you’d like to share, etc.)
Who am I? That is an excellent question and one that I ponder daily.  Sometimes hourly. Who I am has evolved and is evolving over time. Constants? I am a mother of three totally kick-ass children, a writer and a passionate and curious seeker. Things that have evolved in the past few years? I am a published author, professional speaker and marathon runner.  Things still evolving? I am a yoga teacher-in-training and on a perpetual journey to discover who I want to be.

Lance's Commentary: My daughter and I were recently in NYC.  We saw a sign in Times Square, with those words…"Kick Ass".  She took a picture and made it her phone's background….(it didn't last!!). 

2.  You have written a book about your battle with cancer.  Tell us about that process, and what it has meant for you personally.
I never planned to write a breast cancer memoir. I never planned to get the cancer that would prompt that. But in 2006 after just completing my second novel about a woman who finds a lump in her breast and thinks she might have breast cancer and wonders if she’s lived a meaningful life, I went in for my annual mammogram and was diagnosed with ductal carcinoma in situ and a week later had a lumpectomy.

It rocked my world. Stunned and panicked and paralyzed me. And even after I was told it was non-invasive and they got it all out and I was “cured,” I fell into a funk. I couldn’t write, couldn’t think, couldn’t do anything other than Google health sites and make homemade batches of organic facial creams and scribble my deepest rawest craziest most intimate thoughts into a journal.

I never planned to show those words to anyone. In fact I wrote them thinking this was a way I didn’t have to burden my friends and family with my crazy thoughts. Nobody I was close to had ever had cancer. Not my parents. None of my friends. And while I knew they cared, I felt alone in my deepest thoughts and fears. Eventually I wrote those thoughts into an essay that I called “CANCER IS A BITCH” and sent it to some trusted writer friends who said it was the most powerful thing I’d ever written. But lose the word, bitch, they both said. Nobody will ever publish like that.

Honestly, I didn’t know what I had written or what to do with it. But soon after that I read that Literary Mama was looking for columnists and on a whim I pitched it as a column and they offered me a monthly column. The responses from readers were so soulful, I was floored. Many hadn’t even had cancer but they either knew someone who had or just responded to the midlife issues that I wrote about. Issues like what it meant to reach midlife and wonder if this was the life I meant to live, if I was the person I’d always meant to be. Next thing I knew I pitched the idea of writing it into a book to a lit agent and he offered to represent me and sold it.

But what I was writing and thinking about evolved over time. At first I thought I was trying to record my thoughts and feelings as openly and honestly and deeply as possible. But after I started connecting with readers, I discovered the more open I was about all aspects of my life, the more universal my message. People responded to my honesty, which, in turn, inspired me to share more of me.

The other major incident was that a good friend of mine was diagnosed with stage IV colon cancer and another neighbor with a stage IV brain tumor, both middle-aged. Both were also mothers of children still at home. At that point, my story evolved into a bigger story. I felt this connection to them (even though I was “cured”). And then beyond that a kind of collective grief. I wanted to speak about cancer in order to try to de-stigmatize it. I do believe that cancer is one of the last standing taboos. You say the word and lot of people wince and physically back off. I wanted to give voice to that. To stand in solidarity with those who had been pierced by cancer’s insidious claw.

More than four years have past since my surgery and the whole experience is starting to fade, other than the fact that I wrote a book about it and still speak and talk about it when people ask, and the profound life-altering effect, I have in many ways left the trauma behind and moved on.

Lance's Commentary:   Writing can be therapeutic.  As I read your thoughts, I'm reminded of how true this is.  Sometimes, a pen and paper can offer so much healing…

3.  “Cancer is a Bitch”…the title of your book – gives the first impression that pretty much cancer is a real evil.  Could you describe what inspired the title, and what the real meaning behind this book is.
As I said earlier, I originally wrote an essay inspired by the journals and the first line of the essay was “I am sitting topless in the oncologist’s office on Valentine’s Day. Cancer is a Bitch.”  I guess I meant that cancer is too forceful, it backs you into a wall, it sits on top of you, crushing your sternum, it doesn’t let you say uncle, it doesn’t back down. At least that’s how hearing those words felt to me initially. I thought the title would be changed before publication, they usually are. It is a little hard to roll off your tongue especially in social gatherings; I cleared an adult table at a Bar Mitzvah once. And of course all my 12 year-old son’s friends wanted a copy of it and I worried social services might come and take me away. But I do think the title captures the sassy, edgy, humorous tone of the book.
 
The real meaning of the book is that facing my mortality at such a young age forced me into a midlife reckoning with myself and inspired me to take charge of my life. And eventually soar (well, I’m starting to soar). I hope the message people walk away with is that if or when you get smacked down by a bitch (like cancer or divorce, or an accident, or losing a job, or any other unexpected tragedy), go ahead and wallow and go a little nutty and then you can pick yourself up, dust yourself off and do and be exactly what you want to do and be. Fewer “whys,” more “why nots.” No excuses. No apologies.

Lance's Commentary: Gail, this is a powerful example of just how much we value heartfelt honesty.  I can't imagine what it must be like to hear those words…the words spoken to you, telling you that YOU have cancer.  Yet, in your sharing of all of this, I think there's this deeper part of all of us – that of how we connect with caring and honesty.
 
4.  Since writing the book what has this meant for you both personally and professionally?
Professionally? The book launched my writing career.  I had been writing for more than 20 years and while I’d had some minor success publishing in small journals and winning some awards, I hadn’t published a book. While on the road promoting it, I discovered I enjoyed speaking to audiences and that launched my public speaking career.

Personally? The scare and promoting the book inspired me to take even better care of myself.  Since the scare I have run two half marathons and one full marathon, started my yoga teacher training, detoxed my diet and look and feel better than I did in my thirties. I also detoxed my life. I decided now was the time to live exactly the way I’d always imagined.

Lance's Commentary: I love that you've found good out of this!  Cancer is a nasty thing (a bitch, I suppose…).  And from this, I get a real sense that it has helped to propel you into some wonderful directions in your life.  It's so good to hear the positive that has come from a very challenging moment in life. 

5. Tell us one unexpected thing that has happened since writing your book.
I think discovering what a shameless ham I am in front of audiences really surprised me. Not much intimidates or scares me anymore.

6. Gail, what does a typical day look like for you?
I wake around 6:30 a.m. do 10 minutes of meditation starting with a devotion of gratitude. I then do 10-15 minutes of yoga just to get the bodily juices flowing.  Stand on my head to both reverse gravity and get some blood in there. I wake him between meditation and yoga and then go down and let the dogs out and feed them (two yellow labs). Then I squeeze a fresh lemon into a glass of water and make coffee and breakfast, drive my son to school. When I am in focused writing mode (like I have been recently trying to finish up a new book proposal), I try not to get sucked into the internet world that likes to seduce me. Instead, I dive straight into whatever I was working on the previous day, before anything interrupts my brain flow. Two hours minimum. My reward after that is the internet. Facebook is my crack! I answer any pressing e-mails and make a list of practical things I have to do. After that it’s either a run or yoga or on very stressful days, both! Shower and then either more writing or errands or driving the carpool. Or all three! When I am promoting or giving a speech, the day is entirely different. For speaking it’s all about the hair and outfit (kidding… sort of!) and for interviews it’s all about making the same thing I have said many times sound fresh and interesting. I don’t like to rehearse too much for speaking or interviews since I have discovered that I operate better off the cuff.

Lance's Commentary: I find exercise to be so good, and for much more than the physical benefits that really took me down that road.  And – I'm doing my first marathon this year!  So…a typical day for me…involves running (kidding…sort of!!).  We should have coffee someday!

7. Anything new you have coming up?
Yes, I am working on a new book that I am very excited about. The topic is marriage. It promises to be very juicy and humorous and inspiring (at least that’s what I’m hoping).

Lance's Commentary: Marriage can definitely have some juicy and humorous moments…this sounds like a GREAT book!

8.  Deep down, what makes you uniquely “you”? 
I am quirky and curious and very alive. It is hard for me to predict exactly what or whom will turn me on but when I am turned on it’s like high voltage energy gone wild.

Lance's Commentary: "Energy gone wild"!!!  Hey, now that's a pump me up kind of moment!

Closing Comments: Gail, it's an honor having you here!  Your story is inspiring.  As I sit here, never having had cancer…I take this one really important thing from everything you've shared today.  NOW is important.  And am I truly living the life that I desire?  We never know when it could all change.  Thank you for sharing a bit of YOU here today!

You can keep up with Gail by visiting her website, and following her on Twitter.

The market is freaked out about the apparently escalation of tensions on the Korean peninsula.

In early trading, the benchmark KOSPI is down 3.3%.

According to Bloomberg, a message posted on a North Korean website relays that leader Kim Jong Il has told his military to “prepare for war,” which is coincidentally what Obama told the US military on Monday.

Join the conversation about this story »

See Also:

• OBAMA TELLS MILITARY: BE PREPARED FOR WAR IN KOREA
• South Korea Threatens War If North Korea Makes One More Provocation
• North Korea Warns ANY Retaliation For The Cheonan Will Lead To All-Out War