Economics with a Heart

Or should that be charity with a brain?

• Do economists not "consider the value of community?" (Economist Blog)
• Are the poor actually different? (Economist Blog)
• Charity and Fraud. According to some estimates, fraud accounts for up to 13% of philanthropic giving. (New York Times, H/T Freakonomics Blog) [Not sure I agree with the methodology, but I do think it's something that most people don't pay enough attention to.]
• For those who worry about the rich getting richer and being an old boys network, apparently social networks might not matter so much - at least for the Freemasons. (Paul Kedrosky)
  
• Venture capitalist philanthropy (Enterprise Resilience Management Blog) [The better way to poverty alleviation? Profit seeking and poverty alleviation can be highly complementary in market based economies.]

Solar Power cheaper than Coal?

Apparently it's finally coming. Solar may become cheaper than coal thanks to a company called 1366 Technologies (H/T Paul Kedrosky). I did a quick search and found this from an entirely different company, Nanosolar. While I've no doubt that it will be a hard road to commercialization, proving that concepts can work in the lab is the first step.

While some people seem to believe that oil prices will continue upwards forever, cheap solar or any other form of alternative energy for that matter (or even dramatically more efficient internal combustion engines), will mean that prices will one day collapse. High prices are only driving the speed of investment. While neither company are public, trying to project which company ultimately wins the race will be difficult (particularly since Nanosolar and 1366 aren't the only ones). The companies that may benefit the most may be those like Applied Materials who build the equipment to make the solar cells, and also firms where the cost of energy is a material amount of their direct costs and who will benefit from cheap energy.

Given the coming energy requirements of India and China alone, this will be great news.

Democracy's role in China's brand of 'Capitalism'

An interesting column by Thomas Barnett. He pulls from "Good Capitalism, Bad Capitalism" by William Baumol, Robert Litan and Carl Schramm. They in turn note that market economies go through several evolutions with the American state being closest to ideal characterized by an entrepreneurial capitalism with leading industries dominated by large firms.

Barnett argues that China is moving closer to the American model and -

Entrepreneurs tend to be notoriously independent characters. If you don't give them the freedom they need, they tend to leave. [...] What comes next? More and more freedom if China hopes to hold onto those entrepreneurs.

I'm not sure that entrepreneurs really have that much mobility. I do however think that fears democracy will not come with increased wealth with respect to China are premature. There's already a lot of unhappiness with respect to the level of corruption of the political class and the policies they enact. Just wait for the next major recession - the economy can't continue to rise at the pace it has forever.

I think it's important to remember that China moved to a more market based model not because they wanted to, but rather, for self preservation. Making the economy more efficient by definition also means meeting the needs, wants and desires of people. At the margin it's entrepreneurs who make this happen - creating businesses that respond to needs and building wealth as a result. While I don't worry that entrepreneurs will leave, without the basic elements that make business work - key amongst them - stable government, rule of law and stable property rights, entrepreneurs just don't start businesses. Both buyers/consumers and sellers/entrepreneurs suffer as a result. Representative democracy and the pressure release valves that come with it, is a rather elegant solution to this problem.

Random and Shiny Linking

• Caring for the poor by smiting them. Both Clinton and Obama have made rather curious statements on trade on the election trail. Nevermind that there is a preponderance of evidence that trade creates jobs, and that this practically the only thing all economists across the political spectrum can agree on, if the Democrats win the presidency, this could bode rather ill for both US competitiveness and the global economy. Comments from the Club for Growth here. More here earlier from ChinaLawBlog.
• "It's not you, it's your books." I don't suppose business books count. (from the dreaded New York Times.) [For the record: I'm a fan of Ayn Rand.]
• Fall of newspaper revenues from advertising accelerating (TechCrunch)
• Amish Paradise: computers are no substitute for creative problem solving and quality thinking. Why a focus on putting computers in classrooms may be useless and wrongheaded. (PBS: Robert X Cringely)
• 50 free ways to get free advertising for your business/startup (InsideCRM)
• The hypocrisy of 'Earth Hour'. (TechCrunch, Samizdata) [I've suspected that environmentalists wouldn't be happy until we were living as if in the Dark Ages - now they've proven it - literally. It strikes me as a rather arrogant assumption that the lack of light offsets the benefit of whatever activity that required the electricity to begin with and that people are generally unable to make the tradeoff themselves as the advocacy of this token measure suggests.] Update: Earth Hour at the CBC (Canada's state owned broadcaster)
  

Factory Ownership Matters

David Dayton from Silk Road has a great post on the impact factory ownership has on how factories are run in China. While they tend to be broad generalizations, I find his observations to be very much in line with what I've seen and very much applicable in considering how one interacts with vendors and partners. Read it here.

China moving upmarket?

ChinaLawBlog highlights the move of some manufacturers to produce high end and even luxury goods in China (as illustrated by an article in the WSJ). The article notes:

In light of the strong euro and steep prices for Italian suits, Jhane Barnes is touting the suits' provenance as an advantage. [...] While Mr. Burke acknowledges that there is still some stigma associated with suits made in China, he can already see men's resistance softening.

While I can agree with the general idea that like Japan, which up until the 70s was seen as manufacturers of junk, China too will move upmarket at some point into products and services that have greater value added to them. But I tend to agree more with Paul Midler at The China Game who notes:

I’m not so sure much has changed. Manufacturers have for some time now been in the position to make a product at virtually any quality level. The bigger variable is whether the customer is getting what has been ordered.

I think we are quite a ways away from anyone associating the China "brand" with high levels of perceived quality. Even amongst seemingly established firms, the variance in managerial thinking of what is acceptable to ship ranges drastically. While I don't doubt that the front line skill base and even the capital base with high end precision equipment exists in China, there remains significant managerial and process gaps that can result in large variances in both what a firm is really capable of (versus what they should be capable of) and more importantly between what is specified and what is produced.

As Mr. Midler further points out, unless you don't really care what gets made, generally speaking, when working with Chinese vendors - particularly those based in China, there's no substitute to adding safeguards to ensure that goods are produced to specification. This will also come at a cost - particularly as your vendors realize that you're planning to check.

Credibility and admitting that "I don't know"

Building credibility means having the intelligence to know when to say "I don't know." (Great advice from the Redeye VC). While often a case of misplaced pride, bluffing wastes a great deal of time and when you're inevitably caught, destroys trust that may not be recoverable in the future.

Another Dump of Shiny Links

• People are people everywhere, even in China. HR thoughts in China. (ChinaLawBlog)
  
• Political correctness kills. African tyrants withhold GMO food from starving citizens with the support of environmental activists. (Instapundit)
• Using economics to tame traffic. (FreakonomicsBlog)
• Remembering John Kenneth Galbraith: A "so-so theorist and brilliant communicator". (EconomistBlog)
• Interview by Conde Naste's Portfolio with Pete Peterson, founder of Blackstone. (H/T: PE Hub) [Fascinating interview. A billionaire who monetized most of his wealth after age 60 and how he sees the world today.]
  

Links Roundup, Some of them Shiny

As I wait with bated breath on the status of a number of contracts out there, here are a few of the links that I've been reading:

• Malthus lives? (WSJ) [When it comes to resource scarcity, the people who bet against technology and human innovation are the ones who have consistently been on the wrong side of history. It takes the heavy hand of government to screw things up.]
• Returning product to China? "In Another Lifetime, Brother" (ChinaLawBlog) [I tend to agree with the general thrust of the post - the key being that an ounce of prevention is worth probably more than a pound of cure.]
• China M&A done right. (ChinaLawBlog)
• Why Vietnam won't replace China. (ChinaLawBlog) [Beyond the noise of exchange rates, etc. - the core value that China continues to offer is labour arbitrage. Cheap, largely unskilled labour that isn't going to disappear anytime soon given the sheer size of the population.]
• The War against Sugar Claims 8th Grade Political Figure. (FreakonomicsBlog) [Apparently he was caught "buying an illicit packet of Skittles from a classmate" - because there really aren't any other pressing issues facing education...]
• The Most Entertaining Trial Ever. (H/T Instapundit) [A bit of an old link but funny nonetheless.]
  

Time to Hunker Down...

Four mistakes entrepreneurs make in a recession... (H/T: Businomics Blog):

1. Failing to take advantage of decreasing costs.
2. Thinking the only way to increase demand is to cut price.
3. Failing to recognize increased competition.
   
4. Forgetting that some products, or even whole businesses, are counter cyclical.
   

Read the whole thing.

Lower Shipping Prices on the Horizon?

"Sharp Fall in Transpacific Cargo"(China Economic Review). With a potentially severe recession in the US, it's not surprising the amount of cargo shipped to the US has fallen nearly 9%. Add the significant increase in transpacific ocean capacity and ocean rates are probably about to get a lot more competitive.

Whether or not these reduced loads will impact inland shipping costs - which can account for almost half of overall shipping costs from China to the east coast in North America is a more open question given higher fuel costs make costs in general more variable in nature (versus fixed for ocean freight). Unfortunately this respite may be temporary in the deluge of overall cost pressures from China - from reporting requirements, energy costs, currency appreciation, to local inflation.

Race for 100mpg car begins

The Progressive Auto X-Prize for a car that gets a minimum of 100 mpg and is available for purchase for a purse of $10 M , was officially announced yesterday. Rules here. As covered by Popular Science (h/t Instapundit). Apparently by the time testing begins in the spring there will be a few cars that already meet at least the first requirement. With motor gasoline consumption taking up nearly 45% of total oil consumption in the US, this could be a real solution to high oil prices.

Links, Links, Links

Some of them Quirky:

• Turning Criminals into Businesspeople (guffaws aside), "Her premise is that many criminals are intelligent people with good heads for business and healthy appetites for risk, and that these traits can be put to productive use." (The Economist)
• It's also good advice for anyone who designs business systems: It's always your fault. (Coding Horror Blog)
  
• If you didn't know the origins of the word "tip" was "To Insure Promptness", according to some, it should be renamed to "To Insure Prejudice". (Freakonomics Blog)
• For the jaded (and there are a lot of you out there): Nice guys finish first. Apparently we are happiest when we spend money on others, and those who punish others the least earn the biggest rewards. (Freakonomics Blog)

Why I don't read BusinessWeek

I don't know if it's because I'm getting older, but I find my patience for advocacy parading as "journalism" has diminished substantially over time. I read this article on "Why Exxon won't produce more" and left wondering who this guy's editors were. The "journalist" makes the argument that Exxon has few incentives to produce more and that greedy Wall Street continues to reward it for limiting production (ok that last bit was my editorial). Says the "journalist":

"It really goes back to what is an acceptable investment return for us," Tillerson said. In other words, producing incremental barrels just to ease prices for consumers is not part of the company's calculations.

His "in other words" makes a rather silly assumption that Exxon's greater investments in production would ease prices or as a corollary, Exxon is withholding investment to prop up prices. The reality is that Exxon's oil production is only the 12th largest oil producer in the world - a fraction of the size of its state owned competitors, and can no more affect oil prices/abundance than I can flap my wings and fly.

Branch Plant Economy not such a Bad thing?

Throughout the 80s and 90s there was a fear that Canada was turning into a branch plant economy to the US. The fear was Canadian companies were selling out to foreign competitors gutting the Canadian industrial base and less control/research and development happening in Canada. According to a recent study, those fears may have been unjustified. H/T: Paul Kedrosky

Big business turnover correlates with rising income, productivity, and (in high income countries) faster capital accumulation; consistent with Schumpeter's (1912) creative destruction and recent formalizations like Aghion and Howitt (1992). Turnover appears to "cause" growth; and disappearing behemoths, more than rising stars, drive our results.

Maybe politicians should be less concerned that companies are too big to fail but rather that because they are big, they should be allowed like any other company to fail.

Questioning Work

From the blog of 37Signals - questions to ask:

Why are we doing this?
What problem are we solving?
Is this actually useful?
Are we adding value?
Will this change behavior?
Is there an easier way?
What can’t we do because we’re doing this?
Ask this all the time. Is it really worth it?

It's too easy to get caught up in the monotony of the day to day without really challenging whether or not what's being done should be done at all.

Quirky: Important questions are asked by Academics all the time...

These probably aren't among them: Can we do business with space aliens? or Calculating interest on goods traveling at close to the speed of light (a paper written by Paul Krugman of all people)

PS - I'm trying to figure out a rhythm/focus for my blog so please bear with me as I figure out how to organize my seriously random thoughts and inspiration amongst the dozens of blogs I follow. I've noticed the stuff I find funny tends to be of the 'quirky' (or deliciously macabre - but out of deference to my sister who feels that this would poorly represent me, I'll try not to post too many of those) variety and hence the label that I'll try using from now on.

Keeping the Momentum Going

Projects midway through sometimes need a shot of adrenaline. Definitely applicable to ours (and probably most) firms, it's not so easy to keep the momentum when you inevitably run into barriers, miss targets or are just midway through a long term project. While it may seem somewhat obvious, this research, according to Incentive Intelligence suggests that key to building on the momentum is reminding the key people involved the time and effort they've put into a project, and those less related to the project what's left and recommunicating the goals/benefits of the project. The message has to be personalized and specific to that individual. Nothing particularly new here, but a useful reminder nonetheless.

Early Spring Cleaning

Like spring cleaning, I think most companies would be better off with periodic reviews of processes and procedures to clean out the "gunk", re-evaluating what's critical, figuring out what information is necessary (what's not) and the shortest distance that information needs to travel. Essentially, starting with a blank page figuring out what the "ideal" is for each of the major players, and figuring out how the current system measures up. For us, the starting point is understanding the value we offer to our clients and trying to design processes to reinforce and add to that value.

Our growth has meant that we have always been focusing on that one emergency - battling one fire after another. To move to the next level it's pretty clear what we need to do and yet - between finding the time and motivation to do it, it can be a struggle. To some, this could is the ideal - we're almost starting from scratch. Where other companies need to unlearn bad habits but the move towards the formalization of processes does not seem any easier.

Quirky: All it needs now is Skynet

"Creepy Robot... frantically scrabbles to regain its footing with the grotesque urgency of a locomoting cockroach" H/T: Core77

China as Mercantilist

Interesting overview in the Economist. Not sure it breaks new ground, but it takes the position that China is recognizing that it can't and shouldn't simply deal with anyone who will sell it much needed resources. This, I think, is in fact in China's best interest in the long run as these are the same countries whose governments are most likely to change. Like Eastern Europe, the general population tends to remember who their friends were and weren't.

Thanking their lucky stars...

... That it didn't happen on a weeknight. From the WSJ:

Federal Reserve officials insisted that the firm complete a deal that weekend...Their priority was that Bear's counterparties -- the parties that stood on the other side of its trades -- would be able to arrive at work Monday knowing their contracts were good, minimizing the risk of a generalized flight from the markets.

Haven't had much to say about the stunning demise of Bear Stearns - surprising on several levels. Those who tend to be further from the markets and of a certain ideological persuasion see this as a bailout of rich fatcats, while those pro-markets see it for what it is - an "orderly liquidation" (at least as orderly as it can be). Play by play of what happened here.

I have no direct interest in the events beyond friends who still work in investment banking (which is now a lot more limited), but the effects will be felt for some time to come. The world is deleveraging (or at least leveraging to reflect revalued assets) and the US is almost certainly in a recession. There has been significant growth in newer and useful tools that have been able to help businesses create liquidity in their businesses - particularly in the area of asset backed securities (e.g. loans against inventory or receivables). With the Americans often pioneering - or at least popularizing products like these, the rigor of these products will be tested and with even greater certainty, it will be more difficult to get almost any type of loan.

Update from a WSJ Editorial: "There's no joy in seeing a venerable firm expire, but it has to happen if financial markets are going to have any discipline going forward."

Somewhat frightening/funny from Paul Kedrosky: "The U.S. financial crises is newly making African debt seem like a (relative) safe haven."

They're on to me.

I'm still in denial.

What will Google Do?

Link to here (TechCrunch). It's more than an academic question as I have been talking with a few people in the development space about this. Do you ignore it? Currently for us, this has no direct operational impact and as such, we have few choices to make but it does reinforce the level of political vulnerability of doing business in China.

For our clients, the primary driving force continues to be about staying competitive. We continue to create jobs in what is one of the largest wealth creation projects ever for a people who were amongst the poorest (and populous) in the world. At what cost this comes at remains to be seen, but for the meantime, I strongly believe our work today will help mitigate any future pain. In the meantime I can't help but watch feeling somewhat helpless.

Quotes from and for Entrepreneurs

From YCombinator's Hacker News - a few highlights:

• Antoine de Saint-Exupery: If you want to build a ship, don’t drum up the men to gather wood, divide the work and give orders. Instead, teach them to yearn for the vast and endless sea.
  
• Henry Ford: If I had asked my customers what they wanted, they'd have asked for a faster horse.
  
• William Shakespeare: Our doubts are traitors, and make us lose the good we might oft win, by fearing to attempt.
  
• Winston Churchill: Success is the ability to go from one failure to another with no loss of enthusiasm.
  
• Eliot Carver: The difference between genius and insanity is measured only by success.
• Albert Einstein: Great spirits have always encountered violent opposition from mediocre minds.
  

Productivity Tip: Sharing Ideas Internally

When I was in university, I had a great Organizational Behaviour prof who pointed out that managers are not in control of what people think and how they react so we can only control such things as culture through seemingly mundane tools as policy and meetings. While I think not for profit generally plays catchup to business when it comes to productivity and best practices, Friday Fury: "a rapid-fire team discussion of a hot investment topic, a new sector that we might want to explore, or a question that is troubling a team member about how the work we do can definitely improve people’s lives" is a great idea.

Productivity Tip: Making Your Product/Service Easier to Use

I agree with the commentary on this. I think the easiest thing any business can do to improve the customer experience is pretend to be a customer and fill out all the forms and documents and follow the paperwork chain through the organization to get rid of what doesn't get used and what isn't necessary (not the same thing). As Google and Apple show, simplicity and good design has value.

China as Political/Economic Anomaly

It's a bit of a related idea that good governance is good business - or at least wealthier citizens: countries that have rule of law have higher incomes as measured by GDP. Implications:;

• Governments in poor countries should be held increasingly accountable
  
• More care should be given as to the disbursement of investment dollars and charity (otherwise we create a perverse cycle - governments in bad countries are incentivized to abuse their people to get more money)

Events in the west show that while China has been exceedingly fortunate in their policies that have allowed for wealth creation for their people, they have a long ways to go.

6.6 Degrees of Separation

This should interest the marketers. A study that appears to show based on who we talk to on MSN, that we are all on average about 6.6 degrees of separation making books like The Tipping Point more relevant in thinking about how ideas spread.

More than just a PR problem

Here. Background here.

Update: A blogger's dilemma - "I want to keep this blog online in China". At what cost? Perhaps it's a flippant question but that was the gut reaction I had. I'm a hypocrite in that I'm not sure what to say about it myself and as someone who believes quite strongly in libertarian principles when it comes to governance - free markets and free people, this development in Western China and the resulting authoritarian reaction is obviously not good and I fear will not end well.

What they don't tell you about being an Entrepreneur

Too true. I think this is one of those universally shared experiences of entrepreneurs all over the world. This is how Marc Andreessen (of Netscape fame) has described it:

First, and most importantly, realize that a startup puts you on an emotional rollercoaster unlike anything you have ever experienced.You will flip rapidly from a day in which you are euphorically convinced you are going to own the world, to a day in which doom seems only weeks away and you feel completely ruined, and back again. Over and over and over. And I'm talking about what happens to stable entrepreneurs.

Meeting Westernized Expectations

The difficulties in communication because of differing life contexts is a concept that isn't easy to convey. Despite how difficult it is to outsource any project outside your company, to do so half a world away requires even greater care and precision. Like programming, GIGO (garbage in, garbage out) applies. But even when you do that, ensuring that people care about the details isn't easy for staff who most of their lives were concerned far more about bigger life issues impoverished outside of the cities. And then you have the clients who seem to be concerned only about price assuming quality will be there. This post from All Roads Lead to China is pretty accurate.

One good traffic idea from China/Taiwan

I notice they do this in China as well (which may very well be the ONLY good idea that they use when it comes to traffic management). I don't really understand why we don't have countdowns at most traffic lights here in North America. It makes perfect sense. As the link does point out however, the countdown should be on the green (or on the crosswalk) rather than than the red. They do it on the red in HK, and with the way the cabs drive there at night, it's sort of like what I would imagine sitting in the passenger seat of a race car might be like - something definitely to be experienced.

What perhaps irks me the most is how most people seem totally unprepared when the light turns green. They don't even care to anticipate it. I notice that the lag to response time is definitely longer where I live in Canada versus a place like New York or Boston. A little impatience and consideration for the time of all the people behind you isn't such a bad thing.

Of course another way of dealing with things (including China where they put these cameras up all over the place). I've always suspected that it's more about revenues than it is about safety.

Apple's Design Process

Pretty interesting. Companies that are able to consistently create great designs fascinate me. I think it's easy enough to "buy" a few creative people who drive innovation but to be able to institutionalize and implement good design is definitely not easy though definitely to be admired.

Paradox of Labour?

"Cheap Labor is Very Expensive, Expensive Labor Very Cheap". Sometimes you just get what you pay for. (Though redundant, it should be pointed out that sometimes you don't - particularly given the range/state of factories on both sides of the Pacific). Markets for labor are generally inefficient in the short run like most other products, services and inputs.

Playing Chicken Little

Some of the usual suspects seem genuinely alarmed about China's development - not so much within a political /military context but because they worry the world is running out of resources or food. 'Can you imagine', they exclaim almost breathless, 'if 1.4 billion people in China had the same environmental footprint as us'?

I've heard the same argument being made about people in Africa. It's similar to somewhat unrealistic views that we in the west have polluted the rich cultures of developing countries to the point that they crave to become more like our recklessly consumer driven society. It befuddles me as it would seem the alternative they suggest is that we keep those in developing countries poor, starving and technologically backwards. For some fleeting moments I wonder if such views are motivated in some small way by racism.

Malthus is long dead. It is a wonder that respectability for his ideas haven't died with him.

Which comes first?

Which should come first? Representative democracy or economic development? That's what a recent article in Foreign Affairs explores - and while it focuses on Russia, I think some of the points being made are very relevant to China today not to mention many developing countries around the world.

They really do think differently

It couldn't have happened to a nicer guy though I feel sorry for his family. What is perhaps more interesting about the Eliot Spitzer debacle is how it's being viewed from China and elsewhere. The Chinese press (and/or foreign press) is pretty predictable criticising American decadence and hypocrisy and my sense is that they've been to a degree successful at creating the impression that Americans really aren't much different than how the Chinese government works.

Of course, I'm not sure any foreigners know what to make of Barack Obama - a black man (ignoring for a moment his mother was white) with the middle name of - gasp, Hussein who could actually become President. When I first started making friends with people who were born and raised in China, it was almost an assumed that I was discriminated against (in the negative sense) growing up (generally not the case).

Then there's this. The post captures it perfectly. The Chinese are truly fantastic at backhanded compliments.

The Benefits of Trade

Requires a bit of a warped sense of humour.

Report: Many U.S. Parents Outsourcing Child Care Overseas

H/T: Greg Mankiw

Building a Startup

Successful web entrepreneur Jason Calacanis wrote a recent note on his blog about what it takes to build a startup that has even the remotest chance of surviving. In doing so, he generated a firestorm. As Michael Arrington, founder of TechCruch points out, it comes down to two basic requirements: you have to hire the right people and you have to watch every penny. I think both posts are a must read even if you're in China.

I think being at a start up - or small organization, or even as part of a highly leveraged buyout is similar - limited resources help to quickly prioritize and clarify what is important or else you fail. I personally think of my business and those like mine as not being too unlike many tech businesses in that we are tools for other businesses to improve productivity and competitiveness. But getting started isn't easy. It's far better to ask for more money than you think you need because you'll likely end up needing anyway - along the same lines of thought, it's not a bad idea to try to maintain a certain cash reserve for emergencies or to survive and keep valued resources during slower periods.

When it comes to Asia and specifically China, it's a bit different and I think hiring the right people becomes even more important. Displays of wealth seem to be ever more important than here in West. Not everyone will understand why they can't get that raise or recognize what the problem is with clocking out at 5 or 6 pm on the dot - given family pressures, and seeing wages continually on the uptick for classmates, and what has only until recently been a more parochial attitude taken by many firms. But I think you can find them. I'm intensely proud and also protective of the team we've built. We're far from perfect, but for the most part, we are almost always trying to work to get there and do right by our clients.

Update 08.03.13: TechCruch linked to another pretty good but older post on succeeding at a startup.

Proving once again the Bladder Theory of Finance

The Bladder Theory of Finance goes something like this: the more cash you have, the greater the pressure there is to piss it all away. I first heard of it from one of Peter Lynch's books. I should note that Lynch is a person whom I hold in very high regard particularly given his books were what turned me onto finance in the first place (dwarf tossing-related scandal notwithstanding).

China has no small amount of cash. I hope that these returns will help to calm protectionist fears of Sovereign funds (funds invested by governments - particularly given the most recent success of China's government).

Because it's a strategy that's worked so well everywhere else...

Something about this headline makes me want to giggle: China will form 'super-ministries' to reduce red tape

Warren Buffet's Letter to Shareholders

Sorry I haven't been posting. I've been particularly busy doing unfortunate but necessary administrative tasks for work. I think anyone interested in business including how great businesses are run, how great businesses look and how great businesses react should read this year's letter to the shareholders from Warren Buffett:
http://www.berkshirehathaway.com/letters/letters.html

While I don't think that there's that much new from previous years, I thought his focus on how he thinks of competitive advantage (or moats around the castle of superior returns as he calls them) to be inspired. With the continual barrage of faddish ideas - particularly as it relates to China, it's particularly refreshing to get a pretty humble perspective and see that there are certain business principles that are timeless.