Watch Margaret Thatcher Slap Down A Socialist Politician For Wanting To Make The Poor Even Poorer

Watch Margaret Thatcher Slap Down A Socialist Politician For Wanting To Make The Poor Even Poorer

Joe Weisenthal | Apr. 8, 2013, 8:18 AM | 2,849 | 12

The sad news today is that former UK PM Margaret Thatcher has died.

She was incredibly influential among conservatives, and she was beloved for stuff like this.

Watch as she slams an opposition labor politician, for, in her words, advocating policies that would prefer to make the poor poorer so long as it resulted in more equality.

10 Memorable Quotes From Margaret Thatcher ; “Economics are the method; the object is to change the heart and soul.”

10 Memorable Quotes From Margaret Thatcher — One Of The Most Quoteworthy Politicians In History

Rob Wile | Apr. 8, 2013, 8:49 AM | 10,357 | 17

Former British PM Margaret Thatcher has died.

Thatcher was one of the more quotable politicians in recent memory.

Her wit and sharp lines about socialism have helped cement her reputation as “The Iron Lady.”

Via Wikiquote, here are some great ones.

“I don’t think there will be a woman Prime Minister in my lifetime.” — BBC, March 5, 1975

“If a Tory does not believe that private property is one of the main bulwarks of individual freedom, then he had better become a socialist and have done with it.” — Daily Telegraph, Jan. 30, 1975.

“The Russians are bent on world dominance, and they are rapidly acquiring the means to become the most powerful imperial nation the world has seen. The men in the Soviet politburo don’t have to worry about the ebb and flow of public opinion. They put guns before butter, while we put just about everything before guns. They know that they are a super power in only one sense—the military sense. They are a failure in human and economic terms.” Speech, Jan. 19, 1976 (The Russians would respond by calling her the “Iron Lady.”) —

“Socialist governments traditionally do make a financial mess. They always run out of other people’s money. It’s quite a characteristic of them.” Speech, Feb. 5, 1976

“Pennies don’t fall from heaven, they have to be earned here on earth.” Speech, Nov. 12, 1979

“No one would remember the Good Samaritan if he’d only had good intentions; he had money as well.” Weekend World, Jan. 6, 1980

“Economics are the method; the object is to change the heart and soul.” Sunday Times, May 1, 1981

“I came to office with one deliberate intent: to change Britain from a dependent to a self-reliant society — from a give-it-to-me, to a do-it-yourself nation. A get-up-and-go, instead of a sit-back-and-wait-for-it Britain.” Speech, Feb. 8, 1984

“It was a lovely morning. We have not had many lovely days. And the sun was just coming through the stained glass windows and falling on some flowers right across the church and it just occurred to me that this was the day I was meant not to see.” Channel 4, Oct 15, 1984, following an assassination attempt by the IRA.

“I like Mr. Gorbachev. We can do business together.” — BBC, Dec. 17, 1984

“No. No. No.” — House of Commons, Oct. 30, 1990

Margaret Thatcher, the former British prime minister who became one of the most influential global leaders of the postwar period, died at age 87

Updated April 8, 2013, 8:03 a.m. ET

Margaret Thatcher Dies



LONDON—Margaret Thatcher, the former British prime minister who became one of the most influential global leaders of the postwar period, died on Monday, three decades after her championing of free-market economics and individual choice transformed Britain’s economy and her vigorous foreign policy played a key role in the end of the Cold War. Mrs. Thatcher, who grew up in an apartment without hot water above her father’s grocery store in Grantham, eastern England, went on to become Britain’s first female prime minister and arguably the country’s dominant political figure since Winston Churchill. She was 87.

She was a key ally and close friend of former U.S. President Ronald Reagan, sharing with him a view on free-market, monetarist solutions to the economic problems of the day, as well as an uncompromising stance on how to handle the former Soviet Union, earning her the nickname “the Iron Lady.” Together the two led a rightward shift in Western politics that extolled the virtues of a free-market economic system with little government intervention that has largely endured, though aspects, such as the deregulation of financial services, have been questioned during the credit crisis. In moves that were widely copied, Mrs. Thatcher took on Britain’s all-powerful trade unions and privatized state-run industries, governing with a take-no-prisoners style that earned her both admiration and dislike.

In China, off-balance-sheet lending risks lurk in the shadows

In China, off-balance-sheet lending risks lurk in the shadows

3:33am EDT

By Gabriel Wildau and Shengnan Zhang

SHANGHAI (Reuters) – China’s banks are feeding unwanted assets into the country’s “shadow banking system” on an unprecedented scale, reinforcing suspicions that bank balance sheets reflect only a fraction of the actual credit risk lurking in the financial system.

Banks’ latest earnings reports only added to concerns. Despite the slowest economic growth in 13 years in 2012, the banking system’s official non-performing loan (NPL) ratio actually declined, renewing a debate about how reliable those figures are.

But the key question is no longer how much risk banks are carrying. Rather, it’s how many risky loans have been shifted to the lightly regulated shadow banking institutions – mainly trust companies, brokerages and insurance companies.

The risk to the overall financial system is not clear, because of insufficient data about the quality of credit in the shadow banking sector. Read more of this post

China’s President Xi Jinping said the days of “ultra-high speed” growth in the world’s second-largest economy – which many hope can spur a global recovery – are probably over.

China’s Xi says “ultra-high speed” growth probably over

POSTED: 08 Apr 2013 5:32 PM

China’s President Xi Jinping said Monday the days of “ultra-high speed” growth in the world’s second-largest economy – which many hope can spur a global recovery – are probably over.

BOAO, China:  China’s President Xi Jinping said Monday the days of “ultra-high speed” growth in the world’s second-largest economy — which many hope can spur a global recovery — are probably over.

“I don’t think we will be able to sustain an ultra-high speed of economic growth and it is not what we want either,” Xi told about two dozen foreign business figures on the southern island of Hainan. Read more of this post

Hey, Fund Companies: Share the Wealth; The oft-practiced but rarely disclosed tactic of securities lending has landed BlackRock and State Street in the courts. Here’s what this practice is, and why it matters to you


Hey, Fund Companies: Share the Wealth


The oft-practiced but rarely disclosed tactic of securities lending has landed BlackRock and State Street in the courts. Here’s what this practice is, and why it matters to you.

When funds lend their holdings to short sellers, shareholders take on all of the risk—but they don’t always get to keep all of the profits.

A handful of pension funds and trusts are suing giant asset managers, includingBlackRock (ticker: BLK) and State Street (STT), over the arcane realm of securities lending. The claim: The firms kept too much profit from this corner of fund management for themselves, instead of disbursing more of those profits to exchange-traded-funds’ shareholders and other fund investors.

The lawsuits focus attention on an industrywide practice whereby asset managers lend (usually to institutional short sellers) stock held by its funds in exchange for various fees and cash collateral, on which they collect interest. Securities lending is common enough that it probably contributes to your funds’ returns—so long as the asset manager rewards you with most of the income it collects, instead of keeping gobs of it at the corporate level. The latter is at the heart of the continuing lawsuits, and while it might not be a bad thing for the firms’ stockholders, it behooves you to know who’s getting what. It’s the fund shareholders, after all, taking on the risk of lending the securities. Read more of this post

Shanghai McDonalds Slashes McNuggets Price By Nearly Half As Birdflu Fears Drive Away Buyers

Shanghai McDonalds Slashes McNuggets Price By Nearly Half As Birdflu Fears Drive Away Buyers

Tyler Durden on 04/07/2013 22:48 -0400

How do you know when the people “just say no” to chicken over rampant bird flu concerns? When even McDonalds (whose ad campaign for the past decade “I am loving it” continues to be an anagram for “ailing vomit“) is forced to slash chicken-related prices, in this case the 20 piece McNuggets, from CNY36 to CNY20. Pretty soon not even giving away the McMystery meat will clear out the shelves of all chicken-related fast food first in Shanghai and soon elsewhere in China. Finally, we dread to imagine the horrors that will befall Yum (read China KFC sales), now that after so much pain, the fast-food chain had finally reported a modest bounce in Chinese sales. So much for that.

McD Nuggets Shanghai

Thousands of Dead Fish in Shanghai River prompt safety fears (Bloomberg TV)

Dead fish in Shanghai river prompt safety fears

A total of 250 kilograms of dead fish, mainly crucian carp, have been retrieved in suburban Shanghai’s Sijing pond since last week. -China Daily/ANN

Shi Yingying
Mon, Apr 08, 2013
China Daily/Asia News Network

SHANGHAI – Hundreds of dead fish have washed up along the shorelines of a man-made river in Shanghai’s Songjiang district since April 3, but the local water authority and environmental protection bureau insist the water is safe.

A total of 250 kilograms of dead fish, mainly crucian carp, have been retrieved in suburban Shanghai’s Sijing pond since last week. Gao Yunchu, director of Songjiang water authority, said small fish with relatively weaker body defence systems were found dead at the beginning of April and the bodies of bigger fish such as carp were discovered on Saturday. Read more of this post

Beware of Index Funds That Aren’t; The new generation of investments aren’t nearly as passive— or as cheap—as you might think

Updated April 7, 2013, 7:51 p.m. ET

Beware of Index Funds That Aren’t

The new generation of investments aren’t nearly as passive— or as cheap—as you might think



Index funds aren’t always what you think they are. And your innocence could cost you.

To most investors, of course, index funds are passive investments, providing returns that basically mirror the market they are designed to follow. They charge low fees and carry no hidden costs.

But the old definition is starting to change. Unlike simpler, earlier generations of index and exchange-traded funds, new variations are morphing into products that risk putting many investors afoul of the old rule about not investing in things you don’t understand.

As more money flows toward indexing, some fund firms are trying to capture a share of it by creating complex ETFs that blend active management and indexing. The fees charged by some of these funds can be several times those charged by traditional index funds. And, because they sometimes specialize in very narrowly defined, less-active markets, they can wrack up hidden trading costs. Read more of this post

First zoo in S’pore rated ‘wonderful’ by Albert Einstein

First zoo in S’pore rated ‘wonderful’ by Einstein

Nation’s status as a hub for animal collectors is featured in exhibition. -ST
Melody Zaccheus

Mon, Apr 08, 2013
The Straits Times

Singapore’s first zoo, which had its beginnings at a family bungalow in Serangoon Road, has at least one unique bragging right.

Albert Einstein, the father of modern physics, was among the first visitors to the private zoo, which was run by animal lover William Lawrence Soma Basapa from 1920 to 1922.

His zoo and the history of Singapore’s status as a hub for animal collectors in the late 18th and early 19th century, are part of a travelling exhibition by the National Heritage Board. Read more of this post

British class system alive and growing, survey finds

British class system alive and growing, survey finds

Wed, Apr 3 2013

LONDON (Reuters) – British people can now aspire to and despise four new levels of social classes, according to a new survey conducted by researchers in partnership with public broadcaster the BBC.

The Great British Class Survey found that the prevailing notions of a system comprised of the Upper Class, Middle Class and Working Class only related to a slice of the UK population, when analyzed according to income, assets, social connections and social activities.

An “Elite” class and a “Precariat” (precarious proletariat)were the two most extreme groups at either end of a new social scale of seven classes produced by researchers from the London School of Economics (LSE) and University of Manchester based on two surveys conducted by the BBC and research firm GfK.

“It is striking that we have been able to discern a distinctive elite, whose sheer economic advantage sets it apart from other classes,” LSE Professor Mike Savage said.

“At the opposite extreme, we have discerned the existence of a sizeable group (the Precariat) – 15 percent of the population – which is marked by the lack of any significant amount of economic, cultural, or social capital.” Read more of this post

To crack human brain’s code, a search for visionaries

To crack human brain’s code, a search for visionaries

Sun, Apr 7 2013

By Deborah Zabarenko

WASHINGTON (Reuters) – To crack the code of the human brain, Cori Bargmann figures it’s best to keep an open mind.

As one of two leaders of a scientific “dream team” in the initial phase of President Barack Obama’s ambitious $100 million project to map the brain, Bargmann said the first step is to find the right combination of people to set research priorities.

“You might start with people who are very senior and are household words in their fields, and then you may realize that what (you) actually need is the young Turk who’s a visionary wild man,” Bargmann said.

Bargmann, a neurobiologist at The Rockefeller University in New York, and William Newsome, a neurobiologist at Stanford Medical School in California, are the co-chairs of a committee announced by the White House on Tuesday for the Brain Research through Advancing Innovative Neurotechnologies Initiative. That long title has been dubbed BRAIN for short.

Both Newsome and Bargmann are at the top of the neurobiology pyramid, professors at premiere institutions, winners of dozens of scientific honors and awards, authors of research papers in prestigious journals. As Newsome noted wryly, “I don’t need this aggravation, to some extent, but I think this is really important.”

Bargmann, who recalls watching the first Apollo moon landing in 1969 as an 8-year-old, this year won a $3 million Breakthrough Prize in Life Sciences for her work on the genetics of neural circuits and behavior and synaptic guidepost molecules. Read more of this post

Disruptions: The Logic (or Lack of It) in Appraising Start-Ups; What a start-up is worth depends on why the prospective buyer wants it, but the prices still sometimes seem random or even nonsensical

APRIL 7, 2013, 11:00 AM

Disruptions: The Logic (or Lack of It) in Appraising Start-Ups

Otis Chandler and his wife, Elizabeth Khuri Chandler, the founders of Goodreads, a social media site that recently sold for a reported $150 million.

I have a vision of how suitors decide how much to offer for a start-up they want to buy. Several executives go into a conference room. Each scribbles a number on a piece of paper and places it in a hat. Then the chief executive pulls out a number, and there it is.

It might sound like a stretch, but given the seemingly random and sometimes nonsensical amounts for which start-ups with no revenue, or no users, or even no product are bought, I might not be far off.

But let’s say there is a logical way to value a company. During Bubble 1.0 there seemed to be — at least sometimes. Tech start-ups were valued by the number of eyeballs they attracted. When was acquired by Yahoo for $5.9 billion in stock in April 1999, it was estimated that the company paid $10,000 per user.

Today, when eyeballs mean much less, how do start-ups with no revenue come up with a valuation? Well, it depends on a buyer’s reason for wanting the company. Read more of this post

Tech upstarts threaten TV broadcast model

Tech upstarts threaten TV broadcast model

Sun, Apr 7 2013

By Liana B. Baker and Ronald Grover

(Reuters) – Two fledgling technologies could dramatically reshape the $60 billion-a-year television broadcast industry as they challenge the business model that has helped keep broadcasters on the lucrative end of the media spectrum.

On April 1, a U.S. appeals court rejected a petition by the major broadcasters including Comcast’s NBC, News Corp’s FOX, Disney’s ABC and CBS, to stop a service called Aereo, which offers a cut-rate TV subscription for consumers by capturing broadcast signals over thousands of antennas at one time.

It was the second time in recent months that TV broadcasters failed to block a new technology that undercuts revenue they generate for their television shows. Read more of this post

Malaysia’s Prime Minister Najib Unveils Poll Manifesto Similar to Opposition leader Anwar’s; “My sincere apologies to all Malaysians if we have done anything wrong. At the end of the day, we are ordinary humans.”

Malaysia’s Najib Unveils Poll Manifesto Similar to Anwar’s

Malaysian Prime Minister Najib Razak pledged to fight corruption, bring down living costs and build a pan-Borneo expressway if his coalition retains power in elections due in a matter of weeks.

These were all policies mooted by opposition leader Anwar Ibrahim in his manifesto released six weeks earlier than the one Najib’s governing National Front unveiled at a weekend rally in Kuala Lumpur. The Election Commission meets this week to set a date for polls after the prime minister dissolved parliament on April 3.

“They had the benefit of time to study our manifesto over the past month and incorporate some elements,” Ong Kian Ming, a political analyst at Kuala Lumpur’s UCSI University and an opposition election strategist, said by phone. “Unlike us, there’s nothing in there about electoral reform. That’s something a lot of people are concerned about.”

In the lead-up to the polls, Najib has boosted government spending, distributed a second round of cash handouts to the poor, and raised salaries of civil servants, police and the military. He also delayed implementing a goods-and-services tax and froze plans to wind back state subsidies on essential items. The manifesto offers increased handouts for the poor, and lowered car costs and broadband fees.

“My sincere apologies to all Malaysians if we have done anything wrong,” the prime minister said in a speech at the rally, broadcast live on national television. “At the end of the day, we are ordinary humans. If we are given a strong mandate, I can assure you that we will do better in the next five years.” Read more of this post

Liquidity Carpet Bombs Fueling Asset Bubbles, Rohde Says

Liquidity Carpet Bombs Fueling Asset Bubbles, Rohde Says

Policy makers steering the global economy have pumped the financial system with so much liquidity that any exit risks popping potential asset bubbles or stunting a recovery, Danish central bank Governor Lars Rohde said.

“The risk is we stay in this climate too long and that the carpet bombing of liquidity spurs inflation,” Rohde, 59, said in an April 5 interview from his office in Copenhagen. Though there are no current signs of consumer price inflation “there is inflation, perhaps a bubble, in some asset classes,” he said. “Equities (MXWO) are trading close to all-time highs. Segments of property markets across the globe, for example London, also display symptoms of this. How do we exit this without killing whatever nascent recovery there might be at that time?”

The warning from the head of Denmark’s central bank, which has kept its deposit rate below zero since July, comes as policy makers in Japan, the euro area and the U.S. deliver unprecedented monetary stimulus to drag the global economy out of the worst crisis since the Great Depression. Easy money has fueled equity prices, helping send the Standard & Poor’s 500 Index to an all-time high on April 2. The yield on Japan’s benchmark 10-year bond hit its lowest on record last week.

“We’re in a landscape where we’ve never been before, with regard to extreme monetary accommodation over a very, very long period of time,” said Rohde, who took over as the head of Denmark’s central bank in February. “What does that end up doing to a society? It’s been a necessary policy, but I have my concerns about what the long-term risks are.” Read more of this post

Why Making Europe German Won’t Fix the Crisis

Why Making Europe German Won’t Fix the Crisis

Most people see Europe’s economic crisis as a cautionary tale of good and bad policy making, in which fiscally prudent countries, such as Germany, remain stable, while reckless ones, such as Greece, unravel.

So ingrained is this idea that it’s now common to hear analysts say Europe must become “German” to exit from the crisis, adopting Teutonic approaches to policy — from fiscal tightening to labor- and product-market reforms. If only societies on Europe’s periphery can learn to do what the Germans do, the argument goes, the European Union and its single currency will have a stable future.

This is wrong and we already have evidence to show it. The question isn’t whether Germany’s policies are correct. It is whether they will produce the same outcomes in different economic and political environments. To see that they don’t, you need to ignore Greece and look at its neighbor, Bulgaria.

Like Germany, Bulgaria went through several years of prudent budgets and economic reforms aimed at improving competitiveness before the financial crisis began in 2008. Both countries initially responded to the shock with sudden increases to their budget deficits, but also quickly reined these back in. Bulgaria’s deficit was 0.7 percent of gross domestic product in February, according to the Finance Ministry. Government debt was 16 percent of GDP. So pretty German already. Read more of this post

Vietnam Crony Communists Resist Constitution Backlash

Vietnam Crony Communists Resist Constitution Backlash

While filming a documentary about Ho Chi Minh as his compatriots battled U.S. forces in the 1960s, Tran Van Tan observed how the Communist leader’s embrace of a simple lifestyle endeared him to Vietnam’s poor.

Five decades later, Tan says the Communist Party’s leaders are more concerned with enriching themselves than adhering to Ho Chi Minh’s ideals. Abolishing the one-party system would lead to “healthy competition” and narrow the wealth gap, said Tan, 65, a retired civil servant who now sells tea in downtown Hanoi.

“There are people who don’t have enough food to eat, whose children don’t have enough clothes to cover their bodies in winter,” Tan said. “There are farmers who don’t have land. They are so poor, while many in the leadership are very wealthy. These leaders are so rich that even their children, grandchildren wouldn’t be able to use it all up.”

Tan is among more than 12,000 former bureaucrats, academics and rice farmers speaking out publicly against proposed constitutional changes that would strengthen the Communist Party’s grip on power. The unprecedented movement threatens to increase challenges to Prime Minister Nguyen Tan Dung as he seeks to turn around a slowing economy which posted Southeast Asia’s highest level of bad debt last year. Read more of this post

Alcoa No Better Than Coin Flip as Market Bellwether Status Fades

Alcoa No Better Than Coin Flip as Market Bellwether Status Fades

Alcoa Inc. (AA), the first Dow Jones Industrial Average member to report results each quarter, is losing its accuracy as a bellwether for the U.S. stock market.

The Standard & Poor’s 500 Index has usually followed Alcoa’s lead since 2002, rising 2.5 percent in quarters when the aluminum producer beat the market after earnings, less when it didn’t. That relationship has broken down since 2011, when the S&P 500 posted even bigger gains, about 3 percent, when Alcoa’s results hurt its stock, according to data compiled by Bloomberg.

Overtaken in size and market clout by diversified commodities companies such as BHP Billiton Ltd. (BHP) and Glencore International Plc, Alcoa has struggled to make a profit with aluminum prices sagging as production outpaces the metal’s use. Investors are looking beyond the New York-based producer, which announces results after the close of trading today, to companies such as International Business Machines Corp., which reports in ten days, according to Bespoke Investment Group.

“We don’t consider it much of a bellwether,” said Edward Dewees, who helps oversee about 3 million Alcoa shares among the $2.7 billion managed by New York-based Douglas C. Lane & Associates. “As far as did Alcoa beat or meet earnings, that’s a meaningless headline. Any investor who’s going to make a decision about other companies’ earnings based on Alcoa’s headline earnings, that’s silly.” Read more of this post

IPO Bankers Become Frogs in Hot Water Amid China Market Halt after China’s securities regulator mandated that two so-called baodai, or sponsor representatives, conduct due diligence and sign off on every IPO to curb fraud; “The baodai are like frogs in a pot of hot water that’s been on slow boil for nine years. The days of excess pay are gone. Rationality has returned.”

IPO Bankers Become Frogs in Hot Water Amid China Market Halt

Shen Wei, one of the first 600 investment bankers authorized to sign off on initial public offerings in China, said the license that made him one of the “golden collared” has lost its magic.

The teacher’s son studied 14-hours a day for a month in 2004 to qualify after China’s securities regulator mandated that two so-called baodai, or sponsor representatives, conduct due diligence and sign off on every IPO to curb fraud. Demand for such bankers is now being eroded by a freeze on IPOs, a surge in people getting licensed and an easing of underwriting rules.

“The baodai are like frogs in a pot of hot water that’s been on slow boil for nine years,” said Shen, 41, who is executive director of Citigroup Inc. (C)’s local joint venture in Shenzhen, overseeing a team of 20 bankers. “The days of excess pay are gone. Rationality has returned.” Read more of this post

Hong Kong nets only small fry for laundering illegal Chinese money

Hong Kong nets only small fry for laundering illegal Chinese money

Sun, Apr 7 2013

By Lawrence White

HONG KONG (Reuters) – Luo Juncheng, a delivery man and school dropout from China’s Guangdong province, was 19 years old when he opened an account at Bank of China subsidiary Chiyu Bank in Hong Kong in mid-2009.

Over the next eight months, he moved more than HK$13 billion ($1.7 billion) through the account, making nearly 5,000 deposits and more than 3,500 withdrawals in the largest money laundering case on record in the territory.

Luo is now serving a 10-and-a-half-year jail sentence for illegal money transfers. But his conviction raises wider concerns – how he got away with it for so many months despite the red flags that should have been raised by his transactions, and why no other arrests have been made despite evidence at trial that he did not act alone.

His conviction is one of the few in Hong Kong for money laundering, despite the city’s reputation as a hub in money transfers, both legal and illegal, carried out by wealthy Chinese. Experts estimate tens of billions of dollars are laundered in Hong Kong every year, much of it crime or drugs-related money funnelled from China or the gambling haven of Macau. Read more of this post

Seoul Residents Threatened With ‘Sea of Fire’ Carry On With Life; “Even if they were to launch a nuclear attack, we’d be dead within minutes anyway.”

Seoul Residents Threatened With ‘Sea of Fire’ Carry On With Life

Choi Yong Wook woke on his 29th birthday to the news that North Korea had repositioned a missile days after threatening to turn Seoul into a “sea of fire.” That didn’t stop him from a romantic dinner with his wife in one of the South Korean capital’s busiest areas.

“This is how we survive, we continue living our lives,” Choi, a Daewoo Electronics Corp. (0741) salesman, said in an interview. “North Korea has always threatened that war can break out any day. But who can believe them?”

As tensions escalate, life for 10 million South Koreans in their capital 40 kilometers (24 miles) from the world’s most fortified border goes on uninterrupted. Schools, businesses and public offices keep regular schedules and there are no reports of panic-buying in shops. While Choi and his wife blew out his birthday candles, Seoul’s LG Twins lost their baseball game against crosstown rivals the Nexen Heroes, 4-3. Read more of this post

Netherlands, the Next Chip to Fall? Consumer debt amounts to about 250 percent of available income. By comparison, in 2011 even the Spaniards only reached a debt ratio of 125 percent

Netherlands, the Next Chip to Fall?

Mike “Mish” Shedlock

Posted: 07 Apr 2013 07:36 AM PDT

Most attention lately has been on Cyprus, Spain, and Italy. Long-time troubles have been brewing in Portugal and I have an update coming up shortly.

First consider Underwater: The Netherlands Falls Prey to Economic Crisis.

The Netherlands, Berlin’s most important ally in pushing for greater budgetary discipline in Europe, has fallen into an economic crisis itself. The once exemplary economy is suffering from huge debts and a burst real estate bubble, which has stalled growth and endangered jobs.

“Underwater” is a good description of the crisis in a country where large parts of the territory are below sea level. Ironically, the Netherlands, widely viewed as a model economy, is facing the kind of real estate crisis that has only affected the United States and Spain until now. Banks in the Netherlands have also pumped billions upon billions in loans into the private and commercial real estate market since the 1990s, without ensuring that borrowers had sufficient collateral.

Private homebuyers, for example, could easily find banks to finance more than 100 percent of a property’s price. “You could readily obtain a loan for five times your annual salary,” says Scheepens, “and all that without a cent of equity.” This was only possible because property owners were able to fully deduct mortgage interest from their taxes. Read more of this post

Acupuncture For India’s Poor; Middle and upper-middle class patients pay between 800 and 1,000 rupees ($15 – $18) for a session of acupuncture. This subsidizes the cost of running the clinic for the underprivileged, who pay 20 rupees a session

April 7, 2013, 9:00 AM

Acupuncture For India’s Poor

By Shanoor Seervai

Sheetal Tupare sits in the waiting room of the Barefoot Acupuncturists clinic in Mumbai’s Vijay Nagar slum. She is accompanying her uncle, who was left partially paralyzed from a stroke eight months ago, for his second session of acupuncture.

Ms. Tupare has also been treated at the clinic. The 25-year-old went there last year because her menstrual cycle was irregular.

“The medicines other doctors gave me only made my stomach hurt more,” she says, adding that she felt better after three months of regular acupuncture treatment.

Barefoot Acupuncturists runs five clinics — three in Mumbai and two in rural Tamil Nadu — that provide low-cost acupuncture to poor communities. The organization was founded by Walter Fischer, a Belgian businessman-turned-acupuncturist, in 2008. Read more of this post

Concerns Grow About New Avian-Flu Strain; Disease May Move Easily to Humans; U.S. Is Preparing to Develop a Vaccine

Updated April 7, 2013, 12:14 p.m. ET

Concerns Grow About New Avian-Flu Strain

Disease May Move Easily to Humans; U.S. Is Preparing to Develop a Vaccine



BEIJING—Concerns about a deadly new strain of bird flu intensified last week as the disease claimed a sixth life in eastern China and agricultural authorities in Shanghai ordered a wide-scale slaughter of poultry in an effort to stem its spread.

The U.S. Centers for Disease Control and Prevention warned U.S. public-health departments and physicians to be on the lookout for signs of the new virus, a variant of the H7N9 strain of avian flu. The CDC said it is developing a diagnostic kit to send to U.S. states and China, and is working on a seed virus for a vaccine that could be prepared should the disease start spreading human-to-human.

Flu experts said they are concerned about the new virus because it exhibits signs of being more readily able to infect humans from ailing birds than is another form of avian flu known as H5N1, which has been infecting people off and on for more than a decade.

The number of people infected nationwide as of Sunday evening had risen to 21, according to the official Xinhua news agency, up from Friday’s 16. The death toll was unchanged from Friday, Xinhua said. The latest was a 55-year-old male working in the live poultry trade in the Chinese province of Anhui who began exhibiting flu symptoms on March 28, Xinhua said. The number of cases, while small, is large for the early stages of an outbreak, and some flu experts said the fact that they are spread over a relatively wide geographic region is reason for concern. Read more of this post

Be like the bamboo, not the oak (Today, 8 April, 2013); “Singapore is too small and its talent pool is too small to produce a world-class manufacturing giant of the Fortune 500 class,” Singapore’s founding Prime Minister Lee Kuan Yew once said. A cryptic remark, indeed, because it does not imply that he thinks Singapore cannot produce knowledge-based giants, or resilient “bamboo innovators”

Be like the bamboo, not the oak
“Singapore is too small and its talent pool is too small to produce a world-class manufacturing giant of the Fortune 500 class,” Singapore’s founding Prime Minister Lee Kuan Yew once said. A cryptic remark, indeed, because it does not imply that he thinks Singapore cannot produce knowledge-based giants, or resilient “bamboo innovators”.

“Singapore is too small and its talent pool is too small to produce a world-class manufacturing giant of the Fortune 500 class,” Singapore’s founding Prime Minister Lee Kuan Yew once said. A cryptic remark, indeed, because it does not imply that he thinks Singapore cannot produce knowledge-based giants, or resilient “bamboo innovators”.

Why bamboo innovators? Bamboos bend, not break, even in the most terrifying storm or devastating earthquake that would snap the mighty oak tree. It survives, therefore it conquers.

Disruptive industry trends and black-swan crises have become a permanent fixture in today’s marketplace. How wonderful it would be if countries, companies and individuals can stay resilient amid such upheavals and unorthodox challenges.

The study of bamboo innovators could inspire companies to be productive innovators in order to surpass stall-points in their business models during tumultuous periods, particularly for small and medium enterprises aspiring to scale up to become global champions.

But why is it that Asian companies are predominantly product manufacturers in the first place? This could ironically be a result of the Asian values of hard work and sacrifice.

It is far easier for the Asian entrepreneur to be the middleman taking orders from a few important anchor multinational corporation customers with access to the end-customers, take capital risk investing in tangible assets and work hard to produce the required products with quality and efficiency — than to attempt to build business models that have direct ownership of the hundreds and thousands of end-customers.

As a result, these entrepreneurs are unwilling to share the rewards with their “undeserving” staff who took neither risk nor sacrifice. They treat employees as expenses and not intangible assets, make most or all of the decisions and hoard most resources and information, running the firm as a “one-man show”. Eventually, they may face the challenge of business continuity arising from succession woes.


Keyence is an example of the unconventional Asian firm. Founder Takemitsu Takizaki liberated the firm from manufacturing conventions and built a knowledge-based enterprise in laser sensors for factory automation, serving more than 100,000 customers in 70 countries.

Despite having less than 1 per cent global market share in a commodity-like product and only around 3,000 employees, Keyence commands a US$17-billion (S$21.1 billion) market value — approximately similar to Singapore’s Keppel Corp, a global leader in offshore oil rig design and building.

Mr Takizaki understood keenly that Keyence cannot improve on Japan’s legendary manufacturing efficiency. So, unlike its manufacturing-based competitors who leave sales to distributors, wholesalers and agents, it deliberately avoids making products, except for manufacturing steps that involve trade secrets kept in-house.

Most of its employees are either “sales” or “research” staff. In their direct contact with the customers, Keyence’s in-house “sales” team picks up new product ideas on frequent factory visits. For instance, its front-liners observed from the production lines at instant noodle factories that the noodle quality was compromised because the noodles were manufactured at variable thicknesses. Laser sensors that could measure noodles to 1/100th of a millimetre were developed to ensure consistency.

A quarter of sales at Keyence is generated from such new products every year, more than what 3M achieves. To excel in these areas, Keyence had to cultivate a meritocratic culture, and it is known for having some of the highest-paid employees in corporate Japan.

Bright young people from rival firms are attracted to Keyence by the performance-based pay. The average salary there is US$100,000. Engineers also get to do their own research, rather than labouring for years under grey-haired supervisors.


Keeping the front line or the “periphery” resilient and innovative, and the centre or the “core” diffused, and enforcing meritocratic values at all levels have compounded immense value at Keyence. This “core-periphery” growth pattern is also that of the bamboo: The vitality of its growth revolves around its “empty” centre.

Instead of constructing itself inch by solid inch, like a tree, the nutrients and moisture that would have been exhausted making and maintaining its empty centre can be utilised for growth of its periphery in the stem. From a builder’s viewpoint, the architecture of the bamboo presents a powerful configuration: Fibres of greatest strength occur in increasing concentration towards the periphery.

Manufacturing and project-based companies often tout the size of their order book and their idea of “team” is about having high-profile dealmakers who can bring in the sales orders; the job of “everyone else” is to execute efficiently and “productively”.

The well-connected dealmakers may be able to pull in high-dollar projects, but because of the difficulties in coordinating and executing large-scale complex projects, these deals cannot be repeated and the hype associated with a big order book starts to fade, particularly when cost overruns and delivery delays rear their ugly heads. Bigger becomes riskier.

Even in manufacturing, the only way to perform and execute large-scale complex projects repeatedly is to create a culture of excellence where the interests of emotionally engaged front-liners matter in the innovation and value creation process.

Customers are attracted to this contagious performance culture rather than to the dealmakers on a relationship basis, resulting in a valuation breakthrough beyond the billion-dollar market value barrier that many Asian companies find difficult to break.

“Fortune 500”? With “emptiness” in business model design, Singapore can instead aim for its own resilient “Bamboo Innovator 500” powerhouse with a US$10-trillion value.


Kee Koon Boon, a former lecturer of accounting at the Singapore Management University, has been an investment professional for the past decade. He is a presenter at the Emerging Value Summit 2013 on April 9-10.

Resilient Growth In Crisis? Bamboo Innovators CSL and Keppel Show How

Resilient Growth In Crisis? Bamboo Innovators CSL and Keppel Show How

By KEE Koon Boon

8 April 2013

“Sometimes to be reborn, you must first die,” Dr. Victor Fung, group chairman of the multi-billion Li & Fung group of companies, cites pensively this old Chinese proverb in order to ask an open-ended question, “In a world that’s speeding up, how will companies change enough without crisis?”

We cannot avoid, or even choose, a crisis in order to engender the change that is required to overcome stall points in growth and to stay relevant in today’s marketplace where disruptive industry trends and black-swan crises have become a permanent fixture. When the inevitable traumatic upheavals and unorthodox challenges do come, innovators craft their business models to stay resilient like the bamboo, which bend, not break, even in the most terrifying storm that would snap the might resisting oak tree.

Australia’s CSL and Singapore’s Keppel are two such companies who have experienced near-deaths in daring greatly to scale and globalize their once domestic SME operations right under the noses of powerful incumbent global giant rivals – and they were renewed and reborned to be resilient Bamboo Innovators.

In its remarkable transformation from a sleepy government outfit providing snakebite antivenin since its privatization and listing in 1994 with a market value of A$500 million to a A$29 billion global biotech champion, CSL had experienced a near-death crisis in 2002. Similarly, Keppel, the global leader in offshore oil rig design and building, had hit a crisis in 1973, 1983 and 1990. Both were able to bounce back higher to scale greater heights. Why? Both companies have dedicated leaders cultivating a culture rooted in trust, cooperation and empowerment to contend with and heal creative dissent to handle large-scale complex projects repeatedly with excellence.

Brian McNamee was plucked from relative obscurity at the age of 33 to head CSL at the recommendation of then Industry Minister John Button. Similarly, the late Hon Sui Sen, founding Chairman of Singapore’s Economic Development Board (EDB), picked Chua Chor Teck to be Keppel’s first managing director in May 1972 and to take over and “Singaporeanize” Keppel from the hands of British managers of the Swan Hunter Group, then one of the best known shipbuilding companies in the world that has now disappeared.

During the era when America was dubbed the OPEC (Organization of Plasma Exporting Companies) of the global plasma industry, CSL broke the dominance of America’s grip by buying Swiss plasma fractionation pioneer ZLB for A$1 billion in 2000 and Germany’s Aventis Behring for US$925 million in 2004. Today, domestic earnings account for 10 percent of the group earnings at CSL with the bulk provided by its global businesses. Similarly, Keppel got its design and technology in oil rig from acquiring rig builder Far East Livingstone Shipbuilding (FELS), which Keppel took majority control in 1973 during the oil crisis. Subsequently, the late Sim Kee Boon, Chairman of Keppel Corp from 1984 to 1999, continued to lead the globalization push of Keppel, subsequently continued by the capable leaders Mr. Lim Chee Oon, Mr. Choo Chiau Beng, Mr. Tong Chong Heong, Mr. Loh Wing Siew and so on. Mr. Sim outlined the basic strategy of avoiding “green-field” or start-from-scratch projects and to invest in yards that are already there. For instance, Keppel acquired Allison-McDermid in America, AHI in Middle East, PEM Setal in Brazil, and Verolme Botlek in Europe. Mr. Sim’s dream was to see Keppel become like a Nestle with a very significant global presence.

The big-picture “plan” to globalize is seen obvious but managing the unseen risks and creating adaptive advantages along the way are more important. For the first two years, ZLB lived up to its promise, resulting in solid earnings growth for CSL, and its market value more than doubled. But the wheels came off in 2002 when the industry went into oversupply and a combination of sharply falling product prices and disadvantageous currency mismatch nearly crippled CSL. Back in 1983, Keppel’s cash purchase of Straits Steamship saddled it with a debt of S$845 million. Furthermore, the shipbuilding industry during that period was pronounced a sunset industry by the pundits as the industry went into oversupply with more than 80 shipyards capable of building rigs. Keppel survived the crisis and was the only surviving rig-builder in the world in 1986 then. Subsequently, another crisis hit shortly after Keppel’s acquisition of Texas-based jackup yard Allison-McDermid in 1990 when an American firm brought a US$565 million litigation case against Keppel for alleged breach of contract and damages involving the building of jackup offshore drilling rigs. CSL turned risk into opportunity by acquiring Aventis Behring to consolidate its position as the industry recovers. Keppel eventually won the suit. Keppel saw the need for control and bought out its partner, renaming the entity AmFELS which became a wholly-owned subsidiary of Keppel. It grew to become one of the best-equipped offshore yards in the Gulf of Mexico.

Growth through acquisitions has proven to be the graveyard for many companies in general. Warren Buffett, the world’s greatest investor, likened growing via acquisitions to kissing unresponsive corporate toads who croaked and the tempting but value-destroying toy that executives must have because their peers have one too. Post-acquisition efforts in integrating the companies into the parent company to compete as a coherent whole prove crucial to successfully scale to greater heights and not blow up. Both CSL and Keppel are able to do so because of the foundation laid down in the culture carefully nurtured by Mr. McNamee and Mr. Chua.

“We respected them greatly for their skills and their capabilities, so we weren’t cultural imperialists. We greatly respect our Swiss and German colleagues and so there was no notion that they were being taken over and that they were going to work to our method,” McNamee articulated how their culture of trust and respect provided both parties a common ground to work together towards a global vision for the group. The culture of empowerment at CSL is embedded into its business model to foster open innovation and extensive collaboration with its acquired companies and a network of high-quality academics, scientists and physicians across the world. CSL minimises a silo formation by giving people personal responsibility and by running R&D using a matrix structure. This intangible culture has delivered powerful tangible results, including how CSL beat competitors to be the first to market with an effective vaccine against the global swine flu epidemic and in developing the anti-cervical cancer drug Gardasil. The dedication of McNamee is also touching. He was diagnosed to have cancer and kidney problems when he was planning to buy ZLB. Swiss giant Novartis also offered more money and fanned the patriotism flame that ZLB should remain in Swiss hands. Due to the persistence of McNamee who flew to Switzerland against medical advice to personally negotiate the deal, CSL acquired ZLB despite paying 20 percent less than its rival bidder.

In his touching eulogy for Mr. Chua, “the much-loved leader among his men” who passed away from cancer in 1986 when he was 47, Keppel’s influential long-time US representative Mr. John Bajor commented, “Yes there’s complete dedication expected but the return in caring for each employee is the spirit he so carefully nurtured and left behind. It has become the Keppel way.” Mr. Sim also paid tributes to Mr. Chua who “tried exceedingly hard to inculcate in the organisation the ‘Keppel culture’ of loyalty, thrift and hard work.” Mr. Chua’s dedication and his “genuine interest in helping junior officers overcome difficulties in order to advance their career” has laid the foundation to the “Can Do” spirit of excellence at all levels in Keppel for many years to come.

The story at Bamboo Innovators CSL and Keppel highlighted the intangible culture of kindness, caring and empowerment is akin to the invisible intricate underground root structure that makes the ground around a bamboo grove very stable – and make possible the adaptability of the bamboo to bend, not break, with storms and crisis, and to remain relevant and evergreen no matter how the world around us speeds up and changes.

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