Today I wanted to take a few photos – so I got the camera and looked what was on it. Now understand im not home all the much – so I had no idea what had been happening at home, but as I looked through some of the photos that one of my other family members took – I realised that we had some visitors. Im not going to say they were cute – because frankly – they are darn ugly 
Also, I found a few nice shots from the garden. So enjoy.
(CLICK ON THE IMAGE TO SEE LARGER)
- Noel
Recently on a long trip around South Africa, I bought a book by Graham Turner – “The Credit Crunch” (ISBN: 978-1-77009-687-5) which aims to talk about the housing bubbles, the effects of globalization and ultimately the worldwide economic crisis which has taken economy by storm. This book has a nice localized South African introduction which explains the global economic crisis in the South African context which shows us readers that we as the South African public in fact are barely being affected by the downturn on the economies.
The book does not deny the fact that South Africa is in a recession and this had recently been officially declared by the South African government. In South Africa, capital markets froze and most foreign investment in the economy stopped. This is attributed partially to the political environment in which South Africa has been in for the last year or so with the ousting of Thabo Mbeki and the speculation of Jacob Zuma taking control of the South African government as the President.
As with the other major economies of the world, much of the problem was caused by the outlandish lending of money to businesses and individuals. Within three years, South African lending had doubled. However, after the collapse of the Lehman Brother Bank in the United States, the rest of the world economies came to a holt and collapse was inevitable. So you may ask, why is South Africa in not as bad of a position as the rest of the western world? The answer is simple – good financial planning.
In the March of 2006, the South African government passed the National Credit Act. The purpose of the act was the promote a non-discriminatory marketplace in which the issuing of credit is regulated and black economic empowerment is encouraged.
I am a follower of the free market economy in which the government is not expected to intervene in the economy and which believes that industry in a country should be privately owned and run. Everything is run as a business as such and there is competition in the market which in theory drives prices down and efficiency up. This book carried what seemed to be a very strong socialist agenda, so I took this into account and was cautious about the concepts and suggested solutions that Turner mentioned in the book.
The book starts out with the Burberry case in which they moved their production location out of the United Kingdom into China because it was cheaper to produce out of China in comparison to production out of the UK. He suggests that this is abuse of the power of globalization.
With that in mind, this article will briefly summarize the book – The Credit Crunch (hopefully I will not give it away or stop you from buying the book – in the end it was a heavy, but brilliant read).
Chapter one was an introduction, so we will start with Chapter two.
Chapter 2: Global Contagion
This chapter starts off with a look back into past recessions and economic depression with a special highlight to the crash of 1929. It then proceeds to discuss how the government began to increase public programmes and ultimately improved the standard of living for many American people. In the past year or so, I have been doing extensive research into the Great Depression of 1929 in the United States of America. Many of the government programmes with special mention to Social Security will need to be privatized as it has become such a large burden and expense on the American economy. It then starts to talk about the first housing recession. What caused the housing bubble in the first price? Well, when problems begin, government brings the interest rate down which in a sense encourages lending. Banks become greedy and essentially, they offer loans to anyone essentially leading to a great increase in the amount of credit issued by the banking system.
This eventually becomes an issue as there is a massive excise of houses in the market leading to a state of deflation which has occurred in the United States recently and previously in Japan.
Chapter 3: Addicted to Debt
With special mention, the United Kingdom and the United States of America is considered to be “addicted to debt” according to the author. In the United Kingdom, under the leadership of the conservative party, the debt ratio increased by 49.8 per cent within 18 years. However it was much worse under the leadership of the Labour party under the financial guidance of Brown – in which it rose 71.5 per cent.
Even worse, in the United States of America, the person debt has risen by 159.1 per cent since the year 1997 (speaking numbers: from $5,547.1 billion to $14,374.5 billion).
Chapter 4: ‘Free Trade’ and Asset Bubbles
According to the author, wages would of fallen if United States and the United Kingdom had not of had the explosion of debt. This chapter talks of how China’s (in fact all low cost labour countries) contribute to the flattening of wage compensation.
Chapter 5: Dealing with the fallout
This chapter deals heavily with one of the biggest mistakes made by the government in a economic crisis – the slashing of interest rates which essentially encourages the usage of credit and this is what asset bubbles are made of. The author suggested that the United States and other western economies should of looked to the Asian crisis to learn from the mistake made there, however, he claims that they (the government) ignored the warnings.
The author suggests that interest rate cuts are not good enough in order to bench the economic crisis, however, the author says that this can assist insuring that the slump is not prolonged. However, it is essential that the these cuts in the interest rates are made at the right stage and the government is notorious in failing in this regard.
Chapter 6: A Global Credit Bubble
This chapter talks yet again about bubbles in the market and “reassures” that they are not isolated events and that it has happened on a number of occasions – but surely then should we not not by now know as to how to avoid them from happening? It brings to light the possibility that emerging economies may be artificially keeping there currency value down in order to remain competitive. It suggests that developing countries see a rise in living standards during times of contraction and crisis in the markets. Finally, this book introduces the concept of “too much intervention” – briefly, this book seems to suggest that inappropriate intervention in the economy can be the fuel which worsens credit bubbles.
Chapter 7: This chapter simply revisits Japans crisis – I will not summarize this chapter for that reason.
Policy Failures in a Liquidity Trap
The introduction into this chapter starts suggesting what could of been done in order to prevent the rise in real borrowing costs. It discusses the reasons as to why the Keynesian policies failed and also the causes of a “liquidity trap”.
The book then ends in a chapter discussing the way forward and what we can perhaps expect in the future. I enjoyed this book, however – it is packed with economics concepts – but it has an explanation of them before the start of the actual book. This book does carry what seems to be a socialist agenda and I took that into account while reading – and even though I may not agree with all that was said in the book, he successfully backed all his concepts and theories up.
Its a recommended read,
Noel Harrison
I was emailed this wonderful opinion of the war / attacks going between Hamas and Israel. I am not all that clued up on the topic, but I understand a basic jist of what is going on, and by what I can see, I feel that Israel is doing the right thing. I have attached this email which was originally authored by Gary Bauer.
- START EMAIL –
To judge by much of the world’s response to Israel’s actions since being besieged by Hamas rocket attacks is to answer in the affirmative. But while much of the media and political Left continue to present the radical Islamists as “David” and Israel as “Goliath,” a closer look shows that Israel waited as long as it could before responding to an enemy whose sole reason to exist is to ensure that the Jewish State won’t.
For months, Hamas thugs in Gaza have fired missiles and mortars into southern Israel, subjecting hundreds of thousands of Israelis to a campaign of 24-hour terror. This was done in clear violation of an Egyptian-negotiated cease-fire to which Hamas had agreed. Hamas ended the truce even against the wishes of some Muslim heads of state. Then after pounding Israel for a week, and after Israel warned it would respond,
Hamas did nothing but continue bombing, targeting civilian centers across southern Israel.
So while the world collectively yawned during months of Hamas attacks against Israel, when Israel did what any sovereign nation would do under the same circumstances — striking back at those responsible for the aggression — it was met with a chorus of condemnation. The American Left is planning to hold “Gaza solidarity” rallies today in 26 states; thousands demonstrated in Washington D.C.; protestors met outside the Israeli embassy in London; and 2,000 Germans demonstrated against Israel in Berlin.
The Israel-bashers argue that, since most rockets and mortars fired by Hamas into Israel have missed their targets, Israel should not respond effectively. But under international law, any nation can respond at a level sufficient to meet the threat. Hamas rocket attacks are destroying normal life and have made daily routines impossible for countless Israelis whose children cannot go to school. Israel has every legal and moral right to demolish the terror infrastructure that supports the daily rocket attacks on its people.
Of course, we’ve seen this movie before. The same scenario has been played out numerous times. In August 2005, Israel spent billions of dollars relocating thousands of its own citizens from settlements in Gaza, only for that act of beneficence to be interpreted by Hamas as validation of their brutal terrorism. Gaza was transformed into, in Benyamin Netanyahu’s words, “a huge base for terror.” In February 2007, Hamas used Gaza to launch thousands of rockets that hit civilians in Ashkelon.
And, just as night follows day, each time Israel responds with force, it is condemned for its “disproportionate response.” This time around, more than 300 Palestinians have been killed, against four Israelis. But here’s why. Gaza is one of the most densely populated areas of the world, and Hamas is infamous for hiding among its constituents, using them as human shields. Weapons are being stored in mosques. The only university in Gaza has turned its labs over to the terrorists, who are using them to make bombs and mortars. These cowards intentionally set up their bases near schools and hospitals to maximize the number of casualties to gain sympathy in the media.
Gaza is hell, but not because of Israel. Its conditions are unbearable because its people elected Hamas — an organization with no economic plan, no educational ideas, nothing to offer at all except to kill the Jews, kill the infidel and destroy Israel.
Gaza, in recent years, has been turned into “Gazastan,” an Islamic republic that educates its own children to seek death in martyrdom operations. Gaza TV airs children’s shows that teach six and seven year-olds to kill Jews. The Gaza government just instituted a new legal code based on Sharia Islamic law that permits crucifixion for certain crimes against Islam.
Hamas exists to wreak havoc and destroy Israel. And it has acted accordingly since its inception. Between 2000 and 2004, Hamas was responsible for the deaths of 400 Israelis, according to the Israeli Ministry of Foreign Affairs.The Hamas charter states that “Israel will exist and will continue to exist until Islam will obliterate it, just as it obliterated others before it.” And, “[t]here is no solution for the Palestinian question except through Jihad. Initiatives, proposals and international conferences are all a waste of time and vain endeavors.” Hamas also is a proxy of Iran, whose president denies the Holocaust and vows to “wipe Israel off the map.”
Tuesday, Israel rejected international pressure to end air strikes against Hamas, which continues to hit Israeli civilian centers across Southern Israel. Though the number of Israeli casualties may be small, Hamas doesn’t really mind if its missiles fail to hit their targets. As long as Israel hits its targets, and as a consequence more Palestinian civilians are killed, Hamas is content, because images of dead Palestinians helps Hamas in the eyes of its real target, public opinion.
The New Year will bring nothing new to Gaza so long as Hamas is allowed to perpetuate the same old vicious cycle of provocation, reprisal and international outrage against Israel.
- END EMAIL –
Images from www.cnn.com
So I just recently finnished the book Starbucked (ISBN-10: 0-316-01348-X) by Taylor Clark who is a former alt-week writer. This book in my opinion was very interesting and showed how Starbucks did its global expansion and how they continue to grow. For those who are now thinking, “How can they grow more?” the answer is that they intent on opening approximately three times more stores than they allready have. There goal is to reach 40000 Starbucks stores of which they allready have around 13000.
One of the top guys at Starbucks says that as long as there are lines in the shops, there is enough demand to have more shops, and he suggest that the customer should not have to wait more than 3 minutes to recieve his or her order.
According to Tim Harford, “Coffee is, of course, the most important subject in the world. Taylor Clark loves it, and his witty, skeptical, and evenhanded take on the world’s most famous coffee chain is as pleasuable and addictive as an espresso.”
On the back cover of the book, they included the following interesting facts; [not quoted]
All in all, I would suggest that you read this book. Although I purchased it whilst I was in the United States, I have seen it avaliable at Wordsworth and Exclusive books in paperback.