Business Without Borders

In a statement issued on March 22nd 2010, Human Rights Watch said, “Google’s decision to stop censoring its Chinese search engine is a strong step in favour of freedom of expression and information, and an indictment of the Chinese government’s insistence on censorship of the internet…” They continued, “China is one of the world’s largest economies, but hundreds of millions of Chinese internet users are denied the basic access to information that people around the world take for granted, Google’s decision to offer an uncensored search engine is an important step to challenge the Chinese government’s use of censorship to maintain its control over its citizens.”

Extending this, Professor Ross Anderson (University of Cambridge), in an interview discussing liberties and free speech in the digital-age stated, “…[the impact of the internet on liberty and free speech has been] very positive indeed – not so much two steps forward and one step back, as ten steps forward for every step back. By breaking the oligopoly of the established press and letting everyone be a publisher, it has made information much harder for the powerful to control. And the overall picture that’s emerging is that the controls which still work operate more along corporate boundaries than along national boundaries. In order to censor YouTube, for example, countries like Turkey and Pakistan had to block access to the whole site; it’s not practical just to block selected content. And a country that stops its citizens having access to Facebook, say, or Google or Skype, faces real disadvantages – from inward investment to domestic discontent…Continue reading

Economic Dependencies and Disasters

On March 11, 2011 at 05:46 UTC, Japan was hit with a Magnitude 9.0 Mega-Quake (the fourth largest earthquake ever recorded) .  To put the size of this quake in perspective, it was 8,000 times more powerful than the one which devastated Christchurch (New Zealand) in February 2011, and around twice as powerful as the 2004 Indian Earthquake and Tsunami which killed over 220,000 people.  The earthquake moved Honshu 2.4 m (7.9 ft) east and shifted the Earth on its axis by almost 10 cm (3.9 in).

As I write today- and watch a continuing feed of apocalyptic images and video, Japan is facing its worst crisis since the devastation of Hiroshima and Nagasaki by nuclear weapons in World War II.  Over 15,000 people remain unaccounted for, 550,000 have been displaced (with almost 250,000 sheltering in refuge centres).  Japan’s Nikkei 225 has de-valued over £387 billion, and conservative estimates put the cost to the country of this quake to over £100 billion.  A number of Japan’s nuclear reactors are also melting-down, with the catastrophe being likened (by international experts) close to the severity of the Chernobyl disaster.

While Japan is an economically rich nation, the sheer scale of the destruction has (rightly) provoked the international community to offer assistance- with over 100 countries offering help. Continue reading

Global Health

In this interview, we speak to Sir Richard Feachem, who is Professor of Global Health at both the University of California, San Francisco, and the University of California, Berkeley, and Director of the Global Health Group. Sir Feachem was also the founding Executive Director of the Global Fund to Fight AIDS, Tuberculosis and Malaria, which has saved over 4.9 million lives globally. We discuss the key issues facing health in the developed and developing world, strategies to eradicate some of the most prevalent conditions, and the future of global health.

http://thoughteconomics.blogspot.com/2010/03/global-health.html

The New Danger of Financial & Economic Bubbles

Recent economic events have brought the concept of financial bubbles from academic texts to the forefront of economic and commercial thought.  Whereas economies used to be slow laborious creatures, the globalisation of capital markets, and growth of technology within them, has increased the ‘speed’ of economies to a pace never seen before.

The New Structure of Bubbles

The Financial Times define a bubble as existing “….When the prices of securities or other assets rise so sharply and at such a sustained rate that they exceed valuations justified by fundamentals, making a sudden collapse likely (at which point the bubble “bursts”).

At the heart of bubbles therefore are three key components:

1)    The underlying asset class on which the bubble is formed (be it real-estate, currencies, or other)

2)    The availability and ratio of counterparties who are interested in acquiring/disposing of assets (in a bubble, one will typically find more individuals willing to acquire assets, than dispose of them)

3)    The availability of liquidity (cash) to finance those transactions.

In relatively slow-paced economies, these components work well, and usually generate ‘fair value’ equilibrium in the market.  Once economies globalise, and their speed increases, the structure of bubbles becomes somewhat different, and can be seen in a three stage model. Continue reading

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