Kleptocracy in Ukraine

Ukraine is run by deadbeats and thieves.  And as long as they can keep playing the EU against Russia, the situation will continue.  Nobody has the heart to shut off the gas and let Ukrainian babushkas freeze to death.

"Starting with gas and including most other commodities, Ukraine has become a pyramid of debt for stolen goods. Lend or pay any amount of cash into the system, and it will disappear immediately, converted into real goods consumed with the intention not to pay for them, leaving nothing but growing debts behind.
When Yanukovich, Putin and their subordinates agreed in December on a Russian programme of rescue measures, $15 billion was promised to refinance Ukraine’s treasury and foreign debts, partly to repay $2.7 billion in debt already owing for deliveries of Gazprom gas last year; and partly to enable Gazprom to continue delivering gas this year at a higher volume than 2013, and at a newly negotiated 36% discount in price.
But it’s now clear the first instalment of $3 billion in Russian bailout financing has gone – Ukraine still isn’t repaying the old Gazprom debt, and Naftogaz cannot afford to pay for current deliveries. Where did the money go? Putin is asking publicly – there’s not a Russian, nor Ukrainian, who doubts the answer.
According to Russian calculations, during the month of January Gazprom delivered 2.5 billion cubic metres of new gas for an invoice value of $658 million. At the start of the new month, however, Naftogaz was owed $3.4 billion by the country’s municipal and regional administrations. How much more is owed to Naftogaz by the Ukraine’s commercial enterprises hasn’t been counted. If the defaulters were paying up, Naftogaz would be able to repay Gazprom as promised, and start meeting its new delivery invoices. But the defaulters won’t, so Naftogaz can’t.
In order for Naftogaz to continue supplying local consumers with gas at a tariff which has been fixed below its supply cost, the state budget must meet its promised subsidy for Naftogaz. But it too cannot pay. There is simply no free cash left in the Ukrainian government."
http://johnhelmer.net/?p=10168

Besame Mucho, Russian-style

Besame Mucho, Korean-style

The American dollar reigns supreme because it is flawed

Read: http://www.cnbc.com/id/101396524

"But there are now few genuinely safe assets. In a world where even US government debt no longer seems risk-free, asset managers have rushed towards the second-best option: a flight to liquidity, not safety.

In that respect, America reigns supreme. Its capital markets are deep and the pool of dollars seems bottomless. Or to put it another way (though Prof Prasad, now an economics professor, does not quite say this) what is happening with the dollar turns the normal rules of economics on their head: it has become ultra-attractive because of bountiful supply, not because supply has been constrained."

The Euro should be a stronger currency because Europeans aren't wildly spending.  And the ECB isn't technically responsible for member nations debts.  But the markets don't care about that.  They just want to make sure that when it is time to sell, that they will have a buyer.  And that is where America rules the roost.  Like the article says, it is about liquidity, not financial stability.  And how did the dollar become so liquid?  Because of profligate spending and quantitative easing.  It's a paradox.  The number one US export in the world is the US dollar.  Our economy is screwed up, but we uniquely among all nations in the world have the ability to create a high-demand product which costs us almost nothing to produce.

See also:  Why the dollar reigns supreme
The Biggest Export of the United States

Que Nadie Sepa Mi Sufrir, Japanese-style

Que Nadie Sepa Mi Sufrir, Korean-style

It's a little slower, but the piano player (from 2:00 to 2:30) is awesome.

 

The Hip Hop Virtual Machine

See: http://www.infoq.com/presentations/HipHop-Compiler-PHP
http://www.wired.com/wiredenterprise/2013/06/facebook-hhvm-saga/

Now you can code in PHP and have it run blindingly fast.

Mas que tu amigo

La Duena Del Swing

Tiene espinas el rosal

Karachi is the world's most dangerous mega-city

"Foreign Policy magazine recently ranked Karachi the world's most dangerous mega-city, topping Bogota, Colombia; Lagos, Nigeria; and Mexico City.

A string of Pakistani leaders, including Prime Minister Nawaz Sharif, have pledged to clean up Karachi, where teeming millions elbow for an edge in the tropical heat. Owners don't leave their property empty, even for a few days, because they worry that gangs will take it over. Even in posher areas, residents venture out at night on unlighted streets at their own peril.

Little reform is expected, given the clout of local political bosses and their affiliated criminal gangs. Of the estimated 10,000 police officers on duty at a given time, more than half are reportedly chauffeuring VIPs around. According to a leaked 2009 U.S. Embassy cable, the armed militia of one political party alone numbered 25,000.

In March, police official Niaz Khoso reported that half the sprawling city was a no-go area for police, who routinely advise the relatives of kidnapping victims to take the lead in dealing with the criminals."

http://www.latimes.com/world/la-fg-c1-pakistan-karachi-crime-20131112-dto,0,7429758.htmlstory

In my latest ranking of the world's top 30 cities, I included Karachi, Pakistan, based largely on its population.  But I think to be one the top cities, a city would have to show that it isn't totally screwed up.  Every city has problems, but Karachi is insane.

Deficit projections worsen

Source: http://crfb.org/blogs/how-much-worse-are-deficit-projections

Each year, the CBO does a 10-year deficit projection.  The latest projection for 2024 shows the cumulative deficit at 79.2% of GDP, up from 72.3% of GDP projected by the last report for 2023.  And this is without taking into effect the next recession, which is starting now.  Next year could be 85% of GDP in 2025.

Top 30 Cities in the World

I've done this like 100 times, and here is my latest list:

Rank	City	Country	Pop	HDI	Pop Score
1	Tokyo/Yokohama	Japan	34800	0.912	3174
2	Seoul	S.Korea	25800	0.909	2345
3	New York	US	21600	0.937	2024
4	Los Angeles, CA	US	17200	0.937	1612
5	London	UK	15500	0.875	1356
6	Osaka/Kyoto/Kobe	Japan	16800	0.912	1532
7	Mexico City	Mexico	23800	0.775	1845
8	San Francisco/San Jose, CA	US	7200	0.937	675
9	Jakarta	Indonesia	26400	0.629	1661
10	São Paolo	Brazil	21500	0.73	1570
11	Shanghai	China	21766	0.699	1521
12	Washington DC/Baltimore	US	8100	0.937	759
13	Beijing	China	19300	0.699	1349
14	Manila	Philippines	22200	0.654	1452
15	Buenos Aires	Argentina	14500	0.811	1176
16	Paris	France	10700	0.893	956
17	Moscow	Russia	16500	0.788	1300
18	Delhi	India	24000	0.554	1330
19	Guangzhou-Foshan	China	17680	0.699	1236
20	Chicago	US	9800	0.937	918
21	Rhine-Ruhr	Germany	11300	0.92	1040
22	Mumbai	India	21400	0.554	1186
23	Miami,FL	US	5800	0.937	543
24	Karachi	Pakistan	22700	0.515	1169
25	Cairo	Egypt	16100	0.662	1066
26	Istanbul	Turkey	13800	0.722	996
27	Bangkok	Thailand	14500	0.69	1001
28	Taipei	Taiwan	8950	0.882	789
29	Hong Kong	China	7150	0.906	648
30	Tehran	Iran	13200	0.742	979

Yep, New York is #3, not #1, and London is #5.

I take the population and multiple it by the HDI to get a number, then adjust it for various factors. I like the number 30. It is big enough to be comprehensive, but also small enough to be an elite group.

Here is a list of cities that didn't make the cut, with some comments:
Singapore.  Singapore only has about 6 million people (Wikipedia says 5.4 million, another source says 6.75 million including suburbs in Malaysia), less than all these other cities, except for possibly Miami. Using the 6.75 million number, and an HDI of 0.895 gives it a score of 604, lower than every other city on the list except for, again Miami.  On a survey of what cities wealthy people prefer, Singapore and Miami are both in the top 10, with Singapore ranked higher.  So why is Miami ranked so high? Because every rich person in Latin America wants to buy a condo there.  Anyways, this is the strongest contender.  In my extended list, which I don't show here, it ranks #34, behind also Rio, Nagoya, and Boston.

Rio de Janeiro.  Miami is ranked higher.
Toronto
Zurich.  Seriously, Zurich - all 380,000 residents, maybe 1.8 million in the metro area?
Boston
Sydney
Madrid
Dallas
Houston
Berlin
Brussels
Auckland
Stockholm
Milan
Kuala Lumpur
Abu Dhabi
Johannesburg
Shenzhen
Philadelphia
Tianjin
Atlanta
Frankfurt

====================
Update: I am kicking Karachi off the list because of its extreme crime problems and adding Rio. It's numbers look like this:

Rio de Janeiro

Brazil

12900

0.73

942

Note that its weighted population score, calculated by multiplying the population by HDI, is at 942, and no other city in the world, other than those listed above, has a score above 900.  The next highest one is Calcutta, India, with a score of 886.

No Sex Please, We're Japanese

Lago Azul

La Lambada

M6 down 1.24%

	12/31/13	01/31/14
M2	10990.3	11017.2
Public Debt	12355.4	12308.1
Fed Owned	-2208.8	-2243.2
G30 Market	6857.2	6564.9
Total	27994.1	27647.0	-1.24%

This is trouble.  This number should be going up every single month.  I think the recession has started.

John Frum is the Messiah

Cargo Cults

I just learned about this.  In the South Pacific is one of the strangest religions in the world.  Primitive tribes during WW2 discovered modern technology (planes, manufactured goods, radios, clothes, etc).  But they didn't understand where they came from since they never saw a white man do anything other than sit behind a desk shuffling papers or march up and down the fields wearing uniforms (military parades).

They developed the belief that the manufactured goods were a gift from the gods, and that the activities the white men performed were religious rituals.  They believed that if they performed the same rituals, they would get the goods. I'm not going to repeat the whole story, read the links, but somehow they believed that the messiah was a mythical man named John Frum whose birthday was on February 15 and who was born in the state of Georgia and was in the US Marine Corps.  On the high holy day of Feb. 15, they paint the letters "USA" on their chests in red paint, and march up and down the fields, with homemade rifles made out of wood.  They build "planes" out of bamboo.



Update:  There is a similar movement in Vanuatu that sees Prince Philip as the Messiah.

Hyperinflation in Argentina

When the temperature insisted on staying at around 40C and humidity levels rose to a drenching 90%, Fernández rushed to buy an air-conditioning unit she had seen on sale a week before.   "When I went to buy it, the price had gone up 25% since when I checked prices last week," she complained outside the Alto Palermo shopping mall. "The same thing just happened to me at the pharmacy where I went to buy the medicine my husband takes: the price was up 20%." http://www.theguardian.com/world/2014/feb/01/argentina-peso-crisis-shakes-queen-cristina

I think inflation of over 3%/month qualifies as hyperinflation.  At this rate, prices would double in less than 2 years.

The black market rate is at 13 pesos to the dollar.  So prices will keep going up.  This will cause a vicious spiral as workers will demand higher salaries which will cause prices on everything to go even higher. "Moody's expects a devaluation of the Argentine peso 50% in 2014."

(Read more at http://globaleconomicanalysis.blogspot.com/2014/02/argentina-cerntral-bank-bans-imports.html) 

Argentina previously experienced hyperinflation from May 1989 to March 1990 when prices rose 12,000% in one year.

The cause?  Generous social spending, causing large deficits, which erode the central bank's hard currency (petrodollar) reserves.  They need dollars to buy foreign oil.  Printing more pesos won't give them more dollars.

Argentina has a current account deficit, so they are sending more money (measured in dollars) out of the country then they are receiving.  Unless this situation changes, the peso will continue to drop.

The Argentina Central Bank is trying to stop all imports.  Good luck with that, they will still need foreign oil.