A bit of politics is OK

This blog was never supposed to be political as so long as the tax system is fair and governments stick to their promises I really don't have a lot to complain about. The trouble is that every so often you read things that make you want to shake some politicians. I liked the move by the UK last year to cut development aid to India. After all if you're able to send rockets into space, own an A-bomb etc., then development aid doesn't seem necessary to me. Pakistan is another case in point. The BBC is reporting that the UK government is threatening to scale back aid for development if the country can't get its' taxation system sorted out. Pakistan had a lower-than-average tax take, with only 0.57% of Pakistanis - 768,000 individuals - paying income tax last year. That seems ridiculous for a country that has the bomb. The UK and many other G20 nations have been afraid to withdraw aid from such countries because they feared others might step in and occupy markets that they once dominated, but clearly when Pakistan remains a reluctant partner in the war on terror one questions whether the people know or care where their new clinics or schools come from. It's sad, but inevitable that the first rule of global aid should be if you can produce a ballistic missile then you should be able to feed your people on your own.

Hong Kong doesn't get aid from anyone, instead it produces its' own from the HK Jockey Club. Right now though with the ultra lose monetary policies of the US inflicting ever increasing inflation upon the business capital of Sino-Asia people are not happy as evidenced by a strike by dock workers now into its' seventh day. I'm sure there are plenty of strikes in HK, it's just that I don't seem to hear about them. What I do see is a growing gap between the peak dwellers and those in social housing in the New Territories. HK is often cited as a special situation because of the limited land available to people, but that's a cop out; the dock workers earn about USD2,200 a month in the land of multi-million dollar condo's.

The markets in Asia are in the red today mainly because of another nut case calling the shots in a desperately poor country. North Korea has trouble feeding its' people, but also has the bomb and ballistic missiles and a perchance for bad haircuts and Mao-jackets. The (South) Korean Won is under pressure again as foreign investors weigh up the risks involved in keeping capital in a country within 40km's of 250,000 artillery pieces aimed at them by a guy who picks fights with the USA, yet loves the NBA . . . go figure? 

When you trade Asian equities you spend a lot of time looking at the cross rates to try and get a bead on  how competitive particular nation's exporters are. My old favourite was the JPY/KRW. As you can see by the below chart the Koreans were a huge beneficiary of the strength of the JPY over the past couple of years and that enabled them to snatch market share in crucial heavy goods such as Auto's:

The Japanese would like the FX rate to start to stabilise around the current levels as it gives them the ability to compete in heavy manufacturing again. It's a bit of a mess and the fact that they sit on a group of islands well within the range of the nutty North Koreans doesn't help a lot.

The Bundesbank is finally getting around to investigating DB in respect to some old allegations regarding the "mis-marking" of various credit derivative books during the crisis. I'm no great fan of any such shenanigans, but I wonder whether anyone in the German or European financial regulators really wants to open up this can of worms right now? The reason why this is coming back is because of the whistleblower legislation in the US that awards 15 - 25% of fines to those exposing wrongdoing such as is outlined in this case. I guess the two American based guys would get the cash if the US government can prove that the DB branch in NY is culpable in the marking of the books. This could get messy, but I'll have a small bet if DB is found to have a case to answer that they certainly won't be the only ones writing cheques to regulators . . . sorry.

There's a great article in the April 4th edition of UK Mag "Cycling Weekly" dealing with Team Sky's use of the Osymetric chainrings. 

It's a good piece in a good magazine. They delve into the benefits of the equipment and basically suggest that proof of the benefits is inconclusive. I haven't ridden them, though I'd like to. I bet it would be interesting to see the power data mapped by the new left/right dual channel system that Team Blanco are using courtesy of Panasonic, as I bet that the single channel SRM is somehow giving a misleading picture to Wiggins and Froome. One question I have for the physics graduates out there is if I ride (say) a 53 toothed big ring on normal chainrings and osymetric rings are they the same thing?

Ciao!