For better or worse: A coup d'etat in Guinea

News comes today of the death of Guinean dictator President Lansana Conte and a subsequent coup d'etat by the military who as recently as May mutinied against the widespread corruption within the ranks. Conte had unsympathetically ruled the country for over two decades, entrenching one of the most resource-gifted states on the planet as one of the the most undeveloped. Despite already being implied, its worth explicating Guinea's incredible performances for Transparency International's Corruption Perceptions Index, most notably their almost chart topping rendition in 2006.

As evidenced by rank and file soldiers taking only hours to exploit the situation, Conte's position is highly prized (pun however you like it) within Guinea. His refusal to relinquish power for 24 years, meagrely --"there is no open transition, I am chief, the others are my subordinates"-- appeasing the disenchantment which resulted in the deaths of 180 protesters by a appointing Prime Minister in 2007, serves as further testament. It was the firing of PM Lansana Kouyate that sparked this summer's chaos.

The current PM, Tidiane Souare, isn't just about to roll over and relinquish control of a quarter of the world's bauxite (aluminium) reserves, and further endowments of everything from gold and diamonds to uranium. He announced that the government is still "functioning" in the afternoon. Out of luck is Australian mining giant Rio Tinto, currently squabbling over the rights to a $6 billion iron ore operation, and probably the Guinean populace, whether it would be for ethic reasons (Conte represented a 10% minority), or for the fact that parents are getting sick of sending their kids to study under the airport's lights due to a lack of electricity--despite the country possessing abundant hydroelectric potential. With electricity comprising 20-40% of the cost of processing aluminium, the priorities of the government, as well as the causes of student bum-itis, are rather clear.

If the experiences of Guinea's Equatorial namesake, and nearby Angola, (not to mention vast historical examples) are any indication, the prospects for positive change within a resource rich African nation are rather grim. There, recent discoveries of sweet crude --the good stuff-- have rocketed the GDPs per capita (Equiatorial Guinea's was 4th in the world a couple of years ago) but HDI scores remain just the opposite. On a 'bright' note, Aluminium producers have reason to rejoice as last year's instability prompted speculation that raised the price of a ton by over 70 percent.

... continued...

Saving failed American enterprises

The US approved their $17 billion rescue package for GM and Chrysler late last week; and Canada immediately followed with its proportionate $4 billion version. Applauding Ottawa's promptness is Canadian Auto Workers president Ken Lewenza--he would be out of an employer had they not done so--as grateful as he is, he is not without reservations. Worrying him, is that the US version is string-heavy with strong emphasis on devaluing labour, and the trading of debt for equity. As if the entire political caste suffers from a chronic case of amnesia, this recipe is oft postulated as cooking up the current financial crisis.

These bailouts are always stomping grounds for interesting interactivity... most prominently within the lifejackets themselves: the auto bailout is both part of the financial rescue package, which the Treasury apparantly has no clue what to do with, and at the same time a miniature part thereof. This (dis)proportionality probably has as much to do with it already laughingly dwarfing GM's market cap, which is hovering at under $3 billion right now, as it does with the fact that the financial sector was actually intended to replace the manufacturing industry as the focus of economy--only this produces extreme contradictions, as evidenced by unemployment rates during the early 80s, and today's bonanza, which is a direct descendant. Fittingly, one of the chief architects of that transition was none other than the head of Obama's Economic Advisory Board, Paul Volcker.

Ultimately, these efforts raise more questions than answers. When a company's debt is $50 billion and its worth 5% of that, how is any swap there going to produce a healthy organization? And how exactly is it supposed to make itself competitive with the foreign auto-makers that have--get this--heavily subsidized and un-unionized plants on the Continent?

... continued...

Crime, or, business as usual: Madoff

It appears that Bernard Madoff's $50 billion Ponzi scheme wasn't large or complex enough to be legitimized within Wall Street and the legal system. Whereas the major players in the multi-trillion sub-prime mortgage backed securities scandal, aided by infinitely complex capital-accruing algorithms masking any attempt at black and white legal interpretation, were rewarded with $700 billion to patch the myriad of holes in their flat tires, Bernie's comparatively simplistic scheme did not earn him so much as a get ouf of jail free card.

Apparently, being a former NASDAQ president and having a hiccup-free scam for 50 years just does not cut it any more. It certainly was good enough when the SEC somehow opted not to investigate Madoff's fund despite receiving credible complaints for over a decade. But this is the 21st century now, and unless you employ a hundred thousand Ivy League grads and hand them a billion in bonuses, bankrupting Jewish charities will land your ass in jail; by not earning the respect and protection of the government, it appears that even those who withdrew their money early could face action on their gains. Give the guy some credit though, he out-Ponzied the government of Albania.

... continued...

Extorted by failed American enterprises

The Canadian government is set to inject just under $3 billion into the obsolete heaps of capital otherwise known as GM, Ford and Chrysler, pending of course, the US government does their part with a 14 billion large IV, which, was rejected for reasons unknown to man last week. A report released by Canada's Ministry of Economic Development projects that the failure of these 3 behemoths would cost Canada 600,000 jobs --almost all within Ontario-- sort of justifying what could easily be interpreted as completely unnecessary ass kissing. What's troubling though...

...is that automakers in China have seen no need to beg their government for "change." In fact, former world's richest man Warren Buffet, invested himself to the tune of $230 million for 10% of BYD as recently as September. The difference? BYD is pumping out hybrid vehicles and generating 60% more revenue over last year. Fittingly so, North American vehicle demand is only 60% of what it was last year. But as we have learned too many times over the last couple years, this sort of tragic ending is exactly what happens when you artificially create, and maintain, demand for a product.

With the suburbia-inspired real estate crash, and its symbiotic brother, the financial crisis, serving as precursors and pulleys to the impending doom of corporations unimaginably large, one wonders if the fallout will finally focus the spotlight on the practices that have led us to this point. As this extremely interesting article points out, ridding America of public transportation is only the tip of the iceberg of achievements accredited to the geniuses employed by the American auto-industry. And that's not even mentioning employing Freudian psychoanalytical methods as marketing tools.

... continued...

Setting benchmarks for hypocracy: ASEAN

In a bid to leverage more bargaining power in the global landscape, 10 South-east Asian countries have ratified a EU-esque politico-economic charter, and are well on their way to forming ASEAN, in what the Associated Free Press calls "setting benchmarks for democracy." Membership includes, but is not limited to: Brunei, a monarchy; Myanmar, a military dictatorship under EU and US sanctions for imprisoning political activists; Indonesia, only too recently accused of genocide; and Thailand, currently a political trampoline. Hypocrisy aside, this development highlights numerous connections, most notably the paradigm shift towards supranational organizations.

We already have the EU, which has, as an institution, flourished, and the Gulf Cooperation Council, currently in an incubator. There are also comparative fundamental frameworks in place in absolutely every region of the world-most interestingly the Shanghai Cooperation, a bloc incorporating China and Russia, amongst others, and with important states like India, Iran and Pakistan in tow. There will be a future post on this mega-entity.

What ASEAN seems to profoundly illustrate, is how long these organizations take to form-it has its roots in 1967. In comparison, the EU began as the relatively obscure European Coal and Steel Community back in 1950. With NAFTA having begun in 1994, and the SCO only two years later (but ever picking up steam since Russia's re-birth and China's emergence), we should probably prepare for a drastic restructuring of the international system in the not so distant future.

And just in case someone's worried about economically disenfranchised countries being left without a long-term partner, these states are the cornerstones of the system. The EU has its Eastern bloc countries; NAFTA Mexico; ASEAN Cambodia, Burma et al; and the SCO has a wide variety of near-failed-state-status former Soviet republics. They provide a multiplex of cheap capital options, from human to land, and promote intra-coop trade in a bid to foster internal growth and cohesion, and external bargaining power.

... continued...

Crime, or, business as usual: Blagojevich, Part 1

With the sensationalism of Illinois Governor Rod Blagojevich's arrest for corruption-conspiracy to commit mail and wire fraud, and solicitation of bribery-dying down, having been exploited by the media to its fullest potential, attention seems to now be refocusing on the minute details of the matter. That is, whether any crime has actually been committed, or has Mr. B's gravest mistake been calling a pile of shit a pile of shit, and not obfuscating it as high-energy content organically reprocessed baby-back ribs with a side of mashed potatoes and a dash of red wine...

After all, the actual process he was orchestrating, the trading of a political position for favours, would probably be considered completely standard by those in the business, including Mr. Blagojevich and the man who arrested him. “We’re not trying to criminalize people making political horse trades on policies or that sort of thing," said Patrick Fitzgerald, the District Attorney for Northern Illinois. Of course you're not, because then the whole political class would be under investigation; this is just a mild case of opportunism. His statement also begs the question, what political manoeuvre is his latest triumph part to? Surely the wording and timing (he was already under previous investigation, hence the wiretaps) was horrible on Blagojevich's part, but one has to wonder how coincidental the expediting and valorizing of this ordeal is with Obama's rise to power.

... continued...

The Peloponnesian War of 2008AD

Those Greeks sure know how to party, and riot. Take notes North Americans, this is how you show contempt for your government's actions. And no, they were not that mobilized solely by the police killing an innocent member of society. The Greeks are a very politically conscious people, as opposed to the apolitical folks on "the Continent;" here less than 60% turned out for this year's election, and as we all know down south they elected Bush twice. It took the media a few days to figure out why the Greeks were so upset...

And it turns out they have quite a few itches to scratch, bones to pick, globes to carry, etc. The rioters, aka the youths, are mostly students, who are unhappy about not only the state of their education, but also their prospects post. Dubbed the "700€ Generation," they stand to make the Continent's minimum wage after graduation-and they know why, which is the reason for all the "anarchy". The West has incorporated their country in a herbivore role within the global economic food chain, and successive pro-Western governments have been only too happy to oblige, destroying the currency, the borders and the future. This westernocracy has, in the wake of the financial crisis, left hospitals without supplies while providing billions to the banks. And their embedded anti-Western sentiment, especially among the radicalized youth, has long-standing tradition and causes, probably having something to do with the installation of a military dictatorship during the Cold War.
... continued...