Thursday, 24 April 2014

Banking on someone else to sleep your bank to the top

Ah, the morality of bankers knows no bounds.
China Resources, the state-owned conglomerate whose chairman was detained last week by anti-corruption investigators, has allocated many of its investment banking deals over the past five years to institutions employing the chairman’s alleged mistress.
From 2009 until 2012, Credit Suisse was one of the most prominent advisers on acquisitions and capital market activity carried out by China Resources and its numerous subsidiaries, according to data from Dealogic financial services information. This period coincides with the employment of Yang Lijuan, who also goes by the name Helen Yang and who is alleged to have been the mistress of the disgraced China Resources chairman Song Lin.
And, surprise, surprise, when Ms Yang left Credit Suisse for UBS the business stopped for Credit Suisse while UBS became the joint bookrunner on two large bond sales and a key adviser on the two largest public acquisitions ever involving China Resources.
I suppose we could call it banking on someone else to sleep your bank to the top.

Wednesday, 23 April 2014

Rich men and third party politics give a different twist to the Westminster system

Gordon Barton gave us a taste in Australia of rich men flirting with third party politics back in the 1960s with his Liberal Reform Group and opposition to the support of conservative Liberal and National (then Country) parties for the Vietnam war. It transmuted into the Australian Reform Movement and then the Australia Party before he lost interest – or maybe it was his money – although his plaything was kind of resurrected in the the form of the Democrats. And they did use the Senate to have a considerable say in national politics before their disintegration as a party without money and thus influence.
Bob Brown. that deservedly revered founder of the national Greens, understood the importance of men with money too. It was the millions poured into campaigning by the founder of the Wotif online travel website, Graeme Wood, before the federal election of 2010 that saw the Greens emerge as such a dominant force that Labor was forced into a formal governing agreement with them. The absence of an equivalent to that largest donation in Australian political history perhaps explains much of the declining Green vote of 2013 when Queensland’s Clive Palmer was the third party man with the millions of dollars. It was the Palmer United Party that bought enough votes this time to upset the established two-party duopoly.
In Australia the success of rich men sponsoring a third force in politics has owed much to the multi-member nature of our Senate elections although now both the PUP and the Greens have a bum on the green House of Representative benches. Perhaps there are more such third forces to come. The current experience in Great Britain certainly points in that direction with UKIP – the UK Independence Party – coming from nowhere to challenge Conservatives and Labour in the opinion polls with the traditional third party Liberal Democrats languishing well behind in fourth place.
And money is surely playing a part in the UKIP ascendancy. The Financial Times reports this morning that a “reclusive multimillionaire behind the anti-Brussels UK Independence party has vowed there will be “no limit” to his spending in the run-up to next year’s general election.
Paul Sykes, a self-made businessman worth an estimated £400m, said he wanted to counter the tens of millions spent every year by Brussels on promoting the EU. “The British people need the facts,” he said. …
Having quit the Conservatives in the 1990s over Europe, Mr Sykes said he had so far spent about “£1.2m or £1.4m” on a media blitz that includes hundreds of controversial posters attacking the EU. “We haven’t stopped spending yet,” he told the Financial Times. “I’ll spend whatever it takes for the British people to make them aware that power has been transferred from Britain without permission.”
And here’s where the money is going:
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It seems like a very powerful message to me – powerful enough to give a different twist to the Westminster two-party system.
Money might not buy you love but it seems to do alright with votes.

El Niño looking a little more likely

A hotter and drier summer than normal in eastern Australia is looking a little more likely with the Bureau of Meteorology reporting today that the likelihood of El Niño remains high, with all climate models surveyed by the Bureau now indicating El Niño is likely to occur in 2014. Six of the seven models suggest El Niño thresholds may be exceeded as early as July.
23-04-2014 elninooutlookSays BOM:
The Pacific Ocean has been warming along the equator over recent weeks, with continued warming in the central Pacific likely in coming months. Another burst of westerly winds is presently occurring in the western Pacific, and is likely to cause further warming of the sub-surface.
El Niño has an impact across much of the world, including below average rainfall in the western Pacific and Indonesian regions, and increased rainfall in the central and eastern Pacific. For Australia, El Niño is usually associated with below average rainfall, with about two thirds of El Niño events since 1900 resulting in major drought over large areas of Australia.
In Western Australia, where the Indian Ocean Dipole (IOD) is a major influence, the Bureau suggests, but not as strongly as for the eastern states, that lower rainfall than usual may be on the way.
Model outlooks currently suggest the IOD is likely to remain neutral through late autumn and early winter, with two of the five models surveyed suggesting a positive IOD may develop by early spring. Positive IOD events often coincide with El Niño and are typically associated with large parts of southern and central Australia experiencing lower rainfall than usual.
A couple of earlier stories by the Owl this month on El Niño:

Baptists and bootleggers and other news and views for Wednesday 23 April

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  • Asteroid impact risks ‘underappreciated’
  • Earth Day: A Baptists and Bootleggers Story – “Earth Day was first celebrated on April 22, 1970. It is now observed in 192 countries, and is coordinated by the Earth Day Network. Bruce Yandle offers a hard-eyed look at how the original Earth Day affected U.S. environmental legislation in How Earth Day Triggered Environmental Rent Seeking… One of Yandle’s signature insights is the idea of a ‘Baptists-and-bootleggers’ coalition. Who favored prohibition of alcohol sales? Baptists, on moral grounds, and bootleggers, because government prohibition would limit competition and boost their profits. He makes a strong argument that Earth Day led to a similar environmentalists-and-industrialists coalition, in which environmentalists pushed for laws to reduce pollution, and industrialists pushed for anti-pollution laws that would hinder their competition.”
  • Tony Blair: ‘West should focus on radical Islam’ – “Western leaders must ‘elevate the issue of religious extremism to the top of the agenda’. And they must co-operate with other countries – ‘in particular, Russia and China’ – regardless of ‘other differences’.”
  • Human capital and income inequality: Some facts and some puzzles – “Most developing countries have made a great effort to eradicate illiteracy. As a result, the inequality in the distribution of education has been reduced by more than half from 1950 to 2010. However, inequality in the distribution of income has hardly changed. This column presents evidence from a new dataset on human capital inequality. The authors find that increasing returns to education, globalisation, and skill-biased technological change can explain why the fall in human capital inequality has not been sufficient to reduce income inequality.”

Tuesday, 22 April 2014

Powdered alcohol and other news and views for Tuesday 22 April

News and views noted along the way.
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Monday, 14 April 2014

Indonesia’s politics of depression

The impact of defeat on the mental health of election candidates is not a subject I have ever thought about but perhaps Jeff Kennett’s  Beyond Blue should put it on its agenda. At least if the Indonesian experience, a country where the subject has been studied, is any kind of guide.
The Jakarta Post reported this morning that many candidates who failed to secure votes in the recent legislative election have become depressed after reportedly giving everything they had, including personal funds, in their efforts to win votes. Recent reports from across the country have shown that of 6,600 legislative candidates running for seats in the House of Representatives, a handful have fallen into depression, displayed maniacal tendencies, or even resorted to suicide due to the losses they suffered. A tragic report came from Banjar, West Java, where a young mother hanged herself after losing in the legislative election. Local residents found her body in a bamboo hut in Limusnunggal hamlet, Ciamis regency, West Java.
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Court reporting with a difference – Pistorius is lying his head off

When there is no jury to prejudice, court reporting can be different. This morning’s South African Cape Argus well illustrates that:
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