January 31st, 2008

The speaker event was a success....so relieved right now, and maybe even a little inspired.

Fed statement:
- market anticipating another 25bps at next two FOMC meetings
- no mention of inflation as opposed to Dec 11th and Oct 11th communmiques, now says "expects inflation to moderate in coming quarters, but it will be necessary to continue to monitor inflation developments carefully"
- not much of a productive day

January 30th, 2008

Inaugural UNA Speaker Event. How's It Gonna End?







- Asian equity markets were mostly lower with KOSPI down 3%, SETI was up 1.5%

- RBI kept reverse repo at 6% and repo rate at 7.75% while keeping CRR unchanged at 7.5%; inflation concerns now a dominant factor

- RBI Gov Reddy indicated shooting for 8.5% growth but inflation is a key risk

- Pimco's Gross said Fed shouldnt head towards 1% as great inflation risk; mortgage reform through FHA would be desirable than cutting

- IMF cut global growth forecast to 4.1% from 4.4%; lowers US growth rate to 1.5% from 1.9%; Eurozone to 1.6 from 2.1%

- HKMA Chief Yam said current market turmoil may affect plan for "through-train" plan for mainland Chinese to invest in HK stocks

- BNM left key rate unchanged at 3.5% but indicated inflation is primary threat to economy

- BoT is monitoring business and household sectors to see how much risk from global slowdown; feel the US impact is limited
- Thai FM raised its '07 economic growth forecast to 4.7% from 4.5.
- Samak Sundaravej's appointment has re-established the standoff b/w Thaksin and the military
- Cabinet formation will probably be decided by Thaksin while day to day will be handled by Samak; seen even by PPP members as a divider

- Samak's advantage is a lot of royal awards from the King; during the coup time he lead the denuniciations of coup leader General Prem b/c had the royal credentials; 73 year old at pinnacble of political career

January 29th, 2008

An evening of playing Rock Band for 3 straight hours. It's all right, it's my rock n' roll fantasy...but meanwhile back on the homefront, completely ignored the State of the Union and for a political junkie perhaps this is another testament to the irrelevancy of Bush right now; that is until he decides to invade Iran to finalize his "legacy".

- Democrats want economic stimulus plan to include rebates for senior citizens and extend unemployment insurance; roadblock with GOP
- Bush's annual meeting with leaders of Canada and Mexico this year to me in New Orleans, to "show off recovery efforts"
- Only one reference in State of the Union to Osama, zero to North Korea
- The Kenya situation: a primer
- Dec. 27th elections started okay but allegations of Mwai Kibaki's party rigging votes after Raila Odinga's Orange Party lost their lead and Kibaki was hurriedly sworn in.
- could have economic impact as many financial centers keep their hub in Nairobi
- power brokers trying to creae a power-sharing agreement, but ODM said wants a new leection or a re-count

- December new home sales fell 4.7% to 604k from 634k in Nov; well below mkt expectations of 640k
- Nigerian oil minister sees no need to alter agreed oil output at Feb 1st meeting, but high prices could suppress demand
*- Fin Services Minister Watanabe said Japan in advanced discussions to created first SWF
- $948bn in reserves, 2nd to China. Motivation would be to generate excess returns to prevent tax hikes on an ageing population
- concern is that this will be used to intervene / prop up equity markets
- President elect Lee in SK announced ex-Foreign Minister Han Sueng-soo as PM
- Malaysia PM Badawi said he was confident growth would beat 6% despite US slowdown
- BoT Chief Tarisa said will adopt a pro-growth monetary policy and will lift capital controls if they can find alternatives
- Thai FM said new government has room to spend more than it earns for next 4yrs to boost the economy
- Chinese appetite for US assets declining: was a net seller of Treasuries in August of $14.2bn, and $12bn for next 3 months
- Durable Goods orders up 5.2% in December; Nondefense ex-aircraft up 4.4% (indicator of business investment)
- Singapore, Hong Kong, and Malaysia most vulnerable to US downturn with exports to America = 20% of GDP vs. 8% China and 2% India

January 28th, 2007

The "Monday After", a brand new year and i'm mildly reinvigorated.

- Obama won South Carolina 55 - 27%
- Ted Kennedy to endorse Obama; Caroline Kennedy endorsed and compared to her father
- breakdown of the Project for a New American Century: http://www.dailykos.com/story/2008/1/27/205559/973/1018/444438
(and who said this was an 'imminent threat')

- China CP was set at 7.1996, first time below 7.2000.
- Again all Asian stock markets were down 1-4%, Hang Seng down 6% at lowest
- John Tsang, HK Financial Secretary, expects growth to slow sub 6% after 6.2% growth in '07
- Singpoare IP fell 1.7% vs. expectation of -0.4%; growth in '08 expected to slow to 4.5%
- PM Lee reiterated that Singaporean SWF is one of the most transparent
- Indian FM Chidambaram expects growth to remain around 9-9.5%,
- FM not in favor of capital controls but might need to to prevent US negative impact
- BoT raised inflation forecast to 2.8 - 4% from 1.5-2.8% in light of supply side constraints and commodity price
- BoT maintained domestic growth rates at 4.5 - 6% in '08
- Thailand: newly appointed speaker Yongyuth said appointment of new PM will be on Monday; rumors flying that PPP and coalition members flying to HK to meet with Thaksin over cabinet allocations; PPP leader Samak is the new PM

Economist
- Many markets are 20% below their highs, definition of a bear market; January 21st was worst day of losses since Sept 11th

January 25th, 2008

Bonus day. Always an experience in this Wall St. adventure. One of those days where you lose all perspective of reality but still in your own constructed world feel like you're completely in the right.

- Not really in the mood for documenting my thoughts on the market as i am just sitting here in anticipation. Davos does look beautiful at this time of year however.

- Wow. What a day. Damn. This job does have its perks.

January 24th, 2008

- The list of "Young Global Leaders" at Davos, keep the dream of Davos alive.
- In the Clinton radio ad, which uses a clip from his recent interview with the Reno Gazette-Journal editorial board, Obama is heard saying: "The Republicans were the party of ideas for a pretty long chunk of time there over the last 10, 15 years." Obama's comment about Republicans came as he discussed elections that represented shifts in political direction. The full quote is: "I think it's fair to say that the Republicans were the party of ideas for a pretty long chunk of time there over the last 10-15 years in the sense that they were challenging conventional wisdom."
- Last year, Obama's campaign circulated a memo describing Hillary Clinton as "D-Punjab," a reference to her Indian-American donors. Obama has said that was a mistake.
- Italian PM Romano Prodi lost the confidence vote, will resign less than 2yrs in to President Giogio Napolitano
- Kenya's Kibaki and Odinga agreed to negotiate end to Kenyan crisis sparked by last month's disputed elections

- AUD appears to be the leading currency of '08 out of the G7 as its strong trade relationship with Asia should protect from the US slowdown; strong levels of growth; high inflation of 3.4% in Q4 means low risk of cut on Feb 5th
- after surprise Fed rate cut, EM hasn't correlate with G3 monetary policy like last summer; if VIX comes down then this relationship will resume itself
- a Rogue Trader at Socgen caused a 4.9bn EUR ($7.2bn USD) loss. This guy was only 31 and limited to equity index hedging and paid about E100,000 a year yet managed to create this disaster. It wiped out 2 years or pretax profits at the bank.
- Home sales dropped again 2.2m. It's the biggest annual slump and first decline in prices since the Graet Depression, down 1.8%
- up until now at Bear Stearns, Merrill, and Morgan Stanley head of risk would always report to head of trading. Now they'll be reporting to CFO's.
- Davos leaders told SWF's to be more transparent. First time in 37yr history of Davos has there been a meeting on this. Muhammed Al-Jasser from SAMBA said "it's putting the cart before the horse", like saying they're "proven guilty until being proven innocent". SWFs could quadruple from 2.5trn today to 12tn in 2015, and 28trn by 2022. Double the size of the US economy
- US govt passed emergency legislation that distributed rebate checks up to $600 and couples $1200, plus $300 per child. Will also allow Fannie and Freddie to temporarily buy mortgages up to $625,000, exceeding federal limit of $417,000. Business incentives added related to how they purchase equipment and related deductions

Day 1

The other night while watching the Democratic candidates debate in South Carolina, I would occassionally flip the channel to CNBC World where there were reports of Asian markets plummeting for the 2nd consecutive night to the tune of over 10% in certain bourses. On my coffee table was an issue of the Economist with a cover regarding Sovereign Wealth Funds and the massive transfers of power taking place in the international political economy.

It was at at this point I realized, 2008 may be one of the most crucial years of my generation. It is a foregone conclusion that this will be a definitive presidential election as in addition to being the most wide-open election since 1932 (no incumbent or VP), it can potentially provide a complete change of direction from the Bush years, and the world readily awaits what this change will be. As our approach to Iraq and the rest of the world may fundamentally shift, whether we can still redeem ourselves will be determined by our actions taken over the coming year and the choice of who we elect president.

The US economy appears to be mired in recession while the global economy is attempting to determine just how dependent on the US it truly is. The next year will provide a roadmap for the next number of years of how the global economy is truly structured in this day and age in terms of distribution of power. Couple this with the new global financial system and the recent disasters associated with complex products that have been a purported boon, and how the world responds to the current challenges and who comes out a winner will be evidence of how the next number of decades play out as we are amidst the first true challenge of the 'global economy'.

In the end I don't believe the world is any imminent danger of breakdown or chaos, but we are going to experience major transitions in both economic and political power in the world. How will the United States respond? How will YOU respond?