Friday, 25 January 2013

A Week In Quotes

I spend a lot of  my time sieving the world's data, but there are other ways to understand what's happening.  Here's another view of the week, constructed from the things people have said.

A move 'reflecting the noble character and sterling integrity and open-mindedness of a Communist'. Xinhua hails Jiang Zemin for asking for his name to be listed among those of  retired leaders, and below the current generation of leaders.

'That Gini coefficient is, to quote Zheng Yuanjie, even wilder than a fantasy'. Xu Xiaonian, former research head at Gao Hua Securities, on being told that the National Bureau of Statistics calculated the Gini coefficient of income inequality had narrowed to 0.474.

Japan and the Yen
'When a large country with its own currency reaches its fiscal limit, growth ends not with a bang but a whimper of declining vitality and diminishing resilience.' Adam Posen, Peterson Institute

'I think 100 yen is a good level for Japan, 110 is too weak but 95 or 100 is no problems. We need to bring the yen back to a level that works well for Japan's economy.' Koichi Hamada, advisor to PM Abe.

'The current level around 90 can be said to be a correction of the strong yen, but it isn't over yet.' Yasutoshi Nishimura, Deputy Economy Minister

Sino-Japanese Relations
"While Japan's high-profile move on the Diaoyu Islands is a direct confrontation against its neighbour, its actions in Myanmar are a secret detour against China."  The cancellation of Y500bn in Myanmar debt 'is not a healthy competition, but a vicious economic war which aims to drive out Chinese companies, control Myanmar's economy, and finally, cut off China's energy passageway to the Indian Ocean." China's Global Times sees Japan and the US trying to encircle China.

“America is the world’s greatest naval power and pre-eminent economic superpower; Japan is Asia’s largest maritime democracy and a liberal capitalist state second only to the United States. It stands to reason that our two nations should be partners.” What Japan PM Abe was to  have said in a cancelled speech in Jakarta. 

European Politics
'Judging from the latest opinion polls, the most likely election result is gridlock, perhaps in the form of a Bersani-Monti coalition of the centre-left, possibly with a centre-right majority in the Italian senate, where different voting rules apply. This would leave everyone, more or less, in charge. Nobody would have the power to implement a policy. Everybody would have the right to veto one.' The FT's Wolfgang Munchau thinks about Italy's forthcoming elections.

Britain, Sterling and the EU
'Substantial headwinds to recovery remained, including . . . the deterioration in UK competitiveness over the past couple of years. The sterling real exchange rate might be above the level compatible with the necessary rebalancing of the economy'. Notes from Jan 10 Bank of England policy meeting:

'If the UK left, France would find herself locked into a situation in which Germany's distinctive strategic culture and security policy would prevail. This would not be easy to accept for the French, who continue, like the British, to have their own views on international security and the use of force. France could then be tempted to balance the German centre through the systematic practice of countervailing coalitions with the other members of the EU. And, with that, the spirit of the Elysee treaty would be irrevocably lost'. Francois Heisbourg, special advisor to the President of the Foundation of Strategic Research. 

'Without trade regulations and the single market of the EU, Britain will be more open to China's huge market.' Ding Chun, Director of Europe Research Center at Fudan University.

Global Business
'Having held Eu790bn of goodwill at start of 2011, the companies surveyed by ESMA suffered Eu40bn of impairment losses during the course of the year.' That only 5% was written down was a 'clear indicator that there might be too much optimism in financial statements regarding goodwill'. European Securities and Markets Authority warns there's too much goodwill out there. 

'The inconsistencies between Solvency II and Basel III are a major issue. Who's going to provide capital to the banks'? Basel II means European banks may need to raise Eu2.3tr euros in l/t funding: but Solvency II dissuades insurers from buying l/t bonds. 'At a high level they want banks to have more capital and you know who owns the banks - It's us. Solvency II, which is our own solvency regime, says that we cannot invest in banks. I've made the point here to many regulators: How does that work?" CEO of Prudential plc ceo. 

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