Interesting research by Deutsche Bank on sovereign wealth funds, China's real politick, a great article from Foreign Affairs on how to defeat insurgency, a truly admirable hatchet job on Alan Greenspan's legacy, much commentary on the US middle class's anger with the President, a great commentary on the end of state funded civil society mania in the United Kingdom, and thoughts on a couple of amazing human beings.

Deutsche Bank's study of sovereign wealth funds. Pdf below 'BRIC_sovereign_wealth_funds_The_external_wealth_of_governments'.

In addition to increasing consumption in the countries with huge external reserves one suggestion is to recycle the money into high income countries via investment.

We are all used to self-denying exhortation.  http://www.ft.com/cms/s/0/6114cdc0-c744-11df-aeb1-00144feab49a.html?ftcamp=rss&ftcamp=crm/email/2010924/nbe/Comment/product

But this raises a huge question for the high income countries.

Do you allow state run investment funds to buy into strategic industries because China has just demonstrated that it will apply economic pressure very publically and quickly when its national interests are threatened.

Sharply raising the stakes in a dispute over Japan’s detention of a Chinese fishing trawler captain, the Chinese government has blocked exports to Japan of a crucial category of minerals used in products like hybrid cars, wind turbines and guided missiles.   http://www.nytimes.com/2010/09/24/business/global/24rare.html?_r=3&nl=todaysheadlines&emc=globasasa1

Related.

Sumio Mabuchi, the new minister of land, infrastructure, transport and tourism, said he is concerned political tensions between Japan and China will seriously damage the tourism industry, which is starting to see trip cancellations, including one involving about 10,000 employees of a Chinese company.  http://search.japantimes.co.jp/rss/nn20100924a8.html

Just in -- Japan caved.

Japanese prosecutors decided Friday to release a Chinese fishing boat captain involved in a collision near disputed islands, following intense pressure from China in the worst spat between the Asian neighbors in years.  http://www.washingtonpost.com/wp-dyn/content/article/2010/09/24/AR2010092400566_pf.html

Related.

Mr Niwa, as Japan’s ambassador to China, captures the mood when he suggests that, rather than quarrel over matters that span 10 to 20 years, the two countries need to deepen their mutual understanding “with the thought of maintaining ties for the next 1,000 to 2,000 years”.  http://www.ft.com/cms/s/0/a1608e58-ae14-11df-bb55-00144feabdc0.html?ftcamp=crm/email/2010823/nbe/Analysis/product

(ed's note: how about the next few months)

Great article from Foreign Affairs of the three things essential to defeating an insurgency: first, efforts must focus on underlying causes; second, patience; and third, no neighbouring safe haven.

Hmmmm, in Afghanistan the people running the country are certifiably corrupt and the leading edge of the effort against the Taliban is foreign led and staffed, after almost ten years Afghan fatigue is widespread, and Pakistan is right next door.

By the start of next year, the Obama administration will unveil its plan for ending U.S. counterinsurgency operations in Afghanistan.  http://www.foreignaffairs.com/articles/66749/ben-connable/the-end-of-an-insurgency?page=show

Greenspan has become Greenswill.

Greenspan is to bloggers as airlines are to standup comics - just an endless fountain of source material for screeds, diatribes, infographs, rants, etc.  http://www.thereformedbroker.com/2010/09/23/another-infograph-from-the-greenspan-fan-club/

 

A tremendously dangerous narrative to the Obama Presidency is emerging, that the middle class has been forgotten as the economy flounders.

America's greatest contribution to the world is the belief in the heroic individual, and long stretches of unemployment belie that story.

On Monday, in a town hall meeting intended to reassure beleaguered voters, the opening questioner, Velma Hart, told the president, ''I voted for a man who was going to change things in a meaningful way for the middle class and I'm waiting sir, I'm waiting. I still don't feel it yet.'' Hart voiced the frustrations of the countless middle-class Americans, who polls indicate will abandon the Democrats in November.    http://www.theatlantic.com/politics/archive/2010/09/the-angry-middle-class/63417/

Larry Summers really appealed to middle class Americans. A second chance for Obama? (ed's note - Summers is leaving because if he is away from Harvard for more than two years he loses his tenure).

With Larry Summers following Christina Romer and Peter Orszag out the door, President Obama has a chance for an economic policy reboot. Clearly he needs to try something different.   http://www.washingtonpost.com/wp-dyn/content/article/2010/09/22/AR2010092202544.html

There is no more important asset for the middle class than their home. And in the United States the prices keep falling.

THE homebuyers tax credit programme, it was hoped, would support housing markets by enticing buyers with a generous purchase subsidy (of up to $8,000), reducing the glut of supply and limiting additional price declines.   http://www.economist.com/blogs/freeexchange/2010/09/housing_markets_4

 

The Fed is stuck.

The financial system is not the fuel that drives an economy. That role is played by labour and resources. It is not the motor that creates prosperity – technology and institutions do that. Finance is more like the transmission that moves the energy to the wheels of commerce – hopefully at the right speed.  http://www.ft.com/cms/s/3/af5111ec-c6ef-11df-a806-00144feab49a.html

 

Real American angst. Not to mention that the Dow adjusted for inflation is doing worse than you think.

I look around me and I see an Empire in Decline.  http://www.zerohedge.com/article/forget-recession-empire-crumbling

 

And a long time observer of the United States asks the impossible question, 'has the US Constitution run its course?' 

A blueprint for fascism.

The United States Constitution is a spare and functional document, and pretty much everything a constitution should be. It eschews the high rhetoric of the Declaration of Independence, prescribing instead how the system should work. It has been widely admired and imitated, and where it has not been imitated – as with the voluminous and ill-fated European Union constitution – it probably should have been.    http://www.independent.co.uk/opinion/commentators/mary-dejevsky/mary--dejevsky-has-the-us-constitution-had-its-day-2087932.html

The zeitgeist in today's high income countries from Sweden to Toronto -- read Rob Ford -- is that people know that the state matters but they are demanding competence and cost control.

Farewell, then, to the Pesticides Residue Committee, the Consular Stakeholder Panel and the Zoos Forum.   http://www.telegraph.co.uk/comment/telegraph-view/8021628/Bonfire-of-the-inanities.html

(ed's note -- I vividly remember being told by two supporters of my candidacies that they were helping me because they expected to be appointed to specific boards with large salaries).

Didi. A British wartime hero.

After she died earlier this month, a frail 89-year-old alone in a flat in the British seaside town of Torquay, Eileen Nearne, her body undiscovered for several days, was listed by local officials as a candidate for what is known in Britain as a council burial, or what in the past was called a pauper’s grave.   http://www.nytimes.com/2010/09/22/world/europe/22nearne.html?pagewanted=1&ref=world&src=me

Howard Zinn. American historian.

Howard Zinn died this year. He is perhaps best known for his People's History of the United States, a book that has featured in The Simpsons and was recommended by Matt Damon's character in the film Good Will Hunting.   http://www.guardian.co.uk/commentisfree/belief/2010/sep/23/howard-zinn-the-bomb