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Foxconn worker dies in China; 10th in a year

So, there is a Chinese company called Foxconn (disclosure: never heard of it before) that has had 10 workers die this year. Apparently they make Ipods, so of course they get massive attention.

10 worker death seems like a lot. But then you read that this company has 300,000 employees.

So, is it the "sweatshop" conditions, or more likely that 300,000 workers probably includes some crazies and even more lovelorn young Chinese workers who handily have access to a tall building at work. Considering China has high suicide rates, I doubt its FoxConn or the Ipods they make that is causing the problem. I could be wrong though.

Change You Can Believe In

In the United States, 3rd parties do not perform well electorally because their platforms that are popular are often simply appropriated by one or both of the major parties.

No to raising state taxes. No to borrowing to close historic budget deficits. Yes to capping state spending. Yes to capping local property tax hikes. Yes to freezing the salaries of state workers. Yes to trimming "benefits and pensions that are out of line with economic reality." Yes to charter schools. Yes to slashing by 20% a state government that has, by XXXXXXX's count, 1,000 agencies. Yes to nonpartisan redistricting and full financial disclosure.

So, which Republican candidate running for Governor of a major Blue state has this platform?

Andrew Cuomo- Democrat.

If this is what he thinks he needs to do to win in New York, it seems to me that at least some of the Democrats have read the tea leaves and decided to embrace some of the Tea Party platforms.

He may also have decided its the tipping point where trying to run on "everything is OK, how about some more money for schools and policemen paid for with a few new taxes" will not work anymore. (On the GOP side it would be "everything is OK, except we need to keep the Gay down and cut some taxes.)

Let's see who else follows the Christie route. I wonder who will do it in California?

My suggested slogan for these people would be:

"State employees need to sacrifice some of their pay and pension benefits. It's for the children."

Currency Manipulation

There is blood in the streets for the Euro - US Dollar.

The Canadian dollar is weakening, the Taiwan dollar is all over the place.

But one major currency just sits there like a frozen block of tofu.

1 US$ = RMB 6.835

Yeah, China is not manipulating their currency. They are just really, really stable compared to the rest of the world. Well, except for the falling stock market, the increasing domestic inflation, and the collapse of the real estate market.

Granted, if the Yuan was going to depreciate, then I praise the ChiCom financial engineers for being paragons of monetary virtue. But the fact that their currency just sits there like a frozen block of tofu raises suspicions that it would more than likely be appreciating. When times are tough, the exporters keep their currencies low.

China Real Estate Bust is happening now

Compared with the week ended April 11, the average transaction price of commercial residential properties in Beijing plunged 31.43 percent or 7,744 yuan per square meter.

But, the "good" news I think is that there will not be too much contagion (knock on wood.) Here is why:

May 13 -- Rich people making up 10 percent of China’s total population accounted for 50 percent ofreal estate transactions conducted in China, reports Beijing Morning Post, citing Wang Xiaoguang, researcher from the Chinese Academy of Governance.

According to Wang, demand by speculators for real estate in China accounts for more than 50 percent of the market. In cities such as Shenzhen, speculators account for between 80 percent to 90 percent of the demand for real estate.

So, essentially its speculators and rich people who will take losses on their investments. Since you need a 20% or more down payment for a mortgage in China and many people actually buy in cash, the real estate bust will simply result in some rich people losing some value on their house.

Plus, we know Chinese folks and houses...they never sell or even rent half the time. They will quietly just take the loss and raise mosquitoes..."yang wen-tz"

Any bank that got in trouble in China would just get bailed out by the central government (sound familiar?) I doubt Citibank is exposed to this sort of stuff.. probably not allowed to lend to locals.

Oh, and China just had a 33% increase in tax revenues, so they could actually afford to bail someone out without printing money.

If the Yuan devalues somehow, I am going to be pissed though. I had some second thoughts on my last trip when I made another bank deposit in Yuan...

China

Funniest Idea Ever

How could you get some extra growth in Europe without raising taxes or spending?

MAKE THE EUROPEANS WORK DURING AUGUST.

Analogy

Reading about the sup-prime mortgage bubble's boom and bust,,the reason the bubble could continue for the final few years was that the mortgage originators were relying on higher home prices allowing their borrowers to refinance their crazy all interest loans before the teaser rate stopped and they lost the ability to repay.

So:

Rising house prices allowed sub-prime borrowers to refinance their homes and stave off collapse. Once house prices became flat, fell, or even just grew at too slow a rate, the game was up for the sub prime borrower and they defaulted on their loan.

leads to this possible analogy of government deficit spending...

Growing economies and populations allowed governments to use deficit spending and to roll over government debts and ignore unfunded liabilities. Once the economy falls enough or population growth becomes too low, the game will be up for government deficit spending and using debt to pay out for unfunded liabilities.

This is what is happening in slow motion (unless economic growth surges soon.)

I am not talking about small deficits here or there or some debt to build a road, but deficit spending for bail outs, health care, a couple of expensive wars, etc. and more importantly, borrowing planned to pay for unfunded pensions and entitlements.

UPDATE:

"What Europe needs is a growth pact because without growth, public finances aren't going to be sustainable," Tilford said. "The bond markets are going to be forcing them to make those kind of changes."

Even EU president Van Rompuy warned that the bloc risks irrelevance and the end of its expensive welfare programs if it can't speed up economic growth, forecast to expand by just 1 percent this year.

"With 1 percent growth we can't finance our social model any more. With 1 percent structural growth we can't play a role in the world," he told the World Economic Forum in Brussels. "We need to double the economic growth potential that we now have."

http://finance.yahoo.com/news/Trilliondollar-euro-rescue-apf-644989406.html?x=0&sec=topStories&pos=3&asset=&ccode=

How do you increase economic growth without changing any tax rates or cutting/adding any government expenditure?

They can't cut taxes because they already have a revenue problem. They can't raise taxes because that will not promote growth.

They can't cut because firing employees or reducing their salaries won't help a fragile economy, and they can't increase spending because that's the problem to begin with.

This explains these expressions....