Getting Shanghaied?

By |2018-07-13T09:09:41+00:00July 13th, 2018|Global Market Update|

Is Tesla turning Chinese? Photo: John Cummings. Source: Wikimedia Tesla says that it plans to set up its first non-US factory in Shanghai. It’s a logical next step for the electric vehicle maker. China is the number one electric car market in the world, with almost half a million in vehicle sales – more than twice the level in the US. Next year, Beijing will require that every automaker that sells gasoline-powered cars in China also offer electric vehicles, or else purchase credits from [...]

Long Term Ownership?

By |2018-06-12T07:56:38+00:00June 12th, 2018|Global Market Update|

What kind of bosses are Chinese owners? Photo: Photo Mix. Source: Pixabay 3,500 employees of Genworth Financial are about to find out. Genworth is the successor company to the old Life of Virginia, a Richmond-based life insurer founded in 1871. In the 1980s, they went through various business combinations, mergers, divestitures, and spin-offs. In 1996 they were bought by GE and sold back into the public markets about a decade later. Their principal products are annuities, mortgage insurance, and long-term care insurance. The mortgage [...]

Revolution and Flood

By |2018-05-22T06:29:51+00:00May 22nd, 2018|Global Market Update|

Where did we come from? “Washington Crossing the Delaware” by Emanuel Leutze. Source: Metropolitan Museum of Art Every society has stories of its founding. In school, we learned about the American Revolution, how a rag-tag band of settlers were able to hold the field against the strongest army in the world. This story has given Americans a sense of identity and direction. My own family came to America from Scandinavia in the 19th century and settled in the Midwest. The gradual settlement and development [...]

Lessons from Global Conflicts

By |2018-05-16T05:40:54+00:00May 16th, 2018|Global Market Update|

What is the “Thucydides Trap”? Map of Ancient Greece. Source: Wikipedia Thucydides was an ancient Athenian general who wrote about the Peloponnesian War between Sparta and Athens. Sparta had been the dominant power in Greece. They had a harsh military culture built around their seemingly invincible army. Athens was a rising power, commercially and at sea. They had built the most powerful navy in the Mediterranean Sea. War between the two city-states was inevitable, according to Thucydides, because Athens’ growth challenged Sparta’s dominance. An [...]

By Their Belt-Straps

By |2018-05-08T07:04:28+00:00May 8th, 2018|Global Market Update|

What is the Belt-Road Initiative? Illustration: Lommes. Source: Wikimedia In 2013, China’s President Xi Jinping announced plans to connect East Asia and Europe via a network of rail, road, and sea routes to facilitate trade, cultural exchange, and open flows of capital and people. Shortly thereafter, China announced that over $160 billion of infrastructure projects were in planning or construction along the way, projects like a 700 MW hydropower station near Islamabad, Pakistan, or extending the current Eurasian Landbridge – a 7,000 mile rail [...]

Visions of Greatness (Part 5): A New Direction

By |2018-05-04T06:00:58+00:00May 4th, 2018|Global Market Update|

How do you deal with a rising Great Power? Photo: Victor Hancek. Source: Picjumbo For decades, the US held a policy of “constructive engagement” towards China. By giving China “Most Favored Nation” status, encouraging trade and cultural exchange, Washington hoped to draw China into – if not the West – at least the broader family of nations. We would look the other way with human rights abuses, and try to avoid major trade disputes. Now, four decades of constructive engagement led to a massive [...]

Visions of Greatness (Part 4)

By |2018-05-03T06:24:57+00:00May 3rd, 2018|Global Market Update|

Can China build a great economy? Victoria Harbor and Hong Kong skyline. Photo: Samuel Louie. Source: Wikimedia In some ways, this seems like a foolish question. China’s economy is already huge. They’re the second largest economy in the world: $10 trillion, about half the size of the US. They’re a major player in trade, manufacturing, consumer goods, and the internet. But their stock market is tiny. They’re only 3% of global equity markets – about the size of France. And their bond market is [...]

Visions of Greatness (Part 2)

By |2018-05-01T07:55:02+00:00May 1st, 2018|Global Market Update|

What makes a country great? UN Security Council Meeting. Photo: White House. Source: Wikimedia The term “Great Power” was first used to describe the major nations in the Congress of Vienna – Austria, Prussia, Russia, England, and France. The members met periodically to settle disputes and to maintain the balance of power. Later, the Great Powers formed competing alliances among themselves, which were tested and broken during World Wars I and II. The legacy of the Great Powers was enshrined in the permanent members [...]

Visions of Greatness (Part 1)

By |2018-04-30T16:42:52+00:00April 30th, 2018|Global Market Update|

Visions of Greatness (Part 1) What makes for greatness? Photo: Ronnie Macdonald. Source: Wikimedia There’s a telling exchange in the movie “Lawrence of Arabia” where King Faisal tells British Lieutenant Lawrence that the medieval Arab city of Cordova had two miles of public lighting while London was still a village. “You were great then,” Lawrence replies. “Time to be great again, my Lord.” When Chinese leader Xi Jinping came to power in 2012, people were curious. He was largely an unknown quantity. Would he [...]

A New Hub?

By |2018-04-24T07:42:26+00:00April 24th, 2018|Global Market Update|

Silicon Valley has a new competitor. Photo: Victor Hanacek. Source: Picjumbo For years California has been the leader in generating, funding, and bringing new information technologies to the market. From Intel to Apple to Google to Facebook, Silicon Valley has been a nexus of technological innovation and economic growth. The last serious competitor to the Valley was Route 128 outside of Boston. Both areas had strong sources of human and financial capital, but Silicon Valley benefited from a more free-wheeling, less hierarchical, and more [...]