BIG MARKET NEWS WEEK 29 DEC 2014 – 03 JAN 2015

Greece Monday, Dec. 29, 2014 24h
EUR Presidential elections
United States Tuesday, Dec. 30, 2014 16:00
USD Consumer Confidence (Dec)
China Wednesday, Dec. 31, 2014 02:45
CNY HSBC Manufacturing PMI (Dec)
United States Wednesday, Dec. 31, 2014 14:30
USD Initial Jobless Claims (Dec 19)
China Thursday, Jan. 1, 2015 02:00
CNY NBS Manufacturing PMI (Dec)
United Kingdom Friday, Jan. 2, 2015 10:30
GBP Markit Manufacturing PMI (Dec)
United States
Friday, Jan. 2, 2015
16:00
USD ISM Manufacturing PMI (Dec)

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    Greece Sunday, January 25, 2015 n/a   EUR Hellenic Parliament Elections Germany Monday, January 26, 2015 10:00   EUR IFO - Business Climate (Jan) Australia Tuesday, January 27, 2015 01:30   AUD National Australia Bank's Business Confidence (Dec) United Kingdom Tuesday, January 27, 2015 10:30   GBP Gross Domestic Product…
    Tags: united, usd, jan, states, trading, calendar
  • 83
    China Monday, April 13, 2015 04:00 CNY Trade Balance (Mar) New Zealand Tuesday, April 14, 2015 00:00   NZD     NZIER Business Confidence (QoQ) (Q1) United Kingdom Tuesday, April 14, 2015 10:30   GBP Consumer Price Index (MoM) (Mar) United States Tuesday, April 14, 2015 14:30   USD Retail…
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  • 79
    All time are GMT+2 Australia     Tuesday 13 May, 2014   11:30     AUD Budget Release Germany   Wednesday 14 May, 2014   08:00       EUR Harmonised Index of Consumer Prices (YoY) (Apr) United Kingdom     Wednesday 14 May, 2014   10:30     GBP…
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  • 68
        China Tuesday, Jan. 13, 2015 03:00 CNY Trade Balance (Dec) China Tuesday, Jan. 13, 2015 03:00 CNY New Loans (Dec) United Kingdom Tuesday, Jan. 13, 2015 10:30 GBP  Core Consumer Price Index (YoY) (Dec) United Kingdom Tuesday, Jan. 13, 2015 10:30 GBP Consumer Price Index (YoY) (Dec) United…
    Tags: jan, dec, united, states, usd, calendar
  • 67
      China Monday, Dec. 1, 2014 01:00 CNY NBS Manufacturing PMI (Nov) China Monday, Dec. 1, 2014 01:45 CNY HSBC Manufacturing PMI (Nov) United Kingdom Monday, Dec. 1, 2014 09:30 GBP Markit Manufacturing PMI (Nov) United States Monday, Dec. 1, 2014 15:00 USD ISM Manufacturing PMI (Nov) Australia Tuesday, Dec.…
    Tags: dec, united, calendar

The Big Economic Unknowns of 2015, From Unemployment to Oil

Source : http://www.nytimes.com/2014/12/28/upshot/the-big-economic-unknowns-of-2015-from-unemployment-to-oil.html

I wish I knew where the economy will be heading next year. If I did, I might become rich. But, alas, I don’t — and even if we don’t always acknowledge it, no economists do.

Too much uncertainty clouds the crystal ball to be confident that any particular course of events will play out in the real world. But we do know something about the sources of that uncertainty, and in a season for sharing, I’d like to offer six questions whose eventual resolution will shape the economic year ahead:

■How much slack really remains in the labor market?

The unemployment rate stands at 5.8 percent. If it continues on its current trajectory, it will have fallen an additional half a percentage point by mid-2015, putting it at a level that some economists see as effectively full employment.

Yet much of the reduction in unemployment reflects a decline in the share of the population in the work force. If a stronger economy were to induce these people to return to work, the recovery would still have a long way to run before we got to full employment. Moreover, millions of those who are counted as employed remain stuck in part-time jobs but want full-time work.

Credit Minh Uong/The New York TimesPhoto by: Minh Uong/The New York Times

Further improvements in the labor market also depend on whether thelong-term unemployed — those who have been out of work six months or longer — will successfully transition into new jobs. Pessimists emphasizethat high levels of long-term unemployment proved to be an intractable problem through much of Europe over the last 40 years. Yet more recent evidence from the United States — particularly from the early stages of this recovery — makes me more optimistic that we can get the long-term jobless back to work.

All of this means we really don’t know how far unemployment could fall without prompting inflation. Get ready for a debate premised on artificial precision about whether the economy can sustain unemployment of 5 or 5.5 percent. That’s the consensus range. But the best research on this question suggests that the lowest sustainable rate could easily differ from our best estimates by a full percentage point or more. Indeed, the Clinton-era boom pushed unemployment below 4 percent without setting off an inflationary surge.

Will the Federal Reserve treat its target for 2 percent inflation as a goal or a ceiling?

Officially, the Fed says it is as willing to tolerate the risk that inflation may rise above this level as it has been about inflation undershooting its goalover the last few years. Yet its actions suggest otherwise. Plans to normalize policy — a euphemism for raising interest rates — are already underway, even as the Fed’s own projections suggest that inflation will not breach 2 percent in the next few years.

Higher interest rates could slow the economy. That leads to my third question:

How fast does the economy need to grow to stay healthy?

Many commentators assume that a healthy economy grows at an annual rate of at least 3 percent. Yet economic growth in the United States has averaged only 1.9 percent since 2000, and average growth of 2.3 percent during the current expansion has been enough to yield large drops in unemployment. To an important extent, this lower rate has been caused by demographic factors: slower population growth, the end of the transition of women into the work force, and baby boomers retiring.

All told, the work force is growing nearly a full percentage point slower than it was in the 1990s, and this is why 2 percent growth is the new 3 percent. Likewise, much as the economy once needed to generate 150,000 jobs a month just to keep up with new entrants to the labor force, that “break-even” number may now be as low as 50,000.

Can the American economy keep motoring without help from the rest of the world?

Among the world’s major economies, the United States had the strongest economic growth in 2014. The picture elsewhere is grim. Japan has lurched from optimism about Abenomics — Prime Minister Shinzo Abe’s program to kick-start the economy — to pessimism as the economy hasshrunk over the last two quarters. And Europe hovers on the edge of a double- or triple-dip recession, depending on your definition. China has slowed, with economic growth moving below 8 percent a year from an extraordinary 10 percent. And the Russian economy is on the cusp of a full-fledged crisis. It’s not just that foreign buyers have less money to spend; their weakness has become the dollar’s strength, which also makes our exports more expensive. These global headwinds could easily knock a fragile recovery off course.

What will be the consequences of lower oil prices, which have fallen by about half since June?

Typically, an oil price decline is like a tax cut, leaving more money in consumers’ pockets to spend elsewhere. That should spur growth. But since the shale boom, the United States is not only a leading oil consumer but also a leading producer. So lower oil prices also spell smaller revenue for some of our energy companies. And our producers have particularly high costs, so further investment in them may become unprofitable if prices fall too far.

This leads us back to the inherent uncertainty afflicting economics:

What, as Donald H. Rumsfeld, the former defense secretary, asked, are the unknown unknowns?

More often than not, the shocks that buffet the economy come out of the blue. Few predicted the huge swings in oil prices over recent years, and the same goes for the financial crisis and many other disruptive events. A few years ago, for example, the weakness in Greece’s fiscal situation was successfully disguised, until it catalyzed the eurozone crisis. In 2011, the tsunami that brought huge damage to Japan also caused global economic tremors. And while we have often seen political gridlock in Congress, the extreme brinkmanship over financing the federal debt in recent years has been a form of economic self-sabotage that was once unimaginable.

I wish I could offer clearer guidance about next year, but an honest account focuses on the limits of our knowledge. We’re not sure how much further the economy can improve next year, or even if it will actually do so, and we don’t know what might drive it off course.

So instead of a forecast, I’ll offer advice: Prepare for the worst, hope for the best and count on being surprised.

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    Submitted by James Stafford via OilPrice.com, With all the conspiracy theories surrounding OPEC’s November decision not cut production, is it really not just a case of simple economics? The U.S. shale boom has seen huge hype but the numbers speak for themselves and such overflowing optimism may have been unwarranted.…
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  • 56
    2014 has been unnerving. Every day, there's a new worrisome headline coming out of Russia, Iraq, Libya, the Gaza Strip, or any of the world's other geopolitical hotspots. And there's also the ongoing fears of an ebola outbreak in West Africa, an unstable volcano in Iceland, and the ever-present risk of a…
    Tags: will, future, prices, best, economic, states, united, oil, years, crisis
  • 55
    Two years ago, I asked a college-bound 18-year-old what kind of job she’d like to have after earning her degree. “I don’t know,” she told me, adding, “I don’t think it’s been invented yet.” Turns out, she was probably right. Though the Bureau of Labor Statistics expects health care and construction jobs…
    Tags: jobs, future
  • 54
    The Dow had broken 17,000, the Standard & Poor's 500 Index had touched a record high and was spitting distance from crossing 2,000. Even the small-cap indexes such as the Russell 2000 and the S&P 600 have notched new highs. And the Nasdaq, up 255 percent since the March 2009…
    Tags: percent, don, trading, economy
  • 53
    At Morningstar, AQR Capital’s leader presents Fama and Shiller’s arguments and says he’s ‘learned to live with my schizophrenia’ “I’m not a super-hardcore efficient marketer,” says Cliff Asness of AQR Capital. Cliff Asness created a “watershed moment in the hedge fund industry” when he brought his sophisticated hedge fund strategies…
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The most successful tech products have one thing in common

How Facebook and Candy Crush Got You Hooked

Facebook. Twitter. Instagram. World of Warcraft. Angry Birds. The most successful tech products have one thing in common: They’re addictive. And users don’t get hooked by accident. Just ask Nir Eyal. A Bay Area entrepreneur turned desire guru, Eyal has worked with some of the top tech firms in Silicon Valley, teaching them how to apply the system he developed for engineering habit-forming apps, services, and games. His blog, Nir and Far, has attracted tens of thousands of subscribers hungry for insights, and his writing has appeared in both the mass-market pages of Psychology Today and the insider club of TechCrunch. His inaugural Habit Summit, held last March on the Stanford campus, drew 400 participants. Eyal’s book, Hooked: How to Build Habit-Forming Products, self-published in January 2014, shot immediately to the top of Amazon’s product-design list. Penguin acquired it and released it in November.

At the heart of Eyal’s system is a four-step cycle he calls the Hook. These steps were derived from his observation of online products and services, as well as a wide range of psychological and neurological research, from B. F. Skinner to B. J. Fogg. The Hook, Eyal says, is the magic behind just about every icon of the consumer Internet, from Google to WhatsApp.

1 | TRIGGER

2 | ACTION

3 | REWARD

4 | INVESTMENT

Full story here : http://www.wired.com/2014/12/how-to-build-habit-forming-products

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    The question of how Uber would spend its billion-dollar investment was never really much of a riddle. More rides in more places has always been the plan. But with its ten-figure cushion, the San Francisco-based ride-hailing startup can be more cunning about how it tries to get huge. Uber wants to grow…
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  • 72
    WhatsApp CEO and founder Jan Koum tweeted that the popular messaging app user-base has now been increased to 600 million. Earlier in April, it was announced that WhatsApp had 500 million active users. Surprisingly, the instant messaging space has been growing by leaps and bounds. It is worth noting that WhatsApp…
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  • 71
    Often, the only way to get ahead is to have a great plan. Which is exactly what makes the companies below so special. It's not just that they're making the big bucks (and they are doing that). This small group of companies from the Inc. 5000 class of 2014 are notable for their…
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  • 71
    What do OpenTable, Yelp, GrubHub, Twitter, Zillow, and Uber have in common? Bill Gurley, and of course his firm Benchmark. In my opinion, Bill’s at the top of the top venture capitalists today. With a deep background in engineering, capital markets, and venture (not to mention basketball), he’s got all the…
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  • 71
    No one ever said being an entrepreneur would be easy. A million obstacles seem to stand in the way each and every day. The naysayers and budget woes can be enough for the average person to start waving the white flag. But you are not an average person: You’re an entrepreneur.…
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The 10 greatest changes of the past 1,000 years

In Europe, the last millennium has been shaped by successive waves of change, but which shifts, in which centuries, have really shaped the modern world? Historian Ian Mortimer identifies the 10 leading drivers of change

http://www.theguardian.com/books/2014/oct/30/10-greatest-changes-of-the-past-1000-years

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    Cartoonists from all over the world mourn in the wake of a Paris shooting that killed as many as 12 people, many of whom are members of Charlie Hebdo. http://www.buzzfeed.com/ryanhatesthis/heartbreaking-cartoons-from-artists-in-response-to-the-ch
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  • 78
    Let’s do a quick review: meditation can help you cope with stress better, help you know (and like) yourself more, help you lessen anxiety and depression. Love music but find yourself drifting off and missing out in the middle of a concert or show? Meditation can help you to stay…
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  • 70
    Scattered mental activity and energy keeps us separated from each other, from our environment, from reality, and from ourselves. And that's a fact. From time to time, we always look for ways on how to loosen the grip of the "occupied aura" which dominates our existence. And as a result…
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  • 68
    Idag skriver SvD : http://www.svd.se/sa-ater-du-klimat-mat-smartast Det känns som om SvD har valt att publicera enkla lösningar utan den fördjupning och diskussion som jag vanligtvis förväntar mig av er journalistik. Även om förekomsten av övervikt och kliniska fetma har ökat under de senaste årtionden så har detta hänt samtidigt som det…
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  • 39
    There seems to be an obvious solution to rising inequality: higher taxes. But there's an inconvenient fact here. The way most advanced, industrial countries have made real gains on inequality is through relatively regressive taxes that fund programs that reduce inequality. In fact, America's tax system is already unusually progressive by…
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Here’s a collection of MarketWatch’s own “gray swans” to watch out for in 2015.

U.S. stocks climbed a wall of worry in 2014 underpinned by a host of nettlesome concerns at home and abroad.

While Wall Street’s brightest are somewhat subdued but still upbeat on the outlook for 2015, investors should always be aware of the risks that lie beneath the surface.

Not all of them rise to the “black-swan” level, which describes the most unexpected events. Gray swans are occurrences that aren’t wholly unpredictable, but are insidiously laying in plain sight. Gray swans can be equally as problematic as Nassim Nicholas Taleb’s highly improbable “Black Swan”. In 2014,the outbreak of Ebola, classified to us as a gray-swan event, especially since the deadly virus isn’t new and this isn’t the first Ebola outbreak, though it was the first to reach U.S. shores.

Here’s a collection of MarketWatch’s own “gray swans” to watch out for in 2015.

http://www.marketwatch.com/story/call-it-a-gray-swan-10-risks-that-could-upend-the-market-in-2015-2014-12-22

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BIG MARKET NEWS WEEK 22 DEC – 26 DEC 2014

New Zealand Monday, Dec. 22, 2014 22:45
NZD Trade Balance (MoM) (Nov)
United Kingdom Tuesday, Dec. 23, 2014 10:30
GBP  Gross Domestic Product (YoY) (Q3)
United Kindom Tuesday, Dec. 23, 2014 10:30
GBP  Gross Domestic Product (QoQ) (Q3)
United States Tuesday, Dec. 23, 2014 14:30
USD Durable Goods Orders (Nov)
Canada Tuesday, Dec. 23, 2014 14:30
CAD  Gross Domestic Product (MoM) (Oct)
United States Tuesday, Dec. 23, 2014 14:30
USD Durable Goods Orders (Nov)
United States Tuesday, Dec. 23, 2014 16:00
USD New Home Sales (MoM) (Nov)
United States Wednesday, Dec. 24, 2014 14:30
USD Initial Jobless Claims (Dec 19)
Japan Thursday, Dec. 25, 2014 04:45
JPY  Bank of Japan Governor Kuroda Speech
Japan Friday, Dec. 26, 2014 00:30
JPY  National Consumer Price Index (YoY) (Nov)

 

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  • 88
      Japan Monday, Dec. 15, 2014 00:30 JPY   Tankan Large Manufacturing Outlook (Q4) China Tuesday, Dec. 16, 2014 02:45 CNY   HSBC Manufacturing PMI (Dec)Preliminar United Kingdom Tuesday, Dec. 16, 2014 08:00 GBP Bank Stress Test Results France Tuesday, Dec. 16, 2014 09:00 EUR   Markit Manufacturing PMI (Dec)Preliminar…
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  • 85
        Canada Monday, Dec. 8, 2014 13:30 CAD Building Permits (MoM) (Oct) Australia Tuesday, Dec. 9, 2014 00:30 AUD  National Australia Bank's Business Confidence (Nov) United Kingdom Tuesday, Dec. 9, 2014 09:30 GBP Manufacturing Production (MoM) (Oct) China Wednesday, Dec. 10, 2014 01:30 CNY Consumer Price Index (YoY) (Nov)…
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  • 83
    Germany Monday, Nov.24, 2014 09:00 EUR IFO - Business Climate (Nov) Japan Tuesday, Nov. 25, 2014 01:00 JPY  Bank of Japan Governor Kuroda Speech Canada Tuesday, Nov. 25, 2014 13:30 CAD Retail Sales (MoM) (Sep) United States Tuesday, Nov. 25, 2014 13:30 USD  Gross Domestic Product Annualized (Q3)Preliminar United States…
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  • 82
    Australia Monday, Nov. 3, 2014 01:30 AUD Building Permits (MoM) (Sep) China Monday, Nov. 3, 2014 02:45   CNY HSBC Manufacturing PMI (Oct) United Kingdom Monday, Nov. 3, 2014 10:30 GBP Markit Manufacturing PMI (Oct) United States Monday, Nov. 3, 2014 16:00 USD ISM Manufacturing PMI (Oct) Canada Monday, Nov.…
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Could oil drop as low as $20 per barrel ?

How low can it go — and how long will it last? The 50 percent slump in oil prices raises both those questions and while nobody can confidently answer the first question (I will try to in a moment), the second is pretty easy.

Low oil prices will last long enough for one of two events to happen. The first possibility, the one most traders and analysts seem to expect, is that Saudi Arabia will re-establish OPEC’s monopoly power once it achieves the true geopolitical or economic objectives that spurred it to trigger the slump. The second possibility, one I wrote about two weeks ago, is that the global oil market will move toward normal competitive conditions in which prices are set by the marginal production costs, rather than Saudi or OPEC monopoly power. This may seem like a far-fetched scenario, but it is more or less how the oil market worked for two decades from 1986 to 2004.

Whichever outcome finally puts a floor under prices, we can be confident that the process will take a long time to unfold. It is inconceivable that just a few months of falling prices will be enough time for the Saudis to either break the Iranian-Russian axis or reverse the growth of shale oil production in the United States. It is equally inconceivable that the oil market could quickly transition from OPEC domination to a normal competitive one. The many bullish oil investors who still expect prices to rebound quickly to their pre-slump trading range are likely to be disappointed. The best that oil bulls can hope for is that a new, and substantially lower, trading range may be established as the multi-year battles over Middle East dominance and oil-market share play out.

The key question is whether the present price of around $55 will prove closer to the floor or the ceiling of this new range. The history of inflation-adjusted oil prices, deflated by the U.S. Consumer Price Index, offers some intriguing hints. The 40 years since OPEC first flexed its muscles in 1974 can be divided into three distinct periods. From 1974 to 1985, West Texas Intermediate, the U.S. benchmark, fluctuated between $48 and $120 in today’s money. From 1986 to 2004, the price ranged from $21 to $48 (apart from two brief aberrations during the 1998 Russian crisis and the 1991 war in Iraq). And from 2005 until this year, oil has again traded in its 1974 to 1985 range of roughly $50 to $120, apart from two very brief spikes in the 2008-09 financial crisis.

What makes these three periods significant is that the trading range of the past 10 years was very similar to the 1974-85 first decade of OPEC domination, but the 19 years from 1986 to 2004 represented a totally different regime. It seems plausible that the difference between these two regimes can be explained by the breakdown of OPEC power in 1985 and the shift from monopolistic to competitive pricing for the next 20 years, followed by the restoration of monopoly pricing in 2005 as OPEC took advantage of surging Chinese demand.

In view of this history, the demarcation line between the monopolistic and competitive regimes at a little below $50 a barrel seems a reasonable estimate of where one boundary of the new long-term trading range might end up. But will $50 be a floor or a ceiling for the oil price in the years ahead?

 

http://blogs.reuters.com/anatole-kaletsky/2014/12/19/the-reason-oil-could-drop-as-low-as-20-per-barrel/

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The world is currently engaged in a financial war and the ruble collapse is just one battle

Make no mistake the world is currently engaged in a financial war and the ruble collapse is just one battle. The 2008 Great Financial Crisis ushered in a new currency war that has morphed into a financial market war, with oil as the weapon of choice.

I am not trying to be a fear monger, I am simply pointing out what is occurring in the financial markets. In the beginning, a financial war seems like a no-brainer, i.e., use financial might to damage your enemy’s economy. The flaw in this logic is it assumes no impact on the economy of the attacker. In the age of open economies investors are correct to be concerned about the collateral damage.

he latest battle in this financial war is the engineered drop in oil and subsequent collapse of the Russian ruble. Now that this battle has been waged investors need to know what/where the next battlefield may be.

order to answer this question we need to understand what has transpired over the last few days. Many have been shocked by the lack of intervention by the Central Bank of Russia (CBR) in the days leading up to the currency collapse. Implicitly or explicitly, it appears Russian President Vladimir Putin has allowed a raid on the central bank currency reserves to benefit the oligarchs and state owned corporations. These corporations have issued debt in rubles and either immediately converted into US dollars or have used the debt as collateral at the CBR. The CBR had a choice to defend the ruble and give its foreign currency reserves to speculators or give those reserves to the state owned corporations. The lack of serious currency intervention suggests the CBR has chosen the latter.

The economic impact of this decision is likely to be felt by Russian citizens as they encounter double-digit inflation. If Putin does not handle the internal situation correctly then Russia could face social unrest which may threaten Putin’s leadership. Therefore, Putin’s next move will define the next battle in the global financial war. The leading battlefield candidates are the wheat market, U.S. Treasurys and Gold.

The currency collapse could accelerate Russian aggression in Ukraine. In my view, the purpose of the invasion has always been to control the port cities along the Black Sea. Since roughly 30 percent of the global wheat supply moves through these ports, control gives Putin a formidable economic weapon. Since further aggression risks more economic sanctions it is unclear if this is the most probable move.

Read  more here  : http://www.cnbc.com/id/102285208

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  • 61
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  • 58
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  • 57
    The Swiss National Bank's foreign exchange reserves inched higher in August, data showed on Friday. The SNB held 453.799 billion Swiss francs in foreign currency at the end of August, compared with 453.353 in July, revised from an originally reported 453.391 billion, preliminary data calculated according to the standards of…
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  • 55
    5 REASONS FOR INVESTORS TO CARE ABOUT RUSSIA’S MARKET TURMOIL It might be tempting to think in realpolitik terms about Russia’s financial woes right now — the idea that a weakened Russia has less weight to throw around in conflicts such as the Ukraine and Syria. But the reality is…
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How much does the ancient game of Go, or weiqi, reveal about Chinese military strategy?

Orginal post is here : http://thediplomat.com/2014/12/maritime-southeast-asia-a-game-of-go/

Over at The National Interest last week, Asia-Pacific Center professor Alexander Vuving ran a nifty longish essay explaining China’s grand strategy in the South China Sea in terms of the Japanese game Go, or weiqi as the Chinese call it. It’s well worth your time. Read the whole thing.

Explaining strategic behavior in terms of the games inhabitants of a civilization play is a cottage industry. Henry Kissinger, to name just one major figure, has drawn the parallel between Go and China’s deportment around its periphery.

For Alex, insisting that Beijing’s moves in the South China Sea are trivial is misguided. That’s thinking inspired by chess. Pawns as largely expendable, strategy largely linear in character. Yet by deploying seaborne counterparts to the pawn — white-hulled coast-guard ships, the fishing fleet, reclaimed islands and reefs — China encircles and exerts influence if not control over swathes of sea and sky where it bills itself as the rightful sovereign. Sovereignty means physical control of territory within certain boundaries on the map. Pawns backed by more powerful forces bring about control over time.

The geospatial thinking of a Go master, then, may be on display in maritime Southeast Asia. This supplies Beijing a psychological advantage. What looks unimportant to Westerners steeped in chess constitutes steady, incremental progress toward permanent control of territory that Beijing has pronounced an inalienable part of the motherland. It also represents steady erosion of freedom of the seas in the China seas — a process that could discredit the principle of freedom of the seas across the globe, with unknowable but certainly baneful results. Unless, that is, you think surrendering a principle on which the liberal system of trade and commerce is built is a price worth paying to appease Asia’s big brother.

But — and you knew a but was coming — I would affix an asterisk to Alex’s commentary. People are not cultural automatons. The games they play may influence how they think, but they do not determine their actions. Or, if they do, it verges on impossible to demonstrate how such factors shape conduct in the real world. If policymakers, executors of policy, or ordinary people report that Go, or chess, inspired them to do this or that, then fine. That’s about as close as it gets to proving causation. Short of that, tracing the impact of strategic culture is largely a matter of conjecture. We know culture exists, and we know it’s important. Measuring it or forecasting its effects is an elusive task, fraught with ambiguity. Hence the asterisk.

It’s also crucial not to oversimplify. Cultural influence isn’t uniform within a given mass of people. I’m virtually sure, to name one Western example I know well, that chess — linear strategy employing cost/benefit logic and pieces with varying capabilities — exerts zero influence on what I say and do. The Naval Diplomat has played little chess, has no talent for it, and — perhaps not coincidentally — has no interest in it. That would nullify Alex’s analysis if — heaven forfend — I ever attained high office. One doubts, moreover, that Go is that all-pervasive among the Chinese that it overrides ordinary cost/benefit logic, Confucianism, the tenets of Marxism-Leninism, and on and on. Go is not all-important. In short, let’s not oversell the social and cultural dimension of strategy.

And lastly, even if you assume Go or chess do provide thumb rules for appraising Eastern or Western behavior, there are countervailing strands of culture within any society. Culture is a mélange, not a simple list of traits or influences. Asians like surrounding and controlling territory? Sure they do. But they have also proved receptive to the Western strategic canon, in particular the writings of Carl von Clausewitz. Mao quotes Clausewitz repeatedly. And Clausewitz was a thinker and martial practitioner who urged statesmen and commanders to subordinate the chaotic, nonlinear world of armed conflict to rational — linear — logic.

Do Westerners prefer the linear approach? Sure, I suppose you can say that. But they also like to encircle and crush opponents. The Battle of Cannae, where Carthaginian forces surrounded and annihilated a Roman army, became a metaphor for European strategists that endured into the twentieth century. That’s rather Go-like. Westerners are direct? Sure, but the figure of Odysseus, who embodied craft, guile, and cunning, also runs through Western strategic thought. Deception has its place in Western warmaking and diplomacy.

And so forth. It’s helpful to think of civilizations as possessing dominant and recessive characteristics. Policymakers or strategists may have certain strategic preferences — Asians for the geospatial approach and gradualism, Westerners for punching opponents in the mouth — but certain situations can bring forth the recessive traits. Trying to discern what action will summon forth what response from an antagonist is more enlightening, and informative, than projecting behavior solely from the games people play.

That is all.

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5 THINGS TO WATCH AT THE DECEMBER FED MEETING

The Federal Reserve holds its last policy meeting of the year on Tuesday and Wednesday, resulting in plenty of material to be scoured for clues about when interest rates will start inching up. The central bank’s policy committee releases its statement and new economic projections at 2 p.m. Wednesday, followed by Chairwoman Janet Yellen’s press conference at 2:30 p.m. Here are five key things to keep an eye on.

A ‘CONSIDERABLE TIME’ TO SAY GOODBYE?

THE LABOR MARKET

OIL PRICE SPILLOVERS

INFLATION EXPECTATIONS, FINANCIAL STABILITY

OVERSEAS OUTLOOK

 

Full Text can be found here : http://blogs.wsj.com/briefly/2014/12/16/5-things-to-watch-at-the-december-fed-meeting/

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