Wednesday, September 3, 2014

UK stock market at 14-year high; China's property conundrum; Of hackers and terrorists; Brown bigots of India and Pakistan

1 UK stock market at 14-year high (Phillip Inman in The Guardian) Britain's strengthening economy and reports of a truce in Ukraine helped London's stock market jump to a 14-year high and put it within striking distance of an all-time record peak. European stock markets also benefited from a Ukraine-induced increase in share prices that have been depressed for months while the conflict has escalated.

The FTSE 100 moved up 44 points to 6,879 while the German Dax increased by 119 at 9626, shrugging off a fall in retail sales across the eurozone. President Obama welcomed the truce, but remained sceptical that the rebels in the east of Ukraine or their Russian supporters would negotiate in good faith and work towards a political solution.

Ukraine has proved a stumbling block in the global recovery with economic sanctions on Russia denting business confidence. A decline in German GDP in the last quarter was also blamed on Moscow, which supplies almost 40% of Germany's energy needs. The UK economy has so far proved largely immune to the spillover from the conflict, with only its manufacturing sector suffering a slowdown in growth during the summer.


2 China’s property conundrum (Linda Yueh on BBC) House prices have been falling in China for several months. Prices for new homes fell in July in nearly all of the 70 cities tracked by the government, constituting the third straight month of price declines. The latest reports for August suggest another monthly decline.

Property developers are slashing prices to unload houses to try to revive sales. Fitch, finds that new construction is down 20% across the country. Property developers, unlike households, tend to take on more debt. It's true in China as it is elsewhere. If these property companies can't repay the loans that they have borrowed, then that could affect the banks. And if banks end up holding a lot of non-performing loans, then they would sell assets to try to recoup some of their money.

It can lead to a fire sale in the property sector that further pulls down property prices, which in turn worsens the value of the equity held by companies and also banks. This is the pattern witnessed in other banking crisis around the world. 
                                                                                       
What's worse for China is that this would be its first significant property crash. It was only in 1998 when housing became detached from the state-owned enterprise or "work unit" that had allocated flats as part of the "iron rice bowl" of assigned jobs and benefits under central planning. The property market only took off after 2001 when housing was privatised.

Now, as prices are falling, people are reportedly taking to the streets to protest. That's certainly another source of concern. Moderating house prices is always challenging, and there is certainly a lot at stake as China attempts to engineer a soft landing for its property sector.


3 Of hackers and terrorists (John Wildermuth in San Francisco Chronicle) The US has no choice but to confront militants seeking to establish an Islamic state in Syria and Iraq, Sen. Dianne Feinstein told a Silicon Valley group, calling the fighters "totally evil." "I have no doubt that we either fight them now or fight them later, because they are not going to stop," the California Democrat said.

Although Feinstein touched on measures important to the tech industry, such as cybersecurity, privacy concerns and patent protection, she saved her toughest words for foreign affairs, including problems in Ukraine and the Middle East. The country has never dealt with a terrorist organization quite like Islamic State, she said, one with ample financial resources, an army with heavy weapons and a leadership "that's absolutely ruthless and pure evil. I have no doubt they will come after us. This is a movement beyond anything we've seen before today."

Closer to home, Feinstein talked of the problems of passing her Cyber Information Sharing Act, a measure that would encourage data-sharing between businesses and the government on issues relating to cybersecurity. Feinstein said the country's computer-hacker enemies are every bit as dangerous as those with guns. "It's time for Silicon Valley to weigh in," Feinstein said. "I hope you see this bill as the first step toward better protection" of cyber data and secrets.


4 The brown bigots of India, Pakistan (Nadeem F Paracha in Dawn) Racism is present as a form of bigotry that has been part of India and Pakistan’s sociology long before they were two separate countries. It is deeply rooted in India’s ancient caste system, part of which then influenced social relationships between native Hindus and Muslims in South Asia. It is a racism exercised by not one perpetuator over the other, but by both. Now hundreds of years old, even to this day, many Hindus and Muslims living in India do not eat from the same plate or drink from the same glass.

The most disturbing aspect of this form of racism is the way it is blindly accepted as a social norm. For example, many offices in India still hire Muslims and the Hindu ‘untouchables’ to do the most demeaning chores, and it is an unwritten rule that these employees are not allowed to use cutlery that is being used by other office employees.

In Pakistan such treatment is meted out by Muslims to ‘underclass’ Hindus and Christians. Though most Hindus and Muslims of India and Pakistan do not overtly display such racism, it is very much present in the psyches of the people of both the countries.

Recently out of such inherent cultural racist tendencies, a more conventional form of racism has emerged in India and Pakistan as well. In 2007, former Australian cricket captain, Ricky Ponting, complained about some Indian spectators who let out monkey noises at the Australian team’s only aborigine player, Andrew Symonds. If this wasn’t bad enough, the very next day, the South African cricket captain, Gerham Smith, accused a bunch of Pakistani spectators of making ape sounds at some of the South African squad’s black players.

Can you imagine ‘brown’ Asians hurling trashy racist taunts at blacks? This may seem outlandish, but if one closely looks at the class make-up of the racist pretenders, one understands their inanity. In this day and age when material wealth is the main indicator of cultural and social trends (through advertising and the eventual ‘dumbing down’ of cultural pursuits), this is a worrying matter.

It is a case of victims of racism not only becoming racist themselves, but becoming something even worse by cleverly decorating this frame of racial judgment with distorted religious declarations — quite like the white colonialists of yore.

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