KaoShiong is where the bulk of industrial manufacturing occurs
Taiwan is a Japan trend follower
When macro economic environment is not conducive for continued operations, stop operations to conserve resources for future opportunities.
Decision to close wooden frame manufacturing factory
Europe became more environmentally conscious
Malaysia reduced the yearly quota of timber to be harvested
These two trends reduced demand for wooden frame and increased cost of raw wooden material
On personal growth
Adversity in youth provides an opportunity to build character and gain experience.
restricting the amount of resources your offspring has access to might be a good thing but it breeds resentment
Good things come from seemingly bad experience too
on DDP policy in KaoShiong
Too radical in their actions and lacks calibration in their policies. Really good at manipulating the press
Pro resource less young
Pro taxing businesses for social welfare
Pro reducing pension to retired
Equally corrupt as the KMT but too aggressive in their policies leaving nothing for the business to continue operations
manufacturing businesses has been negatively affected with over regulation and rising administrative cost
Worker protection makes overtime illegal severely restricting the throughput volume businesses are allowed in their operations
Workers not making enough from their day job due to such restrictions are forced to take on a second job on top of their main one
30,000 to 40,000 businesses have failed within the KaoShiong area over the past 12 months at the point of writing with more set to fail if policy should persist
While GDP growth rate has been reported at 2% in 2019, shipping volume through KaoShiong has continued to drop
A more mature party with measured policies which lost leadership due to lackluster performance
Pro-protecting pension of the retired
Social security system and the aging population
Social security system is in a state of flux. Employers are required to contribute to two systems. The contribution for the old system is 5X the new system and was too much overheads for the employers.
Retirees are concerned their pension will get cut while the young are concerned their contribution to the social security system is to heavy a burden
China has imposed restrictions on independent Chinese tourist to Taiwan
Chinese tourist are easy customers who engage in indiscriminate spending
Night markets looked empty
Quite a few restaurants have closed down along the main street due to the lack of tourist spending
The bulk of Taiwan’s export has been to China it makes economic sense for both territories to become unified
noteworthy to observe Joe’s shift to a pro Chinese stance the on Chinese Taiwan relationship as compared to the high school days.
Observation of Taiwan style politics in contrast to Chinese style politics leads me to have reservation about how these two systems can be resolved.
the Taiwanese have no reservation with injecting outrageous humor into the legal framework afforded to them by their political system with candidates as outlandish as Mr Crazy Friday and Mr Fortune God
China’s one country two system need to become more robust for this undertaking
Recent HongKong riots has caused concern for Taiwanese and has lead to increased support for the DDP whose leader English Tsai is known to be a strong negotiator
On Korean Japan trade war
Huge influx of Korean tourist observed during this period of tension (Sept 2019)
Korean tourist are more discriminate in their spending, hence a lower per capita spending as compared to the Chinese tourist.
Following the end of world war two, with US being the world’s largest creditor, countries started largely denominating their debts in USD. US in turn pegged USD to a fixed exchange rate with Gold. This agreement was formally known as the Brettonwood Systems.
US experienced difficulty backing this exchange rate during the oil crisis of the 1970s when OPEC started artificially reducing it’s supply of oil thereby driving it’s price in USD. This had a strong downwards pressure on value of the USD which the US propped up through use of their foreign reserves.
Seeing this weakness in US foreign reserve, thereby an discrepancy of the USD against gold, other trading partners started exchanging US dollar for gold. This added further pressure.
To provide relief on their foreign reserves US finally decoupled the fixed exchange rate between USD and gold. This resulted in the collapse of the Brettonwood Systems, leaving USD as the official reserve currency in the world without any underlying backing.
What followed were decades of global growth largely funded by the US government through control of the world’s reserve currency.
Developing countries would sell goods to the US in exchange for USD. Instead of buying US goods in exchange for the USD earned, they would buy US Treasury bills, notes and bonds. This had the effect of maintaining favorable exchange rates for these countries while keeping their products competitive in the US market.
This widespread practice had the long term effect of driving balance of trade deficits in US with it’s trading partners. While negligible in times of strong US domestic GDP growth, this system has of late started exhibiting difficulty sustaining. This is largely due to slow down in US domestic growth and its inability to scale to support trading partners that 4 times times the population size of the US.
It is advised countries which had long relied on this approach to domestic growth transit their economies to become net importers as soon as their economy gains the necessary growth momentum to do so.
Core inflation at 1.8% continues to run below target 2%.
Federal reserve decides upon another 0.25% cut in interest rates, targeting range of 1.5% to 1.75%.
Action is taken to provide meaningful support to the economy in response to global economic slowdown and the increasing disinflationary pressure felt from around the world. The special characteristics of this particular slow down is a lack of any large imbalances in the economy.
Dual mandate of the federal reserve
2% symmetrical inflation target
Low unemployment rates
Consumer confidence remains strong
Unemployment rate is at historic low
Business fixed investments has slowed
Global exports has slowed
Manufacturing compared to a year ago is down
macro environment risk
protracted US/China trade risk is down
No deal Brexit risk is down
economic health monitor
Leverage in financial system: low
Funding risk in banks and non-banks: low
Asset prices: no major bubble, high in some
Leverage in non-financial sector
households: gone down
businesses + corporate debts: historic high
Concerns in Overnight Repo markets persist.
Banks have liquidity in excess of required reserves level but choose not to participate in the markets.
Federal reserve will seek to inject short term liquidity into the system
build up short term treasury reserves
buying into short term treasury bills thereby boosting treasury reserves
opposed to the standard QE mechanism which entails buying up of assets and securities with longer maturity periods
The polarization between democratic systems and authoritarian systems is becoming more apparent as China leverages its growing middle class to project it’s influence on the world stage a strategy that US has been utilizing for the past decades.
Facebook is a vehicle for projecting American values overseas.
The African continent remains a land grab for the two different regime types. Thus far, China has won out on the physical infrastructure and government level while FaceBook has won out on the community grassroots levels.
For the C Suite especially CMOs to execute their jobs well they need to be focused on what’s happening out there in the world as opposed to what’s happening within their own functional organization. It’s the VP of marketing’s job to handle what is within their own marketing organization.
Its a time when US companies will need to navigate the international markets while managing the challenges to their American values.
The Chinese government has done a better execution on that front with their One Belt Road initiative by clearing the path at the government level to facilitate the unhindered expansion at the commercial level by its enterprises.
Western media is working at full Rev to control the narrative frames that drives public opinions.
Mark Zuckerberg has masterfully leverage recent trends to reframe Libra as a champion of democratic ideals as opposed to a disintermediation force on central banks around the world.
Fascinating AB testing observed on the entire world’s population by major news networks.
Barely 72 hours after the announcement of phase 1 trade deal, its accompanying mass euphoria and surge in world markets, the almost same exact photo with some slight changes in copyrighting and background color is released into production.
It will be fascinating to observe the world’s reaction to this new AB year variant that just got released and the corresponding market price levels.
Public opinion is observed to be very malleable and fickle. It’s highly susceptible to reshaping by main stream media.
In an unlikely twist of events, what was once presented as a war by the White House against China over trade and national security has overnight morphed to become a fight for American values like democracy, free speech and human rights.
While the ongoing unrest in Hong Kong have provided ample fuel, the tweet by NBA Houston Rockets general manager was the spark that caused the fire.