Tuesday, December 30, 2008
FROM 2008 TO 2009
For those of us who have made through it, 2008 might well be remembered for personal successes and achievements, but collectively it has certainly set the world back, at the very least in terms of its wealth, health, environment, security and stability. With the possible exception of scientific progress, the faith in linear historical developments has now been duly, albeit belatedly shattered.
This surely makes us wiser. Yet, by itself, this is not a reason to gloat. As Vernon Sanders Law once quipped: "Experience is a hard teacher because she gives the test first, the lesson afterward". And so, let us bid farewell to 2008 without nostalgic sobs. We may in future remember it as those inexplicably 'hard' teachers from schools. In other words, we will remember 2008 better than other years.
Below are THREE LISTS of various events which occurred in 2008 and, deservedly or not, may linger in our memory. I begin with (rather obvious) negative headlines. This is followed by my own very personal view of what was positive throughout 2008. The third list focuses on the absurdities whose copious supply the passing year ensured regardless of the latitude, longitude and season.
The following TWO LISTS shift emphasis to the uncertainty surrounding the upcoming 365 days. I first review the risks of varying impact and probability of occurrence. Finally, to end on a perhaps naively positive note, I outline my wishes for 2009. They range from perfectly possible to nonsensically dreamlike. But then, the beauty of these times is that we are still free to dream. And to blog freely about it.
2008 - THE BAD:
1. Financial crisis deepens (Societe Generale, Bear Stearns, AIG, Freddie and Fannie, Lehman, fund redemptions, Madoff scandal). Severe liquidity breakdown. Volatility at all-time high. Spreads rocket. Markets collapse.
2. Economic crisis begins: US, China, Japan, Europe, emerging markets are all affected. The immediate response stinks socialism, but not (yet) protectionism.
3. Russia invades Georgia
4. China destroys Tibet
5. Cyclone in Burma
6. The situation in Afghanistan worsens
7. Zimbabwe violence, false hopes and misery
8. Terrorist siege of Mumbai
9. Sichuan earthquake
10. Kenya tribal violence
11. Iran is building up its military capability
12. Crude oil at $147/b
13. Rice prices destabilize markets in West Africa and Southeast Asia
14. Irish referendum freezes Lisbon Treaty
15. Iceland collapses
16. Near defaults in Hungary, Argentina, Pakistan, Latvia, Bulgaria and South Korea
17. Sarah Palin’s neo-fascist harangues stigmatize the ‘bad people’
18. Israel attacks Gaza in response to Hamas’ provocations
19. Fighting resumes in eastern Congo
20. China poisons milk, and not only milk
21. Rioting becomes politics in Thailand
22. Youth riots in Greece
23. Somalia’s piracy proves a rare winner in the Year of Losers
24. Al Qaeda successfully destabilizes Pakistan
25. The Jeremiah Wright case raises questions about Obama’s judgment
26. Clinton as a Secretary of State raises such questions a notch further …
27. Governor affairs reveal the corrupt nature of US politics – from Spitzer to Blagojevich
28. China’s Communist-nationalist propaganda nauseates in “Olympic” sauce
29. Power crisis hits South Africa and China. Supply constraints fuel coal price boom.
30. Doha Development Round negotiations fail
31. Venezuelan nationalizations
32. Fascist upbringing for Russian youth intensifies
33. German politics loses its Right
34. Israeli politics loses its Left
35. Sectarian violence in Nigeria
36. Violent riots over alleged election fraud rock Mongolia
37. Typhoon in the Philippines
38. Hurricane in Haiti and Cuba
39. NATO fails to agree a Membership Action Plan to admit Georgia and Ukraine
40. Tensions in the Turkish and Iraqi Kurdistan pit Ankara against PKK’s positions
41. Maoist Sendero Luminoso reappears in remote regions of Peru
42. Polar bears on endangered species list
43. Saddening departures: Edmund Hillary, Mahmoud Darwish, Bobby Fisher, Harold Pinter, Sydney Pollack, Robert Rauschenberg, Alexandr Solzhenytsin, Paul Newman, Hector Zazou and Lars Hollmer
2008 - THE GOOD:
1. Obama won !!!!!
2. After 13 years on the run, Radovan Karadzic is caught in Belgrade
3. Ingrid Betancourt freed in Colombia shortly after Bogota hobbled FARC’s operational capability in Ecuador
4. Iraq’s (tentative) improvements in State building
5. Some Olympic glory (mostly Jamaican and in the fish-swimming events)
6. Pervez Musharraf bows out in Pakistan
7. Doha compromise averts further bloodshed in Lebanon
8. Constitutional crisis in Turkey avoided when the Court rejects a call to ban AKP
9. Kosovo declared independent
10. The Dalai Lama meets with Bush and with Sarkozy
11. The President of Sudan Omar al-Bashir indicted by the International Criminal Court
12. John McCain’s concession speech
13.The founding of COPE promises the creation a viable (?) opposition in South Africa
14. The Pope blasts pedophile priests during his trip to the US
15. Liberia’s Charles Taylor is put on trial at the Special Court for Sierra Leone and Rwanda’s Theoneste Bagosora is condemned to life imprisonment by the International Criminal Court for Rwanda
16. Gordon Brown thrives in crisis: not a bad performance at all…
17. After 40 years, Spain wins Euro soccer
18. Relative peace in the Taiwan Straits
19. Nambu, Kobayashi and Masukawa receive Nobel Prize in physics for their work on asymmetry
20. Particle accelerators at CERN are now ready to tell us more about it all…
THE ABSURDITIES OF 2008 (almost funny, except, they were true):
1. Private jets bring CEO beggars from Detroit to Capitol Hill
2. Greenspan spits it out: “I was wrong”
3. From London to Paris to Seoul, the Olympic torch “tour” of shame
4. “President” Dmitry Medvedev learns to walk
5. Sarah Palin’s family (was it Piper, Steeler, Rodder and Plater?) can see far from their window
6. Carla Bruni-Sarkozy mania towers over her husband’s high heels
7. Chinese sports fans “forgive” athlete star Liu Xiang for his failure to run 110m hurdle heat
8. Russian war games in the Caribbean (oh, phleeeze!)
9. Hillary Clinton’s tears in New Hampshire save her campaign (for a while). Then the poor woman suffers from Bosnian amnesia, probably caused by sniper fire.
10. Two Russian sumo wrestlers are banned for life by Japan’s Sumo Association for smoking marijuana. What were they thinking? That it would help them regain slim looks?
11. Joe the Plumber almost wins the US presidential ‘debate’, but in the process he inadvertently turns the 1.5% Americans who make $250’000 or more, into a “middle class”
12. Eureka! Eggheads at National Bureau of Economic Research take a year to recognize that US economy has been in recession.
13. Chinese children pose as ‘adults’ in gymnastic events (not enough baby formula perhaps?)
14. Forecasters’ demise. At the beginning of the year, Goldman Sachs made its 12-month predictions: crude oil at $105 per barrel (it is $38/b), natural gas near $11/mmbtu (it is $5.8), gold falling to $750/oz (instead it went up to $869/oz), Korean Won at 900 to the dollar (it is at 1260)…and the Fed Funds rates were supposed to be at 4% (it’s 0.25%)…
15. 40 years after USSR, China sends a manned rocket for a space walk
16. Helicopter Ben in action. US prints $7.6 trillion in bailout money during the first 11 months of the year. The combined debt is now apparently at $67 trillion.
17. Hugo Chavez sings on TV (and then sends troops to the border with Colombia)
18. It snows, so China can’t go on holiday. The Olympics is over, but China forgets to come back from the holiday.
19. Nearly thirteen centuries after Vikings established the first Russian state, Russia offers to “buy” Iceland (like you buy an aircraft carrier)
20. Rudi Giuliani’s presidential “campaign” founders in Miami. Thumbs down, but no one is thrown to the alligators.
21. North Korean nuclear “negotiations”: now you see it, now you don’t
22. Castro dynasty holds on in Cuba (sign of change: people are allowed to buy cellphones)
23. Hollywood strike saddens the nation, but somehow no one rushes with handouts
24. Education in action. Kindergarten kids in California are asked to pledge never to use anti-LGBT (lesbian, gay, bisexual and transgender) slurs…
25. At the peak of the market in June, famed pundits from Jim Rogers to Don Coxe hail commodity investments and launch new products. But they are young enough to be in it “for the long run”.
26. Mr McCain goes to Washington (to save us from the economic crisis). We are relieved.
27. Silvio Berlusconi is back (no grey hair here)
28. John Edwards’ campaign-financed lovemaking fails to ruffle his hairstyle
29. Having scrapped onboard service, punctuality and courtesy, some US airlines now charge for checked-in luggage, a cup of tea and a glass of water. Lavatory use and pillows will be next.
30. Russia recognizes South Ossetia as “independent”. North Ossetia remains ‘part of Russia’.
31. Paulson’s summertime tale: ‘sorry, children, no shorting allowed now’
32. Anglican Church faces a schism. The world holds its breath.
33. Food fascism invades US schools: a child in Connecticut is suspended for buying a candy bar
34. Oprah Winfrey can’t lose weight and Madonna lives sexless life for six long months…
35. Surprise: O.J. Simpson is a bad man. No SUV chases this time due to political incorrectness of the vehicle.
2009 - THE RISKS:
1. The world plunges into global deflation, hobbling both the deleveraging private sector and the re-leveraging public sector. Oil hits $20 per barrel.
2. Competitive currency devaluations
3. Social instability in China redirects the regime to nationalist adventurism abroad
4. Hillary Clinton derails Obama’s agenda
5. Al Qaeda’s operatives in Algeria and Morocco mount a terrorist offensive in Europe
6. Iran gets the Bomb
7. Israel strikes Iran. Iran retaliates. US navy presence in Hormuz strengthens radicals in Tehran.
8. Impoverishment in China triggers another wave of Avian flu
9. Financial deleveraging and precautionary hoarding of capital continues apace
10. Czech Republic’s Vaclav Klaus chairs EU and derails whatever European cooperation there still is
11. Benjamin Netanyahu wins elections in Israel but depends on Mosche Feiglin’s support
12. Felipe Calderon loses the war on drugs in Mexico
13. Obama’s administration taxes capital, and in a chilling reminder of the 1930 Smooth-Hawley act moves to “protect American jobs” from international competition.
14. Trade financing collapses, leaving strained value chains and empty shelves
15. Hamas does what Hezbollah did in 2006, i.e. strengthens radicals after another Israeli military failure
16. In the wake of the above, Egypt falls into chaos, fuelled by Muslim Brotherhood’s radicalization. Amr Khaled’s televangelism loses audience.
17. Major Internet glitch
18. Al Qaeda wins control in the tribal areas of Pakistan
19. Zulus and Xhosas resort to violent means in the fight for political spoils and sinecures in South Africa
20. India intervenes against ‘terrorist camps’ in Pakistan
21. Russia cuts off gas to Ukraine and Europe
22. From US to France to Slovakia to Russia, global automotive industry dies out, rising jobless rates by millions
23. Collapse of $54 trillion market in credit default swaps
24. Global protectionism kicks in (no trade financing, non-tariff barriers, NAFTA moribund, WTO defanged)
25. Global capital expenditure fails to respond to stimulus. Lack of upstream investment lays the foundations for future hyperinflation.
26. Peer Steinbruck wins elections in Germany and allows Russia to reclaim proxy influence in the Baltic Countries
27. Canada disintegrates
28. Bolivia fractures in a violent manner. Santa Cruz struggles to have its independence recognized internationally.
29. Failure to reform “mark-to-market” rules further undermines confidence in the market
30. The Dalai Lama dies, opening the way to overt (and bloody) independence struggle in Tibet
31. Kim Jong Il dies and leaves unstable vacuum of power in North Korea
32. Western military intervention in Darfur fails
33. Warren Buffett proves to be yet another scam…
34. Populist politicking in US kills a proposal to declare a holiday on payroll tax
35. Cash-strapped local governments raise taxes, offsetting national stimuli…
36. Kosovar mafia and Salvadorian maras shake transatlantic hands after yet another year of rising crime rates
2009 - HOPES AND WISHES:
1. Osama bin Laden and Ayman Al-Zawahiri are captured and tried for their crimes
2. Major breakthrough in combating cancer (through stem cell research?)
3. International financial and economic cooperation is made possible under Obama/Volcker leadership. Counterparty confidence returns and usable collateral reappears in the market. Interbank funding conditions improve.
4. Nicolas Hayek’s companies in Jura accelerate successful commercialization of a fast electric car
5. Low sunspot activity delays climate change and helps extend glaciers
6. A public exchange for credit derivatives is inaugurated with success
7. Russia runs out of foreign reserves due to its ill-conceived defense of the ruble in the environment of low oil prices. Brave Russians bring the end to the decade of Putinism.
8. Governor Bobby Jindal rises to lead the Republicans. The influence of social conservatives marginalized.
9. Mohammad Khatami runs against Mahmoud Ahmadinejad in Iranian elections and wins
10. Zhang Qingli, Secretary of Communist Party of China in Tibet is put on trial at the International Criminal Court
11. The Fed prints even more dollars and when the bond yields rocket, it buys them back, keeping interest rates low and transferring the wealth from creditors to debtors. In the process, inflation cuts down the debt burden and a weakening dollar radically reduces the value of foreign reserves accumulated during the preceding decade thanks to the mercantilist policies of oil producers and China.
12. Gold protects investors exposed to weakening dollar
13. Global airline industry consolidates into a binary market: low cost and high-end, killing hapless US airlines (and ‘rude hostess’ jobs) in the process
14. The Amazon forest conservation system brings first territorial gains in Brazil. Indonesian officials are invited to study the progress.
15. Dick Cheney, former Vice-President of the United States is accused of, and tried for maintaining links with Halliburton while in public office in 2003
16. In a breakthrough initiative, US induces Israel to abandon illegal settlements in the West Bank. A viable Palestinian state is made possible.
17. Israel gives back Golan Heights. Syria becomes a US ally.
18. EU boosts its defense capabilities and cooperation with NATO, with positive impact on the military engagement in Afghanistan and Darfur
19. Further development of the global market in liquefied natural gas (LNG) and EU investments in Central Asia begin to wean Europe of its dependence on Gazprom
20. Further opening of arable land to cross-border investment in agriculture
21. Governments revitalize corporate credit markets
22. Taiwanese hi-tech companies revolutionize touch screen technology, ushering in a new era in notebook development
23. After international navy forces squash the pirates, the former Somalia is officially divided into three states (Somaliland, Somalia, Puntland) in an international conference which also solves Maakhir and Northland issues
24. Germany, Brazil, India and Japan become permanent members of the UN Security Council and begin to reform the organization
25. A modern, multiracial bi-party system is born in South Africa, with COPE building a strong opposition to ANC. Cyril Ramaphosa returns to politics.
26. Supported by international forces, Kinshasa finally cracks down on Interehamwe’s forces. Rwanda’s security is safeguarded and Laurent Nkunda neutralized.
27. Robert Mugabe dies. Structured international assistance helps Zimbabweans rebuild their country
28. Belarus opens up to the West and sucks in investment, offering high rates of return
29. A new technology is developed to denitrify waters contaminated by overferilization
30. Commodity prices stabilize. Saudi Arabia manages to protect the markets from high volatility in oil prices.
31. Serbia swaps the Kosovo emotionalism for EU membership. Hardline nationalists marginalized.
32. Venezuela’s Chavismo turns less rhetorically virulent and more pragmatic, avoiding clashes with Obama’s administration
33. Beijing redirects defense, navy and 'star wars' funds to education and health care reform
34. Music sharing via internet remains free
35. FARC signs an unconditional peace agreement in Bogota. End to decades-long civil war opens up Colombia to investment and tourism.
36. End to the Yushchenko/Tymoshenko political feud in Ukraine helps stabilize the economy
37. Greek government chills out: less anti-Macedonian rhetoric, more labor market reforms
38. Guinea (Conakry) escapes violence in its transition to democracy
39. Good monsoon relieves pressure on agricultural economies of South Asia
40. A post for an infrastructure Czar is created in the White House, helping to channel stimulus funds without subcommittee filibuster
41. US and Germany regulators abandon plans to destabilize the “banking secret” rules in Switzerland
42. A power-sharing deal ends the political stalemate in Thailand
43. Guantanamo Bay detention centers closed
44. With little export dependence and much interest rate firepower, Indonesia joins Brazil to emerge as the most defensive emerging market anchor for global investment
45. Roger Federer beats Pete Sampras’s grand slam record
46. Due to rising populations, polar bears, tigers, snow leopards, black rhinos and Iberian lynxes are taken off the endangered species list
47. China and Iran abolish death penalty
48. Justice and peace in Burma, Xinjiang, Kashmir, Pakistan, Darfur, Afghanistan, Kurdistan, Kivu, Palestine, Abkhazia, Ossetia, Chechnya, Niger Delta, Ogaden, Eritrea, Cote d’Ivoire, Sri Lanka, Northern Uganda, Michoacan, Mindanao, Dagestan, Fiji, PNG’s Highlands, Bougainville, Tibet, Mauritania, Southern Thailand, Crimea, Nagorno Karabakh, Corse and the Basque Country.
49. Atlantis is re-discovered. Religious zealots and fundamentalists of Evangelical, Sunni, Shiite, Judaist and Hindutva ilk are all relocated to live there in their own, pure way.
Postjudice wishes you all the very best for 2009.