The decline of US’s superpower status?

Some commentators have been writing even before the global financial crisis took hold that the US was in decline, as evidenced by its challenges in Iraq and Afghanistan, and its declining image in Europe, Asia and elsewhere.

The BBC also asked if the US’s superpower status was shaken by this financial crisis: The financial crisis is likely to diminish the status of the United States as the world’s only superpower. On the practical level, the US is already stretched militarily, in Afghanistan and Iraq, and is now stretched financially. On the philosophical level, it will be harder for it to argue in favor of its free market ideas, if its own markets have collapsed. Some see this as a pivotal moment.

The political philosopher John Gray, who recently retired as a professor at the London School of Economics, wrote in the London paper The Observer: “Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably.“ The era of American global leadership, reaching back to the Second World War, is over… The American free-market creed has self-destructed while countries that retained overall control of markets have been vindicated.” “How symbolic that Chinese astronauts take a spacewalk while the US Treasury Secretary is on his knees.”

Paul Reynolds, US superpower status is shaken, BBC, October 1, 2008 Yet, others argue that it may be too early to write of the US: The director of a leading British think-tank Chatham House, Dr Robin Niblett … argues that we should wait a bit before coming to a judgment and that structurally the United States is still strong. “America is still immensely attractive to skilled immigrants and is still capable of producing a Microsoft or a Google,” he went on. “Even its debt can be overcome. It has enormous resilience economically at a local and entrepreneurial level.“ And one must ask, decline relative to who? China is in a desperate race for growth to feed its population and avert unrest in 15 to 20 years. Russia is not exactly a paper tiger but it is stretching its own limits with a new strategy built on a flimsy base. India has huge internal contradictions. Europe has usually proved unable to jump out of the doldrums as dynamically as the US.“But the US must regain its financial footing and the extent to which it does so will also determine its military capacity. If it has less money, it will have fewer forces.”

Father takes Son to Court for Idleness

I have just read some very interesting news. The news is about a Nigerian father who took his son to court for idleness. And, surprisingly, the court took serious action.

The piece of news reads:

A father took his 20-year old son to an Islamic court in northern Nigeria for idleness, asking that he be sent to prison for refusing to engage in productive activities.

“He is not listening to my words and he is bringing shame to my family. I am tired of his nefarious deeds, please put this boy in prison so that I can be free,” Sama’ila Tahir, a market trader in the North Eastern town of Bauchi, was quoted as saying.

Tahir told the court that his son had refused to go to school and accused him of belonging to a criminal gang.

The court sentenced the son to six months in prison and 30 strokes of the cane – which were immediately administered on the premises – for being disobedient to his parents.

I wish and hope that the parents of “lazybones” in Kenya can take the cue. Maybe the situation would change. There are so many young people in this country who think life is smooth sailing.

Young people out there just know that nothing comes on a silver plate. You have to work hard to get whatever it is you think you deserve. Another thing, being disobedient to parents is being very unfair to them.

What thinkest thou?

God is not Mocked…

Hi guys, in everything you do, just make sure you do not mock God. That, in itself, has serious consequences.
Here are some men and women who mocked God:

JOHN LENNON: Some years before, during his interview with an American Magazine, he said: 'Christianity will end, it will disappear. I do not have to argue about that. I am certain. Jesus was ok, but his subjects were too simple, today we are more famous than Him'. Lennon, after saying that the Beatles were more famous than Jesus Christ, was shot six times.

TANCREDO NEVES (President of Brazil): During the Presidential campaign, he said if he got 500,000 votes from his party, not even God would remove him from Presidency. Sure he got the votes, but he got sick a day before being made President, then he died.

CAZUZA (Bi-sexual Brazilian composer, singer and poet): During a show in Canecïo (Rio de Janeiro), whilst smoking his cigarette, he puffed out some smoke into the air and said: 'God, that's for you.' He died of AIDS in a horrible manner at the age of 32.

THE MAN WHO BUILT THE TITANIC: After the construction of the Titanic, a reporter asked him how safe the Titanic would be. With an ironic tone, he said: 'Not even God can sink it'. The Titanic hit an ice berg on its maiden voyage and sank. This led to the deaths of 1,517 people out of the 2,223 on board.

MARILYN MONROE: She was visited by Billy Graham during a presentation of a show. He said the Spirit of God had sent him to preach to her. After hearing what the Preacher had to say, she said: 'I don't need your Jesus'. A week later, she was found dead in her apartment.

BON SCOTT: The ex-vocalist of the AC/DC. On one of his 1979 songs he sang: 'Don't stop me, I'm going down all the way, down the highway to hell'. On the 19th of February 1980, Bon Scott was found dead. He had been choked by his own vomit.


CAMPINAS in 2005: In Campinas, Brazil, a group of drunken friends went to pick up a friend. The mother accompanied her to the car and was so worried about the drunkenness of her friends and
She said to her daughter - holding her hand, who was already seated in the car: 'My daughter, go with God and may He protect you.'

She responded: 'Only if God travels in the trunk, cause inside here it's already full'.

Hours later, news came by that they had been involved in a fatal accident, everyone had died, and the car could not be recognized what type of car it had been. But surprisingly, the trunk was intact. The police said there was no way the trunk could have remained intact. To their surprise, inside the trunk was a crate of eggs. None was broken!

CHRISTINE HEWITT: A Jamaican Journalist and entertainer said the Bible (Word of God) was the worst book ever written. In June 2006 she was found burnt beyond recognition in her motor vehicle.

Quick quip for today: Think like a man of action, act like a man of thought.

Overview of Global Financial Crisis - Part 3

There is the argument that when the larger banks show signs of crisis, it is not just the wealthy that will suffer, but potentially everyone. With an increasingly inter-connected world, things like a credit crunch can ripple through the entire economy.

For example, people may find their mortgages harder to pay, or remortgaging could become expensive. For any recent home buyers the value of their homes are likely fall in value leaving them in negative equity, and many sectors may find the credit crunch and higher costs of borrowing will lead to job cuts. As people will cut back on consumption to try and weather this economic storm, yet other businesses will struggle to survive leading to further fears of job losses.

The real economy in many countries are already feeling the effects. Many industrialized nations are sliding into recession if they are not already there.

Overview of Global Financial Crisis - Part 2

Some of the bail-outs have also been accompanied with charges of hypocrisy due to the appearance of “socializing the costs while privatizing the profits.” The bail-outs appear to help the financial institutions that got into trouble (many of whom pushed for the kind of lax policies that allowed this to happen in the first place).

Some governments have moved to make it harder to manipulate the markets by shorting during the financial crisis blaming them for worsening an already bad situation. (It should be noted that during the debilitating Asian financial crisis in the late 1990s, Asian nations affected by short-selling complained, without success that currency speculators—operating through hedge funds or through the currency operations of commercial banks and other financial institutions—were attacking their currencies through short selling and in doing so, bringing the rates of the local currencies far below their real economic levels.

However, when they complained to the Western governments and IMF, they dismissed the claims of the Asian governments, blaming it on their own economic mismanagement instead.) Other governments have moved to try and reassure investors and savers that their money is safe. In a number of European countries, for example, governments have tried to increase or fully guarantee depositors’ savings.

In other cases, banks have been nationalized (socializing profits as well as costs, potentially.) In the meanwhile, smaller businesses and poorer people rarely have such options for bail out and rescue when they find themselves in crisis. There seems to be little sympathy—and even growing resentment—for workers in the financial sector, as they are seen as having gambled with other people’s money, and hence lives, while getting fat bonuses and pay rises for it in the past. Although in raw dollar terms the huge pay rises and bonuses are small compared to the magnitude of the problem, the encouragement such practices have given in the past, as well as the type of culture it creates, is what has angered so many people.

Overview of Global Financial Crisis - Part 1

The global financial crisis, brewing for a while, really started to show its effects in the middle of 2008. Around the world stock markets have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems.

On the one hand many people are concerned that those responsible for the financial problems are the ones being bailed out, while on the other hand, a global financial meltdown will affect the livelihoods of almost everyone in an increasingly inter-connected world. The problem could have been avoided, if ideologues supporting the current economics models weren’t so vocal, influential and inconsiderate of others’ viewpoints and concerns.

Following a period of economic boom, a financial bubble—global in scope—has now burst.

A collapse of the US sub-prime mortgage market and the reversal of the housing boom in other industrialized economies have had a ripple effect around the world. Furthermore, other weaknesses in the global financial system have surfaced. Some financial products and instruments have become so complex and twisted, that as things start to unravel, trust in the whole system started to fail.

The extent of this problem has been so severe that some of the world’s largest financial institutions have collapsed. Others have been bought out by their competition at low prices and in other cases, the governments of the wealthiest nations in the world have resorted to extensive bail-out and rescue packages for the remaining large banks and financial institutions.

15 financial problems

Now a day's many people have started to experience so many financial problems in their life. Just check these 15 financial problems that I have found out across the web.

• Not planning: The single biggest problem for most people is that they just do not plan their finances. It just keeps coming and going. Even if they are not happy about the results of what they have done so far, they do not change the way things are done.
• Overspending: Many people with not very high incomes have very high ambitions. This is likely to get them to grief. Most of this problem is because the salesmen in most shops do not tell you the price of a product, they only tell you the EMI -- so anything from a plasma TV to a luxury home on the outskirts of the city are made to look cheap! After all at Rs 2,899 a month does a plasma TV not look cheap?
• Not talking finance at home: Children are kept away from the finance topics at the dining table. Finance is perhaps the second most taboo topic at home! So many children grow up without knowing how much of sacrifice their parents have gone through to educate them.
• Parents spending on education and marriage: There are just too many kids out there who believe that they need to worry about savings, investment and life insurance only at the age of 32 plus. This means your father, father-in-law or a bank loan has funded your education and marriage. Kids should take on financial responsibility at a much younger age than what is happening currently.
• Marriage between financially incompatible people: Most marriages under stress are actually under financial stress. Either the husband or the wife is from a rich background and the other partner cannot understand or cope with the spending pattern. It is necessary to match people financially before marriage.
• Delaying saving for retirement: "I am only 27 years old why should I think of retirement" seems to be a very valid refrain for many 32 year olds! Every year that you delay in investing the greater the amount that you will have to save later in your life. Till the age of 32 it might be feasible for you to catch up, but after some time the amount that you need to save for retirement just flies away.
• Very little life insurance: With all the risks of life styles, travel, etc. illness and premature death are common. We all have classmates who had heart attack at the age of 32 but still pretend that we do not need life or medical insurance. We buy car insurance because it is forced upon us, but we ignore life insurance! Imagine insuring an Rs 10 lacs car, but not insuring (or under insuring) the person who is using the car -- and paying for it, that is, you!
• Not prepared for medical emergencies: Normally big emergencies -- financially speaking -- are medical emergencies. Being unprepared for them -- by not having an emergency fund is quite common. Emergency fund has now come to mean the credit card -- which is good news for the bank, not for the borrower.
• Lack of asset allocation: Risk is not a new concept. However, it is a difficult concept to understand. For example when the Sensex was 3k there was much less risk in the equity markets than there is today. However at 3k index people were afraid of the market. Now everybody and his aunt want to be in the equity market -- and there are enough advisors who keep saying, "Equity returns are superior to debt returns." This is true with a rider -- in the long run. It is convenient for the relationship manager to forget the rider. So there could be a much larger allocation to equity at higher prices -- to make for the time missed out earlier.
• Falling prey to financial pitches: The quality of pitches has improved! Aggressive young kids are recruited by brokerage houses, banks, mutual funds, life insurance companies, etc. and all these kids are selling mutual funds, life insurance, portfolio management schemes, structured products, et al. Selling to their kith and kin helps these kids keep their jobs, and there is happiness all around! These kids, themselves prey to financial pitches, have now made it an art when they are selling to their own natural 'circle of friends' and relatives.
• Buying financial products from 'obligated persons': This is perhaps one of the worst things you can do in your financial life. A friend, relative, neighbor, colleague who has been doing something else suddenly becomes a financial guru because they have become an agent! They, in great enthusiasm, sell you a financial product and promptly in 2 years time give up this 'business' because it is too difficult. You are saddled with a dud product for life! What a pity. Charity begins at home, not financial planning.
• Financial illiteracy: Most people do not wish to know or learn about financial products. They simply ask, "Where do I have to sign" -- so buying a mutual fund is easier than buying life insurance! Selecting products based on the ease and simplicity of buying is a shocking but true real life experience in the financial behavior of the rational human being!
• Ignoring small numbers for too long: What difference will it make if I save Rs 1,000 a month? Well over a long period it could make you a millionaire! So start early and invest wisely. It will make you rich. That is the power of compounding.
• Urgent vs important: Most expenses, which look urgent, are perhaps not so important -- the shirt or shoe at a sale. That luxury item which was being offered at 30 per cent discount is such an example. These small leakages are all reducing the amount of money you will have for the bigger things like education or retirement.
• Focusing too much on money: Money is no longer a commodity to buy things. It is a scorecard of one's life. That will cause stress, and yoga might help. However if you will seek a branded yoga teacher -- so that your friends think you have arrived, yoga itself could cause financial stress!

The Cut...even for Old Women

September 15, 2008 started off as a normal day for Consolata Kathambi. But it was never to end pleasantly. The claws of a nightmare were just lurking somewhere in the shadows.

This 35 year-old mother of three was at her home in Meru District (in Kenya) when she was informed of an impromptu visit from some female members of her village. She was shaken a bit for this was a strange visit. There had to be something the matter.

When she got to the door to let them in, she nearly fainted when she beheld the numbers. They were more than she had “bargained” for.

They cut to the chase and informed her that they had come to “transform” her to a “real” woman. Before she could digest the gist of that statement, they continued to say that she, Consolata, was not a real woman for she was not “circumcised”.

This hit her like a thunderbolt. She tried to piece this information together in her mind, but it did not add up. Her husband had accepted her as she was, so what were these women here to do? This whole thing just did not make sense.

Even then, female circumcision, in her community, is not for old women but for girls (up to a certain age group).

Things went so fast for her comprehension. Before she could shout Jack Robinson, she was being dragged across the compound. She could not see where they were taking her for she was blindfolded. Her shouting and kicking did not help matters.

Her hands and legs were held firmly. When they got to the “opportune” place, they stopped and tied her hands securely. Next, her legs were spread wide apart. They were not bluffing, they meant serious business.

She was circumcised by this mob of ‘fire and brimstone breathers’. She experienced something that she had all along hoped and believed that she had escaped. But then, tribal edicts had caught up with her and she was stripped to the last piece of clothing.

My Two Cents: Female circumcision is cruel to women and we should do everything in our power to do away with it. More and more people should join in this war (of terror!)

Related Links:

• Female Genital Cutting (FGC) and the Woman
• An Inglorious Cut for Sure
• The Female Genital Cut and its many Faces