tag:blogger.com,1999:blog-318313212011-11-27T17:07:55.290-08:00Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.comBlogger781100tag:blogger.com,1999:blog-31831321.post-34862746656474712722009-05-20T14:25:00.001-07:002009-05-20T14:25:54.962-07:00<b><br />I originally wrote this entry on October 9, 2004, and published it on blogs.sun.com.<br /></b><br /></b><br /><p><br />Scottish Philosopher and Christian thinker, John MacMurray argued in his seminal work, <i>The Self As Agent</i> (1957), for the centrality of action to our existence. "Action," for MacMurray, "is choice." <br /><br /><blockquote><br /><p><br /><font color="blue"><br />Time, and indeed action, of which it is the form, cannot be object for a subject. It can only be experienced in action. In such experience of time, the characteristic structure is a dinstinction between past and future. When the agent moves, his action continues. At any point in this continuing movement he is aware of the distinction between past and future. The past is what has been done; the future what has not been done but remains to do. That part of the movement which is past is already actual, the part which is future is not actual but only possible. In general, therefore, the past is the field of actuality, the future the field of possibility. The present is simply the point of action . . . <br /></font><br /><p><br /><font color="blue"><br />In action, then, the Agent generates a past by actualizing a possibility. This 'generation', or 'bringing into existence', is pratical determination, and the actual is the determinate. To act, therefore, is to determine; and the Agent is the determiner . . . We may therefore define acting as determining the future. The past is then that which has been determined, and is, in consequence, completely determinate . .. <br /></font><br /><blockquote><br /><p><br /><i>The Self As Agent</i> (pp. 133-134)<br /></blockquote><br /></blockquote><br /><p><br />What becomes to our propensity to act, i.e. to determine the future, when it comes to our activity within large, formal organizations?<br /><p><br />Chester Barnard (<i>The Functions of the Executive</i>, 1938), writing at about the same period as MacMurray's philosophical musings sees "a <i>need of action</i> as a primary propensity and instinct" even when we are acting within organizations. The need for action extends beyond individuals to organizations (in which they have to organize themselves because of various limitations imposed on individuals in making choices through individual action).<br /><blockquote><br /><p><br /><font color="blue"><br />. . . Correlative with this is the observation that enduring social contact, even when the object is exclusively social, seems generally impossible without activity. It will be generally noted that a purely passive or bovine kind of association among men is of short duration. They seem impelled to <i>do something</i> . . .<br /></font><br /><p><br /><font color="blue"><br />. . . Where the situation affects a number of persons simultaneously they are likely to do any sort of mad thing. The necessity for action where a group of persons is involved seems to be almost overwhelming. I think this necessity underlies such proverbs as 'Idle hands make mischief,' and I have no doubt that it may be the basis for a great deal of practice within armies. <br /></font><br /><blockquote><br /><p><br /><i>The Functions of the Executive</i> (pp. 117-118)<br /></blockquote><br /></blockquote><br /><p><br />Organizations die if they cannot provide for purposeful and satisfying action of individuals, while guaranteeing a sense of choice-making which can only be authentic in local groupings.<br /><p><br />In large organizations, the possibilities of participation increase with the greater possibilities offered for association and action. Returning to a concept of choice similar to MacMurray's, Barnard notes that this greater number of possibilities and also the conflict of obligtaions they accompany, "may induce a sort of paralysis of action through inability to make choice." <br /><p><br />In short, we have a propensity to make a choice, to determine the future, through our actions, but in large organizations, such choice-making actions are often frustrated.<br /><p><br />Situations that frustrate such choice-making and action-determintation, degrade our personalities and lead us to a state of being lost.<br /><blockquote><br /><p><br /><font color="blue"><br />The activities of individuals necessarily take place within local immediate groups. The relation of a man to a large organization . . . is necessarily through those with whom he is in immediate contact. Social activities cannot be action at a distance . . . [This] justifies a statement made to me that comradeship is much more powerful than patriotism, etc., in the behavior of soldiers. The essential need of the individual is association, and that requires local activity or immediate interaction between individuals. Without it the man is lost. The willingness of men to endure onerous routine and dangerous tasks which they could avoid is explained by this necessity for action at all costs in order to maintain the sense of social integration.<br /></font><br /><blockquote><br /><p><br /><i>The Functions of the Executive</i> (119)<br /></blockquote><br /></blockquote><br /><p> <br />So, what is the upshot of all this philosophizing?<br /><p><br />Action summarizes our being, and organization is often a necessity to take particular types of action. Local, (often informal) immediate groups within organizations function to limit and make more effective our action-choices whose frustration will put us in danger of becoming lost. We take on large, dangerous tasks not because of some large ideal but to ensure comradeship and local social cohesion.<br /><p><br /><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-3486274665647471272?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com22tag:blogger.com,1999:blog-31831321.post-67100793858742168932009-05-20T14:23:00.001-07:002009-05-20T14:23:10.437-07:00<b><br />I originally wrote this entry on October 9, 2004, and published it on blogs.sun.com.<br /></b><br /><p><br />Some say the answer lies <a href="http://www.epinet.org/stmt/2003/statement_signed.pdf" target="_blank">here</a>.<br /><p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-6710079385874216893?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-43957995292108421282009-05-08T23:26:00.001-07:002009-05-08T23:26:56.091-07:00<b><br />I originally wrote this entry on September 28, 2004, and published it on blogs.sun.com.<br /></b><p><br /><br /><table cellspacing="10"><br /><br /><tr><br /><td><br /><br /><img src="http://images.amazon.com/images/P/0674328035.01.LZZZZZZZ.gif" width="128" align="left" vspace="10" hspace="10"><br /><br /></td><br /><td><br /><br /><p><br />Simple facts are often quite difficult to recognize, remember or articulate. They just are true. So, for example, <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040810#individuals_in_organizations" target="_blank">why do we work in teams</a>? We don't really know. For many of us, it is just the way it is.<br /><p><br />Earlier, I wrote about how <a href="http://blogs.sun.com/roller/search/MortazaviBlog?q=Chester+Barnard" target="_blank">Chester Barnard</a>, father of modern organizational theory, draws a distinction between <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040913#effectiveness_vs_efficiency_why_organizations" target="_blank">effectiveness and efficiency</a>. Here, I will add a short note on how he draws the distinction between "simple" and "complex" organizations. <br /><p><br />Barnard was very interested in how organizations actually formed. He gives examples of spontaneous organizations, where people get organized because of some accident. Any person in an urban area who has witnessed an open source conference, a disaster, a revolution, military action or occupation knows how spontaneous, simple organizations form to handle particular tasks unachievable as an individual. Such spontaneous organizations are usually of a small size. <br /><br /></td><br /><br /></tr><br /><br /></table><br /><br /><p><br />The largest simple organization, according to Barnard, are probably orchestras and speaking forums where the audience and the speaker form, at least, a temporary organization. These large simple organizations, according to Barnard, share a common theme. They all imply a mostly unidirectional communication from the leader (conductor, speaker) to the rest of the members. They all involve well-understood, specialized symbolism, sometimes even a specialized language (e.g. musical notes, the conductor's movements, etc.). <br /><p><br />In his 1938 book, <i><a href="http://www.hup.harvard.edu/catalog/BARFUX.html" target="_blank">The Functions of the Executive</a></i> (<a href="http://www.hup.harvard.edu/insidehup/history.html" target="_blank">Harvard University Press</a>), Barnard writes<br /><blockquote><br /><font size=-1><br />The clue to the structural requirements of large complex organizations lies in the reason for the limitations of the size of simple organizations. The limitations are inherent in the necessities of intercommunication. . . . [Communication] between persons as an essential element of cooperative systems; it is also the limiting factor in the size of simple organizations and, therefore, a dominant factor in the structure of complex organizations.<br /></font><br /></blockquote><br /><p><br />The key here is that Barnard sees the large, complex oragnization as a byproduct of the smaller, simpler organizations through growth, divisions and mergers. He also sees "intercommunication" as the limiting constraint on the size of simple organizations, a limiting constraint that also plays the most significant role in determining the structure of the complex organizations such as a corporation.<br /><p><br />I wonder what role blogs will play in complex organizations. Corporate blogs could be a centrifugal and gravitational force that help an organization to reconfigure and hold together spontaneously and continuously, but that view seems like an exaggerated one. I guess we will have to wait and see how it all unfolds.<br /><p><br /><br /><p><br /><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-4395799529210842128?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-48842695337357681242009-05-07T14:20:00.000-07:002009-05-07T14:35:45.609-07:00Measuring value of a product bundle, particularly when the bundle contains non-equal or potentially complementary lots, has puzzled economists and business strategists alike. I don't claim to have solved the puzzle but I have puzzled on some other aspects of the problem in <a href="# http://blogs.sun.com/MortazaviBlog/resource/papers/BundledSubscriptionValue_AGeneralBriefing_v0.1.pdf">a short three page briefing</a> I wrote a few weekends ago.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-4884269533735768124?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-13466496056069476872009-03-26T22:53:00.001-07:002009-03-26T22:53:31.736-07:00<b>I originally wrote this entry on September 16, 2004, and published it on blogs.sun.com.</b><br /><br /><p><br /><br /><a href="http://www.oreilly.com/catalog/cathbazpaper/"><img src="http://blogs.sun.com/roller/resources/MortazaviBlog/thecathedralandthebazaar.jpg" align="left" vspace="10" hspace="10" width="250"></a><br /><br />Some in the open source community, who may have had a chance to glance through <a href="http://www.oreilly.com/catalog/cathbazpaper/"><i>The Cathedral and the Bazaar</i></a>, will most probably miss that the contrast between "Markets" and "Hierarchies" is nothing new, at least to the institutional and transaction-cost economists. (To be fair, <a href="http://www.catb.org/~esr/writings/cathedral-bazaar/">Eric Raymond</a> does briefly mention some papers based on <a href="http://www.nobel.se/economics/laureates/1991/index.html">Ronald Coase</a>'s work, including some by <a href="http://cepa.newschool.edu/het/profiles/demsetz.htm">Harold Demsetz</a>.) <br /><br /><p><br />My own understanding of the topic is based on Oliver Williamson's works on <a href="http://www.haas.berkeley.edu/calbusiness/s99articles/s99.14a.html">Markets and Hierarchies</a>. [I can only say that I was extremely lucky to have a chance to learn more about his ideas in the course of an independent study with Williamson while I was at Berkeley earlier this year. It was a very rewarding experience.] <br /><br /><p><br />In fact, I'd very much like to see more applications of <a href="http://blogs.sun.com/roller/search/MortazaviBlog?q=Oliver+Williamson">Williamson</a>'s ideas to Open Source economics and to software economics in general.<br /><br /><p><br />In short, there's a place for hierachies and there's a place for markets. As the economy evolves, relations of exchange could be brought into the market or into hierarchies. What matters is <a href="http://blogs.sun.com/roller/search/MortazaviBlog?q=Williamson">transaction costs</a>. Whichever exhange relationship (market, hybrid or hierarchy) reduces transaction costs will be taken up. These ideas are also echoed by <a href="http://www.nobel.se/economics/laureates/1993/north-autobio.html">Douglass C. North</a> in his <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040809#technology_and_transaction_costs_economics">investigation of how economic structures evolve</a>.<br /><br /><p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-1346649605606947687?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-86329074035578177152009-03-26T22:51:00.001-07:002009-03-26T22:51:21.603-07:00<b>I originally wrote this entry on September 15, 2004, and published it on blogs.sun.com.</b><br /><p><br /><a href="http://www.sierraclub.org//globalwarming/suvreport/"><br /><img src="http://www.sierraclub.org//globalwarming/suvreport/images/cover_200.gif" align="left" vspace="10" hspace="10"><br /></a><br /><br /><p><br />I drove my daughters back from <a href="http://www.ecys.org/">El Camino Youth Symphony</a> violin practice tonight and was wondering why we could not simply and conveniently ride a train home.<br /><br /><p><br />We were driving in my (still quite inefficient) <a href="http://www.mbusa.com/brand/models/C230K.jsp">compact European car</a>, and with two additional passengers, I had the luxury of driving in the carpool lane. I don't often get to ride in the carpool lane. So, I was quite surprised when I kept passing the many, many <a href="http://www.sierraclub.org/globalwarming/SUVreport/">SUV</a>s in the non-carpool lanes, each with a single driver inside.<br /><br /><p><br />What an odd sight! <br /><br /><p><br />My immediate thought was whether we could claim to have an efficient economic organization in the Bay Area? I don't think so. (Given equal purchasing power, it still takes me less time and effort, per transaction, to buy a certain quantity of yogurt in Tehran, where I visit my grandmother, than it does in San Jose, where I live with my family.)<br /><br /><p><br />Note that I'm not criticizing SUV owners, drivers or buyers. People often own and use things that they believe they need. In fact, I constantly toy with the idea of owning an SUV. (It could make life much easier.) What I'm questioning is the organizational aspects that help drive and accentuate such needs at a larger level.<br /><br /><p><br />According to Chester Barnard, an organization has to be <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040913#effectiveness_vs_efficiency_why_organizations">efficient</a> or <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040913#effectiveness_vs_efficiency_why_organizations">effective</a> to survive. The more an organization lasts, the more efficient <i>and</i> effective it will have to be to continue surviving. Does Barnard's maxim hold about national or regional economies? It seems to me that it does to a very significant degree. <br /><br /><p><br />In the long run, only the resourceful organizations will survive. The wasteful ones are most likely to disappear, and disappear they will quite quickly.<br /><br /><p><br /><br /><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-8632907403557817715?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-84569396295155099082009-03-26T22:50:00.001-07:002009-03-26T22:50:06.948-07:00<b>I originally wrote this entry on September 13, 2004, and published it on blogs.sun.com.</b><br /><p><br /><br /><img src="http://images.amazon.com/images/P/0674328035.01.LZZZZZZZ.gif" width="200" align="left" vspace="10" hspace="10"><br /><br />I've written about <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040811#why_we_cooperate_and_adopt">Chester Barnard</a> before. His 1938 book, <i><a href="http://www.hup.harvard.edu/catalog/BARFUX.html">The Functions of the Executive</a></i> (<a href="http://www.hup.harvard.edu/insidehup/history.html">Harvard University Press</a>), remains one of the most important business and institutional economics classics. It has been reprinted some 30 times since its initial publication.<br /><br /><br /><p><br />Here's what Barnard says about the persistence of organizations.<br /><br /><blockquote><br /><br /><p><br /><font color="blue"><br />The persistence of cooperation depends upon two conditions: (a) its effectiveness; and (b) its efficiency. Effectiveness relates to the accomplishment of the cooperative purpose, which is social and non-personal in character. Efficiency relates to the satisfaction of individual motives, and is personal in character. The test of effectiveness is the accomplishment of a common purpose or purposes; effectiveness can be measured. The test of efficiency is the eliciting of sufficient individual wills to cooperate.<br /></font><br /><br /></blockquote><br /><br />As Barnard seems to imply, efficiency is harder to measure than effectiveness. Let's give an exmaple. <br /><br /><p><br /><br />Say, 10 people get together to push a large spherical rock up a hill. Effectiveness of their organized activity can be determined by seeing whether the rock makes it to the top. The efficiency of their activity will depend on their optimal expenditure of energy for pushing the rock up the hill. How do we know who's pushing more, <i>or</i> less, optimally? A measurement of effort which does not poison cooperative relatioships is quite hard. The only way people are motivated to do what they are doing is if they are satisfied with the results as it relates to them personally. As Barnard has noted, the <i>survival</i> of an organization not only depends on the environment or context of its activity but also on factors "which relate to the creation or distribution of satisfactions among individuals" since such satisfactions will determine motivation and efficiency of the cooperative activity.<br /><br /><br /><p><br /><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-8456939629515509908?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-20094721997238432472009-03-26T22:34:00.001-07:002009-03-26T22:34:53.883-07:00<p><br />I have always wondered how technical (not scientific) revolutions come about and join with market forces to create a bonanza of activity in a particular industry.<br /><br /><p><br />We have seen it happen with Java in the Software and Internet industries.<br /><br /><p><br />Now, we are witnessing similar processes in other industries. <br /><br /><p><br />Take the case of flat panel displays. This is a case where consumer demand, technology, globalization and bold planning are meeting to create fantastic industrial giants.<br /><br /><p><br />Here are some interesting facts from <a href="http://online.wsj.com/article/0,,SB109381594868603924,00.html?mod=todays_us_page_one">a recent Wall Street Journal article</a> by Evan Ramstad.<br /><br /><p><br /><ul><br /><li><br />AU Optronics Corp. is the third largest producer of flat-panel, LCD screens after Samsung Electronics Co. and LG Philips LCD of South Korea. AU is pouring $2.3 billion in a factory to be built in Taiwan. To shorten the construction time for the factory by 40 days, they paid $500,000 to have a 210-ton machine delivered from its manufacturer in a Soviet-built, six-engine Antonov 225 plane. It was the only plane large enough to carry the machine to its destination. The machine was built in Germany by Applied Films Corp., a U.S. firm that specializes in glass and metal coatings.<br /><li><br />Revenues in flat-panels is going to increase to $60 billion this year, 40% above last year.<br /><li><br />Ordinary TVs cost manufacturers less than $5 / sq. inch of screen size. LCD's cost $20 to $30 / sq. inch of screen size. Plasma screens cost around $20 / sq. inch.<br /><li><br />Most of the research and development for flat panel screens is now being done in the Asian countries where the manufacturers are based: Korea, Taiwan, China and Japan.<br /><li><br />Here's a couple of very interesting paragraphs from <a href="http://online.wsj.com/article/0,,SB109381594868603924,00.html?mod=todays_us_page_one">the WSJ story</a>:<br /></ul><br /><br /><blockquote><br /><br /><p><br /><font color="blue"><br />The company [AU] has built each of its five latest plants faster than the previous one. It's now pushing its contractors to the limit: AU's new factory has 2.4 million square feet of clean room, where manufacturing takes place, compared with 500,000 square feet at Intel Corp.'s largest chip-manufacturing plant. Handed a deadline of just seven months, general contractor Fu Tsu Construction Co. began construction late last year even before the plant's architects were done. "When we are still working on the first floor, they are still designing the second floor," says Lin Chih-sheng, a Fu Tsu director.<br /></font><br /><br /><p><br /><font color="blue"><br />Fu Tsu lined up three sources of steel because the project consumed 140,000 tons of it. That's nearly twice as much of it as <a href="http://www.tfc101.com.tw/english/taipei/taipei101.htm" target="_blank">Taipei 101</a>, the world's tallest skyscraper that opened last year in the capital city. The plant and other flat-screen facilities being built in Taiwan began consuming so much concrete that a sand shortage arose.<br /></font><br /><br /></blockquote><br /><br />Now, there's an industry exploding into a revolution ! ! !<br /><br /><p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-2009472199723843247?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-42242525499300805872009-03-26T22:27:00.001-07:002009-03-26T22:27:40.038-07:00<b>I originally wrote this entry on August 27, 2004, and published it on blogs.sun.com.</b><br /><p><br />The vastly prolific Judge <a href="http://www.law.uchicago.edu/faculty/posner-r/">Richard Posner</a>'s musings regarding <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040826#to_share_or_not_to">a recent court decision</a> on file-sharing ("<a href="http://www.lessig.org/blog/archives/002128.shtml">In the Wake of Grokster</a>") has led to a torrent of great <a href="http://lessig.org/cgi-bin/mt/mt-comments.cgi?entry_id=2128">commentary</a> by his readers.<br /><br /><br /><p><br />In their commentary, Luka, <a href="http://lessig.org/cgi-bin/mt/mt-comments.cgi?__mode=red&id=38918">Ernest Miller</a> and Matthew Saroff have made interesting technical points to demonstrate the serious challenges police crackdown faces as a prevention tool, and I certainly agree with Luka's critique of the ideal-world equilibrium analysis offered by James McDonnell. <br /><br /><p><br />McDonnell claims that if file-sharing could be stamped out, the no-file-sharing world would be possible to maintain through minimal enforcement because such a world would be one of the equilibrium worlds (that he postulates). Luka notes how the diversity and growth of file-sharing alternatives make such ideal-world analysis less than satisfactory. He gives <a href="http://www.orkut.com/">Orkut</a> as one of the non-trivial examples. <br /><br /><p><br />Referring to unsuccessful prohibition attempts in history, Raoul and <a href="http://lessig.org/cgi-bin/mt/mt-comments.cgi?__mode=red&id=38963">Doug Munger</a> focus on the limits of enforcement in general. ("The <a href="http://www.riaa.com/default.asp">RIAA</a> has only sued 4000 people out of 60,000,000," writes Raoul. "It's a joke.")<br /><br /><p><br />In his original <a href="http://www.lessig.org/blog/archives/002128.shtml">blog</a>, Judge Posner has used the "expected utility" approach of the economists to analyze the ancillary effects of <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040826#to_share_or_not_to">a recent DoJ crackdown on a file-sharing network</a>. (I'm coining the phrase "expected utility" for explanatory purposes.) The "expected utility" approach says, basically, that economically rational agents will look at the probabilities of outcomes (will I get punished or not if I file share) and multiply these probabilities with the value of each outcome (the pain of getting arrested vs. the gain of thousands of more free songs) and determine the "expected" utility of some action.<br /><br /><p><br />On the limits of such "expected utility" analysis, see <a href="http://gsb.uchicago.edu/dynamic.asp?nNodeID=18&intContentID=162&intContentTypeID=2">Richard Thaler</a>'s <i><a href="http://pup.princeton.edu/TOCs/c5451.html">The Winner's Curse: Paradoxes and Anomalies of Economic Life</a></i>, Chapter 6 (<a href="http://pup.princeton.edu/">Princeton University Press</a>, 1992). The point Thaler makes is that people do not always see decisions according to the "expected utility" approach. (I will say more on this in a separate log.)<br /><br /><p><br />. . . Thanks to honorable Judge <a href="http://www.law.uchicago.edu/faculty/posner-r/">Richard Posner</a> for having started <a href="http://www.google.com/search?q=site%3Awww.lessig.org+Richard+Posner">the dialog on <i>Grokster</i></a>. As a bystander, I thoroughly enjoyed the conversation as it unfolded.<br /><p><br /><br /><p><br /><i>Note:</i><br /><a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040826#to_share_or_not_to">Earlier</a>, I'd given a quick review of reports on the <i>Grokster</i> case and pointed to the DoJ crackdown on a file-sharing network that followed, almost immediately.<br /><p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-4224252549930080587?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-14119944478044268982009-03-26T22:25:00.001-07:002009-03-26T22:25:30.333-07:00<b>I originally wrote this entry on August 26, 2004, and published it on blogs.sun.com.</b><br /><p><br />Shreedhar <a href="http://blogs.sun.com/roller/page/shreedhar/20040826#bay_area_home_prices_moving">has written</a> regarding his surprise at the unfathomable Bay Area housing market. He has noted wages and population moving in a direction that will lead to lower prices. Things are a bit more complicated, as <a href="http://www.haas.berkeley.edu/faculty/rosen.html">research has shown</a>.<br /><br /><p><br />Housing prices are determined by a number of factors, including wages, population growth (as Shreedhar has noted implicitly), interest rates, inventory, "production" (new houses), etc. When interest rates are low, housing market will move faster; when production or inventory is high, prices will be lower.<br /><br /><p><br />Historic prices, however, need to rise somewhat to provide an incentive for buying the house and also to help avoid defaults. If prices fall too sharply and too much, borrowers will go into default. This is not good for the borrowers. It's also not good for the banks or <a href="http://www.fanniemae.com/index.jhtml">other creditors</a>. At the moment, loans on houses form the largest volume of "fixed-income" debt paper (i.e. bonds) out there. So, on its own, any illiquidity in housing debt (bond) markets may have more influence on interest rates in the U.S. than <a href="http://www.federalreserve.gov/">government treasuries</a>. <br /><br /><p><br />If bonds on loans become cheap, i.e. once default rises, interest rates will rise, too. However, high interest rates are not good for a sputtering economy because they make money too "slow" to come by. The only saving grace, I've read, is for the U.S. dollar to devalue even further against other currencies. <br /><br /><p><br />This could be good for companies such as Sun because of its large revenue footprint abroad, but it also may mean inflation if the U.S. becomes increasing more dependent on imports of basic goods. Any devaluation steps need to be taken very gradually.<br /><br /><p><br /><br /><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-1411994447804426898?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-36886332472074503472009-03-26T22:22:00.001-07:002009-03-26T22:22:58.341-07:00<b>I originally wrote this entry on August 23, 2004, and published it on blogs.sun.com.</b><br /><p><br />Richard Posner, the honorable guest at <a href="http://www.lessig.org/blog">Lessig Blog</a>, has <a href="http://www.lessig.org/blog/archives/002112.shtml">written a short piece</a> about the <a href="http://www.eldred.cc/eldredvashcroft.html"><i>Eldred</i></a> decision. He is correct that Lawrence Lessig has "from time to time" self-flagellated about losing the <i>Eldred</i> <a href="http://www.supremecourtus.gov/opinions/02pdf/01-618.pdf">decision at the Supreme Court</a>. (See chapter 13 and 14 of Lessig's <a href="http://www.free-culture.cc/">Free Culture</a>.)<br /><br /><p><br />Frankly, I don't see anything dishonorable in feeling shame. Particularly when something happens on your watch, and <a href="http://www.eldred.cc/eldredvashcroft.html"><i>Eldred</i></a> did happen on Lessig's watch, <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040820#shooting_donkeys_or_nobility_in">shame is a noble feeling</a>. It may have been better not to argue the case at all, as Lessig notes himself in his most recent book. So, I applaud Lessig for flagellating himself on this, at least for a while. In any case, he has now recorded his feelings in <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040706#free_culture">his book</a> and can move on to more interesting stuff.<br /><br /><p><br />Now, let's stick to the actual issue Posner has mentioned.<br /><br /><p><br />First, I don't think anyone would argue with Posner when it comes to the importance of propertization as an incentive to the owner to conserve and nurture his or her property. In fact, it has been argued by many economists, including <a href="http://blogs.sun.com/roller/search/">Nobel Economics Laureate</a> <a href="http://www.nobel.se/economics/laureates/1993/north-autobio.html">Douglass North</a> that <i>secure</i> propertization is essential to economic progress. (See <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040623#once_again_for_lessig">here</a>.) This has been well established by him and other economists who have written since the Second World War. (North has also made some other interesting, general points about <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040809#technology_and_transaction_costs_economics">the role of technology in economic development</a>.)<br /><br /><p><br />Second, Posner is right when it comes to a relativistic interpretation of the "for limited Times" term in the <a href="http://cyber.law.harvard.edu/openlaw/eldredvashcroft/progress.html">Progress Clause of the Constitution</a>. However, Lessig has also realized that fact. In his book, he has noted that insisting on a reasonable interpretation of "for Limited Times" in his arguments was not a winning strategy before the Court. Lessig says that he should have argued from the "Free Culture" point of view. In other words, he should have said that extending limited terms is harmful to basic freedoms in our culture. However, I think even that argument has some flaws in it. First of all, no culture is truly free. We all live with and are rooted in our pasts. If any institution in the U.S. government knows that fact well, it should be the Supreme Court. So, emphasis on "free," instead of on "roots" might not always work with the Court. <br /><br /><p><br />Last but not least, copyright term extension beyond a certain point, <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040630#copyright_extension">as Lessig has analyzed so skillfully</a>, promotes the death of culture much more efficiently than it stifles free culture. (That is why I think Lessig should have chosen a different title for his book but it could have become too dramatic. I don't know?) <br /><br /><p> Death of culture through repeated copyright extensions going well beyond three or four generations happens in several essential ways.<br /><br /><ul><br /><br /><li> Only "cultural" products for which current economic value can be extracted are protected and nurtured into prosperity.<br /><br /><li> With continuing copyright term extension, many pieces of potentially valuable cultural works that are not currently and commercially active remain silent and could be lost to history because it costs more to clarify their copyright status than can be earned by making them available to public, either directly or through "mixing" in other cultural products.<br /><br /><li> Continuing copyright term extensions also prevent active mixing of the past into the future. If copyrights are allowed to be extended beyond a certain point, going for more than three or four generations as the case may be, it becomes increasingly more problematic to do such cross-generational mixing of cultures beyond what is made available through commercially active culture. That's the true loss.<br /><br /></ul><br /><br /><p><br /><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-3688633247207450347?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-34034302146696150052009-03-22T13:26:00.001-07:002009-03-22T13:26:46.762-07:00<b><br />I originally wrote this entry on August 17, 2004 and published it on blogs.sun.com.<br /></b><br /><p><br /><br /><img src="http://blogs.sun.com/roller/resources/MortazaviBlog/Gas_Pump_On_The_Isfahan_Saveh_Road_July_2004.JPG" width="500" alt="Gas pump on the Isfahan-Saveh road. July 2004."><br /><br /><p><br />The price, listed on this gasoline pump, is in <a href="http://www.cbi.ir/">Iranian Rials</a>. In July 2004, when this picture was taken on <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040717#a_visit_to_half_the">the road from Isfahan to Saveh</a>, 8600 Rials could be exchanged for about $1. The total price, seen in this picture, is for 5.07 liters. That's about 1 + 1/4 of gals for less than 50 cents. <br /><br /><p><br />As you can see, in Iran gasoline is priced sharply under the world markets. The social and economic reasons are subtle. In very brief terms, this is primarily a way for <a href="http://www.nioc.org/">the government</a> to subsidize the national economy. Other oil derivatives which require higher-level processing are traded at world market prices and are normally produced by companies listed on the <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040711#tehran_stock_exchange">Tehran Stock Exchange</a>. <br /><p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-3403430214669615005?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-53280124764871256432009-03-22T13:13:00.001-07:002009-03-22T13:13:02.393-07:00<b><br />I originally wrote this entry on August 11, 2004 and published it on blogs.sun.com.<br /></b><br /><p><br /><a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040710#chester_barnard">Chester Barnard</a> provides the following summary answer to this question:<br /><p><br /><blockquote><br /><p><br />Among the most important limiting factors in the situation of each individual are his own biological limitations. The most effective method of overcoming these limitations has been that of cooperation. This requires the adoption of a group, or non-personal, purpose. The situation with reference to such a purpose is composed of innumerable factors, which must be discriminated as limiting and non-limiting factors. <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040810#the_functions_of_the_executive"><i>The Functions of the Executive</i></a><br /></blockquote><br /><p><br /><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-5328012476487125643?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-8845498289703737922009-03-22T13:10:00.001-07:002009-03-22T13:10:51.837-07:00<b><br />I originally wrote this entry on August 10, 2004 and published it on blogs.sun.com.<br /></b><br /><p><br /><a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040710#chester_barnard">Chester Barnard</a> provides the following account of the "individual" in organizations:<br /><br /><blockquote><br /><p><br />The individual human being possesses a limited power of choice. At the same time he is a resultant of, and is narrowly limited by, the factors of the total situation. He has motives, arrives at purposes, and wills to accomplish them. His method is to select a particular factor or set of factors in the total situation and to change the situation by operations on these factors. These are, from the viewpoint of purpose, the limiting factors; and are the strategic points of attack. <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040810#the_functions_of_the_executive"><i>The Functions of the Executive</i></a> (1938)<br /></blockquote><br /><p><br />Barnard starts by noting our limited power of choice. Earlier in his book he amplifies on this theme connecting choice to context (i.e. "factors of the total situation") one is acting in. The structure of action is then decomposed into motives, purposes and will. In terms of actual practice of acting, he notes that individuals usually select a factor or a set of factors in the "total situation" to affect. For example, say you don't like your career path. It could be because of where you are, what you're doing, who you're reporting to, the goals or the team. One can change one or a set of these factors. Which actual factor is selected depends on one's total situation. Next Barnard discusses purpose. Purpose determines one's goal. From the point of view of one's goals, some factors may be limiting. Those factors are exactly the ones that will be selected for change.<br /><br /><p><br />That's a brief summary of Barnard's views on "individual" actors in an orgniazation. <br /><br /><p><br />In the next post, I'll summarize his views on what moves individuals in an organization to adopt group purposes.<br /><br /><p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-884549828970373792?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-9001271933207918482009-03-22T13:08:00.001-07:002009-03-22T13:08:11.965-07:00<b><br />I originally wrote this entry on August 10, 2004 and published it on blogs.sun.com.<br /></b><br /><p><br />In my last semester at the <a href="http://www.haas.berkeley.edu/">Haas School of Business</a>, I had the good fortunate of studying transaction cost economics (TCE) with the master: <a href="http://groups.haas.berkeley.edu/bpp/oew/">Oliver Williamson</a>. He was a wonderful advisor, and although I had already read many of his essays, he guided my more extended readings and helped me gain a better understanding of the fundamental concepts of TCE. I started several ideas with him and finally settled on writing a paper that gave a transaction cost economics account of the bullwhip effect in supply chains. It was a fascinating exercise and learning experience. (Earlier on this weblog, I have written <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040809#technology_and_transaction_costs_economics">a brief account</a> of the bullwhip effect, investigating it as a consequence of technological specialization and within the context of <a href="http://www.nobel.se/economics/laureates/1993/north-autobio.html">North's theories on <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040809#technology_and_transaction_costs_economics">the structual evolution of economic institutions</a>.)<br /><br /><p><br />There was one book whose reading Williamson highly recommended to me: <i>The Functions of the Executive</i> by <a href="">Chester Barnard</a>. That book was first published in December of 1938. I have a copy of its 2002, 39th printing in my hands.<br /><br /><p><br />I've written about <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040710#chester_barnard">Chester Barnard</a> and <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040608#economizing_and_strategizing">Oliver Williamson</a> earlier, including a brief mention in a piece on <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040809#technology_and_transaction_costs_economics">Douglass North</a>. <br /><br /><p><br />Today and possibly tomorrow, I'm going to extract a short summary of the first part of Barnard's book on <i>The Functions of the Executive</i>. <br /><br /><p><br />I think the material is important to anyone who works within a cooperative system, a business organization or any other kind of association.<br /><p><br /><br /><br /><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-900127193320791848?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-41095820286946665762009-03-22T13:05:00.001-07:002009-03-22T13:05:57.375-07:00<b><br />I originally wrote this entry on August 9, 2004 and published it on blogs.sun.com.<br /></b><br /><p><br /><a href="http://www.nobel.se/economics/laureates/1993/north-autobio.html">Douglass C. North</a>, the <a href="">Nobel Economics Laureate</a> (1993), has applied transaction cost economics, an economic theory originally founded by <a href="http://www.nobel.se/economics/laureates/1991/index.html">Ronald H. Coase</a> (the 1991 Nobel Economics Laureate) to develop a new theory of institutional economics. <br /><br /><p><br />In the last chapter of <a href="http://www.amazon.com/gp/reader/039395241X/ref=sib_dp_pt/102-9566099-5480115#reader-link"><i>Structure and Change In Economic History</i></a>, one of his earlier books on the economic history of institutions, North gives the following assessment of technology in economic history (pp. 206-207):<br /><br /><blockquote><br /><p><br />. . . the stock of technology determines the gains from specialization (via scale economies) and the costs of alternative forms of organization. The greater the gains from specialization, the more steps in the production process and the higher the transaction costs.<br /></blockquote><br /><br /><p><br />The jump from "the more steps in the production process" to "higher transaction costs" may be surprising for some but a review of the <a href="http://economist.com/printedition/displayStory.cfm?story_id=949105">bullwhip effect in supply chain management</a> should clarify the connection.<br /><br /><p><br />The bullwhip effect, i.e. demand and inventory uncertainty amplifications upstream of a supply chain was analyzed theoretically by Jay Forrester in his famous 1961 book, <i>Industrial Dynamics</i>. The bullwhip effect has also been studied by more recent investigators, such as Professor <a href="http://gobi.stanford.edu/facultybios/bio.asp?ID=98">Hau Lee</a> of Stanford University. <br /><br /><p><br />The expenditure necessary to handle increasing fluctuations upstream of a supply chain (either on larger inventories or on better supply chain coordination) represents transaction costs. Roughly speaking, transaction costs comprise the costs of remaining in business, the cost of making a deal or a transaction go through, the cost of holding a production organization together. <br /><br /><p><br />As <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040608#economizing_and_strategizing">Oliver Williamson</a>, the noted transaction cost economics scholar, has shown, transactions can be characterized by the associated uncertainties, their frequency and the specific assets devoted to them. Each one of these characteristics determine some aspect of transaction costs. For example, transaction maintenance costs increase as specific assets increase. Human know-how specific to a particular contractual relatioship is an example of specific assets. <br /><br /><p><br />So, what is North saying again about technology? <br /><br /><p><br />He is saying that the stock of technology can lead to greater specialization, i.e. to more steps in the production process and hence to greater transaction costs.<br /><br /><p><br />The big question is then the degree to which these production steps will be organized by the market or within a hierarchy. This is the big strategy question that each economic entity needs to consider--for example, the question: "Shall I produce my own software or shall I buy it?"<br /><br /><p><br />Let's end with another quote from North's book:<br /><br /><blockquote><br /><p><br />The degree to which these various steps will be organized by market versus hierarchical organization will depend upon the alternative costs of measurement and enforcement. Since vertical integration into hierarchical organization means the substitution of factor markets for product markets, a key determinant will be the cost of the organizing factor, and in particular, labor markets. <br /></blockquote><br /><br /><p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-4109582028694666576?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-78926402428475395742009-03-17T22:05:00.001-07:002009-03-17T22:05:22.679-07:00<b><br />I wrote this entry, originally, on July 11, 2004.<br /></b><br /><br /><p><br /><br />According to Iranian financial news reports I have read in the last few days, real estate grew by only 19% across Iran while stocks grew by more than 130% in 2003. It may be possible to confirm this by a look at the <a href="http://69.0.199.104/qtp_27-04-2048/tse/">Tehran Stock Exchange</a> although I have not tried it myself in any depth. Volume of exchange has grown by more than %250. More and more companies are being listed. CEO of the TSE recently called for listing of news media companies to give them greater vitality.<br /><br /><p><br /><br /><br /><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-7892640242847539574?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-89863676378873993062009-03-17T22:04:00.001-07:002009-03-17T22:04:14.848-07:00<b><br />I wrote this entry, originally, on July 10, 2004.<br /></b><br /><p><br />I have started reading <a href="http://www.google.com/search?hl=en&lr=&ie=UTF-8&q=Chester+Barnard">Chester Barnard</a>'s <i><a href="http://www.hup.harvard.edu/catalog/BARFUX.html">The Functions of the Executive</a></i>.<br /><br /><p><br />It has been recommended by professor <a href="http://groups.haas.berkeley.edu/bpp/oew/">Oliver Williamson</a> (<a href="http://emlab.berkeley.edu/econ/">Economics</a>, <a href="http://www.law.berkeley.edu/">Law School</a> and <a href="http://haas.berkeley.edu/">School of Business</a> at <a href="http://www.berkeley.edu/">UC Berkeley</a>) as an important work. Professor Williamson has reviewed Bernard's influence in <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20040608#economizing_and_strategizing"><i>Mechanisms of Governance</i></a>.<br /><br /><p><br />The volume I have in my hand is published by the <a href="http://www.hup.harvard.edu/">Harvard University Press</a>, Cambridge, Massachusetts. It is the thirty-ninth printing (2002) of the book, originally published in 1938. <br /><br /><p><br />What sort of book is it that gets to have so many printings? <br /><br /><p><br />Apparently, Barnard never completed Harvard, but he wrote one of the most influential books there is when it comes to management, executive functions and organizational theory.<br /><br /><p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-8986367637887399306?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-68302415827768958982008-05-03T23:23:00.001-07:002008-05-03T23:23:34.215-07:00<p><br /><br />The answer to this question depends on the context, i.e. the market with respect to which we are asking it.<br /><br /><p><br />In his 1997 national best seller, <a href="http://www.amazon.com/exec/obidos/tg/detail/-/0875845851/103-8775666-7881409?v=glance"><i>The Innovator's Dilemma</i></a>, the Harvard Business School professor<a href="http://hbswk.hbs.edu/faculty.jhtml?t=clchristensen"> Clayton M. Christensen</a> coined the terms <i>disruptive</i> and <i>sustaining</i> technologies. <br /><br /><p><br />According to Christensen, most new technologies improve product performance. He calls such technologies <i>sustaining</i> technologies. In contrast, he identifies <i>disruptive</i> technologies to be those innovations that lead to <i>worse</i> product performance, at least in the near-term. He goes on to say that such initially less-performant technologies end up precipitating the leading firms' failure. <br /><br /><p><br />Christensen also notes that there are three reasons established companies do not invest in disruptive technologies. First, because disruptive technologies are simpler and cheaper, their use only provides low margins to begin with. Second, disruptive technologies are usually first commercialized in markets which the established firms consider to be insignificant. Third, established firms' most profitable customers cannot initially use such technologies. According to Christensen, a practiced discipline of "listening to customers and identifying new products that promise greater profitability and growth are rarely able to build a case for investing in disruptive technologies until it is too late." <br /><br /><p><br />Frankly, I am not sure I agree with this last point Christensen is making. I think listening to customers does not just mean listening to what it is they want. Often customers don't really know or think they know but are not sure if what they want jives with what's "there." The most important thing companies should listen for are "requirements" in a deep sense of that word, i.e. not what a customer wants from us but what their goals are, how they go about achieving it now and how they can go about achieving it in the future. This approach is quite different from just seeing what they want.<br /><br /><p><br />So, is <a href="http://java.sun.com/j2ee/">J2EE</a> an example of a disruptive technology in the Christensen sense of the word?<br /><br /><p><br />Well, in the enterprise market, J2EE has been proven to be the <i>de facto</i> platform because one can easily develop, deploy and maintain scalable applications in production environments. So, one may argue that in the enterprise market, J2EE may not be as <i>disruptive</i> as it once was. This may not be completely true. While some real innovations (such as <a href="http://java.sun.com/webservices/downloads/webservicespack.html">JAX-RPC</a> and <a href="http://java.sun.com/j2ee/connector/index.jsp">Connectors</a>) have emerged that are not just about "performance" in speed, some may still argue that these new innovations are simply about "performance" in integration. They may have a point.<br /><br /><p><br />However, that is not what I wanted to talk about. What I want to say is that Christensen's notions of <i>disruptive</i> and <i>sustaining</i> technologies really need to be applied and scoped with respect to <i>particular</i> markets.<br /><br /><p><br />So, let's ask the question again and scope it to the telecommunications market.<br /><br /><p><br />Is J2EE a <i>disruptive</i> technology in the telecommunications market?<br /><br /><p><br />Applying the Christensen analysis, we have no choice but to say that it is.<br /><br /><p><br />There are three classes of telecommunications applications where J2EE has a good fit as the <i>emerging</i> and <i>disruptive</i> middleware platform: OSS/BSS applications, service applications, service control function applications.<br /><br /><p><br />Who will take advantage of this opportunity will be offering the next-generation platform for convergence applications.<br /><br /><p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-6830241582776895898?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-8341161572359337502008-05-03T23:21:00.001-07:002008-05-03T23:22:30.002-07:00<p><br />Institutional economists, such as <a href="http://cepa.newschool.edu/het/profiles/dnorth.htm">Douglas North</a> (<a href="http://www.amazon.com/exec/obidos/tg/detail/-/039395241X/ref=pd_bxgy_img_2/104-0959690-2138337?v=glance&s=books">Structure and Change in Economic History</a>) have long argued that the protection of intellectual property was a necessary ingredient for the technology-driven economic growth of the post-industrial world.<br /><br /><br /><p><br />North and others have been focusing on the importance of protecting private and intellectual property. Less attention has been given to the regulatory limits of such protection. <br /><br /><p><br />Over the years, copyright laws have expanded to include derivative work. It is not clear whether such expansion (to derivative work) is actually good for economic growth.<br /><br /><p><br />Once again, Stanford University Law professor <a href="http://www.lessig.org/">Lawrence Lessig</a> has written a wonderful book, this time on how new technologies affect our economic environment and our culture.<br /><br /><p><br />In this new book, <a href="http://www.amazon.com/exec/obidos/tg/detail/-/1594200068/qid=1088019171/sr=8-1/ref=pd_ka_1/104-0959690-2138337?v=glance&s=books&n=507846"><i>Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity</i></a>, Lessig examines the changes made to the copyright law and how those changes can stifle creativity and an open culture.<br /><br /><p><br />His writing is meant to be accessible to all, including those who do not have any training in law and its methods. He takes care to bring out some of the legal subtleties involved in a very lucid and accessible prose.<br /><br /><p><br />Lessig is one of the few legal scholars who have really thought hard about how new communications technologies are changing our world. Reading his works would be useful for all who play a role in the creation of such technologies.<br /> <br /><p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-834116157235933750?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-17223816272341617042008-05-03T01:51:00.001-07:002008-05-03T23:22:03.039-07:00<div style="float: right; margin-left: 10px; margin-bottom: 10px;"> <a href="http://www.flickr.com/photos/mortazavi/2445117062/" title="photo sharing"><img src="http://farm3.static.flickr.com/2046/2445117062_241e3355b9_m.jpg" alt="" style="border: solid 2px #000000;" /></a> <br /> <span style="font-size: 0.9em; margin-top: 0px;"> <a href="http://www.flickr.com/photos/mortazavi/2445117062/">Tehran, Iran (Nov. 2006)</a> <br /> Originally uploaded by <a href="http://www.flickr.com/people/mortazavi/">M.Mortazavi</a> </span></div>A bank is a bank no matter where it lives.<br /><br />It does roughly the same thing everywhere.<br clear="all" /><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-1722381627234161704?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-51357833327832374612008-03-21T00:02:00.001-07:002008-03-21T00:11:21.435-07:00<p><br />So, here I go, testing this Weblog system . . . <br /><br /></p><p><br /><a href="http://groups.haas.berkeley.edu/bpp/oew/">Oliver Williamson</a>, the great contemporary economist, notes that there has been too much focus on triangles formed by supply-demand curves, i.e. on strategizing, and not enough attention on the larger rectangles, i.e. on economizing. A good place to read about this is in his book of essays on transaction cost economics, <a href="http://astore.amazon.com/onthemargins-20/detail/0195132602/002-1062567-6156834"><i>Mechanisms of Governance</i></a>.<br /><br /></p><p><br /><br /></p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-5135783332783237461?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-80990127452576967992008-03-15T01:32:00.001-07:002008-03-21T00:11:41.707-07:00<div style="float: right; margin-left: 10px; margin-bottom: 10px;"> <a href="http://www.flickr.com/photos/mortazavi/2334088302/" title="photo sharing"><img src="http://farm4.static.flickr.com/3196/2334088302_14f3c33087_m.jpg" alt="" style="border: solid 2px #000000;" /></a> <br /> <span style="font-size: 0.9em; margin-top: 0px;"> <a href="http://www.flickr.com/photos/mortazavi/2334088302/">Tehran Bazaar (August, 2006)</a> <br /> Originally uploaded by <a href="http://www.flickr.com/people/mortazavi/">M.Mortazavi</a> </span></div>In each minutes, a tremendously large number of transactions are carried out.<br /><br />Only economies that improve the volume and value of such transactions per quanta of time and resources used will survive well in crisis.<br clear="all" /><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-8099012745257696799?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-56028271681523982992008-03-14T05:47:00.000-07:002008-03-14T05:49:38.576-07:00I find this paragraph from a <span style="font-style: italic;">Financial Times</span><a href="http://www.ft.com/cms/s/0/de933870-f133-11dc-a91a-0000779fd2ac.html"><span style="font-style: italic;"></span></a> <a href="http://www.ft.com/cms/s/0/de933870-f133-11dc-a91a-0000779fd2ac.html">editorial</a> published today telling a big story:<br /><blockquote><br />It would be pointless, foolish and wrong to try and fix the dollar at its current level. Markets are the best way to determine exchange rates, and on a trade-weighted basis it is far from clear that the dollar has overshot its fair value. But what intervention might do is slow the decline, by putting fear in the minds of momentum investors who are selling short on margin.</blockquote><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-5602827168152398299?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-42589185911105128002008-01-20T18:27:00.001-08:002008-01-20T18:29:11.902-08:00<div style="float: right; margin-left: 10px; margin-bottom: 10px;"> <a href="http://www.flickr.com/photos/mortazavi/2206809508/" title="photo sharing"><img src="http://farm3.static.flickr.com/2257/2206809508_be000654af_m.jpg" alt="" style="border: 2px solid rgb(0, 0, 0);" /></a><br /><span style="margin-top: 0px;font-size:0;" > <a href="http://www.flickr.com/photos/mortazavi/2206809508/">Tehran Metro (2005)</a> <br /> Originally uploaded by <a href="http://www.flickr.com/people/mortazavi/">M.Mortazavi</a> </span></div>Social stability comes about when society organizes itself to reduce all kinds of transaction costs.<br /><br />In modern, large cities, transportation cost contributes, perhaps more than many other specific costs, to transaction costs.<br /><br />Many transactions require people to be brought together or brought to specific locations.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-4258918591110512800?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-65685570559857709132008-01-20T18:20:00.001-08:002008-01-20T18:21:33.545-08:00<div style="float: right; margin-left: 10px; margin-bottom: 10px;"> <a href="http://www.flickr.com/photos/mortazavi/2206005661/" title="photo sharing"><img src="http://farm3.static.flickr.com/2217/2206005661_c18530c029_m.jpg" alt="" style="border: 2px solid rgb(0, 0, 0);" /></a><br /><span style="margin-top: 0px;font-size:0;" > <a href="http://www.flickr.com/photos/mortazavi/2206005661/">Tehran Bazar (2005)</a> <br /> Originally uploaded by <a href="http://www.flickr.com/people/mortazavi/">M.Mortazavi</a> </span></div>Some look.<br /><br />But Some will always buy.<br /><br />And that will be enough.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-6568557055985770913?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-22408495893056443872008-01-20T17:51:00.001-08:002008-01-20T17:51:51.478-08:00<div style="float: right; margin-left: 10px; margin-bottom: 10px;"> <a href="http://www.flickr.com/photos/mortazavi/2206814178/" title="photo sharing"><img src="http://farm3.static.flickr.com/2167/2206814178_d16e4285bc_m.jpg" alt="" style="border: solid 2px #000000;" /></a> <br /> <span style="font-size: 0.9em; margin-top: 0px;"> <a href="http://www.flickr.com/photos/mortazavi/2206814178/">Friday Bazar, Tehran (2005)</a> <br /> Originally uploaded by <a href="http://www.flickr.com/people/mortazavi/">M.Mortazavi</a> </span></div>He sells watches and waits.<br /><br />The customer looks, and he looks at the customer, and wonders: <br /><br />He is a real one, likely to buy, likely to make a choice.<br /><br />He sells watches when he is free, and then goes back to one of his three or four other jobs.<br clear="all" /><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-2240849589305644387?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-38463067622055930732007-09-17T10:22:00.000-07:002007-09-17T10:26:02.201-07:00This weekend <span style="font-style: italic;">Financial Times</span> carried a picture of people queued to withdraw cash from Northern Rock. Several articles discussed the run on the bank. This morning, <span style="font-style: italic;">The Wall Street Journal</span> <a href="http://online.wsj.com/article/SB119004858354329943.html?mod=djemalert">reports</a> that "British government will guarantee all existing deposits at troubled bank Northern Rock PLC, U.K. Chancellor of the Exchequer Alistair Darling."<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-3846306762205593073?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-84842683324606665532007-08-29T23:56:00.000-07:002007-08-30T00:00:49.636-07:00<a href="http://www.historiasiglo20.org/MEC-BC/2-6-5.htm" target="_blank"><img src="http://www.historiasiglo20.org/MEC-BC/images/medieval_fair.jpg" align="left" border="0" hspace="10" vspace="10" /></a>In the last several months, as the credit crisis has rippled from the U.S. to Europe and back, I'm reminder of other historical examples:<br /><blockquote><p>Princes, abbots, bishops, even the Holy Roman Emperor debased the subsidiary coinage used in daily transactions (but not gold and silver coin of large denominations) by raising the denomination of existing monies, substituting baser for good metal, or reducing its weight, in order to extract more seignorage in the absence of effective tax systems and capital markets--this to prepare for the Thirty Years' War, which broke out in 1618. Debasement was limited at first to one's own territory. It was then found that one could do better by taking bad coins across the border of neighboring principalities and exchanging them for good with ignorant common people, bringing back the good coins and debasing them again. The territorial unit on which the original injury had been inflicted would debase its own coins in defense and turn to other neighbors to make good its losses and build its war chest. More and more mints were established. Debasement accelerated in hyper-fashion until a halt was called after the subsidiary coins became practically worthless, and children played with them in the street, much as recounted in Leo Tolstoy's short story, "Ivan the Fool."<br /></p><p>Charles P. Kindleberger, <a href="http://astore.amazon.com/onthemargins-20/detail/0471389455/105-1048055-2135654"><i>Manias, Panics, and Crashes: A History of Financial Crisis, 4th edition</i></a>, p. 121, John Wiley and Sons, Inc., New York (2000) </p><p> </p></blockquote><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-8484268332460666553?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-88495359612901529652007-08-16T23:13:00.000-07:002007-08-16T23:28:48.283-07:00Hal Weitzman <a href="http://www.ft.com/cms/s/ae4d9aa0-4b5e-11dc-861a-0000779fd2ac.html">reports</a> from New York:<br /><p></p><blockquote><p>Countrywide, the beleaguered mortgage group, prompted an early plunge in stocks by saying it would have to draw on $11.5bn of credit and an official reports showed new homebuilding dropped to a 10-year low while building permits were at an 11-year low in July.</p><p>. . . “While Fed officials are proceeding as if the calamity has yet to occur, it would appear that some in the market believe the calamity is simply yet to be fully appreciated,” said analysts at Interactive Brokers.</p><p>. . . Nerves were not soothed by the Federal Reserve pumping more liquidity into the system on Thursday morning. The New York Fed announced an overnight repurchase agreement worth $12bn and a 14-day repurchase worth $5bn, while signalling that it expected to make similar repurchases on a more regular basis over the coming days.</p><p>. . . An hour before the opening bell, the Commerce Department released a gloomy report on US housing starts, showing that construction of new homes last month dropped to its lowest level in 10 years. The figures underlined the woes that have beset the homebuilding and mortgage sectors in recent weeks.</p></blockquote><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-8849535961290152965?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-11803060620989291812007-08-12T01:25:00.001-07:002007-08-12T01:27:15.223-07:00As of late last week, central banks in the EU, the US, Japan and Canada have begun claiming their mantle as a lender of last resort, <a href="http://www.ft.com/cms/s/3d97cc30-472c-11dc-9096-0000779fd2ac.html" target="_blank">pumping lubricating liquidity into financial markets</a> (at least some $120B of it) to put a break on an impending credit crunch. The coming weeks will reveal more. (John Authers speaks about it <a href="http://video.ft.com/thumblistgrid.aspx?siteId=382440eb-c8f2-410f-b493-73cc4133e240&v=2927&amp;channel=US%20Daily%20View&startPosition=1&amp;bt=NS&bp=MAC&amp;bst=FF&biec=false&amp;format=flash&amp;bitrate=300" target="_blank">here</a>. He calls it "very dangerous times" and speaks of a potential "melt-down" and hopes that this injection of liquidity can push back the tide of "bad news.")<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-1180306062098929181?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-73421482840599701032007-08-04T00:09:00.000-07:002007-08-04T00:17:49.034-07:00With the collapse of the sub-prime mortgage back securities, and the reverberations in other other mortgage back securities, it might be time to sell and buy homes. However, as the prices continue to be high, developing an understanding of California tax laws might be necessary. Some resources follow:<br /><br />1. <a href="http://www.boe.ca.gov/">California Board of Equalization</a><br />2. <a href="http://www.csac.counties.org/default.asp?id=7">California Counties</a> (Counties have detailed property tax break downs and much more.)<br />3. <a href="http://www.boe.ca.gov/proptaxes/assessors.htm">County Assessors</a><br />4. <a href="http://www.ccbsa.net/index.php?option=com_comprofiler&task=usersList&amp;Itemid=50">Clerks to the Board of Supervisors</a><br />5. <a href="http://co.el-dorado.ca.us/countyclerk/other_rec.html">Recorder Clerks' Offices</a><br />6. <a href="http://www.cacttc.org/ttclist.shtml">County Treasurers and Tax Collectors</a><br /><br />Property taxes can be a huge burden when houses are traded at higher and higher prices. Of course property tax collectors like that.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-7342148284059970103?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-22780953683483979492007-07-31T22:38:00.000-07:002007-07-31T23:21:17.438-07:00US Under Secretary of the Treasury Stuart Levey's Don Quixotic efforts <a href="http://www.businessweek.com/globalbiz/content/jul2007/gb20070731_760102.htm?chan=globalbiz_europe+index+page_top+stories">test</a> German economic and financial independence. The threats are becoming somewhat childish, <a href="http://www.businessweek.com/bios/Ralf_Beste.htm">Ralf Beste</a>, <a href="http://www.businessweek.com/bios/Christoph_Pauly.htm">Christoph Pauly</a> and <a href="http://www.businessweek.com/bios/Christian_Reiermann.htm">Christian Reiermann</a> of Spiegel Online report:<br /><blockquote><br />German financial institutions feel the United States government has been engaging in "downright blackmail," according to one banker. Anti-terror officials from the US Treasury are constantly showing up to demand they cut their traditionally good relations with Iran. The underlying threat from the men from Washington is that they wouldn't want to support terrorism, would they?</blockquote>Don Quixotic efforts do not end in the offices of the Treasury but have been taken up by the US Congress at <a href="http://investing.reuters.co.uk/news/articleinvesting.aspx?type=oilRpt&amp;storyID=2007-07-31T165240Z_01_WAT007944_RTRIDST_0_IRAN-CONGRESS-URGENT.XML">408 to 6</a>. It makes one wonder what rationality and reason is guiding US Middle-East policy. It is almost embarrassing to watch all this: <a href="http://www.iht.com/articles/ap/2007/07/31/america/NA-GEN-US-Iran-Sudan.php">Changing the law to protect against its original wisdom</a>.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-2278095368348397949?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-80987078252728710552007-07-29T20:53:00.000-07:002007-07-29T20:54:12.186-07:00Jonathan Schwartz, the chief executive officer of Sun Microsystems Inc., <a href="http://blogs.sun.com/jonathan/entry/truly_fair_disclosure" target="_blank">explains</a> how Sun intends to publish its FY'07 financial results on Monday, July 30. (Note his comments about the use of web for fair disclosure.)<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-8098707825272871055?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-16934058335445407972007-06-27T00:36:00.000-07:002007-06-27T00:41:35.589-07:00Another <span style="font-style: italic;">Financial Times</span>' <a href="http://www.ft.com/cms/s/3666d74e-2279-11dc-ac53-000b5df10621.html">report</a> notes a warning from BIS, <a href="http://www.bis.org/">Bank for International Settlements</a>:<br /><blockquote><p>Interest rates in the world’s leading economies should rise while conditions are good to avert the twin risks of rising inflation and trade imbalances that could destroy the remarkable strength of the world economy, the Bank for International Settlements has warned.</p><p>The central banker’s bank, based in Basel, Switzerland, also says that financial innovation may be dangerous, especially the wider distribution of credit risk using asset-backed securities. “More scepticism might be expressed about some of the purported benefits of having new players, new instruments and new business models,” it says in its annual report.</p></blockquote><p></p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-1693405833544540797?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-13561588146343961342007-06-27T00:30:00.000-07:002007-06-27T00:40:49.026-07:00<span style="font-style: italic;">Financial Times</span>' Ralph Atkins <a href="http://www.ft.com/cms/s/91c6eac2-2335-11dc-9e7e-000b5df10621.html">reports</a> from Frankfurt (<a href="http://www.ecb.int/home/html/index.en.html">home of ECB</a>) that there are now more euors in circulation than dollars.<br /><br /><blockquote>Banknote holdings per person are almost twice as high in the 13-country eurozone as in the US, the study shows, while eurozone citizens typically withdraw 50 per cent more each time they use a cash machine.<br /><p>Net shipments of euro notes to outside the eurozone are declining, says the report. Only 10-15 per cent of euros in circulation are held abroad. About 60 per cent of US dollars in circulation are held overseas.</p><p>One explanation for Europe's cash addiction could be that the use of payment cards is less developed in many eurozone states than in the US. The ECB believes low inflation and interest rates have increased the attraction of holding cash, while euros are available in higher-denomination notes than dollars. Demand for €500 ($674, £337) notes has shown a particular rise.</p><p>Excluding notes held abroad, per capita holdings in the US were worth the equivalent of about €870. For the eurozone, the figure was more than €1,600.</p></blockquote><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-1356158814634396134?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-7226687628247740382007-06-27T00:20:00.000-07:002007-06-27T00:25:43.389-07:00<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://www.economist.com/opinion/displaystory.cfm?story_id=9366299"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 199px; height: 142px;" src="http://www.economist.com/images/20070623/CLD539.gif" alt="" border="0" /></a><br /><br /><span style="font-style: italic;"><br /><br /><br /><br /><br /><br />The Economist</span> knows <a href="http://www.economist.com/opinion/displaystory.cfm?story_id=9366299">the difference</a> between the headline inflation and core consumer price index, and understands the importance of the former as an inflation indicator:<br /><blockquote><p> What the markets blithely ignored was the day's bad news. Headline consumer prices rose by 0.7%, the biggest monthly increase for nearly two years. Unlike core inflation, the headline measure includes fuel costs, which rose sharply, as well as food prices. For bond prices to rise on such a big jump in inflation, markets must be placing a great deal of faith in the core index as the true gauge of price pressures. Is that wise?</p><p><span style="font-weight: bold;">The cold-and-hungry index</span><br /></p> <a name="the_cold-and-hungry_index"></a> <p>The lure of core inflation as a barometer is that headline inflation rates tend to be volatile. Last June the annual headline rate in America, pushed up by soaring oil prices, was as high as 4.3%, but by October it had plunged to 1.3%. The rationale for excluding food and fuel is to filter out prices that jump around for temporary reasons, such as the vagaries of the weather or the messy politics of the Middle East. A good core index excludes this noise, leaving only the enduring part of inflation that reflects the weight of spending in the economy.</p></blockquote><p></p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-722668762824774038?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-21150874903648138192007-06-14T22:19:00.000-07:002007-06-14T22:21:14.767-07:00Despite <a href="http://www.ft.com/cms/s/097bce16-19cc-11dc-99c5-000b5df10621.html" target="_blank">the recent correction</a> to the falling prices and rising yields of U.S. treasuries, I've been wondering how the <a target="_blank" href="http://www.federalreserve.gov/">Federal Reserve</a> might react in the coming months as the bond market remains jittery. The talk to beat inflation was tough when the new chair took his place. However, if money is tightened to reduce inflation, interest rates will have to rise even more, furthering the slump in the housing market already suffering from the recent subprime melt-down. This course of action will lead to serious unhappiness among those owning property. If the Fed decides on merely talking about beating the inflation while letting money loose, interest rates will remain less volatile and inflation will rise but perhaps at a slower rate than would cause a shock. If I were to bet, I would bet that the Fed will choose the latter coure of action. It is the politically "prudent" course although many who earn wages and have little property to own may suffer more than others.<br /><p>From an entirely different perspective ... </p><p> If they fight inflation too hard, interest rates will go higher, more adjustable rate mortgages will go into default, and fewer people will be able to afford a first home. If they don't fight inflation, adjustable rate mortgages do not need to go up too high. Instead, salaries will eventually go higher with inflation (there's always a delay with salaries) ... but this course of action devalues outstanding debt. In other words, those who have given their money into debt will be earning lower, <i>real</i> interest rates (real interest rate = nominal interest rate minus inflation rate) ... </p><p> So, they need to side either with people that owe (mortgages or other debt) and let inflation rise or with those who lend and let interest rates rise. </p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-2115087490364813819?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-45976995734563004072007-06-09T02:43:00.000-07:002007-06-09T03:00:24.042-07:00As 10, 20 and 30 - year treasury prices go down, their yeild goes up, putting upward pressure on interest rates. Thus, <a href="http://www.ft.com/cms/s/2ec27a8a-15ee-11dc-a7ce-000b5df10621.html">reports</a> Krishna Guha of <span style="font-style: italic;">Financial Times</span>:<br /><p></p><blockquote><p>The spectacular sell-off in the US bond market this week is a macroeconomic event not just a financial market event, with consequences for the rate and composition of US growth and the conduct of monetary policy.</p><p>The sharp increase in yields on 10, 20 and 30-year Treasuries will push up mortgage rates and put renewed pressure on a still-weak housing market, with potential spill-over effects on US consumer spending.</p></blockquote><p></p><p>In a second <span style="font-style: italic;">FT</span> <a href="http://www.ft.com/cms/s/5f38749a-161a-11dc-a7ce-000b5df10621.html">report</a>, Richard Beales and Joanna Chung, describe how the rise in yeilds relate to expectations:</p><blockquote>Investors sold bonds heavily on Thursday following growing concerns over rising interest rates and the sustainability of easy credit conditions.</blockquote><p><br /></p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-4597699573456300407?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-7440413417238935632007-06-06T17:53:00.000-07:002007-06-06T17:54:31.704-07:00Coffee ... the world's second most widely sold commodity, after oil .... (<i>Harvard Business Review</i>, October 2006)<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-744041341723893563?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-31776195440246826772007-05-21T22:45:00.000-07:002007-05-21T22:48:11.226-07:00<p><i>Financial Times</i>' Weekend columnist and author of <i>Undercover Economist</i>, Tim Harford, confirms my earlier claim that urban planning with good transportation systems can provide better energy security, where security can also come in the form of being greener. </p><p>I wrote my note <a href="http://economicsigns.blogspot.com/2007/05/security-consequences-of-urban-planning.html" target="_blank">lamenting the lack of energy security and urban planning with adequte public transportation in California</a>, one of the largest economies in the world and one of the poorest places when it comes to good public transportation, and yet one of the places that has the greatest ambition to have cities as green as its environ. The only trouble is that you cannot be green with so many cars and so many roads and so few efficient (and nonexistent) public transportation networks.</p><p>This is what Harford <a target="_blank" href="http://www.ft.com/cms/s/5b3df528-02aa-11dc-a023-000b5df10621.html">writes</a> (<i>FT</i>, May 18, 2007): </p><blockquote><p>The Office for National Statistics reports that Londoners produce much less household waste than anywhere else in the UK. From the same source I learn that London’s households are the most likely to have no cars, and the least likely to have two or more cars. Even before the congestion charge came into force few Londoners commuted by car.</p><p>London’s Mayor’s office informs me that London emits 40 per cent less carbon dioxide a person than the national average - which would be less than half the rate of ”carbon neutral” Ashton Hayes. All this from a city that is hugely dynamic, innovative and, frankly, disgustingly rich.</p><p>It is true that these figures do not include the environmental cost of producing products elsewhere and shipping them to London. That would be a more telling omission if the rest of the country was growing its food in the back garden, but the truth is that most UK citizens fill their houses with products produced elsewhere. They just have bigger houses to fill.</p><p>London, like other big, dense cities, is good for the planet. That fact seems to surprise people. After all, cities are polluted places. </p><p>...London’s environmental performance comes naturally. My in-laws live in the Lake District in a house that is twice as large as mine with half as many occupants; they drive into town to pick up the morning paper. We travel around by bicycle or walk pushing our kids in a baby buggy because a car is impractical. We are enormously greener than they, but not because we’re more virtuous nor because we’re poorer. We’d like a bigger house, but that costs too much in London. A fancy car would be a waste of money because we’d rarely use it. Economic necessity, rather than deeply held principles, compels us to be green.<br /><br /><br /><br /></p></blockquote><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-3177619544024682677?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-30258868045993460352007-05-21T16:24:00.000-07:002007-05-21T16:25:22.128-07:00<table cellspacing="5"><tbody><tr><td> <a href="http://www.myspace.com/ingridmichaelson" target="_blank"><img src="http://a245.ac-images.myspacecdn.com/images01/12/m_9cf77748173807e3631edc7ee0d250cc.jpg" align="bottom" border="0" height="112" hspace="0" vspace="0" width="89" /></a></td><td><p>Internet, as a giant copy and distribution machine, may and should continue to afford artists with greater autonomy well into the future. Reports of musicians' success in using this copy-and-distribution tool continue to pour in.<span style="font-style: italic;"><br /></span></p><p><span style="font-style: italic;"></span>For example, <i>Wall Street Journal</i>'s John Jurgensen writes about how musicians use the Internet to promote their work ("<a target="_blank" href="http://online.wsj.com/article/SB117936722585905760.html?mod=todays_us_marketplace">Singers Bypass Lables for Prime-Time Exposure</a>," May 17, 2007, <i>WSJ</i>, B1). The report focuses on the case of singer and musician <a target="_blank" href="http://www.myspace.com/ingridmichaelson">Ingrid Michaelson</a>, "a 26-year-old Staten Island native who ... was discovered on MySpace by a management company that specializes in finding little-known acts and placing their works in soundtracks for TV shows, commercials, movies and videogames."</p></td></tr></tbody></table> <blockquote> <p class="times">Many shows will only pay unsigned artists about $1,000 for the use of their music on TV, while artists on major labels might garner more than $30,000. Since she has been signed to Secret Road [Music Services, not a label], Ms. Michaelson has been paid up to $15,000 each time her music has been featured on a show or commercial, according to someone familiar with the deals. Secret Road says its cut of Ms. Michaelson's income is in keeping with industry standards of between 15% and 20%.</p><p class="times">TV, of course, has become an increasingly powerful force for driving music sales. Apart from "American Idol" and "Saturday Night Live," possibly the most coveted TV slots for musicians are on "Grey's Anatomy," which has helped make songs like "How to Save a Life" by the Fray into top sellers on iTunes. A finale spot on "Grey's" is considered a particularly plum slot. Last year, the finale allowed Scottish band Snow Patrol to break through to a broad audience and played a role in making its featured song, "Chasing Cars," a hit.</p><p class="times">Because Ms. Michaelson doesn't have a record-label contract, she stands to make substantially more from online sales of her music. For each 99-cent sale on iTunes, Ms. Michaelson grosses 63 cents, compared with perhaps 10 or 15 cents that typical major-label artists receives via their label. So far she has sold about 60,000 copies of her songs on iTunes and other digital stores. Ms. Michaelson is pouring most of her profits into pressing her own CDs and T-shirts, hiring a marketing company to produce promotional podcasts and setting up distribution for her CDS.</p></blockquote> <p> The fact that much good music today is discovered on the Internet before it ever makes it to the labels demonstrates that the labels need to reconsider their full "supply chain" and continue to review their policies and rules governing the protection and distribution of cultural content they come to license ("for a limited time"). </p><p>On the same day as the report above, <i>The Wall Street Journal</i> also reported <a href="http://online.wsj.com/article/SB117932131942204841-search.html?KEYWORDS=Amazon&amp;COLLECTION=wsjie/6month" target="_blank">a significant move</a> away from DRM which indicates the labels are recognizing the role of the Internet as a means to build networks of fans for artists through low-cost copy-and-distribution of content:<br /></p><blockquote><p class="times">EMI Group PLC, the world's third-largest recorded-music company by sales (and the fourth-largest in the U.S. market) announced yesterday it would license its catalog to Amazon's DRM-free service. The three other major music companies haven't said publicly whether they expect to play ball with Amazon, but people close to all three companies said they don't expect to license content to Amazon in the near future. That means consumers shopping for downloads on Amazon will be able to buy tracks from EMI artists like Norah Jones and Coldplay, but are unlikely to be able to find music by most other major artists, including, for instance, each of the top-10 selling albums last week. Another complication: Apple's iTunes is moving toward offering music without copy protection, and also plans to release EMI's catalog in that format.</p></blockquote>Much of the early use of DRM technologies has focused on limiting the power of digital copy and distribution of content.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-3025886804599346035?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-22282384418852410582007-05-15T22:43:00.001-07:002007-05-15T22:43:53.011-07:00<p>It is good to see someone who has a relatively good understanding of Transaction Cost Economics write about the topic of open source software or software in general:<br /></p><blockquote><p>There was a time when a single determined individual could write the core of a single operating system for a primitive computer. But given the demands of computer applications and the capabilities of hardware technology at present, that is no longer conceivable. The task needs to be divided somehow. This immediately raises a ... core political economy question, about coordination of a division of labor within a centralized, hierarchical structure--that is, a firm. Within the firm an authority can make decisions about the division of labor and set up systems that transfer needed information back and forth between the individuals or teams that are working on particular chunks of the project. The boundaries of the firm are determined by make-or-buy decisions that follow from the logic of transaction cost economics. The system manages complexity through formal organization and explicit authority to make decisions within the firm as well as price coordination within markets between firms.</p></blockquote>That's from Steven Weber's <a href="http://www.hup.harvard.edu/catalog/WEBSUC.html" target="_blank"><i>The Success of Open Source</i></a>.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-2228238441885241058?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-69198835929963321412007-05-15T06:45:00.000-07:002007-05-15T06:47:26.163-07:00<p><a target="_blank" href="http://www.economist.com/world/na/displaystory.cfm?story_id=9122549"><img src="http://www.economist.com/images/20070505/CUS975.gif" align="bottom" border="0" height="245" hspace="0" vspace="0" width="212" /></a> </p><p> </p><p>Modern urban planning in the U.S., as it has been conceived and implemented in the urban sprawl since WWII, poses serious security concerns that arise from its economic vulnerabilities. The vulnerabilities are both explicit, in terms of direct transaction costs such as transportation to work, and more implicit, in terms of aggregate and individual worker productivity. Thus, did <i>The Economist</i> ("<a href="http://www.economist.com/world/na/displaystory.cfm?story_id=9122549">In a Jam</a>," May 5, 2007, p. 38) describe the situation in the area where I live:</p><blockquote><p>[The] Bay Area is not set up like a European metropolis. Most suburbanites have quite a drive just to get to an underground station, and must then win a vicious struggle for parking to make it onto a train.<br /></p></blockquote><p>The description fits well with my family's experience here.<br /></p><p>In major American cities, workers have to drive long distances (of the order of 80 - 200 km / day) from home to work and back, and a significant increase in gas prices, without a similar increase in better communications technologies (that allow people to reduce trips to work to compensate for other losses) or a similar increase in energy efficiency of automobiles (at the same unit price) can cause perturbations towards lower growth rates.</p><p>Lack of adequate and efficient public transportation is not limited to major cities. One in eight who live in the U.S. live in California, just as I do. The state by itself has consistently accounted for one of the top 10 largest GDPs in the world for multiple decades, and it drives the U.S. economy with its vast consumption, tax base, farming and real estate, not to mention high technology. And yet, there are no super fast trains connecting any of its major metropolitan areas together: Los Angeles, Orange County, San Francisco Bay Area, Sacramento Valley, etc.<br /></p><br /><p><br />The economic inflexibility of urban sprawl leads not only to higher overall transaction costs throughout the economy but also to instabilities in various sectors. For example, <i>The Wall Street Journal </i>recently <a target="_blank" href="http://online.wsj.com/article/SB117879361118198441.html?mod=todays_us_page_one">reported</a> that 51 leading retail store chains have reported a collective 2.3% decline in same-store sales. Michael Niemira, chief economist of the New York-based <a href="http://www.icsc.org/" target="_blank">International Council of Shopping Centers</a> says this is the weakest showing since he began tracking the closely watched industry measure of performance in 1970. People have blamed this on a soft housing market, bad wheather in March, a fast Easter or fuel prices. Fuel prices and a soft housing market seem to be the most likely explanations for why this drop has been as large as it has been. While the real estate industry benefits from generally cheap gas prices (which lead to better possibilities for greater urban sprawl) and may be willing to go to war for it (observe how the representatives of American economic power offered almost universal support, in 2002-2003, for aggression against and occupation of Iraq), the spending for war might come back to bite the real-estate and other industries in the form of rampant deficits and inflation, higher interest rates, higher fuel prices and <a href="http://blogs.sun.com/MortazaviBlog/entry/asset_attrition_in_protracted_wars" target="_blank">general asset attrition</a>. One would expect that the economic elites and political leaders of a super power to comprehend that peace, justice, stability and truly open commerce (of course, not in commerce of aggressive war machinary) remain the solid base and the best guarantors of mutual understanding and development, economic vitality and growth. However, "stability" is often confused with the extension of imperial rule. In the meantime, a rampant political jargon and an infected moral language equates mass aggression with liberation, injustice with natural rights, murder with "collatoral damange," etc. Such infection of moral language, publicly spread, will always fog people's minds and provide a kind of self-belief among the elites to perpetuate the rule of what becomes a militaristic economy unashamedly pursuing its ends until it exhausts all resources at its disposal (and reaches its own end) at a huge toll in human life and well-being.</p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-6919883592996332141?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-48011476538038529022007-04-19T14:52:00.000-07:002007-04-19T15:03:34.881-07:00Lawrence Summers <a href="http://blogs.ft.com/wolfforum/2007/03/as_america_falt.html">wonders</a> whether the global economy can rely on the U.S. as the importer of last resort:<br /><blockquote><br />It is clear though that the global economy has been relying on the US as an importer of last resort; that the US economy has been relying on the consumer for its primary impetus; and that until now consumers have been encouraged to spend their incomes fully or more than fully by being able to access the wealth in their homes.</blockquote><p><br />Summers notes that the U.S. imports 70% more than it exports.<br /><br /></p><p></p><blockquote><p>But the growth syllogism is now in doubt. Recent developments in the subprime sector exacerbate housing’s brake on US economic growth. Foreclosures will bloat the supply overhang of houses. At the same time reductions in capital in the housing finance sector and more rigorous credit standards will reduce the demand for new homes.<br /><br /></p> <p>Even as these developments reduce housing prices and the construction of new houses, housing finance problems are likely to magnify wealth effects on consumption as consumers face upward resets on their mortgage rates and are unable to refinance as they had planned, and as home equity, car and credit card lending conditions tighten.<br /><br /></p> <p>If consumer spending declines and interest rates fall or appear likely to fall, there is the real possibility that the foreign lending to the US that has financed imports far in excess of exports will start to dry up, leading to a combination of higher long-term interest rates and a weaker dollar. This would tend to raise inflationary pressures, transmit US weakness to the rest of the world and could, by discouraging foreign demand for US assets, lead to further downward pressure on investment in plant, equipment and commercial real estate. </p></blockquote><p></p><p>I wrote about <a href="http://economicsigns.blogspot.com/2007/03/asset-attrition-in-protracted-war.html">asset attrition</a> earlier, and this is another example of it.<br /></p><p>The financial problems, which Summers relates to attrition in assets' financial value, and the real asset attrition, about which I wrote earlier, are related like the chicken and the egg!<br /></p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-4801147653803852902?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-24129452429676106022007-04-19T14:38:00.000-07:002007-04-19T14:47:02.090-07:00<span style="font-style: italic;">Financial Times</span>' Chris Giles and Eoin Callan write about <a href="http://www.ft.com/cms/s/66614a84-ed1c-11db-9520-000b5df10621.html">the recent rise is the pound due to UK interest rate expectations</a>:<br /><br /><blockquote>Richard Jeffrey, an economist at Ingenious Media, saw the trend towards rising prices as a return to normality after a period where Britain was more-or-less alone in experiencing sharply falling goods prices on the high street alongside normal levels of overall inflation.<br /><br /><p>Interest rate expectations jumped and a May rate rise is now considered a certainty. “People have to get used to higher interest rates than we have seen for much of this decade. I am not sure that house-buyers are taking that into account yet,” said Martin Weale of the British National Institute of Economics and Social Research.</p></blockquote><p></p><p><br /></p><p>Currency traders anticipate higher pound prices as inflation grows giving rise to an expectation for a rise in interest rates, which will draw currency exchanges into the pound.<br /></p><p>Matters exacerbate when the U.S. economy slows down but the European economies don't. Inflation rate in the U.S. slows while it speeds in Europe. This forces interest rate expectations in opposing directions in Europe and in the U.S. causing the currency rate swing we have seen recently.<br /></p><blockquote><p>Alan Ruskin, a currency strategist at RBS, said: “What we are seeing is those investors chasing risk moving to higher yielding currencies. These numbers reinforce an existing trend.</p><p><br /></p><p>“There had been persistent fears about inflation boxing in the Fed and making it difficult to respond to a slowdown in growth. Now the Fed is less boxed in.”</p><p><br /></p><p>The Fed still views inflation as a slightly greater threat to the US economy than the uncertain outlook for growth but investors sold dollars on the basis that the inflation slowdown made the Fed more likely to keep interest rates on hold and could give the central bank slightly greater flexibility to consider easing monetary policy in future.</p><p><br /></p><p>US government debt prices rallied as investors priced in a lower likelihood of US rate cuts, sending the yield on the benchmark 10-year note down to 4.71 per cent from 4.74 per cent.</p><p><br /></p><p>London experienced the opposite trends in bond markets, again contrasting the current accelerating economic expansion in Europe with the slowing US economy.</p></blockquote><p></p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-2412945242967610602?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-76968600884502752142007-04-19T00:43:00.000-07:002007-04-19T00:50:46.276-07:00<span style="font-style: italic;">Financial Times</span> reports of websites that support people who want to sell their property without the involvement of an agent ("<a href="http://www.ft.com/cms/s/8a7f391e-39a6-11db-90bb-0000779e2340.html">Websites log on to the power of private sales</a>").<br /><blockquote>Large numbers of property sellers are abandoning the traditional services provided by estate agents and marketing their homes directly to house hunters via a growing number of private websites.<br /></blockquote>Examples are periodproperty.co.uk and barnsetc.com, and "Flatshare has launched a portal dedicated exclusively to direct property sales, propertiesdirect.com, which has private property listings from a range of websites." The report notes that<br /><blockquote>Some of the biggest names for private property sales include House Web, House Ladder, The Little House Company and ClickSell and new providers are entering the market all the time.</blockquote>While the market is crowded, these sites have about a 100 fold less listings and they have trouble placing ads to draw customers.<br /><blockquote>These “buy from owner” sites have been banned from advertising on propertyfinder.com, one of the main property portals, as it claimed their presence was damaging advertising revenue from estate agents. Rightmove.co.uk also only accepts listings from estate agents.<br /></blockquote><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-7696860088450275214?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-21982616193377081372007-04-11T23:15:00.000-07:002007-04-11T23:17:29.201-07:00David Cay Johnston has <a href="http://astore.amazon.com/onthemargins-20/detail/1591840694/002-1062567-6156834">an ineresting book on the tax system in America</a>.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-2198261619337708137?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-22562414863917267472007-04-11T20:45:00.000-07:002007-04-11T20:47:22.127-07:00Jaclyn Badal of <span style="font-style: italic;">The Wall Street Journal</span> has a story on <a href="http://online.wsj.com/article/SB117502755332550815-search.html?KEYWORDS=Taxes&amp;COLLECTION=wsjie/6month">recognizing mutual funds for tax efficiencies</a>. She concludes her story in this way:<br /><blockquote><p class="times">Good indicators of a tax-efficient fund strategy are low annual turnover -- below about 30% -- and a potential capital-gains exposure, or the percent of a fund's assets that represent gains, of less than 25%. Both figures can be found for free at Morningstar.com.</p> <p class="times">Note that some funds' after-tax returns may be attractive partly because they have used losses harvested during the bear market of 2000-2002. Funds have up to eight years to use past losses to reduce capital gains. Morningstar factors relevant past losses into its calculation of capital-gains exposure.</p></blockquote><p class="times"></p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-2256241486391726747?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-81508548201393564162007-04-11T20:41:00.000-07:002007-04-11T20:43:55.720-07:00<span style="font-style: italic;">The Wall Street Journal</span> has published <a href="http://online.wsj.com/article/SB117457951316745595-search.html?KEYWORDS=Taxes&amp;COLLECTION=wsjie/6month">a list of readings on annuities</a>. The comments in the list are by Dr. Moshe A. Milevsky, a finance professor at York University in Toronto:<br /><br /><b></b><blockquote><b>"Getting Started in Annuities,"</b> <i>By Gordon K. Williamson</i><br />If you're a beginner, a good (if somewhat dated) introductory book on the different types of annuities. For those who are hesitant to purchase anything with the word "dummy" in the title.<span style="font-size:180%;"><br /><br /></span> <span class="p12">•</span> <b>"The Annuity Handbook,"</b> <i>By Darlene K. Chandler</i><br /><b>"The Variable Annuity Handbook,"</b> <i>By Gary H. Snouffer</i><br />Both published by National Underwriter Co. Good sources of information, specifically on variable annuities, with detailed explanation of products and terminology written by sunny and optimistic industry insiders.<span style="font-size:180%;"><br /><br /></span> <span class="p12">•</span> <b>"Investing with Variable Annuities,"</b> <i>By John P. Huggard</i><br />Focused specifically on the tax aspects of buying variable annuities versus mutual funds, this book—written by a practicing attorney—provides a long list of debatable reasons for saving and investing only in variable annuities.<span style="font-size:180%;"><br /><br /></span> <span class="p12">•</span> <b>"Equity-Indexed Annuities: The Smart Consumer's Guide,"</b> <i>By Jay Adkisson</i><br />A brief (92 pages) introduction to this important subcategory of fixed annuities, in which the author tries to bring clarity to the genre and echo his warnings to the novice.<span style="font-size:180%;"><br /><br /></span> <span class="p12">•</span> <b>"Guaranteed Income for Life: How Variable Annuities can Cut Your Taxes, Pay You Every Year of Your Life, and Bring You Financial Peace of Mind,"</b> <i>By Michael F. Lane</i><br />A dated but still readable book that explains with personal case studies and examples how variable annuities can be used to create a sustainable, predictable and tax-efficient retirement income.<span style="font-size:180%;"><br /><br /></span> <span class="p12">•</span> <b>"The Handbook of Variable Income Annuities,"</b> <i>By Jeffrey K. Dellinger</i><br />An encyclopedia of detail on the actuarial and insurance minutiae of variable income annuities, from reserving requirements to asset-allocation dynamics.<span style="font-size:180%;"><br /><br /></span> <span class="p12">•</span> <b>"Retirement Income Redesigned: Master Plans for Distribution,"</b> <i>Edited by Harold Evensky and Deena B. Katz</i><br />A collection of independent articles by well-known authors and practitioners in the field, many of which provide the intellectual foundation on how to integrate and use - or ways to avoid - annuity income at retirement.<span style="font-size:180%;"><br /><br /></span> <span class="p12">•</span> <b>Securities and Exchange Commission,</b> <a class="times" href="http://www.sec.gov/investor/pubs/varannty.htm">sec.gov/investor/pubs/varannty.htm</a><br />Important consumer information on what to look out for when buying variable annuities.<span style="font-size:180%;"><br /><br /></span> <span class="p12">•</span> <b>National Association of Variable Annuities,</b> <a class="times" href="http://www.navanet.org/">navanet.org,</a><br /><a class="times" href="http://www.retireonyourterms.com/">retireonyourterms.com</a><br />These industry sites provide educational material.<span style="font-size:180%;"><br /><br /></span> <span class="p12">•</span> <b>Insurance Information Institute,</b> <a class="times" href="http://www.iii.org/individuals/annuities">iii.org/individuals/annuities</a><br />Information on all aspects of the insurance industry, including annuities.<span style="font-size:180%;"><br /><br /></span> <span class="p12">•</span> <b>ImmediateAnnuities.com,</b> <a class="times" href="http://www.immediateannuities.com/">immediateannuities.com</a><br />A source of product and industry information for individuals considering purchasing income annuities. A simple calculator allows the user to estimate income he or she may receive from such a product.<span style="font-size:180%;"><br /><br /></span> <span class="p12">•</span> <b>Annuity Nexus,</b> <a class="times" href="http://www.annuitynexus.com/">annuitynexus.com</a><br />Tracks the trends and statistics for the fixed annuity market and offers various educational articles about the product.<span style="font-size:180%;"><br /><br /></span> <span class="p12">•</span> <b>Advantage Compendium,</b> <a class="times" href="http://www.indexannuity.org/">indexannuity.org</a><br />Offers educational and sales-trend information, as well as an overview of currently offered rates for index annuities.<span style="font-size:180%;"><br /><br /></span> <span class="p12">•</span> <b>National Association for Fixed Annuities,</b> <a class="times" href="http://www.nafa.us/">nafa.us</a><br />An industry site that offers educational resources for agents as well as customers.<br /></blockquote><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-8150854820139356416?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-73332223909514553272007-04-10T22:38:00.000-07:002007-04-10T22:39:29.709-07:00English may be <a href="http://www.iht.com/articles/2007/04/10/europe/engbiz.php" target="_blank">the language of business today</a> but many know that there are no guarantees it will remain the language of business tomorrow. In fact, more business was conducted among nations (per capita) prior to World War I, when there was no uniform business language, than around the late 1990s, at the height of the .com boom and when English was the <i>lingua franca</i> of business. (See <a href="http://www.economics.harvard.edu/faculty/barro/barro.html" target="_blank">Robert Barro</a>'s <a href="http://astore.amazon.com/onthemargins-20/detail/0262522268/002-1062567-6156834" target="_blank"><i>Getting It Right: Markets and Choices in a Free Society</i></a>.)<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-7333222390951455327?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-16780260894738863372007-04-10T07:50:00.000-07:002007-04-10T07:53:30.834-07:00<div style="text-align: right;"><span style="font-style: italic;">Note: A friend just forwarded this message.</span><br /></div><p><br /></p><p style="font-weight: bold;">Hang Up on War: Get a Tax Refund</p> <p><b>By <a title="View all stories by Amy Goodman" href="http://www.alternet.org/authors/5721/" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)">Amy Goodman</a>, <a href="http://www.kingfeatures.com/" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)"> King Features Syndicate</a>.<br /></b></p><p><b>Posted <a title="View all stories published on April 5, 2007" href="http://www.alternet.org/ts/archives/?date%5BF%5D=04&date%5BY%5D=2007&amp;amp;amp;date%5Bd%5D=05&amp;act=Go/" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)"> April 5, 2007</a>.</b></p><br /><div>If you are upset that Congress won't defund the war in Iraq, there's something you can do: Take the IRS up on its offer for a war tax refund.<br /></div> <p>If you are upset that Congress won't defund the war in Iraq, there's something you can do: Stop paying a tax. Legally.</p> <p>The Internal Revenue Service is giving a rebate this year on a telephone war tax. This is one of those line items at the bottom of your phone bill. The tax was instituted in 1898 to help the United States pay for the Spanish-American War. Individuals and businesses have one chance to obtain a refund on this telephone war tax, by asking for it in their 2006 income tax returns. </p> <p>Remarkably, the Internal Revenue Service has made it easy to request the refund, yet IRS Commissioner Mark Everson says that many taxpayers are overlooking it. Obtaining the refund is easy. But first, a little history. </p> <p>The Spanish-American War lasted from April to August of 1898 and was predicated on a U.S. government demand that Spain abandon its colony in Cuba, which the U.S. subsequently occupied. By the end of 1898, the United States had also taken over the Philippines, Guam and Puerto Rico. </p> <p>The war was also used as an official pretext to take over Hawaii. The Senate debated over the annexation in secret, some arguing for total annexation, others for just Pearl Harbor. Sen. Richard Pettigrew of South Dakota derided the annexation plan as money "thrown away in the interest of a few sugar planters and adventurers in Hawaii." Military bases and raw materials -- sound familiar? </p> <p>The telephone tax was instituted as part of the War Revenue Bill, which expanded the government's ability to collect taxes, ostensibly to pay for the war. As with the myriad controversial "pork" items added to the recent Iraq war funding authorization, the 1898 bill was the subject of scores of amendments that benefited big business. These included tax breaks for powerful industries like the insurance companies and tobacco dealers. </p> <p>The telephone tax of 1 cent per call targeted the wealthy, who were generally the only ones who had telephone access in 1898. After the war, the tax was eventually raised to 3 percent. Since the Vietnam War, it has been the target of war tax resisters, people who refuse to pay taxes because they do not want to fund war. </p> <p>Tax resistance has a long history. Henry David Thoreau promoted it in his essay "Civil Disobedience" to fight slavery: "If a thousand men were not to pay their tax bills this year, that would not be a violent and bloody measure, as it would be to pay them, and enable the State to commit violence and shed innocent blood." </p> <p>The IRS has vigorously targeted full-fledged tax resisters -- ranging from those refusing to pay the Pentagon's percentage of their taxes, to those who outright refuse to pay anything to the government -- making an example of them by garnishing wages, sending them to prison for tax evasion and confiscating their homes. </p> <p>Tax resisters figured out that they could protest the telephone tax simply by writing their checks to the phone company, withholding the amount of the tax. The IRS deemed the collection of the tax too expensive, relative to the small amount of the tax itself. </p> <p>According to the National War Tax Resistance Coordinating Committee, early collection efforts by the IRS included the auctioning of Jim Glock's bicycle for $22 in 1973 and of George and Lillian Willoughby's VW Bug in 1971 for $123 (in 2004, Lillian, at 89, with the support of her husband, George, 94, was jailed for protesting the Iraq war). </p> <p>Court losses convinced the IRS to dump the telephone war tax in 2006 and to offer the retroactive rebate for phone taxes paid between March 1, 2003, and July 31, 2006. Typical refunds will be between $30 and $60. Ironically, while the IRS has dropped the tax on long-distance and "bundled" services, like high-speed Internet, the tax remains for older, standard local phone services and rental of equipment that enables the disabled to use phones. </p> <p>Thus, this tax on the rich is now a tax on the poor. Congressman John Lewis, D-Ga., has submitted a bill to permanently wipe this remnant clean. Two-thirds of the bill's co-sponsors are anti-tax Republicans, so Democrats might be leery about passing it. </p> <p><strong>The website, <a href="http://www.refundsforgood.org/" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)">www.refundsforgood.org</a>, lists step-by-step instructions on how to recoup the telephone tax rebate, and recommends donating it to charity. </strong></p> <p>While Congress and President Bush trade barbs over war funding, with a simple check mark on your tax return you can help to defund the war. Claim your telephone tax rebate. Let the Pentagon hold a bake sale. </p> <p><i>Amy Goodman is the host of the nationally syndicated radio news program, Democracy Now!</i></p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-1678026089473886337?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-84116913171481485192007-04-09T11:21:00.000-07:002007-04-09T11:24:29.074-07:00In his <a href="http://online.wsj.com/article/SB117607198647163481.html?mod=djemITP">letter</a> ("Importing Inflation," <span style="font-style: italic;">WSJ</span>, April 9, 2007; Page A11) in response to the <span style="font-style: italic;">Wall Street Journal</span> opinion piece, "The New Inflation Equation," by Richard W. Fisher and W. Michael Cox (editorial page, April 6), Tom Willoughby, a reader from Columbus, Ohio, observes:<br /><br /><blockquote>The writers appear to omit the importance of exchange rate: "A country that consumes only imports will find inflation responds to foreign GDP growth alone." Countries with negative export/import balances eventually see their currency decline, resulting in domestic price increases, or inflation, for imported goods and services. We have not felt much of the impact of this because capital flows have counterbalanced the flow of goods temporarily boosting the dollar. In, time, if the imbalance remains, we will import inflation as our currency declines.</blockquote><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-8411691317148148519?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-33660375573090701592007-04-07T00:31:00.000-07:002007-04-07T00:33:26.736-07:00<p>Lots of people have said lots of things about open source communities. </p><p>Among the books I have seen on shelves and articles in books and online, I've been wanting to read Steven Weber's 2004 book <i>The Success of Open Source</i> but time has never allowed.<br /></p><p>Finally, I've been able to start and finish the first 15 pages of Weber's book, and I can tell you that it has all the right elements and sources for its analysis of the political economy of open source communities. Mancur Olson's work, transaction cost economists', Chester Barnard's and others' are weaved together beautifully in those pages. </p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-3366037557309070159?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-91617595512164487012007-03-26T17:08:00.000-07:002007-03-26T17:10:43.853-07:00<span style="font-style:italic;">Financial Times</span> <a href="http://www.ft.com/cms/s/7e25f36c-db7f-11db-9233-000b5df10621.html">reports</a> that Citigroup has made significant savings, moving from silos to centralized computing:<br /><blockquote><br />The group has tended to operate as a collection of “silos” without focusing on the opportunities to share costs, he argues.<br /><br />However, significant savings have been made in recent years.<br /><br />The introduction of central computerised purchasing is saving more than $500m a year and rationalisation of information technology is expected to yield about $2bn a year.<br /><br />Mr Prince has made clear he is expecting Mr Druskin to come up with big structural savings rather than more trimming.<br /><br />“We’re not looking for him to squeeze the rock in terms of magazine subscriptions or black cars,” he told analysts in December. </blockquote><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-9161759551216448701?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-71985104984413021572007-03-23T23:53:00.000-07:002007-03-23T23:55:51.329-07:00Fuel prices have been amazingly low in Iran, at around 8 cents a liter for the last 4 years.<br /><br />Now, <span style="font-style: italic;">Financial Times</span> 's <a href="http://www.ft.com/cms/s/39fa52fc-cd81-11db-839d-000b5df10621.html">Gareth Smyth reports</a> that<br /><br /><blockquote>Parliament decided on Wednesday to limit annual petrol subsidies to $2.5bn, and Iranian news wires have reported the new rationed price will be 100 tomans (11 cents) a litre, with extra fuel sold at a higher price. <p>Deputies left the government to decide by April 20 on ration quantity, the price of un-rationed petrol, and the method of rationing, likely to be the use of ‘smart cards’. </p></blockquote><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-7198510498441302157?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-38194132875307962022007-03-03T23:20:00.000-08:002007-03-03T23:21:38.073-08:00<p>When aggressive wars are waged with the purpose of acquiring resources (geopolitical bases, currency values, people, mines, energy resources, transportation resources, land, etc.), besides the moral bankruptcy of such a behaviour, the utilitarian calculation that takes the aggressor into war also stems from the "positive" consumptive impact on its economy. The "positive" nature of the impact shows up in the hope of the application and execution of war in a short time scale in order to solve a specific problem in a specific economic cycle. The impact of war spending on the cycle will always prove more dramatic than any long-term investment, whose impact will be faced and felt in a term longer than of interest to the executioners of "national interest."<br /></p><p>However, matters of war and peace and life and death, have always proved to be more complex than what simple utilitarian calculations tend to reveal.<br /></p><p>Despites rosy predictions and enthusiastic promises pundits of the war party give, the aggressive war itself drags on when it faces resistance, which it often does. Note that historians have found it odd and unusual when an aggressive war has encountered no resistance. While the planners of aggression always do what they can to dismantle resistance, the aggressor should always bet on encountering resistance to its aggression. (Even little Melos <a target="_blank" href="http://www.wellesley.edu/ClassicalStudies/CLCV102/Thucydides--MelianDialogue.html">resisted</a> the Athenian armada.) Occasionally, the aggressor perpetrates extreme violence in order to prove resistance futile. As a consequence, those who resist fold temporarily but only as a means to survive for a better day.<br /></p><p>So, as a historical experience, all aggressive wars in history have bred resistance in various forms, scales and stages. Often the aggressor is quite well-versed in history and knows this fact of history full well. So, the aggressor takes care only to attack those who cannot be expected to defend themselves or only targets which have been "softened" through years of brutal but calculated preparation. Of course, not always do such preparations and campaigns succeed. History is littered with their failures more than with their successes. However, the successes occur with enough frequency to salivate the aggressor's appetite.<br /></p><p>With the stretching of the war beyond expected scope, larger chunks of hard-to-renew resources continue to be wasted on it. Even as such wasteful spending may be advocated to drive further consumption, in reality, it generates no added value to supplement existing asset values. Hence, a general asset attrition sets in, and by extension, inflation takes hold, and soft and hard landings beset various asset-based sectors of the economy. Note that all sectors of the economy ultimately prove to be asset-based if we are daring enough to include, also, non-physical assets in our utilitarian calculations. We can think of various types of assets -- for example, national currency value (determining the value of various forms of savings and investments), stock values, real-estate values, expertise, know-how, skills and knowledge -- these are all assets, the latter few examples of which, by themselves, are non-physical assets even if they may have physical representations. Note that the most important assets are the human beings. This makes a mockery of aggressive war as one waged "for the hearts and minds" of the targets of aggression.<br /></p><p>As war drags on, a grinding attrition grips all national assets. Resources that should have been invested to improve such assets are wasted, and the negative long-term economic impact draws itself near. (I refer the reader to a note <a target="_blank" href="http://economicsigns.blogspot.com/2007/02/cost-of-war.html">elsewhere</a> which extracts one of <a target="_blank" href="http://nobelprize.org/nobel_prizes/economics/laureates/2001/stiglitz-autobio.html">Nobel Prize economist Joseph Stiglitz</a>' relevant observations on the cost of war.)<br /></p>In conclusion, we should note that asset attrition has a multiplicative effect at a macroeconomic level. The value of assets deployed in a <i>value network</i> depend on the value of other asssets. So, as a particular group of assets lose value due to a lack of proper and long-term investment, they depress value of other, related assets.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-3819413287530796202?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-86646706141222217162007-02-28T18:37:00.000-08:002007-02-28T18:40:09.433-08:00<a href="http://www.ft.com/cms/s/7898b51a-c66c-11db-be1a-000b5df10621.html">Financial Times reports sluggishness in durable goods orders in the U.S.:</a><br /><blockquote><p>The thin order books also prompted Wall Street economists to revisit their forecasts for growth for the first quarter, following already severely reduced expectations for growth last quarter.</p><p>Haseeb Ahmed, an economist at JPMorgan, said: “The weakness in orders points to softness ahead for manufacturing and sluggish capital spending. The weakness was broad-based and points to clear risk to our forecasts.”</p><p>The fall in orders was led by big drops in demand in volatile sectors such as aircraft, which fell 59 per cent. </p><p>Demand for capital goods excluding defence and aircraft orders fell 6 per cent, while orders for motor vehicles and parts dropped 5.1 per cent. However, there were signs of renewed vigour among American consumers, who defied expectations and saw increased confidence this month, according to a private survey by the Conference Board.</p><p>There were signs of tentative stability in the housing market as sales of existing homes rose by 3 per cent last month, the biggest rise in two years.</p><br /></blockquote><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-8664670614122221716?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-34979257278748779042007-02-18T20:00:00.000-08:002007-02-19T00:10:55.922-08:00Gretchen Morgenson has written a rather complete <a href="http://www.iht.com/articles/2007/02/18/yourmoney/morgenson.php">story about the growing failures in the subprime debt obligation market</a>.<br /><br /><blockquote>In the last three years, for example, big banks and brokerage firms almost doubled the amount of residential loans they issued, going to $1.1 trillion last year from $586 billion in 2003.<br /><br />Many of these loans have been packaged into collateralized debt obligations and sold to pension funds, hedge funds, banks and insurance companies. For example, 81 percent of the $249 billion in collateralized debt obligation pools in 2005 consisted of residential mortgage products.<br /><br />...Mortgage-related activities at the major firms generate an estimated 15 percent of total fixed-income revenue, according to Brad Hintz, an analyst at Sanford Bernstein.<br /><br />...UBS said that 76 percent of adjustable-rate interest- only loans written in 2006 had low documentation, while 57 percent had loan-to-value ratios greater than 80 percent. No surprise, then, that 3.16 percent of these loans are already delinquent by two months or more.</blockquote><p></p><p>The exposure to these debt obligations is quite widespread.<br /></p><p>In her article, published in <span style="font-style: italic;">International Herald Tribune</span>, Morgenson wonders why the "wreckage" in the subprime segment has not rattled capital markets more than one might expect. While <a href="http://www.moodys.com/cust/default.asp">Moody's Investors Service</a> has downgraded only 1 to 2 percent of subprime loans issued from 2001 to 2006, it now appears that more mortgage back securities will be downgraded.</p><p></p><blockquote>Relying on rating agencies to analyze the risk in collateralized debt obligations may be unwise, however. Back in May 2005, Alan Greenspan noted the complexity of collateralized debt obligations and the challenges they pose to "even the most sophisticated market participants." He warned investors not to rely solely on rating agencies to identify the risks in these securities.</blockquote><p></p><p>Morgenson concludes with an ominous paragraph:</p><p></p><blockquote>So far, the pain from subprime defaults has been muted. Market participants are cheered that lenders are finally tightening their loan standards, albeit a bit late. Unfortunately, the damage of the mortgage mania has been done and its effects will be felt. It is only a matter of when.</blockquote><p></p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-3497925727874877904?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-2464948068117015862007-02-16T17:45:00.000-08:002007-02-16T17:46:09.770-08:00<p><img alt="The image “http://online.wsj.com/public/resources/images/NA-AM116_Banklo_20070214191349.gif” cannot be displayed, because it contains errors." src="http://online.wsj.com/public/resources/images/NA-AM116_Banklo_20070214191349.gif" /></p><p>Not only subprime lenders but also most other lending institutions package and sell their mortgage loans to investment banks who often slice and dice these loan pools to issue mortgage-backed securities of varying risk levels. Occasionally, as HSBC seems to have done with some loans, the bank may keep these loans on its own books. This is a very risky proposition. However as was also the case with subprime loans purchased by HSBC, most investment banks purchasing these loans include repurchase clauses in the mortgage pool contracts. After adding $1.76b to bad debt costs, HSBC has sued some subprime banks who have failed to abide with repurchase clauses. (See "<a href="http://online.wsj.com/article/SB117150090506509262.html?mod=todays_us_page_one" target="_blank">Mortgage Hot Potatoes: Banks Try to Return High-Risk Loans To the Originators</a>," <i>The Wall Street Journal</i>, Thursday, February 15, 2007. page A4.) </p><p>In economics, such repurchase clauses are called transaction "safeguards," which if set correctly, will lead to a better hybrid transaction model. They discourage subprime lenders to take unreasonable risks and put them in a risky position if they do take extreme risks. The investment bank purchasing the loan pool may at any time (coinciding with a trigger, perhaps) want to exercise the repurchase option.</p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-246494806811701586?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-82200595560494769782007-02-11T23:08:00.000-08:002007-02-11T23:26:56.973-08:00You may have wondered why I earlier wrote about <a href="http://economicsigns.blogspot.com/2007/02/optimal-vs-natural-vacancy-and.html">vacancy rates</a>.<br /><br />In macroeconomics, vacancy rates help facilitate micro-transactions that give rise to significant macro-effects. So, unemployment, <a href="http://economicsigns.blogspot.com/2007/02/optimal-vs-natural-vacancy-and.html">as I explained earlier</a>, is a type of vacancy, i.e. each unemployed person represents the vacancy of a person who can be assigned to a job.<br /><br />More recently, what motivated me to write the entry on vacancy rates was a page-one article by Michael Corkery appearing on Monday, February 5, 2007 edition of <span style="font-style: italic;">The Wall Street Journal</span>: "<a href="http://online.wsj.com/article/SB117064480990297820.html?mod=todays_us_page_one">Vacant Homes for Sale Cloud Economic Hope: Data Pointing to Glut Are Worst in Decades; Impact of Speculators</a>". Of course, <span style="font-style: italic;">WSJ</span> followed this article by another on Saturday, giving advice on how to buy foreclosed homes.<br /><br />Corkery's article focuses on the rise in <span style="font-style: italic;">the home owner vacancy rate</span>, a "measure of how many homes for sale in the country are empty," which "has climbed to its highest level since the Census Bureau began tracking it four decades ago." This has occured "even after a 13% decline in new home starts in 2006," writes Corkery. The expected behavior of the speculators proves to be of great significance:<br /><blockquote>Meantime, J.P. Morgan economist Haseeb Ahmed said the overhang of vacant housing stock could erode existing home values as sellers slash prices to move their vacant properties. Economists fear that many vacant homes are owned by speculators who are stuck with investment properties that they can't sell and may be under increasing pressure to drop their prices. "We are concerned that there could be downward pressure on prices for awhile," Mr. Ahmed says ...<br /></blockquote><blockquote><p class="times">What's troubling is that speculators may not act like typical home sellers. When they sell their vacant home in a down market, they don't necessarily purchase another home. By contrast, people selling the homes they live in will most often buy another house -- thus fueling a healthy market of buying and selling.</p> <p class="times">Not surprisingly, buildings with five or more units -- which include condos that were magnets for speculators -- had the highest rate of vacancy. The vacancy rate among these units rose to 11% in the fourth quarter from 7% in the first quarter. For single-family homes, the vacancy rate rose to 2.3% in the fourth quarter from 1.8% in the first quarter.</p></blockquote><p class="times"></p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-8220059556049476978?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-49656380547479032372007-02-09T15:11:00.001-08:002007-02-08T19:40:40.440-08:00<p>There is a similarity (as one thinks of self-silimarity and self-similar transformations in non-linear differential equations) between "vacancy rates" as seen in the world of real-estate economics and "unemployment rates" as seen in the world of macroeconomics.</p><p>This should become clear when we look at <b><i>optimal</i></b> vs. <b><i>natural</i></b> vacancy and unemployment rates. </p><p><i>Optimality</i> can be defined once we know what it is we are optimizing. </p><p><i>Naturality</i> (to coin a word) can be defined when we know what vacancy rates or unemployment rates a particular market's transactions dynamics will create given its parameters of routine operations.<br /></p><p>In a non-monopolistic real-estate market, <i>optimal</i> vacancy rate is 0. All landlords would like to have all of their units rented throughout the year. If tenant X moves out on January 31, the landlord would like tenant Y to start paying rent on February 1. In a monopolistic or oligopolistic market, say in the market for prime office space in San Francisco, optimal vacancy rate might be non-zero. For the monopolist, what matters is an optimal level of profit, not demand satisfaction. Similarly, optimal levels of unemployment are said to occur when Gross Domestic Product (GDP) of an economy is maximized. Of course, the solution to this optimization exercise depends on how we measure GDP. (The general concept also holds at the level of families as socio-economic units. One family may measure their gross domestic product to include things like childcare and nurturning and another may not. Their "optimal" money-driven employment rates will be different.)<br /></p><p>For a given real-estate market, <i>natural</i> vacancy rate occurs in order to support the routine movement and migration of tenants from one site to another. For example, if finding a new property proves slow in a particular real-estate market, that market will have a higher "natural" vacancy rate. Similarly, the natural unemployment rate occurs in order to support the routine movement and migration of workers from one job to the next. </p><p>We can also talk about natural vacancy rate of positions within an organization or a company. There are always some number of unfilled positions due to the natural rate at which they are vacated and filled and the time lag involved in filling a position.<br /></p><p>I should end this entry by noting that in a real economy, there's usually a relationship between all the various kinds of "vacancy" rates (employment, rental-property, etc.) but that relationship has not been the focus of what I've written here.<br /></p><p> </p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-4965638054747903237?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-12573035753513067802007-02-08T17:05:00.000-08:002007-02-08T17:17:53.033-08:00<p>We know about <a target="_blank" href="http://www.sun.com/software/opensource/">Open-Source Software</a> but can we also talk about Open-Source Currencies. A report by <i>International Herald Tribune</i>'s Carter Dougherty reminds us that <a target="_blank" href="http://www.iht.com/articles/2007/02/07/business/currency.php">we can</a>. </p><blockquote><p>Inspired by a long-dead German theoretician, <a target="_blank" href="http://en.wikipedia.org/wiki/Silvio_Gesell">Silvio Gesell</a>, the currencies mine a hoary conflict in economics — usually pitting the mainstream against subversive outsiders — about whether paper money is a neutral medium of exchange whose purchasing power should be scrupulously guarded, or an instrument that could be manipulated to fulfill capitalism's untapped potential.</p></blockquote><p> Dougherty notes that these currencies are encouraged to be used more quickly. For example, "in the case of the chiemgauer, the notes lose 2 percent of their value each quarter if people do not spend them in time." </p><p>Some 21 such currencies exist in Germany. Some 31 more are in preparation and "Gerhard Rösl, <a href="http://econpapers.repec.org/paper/zbwbubdp1/5171.htm" target="_blank">an economist</a> with the University of Applied Sciences in Regensburg, has also located similar experiments in Denmark, Italy, Scotland, Spain and Italy."</p><p>The main effect of these local currencies is an increase in the "velocity of money" in the local economy where they are used. The automatic devaluation rate of the chiemgauer, apparently increases its circulation by a factor of 3 compared to central bank issues used in the same market. The factor will obviously depend on a number of macroeconomic variables.</p><p><u><b>Note:</b></u></p><p> </p><p>By "Open-Source Currencies," I mean currencies that are not sourced from central banks. These are often sourced, openly, from private non-bank or non-profit institutions.</p><p>You may wonder about the words in the title of this blog entry. They all refer to currencies issued by non-bank institutions. </p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-1257303575351306780?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-88303479379289630332007-02-07T23:57:00.000-08:002007-02-08T00:30:46.875-08:00On Monday, February 5, 2007, <span style="font-style: italic;">The Wall Street Journal</span> carried a very interesting article on the President's budget proposal, focusing on its very large military component.<br /><br />The heading of the article ("<a href="http://online.wsj.com/article/SB117064184821097897.html?mod=todays_us_page_one">How War Expense Didn't Strain The Economy</a>") and the graph on the front page seemed to be saying that there was nothing to worry about. They seem to say that the U.S. is spending less, per-capita, on military than before. However, reading the article gives a totally different sense.<br /><br />The subtitle is a bit more subdued ("Foreign Lending; Lessons From LBJ; How Long Will It Last?"), and the story has a rather thorough analysis of macroeconomics of war. There is little wonder here as Greg IP, <span style="font-style: italic;">WSJ</span>'s macroeconomics correspondent contributed to the article written by Deborah Solomon. (To access it online, you'll need a subscription. Personally, I find the paper edition much easier to read. An online subscription also seems to give a much faster download rate of <span style="font-style: italic;">WSJ</span> pages.)<br /><br />The article notes, in one of its early paragraphs, that it is unknown for how long foreigners will finance U.S. budget deficit.<br /><br />Interest rates rose when Lyndon Johnson raised the level of government borrowing to fund the Vietnam War.<br /><blockquote><p class="times">This time, interest rates haven't risen as much, because foreigners, particularly in Asia, are eager to lend to the U.S. economy at fairly low rates. The economy as a whole is a heavy borrower from the rest of the world....</p><p class="times">Mr. Bush's ability to sustain spending and tax cuts depends largely on the willingness of foreigners to continue lending the U.S. money. Mr. [Menzie] Chinn, the economist, says that at some point, global investors will lose their appetite for ever-larger amounts of American debt. That would trigger a decline in value of the U.S. dollar and an increase in interest rates.</p> <p class="times">"So far it's not a problem because foreigners are willing to lend, but you've got to wonder what happens when the rest of the world says, 'We're tired of taking paper that loses value pretty quickly,' " says Mr. Chinn.</p></blockquote><p class="times"></p><br />And, of course, war can bring an economic relief and an infusion.<br /><br /><blockquote>The Bush era upturn in defense and homeland-security spending came not during a 1960s-style boom, but in a lull in the U.S. economy, which had tumbled into recession even before the Sept. 11, 2001, attacks. That meant the economy had plenty of slack to absorb increased government spending without sparking inflation. Lee Price, an economist who until recently was research director at the Economic Policy Institute, a liberal Washington think tank, says defense spending created 1.3 million private-sector jobs between 2001 and 2005 while all other private-sector employment fell by 1.2 million.</blockquote><br />However, such relief is short-term and short-lived, if "lived" at all. After all, a bumb drop, is only a bomb drop and nothing productive comes of it as an economic tool. Hence, Nobel laureate Joseph Stiglitz' prediction.<br /><blockquote><br />Some academic economists are beginning to gauge what the sums spent on Iraq could have financed -- a down payment on a Social Security fix, for instance. Nobel laureate Joseph Stiglitz predicts Iraq will cost at least $1 trillion, assuming troops are withdrawn by 2010. "Half that sum would have put Social Security on a firm grounding for the next 75 years," he wrote last year in a paper. "If we spent even a small fraction of the remainder on education and research, it is likely our economy would be in a far stronger position."</blockquote><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-8830347937928963033?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-58010221176130203532007-02-04T00:11:00.000-08:002007-02-04T00:21:17.403-08:00<a href="http://www.ft.com/cms/s/42990b40-a80d-11db-b448-0000779e2340,dwp_uuid=d8e9ac2a-30dc-11da-ac1b-00000e2511c8.html">Apparently</a>, <a href="http://en.wikipedia.org/wiki/Alexis_de_Tocqueville">Alexis de Tocqueville</a> once observed: “In no other country in the world is the love of property keener or more alert than in the United States.”<br /><br />So, with the housing prices going down, people are scrambling to recover some of their losses and make better with what they have. Some are looking into setting up a <span style="font-style: italic;">qualified personal residence trust</span>, or a QPRT.<br /><br />Here's an example form <a href="http://www.ft.com/cms/s/42990b40-a80d-11db-b448-0000779e2340,dwp_uuid=d8e9ac2a-30dc-11da-ac1b-00000e2511c8.html">a report</a> in <span style="font-style: italic;">Financial Times</span>:<br /><blockquote>Assume, for example, that a second home owned by a grantor aged 65 is worth $500,000 and the IRS’s assumed interest rate is 6 per cent. If the grantor establishes a 10-year QPRT, the total value of his or her retained interest is $287,760. The taxable gift is only $212,240.<p>If the grantor survives the 10-year term and the residence appreciates 4 per cent a year to $740,122, the potential estate tax savings at 50 per cent will be $263,941.</p></blockquote><p>According to the same report "a QPRT makes the most sense when there is a vacation home that a grantor would like to keep in the family."</p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-5801022117613020353?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-643879020297183432007-02-01T18:13:00.000-08:002007-02-01T18:24:57.251-08:00When cost-conscious IT departments evaluate hardware upgrades to support a new OS, they may settle for an alternative OS which can bring new advantage to their hardware platforms. <a href="http://www.infoworld.com/article/07/01/30/HNpeugeotlinux_1.html"><span style="font-weight:bold;">Consider the case of European car manufacturing giant PSA Peugeot Citroën</span></a>. I wrote about it some more below, <a href="http://economicsigns.blogspot.com/2007/02/economics-of-open-source.html">in my previous blog entry</a>.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-64387902029718343?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-32863972717195219572007-02-01T15:46:00.000-08:002007-02-01T15:50:07.638-08:00<a href="http://www.infoworld.com/article/07/01/30/HNpeugeotlinux_1.html">InfoWorld reports</a><blockquote>European car manufacturing giant PSA Peugeot Citroën has agreed to one of the Continent's largest-ever deployments of open-source Linux software on desktop computers.<br /><p>As part of a multiyear contract with Novell, the French company will install Suse Linux Enterprise Desktop on up to 20,000 computers in addition to 2,500 servers, the U.S. software vendor said Tuesday.</p></blockquote> <p> This is an amazing blow to Vista and a great win for Linux.</p><p>Here, we are witnessing the economic impact of Open Source Software in a very real way. Peugeot is no little company. Migration to Vista would carry with it a hardware migration which many find unnecessary for most of their work. This happens when complementary technologies do not move in lockstep. How could day? The very nature of innovation and technological change has many effects that prevent such lock-step movement. So, here, we see how Linux has begun to fill a gap at the centers of industry.<br /></p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-3286397271719521957?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-62237398528162677552007-01-30T23:21:00.000-08:002007-01-30T23:27:22.501-08:00<p>Back in December of 2004, in a weblog entry entitled <a target="_blank" href="http://blog.sun.com/MortazaviBlog/entry/the_basel_accord_and_the">The Basel Accord and the Value at Risk (VaR)</a>, I wrote the following:</p><blockquote><p>While the advance in synthetic financial derivatives have allowed hedging of bets across the board and through the wide range of financial institutions, since these derivatives have also led to greater interlocking and entanglement of all aggregate financial bets across institutions, they may leave the whole system under a larger meta-level risk. The only breathing space left as an influence factor seems to be how the system is connected and interacts with its "edges" such as the emerging economies. In other words, while entanglement of bets has led to greater distribution of risks into a lower overall risk aggregate, the boundaries still determine how stability may "leak."</p></blockquote><p> Now, at the Davos 2007 <a target="_blank" href="http://www.weforum.org/en/index.htm">World Economic Forum</a>, Jean-Claude Trichet, the president of the <a href="http://www.ecb.int/home/html/index.en.html" target="_blank">European Central Bank</a> seems to be moaning the opacity of fancy derivatives and hedge funds who use them. Trichet spoke as part of a session dedicated to <a target="_blank" href="http://www.weforum.org/en/knowledge/Events/KN_SESS_SUMM_18807?url=/en/knowledge/Events/KN_SESS_SUMM_18807">whether central banks could manage global financial risks</a>. As <a target="_blank" href="http://www.ft.com/cms/s/1a94c8be-af15-11db-a446-0000779e2340.html">reported by <em>Financial Times</em> from Davos</a>:</p><blockquote><p>Conditions in global financial markets look potentially “unstable”, suggesting investors need to prepare for a “repricing” of some assets, Jean-Claude Trichet, president of the European Central Bank, said over the weekend in Davos ......<br /></p><p> </p><p>“There is now such creativity of new and very sophisticated financial instruments ... that we don’t know fully where the risks are located.” He added: “We are trying to understand what is going on but it is a big, big challenge.” </p><p>Mr Trichet’s comments reflect a debate in policymaking circles about the implications of the growth in derivatives.<br /></p><p>Many investment bankers and some regulators and economists argued at last week’s World Economic Forum in Davos that the growth of the $450,000bn (€350,000bn, £230,000bn) derivatives sector had helped reduce market volatility and made the system more resilient to shocks by spreading credit risk. But other officials fear these instruments may be raising leverage and risk-taking to dangerous levels and keeping the cost of borrowing artificially low, potentially increasing the chance of financial crises. </p></blockquote><p> I have to say that at least in my 2004 blog entry, I had some conjectures regarding the form of the risks and how they may leak out of the system so tightly bound together in hedges, bets and counter-bets.</p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-6223739852816267755?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-4206161785443919532007-01-28T17:13:00.001-08:002007-01-28T17:13:56.345-08:00<p><br />Chris Giles and Ralph Atkins of <em>Financial Times</em> tell <a href="http://www.ft.com/cms/s/db2451f2-83bf-11db-9e95-0000779e2340.html" target="_blank">the tale of two diverging economies</a>. </p><p>While there are many &quot;good examples of the new European economy: robust, diversified and able<br />to sustain growth without a US motor...anecdotes cannot supply<br />conclusive proof of Europe’s new resilience,&quot; they write. &quot;In recent months, the debate has been fierce, with opinion among<br />economists split roughly equally between optimism and pessimism.&quot; Wild differences seem to be part of the common course when it comes to much of economic opinion. It seems that Europe is finding its own internal growth engines, and having continually improved its infrastructure and expanded on trade with others while paying very little military tax, it has braced itself to weather changes.</p><p>A similar story by Marcus Walker appears on page one of <em>The Wall Street Journal</em> on December 6: &quot;<a href="http://online.wsj.com/article/SB116536805826041835.html?mod=todays_us_page_one" target="_blank">Europe is Giving Global Economy A Surprise Boost Amid U.S. Lull</a>.&quot; </p><p>In the meantime, ties remain and mutual investment between the two economies has dwarfed all others.<br /><br /></p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-420616178544391953?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-1159075914931134712006-09-23T22:28:00.000-07:002006-09-23T22:53:43.596-07:00This Saturday's <span style="font-style: italic;">Financial Times</span> had two very interesting reports.<br /><br />The first, "Make Money, Not War" by Gillian Tett, was <a href="https://registration.ft.com/registration/barrier?referer=http://search.ft.com/searchResults?queryText=Islamic+finance&x=0&amp;y=0&javascriptEnabled=true&amp;location=http%3A//www.ft.com/cms/s/ce615ed6-4aa0-11db-8738-0000779e2340.html">a cover page story on Islamic Finance</a> and about the rise of the Islamic financial instruments <a href="http://www.deutsche-bank.de/presse/en/content/presse_informationen_2004_2509.htm?month=7&dbiquery=1%3AIslamic+Finance">department</a> at the <a href="http://www.db.com/index_e.htm">Deutsche Bank</a>. (Other, shorter and more specific <span style="font-style: italic;">Financial Times</span> stories on the topic of Islamic finance can be found <a href="http://www.ft.com/cms/s/1eb324de-440f-11db-8965-0000779e2340.html">here</a>, <a href="http://www.ft.com/cms/s/da74e3d8-4455-11db-8965-0000779e2340.html">here</a> and <a href="http://www.ft.com/cms/s/acb188e8-2e34-11db-93ad-0000779e2340.html">here</a>.<br /><br />The second, "How Mental Accounts and Oil Prices Can Hit Spending" in the print version and "<a href="http://www.ft.com/cms/s/ebe247e0-4a4b-11db-8738-0000779e2340,dwp_uuid=d8e9ac2a-30dc-11da-ac1b-00000e2511c8.html">Oil, Diapers and the U.S. Economy</a>" in the online version by Vitaliy Katsenelson, was filled with examples of mental accounts (a concept form behavioral economics) by way of exploring how fuel prices will affect retail businesses. The conclusion: diapers will continue to be good business! Perhaps, the enthusiasm of the author could be attributed to the fact that he might have just become a father! We all see things through our own viewpoints and windows.<br /><blockquote>We put different value on money depending on the source of funds. Borrowed money usually carries less weight when it comes to spending decisions than hard-earned cash, though it should carry a higher value since we have to pay interest on it.<br /></blockquote><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-115907591493113471?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-1158816328164261502006-09-20T22:24:00.000-07:002006-09-20T22:25:29.020-07:00U.S. will continue to absorb a quarter of all foreign direct investment over the next five years, <a href="http://www.ft.com/cms/s/07939214-3d45-11db-9b3d-0000779e2340.html">the Financial Times reports</a>.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-115881632816426150?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-1158814725939391222006-09-20T21:57:00.000-07:002006-09-20T21:58:45.946-07:00Chinese government is often accused of not paying attention to environment cost of the country's rapid development.<br /><br />However, as <a href="http://www.ft.com/cms/s/b9b7c57c-3eb3-11db-b4de-0000779e2340.html">a recent <span style="font-style: italic;">Financial Times</span> report</a> shows, China is in fact quite advanced in quantifying the environmental impact of its economic development, when compared to tranditionally more industrial nations. The quantification of the economic impact is quite surprising.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-115881472593939122?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-1157782962276420702006-09-08T23:21:00.000-07:002006-09-08T23:22:42.286-07:00Web 2.0 offers new types of investment opportunities, argues <a href="http://www.ft.com/cms/s/5997bcda-3f47-11db-a37c-0000779e2340,dwp_uuid=d8e9ac2a-30dc-11da-ac1b-00000e2511c8.html">a <span style="font-style: italic;">Financial Times</span> report</a>.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-115778296227642070?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-1156746684677350922006-08-27T23:30:00.000-07:002006-08-27T23:31:24.683-07:00Irving Kellner explores <a href="http://www.marketwatch.com/news/story/story.aspx?guid=%7B9537370A-E74D-4F62-B87D-E974AAA0998F%7D">whether bond market can make up its mind</a> and <a href="http://www.marketwatch.com/news/story/Story.aspx?guid=620336c8-b9c0-4ffe-886f-add5c318540c&siteid=mktw&dist=morenews">what stagflation has in store</a>.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-115674668467735092?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-1156662137617178422006-08-27T00:01:00.000-07:002006-08-27T00:02:17.623-07:00<a href="http://blogs.sun.com/MortazaviBlog/entry/salami_tactics">Here</a>, is an interesting quote form Thomas Schelling, winner of <a href="http://nobelprize.org/nobel_prizes/economics/laureates/2005/">2005 Nobel prize in Economics</a>.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-115666213761717842?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-1154928806092968892006-08-06T22:11:00.000-07:002006-08-07T22:06:19.046-07:00<p><br /></p><center><iframe src="http://rcm.amazon.com/e/cm?t=httpsimpleblo-20&amp;o=1&p=8&amp;l=as1&asins=039332396X&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;fc1=000000&IS2=1&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;lt1=_blank&lc1=0000ff&amp;bc1=000000&bg1=ffffff&amp;f=ifr" style="width: 120px; height: 240px;" marginwidth="0" marginheight="0" frameborder="0" scrolling="no"></iframe></center><br />I've written earlier about <a href="http://blogs.sun.com/roller/page/MortazaviBlog/20050511">how war can be a tempting tool to resolve economic crisis</a> in the short term but with grave long-term consequences.<br /><br /><p><a href="http://blogs.sun.com/roller/page/MortazaviBlog?entry=echoes_back_across_the_atlantic">John Mearsheimer</a>, in his book <span style="font-style: italic;">The Tragedy of Great Power Politics</span>, points out the important relationship between economic and military power.<br /></p><p><font><br />Now, the current war in the Middle East shows another the aspect of war which is closer to what Mearsheimer has noted. War can also be used to set back the economic progress of a potential adversary.<br /></span></p><font><font><font><font> </span></span></span></span><p><font><font><font><font><font><font><font><font><font><font>In its U.S. weekend edition, published on August 6, 2006 but with no significant mention of Hiroshima's anniversary, <span style="font-style: italic;">Financial Times</span> <a href="http://www.ft.com/cms/s/1ab10cc4-23d6-11db-ae89-0000779e2340,dwp_uuid=f98b03ba-4d11-11da-ba44-0000779e2340.html">reports</a>:</span></span></span></span></span></span></span></span></span></span></p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><blockquote><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font>At least 45 large factories have been hit by Israeli air strikes according to a list compiled by Lebanese businessmen. On the list are factories for furniture, medical products, textiles, paper and a milk plant. Procter and Gamble's warehouse in Beirut was bombed, with damage to $20 million of stock.<br /></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font>In total, 95 per cent of industry has ground to a halt, according to the Association of Lebanese Industrialists. Those companies not directly targeted have been halted by the Israeli blockade.<br /></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font>Until fighting broke out last month, Lebanon's economy was on track for its best year in more than a decade. Exports were up over 100 per cent on 2005 and tourism was booming.<br /></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font></span><font></span><font></span></span></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font>...<br /></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font></span><font></span><font></span></span></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font>Annualised growth for the first five months of the year was estimated at 5 per cent.<br /></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font></span><font></span><font></span></span></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font>Economists are now looking at another zero-growth year or worse...<br /></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font></span><font></span><font></span></span></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font>"Israel is taking advantage of the war to destroy what it can of the infrastructure as well as the basic sectors of the infrastructure as well as the basic sectors of economy," said Adnan Kassar, president of the Lebanese Economic Organisation grouping the country's business associations.<br /></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font></span><font></span><font></span></span></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font>"They want to destroy everything--even pick-up trucks loaded with potatoes or watermelons. People on motorcycles have been killed like birds."<br /></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><fo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</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font></span><font></span><font></span></span></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><fo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Lebanese believe that Israel has calculated that businessmen, if they suffer enough, will put pressure on the government to put more effort into neutralising Hizbollah guerrillas.</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></p><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font></span><font><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are the uses of war strategy to knock out economic and power competition.<br /></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-115492880609296889?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-1154305844459484782006-07-30T17:28:00.000-07:002006-08-07T21:40:16.830-07:00<a href="http://www.ge.com/en/">General Electric</a> will shift output out of the U.S.<br />Source: <a href="https://registration.ft.com/registration/barrier?referer=http://search.ft.com/search/totalSearch_Form.html?vsc_query=GE&x=0&amp;y=0&vsc_appId=ts&amp;ftsite=FTCOM&searchOption=news&amp;location=http%3A//www.ft.com/cms/s/cdf1f968-1d0c-11db-9780-0000779e2340.html"><span style="font-style: italic;">Financial Times</span></a>.<br /><br />June 2006 issue of <a href="http://harvardbusinessonline.hbsp.harvard.edu/b02/en/hbr/hbr_home.jhtml?_requestid=32520">Harvard Business Review</a> <a href="http://www.ge.com/files/usa/company/investor/downloads/harvard_business_review_ge.pdf">features</a> GE's <a href="http://www.ge.com/en/company/companyinfo/executivebios/eb_immelt.htm">Jeffrey R. Immelt</a>.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-115430584445948478?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0tag:blogger.com,1999:blog-31831321.post-1154137677658245892006-07-28T18:47:00.000-07:002006-07-28T18:47:57.666-07:00On this blog, I'll write about economic, financial and business issues and there are many such issues around .... So, it should be interesting.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/31831321-115413767765824589?l=economicsigns.blogspot.com' alt='' /></div>Masood Mortazavihttp://www.blogger.com/profile/08360285774352781059noreply@blogger.com0