What Caught My Eye Today - Reflection, China, Cayman Islands, Debt, Bad Neighbors, Wine

Reflection - In addition to all the traditions and trappings of the holiday season, it seems to me the end of the year is as good a time as any to take a few moments to reflect on the year that was.  Truth be told, I think a bit of reflection on a daily basis wouldn't be such a bad idea, but we'll just roll with things as they are. There is much to be thankful for this year, not least of which is the fact that we still exist. Those Mayans so totally got that end of the world thing wrong. By now, hopefully most of us who use our brains as God intended, we get that the end of the Mayan calendar was not an indication that the world was ending, but just the end of a 2,760 years cycle and the start of another (so if you are bummed out that the world is still here, maybe you will have better luck on October 13, 4772). And let us not forget to pay homage to Korean pop sensation Psy for achieving 1 billion YouTube hits for his "Gangnam Style" video (sigh). Unfortunately, we live in a day and age, where doomsday event and "bad news" tend to dominate the headlines. It seems folks are far more interested in reading about how their financial well-being will be affected by a "fiscal cliff" (which incidentally is a "marketing term" made up by the Federal Reserve to highlight the importance of Congress enacting some meaningful legislation to avert potentially much more damaging austerity measures like some of our European friends are enduring) than about an act of kindness performed by one person on behalf of another.  We've all been touched in some way by the tragic events in Newtown, Connecticut earlier this month. Maybe, just maybe, if we all try to focus on the good in people instead of dwelling upon the bad, we won't as many bad headlines in 2013 as we did in 2012.

Okay then. Let's put that soapbox back into storage, shall we?

China - China's wealth gap has widened so much that the country is now one of the most unequal outside of sub-Saharan Africa. Interesting. I didn't think there was any wealth in sub-Saharan Africa. China's Gini coefficient (click here), a number that represents income inequality, has sorted from 0.41 in 2002 to 0.61 today. Anything over 0.5 is considered to be destabilizing. Depending on how you apply the Gini coefficient, the United States measures somewhere between 0.36 and 0.46. Not surprisingly, those rat bastards in Scandinavia have the most stable coefficients coming in at between 0.24 and 0.27. Nearly half a billion Chinese live on $2 a day or less. Chinese economists are urging tax reform and increased spending on social services. Correct me if I'm mistaken but China is a communist regime. Isn't social spending supposed to be a cornerstone of communism?

Cayman Islands - You have to appreciate the irony of this next item. The leader of the Caribbean's biggest tax haven has been arrested on suspicion of corruption. The Prime Minister, who is also finance minister and the longest serving member of the legislature, is being investigated for alleged theft, abuse of office and conflict of interest involving import of explosives. I'm guessing the separation of powers is an unfamiliar concept in this neck of the woods. The Cayman Islands as $1.6 trillion  in officially booked international assets. Numerous private equity and hedge funds have their nominal headquarters there in order to avoid U.S. taxes and financial disclosure regulations. You can't really begrudge the guy from trying. Sure he got caught with his hand in the cookie jar, but them be some pretty nice cookies.

Debt - As is the case with most issues involving government, it item is so crazy it must be true (and sadly...is). Soon after the new year begins, the U.S. Treasury Department will hit its $16.4 trillion borrowing limit, and unless Congress raises the ceiling, the government will default on its debts. It's like giving more drugs to a drug addict to avoid having to go through withdrawal. Enter the "platinum coin option." Current federal laws authorizes the Treasury Department to mint platinum coins and assign then any value it wants. Well that's convenient. Legally, the President could direct The U.S. Mint to product two shiny coins worth $1 trillion each and deposit them in the Treasury, giving the government about two years' worth of reserve capital. There's a funny money joke in there someplace, but I'm going to just shake my head in disgust and move on.


Bad Neighbors - In Amsterdam, Netherlands families that persistently behave badly and harass their neighbors are to be evicted from city-run housing projects and moved into trailer parks that have minimal services are are under constant police supervision. Before you poo-poo this story, be honest with yourselves. We all have a neighbor (perhaps several) that we would like nothing more than to ship off to destinations unknown. The new housing camps have been dubbed "scum villages" by Dutch media. Yeah, the marketing guys might need to work on a slightly more appealing moniker. City officials deny that the plan will create ghettos of uncontrollable troublemakers on the outskirts of Amsterdam. Of course they do. Besides, what could possibly go wrong by gathering up a bunch of malcontents and having them all live together? You know where they can talk and bond and plan... 


Wine - Consumption of wine in France has slumped to a record low, with the average French adult now consuming barely one glass a day. I believe the phase you are looking for is dire que ce n'est pas si (say it isn't so) or perhaps l'enfer que vous dites (the hell you say). Thirty-eight percent of people in France now abstain from drinking altogether, while just 17% drink wine on a daily basis. It has been suggested that the decline in wine drinking is the result of the sluggish economy and public awareness campaigns over the dangers of "le binge drinking". I just don't get French people at all. Speaking strictly for myself, whenever I read about the economy, drinking is one of the few things that makes me feel better (or numb).

And on that "sobering note," Happy Holidays, one and all!