The story of economic sanctions as told by PMI

While the world is watching the civil war in Ukraine the European economics is sliding into oblivion. The Manufacturing PMI tells a story that should scare the hell out of the politicians of EU – so bad the business dynamics in manufacturing looks.

In August, out of 26 countries, only 9 reported improvement in the index, 15 recorded a slowdown in the two countries has not changed. In fairness it should be noted that 21 countries report PMI is still above the level of 50 points, and below only 5. But it is not so important, because the dynamics is still downward. There are those who are moving in the right direction: in Greece and Turkey business activity index in August was able to finally overcome the mark of 50 points. The rest of Europe presents a serious reason for concern, whether peripheral or central: everywhere there are signs of a serious recession.

United States, on the other hand, sports the best activity indicator in the world. PMI index has reached its highest level since April 2010 and reached 57.9 points. In case of U.S., the export orders component grew at the fastest pace in three years, and the employment …
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Externalities are crucial for the software industry

Externalities exist in any business. We are very familiar by now with the externalities of the manufacturing industries – air and water pollution, noise pollution, depletion of resources etc. But what about the software industry? How bad is the industry’s addiction to the externalities?

In economics, an externality is a cost or benefit which affects a party who did not choose to incur that cost or benefit.[1]

For example, manufacturing activities which cause air pollution impose health and clean-up costs on the whole society, while the neighbors of an individual who chooses to fire-proof his home may benefit from a reduced risk of a fire spreading to their own houses. If external costs exist, such as pollution, the producer may choose to produce more of the product than would be produced if he were required to pay all associated environmental costs. If there are external benefits, such as in public safety, less of the good may be produced than would be the case if the producer were to receive payment for the external benefits to others. For the purposes of these statements, overall cost and benefit to society is defined as the sum of the imputed

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Corporate responsibility

One of the buzzwords I dislike is “Corporate Responsibility”. It is overused, abused and never means what it is supposed to when you hear it from the top managers. However, it is important. Rather, the concept that it used to mean is important.

I spent a few months in Russia now and I am shocked and disgusted at how business is done there. That is the place where you go if you want to learn what the consequences of irresponsibility on a grand scale are.

Nobody feels responsible for anything there. The only king of this newly capitalistic country is money. Everybody dreams of making money quick. Some people make the money quick. Some don’t. But for everyone the main theme remains – just make money, no matter how, no matter what the consequences are, never mind the “after”.

What is the result? Well, most, or, perhaps, all of the business is based on making or buying something dirt cheap and selling it high. Most products are made in China or are counterfeit. Everything is made of the cheapest materials and with the cheapest technologies.

Can you imagine the life in a disposable world? Disposable furniture, disposable cars, disposable roads, …
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Chinese can!

Reuters is amazing me today. Another short article gives a quick update on the Chinese affairs in Africa. Chinese were copying small stuff from everywhere until now: products, technologies, machines, tools. Now they are copying the big politics and economic strategies. US has used this strategy successfully for a long time in South America, Europe, Asia and Middle East, enslaving multiple countries with horrendous amounts of debt. Now China is copying their approach in Africa. There is a lot of agricultural land in Africa and securing access to this land in the long term is a very wise decision. Not that it is going to do any good for the others but for China it is definitely a very good move.

Update: another good article from much later:

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Greece and … IMF?

Graffiti on the wall in Athens says "I.M.F. GET OUT"

A very interesting thing has caught my eye in the photographs from the recent riots in Athens, Greece.

If you look at the pictures, it very definitely says “I.M.F. GET OUT“. Why would demonstrators talk of IMF in Greece? Would it be possible that Greece bought into one of those IMF backed plans? If so, it would be interesting to learn a bit more about what economic development “plan” was sold to Greece. It is also quite interesting to see that Reuters does not mention IMF in their articles on Greece for some reason. Did they not see their own pictures?

Eurozone troubles drove U.S. treasury debt prices higher as investors fled to havens including gold and the dollar.

Seek the one who benefits, right?

Did you see how much Euro went down recently? Do you think it is normal? Do you think if Greece went bankrupt it would really mean something apocalyptic for the Euro-zone? No, really? How much of the all-European economy is in Greece? Come on, be realistic, Greece is too small for the kind of impact pictured in those articles. But panic! yes, panic can hurt Euro-zone, oh, yes… I have seen …
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Technology vs. People

A well-known expression used an abused millions of times over the history of the mankind says that the weapons do not kill people, other people do. The meaning is, of course, that the knife is just a tool and it is up to the hand wielding the knife to put it to use – good or bad.

In fact, all of the technology is like that. The technology can be put to serve people or it can be used to deceive people. I think that recently most technologies are used to deceive people and more and more technologies and techniques arrive every day that serve this same purpose. They could be put to good use, serving people and helping us on our evolutionary path but, no, they are not. Instead, they are all abused.

I used to argue and fight against such uses of technology (that I consider to be rather abuses) but to no avail. And now I realize that it is no use fighting against it. As Antoine de Saint-Exupery says, you never fight “against”, you always fight “for”. So it is necessary to fight for the proper uses of technology, put all those resources to the service …
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South America bloc

There was an interesting event in South America – a meeting of the Rio Group happened in the middle of February as DW-World reports. What is interesting? The Latin American and South American countries have announced their intention to create a union similar to the EU in nature. This is a great answer to many problems connected with their northern neighbors.

See, the real integration like in EU is unlikely coming any time soon, the South American countries are far too independent and nationalistic for that. Not that it is a bad thing either. But, but, what is quite possible is that they can create a no-Visa-required travel space in the South and Latin America and organize a monetary union. Especially now that the US Dollar is in trouble and everyone and their neighbor is looking for an alternative to the USD trading, the South American monetary union could be very successful, especially if they manage to avoid the blunders with the local monetary policies like it happened so many times in the past.

If they succeed, South and Latin America may well become the newest place-to-be, the region could really develop into a more balanced and highly attractive …
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