- Do the Diaoyu/Senkaku islands have oil?
It all begins to make so much sense. For those interested in maps and pictures of patrol ships threateningly rolling in, I posted a few here. But the new story floating around Bloomberg is that the disputed islands sit above an oil reserve that would meet China’s energy requirements for the next 45 years. And according to a BP study, the combined reserves of the South China Sea may be bigger than those in Saudi Arabia.
It’s enough to go to war over. Especially as China’s current consumption habits are making it increasingly reliant on Africa and the Middle East. I don’t think that’s good Art-of-War strategy.
Isn’t the general principle “rely on no one, be relied upon by everyone”? When playing texas hold’em, it’s best to have a royal flush and a pair of aces in reserve. At which point, you bemoan your fate so that the Americans get overconfident and bet heavily.
For a long and wordy explanation of the substance of the claims made by China and Japan, I refer you to this paper. But the summary is that this wasn’t an issue until someone realised that the organic deposits made by the Yangtze and Yellow Rivers into the South China Sea make the continental shelf “one of the most prolific oil and gas reserves in the world”.
- Affirmative Action at the Supreme Court.
The representative issue at play is whether the University of Texas is still entitled to use race as a primary basis for admissions. It looks similar to a case heard by the Supreme Court in 2003, where affirmative action won.
I was recently listening to an interview about executive leadership, where the interviewee (a candidate evaluator for large companies looking for new CEOs) was asked to identify the key distinguishing feature that separates recommended candidates from those he rejects. His answer was: “the way they interpret difficulty: whether they see themselves as victims of circumstance or not”.
Is this not the same issue with affirmative action? It perpetuates the identification of those being “affirmed” as victims of circumstance. The un-affirmed are fully capable of doing it themselves – but you, you poor dears, need our legislated assistance. It’s easily as pernicious as apartheid.
It should go.
- All the Facebook IPO dirty laundry.
The SEC has announced that it was sceptical of certain items in the Facebook prospectus and told Facebook so but Facebook didn’t change it.
A spate of communication has been released on the SEC website to show that they had everyone’s best interests at heart.
My question: how is this useful? Don’t arrive with these stories months after the event – arrive early.
It’s this type of thing that makes regulators seem worse than plain ineffective. Because everyone would be a little more skeptical if they weren’t there; but instead, there seems to be general contentment with face value. Because, you know, the SEC is on it, etc.
The Facebook share-price:
I included Zynga’s share price as well, just because I think it’s interesting how correlated those two shares are.
- Jamie Dimon won’t do it again.
Link: no more Bear Sternses.
Jamie Dimon is continuing to advocate against a governmental stalemate over fiscal policy. He says that JPMorgan is now preparing itself for the possibility that America will launch itself over that cliff.
And this time, he warns, they may not be able to do the US a favour and pull off the purchase of another Bear Sterns.
“We were asked to buy Bear Sterns. We did them a favour. Let’s get this one exactly right. We were asked to do it, we did it at great risk to ourselves.”
“Would I have done Bear Sterns again knowing what I know today? It’s really close. Knowing what I know today, if they called me again to something again like that, I couldn’t do it.”
- Gill Marcus says that the South African economy is deteriorating rapidly.
Link: the ravages of populism.
And the recent double-digit wage increases from the strikes are likely only to result in job losses.
Ah strike season: a good time for exporters… Except, as Gill points out, “the reality is that there is no market out there”.
That’s all for now.
Have a good day.