Starting Sept. 27, Euroclear, the inter-market bank settlement group, will accept payments and debits in renminbi, also called yuan, the Chinese currency, in which some Hong Kong securities, and all Shanghai and Shenzhen ones are denominated. There were about 70 bn RMB in Hong-Kong-settled transactions in H1 this year after the Bank of China allowed Hong Kong to settle trades in Chinese currency late last year. Based in Brussels, Euroclear handles cross-border transactions involving domestic and international bonds, equities, derivatives, and investment funds.
The market is still digesting the impact of the watered-down compromise on new capital requirements for banks. These will come into force in 7 years. The Bank for International Settlements, the central bank of central banks, in Basel, Switzerland, reached the so-called Basel III deal over the weekend. This Jean Claude Trichet called “fundamental to assure long-term growth and stability”. Mr. Trichet heads the European Central Bank which had to cut its own ambitious reform agenda because of German resistance to meaningful regulation short-term. Bank analysts, wise-men economists, and wise guys from back offices are still trying to figure out the impact, some saying the banks got a free pass, while others fear that even before the new reserves for risky business come into effect, the banks will have to start raising more capital to cover them. My comment will come later.
Here is an extract from one of the last short essays written by the late Tony Judt, published in The New York Review of Books dated Sept. 30, on Czeslaw Milosz’s book, The Captive Mind. Judt wrote:
“When I first taught the book in the 1970s, I spent most of my time explaining to would-be radical students just why a ‘captive mind’ was not a good thing. Thirty years on, my young audience is simply mystified: Why would someone sell his soul to any idea, much less a repressive one? By the turn of the 21st century, few…American students had ever met a Marxist. A self-abnegating faith was beyond their imaginative reach. When I started out, my challenge was to explain why people became disillusioned with Marxism; today, the insuperable hurdle …is explaining the illusion itself.
“Contemporary students do not see the point… Repression, suffering, irony, and even religious belief: these they can grasp. But ideological self-delusion?…
“There is more than one kind of capitivity…The true mental captivity of our time lives elsewhere. Our contemporary faith in ‘the market’ rigorously tracks its radical 19th century doppelgänger—the unquestioning belief in necessity, progress, and History. Just as the hapless British Labour chancellor in 1929-31, Philip Snowden, threw up his hands in the face of the depression and declared that there was no point opposing the ineluctable laws of capitalism, so Europe;’s leaders today scuttle into budgetary austerity to appease ‘the markets.’
“But ‘the market’–like ‘dialectical materialsm’–is just an abstraction: at once ultra-rational (its argument trumps all) and the acme of unreason (it is not open to question). It has its true believers—mediocre thinkers by contrast with the founding fathers, but influential withal; its fellow travelers—who may privately doubt the cliams of the dogma but see no alternative to preaching it; and its victims, many of whom in the US especially have dutifully swallowed their pill and proudly proclaim the virtues of a doctrine whose benefits they will never see.
“Above all, the thrall in which an idology holds a people is best measured by their collective inability to imagine alternatives. We know perfectly well that untrammeled faith in unregulated markets kills; the rigid application of what was until recently th ‘Washington consensus’ in vulnerable developing countries—with its emphasis on tight fiscal policy, privatization, low tariffs, and deregulation—has destroyed millions of livelihoods… But in Margaret Thatcher’s deathless phrase, ‘there is no alternative.’
“It was in just such terms that communism was presented to its beneficiaries following World War II; and it was because History afforded no apparent alternative to a Communist future that so many of Stalin’s foreign admirers were swept into intellectual captivity. But when Milosz published The Captive Mind, Western intellectuals were still debating among genuinely competitive social models—whether social democratic, social market, or regulated market variants of liberal capitalism. Today, despte the odd Keynesian protest from below the salt, a consensus reigns…
“There is nothing innocent about Western (and Eastern) commentators’ voluntary servitude before the new-panorthodoxy…In this sense at least, they have something truly in common with the intellectuals of the Communist age. One hundred years after his birth, 57 years after the publication of his seminal essay, Milosz’s indictment of the servile intellectual rings truer than ever: ‘his chief characteristic is his fear of thinking for himself.’”
After that serious reading, here is part of a fun email I got from Elliott Gue which I have cut because it is full of lots of atmospheric chatter which is supposed to make you think he knows all about the plans of the Rockefeller family. Gue edits The Energy Stragegist and his note offers subscriptions to this weekly at $696/yr. We publish almost daily and charge less. Gue (or his marketeer) writes:
“This Under-the-Radar Millionaire-Maker is Paying a 10% Yield Right Now. And the Stock is Poised to Gap Higher in the Next 6 Months and Triple Upon Being Acquired!
“This deepwater driller that I believe the Rockefellers will move to seize control of is an offshore deepwater driller. The company operates a fleet of over 40 units comprised of drill ships, jack-up rigs, semi-submersible rigs and tender rigs. They have 7,000 employees across 15 countries on five continents.
“Consolidation in the offshore drilling rig industry is rapidly approaching. This narrowing of the field of play would only improve the pricing and earnings visibility for this millionaire-maker’s services.
“Such consolidation activities may be in the form of transactions for specific offshore drilling units or entire companies. I believe the Rockefellers will acquire this under-the-radar winner and then turn around and use the firm as a powerful M&A vehicle. This millionaire-maker will definitely take part in the future consolidation of deepwater oil extraction services.
“Future M&A activity aside, the company is on an amazing organic growth track. With a backlog of projects worth nearly $30 billion and rapid-fire expansion plans, current quarterly earnings targets are going to he hit and exceeded for years to come.
“The Founder and CEO is a Buccaneer Billionaire Who Has Been Compared to Oil Titan John D. Rockefeller!
“The founder of this under-the-radar deepwater driller comes from humble beginnings. The son of a welder, this modern-day Rockefeller used hardball tactics to build his company into a powerful deepwater driller.
“This entrepreneural genius made an early bet many thought was insane. Years ago, his company broke one of the cardinal rules of the rig business. It ordered two “ultra-deepwater” rigs, capable of drilling in waters at a depth of at least 7,500 feet, for nearly $900 million—on spec. It didn’t have a single contract from an oil company to guarantee them. Demand exploded and the company charges a whopping $600,000 a day for its services!
“The CEO sees years of strong demand ahead. And I’m inclined to believe that he’s right. After all, the amount of oil pumped from deepwater fields will double between 2010 and 2015, according to the U.S. Energy Information Administration. Douglas-Westwood, a consulting firm, says capital spending on deepwater oil will rise to $25 billion annually by 2012.
“Suffice it to say that the CEO is part of new breed of entrepreneurs that is busy reshaping the oil business. Having been described as secretive and a workaholic by the press, he appears to have the same business philosophy as John D. Rockefeller, who once noted publicly, “Competition is a sin.”
“The company is a winner. The CEO is great. But I saved the best part for last…”
For paid subscribers, I identify Mr. Gue’s stock pick. Note that there is a “Rockefeller” subscription discount in effect for the first quarter of Mr. Gue’s service, so it only costs $99, after which the regular price kicks in. There is also news from Israel, Canada, Australia, Thailand, Brazil, Britain.
