Tag Archives: economics

Capital Risk

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There are a number of forms of capital risk, which in the main represents the likelihood that an investor (person or company) will lose some fraction of his investment, up to and including all of it. Two such forms, when doing international investing is currency risk and political risk. Currency risk is the risk that the exchange rate between the [company’s] home nation currency and the currency of the nation in which that [company] is investing will move against the company. This risk exists in any international transaction (treating the eurozone as a financial intranational region).

Political risk is the risk that the government of the invested-in nation will interfere with the repatriation of any moneys—principle or profit—to the company’s home nation.

Enter the PRC. But invest there at your peril.

China has capped the amount of money Chinese holders of bank and credit cards can withdraw outside the country, in its latest effort to discourage people from moving badly needed capital offshore.

So far, this only applies to PRC citizens. Its purpose, though, is to stem the outflow of cash from the PRC’s economy. That means it’s a short walk to limiting a foreign company’s ability to repatriate any part of its principle investment or profit.

Government Responsibility

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At least one charity is figuring out the impediment that is government involvement in what is, at bottom, an individual responsibility.

Andrea Koppel, Mercy Corps’ Vice President of Global Engagement and Strategy, wants the UN’s involvement in the current Middle East refugee crisis severely downsized. Her focus is on the UN as a quasi-government, but she’s also moving further and wanting sovereign government roles downsized, too.

The better idea, Mercy argues, would be to sweep away the old institutions where they are not likely to be effective and place greater reliance on new combinations of private-sector organizations, civil society groups and different levels of government. This, the report says, would allow humanitarian organizations to take bigger risks to support local victims regardless of government response, and work faster and more easily with local communities when national governments are virtually non-existent.

It’s not an explicit call for government(s) to be the last resort rather than the first, but it’s a move in that direction.

A Cynical Distortion

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And, perhaps, a sign of growing Democratic Party desperation.

Republican Presidential candidate Jeb Bush, on a campaign stop in South Carolina last week, said this to his black audience:

Our message is one of hope and aspiration. It isn’t one of division and get in line and we’ll take care of you with free stuff. Our message is one that is uplifting and says, “You can achieve earned success. We’re on your side.”

There are few things that terrify Progressives and Democrats more than those trapped into dependency on Progressive Government escaping the trap and being able to do for themselves, without those Progressives doing for them—and collecting personal political power in the process.

So: when a Republican comes along and says he can help those trapped and want out a way out, Democrats come out of the woodwork with their distortions.

You can achieve earned success. We’re on your side. How does that get distorted in to “black folks all want free stuff?” Only a Democrat can follow that pseudo-logic.

A Step in the Right Direction

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But it remains woefully insufficient, and further changes need to be pushed—apparently from outside—and those additional changes need to happen quickly.

The Securities and Exchange Commission said Thursday it will overhaul its in-house tribunal following months of escalating legal challenges and criticism of its increased use of its own judges.

Under the new rules, defendants will get more time to prepare: up to eight months, instead of the SEC’s “rocket docket” of pacing that suits the agency, regardless of the time actually needed to prepare. Defendants also will be able, for the first time, to get sworn testimony as part of their defense preparation.

These are crucial changes, to be sure.

However.

The SEC still will use judges that are explicitly on the SEC payroll to hear the cases the SEC brings against defendants. The SEC still will use judges that are explicitly on the SEC payroll to hear defendants’ appeals of the SEC’s house judges’ decisions.

Absent corrections to those failings, the SEC’s “courts” will remain very much kangaroo courts.

Hypocrisy of the Left

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Sanctuary City San Francisco has

proposed new city regulations, which could only be aimed at High Bridge Arms, would have required the shop to take and preserve video of all transactions and turn customers’ personal data over to police on a weekly basis.

There was only one gun shop left in San Fran at the time these new rules were proposed. That shop already had 17 cameras installed and turned video over to the police on their request. However, as the shop’s General Manager said,

it’s the idea of filming our customers taking delivery of items after they already completed waiting periods[.]

Rather than accepting that increased invasion, not just of an honest business doing business, but of the privacy of honest Americans doing honest business, the gun shop is closing.

Clearly, the Sanctuary City’s government and the residents that elect them care more about the ability of illegal immigrants with long records of violent crime to get guns than they do about honest Americans’ ability to defend themselves.