Consumer confidence in Scandinavia

It now seems that a lot of data is coming in from how Q4 2008 was. It seems as if the consumer confidence has hit a record low (Bloomberg). At the same time, the Swedish chief of the central bank, Stefan Ingves, assume that the Swedish economy will see an increase in GDP in the beginning of 2010 (DI).

I must say that I see a large differences between how the consumers feel in the EU and Scandi. Some issues that I believe will impact the Swedish economy in 2009 - which I believe will force the Swedish economy to see a long recession (unfortunately).

(1) Risk of inflation - the low interest rate allows consumers to borrow more on future income. More monetary funds are inserted in the economic system. If (more a question of when) the interest increases, in order to cap the price increases and lower the demand for money, the central bank will increase interest rates rather rapidly (to prevent what happened in 2004, 2005 and 2006).
(2) Consumer gearing - A variable that is very much interrelated with (1). When the interest rate goes up, and the demand for return-for-risk goes up, the Swedish consumers will have to cut down their consumption to manage to repay their coupon payments.
(3) Jobb losses in the service sector - Sweden has not yet seen large job losses in the same way as the US. Of course, the Swedish economy is in a better shape than that of the US; but the economy will be affected. Old business models will die (SAAB for example) which will force down the demand for labor, and in the end - services.

(This situaiton would mean a stagflation) Who are then the winners? The people who are sitting on stablie assets (whichever these are, Swedish krona not included) and people who can afford to pay their debt coupons! These will probably see their large debt positions get eaten up by inflation and sail into the future, with less debt and smaller debt burdens for studies. The loosers? everyone else and people who will get squeezed out from the housing sector.

It's not over, until it is over - well, it IS over

It now seems as though the Swedish car manufacturer SAAB is finally heading into a restructuring phase - very similar to what in the US is called Chapter 11. The Swedish government is currently arguing a couple of loans. The public perception of the upper management of SAAB is in my opinion something to laugh about. The mismanaged Swedish "world famous SAAB" is soon dead.

Read a good article about it here - in Swedish.

Witness to a game-changer

This is the finest piece of article that I have read so far about the financial melt-down, it is called "Wall Street lays another easter egg" by Niall Ferguson.

Well, no-one who hasnt been living under a rock since september 2008 can say that they have not been shaken up by the things around you. Information coming from the most inner sanctum of the worl economy says that we have been overspending, over-leveaging and buying stuff that we simply havent had collateral for. Well, this statement can definitly been said about the U.S. A normal family, living in the suburbs with "normal" jobs.. of course you take out yet anohter mortgage in order to send your kids to college/b-school/unvisity (whatever!) but ordinary consumption? Well, this has certainly been the case, but what about the Nordic countries.

Well, when I say Nordic I should say Scandinavia - see what happened to Iceland. Talk about emulating the behavior of American consumers and doubling that. What I get so confused about is that no-one stopped for a minute and asked themselves "where does this newly found wealth come from?". Well, certainly not from organic growth, taking away the effects of gearing - the US economy has only grown 1 % per annum during the last administration (according to Krugman) and this can certainly be said about Iceland too. Well, a burger at one of the ordinary restaurants in Reykavik, that will be SEK 200. What?! What is in this burger, Iceland-pony?

I cannot say that I feel any pain for the Icelandic people - what I see is that I see a total game-changer, a new order that we cannot yet define. And this new way of capitalism, is in the end going to affect all of us. In what way then? Well, lower access to capital - a focus on organic growth and less financial alchemy. Many of the hedge funds operating in Scandinavia has had this as their primer objective, pay out the cash - give this "wealth" to the owners since the owners have better use for it than the company, since they are only "sitting on it". Well, now - in retrospect, how wrong they were. However, less access to capital will definitely change the P/E market in Scandinavia. Less access to capital will mean that it will be harder to find positive NPVs out there, skill of running businesses and finding opportunities will definitely become harder and more scarce. The cost of capital is going up and so is the demand for returns. As we live with the forces of market capitalism, we cannot change the way people think about life, wealth and jobs (and I dont think it is wise to re-define the modern world).

However, what I believe this financial melt-down will do is that we in a couple of years will see new domains of power emerge from the ashes of those that once were. Should the Swedish government allow SAAB to go into bankruptcy? Of course (in hindsight, the Swedish ship yards?). Is there any value in retaining something that needs financial medicine every quarter? Of course not. From the ashes of the old corporations, new one will rise. Profitable businesses, and those companies that will survive this year of judgement will re-emerge as the powerhouses of tomorrow. What do I base this on? Well, I base this on the fact that the latter half of the last century was one of the most prominent times of the history of humanity. Krugman derives the wealth from the fact that we had a different game-changer back then, the 2nd world war. I disagree (even though my access to facts is limited), I believe that what we saw back then - disregarding the cold war - was a new way of comradery, the construction of the EU, the emergence of new technologies and a commitment of consumption that touched every soul in the "western world".

This may sound naive, but what I hope is that the rest of world, eventually will get on the wagon and see the potential in disruption. After all, in the old testament, g#d found it appropriate to rest on the 7th day - and I think we just have to understand that so will consumption during 2009, either if its financed with debt or with equity since the stakes of our future foundation of wealth are so high.

To sum up what it is i mean with this posting: In 10 years we will see that the demand for goods and services will be rising and in the long run we are all dead. This also means that a lot of old - earlier functioning - business models will die.

(Good links on this topic: Krugman 1, Krugman 2, Becker-Posner Blog, Roubini 1, Ferguson 1, Ferguson 2, Roubini and Mishkin on Charlie Rose, Washington Post)

Murder on the financial dance floor

I found a couple of articles that highlights the financial distress in the UAE. It seems as if a lot of expats are seeing a really though time paying for their debt, and if they don't? well, then they will end up in jail.

What is the evidence of this? well, apparently.. when the expats leave Dubai (according to some statistics, 1 500 expats leave the city every day) they tend to leave their car (luxury/standard) vehicle in the long-term parking lot outside the airport. The police then auction off the cars on a montly basis. When will the crisis end? Not soon.(NY Times, The Financial Times)

As if these numbers aren't scare, the officials in Dubai denied an Israeli tennis player access to their annual ladies tennis tournament. Well, now that is a sign of really bad sports. (NY Times)

Link from US PBS

I recently saw this great great program dealing with the financial crisis on US PBS. Its made by Frontline and is called "Inside the meltdown". Have a look and watch the show. Great production!

Interesting article from Krugman

Paul Krugman published this fascinating article in the NY Times. It is very very interesting and gives you a very sharp analysis of how the worlds largest economy currently is functioning. Hope this mess ends soon.

The coldest winter in 20 years

It seems as though this winter is the coldest winter in 20 years here in Norway.. I have therefore bought winter shoes as well as a new "parka-coat". I am very happy because the sale has started which meant that i got a good price.. So, bring on the cold! Im finally prepared.

I have also decided that I will go to Mannheim Business School to study some international marketing which Dr Sabine Keuster is teaching. It seems to a very interesting and everthing seems be in order for my participation.

Kalle also sent me a link with a great song; "sex on fire" by Kings of Leon, which is an awesome song.

Week coming to an end

This week has so far been very hectic and then im not counting the birthday. It has been a lot of school work and hand ins for a subject called "Value Based Decision Making" which more or less comprise of micro, game theory and quantitative valuation techniques. It is very interesting, and this week we built a simulation model in Excel. I do not know how well our team performed with the task, but I do have a positive gut feeling.

What else, yeah - tonight im off to a bar in Oslo city and tomorrow im going to go look at some stores for a paper im going to write about service marketing. I also slept more than 9 hours this night, which was a true blessing.

New class in corporate finance

On my birthday, we now started the new class in corporate finance. We are now going through the theorem by Modigliani and Miller. I have of course seen these propositions before, and if feels like I have worked with them a lot.. its just, I cant kick the fact that I still find the theory very very interesting. It also feels great to get a re-fresher in regards to the theory.. As I write, it seems like the world is "drowning" in rescue packages.

My birthday is today

... and the economic gloom continues and stocks can always loose an additional 50 %. Cheers!

Horrible news from the US

Apparently, the unemployment stats from the US are grim, in January alone they lost a total of 598 000 jobs in the US.. confirming the largest economical contraction in decades. When it will end? not tomorrow, thats one thing for sure (NY Times).

Great marketing article

I recently read a great service marketing article called "Marketing intangible products and product intangibles" by Theodore Levitt. It was published in the Harvard Business Review in 1981!

The basics in his article stems from the fact that all companies are service producers - which is a statement that many can sign off on (Honda doesnt produce cars, they produce units that enable travel?!??). Well, this is sort of the core of the article, that what makes marketing different is whether the output is intangible or tangible - here the argumentation stops (a car, is a car = tangible). And this causes problems for marketing... more on this topic later.

Case on Starbucks

We are currently reading a case on a former employer of mine, Starbucks. I used to work at Starbucks when I was 19 - which is now more or less 10 years ago. I remember it quite well. I worked at the cafe close to Liverpool St Station in London, not Old Broad Street - the other one.

Well, now Starbucks are closing several stores and selling their newly purchased corporate Jet. Well, what can you say.. a bit irrational exuberance from Mr Howard Schultz perhaps?

- When will this worldwide corporate melt down end? Now?

Two excellent quotes

Yesterday, Öystein Fjeldstad quoted this line:
"You don't have to have been a horse to be a good jockey"

- Arrigo Sacchi

Another great quote - for the same price...
"Public opinion is no substitute for thought"

- Warren Buffett

Grading my Dell.

I have now used my Dell for a couple of hours and here is what i think about it. The computer is a Dell Inspiron 1525.

• Screen: 5/5 (great, good view and clear)
• Overall size of computer: 3/5 (too big)
• Weight: 3/5 (see above)
• Price: 5/5
• Speed and storage: 4/5

Overall, a good purchase.. i think, but dont use it for work/travel.. its way to big for that.

Sunday evening.

Well, I had a great time in Stockholm. Managed to pick up my Dell computer which is very fast.. Its quite big though, which is not good... but then.. I got what I paid for. I didnt whish to have a very nice and small computer, because of the price tag.. but as for now.. it strikes me as a good computer for the purpose of listening to music and watching media (pictures and movies). I also saw a movie this weekend called "city of ember" which also stroke me as good.

Well, lets see.. on the agenda for the week is a hand-in in value based decision making and some articles for tomorrows class. Ill better go through them asap. In the news.. Ingemar Johansson - former heavy weight champion of the world - has now passed away. I found this compilation of fights on youtube, with a horrible version of the Swedish national anthem in the background. Unfortunately Ingemar spent his last years in life battling the damages that he received during his fighting years, yet another reason to ban universal health care... why should the health care system take care of people that deliberatly interact in a sport where they receive punches to the head? anyone? how do you cope with this issue? Hard nut to crack (Washington Post, Int'nl Herald Tribune, Times Online)

Stockholm

Im heading to Stockholm for a nice weekend. I cant wait, im leaving at 8.50 tomorrow morning - friday that is.. and going back to Oslo on sunday.

Against universal healt care?

I have never been totally convinced that the market can actually take care of every single need that the inhabitants need in a sociatey - such as healt care. I must say that I support the notion of it though and that it is part of a society to pay for basic medical services.

However, a student of Swedish Konstfack, an institution for higher learning, has created an installation where she has acted to be insane and been "captured" by the police. The woman has therefore spent valuable resources on what she considers art. I do not care if it is art or not art, I wonder if she would have acted in the same way if the money had come out of her own pocket or her partents medical insurane. I do not think that she had done this, pathetic and irresponsible and yet another reason why universal health care only suits people that take responsibility for their actions. (read about it here in Swedish DN.se)

Weird times!

It seems like the hard times are hitting some of the educational institutions in the US. In especially a University where I studied a couple of years ago - Brandeis University. Since the times are terrible, they have chosen to close down the very nice Rose Art Museam - a museum that houses modern art on campus. In my opinion, this is very sad since I remembered that I visited the museum and marveled over the great treasures that the relatively small Brandeis U. had. Well, I hope this hasnt anything to do with Bernard Madoff, who managed a lot of assets belonging to the Carl and Ruth Shapiro Family Foundations that has endowed a lot of money to the university and enabled some absolute first class facilities. (Read about it here)

A couple of days ago

It has now been a couple of days ago since I posted anything on this blog and that has mainly to do with the fact that I have been very busy. We - the group that is - has had 3 major hand-ins in Value Based Decision Makin, Service Marketing and Corporate Finance. Well, yesterday night wasnt that busy.. I saw Slumdog Millionaire, which was good. Hope next week will bring +15 degrees celcius, spring and a lot of sun.. But i doubt it.

US inauguration

I am currently watching history unravel before my eyes at CNN.com/live - the US inauguration... it sends chills down your spine.

Great read - for free

I have found Roger Lowensteins blog at Huffington Post.. Internet is truly a great source of inspiration.

If you have not read Greenspans book, "The age of turbulence" - do so.. it is great and gives you an excellent overview of the economic history of the United States over the 2oth century.

Trouble with Dell

I was on the chat with the Dell-people today. Since I am Swedish I want a computer that has the Swedish version of Windows Vista with a Swedish keyboard. Because I now reside in Norway I therefore want it shipped to the school... I contacted Dell.se and tried to get them to ship a computer to me, which was easier said than done. If I wanted a "Swedish" computer it had to be shipped to a Swedish address, which doesnt really work since I live in Norway.. If I wanted to have it shipped to Norway - then I had to go through the Norwegian site and then call them explicitly in order to give them the specs on the Swedish Vista and Swedish keyboard. I also had to pay Norwegian prices which was SEK 800 more. Insane! I think this is really weird, since the computers probably are being put together next to one another.. The time of delivery was also in excess of two weeks (hmmmm??).

Went to the movies.

I went to the movies and saw a great Norwegian movie, called Max Manus. It had a certain feeling to it that very few Scandi produced movies have, such as great cast and above all, a great historical feeling to it that makes you believe in the story. Well, it was great... and now im sitting and reading about Home Depot.

Message #200 and books

Since things havent really come up to the pace of the last semester, I have taken up "ordinary" reading again. I am reading two books now, none of them real fiction. I was thinking about reading "The castle in the forest" by Norman Mailer, but decided to go for Alan Greenspan's "Age of Turbulence" since it was a gift from my father, some year ago... its extremely interesting to read about his career, and to understand where he draws his inspiration and the conclusion that he comes up to.. of course, his involvement in political life is what really sucks me into the book.

Another, very fascinating read is that of United Fruit company which is the main topic of the book "Bananas" by Peter Chapman - a book that I was given by a classmate (thanks Rafa).. It should be said that I am not finished with any of the books yet.

Both books are very very good, of course in different ways.

Swedish banking stocks are down

Apparently, the Swedish banking stocks are down approx 20 % during the first time of 2009. This is of course weird, I mean - the market must have known about the Baltic and Ukrainian investment for some time.. Well, a year or two ago these investments generated a lot of profit (not least for Swedbank) but the hunt for positive NPVs goes on.. Going to be interesting to see how this plays out. Even if I dont know very much about the baltic real estate sector, it must be safe to say that many properties and houses were overvalued.

The building is from Swedbanks facilities in Kaliningrad.

Unfortunate conflict

The current war between Palestine and Israel is extremely unfortunate. It is also very unfortunate that the reporting from the war is so filled with opinions and ad-hoc "facts". However, New York times has a specific page where they have both US, Israeli and Palestinian reports.

Thomas Friedman also writes about the conflict here, in a debate article from the NY Times.

Slow start picking up

We are now picking up the pace from the slow start. I read a great article by Michael Lewis in the magazine Portfolio the other day (which is a very good read). There was this great article by Michael Lewis about the end of overpaying Wall Street bankers and the end of an era (somewhat like the one he described in Liar's Poker - which I never actually read.. too many people told me about the book and its greatness which made me not read it). Well, this article is really good - After the fall, by Michael Lewis. (The picture: the bull is certainly dead.. for now.. ever heard of Bull Phoenix?)

On the other hand, Im thrilled about our consultancy project. Now back to the lecture in Macro.

New electives and corporate projects...

We are now getting information on the different electives;

The electives that we can choose between are:

• Management control
• Multinational financial management
• Negotiations
• New product development and service innovation

We can also choose between Mannheim electives, but unfortunately they only yield 4 ECTS. The electives should add up to 18 ECTS. We can also take more courses if we want that, which means that we can take three courses at BI and then ad additional courses from Mannheim. Now that we get a chance to take additional courses, Im thinking about doing that. How about that.

The corporate case that we are going to do is an analysis of the LNG market in the North Sea for a Pan-European gas company. Very interesting assignment!!

Norway, finally a new week

The past week has been a slow start on the new block of courses. The past week has been very slow with only some administrative tasks and two lectures. Tomorrow, we have a full day and we get to find out which companies we are going to consult this forthcoming semester. Its going to be very interesting.

This is also the first time I encounter some signs of fatigue or tiredness about the program. I do feel some anxiousness in getting back to work and so on. I try to keep my focus with the studies, but its hard at the moment... i really want the whole prorgram to get going. I am also very anxious to see the spring come; I am already tired of winter.

Swedish bank to get support from Swedish government?

I have written several times of the Swedish bank Swedbank and their investments in the Baltics - where they have come out as a major force in banking over the last couple of years. Well, they have seen great profitability from these investments before - but now it seems that the market has caught on and wonders; Is it reasonable that the investments in real estate have they value that the debt and investments in those real estate mandate that they have?

Well,i dont know... Therefore (its reported here in Swedish) the market is now adjusting to the notion that Swedbank probably will have to take on measures to secure some cash from these investments. SEB is currently also seeing some indications from the Baltic markets that something is not right.

New release from Microsoft

Saw that Microsoft has released a beta version of their new operating system called Windows 7. It seems to be a new update for Windows Vista. I have decided to buy a Dell 1525 computer since I feel I need a new laptop after being a Mac-fan for several years. Of course, I have been using a Wintel PC from work, but it will be interesting to try Windows Vista. The thing is that I have only heard positive feedback about the program. The reason for changing computer platform can only be credited due to the price tag of the new Mac notebooks; I am also a bit tired of the price differentiation between the MacBook and the MacBook Pro. I mean, what happened to the iBook?

Well, it will interesting to try.

He's at it again..

I am back in Norway and Jeff Skilling lost his appeal!! the former Enron boss has complained and wanted to pardoned since he apparently think that he has made up for his crimes that he committed when he was the Enron CEO. Well, I dont think that he should be let out - many million people were affected because of his and his friend Andy Fastows direct scam -and then we are not talking about the consumers of California who had to pay a hefty overprice for the their electricity in order to satisfy the Enron stock holders. Interesting how many people who think that they have made up for their crimes now that G.W Bush is leaving office. I saw this great documentary approx 1 year ago - I certainly recommend it; Enron - the smartest guys in the room.

By the way... Lowenstein - who else - wrote a great book about it (and has yet another great article out - Whats really wrong with the price of oil - Great great read).

New team mates for the new semester

I have now ended up in a new group. My former group with Erlend, Deepthi and Lars is now more or less dissolved - we have one hand-in in corporate finance left.. then, Ill be in a group together with Egil (Norwegian from DuPont), Laura (An American who were in Software sales) and Filipe (a portugese who has worked in the shipping industry). I think its going to be a great group.

Postponed trip

... my trip to Oslo has been postponed, Im going on tuesday instead...

Leaving for Oslo

I am now leaving for Oslo for Block #3 at BI. We are also getting our new groups and our corporate assignment from the Dean, which is going to be great.

Ethics case by CAT and Goodpaster

During the holidays I saved the nice task of construcing an ethics case and then analyzing this case by the use of Goodpasters CAT-scan/model. It is actually quite fun to construct your own case and it also jerks you back to reality after several days of relaxing. More information will follow...

I have recently switched over to Google Chrome on my Wintel PC.. its very very fast and thus.. good.

Happy start of the new year, Rick!

The new year has finally started and it has already had some interesting issues for GM and Rick Wagoner. They get a fresh and cheap loan from the US government of approximately 4 bn USD. In my opinion a stupid mistake, why throw good money after bad?

By the way.. Ivanhoe is such a slow and terrible moving. Since we currently are in an economic downturn, I would like us all to remember the great commercial that Gotabanken (or Götabanken) issued in the late 1980's.

Blog retrospective: 2008

Overall, 2008 was the year when a bull market suddenly turned into a bear and when the situation for thousands of MBA students changed in a nano-second. Suddenly, good and high paying employers started to implode, banks such as Lehman Brothers, Kaupthing, Fortis and UBS all took massive hits. Car makers all around the world are now trembling, which will affect thousands of laborers in Germany and in Sweden. Where is Lee Iacocca when you need him the most? Will Lou Gerstner save yet anohter company? What is going to happen to Steve Jobs Apple? - These are all questions that belong to 2009. It all started out with a different tune.

January: the Oil price for a barrell of crude passes the USD 100 mark, Tata Nano - the worlds cheapest car goes into production, The FED cuts its interest rates by 75 basis points and the stock exchange drops by 3,5 % since investors are afraid the US is heading for a recession, Heath Ledger dies, the Dem's and GOP primary are both up to speed - will Hillary make it?, I am waiting for answers from business schools

February: President Bush announce the new budget - a deficit of 410 billion USD, Super tuesday arrive - Hillary is weakened, Obama strengthened and McCain seems like a winner, Ukraine and Russia solves the dispute they have had over the gas pipelines, Fidel Castro retires, UK bank Northern Rock goes belly up, the nation Kosovo is born, I have my interview for Norwegian School of Management

March: Russia votes - Dimitry Medvedev is elected president, Obama and Hillary battle, Swedish foreign minister Carl Bildt visits Kosovo, the USD trades below 100 to the Japanese Yen, Hu Jintao is elected President of China for a second term, JP Morgan Chase announce that they will buy BearStearns and world markets plummets on this news, Pernod Ricard purchase Swedish Company Vin&Sprit (and thus the brand Absolut), I get accepted to business school and accept my spot at BI

April: Swedish post will merge with the Danish counterpart, Albania and Croatia are invited to join NATO, Hillary sees a lot of commotion in her campaign for the White House and calls on Bush to boycott the ceremony of the Olympic games, Silvio Berlusconi is elected president of Italy - again, Josef Fritzl is revealed to have incarcerated her daughter for a very very long time, GM cut production of SUVs and pick ups in detroit - they dont sell, 1-year T-bill is introduced to cope with the budget deficit in the US, I decide to sell my apartment in Stockholm

May: Microsoft withdraws their bid for Yahoo! - Jerry Yang later resigns, a near perfect tie in the Dem's race for the White House, US banks seem to tighten their lending policies - apparently too late, Crude oil breaks the USD 120 barrier, Earthquake in China, HP buys Electronic Data System - a service branch, Manchester United wins the Champions league, questions are raised regarding if Ehud Olmerts has taken bribes, I sell my apartment after some minor restoration

June: bank crisis seems to arise in the US - Wachovia fires their CEO, the price of a barrell of crude reaches a new record with an increase of more than 11 USD in one day - new price: in excess of 138 USD!, Hillary suspends her presidential campaign and Obama is in a small lead over McCain, in Sweden - the FRA law allowing emails to be stored and read by the government is put into affect, Spain wins the Euro, I am buying books of ebay.com

July: Starbucks announce that they will close shops, the US Fed tightens mortgage regulations - something seems to smell, UBS announce that they have taken losses of more than 180 billion Swedish SEK (more than the entire Swedish bank crisis 1990-1992), Fannie Mae and Freddie Mac are in no danger according to Ben Bernanke, The Dark Knight - the second new installment of Batman sets several box office records worldwide, the politicians in the US seems to have understood that the financial system needs helping and several laws and plans are made public, I am waiting and reading

August: Conflict between Georgia and Russie erupts, Beijing Olympics start, UK home repossessions rise by more than 48%, Michael Phelps manages to reach 8 gold medals in one single olympic game, Obama secures the democratic nomination, Italian airliner Alitalia is now broke, Sarah Palin enters the national political scene in the US - could the GOP take the white house?, I move to Oslo and start at the MBA program at BI Norwegian School of Management

September: Unemployment rate is now at its record height in the US since 2003, Washington Mutual - a US bank - is hit hard in the financial crisis, oil prices rise through cut in OPEC production, Lehman Brothers together with AIG and other companies are hit HARD in the financial crisis - it will not just blow over, trading is hindered at the Russian stock exchange due to some heavy losses, Goldman Sachs and Morgan Stanley are turned into ordinary banks to increase their cash flows, firs presidential debate between Obama and McCain, I am sweating at school - its a lot

October: Biden and Palin debate - its a tie, the 700 bn USD bailout planned is signed by Bush, OJ Simpson is sentenced to jail, the noise coming from the financial markets is tedious and horrible, the Icelandic financial sector is blown to pieces, IMF warns of a global meltdown, Danish Sterling files for bankruptcy - the Icelandic owners could not afford to keep it afloat - a case of a bit aggressive gearing?, I start to feel the pressure in school

November: Obama secures the race for the White House and becomes the 44th president of the United States, Swedish I-bank Carnegie is taken over by the Swedish government due to malpractice, the Euro-zone officially enters recession, crude is now down to approximately 40 USD - a more than 100 USD decline since the record prices during the summer, pirates operates off the coast of Somalia, I finish up the first block of school and get ready to study in China

December: Manny Pacquiao defeats Oscar De La Hoya and is considered the best pound-for-pound boxer from Asia - ever, insane interest rates all over the world - Australia, Sweden and the US, the US automotive industry is biting the dust - could this be the end of the Big 3 from Detroit?, Switzerland joins the Shengen Agreement with the EU, the US economy is seeing signs of entering a depression - the Great Depression II?, fighting erupts between Palestine and Israel with catastrophic consequences, I celebrate the holidays in Shanghai and Beijing

The end of 2008 - lets hope for a good 2009 - I wish all the readers a very happy New Year!

Blog retrospective: The American Election

It has truly been a weird year and in the first of two summaries over 2008 I will write my comment on the presidential election in the US. When I first started writing this blog I never saw it as a channel for me to propel my political views. I will of course deviate from this track with this comment and highlight what I thought was the key moments in the Obama campaign.

I remember very well when I lived in Boston 2004 and when I first saw Barack Obama speak. My second cousins had worked on the Dem’s campaign to elect John Kerry – an absolute train wreck as a politician – who later lost greatly to an aggressive Bush campaign. At that time Barack Obamas victorious campaign for the senate was one of the few highlights that the Dem’s had that year. Then, I had no idea or not even a slightest thought in my head that Obama would later become the 44th president of the US. So, what did I find so intriguing about him? Well, his story was and is mesmerizing; coming from an interracial background, being raised by his grandparents to being accepted Harvard Law School and there becoming the first black editor for the Harvard Law Review. Well, some might argue “he is not different only because he is black” but the meaning is different, and that counts.

What made Obamas campaign so different? Obama launched an effective “grass roots movement” and managed through small donations en masse conquer the White House. Whenever I have read about this in Scandinavian press, I have found it hard to actually get a grip about what it is that he has actually done different than others before him, except launching a web site and discussion boards etc. To me, this doesn’t really strike me as very progressive or different, it is just that Obamas web site has become popular, people have actually sought out his details on the internet and logged on. Why? This I think is of course very easy and is a word with four letters, B-U-S-H. Bush has been an absolute disaster for the US, not through his actions but because of a completely moronic attitude and lack of cultural understanding. Add an unpopular war that was deemed victorious in 2004 and you have a mixture that the real average Joe in the US doesn’t like (and I am not talking about Joe Sixpack Wurzelbacher here). Bush forced the majority of voters who earlier backed him into something different, and through his constant flirting with the evangelicals; he managed to alienate the ordinary American people. Well, Obama did not run against Bush, but against McCain.

Why did McCain lose? Well, In my opinion McCain was an outstanding candidate that under “normal” circumstances would have won against Obama. There were some factor that didn’t function for McCain, such as being a Maverick inside the Republicans (or the Grand Old Party as they are called in the US). Being a Maverick in the GOP is not good, since you are acting out and being uncomfortable, such as speaking against the usage of torture and closing weird military facilities in Cuba (I see some similarities with the Swedish Socialist Erik Åström, who got the boot because of “truth telling”). In the field of candidates though, McCain stood out as a fantastic, managing to wipe his other contenders off the field and unite a GOP under pressure (Mitt Romney and Rudy Guilliani dropped out fairly quickly – the other two realistic candidates). The GOP played a strong game, and were ahead at the same time as the Dem’s seemed like drunk driver moving all over the place, and Hillary Clinton attacking Obama (remember the commercial where she answers the phone in the morning?). Well, here she made her largest mistake, running on a platform of electability and being ready from day 1. This message was as interesting for the US public as being given a foot massage by a sledge hammer. Hillary ended up chasing a man with momentum, constantly hammering on his single vague message – change. It was not the same medicine, it was a new medicine and people liked it.

Along came two extremely strong candidates, one with a fantastic track record of public service, another one with a fantastic charisma and speaking abilities not seen or heard since Churchill and JFK. Here, somewhere along the way… McCain slipped, and he slipped badly. The whole mess up with going to Washington but not still going when the financial crisis hit the big fan was a major issue for the campaign. In my opinion, I never really saw the “real” McCain during the entire year, I saw a man on a leash from the GOP. Weak appearances on Ellen DeGeneres show did not help when Michelle Obama seemed to become one of the most able first lady’s on the same show.

Another very wise choice from Obama was to be bold enough to choose a VP candidate who had critized him because of his lack of experience, and told the public that through discussion you get the best results, not through an intact unity. He also managed to fill the spaces where he was weak, such as in the international scene. The same cannot be said about the VP from the GOP. Sarah Palin emerged as the political MILF from hell and shocked the political landscape. It didn’t start well for Palin, taking cover for her daughters teen pregnancy and then buying clothes for 150k when the financial system was collapsing. Appearances on Katie Couric dindt go well, and McCain accused the program of being a “gotcha journalism” (wasn’t it just normal questions?). In the end the GOP had now become the drunk driver, accusing the Dem’s of being socialist and letting the watchdog Palins attack Obama for his conspiracy with William Ayers (an American terrorist). This focus was so tedious and so boring that it was ludicrous since Obama was 8 when Ayers made his deeds – he is now a professor at the University of Illinois in Chicago. Back to the interview of Palin; If you cannot name the news papers you read, you are not fit to run the biggest economy in the world. Palin was a tragic decision and very unwise and I rely on the fact that nothing, never, has anything important become of a loosing VP candidate. Edwards failed, thank you.

To me, election day was decided well before hand – you could almost feel it (or was it hope?). When I saw Obamas speech, I thought to myself, this story could only happen in one country in the world and only there. The message that the American people sent around the world was one of change, equality and willingness to be different. To think that the economic effects of electing McCain/Palin 08 would be greater than electing someone who can restore a the US as the democratic light in the world is – in my belief – naïve.

Obama (+): Clear message, fantastic oral abilities

Obama (-): Nothing, really
McCain (+): Very very little, said "no" to the usage of torture

McCain (-): Choice of VP, no single message, too old
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Overall: I dont think that Obamas victory would have been possible without the financial crisis, unfortunately

Back from China

... after a very very tedious journey home with Swiss.. I am now back in Stockholm and that feels great. Couldnt stand yet another dumpling.

Narrow perspective #2

I have now surfed the web and read up on some issues regarding the news that Barack Obama enjoys an approval rating of approximately 82 % (Read about it here and here). After going through some well written blogs and some not so well written blogs i find it staggering to see the amount of interpretation and "will" that goes into this report.

Of course, in the Scandi-blogosphere there are some patterns that can be seen. Conservatives say that Obama is "controlling" the media and that running the country is not the same as being friendly in the media. Socialists on the other hand seem to see this approval rating as a proof that "Obama is good" (Socialists sometimes have a great 6th sense, to see every important, and unimportant matter in a strict black and white scale).

Well, I dont believe in any of this. The approval rating only says one thing. That many people in the US are looking forward to see the transition of power. Do I think that Obama can live up to the millions of expectations that he has, through is vague message of change? No, of course not - to actually beleive that he can do this is utterly insane, and comment on this fact is also redundant and seem to be the biggest sickness that conservatives in the Scandi area are facing. I for one am looking forward to have a well read and well educated person in the White House, this does not necessarily mean that I support some of the Democrats often weird and BIG government plans for universal health care (nor do I mean I dont support universal health care). I strongly believe that Obama is good for the US and more importantly good for the EU and Scandi area. Obama will force the hand of the EU to take on forgotten responsibility and demand "change" from within the EU. Do you want peace in Afghanistan? Well, send troops. Do you want peace in Iraq? Send troops, share the burdons of creating democracy and you might reap the rewards of stability. Never, has the echo of anti Americanism sounded so wrong and tedious, now lets leave it at that.

The narrow perspective of Swedish media

I logged on to DI.se - the Swedish business magazine (Norwegian DN.no is better) and read a tiresome article about 2008 where they had invited two well-known debaters, Maria Rankka (Conservative) and Göran Greider (Socialist). This to me, corresponds to the worst in Scandinavian media where two, fairly well-known, persons get to "speak" to the media and adress their "truth". A very wise person once said "many of the truths we cling to depend greatly on our own point of view".

If I would have been the editor I would have seeked out a couple of Scientists, for example at KTH (the technical university in Stockholm) and Stockholm School of Economics and let them debate and think about the past year. This, of course, would have been a more analytical and longer piece which probably would have forced the reader to actually analyze and think about the past year, instead of getting their own opinions reinforced. To me, 2008 was the year when corporate greed (Incarceration of the Cevian-Man, insider trading at Handelsbanken, the collapse of investment house Carnegie) and stupid bank deals (Carnegie again, SEBs creation of "secured" house loans in the Baltics, and Swedbanks emission of new stocks in order to cover investments in the Ukraine and the Baltics) got introduced into the Swedish corporate world.

Christmas morning

We have now arrived in Shanghai with the train D301. This was an express train with better facilities than the "Z" train. We also managed to miss our train because of bad planning, but we could still re-book our out of time tickets which was good.

Check this link for a video I uploaded. I have not bothered checking the news today - I assume that things are fairly quiet now because of the holidays. I cant seem to wonder what is happening inside GM right now though. Allright, happy Christmas and Hannukah and I whish all the readers (how many are you?) a very happy and fruitful 2009. I have read this book about Google. Its not very good, i think the text is a bit sloppy and a lot of focus on the main actors, Sergey Brin and Larry Page. Well, it makes you understand why companies like GOOG and Apple can prosper in the US and not, for example, in Sweden. The vast resources of Stanford is amazing.

Nippon #1

The worlds largest auto manufacturer, Toyota, is apparently reporting a loss for the first time in 70 years. Well, this still does not mean that they are going into chapter 11. Tell me, when during the last 15 years did SAAB Automobil report a profit? huh? My favourite Japanese auto maker is still Nissan, since Carlos Ghosn took over their entire value chain seems to have gotten a sincere and healthy dose of vitamine, producing "wanna-have" products such as the new 350Z and the Qashqai. A CEO to admire.

Read the story on WSJ.com.

Christmas on the train..

Due to the terrible weather we are going back to Shanghai to stay at this hotel; Mercure Baolong. They have an indoor pool which Im definitely going to enjoy after the nice visits to the Great Wall..

Shanghai; 2 - Beijing; 0

Well... after being in Beijing for two days now I can honestly say that I prefer the city of Shanghai to the city of Beijing. However, I went to a restaurant called "Haiku" and had some delicious sushi. It was fantastic. I also saw the Forbidden City.. I would have enjoyed it a lot - if not for the furious cold.

This photo of me is from the forbidden city.. it was colder than -10 degrees (metric) with an icy wind.. I had not packed the appropriate clothes, which made the whole situation quite bad. I think im listening to some tape about a certain building (i have had better times).

Beijing before the holidays..

Well, we passed the final day of Hanukkah yesterday.. and in two days we are going to have Christmas here in Beijing. Weather.com says that it will continue to be cold in Beijing.. probably around -10 degrees celsius which is really horrible.

Today, we are going to try to find a place where we can buy warmer mittens (or gloves) and then we are going to go to the Forbidden City.

There was also a fairly interesting article in the Swedish Business Newspaper DI.se. DI had interviewed a couple of Swedish students at the Harvard Business School. Well, apparently, it seems as though the economy is falling down really hard in the US.

Beijing

The weather today was absolutely horrible today - terrible and horrible. I think it was below 0 and powerful wind. We also encountered a moronic taxi driver and realized that Michaels House was situated at a weird side street which makes it hard for cab-drivers to find.

This means that I am checking the weather for Beijing.

Train to Beijing.

We have now managed to reach Beijing with the Z.14 train from Shanghai to Beijing. To sum up:

• Cheap
• Fairly hard "beds"
• Fairly good restaurant

Michaels House is located in a weird neighbourhood. I am now going to relax in the room for an hour or two before heading out. I must say it feels good to see something else than Shanghai. And, well.. its really cold here. Might have to visit H&M (if there is a store here in Beijing).

I also finished reading Watchmen by Alan Moore. Fantastic, what a thrill. Rorschach is definitely a favourite.