mercredi 27 avril 2011

Idiot of the week: Barack Obama

Obama has very little going for him right now. But at least he could always find comfort in the knowledge that his opposition was represented by conspirationist nutjobs obsessed with convincing the world that Obama is either a muslim or was born outside the US (often both).

Let's face it folks, when your main opponent is a megalomaniac business mogul with styrofoam hair who spends his time discrediting himself on national TV by saying that "China is raping this country"; things can't really be that bad.

Nice try but... you're fired!

The whole birth certificate affair was probably the best thing that happened to Obama during his presidency. It made the GOP focus on trivial issues instead of policy propositions, discredited his potential opponents in the eyes of the general public and forced right-wing politicians to engage in a race towards the bottom to court the base. It tarnished the Republican brand so bad that even respectable politicians were affected by the spillover effects. In short, it left the league of serious politicians pretty empty and heavily left leaning.

Up to today, the race for the Republican nomination was a giant farce and Obama could look forward with serenity to dozens of televised debates during which mildly crazy middle aged men would debate whether or not the current president is a Muslim or an American or the next Hitler instead of engaging in a meaningful conversation about the nation's future.

But Obama kinda blew it when he released his full birth certificate 2 days ago. By so doing, he pretty much made Mitt Romney, Tim Pawlenty and the other Republican candidates that are actually electable a huge service by clearing out the field for them. With the birth certificate now public, the front stage can finally be occupied by Republicans with some real ideas that present a much more credible threat to the incumber president than Hockey Moms and crazy business moguls.

Dumb move Barry...

mardi 19 avril 2011

Idiots of the week: the UN!

My online activity has been pretty limited lately, the reason being that I am currently writing my graduation thesis and have little time for more frivolous activities such as blogging. I'll be back in a week or so!

In the great international league of idiots, the UN's environment agency arm always ranks high. No organization on earth can match its capacity to make grandiloquent, alarmist claims backed by high school level science and still make the entire package look like serious scientific research.

In 2005, the UN Environment Program gravely predicted that by 2010, there would be over 50 million climate change refugees displaced by catastrophes such as hurricanes, tsunamis, plagues of locusts, you name it! These alarmist predictions were backed by a very serious looking map supposed to show the extent of the cataclysm ahead.

Well, 2011 has come and the UN's deadline is behind us. Let's see how the UN's claim fare when compared with reality.

It goes without saying that the 50 million climate refugees predicted by the UN failed to materialize. Not only that but populations are actually increasing in the areas that were supposed to be hardest hit. the 6 fastest growing cities in China are right in the middle of zones that are by now supposed to be devastated.

Hard hit by the repercussions of climate change, the few remaining inhabitants of the Seychelles are slowly drowning in muddy water

Damn, that's embarrassing

Surely an institution as serious and impartial as the UN would face its errors with dignity and wouldn't engage in any grotesque cover up operation aimed at trying to send its idiotic predictions down the memory hole. Well, this is what you get when to try to upload the page with the map and the original article:

404 not found: honesty and scientific credibility could not be displayed on this page

So not only did the geniuses at the UN misinform public opinion with misleading claims dictated by ideology rather than serious science but they even managed to mismanage the cover up... They forgot that in the great World Wide Web, nothing is really forgotten and bloggers were quick to dig up the original page on Google cache.

The great disaster that wasn't...

One might think that the UN would at least have the decency to keep their head down. Think again! Rather than facing their mistakes, those who are supposed to be the leading scientists of our times simply recycled their original previsions (remember, those people love recycling). It's official folks, the deadline is now 2020! By 2020, we swear that the refugees that were promised will be delivered. Satisfaction guaranteed! Obviously, a sycophantic media sphere was quick to channel this piece of "news" without exposing the UN's original fraud. Investigative journalism at its finest...

Beyond the comical aspect of this entire story, it poses once again the question of how climate change ideologists manage to manipulate public opinion and use their grip on the media sphere to fool the general public with seemingly solid science that inevitably turns out bogus. It's high time for us to start holding these people accountable for the claims they make and the fallacies they spread!

dimanche 10 avril 2011

Idiots of the week: French Socialists

I noticed that I forgot to hand out last week's "idiot of the week award". I'll make up for it by honoring a very special group of idiots who have shown remarkable consistency in their performance over the years: the french Socialist Party.

Earlier this week, the Socialist Party (one of the last of their kind for which the term "Socialist" is to be taken literally) finally unveiled its grand program for the 2012 presidential election. The result is a superb bundle of dusty antics that bring back to mind sepia colored memories of the golden age of the 70s when being shielded from the responsibilities of power allowed Socialists to live in their own world where the laws of economics and mathematics did not apply.

It certainly looks like it...

Deriding the french left is of course one of my very favorite hobbies, but the Socialists are making it so easy lately that it's not even funny anymore. I miss the challenge.

Their program is so ridiculous that I don't even know where to start... Which of these dust covered policies that have all magnificently failed in the past and are living testimonies to the Socialist Party's state of absolute decrepitude should I start with?

You know what, I don't even want to make the effort. This program needs no further deriding so I'll just summarize it in one sentence:

Free money for everybody, more taxes on the rich, more jobs, higher wages, lower rents, higher import duties, cleaner energy and free candy.

I'd like to say that I'm simplifying but I really am not... If you want a good laugh, I encourage you to read the full version of the website.

In any other country, this sad bunch of neo-commies would have been relegated to the dustbin of history a long time ago. In France, sadly, they represent a credible alternative to the current administration. This country is screwed...

samedi 9 avril 2011

I told you so: Facebook in China

Damn, this week has been good for my ego...

In my last post about Facebook I predicted that the world's largest social network would try to enter China through a joint venture with Baidu, the Chinese internet search giant. Two reasons for that stood out:

1- Facebook can't afford to ignore the Chinese market. As the company grows, prepares its IPO and needs to justify its sky high valuations; it can no longer accept to leave 500 million netizens outside of its reach. Furthermore, Facebook is putting mobile at the center of its strategy and China is THE country where mobile internet will be taken to an entirely new level (figures here). In my view, Facebook's vision is almost too advanced for western internet users. But in China, people will integrate social networks and mobile technologies into their daily life and consumption habits at an amazing speed, way faster than anywhere in the developed world. The Chinese market is thus an amazing playground for Facebook that wants to turn the social network into a platform for a myriad of services ranging from e-commerce to virtual currency and mobile payment.

The little red Facebook

2- Despite its status of superstar of the Chinese tech scene, Baidu does not have a strong position in social services (a problem is shares with Google). It is fighting against well established competitors with strong user bases such as RenRen, Pengyou and Kaixing101. A joint venture with Facebook may be its only chance to make up for the time lost and shake up the market.

As it happens, rumors have been surfacing this week that Facebook and Baidu may be going forwards with a project to create some kind of Chinese version of Facebook. What the end result will look like is still unclear at this point but we will surely know more in the weeks to come.

For now, neither Facebook nor Baidu have confirmed the rumors and there is some talk that the partner might not be Baidu but Sina (China's leading micro-blogging site). But I strongly believe that the deal will go through, which might frighten Kaixing and thwart its IPO plans. This is not really good news for RenRen either since it is essentially a Facebook copycat that might suffer from having the real deal now in its own backyard. Look ahead for an interesting couple of weeks in the SNS universe.

vendredi 8 avril 2011

I told you so: Iran's blue revolution

It's kind of of nice to see major think tanks making the same case you made only one month after.

Last month I published an article about Iran. Here is what I said in it:

My personal position is that Ahmadinejad's mishandling of the economy has strongly eroded his support(...) I don't believe in an Egyptian scenario in Iran. I think that the regime might crumble in the next year or so but wouldn't place a large bet on it. Most importantly, if the regime falls, it will be worsening economic conditions that will give a popular uprising the necessary amplitude to have a real impact.

A few days ago, Foreign Policy published an article called "Iran's blue revolution". The point it makes is that discontent is starting to grow amongst Iranian blue collars, who hitherto represented the bulk of the regime's support. With employment next to 30%, inflation on the rise and subsidies on everything from fuel to food being scrapped; workers are filling the ranks of the would be revolutionaries.

Not your average protester

Another things I emphasized in my article was the Green Movement's representativeness problem:

Being skeptical about the regime's real popularity does not lead me to overestimate the real representativeness of the green movement. One of the reasons why it didn't manage to overthrow the regime in 2009 was that its could not claim to represent a majority of Iranians. The movement is young, mostly urban, liberal and centered on Tehran. I believe that even though Ahmadinejad is unpopular, many Iranians are still uncomfortable with explicit attacks towards the Islamic Republic itself and supreme leader Khameini. I don't think that a revolution that has the Green movement as its primary representative can gather the necessary popular support to be successful.

The Green Movement seems to agree with me since they are trying to expand their base by reaching out to poorer, more rural populations. The latest Green Manifesto clearly lays out a strategy of including workers and farmers into the movement to gain traction.

Si what can we expect now? If the Green Movement indeed manages to incorporate disgruntled working class voters into their organization, the government will be in big trouble. However it is more likely that Ahmadinejad will pursue a strategy of divide and rule, trying to buy workers' support with more subsidies and government hand outs and pitching one group against the others, probably by depicting the Green Movement as an impious band of agitators subordinated to western interests and bent on letting Iran sink into chaos.

vendredi 1 avril 2011

What will the iPhone 5 be like?

Signals have been surfacing over the blogosphere that Apple may have something special in store for us with the iPhone 5. Here are the two main reasons why:

1- The iPhone concept is stagnating. Since the iPhone 3G, Apple has been innovating incrementally and it looks like it has more or less reached the end of a cycle with the iPhone 4. Apple has used us to regular game changing innovations that completely redefine the rules of competition in the market (Macbook air, iPhone, iPad, iPod touch etc...). Furthermore, it looks like Apple is working on lots of cool stuff such as NFC chips, tactile screens that can recognize up to 4 touch points, a new system that would allow the phone to be controlled via the camera (ex: while listening to messages, you simple flick your finger in front of the cam to delete or skip) etc...

2- Its competitors have stepped up their game. Android now enjoys a 35%+ market share and shows no sign of slowing. More crucially, Google looks determined to address Android's one shortcoming: fragmentation. Openness may be cool in principle but it has resulted in operators loading Android phones with crappy apps and basically building their own version of the software. The result is a very uneven customer experience that widely varies according to the phone and carrier. With Google now tightening its grip over the Android eco-system, more people will flock to the little green man and the Android market will take a more central place. This in turn means more app downloads which equals more ad revenues and a higher potential for monetization. You get the picture.

Bring it on Stevy!

So how will Apple try to re-establish its preeminence over Android? I expect a push on content since that is where the threat represented by Android is the greatest. We can expect more stuff to be sold through iTunes (concert tickets for example) and maybe mobile payment. One thing is for sure: it will be pretty interesting battle.

4 Reasons to be bullish about China

In a previous post, I listed the reasons for which I think that China's economy is due for a slowdown in GDP growth. However, there are plenty of very good reasons to be extremely optimistic about the long term potential of China's economy. Indeed, lots of people are impressed by the mighty Chinese economic powerhouse but for the wrong reasons. They look with admiration at the large scale infrastructure projects, shiny sky scrapers and Louis Vuitton shops which are precisely the most fragile and misleading signs of economic success.

Here is why, despite my belief that China is due for a downturn, I still have great faith in the Chinese economy's long term prospects:
  • A sophisticated consumer base: in my post about the risks China faces, I placed particular emphasis on the alarmingly low (30%) share of private consumption in the country's GDP. However, while still worrying, the numbers I used to illustrate my point can be misleading. In truth, the problem is not so much that consumption is atrophied but that investment is on steroids. More importantly, the Chinese consumer is extraordinarily sophisticated, much more than his level of disposable income would suggest. Examples abound to illustrate this phenomenon amongst which the extraordinary speed with which Chinese consumers have integrated the Internet and now mobile networks in their consumption behavior. Chinese consumers are brand sensitive, tech savvy, open to trying out new products and increasingly demanding. Simply selling them tuned down versions of products designed for western markets is no longer enough (it probably never was to begin with). More and more western brands are acknowledging this and are integrating the sophistication of Chinese consumers into their strategies by launching "designed for China" products (notable examples include Hermès and Levi's). Sophisticated consumers are good for the economy since they force local firms to step up their game and stimulate product and process innovation. It also means that once structural obstacles are lifted, the Chinese consumer might well be able to make up for the fall in investment levels.

Carrefour, not Cartier
  • Great companies: when western media mention Chinese enterprises, they usually pick state owned giants such as telcos, banks and insurance companies. In my view, these firms have little growth potential beyond Chinese borders and succeed mainly because they operate in ultra-protected markets and benefit from government largesse. But this does not mean that China does not have world class companies. I'm planning on devoting an entire post to the strengths of Chinese companies so I won't give too much away in this paragraph. In short: China has plenty of dynamic firms that have developed innovative products and business processes that answer the specific needs and constraints of emerging market consumers. These companies such as Alibaba, Huawei, Wahaha, Lining and other less well known firms have managed to leverage their cost and scale advantage, capitalize on their first hand knowledge of local environments and exploit market gaps left by large western multinational. They represent the future of China's economy and I'll bet an arm that in a few year's time you will have some of their stuff in your garage/pocket/on your feet.
Take that Nike!
  • Shanzhai and incremental innovation: the word Shanzhai (山寨) literally means "Mountain bandit". It originally referred to counterfeiting but its sense has gradually evolved and it has come to signify the practice of incremental innovation. In short, it means outsmarting richer and better equipped competitors by building cheap but reliable products that still integrate advanced technology and focus on features that truly matter to the customer. The best example is smart phones. For the vast majority of Chinese, smart phones remain too expensive. There is no way the average Li can spend $400 on an iPhone, HTC Desire or Motorola Droid. However that does not mean that the average Li does not want a smart phone and is not willing to spend a sizable chunk of his income on one. Many Chinese companies such as Huawei (mentioned above) and Meizu have smelled opportunities at the low end of the market and have rolled out cheap smart phones that start at around $100. These models such as the M9 and the Ideos are reliable, integrate advanced technologies and take advantage of the open Android platform. What you get is a phone that doesn't look half bad, runs Android and allows you to do pretty much the same thing than the 3 times more expensive HTC Desire. This knack many Chinese firms have for delivering great value at a competitive price will prove a tremendous asset for China's economy.

  • A pragmatic leadership: this argument may come as a bit of a surprise but I truly believe that most people in Beijing are aware of the challenges they face and have a generally good idea of what needs to be done to rebalance the economy (even if the process proves to be painful). In my view, the problem lies mainly with local authorities who are the main drivers of credit expansion and investment and who are reluctant to take any meaningful action towards making the Chinese model more sustainable and consumption-driven. But if Beijing manages to nudge local officials in the right direction, I see no reason why China should not be able to pull the rebalancing trick off. There will be some painful re-adjustments but in the end, if everybody sings the same tune (and that tune is the right one) China's should be back in the game pretty quickly.
All in all, even though China may have a brief fall from grace, I have no doubt that it has tremendous long term potential, albeit nor necessarily for the reasons that are most often cited.