China Chaos & Subprime Butterfly; India turns History
Upside Down
London, UK - 19 August 2007, 13:53 GMT
Dear ATCA Colleagues
[Please note that the views presented by individual contributors are not
necessarily representative of the views of ATCA, which is neutral. ATCA conducts
collective Socratic dialogue on global opportunities and threats.]
We are grateful to:
. Dr Jim Walker, Chief Economist, CLSA, based in Hong Kong, China, for "China
Chaos and Subprime Butterfly;" and
. Ashutosh Sheshabalaya, CEO, India-Advisory, based in Brussels, EU, and Bassilly,
Belgium, for "India turns History Upside Down;"
____________________________________________________________________________
Dear DK and colleagues
Re: China Chaos and Subprime Butterfly
In the well-known Chaos Theory metaphor a butterfly flaps its wings on a yak's
ear in Tibet and sets in motion the climatic forces that result in a hurricane
devastating Florida. In that analogy the disturbance to the initial conditions
starts in the east and finishes in the west. The reverse reaction is in train
in this crisis. Sub-prime is Chaos Theory's flapping butterfly. The beat of
its wings disturbed the 'sensitive dependence' of the credit house of cards
which is now falling around the global financial system. But the 'hurricane;
in Florida will eventually manifest itself as a typhoon in China's capital
goods industries! The first extended capital goods structure to collapse in
this story was the US housing market. But China's industrial build-out has
been no less dependent on easy global credit conditions than Florida and California's
overbuilt condominiums. It may take a number of months or quarters but eventually
the demand, credit and capital patterns will shift enough to expose China's
productive capacity for what it is, a structure based on artificial global,
not solid domestic, demand.
[CONTINUES]
[ATCA Membership]
Best regards
Jim Walker
Dr Jim Walker is CLSA's Chief Economist based in Hong Kong since 1991. From
1993 to 2004 (for eleven consecutive years), he was voted Number One -- Best
Regional Economist in the Asiamoney stockbrokers poll. He is in charge of
a team of economists who produce economic growth forecasts and assessments
of economic policy in the Asian region. The CLSA economics team is currently
ranked Number One in the Asian, European and US surveys undertaken by Greenwich
Associates in 2005. Dr Walker's main responsibilities focus on China and India
as well as co-ordinating CLSA's regional and global forecasts. After graduating
in 1980 he was a research student and then fellow at the Fraser of Allander
Institute for Research on the Scottish Economy, Strathclyde University. During
that time he undertook research work on the Scottish economy culminating in
his PhD thesis on modelling Scottish international trade patterns. He was
also the Chairman of the Scottish Business Forecasting Service and the Editor
of the Scottish Business Survey. After leaving academia in 1987 he joined
The Royal Bank of Scotland in Edinburgh as an economist. In this post he was
responsible for the Bank's coverage of the oil industry, the US economy and
the Scottish economy. He holds a Bachelor of Arts Honours degree and a Doctorate
in economics from the University of Strathclyde, Glasgow. He is the co-author
of the book "Challenges of New Technology", published in 1987 and
of a number of academic papers on Scottish ports and renewable energy assessments.
CLSA is an award-winning brokerage, investment banking and private equity
group in the Asia-Pacific Markets. Founded in 1986 and headquartered in Hong
Kong, CLSA's major shareholder is France's Credit Agricole, the world's 5th
largest bank by assets and 5th by Tier one capital. CLSA enjoys substantial
staff ownership which contributes to its independent stance and operations.
____________________________________________________________________________
Dear DK and Colleagues
Re: India turns History Upside Down
Congratulations to Mr Elkington for an excellent submission to ATCA in regard
to "India's Mother Convulsion." His choice of examples from two
representatives of India Inc -- Niraj Bajaj and Yogi Deveshwar -- may be pure
coincidence. In reality, they represent opposite sides of New India's business
spectrum -- a regenerating family of Old Money tycoons (the Bajajs), and ITC
(a professionally managed company since its inception). I endorse Mr Elkington's
conclusions, but would like to add the following comments:
[CONTINUES]
[ATCA Membership]
Kind regards
Ashutosh Sheshabalaya
Ashutosh Sheshabalaya is the author of 'Rising Elephant', which is a heavily-researched
bestseller about India's rise and long-term opportunity and challenge to the
West, published in the US, India and Europe. Described as a "tour de
force" by the Director of UBS bank's Wolfsberg think-tank and as "highly
provocative" by former Indian Deputy Prime Minister LK Advani, 'Rising
Elephant' has been reviewed worldwide.
Ashutosh Sheshabalaya has worked in Brussels as an accredited foreign correspondent,
in public affairs (for the European Federation of Pharmaceutical Industries),
and as a strategic consultant -- both for private corporations as well as
the European Commission, Invest in Sweden Agency and others. In total, he
has led research projects for over 65 studies covering a wide range of industries.
Now heading Belgium-based India-Advisory, he is a frequent speaker at conferences
and seminars in Europe, India and the US, a columnist for the Indian online
news portal Sify and an occasional contributor to Yale University's Center
for Globalisation and Washington's Globalist. A winner of the all-India National
Science Talent Scholarship and the Wien International Scholarship, he studied
at a leading Indian engineering institution, the Birla Institute of Technology
and Science, and at Brandeis University in the US. Mr Sheshabalaya is married
to a Belgian and is part of New and Old India. His parents were both university
Vice Chancellors, and his family includes an Industry Minister in the Nehru
government, a Commissioner in British India and representative of the Tata
industrial group, one of India's first women legislators, senior military
officers, diplomats and seven members of the elite Indian Administrative Service
(IAS).
[ENDS]
We are grateful to:
. Dr Jim Walker, Chief Economist, CLSA, based in Hong Kong for "China
Chaos and Subprime Butterfly;"
. Ashutosh Sheshabalaya, CEO, India-Advisory, based in Brussels, EU, and
Bassilly, Belgium, for "India turns History Upside Down;"
. John Elkington, Chief Entrepreneur, SustainAbility, based in London, UK,
and returning from India, for "Mother Convulsion
- India's Third Liberation;"
. Stephen Lendman, based in Chicago, Illinois, USA, for "Slow
Motion Train Wreck" via Ashok Khosla, Chairman, Development
Alternatives, New Delhi, India;
. The ATCA Editorial Team based in Canary Wharf, London, UK, for "Market
Convulsions;"
. Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA
for "Federal Reserve's Changed Focus;"
. Bill Emmott, Director, UK-Japan 21st Century Group, based in London and
Somerset, UK, for "Japan's Strong Yen;"
. Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA
for "The Asymmetric Loss of Trust and Chain
Reaction;"
. The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Public
Inquisition of Credit Rating Agencies may Accelerate Downturn;"
. Dr George Feiger, President and CEO, Contango Capital Advisors, based
in Berkeley, California, USA, for "Watch
out for Dramatic Winners;"
. The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Systemic
Risk & Sectoral Meltdown: Heightened Correlation and Deleveraging;"
. Rudi Bogni, Chairman, Medinvest, and Director, Old Mutual, from Basel,
Switzerland, for, "Non-Stop Central Banks'
Intervention;"
. Dr Ravi Batra, Professor of Economics, Southern Methodist University,
Dallas, Texas, USA, for, "Towards a Global
Economic Crisis?;"
. Aurora Carlson, Founder, Open One Center, based on the West Coast, Sweden,
for "The Coming Storm of Change;"
. The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Large
Quake hits Quants as Computer-Driven Quantitative Hedge Funds Short-Circuit;"
. Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA
for "Prolonged Credit Market Correction Ahead;"
. Prof Dr Norbert Walter, Chief Economist, Deutsche Bank Group, based in
Frankfurt, Germany, for "Economic Consequences
of The Sub-Prime Crisis;"
. Anthony Whitehouse based in Coppet and Geneva, Switzerland, for "Regulators,
Hedge Fund Lending and Cross-Selling;"
. The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Perfect
Storm: Credit Freeze and Distress Selling by Hedge Funds;"
. Dr George Feiger, based in Berkeley, California, USA, for "Two
Faces of the Same Coin;"
. The ATCA Editorial Team, based in Canary Wharf, London, for "Contagion
and Systemic Risk? ECB Injects Record Euro 95bn post Major Disturbance;"
. The ATCA Editorial Team, for "Flight to Quality
as Markets finally Appreciate Risk;"
. Robert McNally, Chairman, London Chamber of Commerce Property and Construction
Group, for "Erosion of Commercial Real Estate
as a Solid Asset Class;"
. Alexander Hoare, CEO, C Hoare and Co, Private Bankers, based in the City
of London, for "Destructive
Creativity, Leverage and The Derivatives Market;" and
. Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, for
"The Fear of Central Bankers -- Flight from
Illiquidity, Derivatives and Heightened Risk of Contagion;"
in response to, "Are the Currency Markets Warning
that there is Trouble Ahead? The Precipitous Decline of the US Dollar and
its Impact on the World."
We look forward to your further thoughts, observations and views. Thank
you.
Best wishes
For and on behalf of DK Matai, Chairman, Asymmetric Threats Contingency
Alliance (ATCA)
ATCA: The Asymmetric Threats Contingency
Alliance is a philanthropic expert initiative founded in 2001
to resolve complex global challenges through collective Socratic
dialogue and joint executive action to build a wisdom based global
economy. Adhering to the doctrine of non-violence, ATCA addresses
asymmetric threats and social opportunities arising from climate
chaos and the environment; radical poverty and microfinance; geo-politics
and energy; organised crime & extremism; advanced technologies
-- bio, info, nano, robo & AI; demographic skews and resource
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over 120 countries: including 1,000 Parliamentarians; 1,500 Chairmen
and CEOs of corporations; 1,000 Heads of NGOs; 750 Directors at
Academic Centres of Excellence; 500 Inventors and Original thinkers;
as well as 250 Editors-in-Chief of major media.
The views presented by individual contributors are not necessarily
representative of the views of ATCA, which is neutral. Please
do not forward or use the material circulated without permission
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