Notebook, 9 February 2011: The World’s Newest Nation . . .

The World’s Newest Nation

In case you’ve missed it, the news from Africa isn’t all bad, Egypt notwithstanding. The world’s newest nation, South Sudan, was born after years of dogged diplomacy helped end the world’s longest civil war (excepting perhaps the Karen revolt against the central government in Myanmar) which claimed the lives of an estimated 2 million. China has announced it’s recognition, and the US is poised to follow suit in July.

I’d like to take this opportunity to offer my own, humble, congratulations to the people of South Sudan and wish them health, prosperity and peace.

One of the most under-developed countries in the world, South Sudan possesses most of The Sudan’s oil reserves, so I await the onset of the Oil Curse. The problems facing South Sudan are enormous, and it’s domestic politics uncertain. Above all, I dearly hope it’s leaders avoid the mistakes being made by their neighbors in Cairo and remember those who voted to put them in charge first and foremost.

What Capital Flight?

It appears that overseas investing may not be all its cracked up to be. If you’re a shareholder in Egyptian companies, you might already be wondering why you never heard about the possibility of headline risk in detail. Like, who could’ve guessed that the murder of an Egyptian blogger would have ripped your retirement portfolio to shreds?

And that’s just the headline risk you know about.

What really has the investment community brotherhood of thieves, thugs and pickpockets abuzz are signs of inflation in Asia. Paul Ryan thinks it’s all Ben Bernenke’s fault, and I’d post the video, but unlike when democrats were in control, House committee hearing videos are now heavily censored and headlined with rethug talking points. Make no mistake. Republicans don’t give a shit about governing, They’re already using the facilities of the federal government as a campaign platform. (Is that legal? I’m just askin’.) However, Bernenke pretty much told the truth as best we know it: prices on ordinary daily necessities are rising because India, China, Brazil, etc. are all experiencing skyrocketing demand on finite resources. Meanwhile since the start of the year, Mumbai’s market is down 11.6%, Jakarta’s down 7.2% and Hong Kong has given back all the gains since January 1 and is now down 1%.

Mostly because the “hot money” from foreign investors is looking for a new home.

Oh, one BBC guest business analyst also briefly mentioned “headline risk,” but confines his concerns to North Africa. Guess he hasn’t heard about the exchange of artillery fire between Thailand and Cambodia, that North Korea walked out of preliminary talks with Seoul, that this might be important because North Korea evidently sank a South Korean naval vessel and shelled Yeonpyeong Island, killing four South Korean civilians, or perhaps he missed the growing tensions between Tokyo and Moscow over the Kuril Islands while Medvedev ups the ante. all of which I grant haven’t really made the headlines.


The Week Ahead . . .

If the scattered stories you’ve heard about dissidents being arrested, tortured and murdered by Egyptian police haven’t been woven into a continuous narrative for you, well that’s coming up a diary soon. (h/t to BBC World for beginning to put this together)

Likely that I won’t get it together before the switch to DK4 though. Hope to meet all of you there.

I also got ahold of a copy of The Economist Intelligence Unit’s Democracy Index for 2010, entitled “Democracy In Retreat” and I’d like to talk a little about that.


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