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Roundball Rock

The original Roundball Rock:

We Awarded The World Cup To This Country?

Really FIFA? Really IOC?

You may have heard how critical I was of the decision when it was made in early December. One of the criticisms of the Russian bid was safety concerns. Russia is hosting two important world events in the next 8 years. How has this happened?

When you have events like this:

But Monday's bombing, which killed 35 people and wounded more than 150, highlighted the persistence of terror attacks in the Russian heartland. Terrorists have struck the capital twice in the past 10 months, breaking a relative lull in attacks there that had lasted for several years.

You're going to put the world's people in the line of fire? I'm not saying that there will be a terrorist attack or a suicide bombing during the games, I hope there isn't one. But why take the risk?

These games are a time where we take a break from the rivalries and the fighting to contest them on the fields, the tracks, the swimming pools. The games are a time of peace. It is up to the host nation to maintain the peace. We've seen the consequences of a lack of peace in the past, in Munich 1972. Who is to say something similar cannot happen in a country where these kinds of events occur regularly?

Oh, that's right...money in your pocket is what's important. Corruption in sport is the worst. I hate it. It's absolutely ridiculous that Russia got the 2018 World Cup when safety was the number one issue and Qatar got the 2022 World Cup which they may move to winter because of weather concerns. It's particularly ridiculous when they beat the likes of England:

Events like these really annoy me because they show a lack of attention. These type of things need to be prevented, not just in Russia, but through out the world. I know that you can just as easily walk into a US airport. May be there should be further securities to prevent these measures. Airport are high capita areas and easy targets as a result. I know flying is a hassle, but what's the cost of a human life?

Women as Referees

Those were the comments by Richard Keys and Andy Gray during the Wolves-Liverpool match. These comments have caused an uproar and Sky Sports subsequently been dropped from Sky's coverage of Monday Night Football. I'm honest enough to admit that when I first heard the comments I chuckled, but then I thought about it more. Female referees are often chastised more openly than male referees because there are so few of them. This means that when they make an error, the reaction is amplified. Everyone knows the names of the female referees because there are so few of them. Fact is though that every referee makes mistakes.

I think the NBA is a good example of this. There is one female referee and her name is Violet Palmer. I will not comment on her credentials as a referee, but if you call her a bad referee, I can name you at least 10 male referees who are just as bad. Going back to football, there was a couple instances in the last two Arsenal games where the male linesman made the wrong call on offsides. The player that the ball was played to was onsides, while another wasn't. The correct call was to play on, but the referee waved his flag for offsides. Where is his criticism?

Fact is that men's sport still has a men's club mentality. There's a certain masculinity that's expected from all aspects and when a female tries to get into the men's club, it's received poorly. This does not make it right, but it's a reality of societal issues in sport. Will this change in the future? I think it's too soon to say. Sky made the right call in dropping Gray and Keys though.

Cajas: Reform At Last

Following concerns surrounding the financial system, Spain has decided to inject its banks with billions of dollars. The lingering problems with the financial problem have been attributed to the cajas, saving banks, which have struggled in the eye of the financial crisis and the collapse of the housing bubble. Spain attempted to rescue these banks last year, but the attempt to recapitalize and restructure these banks was thwarted by a lack of widespread reform and a desire by the banks to maintain the status quo. A year later, Spain has found itself under scrutiny for its increasing debt issues as well as its struggling economy. This time, Spain has responded with a more proactive plan. Injecting cash into the financial sector to recapitalize these banks has been well received, but the new reform measures have been the key to the positive response since they address the underlying issues which plagued last year’s rescue attempt.

The Spanish financial system is being monitored with a watchful eye by other European countries. Greece and Ireland have already accepted bailouts from the European central bank, so the worry is that, with its growing debts and struggling financial sector, Spain will be the next country to need a bailout. The deficits have hurt investor confidence in Spain, making debt hard to finance. Spain is already estimated to borrow €125 billion this year “just to finance its deficit and roll over maturing debt.” This new infusion of cash financed through debt poses risks and adds stress to an already taxed economy. However, it is a necessary move because the cajas are an important part of Spain’s financial and economic well-being.

The cajas are integral to the interests of Spain because of the large role they play in driving Spain’s economy. The cajas account for €1.3 trillion in assets, which accounts for 42%% of the total bank assets in Spain. The problems with the cajas are two fold. First, they have had trouble raising capital because there is lack of investor confidence. Second, the lack of regulation combined with the complex structures and histories of these banks are part of why these banks are in such dire situations. For example, because of the lack of regulation in lending practices, these banks, like many others around the world, funded a housing boom that went bust, crippled by “bad loans and heavy losses.” The housing spiral has played a huge role in depleting the banks’ funds.

Mortgage or other real estate loans account for nearly half of the cajas assets, therefore the burst of the housing bubble had a considerable effect on these institutions. As the defaults in the housing market began, the cajas were forced to foreclose on the assets and attempt to sell them to recoup the funds. The new influx of real estate for sale further plummeted housing prices, making the underlying assets worth less than the value of the loans. The result was a housing spiral that has seen the cajas suffer great losses. The easy response to fix the depleted capital at these banks is to provide them with more funds. It is not enough just to hand these banks some money; reform measures are necessary to prevent another financial crisis from happening in the future and to satisfy investors.

The idea to inject new funds into these banks is not a new one; Spain injected €11 billion into these banks last year through the Fund for Orderly Bank Restructuring (FORB). While the government had said that that amount put into the fund could rise to €99 billion, the country did not make more money available. A requirement of that rescue attempt was forcing the mergers amongst different cajas, reducing their number from 45 to 17. However, the mergers resulted in “confusing, unwieldy structures” which “scared off investors.” What is more is that they did little to provide transparency in these banks. The politicians who control the cajas used the FORB to create “virtual mergers,” allowing “the banks to keep their own brands, governing bodies and local retail operations while combining treasury and risk-management functions.” This is symptomatic of the political and social issues that go with forcing reform on these banks.
Part of the problem with the cajas is intrinsic with their history and their roots. These banks have “close ties to provincial governments,” which can be traced to the cajas rurales. These rural banks were affiliated with syndicalist, co-operative movements and the Catholic church. While they were absorbed by the savings banks, their ties to political and social interests remained. Because of this, the cajas “face pressure to back projects that may not be profitable.” For example, Bancaja and Caja Granada invested in a theme park, Terra Mitica, in Benidorm, which “went bankrupt in 2004” and” has struggled since reopening in 2006.” Additionally, another bank, CajaSur, which is operated by the Roman Catholic church in Cordoba, mysteriously refused to merge with Unicaja. It exemplified an instance where “politics often trumps rationality” in Spain. As a result, the Bank of Spain had to seize control of it. For Spain to make a real impact on these banks, widespread reform is necessary to usurp these special interests.

The overriding sentiment for reform seems to be that the cajas need to become more “centralized” and “transparent entites,” but in a country with Spain’s history, it might be difficult challenge to overcome. The Franco regime was extremely divisive, and though Spain has done much to repair these division, cultural and lingual values still prevail. For instance, the idea of centralized banks may not resonate well with Basques or Catalans, who were marginalized by the strong, centralized, Madrid-based government of Franco. In instituting this new reform, the hope here would be that the country is far enough removed to accept a decision that affects the health of the overall economy. A strong Spanish economy is beneficial for everyone and reforming the cajas would go a long way in repairing financial uncertainty. These political and social differences which have affected the effectiveness of past attempts to reform the cajas serve as evidence why the new reform has been positively received.

The new plan has shown investors how Spain has learned from previous misgivings and how the country is going to take a more proactive approach towards fixing the caja problem. Last year’s rescue attempt was focused on providing capital for the banks by holding them to lax restrictions. However, the banks took advantage of this through “virtual mergers,” providing access to the capital, but not making the desired changes. This time, Spain is not only providing capital, but also forcing “them to be more open about their lending practices.” By “simplifying their complex structures” and “making them more like traditional banks,” Spain is taking significant steps to usurping the “influence” of “local politicians, union members, clients,” and “Catholic priests” who were “reluctant to relinquish their influence” in the past. With all of these changes, it is easy to see why investors have reacted positively to the announcement.

Under the new plan, the cajas will no longer be complex, enigmatic institutions, but rather more like other banks in Spain. Spain wants to “transform” the cajas into “centralized, transparent entities” that “resemble traditional banks by placing all of their assets into a central holding company and streamlining management.” it is easy to see why the country wants the cajas to be more like traditional banks because Spain’s traditional banks, like Santander and BBVA, are strong. The plan already seems to be shaping the cajas. Cajastur, which merged with three other lenders, has said that it would be “pooling 100% of its assets.” However, the government is going to wait to see the “results of detailed disclosures” before giving an “ultimatum” to the cajas. This should allow the government to assess how bad the situation really is and allow the banks to restructure themselves before necessitating government intervention.

Improving the health of the Spanish economy should be a strong first step towards addressing concerns about Spain’s debt problems. Once these banks are recapitalized and restructured, they can get back to providing loans, stimulating economic growth, and creating new jobs. It should eventually ease the stress on the government, increasing the number of people contributing taxes and reducing the strain of social welfare programs. Spain has been plagued with issues relating to investor confidence because of the cajas for some time; resolving the caja problem should go a long way to addressing these issues.

How Does a Chant at Yost Begin?

So Friday night, I walk into Yost and go to my seat. There's a group of kids, not sure what age they were, but they definitely weren't regulars. This one kid was obsessed with Carl Hagelin. Through out the night, he would yell "give it to Carl" or "Carl's my boy," you know general fanboy fodder. They were just being obnoxious before the game, and I gave them a look. One of the kids asked me "you want in on this." Now I thought they were just drinking or something, but I wouldn't have been surprised if it was something else.

Anyway, these kids were just awful. They were sitting in the student section but had no interest in chanting with the student section. After a while, it sounded like they got bored with Carl, and started chanting "Beat that ass." It was really awkward for us regulars. We all just gave each other looks and rolled our eyes. It was annoying but partially funny.

Well, after one of the goals, one of the kids threw that ball on the ice. Kid tried to take and blow my vuvuzela too, which I snatched before he even took it (this is where I had had enough of this fucktard). The Alaska goalie was hilarious though.

So last night (YES THE THREAD TITLE HAD A POINT), whenever Michigan got into a skirmish, we broke out into chants of "Beat that ass." It was more a hilarious recall to an awkward yet entertaining night. I'm just glad I didn't get into a fight with that kid.

Browntown

Would you buy this?

Yuan Appreciation!

On Wednesday, Chinese President Hu Jintao will meet with President Obama to discuss the relationship between China and the United States, focusing particularly on issues of trade. This has been a hotly contested issue for sometimes now as the US has pressured China to appreciate their currency, claiming that China has held the exchange rate artificially low so that Chinese businesses can enjoy a trade advantage over their US counterparts. In an interview with the Wall Street Journal, Jintao has fired back at the US saying that “the monetary policy of the Untied States has a major impact on global liquidity and capital flows and therefore, the liquidity of the US dollar should be kept at a reasonable level.” He also suggested that China will consider making the yuan a global currency, while conceding that it “will be a fairly long process.” This is the setting for what should be an intense bilateral discussion between the leaders of the two biggest economies in the world.

The yuan has tremendous potential as a global currency because of China’s continuing emergence as a global economy. Currently, less than 1% of China’s $2.3 trillion imports are done in yuan. According the the Wall Street Journal article “New Move to Make Yuan a Global Currency,” “some analysts have predicted that it will be only a few years before 20% to 30%” of the imports “will be conducted in yuan rather than dollars.” This suggests that there is already a demand for direct yuan exchange in foreign exchange markets.

Trade between the United States and China constitutes a large portion of the United States’ goods deficit and China’s surplus. Of the United States’ $51 billion monthly goods deficit, $26 billion is attributable to China. The trade between the two countries means that both countries have a stake in each other, present and future. The US has helped China build its economy by buying their goods, and as a result of this capital outflow and wealth, China has accumulated US financial assets.

From an economics perspective, it should be understood that both countries can benefit from a yuan as a global currency, one that is subject to appreciation and convertible for direct trade with other countries. The appreciation of the yuan relative to the dollar can help the US industry and trade in a number of ways. However, it can also help China by reducing its exposure to the US, reducing its transaction costs in trade and making foreign resources less expensive. The decision to make the yuan a global currency should have mutually beneficial consequences.

The US has been clamoring for the Chinese government to appreciate their currency for sometime. Because the yuan has been pegged at a fixed rate, China has enjoyed advantageous trade with several countries, but in particular the United States. We know from our stock and flow model that countries neither want to face a trade deficit (because of the marginal cost of debt) nor accumulate foreign financial assets forever (because of the risk of default). Eventually, the demand for a flow of foreign goods and services must shift, leading to an appreciating yuan. An stronger yuan should help the US trade deficit by making its goods cheaper and China’s goods more expensive.

Devaluing currency often is depicted in a negative light because it is usually caused by inflation. Traditionally, inflation has been the primary cause of a depreciating dollar. Additionally, a strong dollar is important for buying foreign foods and for travel. However, it has been detrimental to domestic industry and labor. First, depreciating the dollar relative to the yuan is not a result of inflation but rather a consequence of the market forces; there is a demand to conduct trade directly in yuan rather than in dollars. Second, a strong dollar has hurt the US by making domestic goods less attractive to foreign countries, influencing the balance of trade. It has also made it more attractive to invest in cheaper foreign labor by outsourcing, since domestic labor has been relatively more expensive. As other currencies appreciate relative to the dollar, companies from those other countries will be more attracted to hiring US labor. Having the dollar depreciate relative to other currencies can have a positive impact on the balance of trade and labor without the worry of inflation.

China has been accumulating US financial assets through the influx of dollars from the imbalance in trade. The combination of accumulating US assets as well as the growth in the US budget deficit has made China increasingly exposed to the US default risk. While US bonds have always had the reputation of being a safe asset to hold, the recent financial crisis has reinforced the important of diversification. China has been concerned that the US will “inflate away its debt” “by printing money.” By making the yuan a global currency and relying less on the dollar as a medium of exchange, China will accumulate less dollars which will not necessitate the purchase of US financial assets. Instead, China will be trading in their own currency and accumulating other foreign currencies and financial assets. This will increase their portfolio’s diversification and help stronger relationships with foreign countries. It will make the countries interdependent on China just as the US has been. Diversification will make China less susceptible to fluctuations in the United States, enabling for a more stable economic environment.

Another advantage of opening the yuan to global trade is reducing transaction costs. By using the dollar as a medium of exchange, China is paying a spread, the difference between the price to buy or sell, of the dollar exchange rate. Essentially, for every transaction that China is conducting in dollars, China is paying a tax. They are paying more and getting less than what they would if they had direct exchange through the yuan. While it may only be a small fraction of the transaction, with the magnitude of trade that China is involved in, its sum adds up. If it makes the yuan a global currency, it can trade directly with other countries rather than using the dollar as an intermediary medium of exchange.

As a developing country, China has become a huge player in the commodities industry. Commodities are very much the life blood of industry and commodity production is integral to industrialization. The mark of an industrialized nation is consuming 300 kilogram per capita of steel. Currently, China is producing 426 kilograms per capita. To produce steel, you need coke, which is a product of coal. Additionally, 68.7% of China’s electricity comes from coal. While China is the leading producer of coal, it imports nearly 3 million tons of coal from the United States. This is only one example of China growing demand for resources, but a stronger yuan would make these resources, these factors of production, cheaper.

The bilateral meetings Wednesday should serve as an opportunity to discuss the possibility of opening up the yuan to the world. As Juntao said, it will be a “long process.” As the world’s two largest economies, China and the United States are the leaders of the global economy. For both sides, it is important for them to come to a resolution that is mutually beneficial. A war of words between two countries so interdependent on each other is not a viable solution. Appreciating the yuan can go a long way to better the relationship by helping trade and industry in the US and making trade less costly and risky for the Chinese.

Happy Thanksgiving Everyone!

Happy Thanksgiving everyone! Thanksgiving is the most American of holidays. I mean, what other holiday has the food, the booze, and the sports like this one? The excessive eating is funny because in a lot of places, they don't have food. In other places, their food sources are limited. Name a country that has a sports day like this? What's impressive is that it's one sport that carries us through the day. The culmination of food, booze, and sports are just unmatched by any other holiday.

We go all out to honor the coming together of the Native Americans (notice I didn't use Indians, that's offensive to us Indians) and the Pilgrims. Or do we? Do we even think of these things? Perhaps not. Perhaps we think of what we're thankful for. Perhaps that's enough, but perhaps we should be thankful for the Native Americans and Pilgrims; we wouldn't have Thanksgiving without them.

Happy Veteran's Day

I knew we just passed the anniversary of the founding of the Marines, but I was unsure we were close to Veteran's Day. I really don't study the calendar as much as I used to, considering we don't get holidays like this off in college. Lately, I've been seeing more of these poppies, for lack of a better word, popping up. I knew they had some symbolic meaning for the Brits, as I'd seen football managers and commentators wear them. I did not know they were worn in the US too, particularly because I've never seen anyone wear them. It got me curious as to how this tradition or meaning was initiated.

I did a little searching (Google Search) and I found this blog entry:

The red poppy is a familiar emblem of Remembrance Day which began with a poem “In Flanders Field” written by Canadian Physician John McCrae. The poppy emblem was chosen because they were the flower that loomed in their red colour across some of the bloodiest battlefields of Flanders in World War One, making the poppy’s colour symbolic for the bloodshed and despair of trench warfare.

That's really powerful. Well, the poppy seems like a very powerful flower. It's bright and distinctly shaped. It probably has the right colors to symbolized the blood and darkness of war as well. It's just so fitting.

Regardless, this day isn't about poppies or me, it's about our troops, our veterans, and our fallen fathers. It's about the people who fought for our freedom, to help make this country the most powerful nation in the World, politically, socially, and economically.

To all the Armed Forces, thank you.

State is Out Of Control

These are the kind of things that lead me to dislike State:

"Zero tolerance does not mean automatic dismissal," the coach said. "To some critics, it might be seen as a low-percentage call or the wrong decision," Dantonio said. "It is neither. To me, our coaches, and our entire team -- the men in the arena -- it was the right call for the right reasons."

I'm not from Michigan, so I don't have the same strong hatred for Sparty that most of my friends seem to have. However, things like this really piss me off. How do you let your students get away with this? You're an institution of higher learning and this is the kind of example you set? If you're a talented athlete and you make horrible mistakes like getting a DUI, assault, or even rape, you will be absolved of your sins.

What kind of example is that? You should be trying to develop quality human beings. This is why you have ex-Spartans getting drug problems (Charles Rogers) and shooting themselves in nightclubs (Plaxico Burress). See Sparty, I'm not denigrating your school for its poor academic reputation and your status as little brother, I'm ripping you for the poor standards you set for your students. How many chances can you give a player without giving him a slap on the wrist? These kids will never learn anything.

I guess when you have your first chance at a national championship in God knows how long, you're willing to turn East Lansing into a State Penitentiary. Dantonio can take that zero tolerance and shove it up his ass. May be he'll understand zero tolerance then. That's where his head is.

Only In Florida

This is sickening:

A 22-year-old mother from Jacksonville, Florida, has pleaded guilty to second-degree murder for shaking her 3-month-old son to death after his crying interrupted her FarmVille game.

For a fucking farmville game? Are you fucking kidding me? These are hte type of people I was talking about when I said we need to get rid of this welfare society. We can't afford to keep idiots like this in our gene pool. C'mon America! Get the fuck with it. This is just fucking disgraceful. A fucking kid died because of this dumb bitch.

O'Reilly Owns The View

My favorite part is when Elizabeth tries to get in a word and Sky Jones is like "no no."

Does Modern Warfare...

...make you feel like a Vietnam veteran? Now stay with me for a second here. You know how Vietnam veterans have all these nasty flashbacks. I feel like over the last couple days, I've been having these types of flashbacks too. As some of you know, I've been completely immersed in playing Modern Warfare, something I've decided to quit. In this time, it's been difficult to sleep because whenever I close my eyes, I feel like I'm in the game. I feel like I'm hiding behind a wall waiting for my opponent to come out so I can snipe him. BOOM HEADSHOT! I've gotten knived so many times, it's a broken record. It's pretty scary. I don't know how to get over this.

Not Cool Yo

This was part of a stunt for San Francisco's Fleet Week, but to me, it's a really scary reminder of events that happened on September 11th. I don't care that it was part of a show. For something like this to happen in real life is extremely frightening and conjures up bad memories to many. This brings up the what if it really was another attack idea. It differs from the recent episode of South Park in this way.