Making Money in the Carry Trade

Falken explains the mechanics of the Carry Trade. As usual, he is a very good teacher. Seems to me easy to explain why a high-interest currency appreciates: it is because liquid international capital pours into the same currency, increasing demand and causing its appreciation. The effect is dramatic in small countries like Israel, and that's why Fisher is maintaining the shekel's interest rate at a low level. It is also possible that I dont understand Falken's reasoning. I have before my eyes the exaple of Fishman (pic) who lost 500 million dollars when the Turks unexpectedly devaluated their lira.

Hungary After 1956

Spiro is a Hungarian Jewish writer of my generation. His new book deals with the formation and workings of the Kadar regime (post 1956 revolution). His hero is a Jewish mechanical engineer that during the revolution and the Soviet invasion is interned in a hospital and misses the action. Yet in the following new regime of Kadar, he is accused of having fought and is thrown out of the party, cannot go back to his job nor his home and he is almost executed. In Hungarian,

Hősünket a főnökei, a kollégái, a barátai egyik napról a másikra kiközösítik, és a munkahelyére sem járhat be többé. Felesége el van foglalva a reprezentatívnak szánt képzőművészeti kiállítás, a Tavaszi Tárlat szervezésével, és semmi egyebet nem vesz tudomásul. Kettejük hideglelős története fél évvel a váratlanul kitört forradalom után, a szintén váratlan demonstrációvá váló május elsejei felvonulással zárul.

While the novel mostly tells the engineer's personal problems, like his bosses and his family's icy indifference and rejection, the background is the new regime, which purges the Party (and the Government and the industry) of old-time idealists (many of them Jews) and replaces them with uneducated non-ideological carreerists. The post 1956 Kadar regime (I was not there) - the parallel of the Brezhnev regime in the Soviet Union - is presented as the rule of the non political incompetent. Hungary loses its sense of purpose and enters a long process of decadence. The novel ends surprisingly with the 46 y.o. Jewish engineer having a juicy flirt (love affair) with a young, blonde schikse (that was a period when East Europeans lost all sexual restrictions), illustrating the limits of the freedom allowed by the regime.

No "Siyakwemukela" to BGU in Johannesburg

An agreement between the University of Johannesburg and the Ben Gurion University of the Negev to collaborate on biotechnology and water purification projects was announced last year; several Johannesburg faculty members had protested the collaboration. The university appointed a committee to report on the possibility of a boycott and get back to the Senate. The report will be heard tomorrow, after which a vote is expected to be taken.

BGU stated that "The joint research project is designed to solve real problems of water contamination in a reservoir near Johannesburg and as such is for the direct benefit of the residents of the region. BGU sees this joint project as an opportunity to make its well-reputed expertise in water research available to improve the welfare of the South African people."

How naive BGU is. They fail to hear what Desmond Tutu and the South African government is saying: You are an apartheid institution. The irony of it is that BGU is the most fervently anti-Zionist university in Israel, home to a self-hating clique of treacherous pro-Palestinian faculty. My daughter studies there and it is full of Beduin underachievers (who enjoy absolute priority in everything) and Palestinian studies programs. Hardly a Jewish institution of higher learning. They will react to their South African collegues's rejection as the sick Jews they are, they will understand that they have been invited to hate and negate themselves even more fanatically, so they may gain the approval and love of Bishop Desmond Tutu and his ugly kin. If BGU had backbone and some self respect it should say: We imagined that we were friends. No, you cannot boycott us, we are gone. Take care to boil the water.


PS: U.K.-based "Doctors Without Borders" reported today that an alarming number of new cholera cases have been reported in Africa. While cholera is endemic to the region, far more cases than usual have been reported. Nigeria experienced its worst cholera outbreak this month when 800 died. That outbreak then spread to neighboring Cameroon, Chad and Niger, where more than 300 people died. Cholera is a waterborne bacterial infection spread through contaminated water. It causes severe diarrhea and vomiting that can lead to dehydration and death within hours.

PSs: The Johannesburg University senate decided NOT to boycott BGU. It demanded that Palestinian Universities should be involved in the cooperation. Is the senate unaware that BGU's wet dream is to work with Palestinians? That they are trying for years? Anyway, Tutu was defeated, which is encouraging.

Inflation, Hyperinflation, Superflation, Unflation

I learned from Professor Gonzalo the meaning of these concepts:

Inflation is when the economy overheats: It’s when an economy’s consumables (labor and commodities) are so in-demand because of economic growth, coupled with an expansionist credit environment, that the consumables rise in price. This forces all goods and services to rise in price as well, so that producers can keep up with costs. It is essentially a demand-driven phenomena.

Hyperinflation is the loss of faith in the currency. Prices rise in a hyperinflationary environment just like in an inflationary environment, but they rise not because people want more money for their labor or for commodities, but because people are trying to get out of the currency. It’s not that they want more money—they want less of the currency: So they will pay anything for a good which is not the currency.

Inflation I know; hyperinflation have never seen, people just never wants to get rid of money, they always want more.

Then there is Superflation. If hyperflation is a very high level of inflation such as that experienced in Germany in the 1920s or in Zimbabwe today, Superflation is a very high level of hyperflation and is marked by the use of paper currency for wallpaper, memo pads and toilet tissue.

Unflation describes Durkheim's anomie. For definition and related concepts follow the link. One gets older but never stops learning.

Ed Miliband's Mother Visits Israel

Following the Marmara blockade running ship, European Jews organized their own "battle yacht" "Irene" against the Israeli navy. On board is Marion Kozak, the mother of Ed Miliband, Britain’s Jewish head of the Labor party. Another peace activist, Rami Elhanan, said: "We are not violent people and it never occurred to us to use any form of force." Elhanan lost his 14-year-old daughter Smadar to a Palestinian suicide bomber in 1997. As observed, anti-Israeli and anti-Jewish demonstrations and protests are where Galut Jews congregate and express their Jewish identity.

Never a Dull Moment

Watch the clip about Gvaot Olam oil prospecting partnership's special meeting. I like the part where Luskin (the American investor) calls one the partners "Ben Belial (son of the devil), Amalek (the Biblical enemy of Israel)". This is a company who searches for oil in Israel following the late Lubavitcher Rabbi's directions. Yesterday, its shares lost 25% of their worth. They found oil and much gas, but it is not commercially exploitable.



Bezeq paid out a nice dividend. I am collecting Bank HaPoali, shares hoping for a large dividend in May 2011. The Shekel is strengthening and the dollar inflating rapidly. American real estate is becoming cheap, many Israeli developers are buying in New York. I am doing it through a Discount company - the one that is building in Las Vegas a megalomaniac phantasy hotel.

America is Self-Destroying

The DeCoster Congressional Hearings Show is an example of the destructive war going on against America's most efficient and competitive industries. The United States exports about $4 billion a year of chicken products, of which $678.2 million went to China last year, according to Global Trade Information Services in Columbia, S.C. It is one of the very few industries that outcompetes the Chinese and contributes to America's trade balance with this country.

I am an Israeli Jew and shouldnt be worried about this issue, but I am definitely for DeCoster. Instead of vilifying him (הלבנת פנים - the Hebrew expression is "whitening his face") for his imaginary animal rights violations, publishing pictures of manure and rats in his farms as it was intentional, he should be respected as the successful innovator and leader he is. Those who create and manage such enterprises are very few and exceptional, and they should be cherised as industrial heroes.

No More Worms

Yesterday I suggested that the political battle going on in Congressman Waxman's Commmittee is being won by the industry. I didnt imagine that the most ardent critic of industrial food, Barry Estabrook (“Politics of the Plate“), arrived independently to the same conclusion. Olson, of Cato Institute, writes:

You needn’t go along completely with Estabrook’s dim view of industrialized agriculture to realize he’s right in one of his central contentions: “the proposed rules would disproportionately impose costs upon” small producers, including traditional, low-tech and organic farmers and foodmakers selling to neighbors and local markets. Even those with flawless safety records or selling low-risk types of foodstuff could be capsized by new paperwork and regulatory burdens that larger operations will be able to absorb as a cost of doing business.

Easterbrook is the author of the latest environmentalist fad, eating locally produced food by small or mini-farmers. In the new regulatory environment he will be forbidden to sell the eggs laid by his dozen chicks fed on worms and sleeping on their own manure.

Paella valenciana

Fishermen's paella with seafood and chicken. I must be hungry if I am dreaming of Spanish treyfl food.

Buy Bank HaPoalim Stock ?

Bank Hapoalim (LSE: 80OA; TASE: POLI) is expected to pay a dividend of 1 billion shekels. Chairman Yair Seroussi said, "The bank's policy of distributing 50% of profits has not changed, but after the bank made losses in 2008 we need to receive approval for the Bank of Israel." My estimate is that each dollar invested today in Poalim will pay a dividend of 0.10 to 0.20 $ around May 2011. Disclaimer: I may be wrong (my estimate is based on the information that the profits of the bank are 9% on its capital, and it has been accumulating profits for THREE years). Life is uncertain. We will all surely die. Money is no salvation, money is unimportant. Nothing really is. Look at the pic of founders and ask yourself: Why? Why hats? למה כובה?

The Battle for Power

The Congressional Hearings (the American name for a political public theater battle for power) that are being fought for extending FDA bureaucracy's control over the food production industry are going well for the industry. The FDA has declared that it is powerless to enforce all the regulations but if I understand right the situation, it is not asking for more inspectors but for cooking all the eggs before they are sold to the public. Cooking kills Salmonella. The FDA has shown pics from DeCoster (the designated villain - see pic below) while the industry is promoting its own pics (see illustration above).

Technically, there are several ways of cooking the eggs, such as radiation and pasteurization. If I am not wrong, milk is universally pasteurized (cooked at 70 degree C during a long time) and it is forbidden to sell crude milk products (French cheese is excepted).

Gradually, we are moving into a sterilized world. I dont know if growing up in a sterile world is good or bad for humanity. We certainly evolved to deal with a different world. Rats, then, were food. In Nigeria they were called "grass cutters" and they were tasty, in Peru I used to eat "cuy" in the best restaurants of Lima. They say their meat has low colesterol content and local doctors recommend it.

DeCoster Goes to Washington

The strain of Salmonella bacteria that sickened people across the United States was traced to the DeCoster Iowa farms, an industrial animal husbandry conglomerate with a disturbing track record of food safety, worker safety and animal rights violations.

On Wednesday, the U.S. House Energy and Commerce Committee questioned Austin "Jack" DeCoster as part of a government hearing. Committee Chair Congressman Henry Waxman of California heard testimony from salmonella outbreak victims and questioned the egg producer about his practices.

During the testimony, "Jack" DeCoster felt unwell and requested to make a phone call to his spiritual adviser. Koko was decorating his new White House office when took DeCoster's desperate call.

"Koko dear, I am in a very bad shit here in the Congress with that vicious bastard Waxman questioning me in fron of the media. He killing me. Believe me, Koko, our farms are the most advanced on Earth, we employ the best nutrition experts and our veterinarians ..."

"Stop it now Jack! Waxman gives a shit if your vets spray Chanell 40 on your chicks' touches when they lay an egg."

"But Koko I TRULY apply the most sophisticated scientific techniques. A Nobel Prize in Chicken Nutrition formulates the rations. We employ 35 PhDs! We produce 1.5 billion eggs!"

"Jack, dont you dare to mention it to Waxman. Not a word more about how good your chicks have it, or I am back choosing colors for my office rug. You think wheat, cream and blue goes well with my black fur?"

"Please, Koko, help me!"

"That's better. Jack, hear, imagine you are a poor Iowa farm boy. You grew up hand feeding corn to your beloved chicken - each had its name - in your ancestral farm. You would never let your Father to sell your beloved pet birds. You are no scientist and you know nothing about big business. You can hardly read and you croak like a Dutch frog. Say Salmonella!"

"Salmone ... sorry! Zaal..moog..uyla."

"Boy, you need practice. That Jew will never dare to harm a wholesome small town American patriot like you. And you are so sorry! Now let me call that Wasserman. Just one more thing. Have you noticed those three letters on Washington phones? Y.O.M. Right, Jack, You Owe Me."

From the papers: "DeCoster had trouble answering some of the committee's questions, trailing off at times with anecdotes of his childhood in the farm, remembering individual chickens, speaking very slowly and barely understandable. He told the committee that he was hard of hearing."

From this morning on TV (DeCoster speaking): "Mr Congressman, I was horrified to learn that my eggs may have made people sick. I apologize to everyone who may have been sickened by eating my eggs."

90 Years Since Europe's First Modern Racist Law

On September 21, 1920, the Hungarian National Assembly approved Europe first Modern Age racist law. It was against the Jews as defined by race (not religion) and it was called the Numerus Clausus (closed number) law, meaning that only a certain number of Jews (about 5% of the total) were allowed to study in Hungarian universities. More than half of the members of the Assembly voted against the law or "voted" absent. The background was that in less than a generation, the most prestigious schools had become dominated by Jews. Hungarian Christian middle class was passing a terrible situation: In the Austro-Hungarian Empire they had administered an area with about 50 million inhabitants, with wide middle-class employment possibilities in the public service, the military and other "gentleman positions". After losing the war, Hungary became a small country of 7 - 8 million and the Hungarian "gentry" became unemployed and unwilling to work in manual trade. Jews had never occupied public service positions so they could not be sacked to make place for others. But the post Trianon bitterness found expression in the universities, where the "Christian-National" students (organized within the framework of something like ROTC reserve units in America) pressured the government to literally to open up positions for them.

The understanding of the suffering of their Hungarian neighbors and the rather localized character of antisemitism, explain the blind lack of alarm of the Hungarian Jews and their quiet acceptance of the restrictive measure. Vienna was a train ticket away and the famous German, French, Swiss universities were open and free to Hungarian Jewish students. Most of them spoke superb German and life in Western university towns was cheap and gay. Among those who left Hungary to study were Teller Ede, Neumann János, Cukor György, Arthur Koestler.

What I have learned in ten years of investing

The dollar is practically worthless so I am not going to mention figures. Enough to say that in ten years I "feltornasztam magam" (a graphic Hungarian expression of a person making gymnastic exercises in a tree - finding himself suddenly in the upper branches). In my learning process, my most vivid memories are of course those of the failures. Examples:

(1) I started investing in local liquid bonds through my bank. The bank used to give buy orders without limit and after a time I discovered that I was always paying more than the current price. I suspect it was because of the banker's sheer contempt towards an ignorant client. The man is still there, fatter and promoted to dept. manager.

(2) I started buying mutual funds. Soon I understood that those investing in shares produced better results. It took me several years to learn that I was paying 4 - 5% per year for something I could do better than the fund manager, like building a portfolio. It took me time to understand that I was buying the Bank's funds for the illusion of paying less fees. Today banks cannot have funds nor give advice.

(3) Having succeeded in selecting good shares, I got interested in small cap stock. Bought many books, read all the MAYA publications (TASE's webside), wrote in all the boards and started speculating in small cap and options. In balance, I think I made money, but I found difficult to sell papers that had no regular markets. In the end, I was stuck with some unsaleable options which lost all their worth.

(4) I was fascinated by oil price fluctuations and its potential for profit. I studied the market and discovered seasonal fluctuations which seemed - statistically - reliable. I bet that oil was going to be under 60 dollars a barrel, but then Americans started to invest in oil futures to station their money (today it is illegal) and they drove up the price over 100 dollar. I lost.

The right thing I did was to avoid panic during the crisis and accumulate stock at low prices. Another good thing was to avoid following expert advice, which pushed people to invest in foreign markets (briefly I bought Chinese funds, and happily sold it at profit).

But the most important lesson I learned in this ten years is to invest in things I know personally and understand, like Israeli companies that I had worked for and admire. For example, a few years ago I had to do a work for Periclass in Nahal Zinn, an infernal chemical dust site in the most god-forsaken desert. I met a Hungarian Jew sitting in a derelict air conditioned hut who explained me what they were doing. It was very clear. I started to collect the shares. They are worth now ten times more. Lately I have been working with food factories, but I cant see them making money. I was among the first to identify the coming scarcity of sand and other building materials in Israel, and studied the recycling business, but I didnt follow up. Now there are several thriving building materials recycling plants, it did not require much investment, but I lacked the drive. Now I see that new building materials and accesories are displacing old materials (like new glasses, new aluminium and titanium linings, new water saving toilets, and so on) but I have no time.

THE important thing is to read all the time and to read everything, to collect, to write down and to think about what is going on. Gary (see link on blogroll) is the most disciplined practitioner of this method, and I think he is very successful as fund manager.

Kever Benjamin Rap

Below my window. Fifty years ago I could do it too. May be.

Quote from a Forbidden Book

Having gained the American socio-economic paradise the Jew proceeded to lose his child. Onward and upward he climbed in his quest for the Material Nirvana. With every difficult step, he had jettisoned more of his Jewish bagagge, the better to be freer and lighter for the drive to the peak. And finally, having overcome the obstacles, having scaled each and every rocky boulder, he looked out for his child and heir and found him missing.

The author has been outlwawed not only in Israel but also in the USA, so I shall not mention his name.

Japan Induced to Secure Imports

China has banned export of rare earths to Japan, a country with no natural resources and historically worried about its dependence on strategic imports.The United States was the main supplier of oil to Japan in the 1930s, and the imposition of an American oil embargo on Japan in 1941 has been cited as the reasons that Japan subsequently occupied Indonesia. Today, once more, many countries are rethinking the idea of world free trade and planning how to secure - when worse comes to worst - their strategic inputs.

The Coming Attack on Israel's Poultry Farms

Salmonella enteritidis caused the recall of 500,000,000 eggs in America, provoking a nationwide regulatory attack on the poultry industry. As expectable, a culprit had to be found and punished to purify the land of his sins (see "Aedipus"): his name is Austin J.deCoster. The NYT describes the villain:

Mr. DeCoster’s frequent run-ins with regulators over labor, environmental and immigration violations have been well cataloged. But the close connections between Mr. DeCoster’s egg empire and the spread of salmonella in the United States have received far less scrutiny. While some state regulators took steps to clamp down on tainted eggs, the federal government was much slower to act, despite entreaties from state officials alarmed at the growing toll.

Presumably, Mr DeCoster's carreer is finished and if he is smart, he will retire to Costa Rica. Knowing how things work in Israel, our Ministry of Health must be planning his own attack on the local poultry industry. Someone will find himself playing DeCoster.

The Eternal Jew

Forward writes about how Haiti disaster relief and rebuilding has become a Jewish story.

...The American Jewish Joint Distribution Committee estimates that at least 17 Jewish and Israeli organizations have been involved in this tiny country this year, ranging from the well-known Israel Defense Forces Medical Corps Field Hospital, the first on the ground after the earthquake, to the modest Ve’ahavta, a Canadian humanitarian and relief organization.

Since January, Jewish groups have raised an estimated $14 million for Haitian relief, mostly in donations to the JDC and AJWS. The financial outpouring became a point of pride, a fresh sign that a community usually focused on Jews and Israel could also rally to address a humanitarian disaster occurring close to home — just two hours from Miami — but outside its sphere of comfort and concern.

Thirty years ago an American rabbi wrote a book "Never Again" condemning the eternal preoccupation of the Jews with changing the non-Jewish world and how pointless it is. His name is tabu and his "Never Again" has become "More of the Same". That's how things are. I have two Haitian paintings at home. One is like the above one.

The World's Most Inept Central Banker

Fortune nominates three central bankers for the title and appears to side with the Swiss candidate. I share Fortune's dislike of Swiss bankers.

Who Is Who in Wall Street: Koko

Name: Koko
Born: 4 July 1971
Birthplace: San Francisco, California
Best Known As: The Talking Gorilla

Koko is a lowland gorilla who talks using human sign language. Beginning when Koko was one year old, psychologist Francine "Penny" Patterson taught the gorilla the American sign language. Koko is the best-known of the "signing apes" (i.e. animals in the financial world with unlimited "authorized signature" rights), along with his friend Nim Chimpsky. In 2009 she left HSBS and is working for Wall Street firm Goldman Sachs managing their secret "Nostro" fund. Codename: Nostro-Dame.

A good day in the bourse

I have recouped my losses and am back up on the horse. Foreigners bought the shares I hold, and the shekel strengthened. I am worried: I fear there may be a balancing mechanism, so if something goes well, some other thing must necessarily go bad. The one who is free of superstition - throw the first stone.

Tel Aviv Street Art

My daughter, the student of architecture, took a professional look at Tel Aviv streets. In the background, the Azrieli Towers and the Ministry of Defense with its helipad.

Chocolate Factory

The workers are retards whose salaries are subsidized by the Gov. They work slowly, with great concentration and at 2 PM they stand up and leave in mass. The plumbing is broken and factory consumes little water. I quoted a low price - my usual mistake.

Twenty Two Jews Rised from the Dead

The Palestinian fishwrap HaAretz published its annual post-Yom Kippur statistics:

93 people fell ill as a result of fasting over the course of the Jewish High Holiday of Yom Kippur on Saturday. Of those, 22 people were resurrected.

Quite a miracle. The pic was painted by Bonnat.

The Man with the Red Kippah

Cardinal Walter Kasper observed that "When you land at Heathrow you think you have landed in a third world country." Are Christians persecuted in the UK? "Yes. An aggressive new atheism has spread through the country." The Church has potential.

Exquisite Politeness in North East Asia

Keeping the forms of Asian exquisite politeness, serious tension is winding up between China and Japan. China chastised the Japanese Embassador for the fifth time demanding the release of a Chinese captain. He was arrested in a disputed part of the sea and is accused of deliberately attacking a Japanese fishing boat. The Japanese Embassy warned Japanese nationals living in China as well as those travelling and doing business there that they should take care of their safety.

Kol Nidrey - All my Promises

Tomorrow afternoon we start the Yom Kippur fast with the Kol Nidrey prayer. We absolve ourselves from all the promises we made during the year in front of the community and in front of the communities "of above" and "of below". Then we confess publicly our transgressions. After that we declare that now also the sinners are allowed to join the ritual with the "baaley batim" - the householders.

Although K did not believe it, today I received a dozen phone calls promising to pay me old debts and that cheque is being posted. People wants to face the coming Judgment Day having asked pardon from those insulted during the year and having paid all their debts. They enter the fast believing they are going to be judged above. This certainly improves payment morals.

During Yom Kippur there are five things Jews dont do: eat, drink, perfumes, leather shoes and sex. We dont work - this day we are occupied with our souls.

My soul? I dont think I sinned against God, since the very idea is absurd. I tried to avoid harming my fellow human beings. I tried to ease my mother's last days. I worked hard and put low-calories rice patties and 0% yoghourt (for my dieting daughters) on the table.

What I pray for? I am an old Jew, and have lived longer than my father and grandfather. I have no desire left, only for my daughters.

A Day in Court

I spent yesterday in the Ramle Court giving expert witness in the State of Israel vs the Potato Peeling Factory case. The State claimed that the factory was a risk to the public and demanded to close it. I destroyed its claim, since it was not based on any objective scientific lab data. Normally, these cases are based on years of sampling and lab results showing that the factory emits noise, fumes, cancerigenous chemicals, sewage, etc. forbidden by any of the numberless regulations. In this case, the State failed to collect any physical evidence, did no sampling nor lab analysis, but anecdotes of conversations with the neighbors.

Second, I described the improvements planned and already done in the factory. They had installed new Belgian peeling machines that used much less water, a modern screw dewatering machine that separated the solids from the wastewater (see pic) and a 10,000 liter FOG interceptor. Moreover, today there was no direct free-flow connection to the municipal sewage network, the treated wastewater was pumped into the municipal network (that is, there could be no gravity flow).

The State of Israel attorney interrogated me about half an hour about the pump - trying to demonstrate that a system that was based on an electromechanical device was unreliable and a endangered public infrastructure. In reality, if there is no electricity or the pump stops working, the sewage is not pumped and not a drop can reach the municipal pipe. It is like a pump draining an underground level, if the pump fails, the water floods the floor but cannot escape to the street level drain. The judge, a 30 something cougar, did not seem to understand the concept, and the interrogator reformulated the issue to hammer in that the "criminal" factory owner could easily interrupt the pumping at will, saving electricity or out of sheer malice. I hope I made clear that no one would voluntarily flood its own factory and that anyway, the water would NOT reach the street.

In the end, the State submitted many documents showing that the factory had paid its taxes late and other old correspondence demonstrating his historic lack of credibility. One damning letter was from a fellow engineer, who wrote the municipality that the drawings he had submitted in the name of the factory were invalid and he retires his signature. These kind of standard letters are sent when the Client fails to pay or there is a conflict between the Client and the engineer, but in this case, the tone was venomous and ugly, more so when read by a malignant attorney in front of a fellow cougar.

The sentence will be published after the Succot holidays. The Client promised to pay me before Yom Kippur, and being a religious Jew (and me, an idiot), I believed it.

Ethnic Wars in China

For most Westerners, Chinese are all of the same race. In fact, there are profound ethnic differences that can easily mutate into open conflict and war. An example is the Punti-Hakka Clan Wars (Chinese: 土客械斗) in Canton in 1855 that lasted a decade. The war's estimated death toll was roughly a million, with many more fleeing for their lives. Hakka means immigrant and Punti means native. The same type of ethnic resentment survives in Taiwan and in Fujian Province.

I believe that this chronic internal divisions make China such a tempting target for imperialists.

No end to history

History is far from ending, and the 1894 China vs Japan war continues to simmer in the background. The WSJ reminds us that there are unresolved territorial issues such as the Japanese prosecution of the captain of a Chinese fishing boat. The vessel had collided with Japanese patrol vessels near a chain of islands both nations claim.

"Disputes over sovereign territory are highly sensitive. Handled improperly, it could cause a serious shock to overall China-Japan relations. The Japanese side should clearly understand this." China's Foreign Ministry twice this week summoned the Japanese ambassador in Beijing, to complain about the incident, which caused no injuries and minor damage.

The incident threatens to arouse strong nationalist sentiment on both sides, especially in China, which has seen periodic outbreaks of public anger against Japan. In early 2005, several small incidents, including the approval of a nationalist history textbook in Japan, triggered a string of anti-Japanese riots, some of them violent, in major cities including Beijing and Shanghai.

It should not be forgotten that Japan and China had been in fighting for the last hundred years. The first modern Sino-Japanese War (1894-1895) was fought over Korea and was won by Japan.

BEZEQ is exciting

Shaul Alovich, the dominant owner of Bezeq, is taking home 48% of the paid capital of the company as dividend. That is a lot of money for other shareholders too. I am buying. Things are getting interesting on TASE.

Tobacco Business in Israel

Since I have started to manage seriously my portfolio, about fifteen years ago, I am searching for a way to learn more about the secretive Israeli tobacco market. It must be very profitable. I tried to see how is Dubek owned, but they dont talk to anybody. Today The Marker (in Hebrew) writes about Eliezer Fishman (a speculator) thinking of buying into cigarette importers, and some data about how this business is structured in Israel. IOf Fishman buys into it, then I can invest through his Jerusalem Corp. To be followed up.

One hundred years later

During the Depression of the thirties, one of the constant themes was how cheap manufactures from the Far East were destroying British and other European industries. Cheap Japanese and Chinese textiles were destroying Manchester and causing widespread unemployment. The same thing is happening today: Cheap Chinese products ("dumping") are causing misery all over the world. Even Krugman, in his convoluted way, has recognized the situation and is taking - hold yourself - a position against free trade.

Last week Japan’s minister of finance declared that he and his colleagues wanted a discussion with China about the latter’s purchases of Japanese bonds, to “examine its intention” — diplomat-speak for “Stop it right now.” The news made me want to bang my head against the wall in frustration.

...China is deliberately keeping its currency artificially weak. The consequences of this policy are also stark and simple: in effect, China is taxing imports while subsidizing exports, feeding a huge trade surplus. ... And in a depressed world economy, any country running an artificial trade surplus is depriving other nations of much-needed sales and jobs.

Today, we tend to forget that the Depression was felt most severily not in America but in Europe and Asia. How did the react a hundred years ago? Japan saw a need to secure raw materials through military occupation. Germany too felt the need to own more agricultural land. China fall into bloody disorder. Russia became more authoritarian. America turned inside, became isolationist. Those were the "dirty thirties", the Cabaret years, when morals relaxed in utter despair.

TASE in the focus

Bloomberg is covering TASE, the Tel Aviv Stock Exchange. This is very good for me, as more foreign money will flow into it and prices will rise. This is dividend time, but at this point of my life, my daughters are refusing to accept money and (believe or not!) they are depositing their salaries in my bank account. It must be my wife's genes because I never felt that I owed to my parents.

Vale of Tears

My childhood friend Tommy has made his life in the Patagonia. Ten hours ago he wrote in Facebook that his daughter has been kidnapped. She was walking home from her job in Rada Tilly, a small holiday village South of Comodoro. The criminals phoned that she is already in North Argentina, so no point in calling the police. The "trata de blancas" (the white girl trade) is an organized business in those parts, some say, with the complicity of the police. I downloaded the pic from his Facebook page. We truly live in valle lacrimarum...

Follow Up (Sept. 16th): The girl appeared in Neuquen, a nearby province, in good health and spirits. Apparently she had run away with someone from her husband.

The Fast of Gedaliah

These are called the Terrible Days, because Jews (some of us) believe that our destiny is decided during this week till Yom Kippur. Among the prayers of these days, the most popular is the one of the Aleppo Spanish (Sepharadi) community - אדון הסליחות Lord of the Compassion, we sinned against you, please pardon us. Today is the Fast of Gedaliah, which commemorates the destruction of the First Temple.

The Sin of Waxing Fat

But Jeshurun waxed fat and kicked (pic) -- thou didst wax fat, thou didst grow thick, thou didst become gross--and he forsook God who made him, and contemned the Rock of his salvation.

They roused Him to jealousy with strange gods, with abominations did they provoke Him.

They sacrificed unto demons, no-gods, gods that they knew not, new gods that came up of late, which your fathers dreaded not.

Jeshurun are the Jews, and Moses says we have grown gross. How right he is! Today is Shabbath Shoovah, the Holy Day of Repentance. I am entering this year with fear in my heart.

Cotton Shortage

The price of raw cotton reached 90 cents a pound, up from the 40 or 50 cent average. There is a drought in China and India, while Pakistan is flooded, further exacerbating the cotton shortage and boosting raw cotton prices. We may even see a revival of cotton growing in the Yezreel Valley, Israel. How to ride this situation?

It seems to me that cotton is not the only agricultural product entering a shortage phase. Coffee and wheat are scarce too. Climate is changing faster than agricultural technology and infrastructure, which is always local. Asyncronous development will increase scarcity and hoarding. The Economist has an article about the shallowing of world ag markets. Ag inputs are going to be the next thing. Change your investing plan: Think Israel Chemicals and Machteshim Agan shares.

Greece or London?

“What the Greeks did was an absolute cardinal sin,” said Ruairi Quinn, former finance minister of Ireland. “They deserve to be punished for it.”

It is good to see Europeans still believing in sin and punishment. Greece lied about using complex swap contracts, hiding the fact that it was broke and could never pay back the debt it was assuming. When this started to come out, confidence in Eurostat's numbers was shattered and the euro plunged, sparking questions whether it could survive. It has lost 15 percent of its value against the dollar since then.

Still vacationing in Greece is not cheap. I think we are going to London. I love British theater.

IgNobel Prize in Law

There is an IgNobel Prize in science, but none in the legal profession. Should one create it, I submit Brian Palmer's research paper titled "Is it legal to eat your cat?".

When police in New York pulled over Gary Korkuc for blowing off a stop sign on Sunday, they found a live cat in his trunk, covered in cooking oil, pepper and salt. Korkuc told authorities that he was marinating the cat and that he intended to cook and eat it. He was charged with animal cruelty. Is there a legal way to cook and eat a cat?

Now, this a most complex legal issue, one that I am not qualified to discuss. I can only contribute an anecdote. When I was working in South West China, we passed through a non-Han farm market and I asked to look around. Dwarfish women in colorful folk dress were hawking exotic vegetables and baskets with small dogs, cats and other animals. My companions became excited and spent time choosing a cute fattened doggie. We stopped at a roadside hut where the dog was butchered and prepared and served with a big bawl of white rice. After politely refusing to join them, in a separate room, I was served rice with chicken. I understand that since the Olympics it is forbidden to eat pets in China.

Another Cookie Factory

The Israel I am discovering in my work is very different of what we in Kever Benjamin imagine or what the world thinks we are like.

Why Zionism?

The Jewish people in the Diaspora is falling in numbers, while in Israel it has succeeded in growing. The demographer Sergio Della Pergola, from the Hebrew University's The Jewish People Policy Planning Institute, says that this year Israel's Jewish population grew 1.7% while the Diaspora lost 0.2%.

The political organization makes all the difference. In the Galut we are powerless, in our land we achieve the impossible.

Weighty Problems

No more sweets, jelly and marshmallows for Koko"s cousin Osine (pic). The starets at Monkey World in Dorset are putting her on fruit and vegetables - like other primates - until she loses her belly.

How it will end?

Stein's Law says that trends which can't continue don't. Since our national debt is assumed by virtually all economists to be unsustainable, and since it seems increasingly unlikely that Congress will act before it has a gun at its head, a few analysts are starting to think about when and how a debt crisis will ultimately emerge and how the government will respond.(writes Bruce Bartlett in Capital Gains).

US debt is unpayable but it is not necessarily leading to a crisis. It can be solved by inflation. I read about deflation, but I cant see any. When the media talks about deflation and its horrors, it is in fact justifying the gradual loss of purchasing power of the US dollar (and all the other currencies, because they move in tandem).

Follow Up from the comments:

And the American public is gonna go, "hey, my paycheck is now worth a roll of toilet paper"?

No, it will happen gradually, like the frog acclimatizing to the slowly heating water in the pot.

Strangled by Bureaucracy

Jerusalem's Holyland project has been frozen indefinitely. The project was sumitted for approval in 1968 and it is about a third built. The police is investigating if any of the multiple phases of the forty years permitting process was illegal. The accusations already have caused the fall of Ehud Olmert, major of Jerusalem about ten years ago. The police is jailing anyone involved in the project (and still alive) in order to "apply pressure", hoping that something dirty will come up. No one believes (except me) that the permitting process is the "criminal", and not those lunatic developers who try to build something in Israel.

Risk Premium according to Falkenstein

"My theory is that life is like the purple chart, where risk premiums exist on Baa bonds, riding up 3 years on the yield curve, but that's it. After that risk is something we take with negative expected returns, because risky assets play into our overconfidence, signaling, and other outside-the-box needs. (regular chart is the conventional academic wisdom from Cam Harvey's website)." See the original in Falkenblog (Thanks Mangan for the correction). I think he is right.

Family Secrets

El Baradey was the International Atomic Energy's head and is running for Egypt's presidency. The official press (there is no other in Egypt) is publishing damning pictures of his hidden family secrets. This pic of his daughter is one of the most damaging. Egypt (and Lebanon) is the most modern and westerized Arab country.

Water saving

Niagara Stealth is the first a real breakthrough in the industry. A good idea. It seems appliable to Israel, where water is very expensive.

The "Africanizacion" of Spain

The climate of Spain is changing fast and becoming more like the African side of the Strait of Gibraltar. There is less rain, there are fewer cold nights and more hot days. Much of Andalucia is becoming desert. Spain will be like Morocco in one or two decades.

Praying on Rabbi Nachman from Breslev's Tomb

Thousands of Israelis are travelling this year to Uman, a small town in Ucraine, to commemorate the 200th anniversary of Rabbi Nachman's death. Praying and singing in the loneliness of the swamps and bathing naked in the river is part of Rabbi Nachman's tradition.

Praying before the New Year (Slichot)

Religious Jews are going up to Jerusalem to pray before the New Year. Happy New Year!

Less Rain in the Middle East

Israeli experts are predicting another very dry winter, which used to be in the near past our annual rainy season. Israel is planning additional water saving measures and a much higher price for water. Thanks to the three water desalination plants already operating, there is no drinking water shortage. but other countries in the area are already having serious supply problems, such as Amman and Damascus that supply drinking water in tanks once a week, and parts of Cyprus that stopped tap water. The North of Syria is a drought disaster area and according to the UN there are nearly 2 million refugees have left the area and live in temporary tent camps around Damascus and other cities. The Syrian government has asked the UN to avoid creating permanent camps and supply food because they are hoping to force these people to return to their home provinces. The near future in this so-called (in the past) Fertile Crescent is going to be quite difficult.