ACG Investment and Sourcing in India event

I attended this breakfast roundtable discussion hosted by the Chicago chapter of the Association for Corporate Growth, which included a few contributors with a wealth of experience in India who expounded upon the past & future of the country.  It seemed like the group was evenly divided between those who’ve worked in India & those interested in learning about how things work there.

Pradeep Nedungadi, Principal of Visthar, suggested choosing a headquarters location based on skills located in that region.  He compared India with it’s neighbor in saying China has advanced because of it’s government, while India has depite it’s government, although it’s expected the Indian government will play a decreasing role in the econonmy in the next 10 years.  IT has grown so tremoundously because the government couldn’t control it.  There are still lots of hoops to jump through to found a business there, so he recommended finding a local partner to deal with problems, but he sifted through 1000 companies to find the handful that could get the job done.  There are some states in India where he won’t recommend manufacturing because the population is too intelligent for that there.

James Pavlik of Baird Venture Partners gave a short presentation which included these interesting tidbits:

-cited the offshore nation which showed India has advantages in labor costs, size of labor pool, language, & government support over China, the Phillippines, Eastern Europe, Latin America, & Russia.

-a 2005 McKinsey survey indicated India was the leading offshore destination in IT, 
call centers/help desks, human resources, finance & admin, business 
research/analytics, & just barely in R&D

-Venture Intelligence India informed that private equity investment in India has skyrocketed from $2.2B in 2005 to $7.5B in 2006, & $14.2B in 2007

Krrishan Singhania of Singhania & Co. provided some of the legal background 
on why/how India has opened up so much in the last 10-15 years. Government use of IT is driving some growth in IT.  There are still caps on investments in insurance & defense industries in India.  The new airport in Bangalore is completed but not open only because the infrastructure leading to it is not yet finished.  Profits can be repatriated, but taxes must be paid on them.  The legal market is still 100% closed to foreigners, so locals like Krrishan are invaluable.

Attorney David Laverty distributed an couple of insightful articles ( indiaacquisitions1 indiaacqusitions2 ) on acquiring Indian companies.

My take is events like these where you can get 1st hand stories from people 
who’ve been there are of great help, especially in someplace as complex as 
India.  I  wish we could have had a bit more input from those desiring to learn more about India in what they’re seeking & the obstacles they’re confronting in attempting to do business there.

Euronext speech

I attended a luncheon sponsored by the National Investor Relations Institute featuring a speaker from NYSE Euronext, the exchange which merged with Archipelago in Chicago, who was speaking on the globalization of financial markets.

Up until 2004 each of the exchanges were essentially single asset classes. The NYSE then changed its strategy to use globalization, diversity asset classes, & leverage technology. In 2006, the NYSE & Archipelago holdings hooked up & went public. In 2007, NYSE merged with Euronext which had 4 exchanges in Europe, to create the 1^st “global markets,” & started their asset diversification in derivatives. They trade $141 B daily, which is 1/3 of the cash trade in the world. They own 5% of the Indian exchange (capped by the government), & 1% in Brazil. They have interests in Tokyo, (which is not yet publicly traded), Malaysia, & the Philippines

There is increasing global competition for capital formation. In 1995, 57% of global proceeds were listed in the U.S. That # has dropped to 18% in 2006. In 1999, private placements were $57B. In 2006, that had risen to $137B. Europeans no longer need to access capital in the US. Brazil is getting deeper & more liquid. Of 64 public exchanges worldwide, only 2 are in the US. Growth in derivatives is 30% to $450B dwarfs others. American holdings overseas was in $7.2B in 59 funds 5 years ago to $87B in 217 funds now. Foreign investment is up 90% in the US.

In the future, consolidation into 5-6 groups is inevitable. Regulation is becoming more global & there will be more convergence with consolidation. Europe offers “fast path” listings for US companies which are already listed with SEC documents instead of European listings.

My purpose in attending was to find out what was left of Archipelago in Chicago.  It seems as if only those responsible directly for the Arca Trading Platform.  Everyone else has relocated to New York.

British-American Transatlantic Business Conference

I attended the British-American Transatlantic Business Conference-Connectivity in a Transatlantic World conference, organized by the British-American Business Council-Chicago, & title sponsor British Airways for a couple of days recently.  I believe this was BABC’s annual conference which moves around the US & UK each year.

Rhian Chilocott, head of Confederation of British Industry’s Washington office presented a briefing on UK investments in the US babc2008cbibritish-investment Her most amusing comments were on a couple of alternative titles for her presentation, either “with your wussy $, we can buy anything we want,” or “Sterling assets,” since highlighting British breasts should result in more downloads.

Transatlantic UK-US trade relations was addressed by government officials from both sides of the pond.  I don’t have enough space to even summarize, so contact me for details.

“Current trends in customer global communications needs” was essentially a commercial for/by British Telecom-Americas.

Lunch Keynote speaker-Woody Harford, Sr. VP-Commercial for North America, British Airways provided a comprehensive & humorous look @ BA.

“Generation X & Y-will they be your future employees?” babc2008generationxandy The conference utilized real-time surveys of the audience which were determined by hand-held devices-(I didn’t track the results).  The panel differentiated between digital pioneers & natives, & that younger generations seek autonomy & control while baby boomers seek 1 career with multiple companies.   Also we boomers keep making the recurring mistake of assuming others want what we want.

“The evolving trust landscape: what it means for business & stakeholder relationships” was presented by Mark Shadle, Exec VP/Pres-Central Region, Edelman Public Relations babc2008edelmantrustbarometerukus I found this to be the most interesting & valuable presentation.  I can’t add any more than what was presented.

The gala reception @ Adler Planetarium proved to be a lovely evening.

The 5 minute welcome by Mayor Richard M. Daley brought out that Tony Blair is 1 of his idols.  He stuck around so that we could wish him Happy Birthday, but I was surprised he didn’t stick around for the Olympics presentations.

The “Impact of Olympic Host on a Finanacial Center City” offered in interesting comparison/contrast between an upcoming Olympic city with an aspiring 1.

“Tailoring the Cord Brand Idea to be relevant around the world” showed a few great examples from LifeFitness & Dyson of different approaches to global branding, either complete revamp to make them consistent across countries, or keep it simple from country-to-country.  I’m still working on getting at least 1 of the presentations.

“The impact of emerging technologies & social media” was presented by Terry McKenzie, Sr. Dir., Employee communications & Change Management @ Sun Microsystems babc2008sunmicrosystems I spoke with Terry on the bus on the way to & from the Adler Planetarium for the gala dinner.  She’s quite a character.  Look for her tmac blog @ blogs.sun.com

I missed the presentation “2 countries separated by a common language?,” featuring 2 principals from Mintel Intl.

BAGOL-British American Group of Lawyers meeting addressed such topics as risk reduction in litigation, patent law changes, audit letter issues, employment, Sarbanes-Oxley.

According to the attendees list, 227 attended the event, of which 81 appeared to be speakers or sponsors, & 10 seemed to be visiting from BABC’s in the UK.

My only criticism of the conference is that there wasn’t enough US-UK interplay:  only 6 out of the 10 presentations dealt directly with British-American business topics.  Further, as important as the Brits are in Chicago & America, we seem to see/hear relatively little from them.  A number of other smaller countries are more active in the local international scene.  I’d like to see more local events from our most important European trading partner.

real estate services expanding internationally

Robert Manor contributed this article to the Chicago Tribune U.S. real estate expertise helps lead international developments which describes how US real estate firms are lending their expertise all over the globe. This is just another example of services leading the way in international trade. It’s a great way for Americans to leverage specific knowledge throughout the world.

I’m not sure I buy the REIT proliferation reasoning for this expansion as much as the realization of the rest of the world that real estate is a very basic investment & that pride of ownership betters whole economies. With the tax deductions the US government gives for mortgage interest, it’s what’s built America. Few of my friends/colleagues in Germany owned their homes, but have since learned their value. While residential real estate is 1 of the most locally-oriented businesses of which I know, commercial/industrial is increasingly international, as this article demonstrates. Especially with the high value of the Euro & other foreign currencies, foreigners are contributing greatly to the construction of the US.

While partnerships with local firms work well when selling products in foreign countries, I question their long-term viability for services companies. As long as there is a continuing need for product, there will be a need for international partners. But for services companies, the relationship with the client is as much if not more important than the service itself, & the client often will turn to the local partner before the global one because those are the people with whom they find the most affinity. Personally I often hear of services firms with international partners & think that these partners are just a convenient means to not learn & invest in other places where their customers are doing business.

Interestingly, while attending the British American Business Council event the day this article came out, I met Edward Lewis, (a scarily similar name to a dear old college roommate of mine), of Jones Lang LaSalle, whose firm was mentioned in the article. Edward had lived & worked in London for a number of years & even obtained a UK equivalent to a green card. If I remember correctly, I believe he also lived/worked in Zurich, Switzerland, but didn’t get so deeply embedded that he learned Suisse-Deutsch, the swiss bastardized version of German. It’s great to see that there are some globally aware people working in Chicago. 1 of my sales managers from Xerox many years ago (Frank…something I believe, help me if you can) moved on to what was then LaSalle Partners. I wonder where he is today?

Peruvians in Chicago & Americans in Peru

Jose Francisco Tagle of the American Chamber of Commerce in Peru was in town with a 12 company delegation visiting the Global Food Expo @ McCormick Place. He gave this presentation @ the World Trade Center Illinois amchamperu-tradeinvestment

To give you an idea of America’s interests in Peru, here’s the list of AmCham Peru’s members:

-3M GENERAL OFFICE -ING GROUP
-ABBOTT INTERNATIONAL LTD. -ADECCO
-AEROPOST INTERNATIONAL SERVICES -AMERICAN AIRLINES, INC.
-AMROP HEVER- BATTALIA WINSTON -THE CHURCH OF JESUS CHRIST OF LATTER-DAY SAINTS
-AT&T GLOBAL NETWORK SERVICES LLC. -AVAYA INC.
-BERLITZ INTERNATIONAL INC. -CHESTERTON BLUMENAUER BINSWANGER
-BRIGHTSTARCORP -BRISTOL-MYERS SQUIBB COMPANY
-BURLINTON RESOURCES INC -CAMBRIDGE INTERNATIONAL CONSULTING
-CHEMONICS INTERNATIONAL, INC. -CHEVRONTEXACO
-CISCO SYSTEMS INC. -CITIGROUP
-THE CLOROX COMPANY -THE COCA-COLA COMPANY
-COLGATE- PALMOLIVE COMPANY -COLLIERS INTERNATIONAL
-BT INFONET -COMSAT INTERNATIONAL
-CONTINENTAL AIRLINES -CHF INTERNATIONAL
-DBM, INC -DELOITTE TOUCHE TOHMATSU
-DELTA AIR LINES INC -DIEBOLD INCORPORATED
-UNIVERSAL COMMUNICATIONS SYSTEMS INC. -THE DOE RUN CO.
-DUKE ENERGY INTERNATIONAL -DUN & BRADSTREET INT.
-PSEG -ELI LILLY AND COMPANY
-EMC CORPORATION -EMERSON NETWORK POWER SYSTEM LATIN AMERICA
-EQUIFAX INC -ERNST & YOUNG
-FLUOR DANIEL INC. -FMC CORPORATION
-FULBRIGHT COMMISSION -G.T.H LA
-THE WACKENHUT CORPORATION/WACKENHUT INTERNATIONAL -THE GOODYEAR TIRE & RUBBER CO.
-GREY GLOBAL GROUP INC. -HANOVER COMPRESSOR L.P.
-HARDCORP, INC. -HEIDRICK & STRUGGLES INTERNATIONAL INC.
-HELLMANN WORLDWIDE LOGISTICS, INC. -THE HERTZ CORPORATION
-HEWLETT – PACKARD COMPANY -INTERNATIONAL HOTELS GROUP
-HUNT OIL COMPANY -IBM WORLD TRADE CORPORATION
-INTRA GLOBAL TRADING CO. INC. -EXPRESS TRADING SERVICES INC.
-IRON MOUNTAIN -JOHNSON & JOHNSON INTERNATIONAL
-ANTHONY INTERNATIONAL -JP MORGAN
-MARRIOTT INTERNATIONAL -KIMBERLY-CLARK LATIN AMERICA OPERATION
-EASTMAN KODAK COMPANY -KORN/FERRY INTERNATIONAL
-KRAFT FOODS INTERNATIONAL -LEO BURNETT COMPANY, INC.
-LIPO CHEMICALS, INC. -LUCENT TECHNOLOGIES INC.
-MANPOWER INC. -MARSH INC.
-FOOTE CONE & BELDING – LATIN AMERICA -MCCANN-ERICKSON WORLDWIDE
-MCDONALD’S CORPORATION -VERIZON BUSINESS
-MERCK & CO., INC. -MICROSOFT CORPORATION
-PHELPS DODGE CORPORATION -NEWMONT MINING CORPORATION
-MOTOROLA CORPORATE EXECUTIVE OFFICES -MSA INTERNATIONAL
-NCR CORPORATION -NII HOLDINGS, INC.
-NOVARTIX / GERBER PRODUCT COMPANY -OCCIDENTAL OIL & GAS CORPORATION
-BECHTEL GROUP INC. -OWENS-ILLINOIS, INC.
-THE PROCTOR & GAMBLE CO. -P&H MINING EQUIPMENT
-PANDUIT CORPORATION -PAYLESS SHOESOURCE INC
-PAYLESS SHOESSOURCE -PEPSI COLA INTERNATIONAL
-PFIZER INC. -PHILIP MORRIS LATIN AMERICA
-POLYCOM INC. -THE DOW CHEMICAL COMPANY
-RENA WARE INTERNATIONAL INC. -HARBISON-WALKER REFRACTORIES CO.
-S.C. JOHNSON & SON, INC -SCHERING PLOUGH INTERNATIONAL
-SCIENTIFIC GAMES CORPORATION -LARM – LATIN AMERICA RELOCATION MANAGEMENT
-SEMPRA ENERGY -STARWOOD HOTELS & RESORTS, WORLDWIDE INC.
-ORACLE CORPORATION -SOUTHERN PERU COPPER CORPORATION
-STANTON CHASE INTERNATIONAL -HUDSON HIGHLAND GROUP, INC.
-GLOBALSTAR LLC -THE MAPLE COMPANY
-THE WASHINGTON POST -THUNDERBIRD GLOBAL MBA
-TRANSWORLD PAYMENT SOLUTIONS -TURNER BROADCASTING SYSTEM LATIN AMERICA INC.
-TYCO -UNISYS CORPORATION
-DEPARTMENT OF STATE -UPS UNITED PARCEL SERVICE
-UPS LOGISTICS SERVICE AMERICAS, INC -VOXIVA, INC
-WALSH ENVIRONMENTAL SCIENTISTS AND ENGINEERS, LL -WESTFIRE INC.
-WYETH -XEROX CORPORATION

volunteer overseas

Continuing on the living/working abroad theme, I read this article by Barbara Rose of the Chicago Tribune, Firms find value in volunteering The thrust of the article is that there is value for the firm as well as the employee to send employees to developing countries for volunteer assignments. I wholeheartedly endorse most opportunities for Americans to pursue the chance to live & work abroad, paid or not. I think what’s interesting is that most of the gains for the employees are in soft skills, yet still substantial. There are ways to further this. Now it’s just big global firms that put together these programs, but big firms are taking increasingly less of the workforce, so smaller firms need to get on board as well. I don’t know how these firms prepared their employees for these experiences-I hope they just didn’t throw them out there, but wouldn’t be surprised if they did. These are great, but in some ways are still quite superficial. They only last for a few months, so you really can’t dig in, learn a language & a culture, & be able to make a long-term difference in either your country or theirs. Maybe they are able to keep in touch afterwards, but it’s still not the same as working there side-by-side. I’m sure it improves employees management skills wherever they go, but it would be better if they were able to apply what they’ve learned about these far-flung businesses & help them grow over a longer period rather than just parachuting in, & then out a couple of months later. The most interesting part about living & working abroad is getting into the heads of the people in the country you visit, learn their values & decision-making, & how they really are different from here. Only then can you really bridge the gap to understanding both sides. These programs also send relatively few people outside the U.S., so they should be expanded so that more companies can be helped & more employees can experience working with businesses in other cultures.

get ahead by going abroad

C. Perry Yeatman was featured @ this Chicago Council on Global Affairs event because she wrote a book of the same name. The subtitle of the book is “A woman’s guide to fast-track career success,” but Perry conceded that 70% of the book applies to men as well. For the record, I’m a huge advocate of Americans working abroad. I don’t think there are enough of these opportunities available & I’m continually disappointed @ the small numbers of people who seem to be interested in working abroad. I lived & worked in Germany for 2+ years, 6+ months in Poland, & 6+ months in Sweden. Each was a tremendous learning experience for me & benefited me unmeasurably in my career. Now that I understand you can be successful in ways that are not necessarily American, it opens up many whole new ways of thinking. Here are a few tidbits from Perry’s talk I don’t think you’ll find in her book:

-In Russia, she had to work with her laptop computer literally on her laptop, because they simply didn’t have tables & chairs, & this was for a big American firm

-with free labor mobility in the EU, Europeans are far ahead of Americans in understanding other cultures

-relatively larger American women may have difficulties in Asia where women are typically smaller, which spins out in many cultural differences

-Perry mentioned that most HR departments assume no Americans are interested in working abroad, which I find hard to believe

The only criticisms I have of her book are

-most of the interviewees are women employed by big American firms. There are great learning opportunities in working for foreign firms as well & these cases didn’t seem to be well-represented

-She didn’t mention that most opportunities seem to be with large firms as opposed to small

-She minimized the role of governments in stoutly protecting local jobs by making the process of obtaining & maintaining residence & work permits burdensomely difficult.

Finally, we differ on the importance of language skills. She mentions “There is no real consensus over the importance of possessing language skills of the country to which you’re going”-I disagree. I don’t know if there’s data which supports any consensus, but I believe if you work in a country which speaks a language other than your own, it’s incumbent on you to learn the local language & accommodate them rather than they accommodate you by speaking your language. “If the market you’re going to accommodates English speakers-like most of Europe & Asia…” -many Europeans speak superficial English they learned in elementary school to help out tourists, etc., but many with whom I worked were not comfortable speaking English on a regular basis @ work …”chances are most important transactions will be done through translators, so at a minimum, you can get by.”-She assumes you’re working @ a high level for an American firm, which is not necessarily the case for some ex-pats. Few companies are going to support the use of translators on an ongoing basis to support foreigners who don’t speak the local language. The purpose should never be to get by. If you go anywhere to work & aspire to just get by, don’t embarrass yourself & just stay home. Perry & I discussed this generally a bit & we both agreed that there are different language requirements, depending on your level in the organization, i.e., if you are managing multiple countries, it’s more reasonable to use English as a common language as a common denominator rather than be required to learn multiple languages for the countries you manage. However if you’re in the trenches working with locals, it’s much more important to learn the local language. Perry agreed to an interview with me, so hopefully we can delve into these issues more deeply.

future of foreign correspondents

I attended this Chicago Council on Foreign Affairs event The Foreign Correspondent: Connecting Chicago and the World featuring former foreign correspondents John Maxwell Hamilton & Richard C. Longworth. Hamilton recently wrote a book on Edward Price Bell, who was America’s 1st foreign correspondent when he opened the London bureau of the Chicago Daily News in 1900.  Longworth was most recently the Chicago Tribune’s senior foreign correspondent based in London.  A few interesting tidbits which came out of the discussion:

-The Chicago Daily News was a progressive pioneer in the news business, being the 1st to sell newspapers before they were distributed, rather than sell them as they were distributed.

-American newspapers invented interviews as we know them today.

Lessons learned from Hamilton:

-maintaining foreign correspondents is expensive for newspapers, so consequently we’ve lost a lot of them

-technology always enables journalists to work as quickly as possible

-competition keeps both business & writers on their toes

-experts are still required to write for their audiences

-newspaper owners must care about foreign service as a public service for it to survive.

Longworth’s contributions:

-1960’s were the heyday when the $ was strong & Time magazine had a staff of 40 in London

-Bretton Woods & the fall of the $ in 1973 spelled the beginning of the end when the # of Time correspondents dwindled to now 2 in London

-the Chicago Tribune still has a dozen foreign correspondents

-the job is still the same, reporting the world for readers @ home, but fewer publications even try to cover the world anymore.  Now most publications are simply platforms of local content.  Even Northwestern’s Medill School of Journalism touts going local to the exclusion of international news.  The result is the American public is becoming less informed & more ignorant of the rest of the world.

My take is publishing is simply following the model of the rest of business & outsourcing the reporting of the news to foreign-based local content providers.  They’re much better educated than they used to be & are now capable of playing that role.   They’re much cheaper than sending over expensive foreign correspondents ex-pats too.  We lose the insight of what’s important/interesting to a US-based audience, but if they report the facts accurately & well, that can be better than a locally-based bias/filter anyway.  Technology is also enabling all sorts of media to provide coverage which wasn’t available prior to the internet era.

foreigners view of intellectual property in the US

The German American Chamber of Commerce of the Midwest in cooperation with Brinks Hofer Gilson & Lione held this event: Avoiding US Intellectual Property Pitfalls The event featured a user’s view from the General Counsel of Robert Bosch, 1 of Germany’s largest electronics firms along with 2 attorneys from Brinks, 1 from Chicago & 1 from Detroit (Ann Arbor actually) with the law firm’s view.  Bosch is a prolific patent filer with an average of 14 filings/working day placing them 3rd in the US Patent office & 1st in Germany. Their goal is not to monetize their patent portfolio, rather to simply protect their  core manufacturing base.  Their best example is anti-lock braking systems.  The lawyers admitted intellectual property litigation is more expensive & extreme in the US, but 98% of cases settle.   Patent clearance searches can help an IP user avoid litigation.  IP owners can be sued when accused of infringements on patents, trademarks, & copyrights.  There are new standards for filing:  “justiciable controversy” judged by the “totality of the circumstances.”  They also offered 10 IP red flags, i.e. instances when IP should be secured

1 hiring an employee

2 disclosing information

3 selling product ideas

4 internal product development

5 co-development projects

6 solving customer problems

7 contracting engineering services

8 contracting software services

9 licensing in or out

10 acquiring business operations

The target audience apparently was German members of the GACCOM, but I’m not sure how many/what percentage of the attendees were German lawyers.  I requested copies of the presentations or links to them from the organizers, but have yet to receive them.

UChicago economists are taking over the world 1 country @ a time!

I caught this article in the Chicago Tribune Chicago grad takes over at Bank of Japan

This obviously is a very important position & it’s remarkable how many University of Chicago economists inhabit such positions. It’s amazing how long Milton Friedman’s extended economic “family tree” extends. It looks like he’s jumping right in & is addressing the G7, talking with the heads of the Fed & European Central Bank, & preventing financial confusion in addition to ensuring financial stability.  Since he’s advocated against bailouts as a result of the 1998 financial crisis, I wonder what Ms. Shirakawa would say about the UK’s bailout of Northern Rock or the US bailout of Bear Stearns?

Dutch entrepreneurs in Chicago

The Netherland America Foundation-Dutch Chicago Business Exchange hosted an event featuring a couple of Dutch entrepreneurs who founded businesses in Chicago. Dirk Meuzelaar of Bitfactory & Marcel Birkhoff of Hyva made presentations on their impressions of founding a business here from a Dutch point of view.  Marcel’s presentation is included here: naf-presentation Noteworthy in addition to his presentation:  Marcel started Hyva-US from his apartment in Chicago, pilfering wireless internet access from a neighbor (who still doesn’t know about it), & selling telescopic cylinders off of his pick-up truck.

The presentation was attended mostly by students, from both Erasmus University-Rotterdam School of Management, the Netherlands as well as the University of Chicago Graduate School of Business. The Dutch presentation is included here: ppt_presentations_bb What’s interesting here is the differentiation between the Americans as “masculine”-assertive, competitive, ambition, wealth & material possessions; & the Dutch as “feminine”-placing more value on relationships, & quality of life.  This is reflected in resumes/CV’s in that Americans focus on achievement-oriented comparisons in education & grades while the Dutch highlight extra-curricular activities.  In business, another reflection is Americans are perceived as overselling, as the Dutch are thought to undersell.  I agree, but resumes/cv’s worldwide are changing to become more American, & Americans would do well to temper their enthusiasm when selling to foreigners.

Jeffrey Sachs Managing Globalization

I checked out this event sponsored by the Chicago Council on Global Affairs.  There was a good crowd to hear this internationally-acclaimed economist over the lunch hour.

His general point was we’re @ a pivotal time in history where technology is enabling us to do much more, but it’s not sustainable, which will lead to a crash.  He cited numerous economic & population statistics, as economist do (of which I am 1)  which support his statements.  His main suggestion is we need sustainable development to avoid this crash.  I was disappointed that there was no opportunity to pose questions to the speaker.

Here are his 10 suggestions for our next President:

1.  end the Iraq war becasue money spent there can be better spent elsewhere

2.  end the Bush tax cuts

3.  invest in sustainable energy

4.  dispatch a climate envoy to the BRIC countries, Brazil, Russia, India, China

5.  stop 1/3 of our corn crop going to produce gas (ethanol)

6.  sign the convention on biodiversity

7.  invite African & Middle East leaders to the drylands initiative to address hunger & H2O shortages

8.  reestablish the United Nations Population Fund

9.  reinstitute the Millennium Development goals to get US out of last place @ donating .16% of our income

10.  create a cabinet-level Department for international sustainable development

I became familiar with Jeffrey Sachs when I went to Poland after he suggested economic shock therapy for the country, i.e., don’t waste time with easing in economic changes, rather jump right in, make them, & force people to make 1 radical adjustment instead of making many small incremental changes.  It seemed to work in Poland, so there’s wasn’t much flak against it.

While I understand his arguments for a better world, I think what’s missing is the recognition that things don’t change unless people see a direct benefit for themselves as a result of it.  I’m all for limiting population growth & supporting alternative energies, but until the poor see the gains from agricultural technologies & wind/solar power prices come down, they’re going to keep producing more babies (future farmers) & not buy expensive energy sources.

Indian longshot to bid for Motorola’s phones?

Wailin Wong must be scraping the bottom of the barrel @ the Tribune to come up with this beauty,  Indian firm may make offer for Motorola’s cell phone division

This just doesn’t seem to make sense from any angle.  Videocon makes appliances which have little to do with mobile phones.  Videocon doesn’t appear to have the capital resources to pull this off & pulling the $ together these days is extremely difficult, so I don’t see them raising much capital for this venture.  Sure growing Indian companies are interested in expanding when times for them are good, but let’s be realistic.  There may be a synergy in managing outsourced manufacturing, but otherwise I don’t see much of a fit.  So why write this article?  Is there some quota for the # of articles WW must contribute to Sam Zell?  Why am I writing an entry on an article that shouldn’t be written…?

Fortune Brands wins by losing Absolut in Sweden

I caught this article by Mike Hughlett in the Tribune Investors toast loss in Absolut bidding in which Fortune Brands share price rose the most in 1 day as it has in last 7 years because it didn’t win the bid for Absolut vodka owner Vin & Spirit by overpaying, as the winner Pernod Richard appeared to do. I spent about 6 months in Stockholm 1 winter a number of years ago & found the Swedes relationship with alcohol somewhat confusing. For such an open society, their restrictions on alcohol seem a bit contradictory. While beer & wine are freely available @ many retail outlets, liquor is sold only from state-owned stores during restricted hours, not unlike in the southern United States. I was told the reason is there are places in rural Sweden where people get so bored, drinking goes out of control & by restricting sales to government-owned stores, it prevents exacerbating the problem. Acqua-vit is still a staple despite these restrictions. I was glad for the Swedes that they got an even better price than expected. I’m a fan of the Swedes, so it’s good to hear them do well.  It’s 1 of the most technologically advanced places I’ve been.  They just seem to have a flair for creating useful technologies & implementing them well.  They have their own version of Silicon Valley outside of Stockholm which has numerous spinoffs from Ericsson.

Outclassed: Can U.S. Education Compete in a Global Market?

I attended this Chicago Council on Global Affairs event Outclassed: Can U.S. Education Compete in a Global Market? My original concern was that given the 2 speakers were locals, that they would defend their vested interests & simply defend US education to the hilt. Thankfully they acknowledged our problems & gave perhaps too much credit to our competitors throughout the world. Although the US did come out 25th out of 30 OECD countries in student assessment, some in each state do well. It was telling to me that a graduate student from India pointed out that US schools are strong in providing critical thinking skills & that is a strong differentiator.

We need to change the conversation to beyond the economic competitiveness goal. There is no direct correlation between test scores & GDP. School science is not real science. Learning is not a mechanical system, but we have organized it as such. We also must move beyond fact memorization to emphasize effort & work. Americans need to respect teaching & teachers.

We are navel-gazers somewhat in that we are obsessed with #’s. 1 of the speakers produced a copy of Life magazine pointing out that we were being accused of falling behind communist Russia’s educational system. It was from from 50 years ago to the day.

Q&A: They get that we get what we design & have too many silos. Like business, education needs to leverage partnerships. While charter schools do foster innovation, privatization & No Child Left Behind are not the answers because we’re not ready to outsource yet & need to teach towards more than passing a test. We teach too widely & not deeply enough. Our classroom materials can lead change. Asians concentrate on fundamental principles-we can learn from them in this regard.

not the Monkees’ Daydream Believers

I attended this event organized by the Chicago Council on Global Affairs Daydream Believers: How a Few Grand Ideas Wrecked American Power  The 2 basic premises of his book are that 1.  the fall of the Berlin Wall changed the world more than US politicians realized, & 2.  9/11 didn’t change the world as much as those same politicians thought.  To #1, it’s not just Bush.  In the times of the cold war, it provided a system of security in which other countries were subsumed to America & wars were political.  When the wall fell, each country went its own way & the US had to focus more on alliances.  Bush took the approach that we don’t need allies because we’re omnipotent, but we’re actually weaker. To #2, deterence doesn’t deter if we’re not deterring states.  We need to create coalitions & haven’t done that.  What Kerry suggested in the last election, police & intelligence, have been adopted.  Rumsfeld claimed the biggest danger was the Pentagon bureaucracy  & that the military needed to be overhauled with new technology & fewer troops.  He seemed to be vindicated by Afghanistan when we needed so few troops, but we didn’t play the game long enough to know what to do after “the war was won.”  The US strategy in Iraq was more misconceived than incompetently implemented.

As a businessperson, my main issue is Kaplan’s take on the economic impact of his assertions.  He claims the budgetary changes the government undertook after 9/11 were miniscule & insignificant.  I maintain that the massive redirection of funds which dismantled whole departments & created the Dept. of Homeland Security have altered the course of our economy.  If taken 1 step further that 9/11 led us to the war in Iraq, I think there’s little doubt that the impact of the war has impacted on our national debt, the value of the US$, & our trade balance.

european law presentation

I attended a presentation given by Prof. Paul Storm of (Erasmus?) University-Rotterdam @ John Marshall Law School Center for International Business & Trade entitled “Recent Developments on the European Corporate Scene.” Basically it was simply a lecture on European corporate law. He said basically that the European Union granted 4 freedoms, of the movement of goods, persons, capital, & establishment (of a company). Establishment was the focus of his talk. Establishment provides the basis for harmonisation, creates the backbone for mobility, & new legal forms. The EU has issued 14 directives regarding harmonization, which don’t just prescribe mechanics, rather control mechanisms. 3 amendments to existing directives failed.

Labor/employee participation in management (works councils-management & supervisory boards) have limited cross-border takeovers by giving labor a voice in the negotiations. By moving the headquarters location, certain corporate structures disappear. In the Sevic case in 2005, the German trade register refused to acknowledge a Luxembourg acquisition because German law did not permit cross-border mergers.  The rule of reason could be possible justification.

The EU has authorized a few new forms (legal structures) under European Community law-European Economic Interest Grouping in 1985, which aren’t much used; European Company, (with smaller supervisory boards) in 2001 ,which has been adopted by Alliance, BASF, & Porsche; & European Cooperative Societies in 2003, of which the 1st was adopted in 2005.

Prof. Storm also discussed the divestiture of LaSalle Bank from ABN Amro from the Dutch perspective.  The end result was the supreme court ruled that the deal must maximize the share price for shareholders, which seemd alien to Dutch law, but was expanded to include employees & customers interests as well.

He also commented briefly on Yukos Oil, which was assessed enormous tax bills, given 2 days to pay, & declared bankrupt.  When addressing the Dutch holding company Yukos Finance, the issue became “Could the Dutch court overrule this turn of events?”  The end result was no.

Finally in Q&A, he addressed the following issues

-German managers are trying to get rid of mitbestimmung & reform company law so that they are more attractive for foreign direct investment

-It’s legal in the Netherlands for Americans to found companies in Delaware just for the purpose of opening an office in Europe, but not in Germany

-there must be an actual case for the European Court of Justice to offer an opinion

-A European constitution is not in sight for a long time.

German insurance symposium

I attended the Panel Discussion: Managing the Complexity of International Insurance Programs from a German American Viewpoint  I requested a copy of the powerpoint presentation to put up here & was told GACCOM keeps its content on its own site.  Last I checked, they haven’t put up the presentation yet.  Here’s what I learned.

Traditional Controlled Master Programs-Germany/Reverse Flow Programs are local policies which sit on top of local policies from other countries with difference in conditions (dic) & difference in limits (dil) coverage in other countries.

Traditional Controlled Master Programs-US/Home Foreign Programs  provide master policy dic/dil coverage on top of local policies in other countries aside from US policies.  These are underwritten in the US for foreign clients.

The key to program selection & implementation is effective communication between the insurer, insured, & broker.  Things to consider are global/local expertise, coverage, capacity, price, network, IT capabilities, & claims service.  On an ongoing basis, program maintenance issues to monitor are the changing marketplace & regulations, continued program improvements, loss control & prevention, acquisitions/divestitures, claims.  It’s important to maintain flexibility & adaptability to change in exposure, country, & market conditions.

The panelist from Porsche Business Services has had a Reverse Flow program since y2k & it has been very successful. Their risk management is centralized, so they can now take on greater risks, & their premiums actually went down.

A few other things I picked up:

-The US is 1 of the most feared markets by foreign insurers because of the possibility of product liability claims & it’s highly regulated.   For example, the Germany CEO of a German company setting up in Indiana’s biggest concern was employee liability insurance.

-deductibles vary by country.  They are reputably high in Germany while low in France, but discrepancies are narrowing.

-European underwriters focus on longer term relationships & can be more creative in creating coverages while in the US we’re less so & more litigious.

-cultural differences do come into play in language differences in contracts & levels of risk aversion (the Krauts are conservative risk-avoiders)

Robert Reich @ ACG world markets conference

I attended the Association for Corporate Growth’s “Middle Market Growth in Uncertain World Markets:  Risk & Opportunity” event which featured former Secretary of Labor Robert Reich as keynote speaker. Here’s what I gleaned from his talk:

-Unlike our last recession in y2k-2001, which was an investor-led recession, our current recession is consumer demand led which has been building for years.  Real wages haven’t risen since the 1970’s, but spending & debt has. This is reflected in what RR terms DINS:  double incomes, no sex-couples with 2 incomes & no time for conjugal pleasures.  Despite the fact that we work 450 more hours/year than the Europeans, Europe doesn’t have a demand problem, but we’re now decoupled economically from Europe.  RR predicted the crash in Oct., 1987 & has been making the same prediction for the last 4 1/2 years.  Current fiscal incentives like the tax rebates due in May are worthless-the fate of the economy lies with the Fed.

-Globalization:  there is currently a backlash against trade & immigration, but NAFTA is not the problem because they are not 0 sum games.  Expertise, innovation & skill are still more important than wages in making location decisions, so education is key to economic success.  Technology has displaced more jobs than globalization, so that even China is losing manufacturing jobs.  The problem is not the # of jobs lost, rather the quality of jobs.  Local service jobs are the only shelter.  US demographics/baby boomers retiring dictates that we’ll need immigration, which means we’ll need education & health care.  Social Security will be a much smaller problem than Medicare.

In sum, our budget debt creates problems in global capital markets, but our problems are solvable if we invest wisely.

In Q&A,  here are a few more points

-the Fed is a part of the subprime problem in that there was no oversight for such low interest rates & cheap $

-there will be legislation for alternative energy soon, but timing is key

-low capital gains taxes are not a problem, but unsupervised hedge fund risk/leverage is

-immigration quotas are unnecessary because in 1900 15% of our population was immigrants & now it’s only 12%

-we shouldn’t impose restrictions on incoming foreign capital

-the Clinton budget deficit of 5% puts our current deficit in perspective

-education in a slow crisis is a whipping boy, but is a state/local problem.  We need smaller classes & more authority/accountability for teachers.  No Child Left Behind teaches students to test well, but doesn’t give them a well-rounded education.

Despite what he says, even as an economist, RR has more personality than most any accountant I know.

I was educated as an international economist, so I’m not going to debate him.  I took notes @ the presentations I attended & ACG captured all of the presentations in digital video, but since they’re only available to ACG members, my notes won’t do you any good.  If you have any particular questions, just let me know.

Romanian trade delegation

Gheorghe Gruia, Consul for economic affairs @ the Consulate General of Romania in Chicago, hosted a trade delegation in from Romania for the housewares trade show @ McCormick Place. Gheorghe made a presentation @ a breakfast reception: Romania has a population of 21.7 million people with 2.5 million in Bucharest. GDP has grown 4-8% the last few years in Romania & has received 31 billion Euros of foreign direct investment from the Netherlands, Germany, US, & Italy. Inflation has shrunk from 47% to 5% & unemployment has more than halved from 12% to 5%. Romania should be part of the Euro-zone by 2012. Illinois exported $25.5million of product/services to Romania in 2006. Romania has the lowest tax rates in the area & all sectors have been privatized & are available for investment. Economic advantages include a fast growing economy, low tax rates, & low inflation. Romania offers human resources, technology, IT, & engineering resources. Location is also an advantage with close proximity to the CIS & Middle East.

Here are the companies which paid a visit:

Acormed-environmental protection, water administration

Aquarius Exim-imports yarns, exports fabrics

Astra-security vaults

CIAC-building, construction

Cozia Forest-wood processing

Elpidex-wood garden furniture, log houses

Hobby House-forwarders & movers

Lumetal-recyclable scrap recovery

Prodin-natural fiber textile producer

Sigstrat-moulded plywood processing

banking on Israeli IT

The Israeli Economic Mission to the Midwest hosted an event last week entitled “Banking on Israel IT” sponsored by Grant Thornton, The Israel Export & International Cooperation Institute, AeA, America-Israel Chamber of Commerce, Bird Foundation, Illinois Dept of Commerce & Economic Opportunity, & Katten Muchin Rosenman LLP.

Michael Strauss of the Chicago Federal Reserve Bank made the Keynote presentation on an economic assessment of the US economy which is attached:  strauss israel presentation  It didn’t contain any interesting new international information, so there’s not much I can add.

Mark Schittig, Director of the Division of Risk Management @ the Fed in Chicago, made a presentation on Regulation & IT solution management but since much of the focus was on security, I guess they didn’t want to give hackers any fodder for thought.

Israel Tenenbaum, Director of the ICT Dept of the Israel Export & International Cooperation Institute made a short presentation which essentially introduced the visiting Israeli firms  tenenbaum ieici presentation Although it’s somewhat repetitive, here’s some additional information on the visiting companies  israeli IT co. details  He pretty much just read through the presentation, so there’s not much for me to add to what he presented.

Illinois exported electrical & non-electrical machinery & transportation equipment & other things worth over $148 million in 2005, down 4.68% from 2004. Other products exported to Israel include optic, photo, medical surgical instruments, organic chemicals, precious stones, plastics, non-railway vehicles, pharmaceuticals, articles of iron or steel, & aircraft.  About 200 Illinois companies have subsidiaries in Israel, such as American National Can Co.,  A.Epstein & Sons International, Motorola, Bi-Logic Systems, & Sara Lee.

Israel lists 100 NASDAQ companies & exports $3.6 billion worth of software.   It appeared as if Grant Thornton had arranged all the meetings for the visiting firms & held them in their offices.

Samantha Power’s post monster mash

Samantha Power, Barak Obama’s former foreign policy adviser, spoke recently @ this Chicago Council on Global Affairs event International Institutions: New Roles for the Global Age to promote her new book  “Chasing the Flame:  Sergio Vieira de Mello & the fight to save the world.”   Here are a few things I gleaned from her talk:

-after noting the Rwandan genocide, we need an endangered peoples movement as well as an endangered species movement.

-contrary to how it appears in the media, the U.S. is the biggest helper in Darfur & Burma, which results in 2 lessons  1.  there is a void with insufficient international commitment to these causes, & 2.  US moral commitment is contradictory when we endorse waterboarding.

Sergio:

-reasoned with unreasonable people in nation-building  for the UN

-found killers interspersed with refugees, a difficult task

-found common ground with Bush by mentioning his shoot to kill order in E. Timor.

Lessons learned:  we need to;

- extend 20th century means to address 21st century problems

-change from Roosevelt’s freedom from fear (”fear is a bad adviser”)

-talk to our adversaries so that we can think outside of our black boxes

-promote dignity within democracy

-be humble while being clear-eyed in examining problems

Pardon the pun, but Samantha is a very Powerful & persuasive speaker.  She obviously knows her stuff very well & presents it in a compelling fashion.  However, as intelligent as she is, I question placing her in a foreign policy role.  She stands up for many laudable causes, but I’m not sure they always deal with more practical & economic matters which would be required in a foreign policy position.  I think it’s a shame she was forced to resign from Obama’s campaign, but it might not have made sense for her to take on a role after the campaign anyway.

Austan’s (city?) limits

I read this article by David Greising in the Chicago Tribune Going to school on presidential politic about Austan Goolsbee, a University of Chicago economics professor who’s an economic advisor to Barack Obama. Apparently Goolsbee responded to an invitation from the Canadian consulate in Chicago to explain Barack’s position & ended up being roasted for it. Austan has been roundly chastised for intimating that Barack’s rhetoric against NAFTA is just that.

As a former employee of the Canadian consulate in Chicago & 1 who knows A. Goolsbee, I have to comment. 1st of all, Barack’s issues with NAFTA are labor & the environment. Loonie-rich canucks are not barraging across the border taking US jobs & Canadian factories are not belching out smoke that is polluting the atmosphere of the US. Barack’s issues must be with the neighbor to the south & not the north, so speaking with the Canadians makes little sense because they have little to fear from change. 2ndly, while Barack supposedly could reopen NAFTA talks, because it was passed 10+ years ago & is already pretty firmly-entrenched, he’d have little chance of making major changes. That’s why bluster about changing NAFTA is simply rhetoric with little chance for real change. Potentially populism politics, but poor economics & not reality-based.

Finally, I’ve met & corresponded with Austan. He’s a brilliant guy. I met him @ a this Chicago Council on Global Affairs event I introduced myself to him because he speaks regularly on Marketplace, an NPR business news radio program & at the time, I was trying to get an international business news program on NPR. When we shook hands, he said, “I know you.” We finally figured out that since we both do triathlons, he’d seen me @ Chicago Triathlon Club meetings. He offered to put me in touch the the President of Public Radio International & did that. I had the conference call a few weeks later. He didn’t have to help me out, but he did, & followed through. Few people do that today, so I respect his integrity.

The Canadians should not have leaked information that I’m sure was delivered off the record. Goolsbee provided that information in good faith, & was chastised for it. Austan is a good guy & I’m glad he hasn’t resigned. If Barack has people as intelligent as Austan Goolsbee surrounding him, I have a lot more confidence in him than our current leadership.

Here’s a supposed copy of the memo from the Canadian Consulate in Chicago which was forwarded & presumably leaked in Canada. I question whether it’s the original because of the formatting. They’re not really so old-fashioned as to circulate old-typewriter written looking documents. I don’t know the interviewee (HOM-Head of Mission Georges Rioux) & scribe Joe DeMora because they rotated in after I left the office in 2003.

For the record, check out this editorial Two faces on NAFTA for a more realistic view of where NAFTA stands today.

heparin coverage in Germany

In following up this article by Bruce Japson Similar heparin issue in Germany in the Chicago Tribune, I found out a few additional things in the German press

Süddeutsche Zeitung Heparin-Skandal erreicht Deutschland Heparin scandal reaches Germany: Axel Thiele of the Bundesinstituts für Arzneimittel und Medizinprodukte (BfArM)/Federal Institute for Medicines & Medical products confirmed about 80 cases of allergic shock.  Because of chemical similarities, contamination is difficult to discover.  There are 10 producers of cheaper variants of Heparin, which is no longer patent protected.

die Zeit Lebensbedrohliche Spritze Life threatening shots, claims almost 100 people are affected & traces the problem to specific Chinese firms.  Other quotes from Axel Thiele:  “At the moment, we don’t know what it is.”  When it’s identified, then they can seek other remedies.  Since Heparin is a natural amino sugar, it’s not under surveillance.WirtschaftsWoche picked up HANDELSBLATT’s article Gefährlicher Blutverdünner Rotexmedica muss Medikament vom Markt nehmen Dangerous bloodthinner-Rotexmedica must take medication off the market-Heparin has been pulled from the German market.  Rotexmedica belongs to the French pharmaceutical group Panpharma.

Berliner Zeitung & Frankfurter Allgemeine make no mention of Rotexmedica or Heparin

Atlantic Canada business mission

Canadians were in town last week with a group of businesspeople to meet with potential customers, partners, & investors in Chicago. Because of weather delays, over 1/2 of the delegation couldn’t make the 1st scheduled lunch. All but 1 was able to make it to Chicago by the reception the following evening. Chicago-based Deputy Consul General/Trade Commissioner Maurice Egan spoke for Janice Goguen of Atlantic Canada Opportunities Agency, who didn’t make it down. Here are the participants:

Atlantic Canada Business Network provides foreign direct investment & international business consultation to Atlantic Canada businesses by enabling access to China

Game Face Graphics, Inc. makes “skins”/removable/reusable stickers/decals for phones, mp3 players, gaming gear for WalMart

Headz UP head support system for infant car seats

InternetWorks Ltd. web-based occupancy reporting system for tourism departments & destination marketing organizations

Marcato Digital Solutions web-based management & contact software for the music industry to manage finance, accounting, & scheduling

Pulse Communications developer of software. database-driven applications, network configuration, hardware sales, for print, graphic design, web design/development, & interactive media

Quick Snap 2-piece plastic clip which replaces shoelaces for footwear. sporting goods, & medical health industries

Stark Oil Purification provides transformer maintenance, oil purification, oil & fluid rejuvenation, alternative fluid rejuvenation, hot oil flushing

european patent changes seminar

I attended this seminar @ DePaul University College of Law The USA Business Impact of A Changing European Patent Regulatory Environment which was co-sponsored by the Association of Patent Law Firms

The presentations & my notes for each are included below:

EPO & the London agreement

-All European countries will eventually ratify the London agreement, but it still makes sense to have translations done in appropriate countries just to be sure your back is covered.

appeals to the epo

-the boards of appeal consist of judges, not examiners

-1600 of 2000 cases/year are settled by decisions of the boards of appeal

-early is best for new documents & arguments in general procedures & timings

-oral proceedings take 1 day-1 week, depending on the # of parties & you receive a decision that day, but no reasoning behind it

-there is no unified patent law in Europe, it’s just a bundle of national patent laws-they can contradict 1 another & still stand

-minutes are a joke

-you can still go back to national courts

-there is no doctrine of equivalence

oppositions before the epo
-documents are 90% of the procedure, & it’s better if they’re in the public domain with prior public use & a written trace

-hearing the parties is seldom done

-opinions by experts are unlikely to be considered

-arguments can be thrown out for being badly argued

-markers are needed for thesis documents referenced in university libraries

Since these presentations were given by lawyers, I’m going to reserve my commentary other than to say, if you’re a patent attorney, I’m sure there’s lots of valuable information here. Otherwise, there’s a lot of detail with which you need not concern yourself.

international economic espionage

I attended this presentation by Michael P. Avramovich,  President of Avramovich & Assoc., P.C. @ the Center for International Business & Trade of the John Marshall Law School.  Here’s what I was able to pull out of it:

-FBI estimates losses of $200B.

-Russia & China are #1 & #2

-Because the U.S. is the largest foreign direct investor, that makes the U.S. the # 1 target

-inside agents are the most insidious

-supply chains open up vulnerability

-French flight attendants were bugged as members of the French equivalent of the CIA

-foreign students in the U.S. gather data to take home

He spent a fair amount of time going through the actual code

the U.S. govt must prove

-theft

-perpetrators knew it was a trade secret

-converted to an economic benefit

-knew there was injury

-related to foreign commerce

this controls acts outside of the U.S. as well

to protect trade secrets

-train employees, consultants, licensees

-sign Non-Disclosure Agreements

-limit physical access to secrets

-restrict the # of copies which can be made of secrets

-encrypt data

only 30 cases have been prosecuted in 11 1/2 years

For the record, this is 1 of the driest presentations I’ve ever seen.

He handed out an 18 page report, 6 pages of code on Protection of Trade Secrets, & a 6 page article he contributed to The Globe. Contact him if you’d like copies.

US not only country suffering from subprime loans

I caught this article by Kim Murphy in the Chicago Tribune Subprime woes, with a British accent  which told of the woes of our British cousins suffering from the same maladies of subprime woes as we Americans are.  What seems to be different are a few things:

-”rescue” companies really don’t rescue mortgagees

-the British housing market, & hence mortgage market, accelerated at an even faster rate than that of the US, & is paying the price for it now, reflected in the sharp increase in mortgage defaults

- interest rates there of 9.5% sound kind of high to me

While much of the rest of the world might not be dragged down by the subprime crisis, part of the reason for that is much of the world, & even the developed world, didn’t benefit from home ownership either.  When I lived in Germany, far fewer people owned their own homes.  They were lifetime renters, which gave them flexibility, but also left the succeptable to the whims of their landlords.  They never had the commitment & tax advantages of mortgage interest.  In many ways, America differs from a lot of the rest of the world in making home ownership a pillar of our financial stability.  There is a lot of sense in rewarding people for bettering their home environment.  But in times like these, when too many people took advantage of the system, there are risks for which we are paying now.  Interestingly in contrast, when I spent time in Poland, I saw many houses in the midst of construction, which might or might not have ever been completed.  I don’t know if they owned the houses & land, but  many of them must have been abandoned because  they ran out of money, even though I was told many people built their own houses by themselves.

w daley on nafta

David Greising of the Chicago Tribune scooped me by interviewing William Daley, brother of Chicago’s mayor Richard J. Daley, about the North American Free Trade Agreement in His own free-trade truce This whole hullaballoo over NAFTA kind of surprises me because it was passed during democrat Bill Clinton’s administration. I wasn’t aware that he was accused of letting corporations write that trade treaty. Being educated in international economics, I’m a free trade advocate, so generally, I think NAFTA is good. What’s seldom mentioned is that the US being able to export more to Mexico (the US already had a free trade agreement with Canada even before NAFTA) creates more jobs. Whether or not that offsets the jobs we lose that are outsourced there, I can’t say. Theoretically, the argument against NAFTA is that Mexico is not held to the same standards as the US for labor & the environment, & therefore has an unfair competitive advantage. Because they don’t have the same OSHA standards for workers & EPA standards to protect the Earth, they are able to unfairly pay lower wages to workers there. As Barack correctly notes, the optimal solution is to improve conditions in Mexico so that their workers are happy enough there that don’t want to immigrate here. Exactly that is happening to Turks in Germany-they are returning home because conditions have improved so drastically there. The Mexican market is open to us, we have reciprocal trade, & we are not patsies. China is the far greater threat because the cost differences are so much greater in manufacturing. Attacking trade is an easy political issue which plays well to labor & about which most can/will not do much. Letting low-skill jobs migrate to Mexico is not what’s killing the American economy. Exorbitant trade & budget deficits are. In my mind, it’s all about competition & the US is not doing such a great job in that area these days.

Tellabs to attack international markets

I read this article by Jon Van in the Chicago Tribune Tellabs looks within where it states  ” Part of Pullen’s strategy will include tapping new foreign & domestic customers, such as telecom carriers in Asia & the U.S. government at home.”  Duh, that’s where the growth is.  Tellabs is already pretty international.  Tellabs generated 29% of its revenue outside
of North America in the fourth quarter of 2007.  It has customers outside the U.S. like Ericsson (Sweden), NTT (Japan), Telecom Italia, Telekom Malaysia, Telstra (Australia), Vodacom SA (South Africa) and Vodafone (Hungary).  Tellabs has regional headquarters in Singapore — Asia Pacific; London— Europe, Middle East and Africa; Ft. Lauderdale, FL— Latin America and Caribbean.  Tellabs employs about 3,700 people,  about 1,100 of which   are based outside the United States. I’m kind of surprised the past CEO Krish Prabhu, an Indian, didn’t pursue this strategy.  I also had to mention this article because an analyst with Robert W. Baird & Co. named Ken Muth, (no relation) commented on the hire in the article as well.