The Curse of Oil

She had one of those scrubbed-up, warbling voices from the Northern Plains, full of flattened vowels and Scandinavian resolve, and it made me think of Fargo. The vast backdrop of Peterbilt trucks and speedboat auctions, the envelope of fresh November snow. The family restaurants feeding the great American stomach a steady diet of hometown pride and manky coleslaw. A postcard from the Great White North.

I couldn't remember the last time I bought airline tickets over the phone, and the whole thing felt a little odd, and profoundly inefficient—like something my parents might do. But I was flying to Nigeria, and if you want to fly to Nigeria, you have to buy your ticket the old-fashioned way. Even if you found the fare online, you have to book your seat over the phone and then go down to the airport to pay for it.

"So what is it that's taking you over there, anyway?" the operator asked while we were waiting for one of her screens to come up. "Business or pleasure?"

"Business, I suppose," I said. "I'm doing some research."

http://www.vqronline.org/articles/2007/winter/ghazvinian-curse-of-oil/

Privaty Equity Firms Strip Mine German Firms

If your baby doesn't cry when you wash its hair, there's a good chance the reason can be found not far from Germany's Rhine River. Same thing if, after washing your windows, there's not a streak to be seen. Cognis, a giant chemical company headquartered near Düsseldorf, makes it happen. And not surprisingly, demand for their products is high. Indeed, in 2000 the company made a tidy profit of €109 million ($143 million) after taxes.

Half a decade later, demand for Cognis products is still high, with sales through the roof. Profits, though, are a thing of the past. In fact, in 2005, the company was deeper in the red than it had ever been. The total loss for the year was €136 million ($178 million). The company continues to limp along but is now on the auction block, likely heading for bankruptcy. Dozens of workers have been laid off.

So what happened? The answer has more to do with a recent development in the global economy than it does with Cognis management itself. In 2001, Cognis fell victim to a private equity firm, those companies trolling the world economy for lightening quick returns on their investments.

http://www.spiegel.de/international/0,1518,456272,00.html

Russia Airports:Kama Sutra and feral cats

WORKING as a journalist in Russia, with its eleven time zones, its endless steppe and perpetual taiga, means spending a lot of time in the air. It involves flying in planes so creaky that landing in one piece is a pleasant surprise —then disembarking in airports so inhospitable that some visitors may want to take off again immediately.

But, if he has the strength, beyond the whine of the Tupolev engines and the cracked runways, a frequent flyer can find in Russia's airports a useful encapsulation of the country's problems and oddities. In their family resemblances, Russia's airports show how far the Soviet system squeezed the variety from the vast Russian continent; in their idiosyncrasies, they suggest how far it failed to. They illustrate how much of that system, and the mindset it created, live on, 15 years after the old empire nominally collapsed. Russia's awful, grimy, gaudy airports reveal how much hasn't changed in the world's biggest country—but also, on closer inspection, how much is beginning to.

http://economist.com/world/displaystory.cfm?story_id=8401107

Asian Central Banks May Spook Investors in 2007

Dec. 15 (Bloomberg) -- While a housing-led slump in the U.S. economy may indeed emerge as the biggest risk to Asian economies in 2007, a more immediate threat to investors will probably be posed by the region's central banks.

Policy makers in China, South Korea and India may have no option except to aggressively contain domestic liquidity and stamp out asset-price bubbles even as the U.S. Federal Reserve and the European Central Bank get closer to ending their monetary tightening cycles.

Relying on ``shock therapy,'' central banks in these countries might end up making overstretched securities -- such as Indian and Chinese equities -- more volatile than they have to be. A case in point was the bloodbath on Indian stock markets earlier this week.

In the absence of a full-blown U.S. recession, an intolerable surge in oil prices or a sudden aversion for financial risk, the global environment is likely to prove fairly stable in 2007.

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_mukherjee&sid=atfvDGiVi93Y

In India, a boom that's bursting at the seams

NEW DELHI — An honest day's work took a good deal of subterfuge for Maneesh Mansingka.

Every morning for a month, he crept surreptitiously into the basement of a gated modern building, trying to dodge the authorities. He stayed holed up underground all day, calling clients and typing on his computer. At night, he slipped out the way he came in: through the back door, like a thief, not a successful professional.
If anyone asked, the ground floor where he normally worked was somebody's apartment. A helper even slept in his former office to keep up the ruse.

It was an embarrassing charade for Mansingka, the India director of a global commodities brokerage. But it was necessary to evade a recent government drive to shut down businesses operating in areas not officially zoned for commercial use. Mansingka's office is in a residential building he picked three years ago, after a futile search for decent commercial space in this teeming capital.

 

http://www.latimes.com/business/la-fi-space23dec23,0,7707992,full.story?coll=la-home-business