Movies: Melancholia

 

 (Drivebycuriosity) -  It is the time for the best of the year lists again. My movie of the year -  so far - is "Melancholia" (imdb). The film, directed by Lars von Trier, mesmerized me. The danish director  and his cinematographer Manuel Alberto Claro created pictures, Stanley Kubrick would have been proud of. Both cinema innovators show what cinema still could do. Days after watching this movie event I was still under its spell.

As the title promises, "Melancholia" has a dark & disturbing plot. The film focuses on 2 sisters, played by Kirsten Dunst and Charlotte Gainsbourg, who have to deal with depression and an enviable fate, a fatal crash of our earth with another planet.

The film doesn`t show the usual action you can find in Hollywood`s science fiction blockbusters, instead it confronts the viewer with the psychology of its characters, it is more Sigmund Freud than Isaac Asimov. Once again Lars von Trier confirmed his reputation as a provocative director and delivered a piece of art, worthy to discuss and contemplate.

Internet Stocks: Bubble? What Bubble?

"The reports of my death are a bit exaggerated", joked once Mark Twain. This reminds me of recent reports about the state of the Internet stocks. "The Tech Bubble Just Popped" titled "Gawker", a popular newsmagazine/blog (gawker.com). The "New York Times" (dealbook.nytimes) and "The Wall Street Journal" (allthingsd.com) had similar articles.

Indeed the shares of Groupon tanked around 30% last week and Linkedin plumped 15%. Netflix imploded around 75% since July. Even well established Internet companies got caught in the selling panic: Last week Google dropped 6%, Ebay lost 11% and Amzon.com tumbled 16%.

I guess the mentioned articles and the sell out are just mirrors of the general hysteria and fear on the markets. Funds and other short sighted speculators are panicking now. These speculators react like lemmings and are dumping everything which seems to be risky. This is a typical herding behavior we experience very often in scary times. Internet stocks, which are usually more volatile than the whole stock market, are just the scape goats of the general paranoia.

The dumping of the whole Internet sector doesn`t have anything to do with the reality. The Internet industry is doing way better than the whole economy, which is still solid (proven for instance by rising retail sales, a climbing industrial production and the shrinking weekly jobless claims).

It is typical for the general climate of neglect that media & market players are completely ignoring the perspectives of the Internet now. The World Wide Web is still in an infancy stage of its evolution. Many more technological innovations and enabling capabilities such as payments platforms are likely to emerge, while the ability to connect many more people and things and engage them more deeply will continue to expand exponentially, claims a recent report by McKinsey (mckinsey).

And: Intel expects that over the next five years 1 billion more people will join the global online community with 15 billion connected devices, including PCs, smartphones, tablets, embedded devices, and smart TVs (drivebycuriosity). The Internet sector will benefit from the falling price for these devices, thanks to the technological progress, and from the globalization. The numbers of Internet users in China, Brazil and other emerging markets already are exploding.

Economy/Stock Market: Occupy Wal-Mart

What a crazy world. Last week the U.S. stock market (S&P 500) tumbled 4.7%. It was the worst Thanksgiving-week since 1932, reported Bloomberg (bloomberg.com/). But on Black Friday, the day after Thanksgiving when the holiday shopping season unofficially begins, the U.S. consumers rushed the shops.

Black Friday sales increased 6.6% to the largest amount ever, wrote Bloomberg. “This is the largest year-over-year gain in ShopperTrak’s National Retail Sales Estimate for Black Friday since the 8.3 percent increase we saw between 2007 and 2006,” commented the research firm ShopperTrak (bloomberg).

This is definitely not a sign of an approaching recession! When will the stock market regain its sanity?

Science Fiction: The New Space Opera, edited by Gardner Dozois & Jonathan Strathan

(Drivebycuriosity) - Nothing is impossible. The universe is full of possibilities. This is the basic idea of science fiction, which has fascinated me for decades. It seems to me that space operas are the cream of the genre. They tell stories about encounters and experiences with foreign planets, alien lifeforms, black holes, strange galaxies and alternative universes. 

The anthology "The New Space Opera", edited by Gardner Dozois & Jonathan Strathan (published 2007 amazon.com), shows how this kind of literature has evolved into the 21st century. It`s a collection of 18 short stories & novellas. The more than 500 pages combine the adventures of their heroes with the advances in cosmology, quantum physics, genetics, molecular and other sciences.

"Winning Peace" by Paul J. McAuley tells the story of a man who was tricked by his deceptive employer and a treacherous alien.
 

"Splinters Of Glass" by Mary Rosenblum narrates a twisted love story and a deadly man hunt on Europe, an icy moon of Jupiter.

"The Emperor And The Maula" by Robert Silverberg confronts us with an assassin trying to accomplish her deadly revenge against all odds.

"The Worm Turns" by Gregory Benford focuses on a freelance pilot of a space ship who - with the help of her AI - has to catch a wormhole.

"Art Of War" by Nancy Kress introduces us to an expert in the sciences of the arts who is involved in a war against strange behaving aliens and a twisted family relationship.

"Muse Of Fire" by Dan Simmons is about a Shakespearean theater group who has to perform before aliens to save the whole of humankind.

The rest of the narratives, including contributions by Alastair Reynolds, Peter F. Hamilton and Ian McDonald, also are full of wonders & surprises. 

Enjoy!

Stock Market: Grateful To The Masochists

The stock market is in the hands of the masochists again and the cult of doom & gloom and his high priests (like perma recession-caller Roubini) sing the recession blues.

The stock market is now just a mirror of the gloomy sentiment and doesn`t display the fundamental data which is still positive. For instance since last year company profits rose 11% (scottgrannis.blogspot.com), but stocks (S&P 500) fell 3% (google.com/finance). The economy is recovering as a lot of indicators prove - like rising retail sales, climbing industrial production and dropping weekly jobless claims.

Some day this madness will end and the stock prices will climb to new highs. Then we  -  the investors  - might be grateful to the masochists who gave us the gift of low stock prices for investing.

Culture: Work In Progress

Visitors of New York might be impressed by the huge advertisements at Time Square, a very commercial kind of pop art. But the connoisseurs of impressive advertisements could find more. I like the huge advertisements which are painted on some walls of houses in South Manhattan. Some are real eye candy.

During my last stay in New York I spotted the development of a huge advertisement at Lafayette Street at the eastern border of the trendy Lower East Side. You can see here some steps of the evolution of this piece of pop culture.

The work started around one week ago and was still in progress as I left the city last Monday.

I`m planning to come back by the Christmas week and to post then the final view of ad art. Stay tuned!

Movies: The Thing

 

(Drivebycuriosity) -  I want to say it frankly: I was disappointed by the movie "The Thing" by Matthijs van Heijningen Jr (imdb.com). The film tells the story of a hostile alien which occupies a research station on Antarctica. It is a sequel to the flick "The Thing" by John Carpenter (1982 imdb.com), which was based on the science fiction novella  "Who Goes There?"  by John W. Campbell, Jr.  (first published 1938).

The novella and Carpenter´s movie were thrilling. Both took time for building up the tension and described the paranoid & claustrophobic situation which developed at the research station after it had been infected by the alien. I also enjoyed the special effects in Carpener`s movie, which where sometimes very funny. The new movie instead didn´t bother to build up the tension and jumped quickly into the gory effects. The new story was very simple told and the special effects lacked the funniness I admired in Carpenter`s movies.  I guess there a better things to do than watching "The Thing (2011)".

Stock Market: Angry Without A Cause?

Movie bugs and fans of James Dean may like the movie "Rebel without a cause" (U.S. 1955 imdb.com).  The current situation on the stock market reminds me somewhat of the title of this film. Last week we got lots of news that the U.S. economy is improving, but the US. stock market (S&P 500) dropped 3.8% -  the worst week in 2 months. Angry without a cause?

The U.S. economy may end 2011 growing at its fastest clip in 18 months as analysts increase their forecasts for the fourth quarter, reports Bloomberg (bloomberg). Bank economists are now upping their predicted growth rates for the gross domestic product (JPMorgan expects plus 3%, Morgan Stanley predicts 3.5%). “The incoming data on consumption, business spending and residential investment all points to GDP growth in the fourth quarter tracking 3.3 percent,” said John Herrmann, senior fixed-income strategist at State Street Global Markets to Bloomberg. Last week the media reported that the index of U.S. leading indicators, designed to foreshadow the economy’s performance over the next three to six months, rose 0.9% in October, the biggest jump since February, after a 0.1% September increase. They also reported growing retail sales, climbing industrial production and that the weekly jobless claims dropped again.

But the stock market ignored the positive facts and focused instead on speculation that Europe may drift into a recession and could draw the global economy with it. History shows that the stock market, at least in the short run, can separate from fundamental data. One example is the Flash Crash on May 6, 2010 in which the Dow Jones Industrial Average plunged about 1000 points—or about nine percent—only to recover those losses within minutes (wikipedia). Another example is the Black Monday on October 19, 1987 as the Dow Jones dropped 22%, following crashes in Hong Kong & Europe (wikipedia). Both crashes weren`t accompanied or followed by a weak economy. They also predicted  recessions which didn`t happen.

Those crashes are possible because in the short run stock markets can be dominated by sentiment. The movements of the stock prices can be sharply aggravated by the herding behavior of funds and other speculators, who tend to buy or sell when other market participants do the same. I believe that now the stock market is dominated by the wide spread doom & gloom sentiment and therefore underestimates the positive fundamental facts. If this belief is correct, the stock market now offers a buying opportunity.

Commodities: What We Could Learn From Cotton

Yesterday the price of cotton fell 3 cents to 91 cents per pound. So what? Oh, now the fiber costs more than 50% less than last March when it reached a peak of $2.15 per pound.  How could that happen? How could the price of an important commodity fall so deep and so fast?

The answer: The price of cotton is strongly influenced by sentiment and speculation, because the raw material is traded on the financial markets like stocks, bonds or other commodities like oil. Producers, textile companies and commodity funds buy and sell futures on cotton (contracts to deliver cotton at a certain date in the future).

If they believe that cotton is getting more scarce the price of the future is rising, if they believe otherwise, the fiber gets cheaper. Many huge hedge funds and other speculators use the fluctuating price to set high bets on expected higher or lower cotton prices in the future and aggravate the price movements.  "We are dealing with money, not with cotton," explained Keith Brown from the U.S. Broker Keith Brown and Co to Reuters.

From fall 2010 until spring 2011 the price of cotton more than doubled. Rumors and speculation about a expected shortage, which could cause further rising cotton prices, attracted many funds and other speculators. CottonMarketNews saw "signs that global supplies may not satisfy demand in China, the world’s biggest consumer"(cottonmarketnews.com).  In February CottonMarketNews was claiming that the "Cotton crisis (SIC) sends prices soaring" and asserted "a  decrease in the cotton supply because of poor crops and reduced planting in response to the recession, rising labor costs in China and India, and renewed demand for apparel as the economy recovers, have combined to make cotton a hot commodity" (cottonmarketnews). (The alleged combination of "recession" and "economy recovers" reminds me of Machiavelli, a master in manipulating the public opinion). One broker claimed "“We don’t have any cotton; everything you can get your hands on is worth gold right now.”

There also were widespread rumors of massive hoarding by cotton suppliers in India and elsewhere trying to get the highest possible price this season. Anticipation of higher prices would also push up demand and inventories in the textile and clothing pipeline, reported EmergingTextiles.com. The rising prices in this period drew more speculative buyers to the cotton market who just tried to benefit from the steeply upside trend, a typical snowballing effect based on the herding behavior of commodity funds.

It seems now that the bubble has burst. Now we get predictions that the demand for cotton should get weaker because of a projected slowdown in global economic growth in 2011 and 2012 (danielstrading.com). In addition, the production of cotton is projected to demonstrably increase in important supplier countries like Pakistan, Australia and Turkey. We also got reports about higher-than-expected yields on Indian and Pakistani cotton crops.

This change doesn´t come unexpectedly. You could have read it in any basic economic textbook before. There you could learn that the demand for a good falls when its price is rising, because fewer buyers can afford the prices and switch to alternative products. For instance textile companies and their customers will buy more synthetic fibers instead of cotton. Otherwise the farmers respond to rising prices which indicate higher profits for them, by planting more cotton, maybe instead of other crops.

Therefore it isn´t surprising that cotton wasn`t the only bubble which happened to pop recently.  For instance wheat ( represented by the ETF US12492G1040) is now traded at $588, and it reached a peak price of $886. A lot of other commodities like corn, coffee, rice, sugar and even oil are now significantly below the peaks reached this year.

We can learn from cotton that prices of most commodities can strongly separate from the reality (the fundamental facts),  at least for some months. In the short term the price of cotton and other commodities is just a mirror of the sentiment and can be ruled by greed and fear, aggravated by Reuters and other media. These psychological factors can easily be manipulated by rumors spread by speculators who are well related and have good connections to the media.

Movies: Anonymous

 

(Drivebycuriosity) - The 16th century had at least 2 persons, who shaped history: William Shakespeare and Queen Elizabeth I.  Since then they are the objects of countless speculations. The director Roland Emmerich and his script writer John Orloff presented in the movie "Anonymous" a very special perception about the playwright and his relationship to the majesty (imdb).

I don`t believe that the plot has much to do with the historic reality, but I could accept the story as a kind of Science Fiction. I consider "Anonymous" as an alternative history, describing the past of a parallel world. Maybe there are alternative universes where such ridiculous things could have happened like Emmerich & Orloff were telling us.

But anyway, the flick was somewhat entertaining. At least the director and his cinematographer (Anne Foerster) opened a peep hole into an alleged London in the time of the Renaissance, kind of. It seemed to be a very bright and clean 16th century. Maybe in this part of the universes they had washing machines, a public garbage collection and synthetic fibers. I regard the contributions of all the people in production design, art direction, set decoration and the costume design as more important than the performance of the actors. They delivered an amusing museum show.

Culture: Russian Circles & Deafheaven at Bowery Ballroom, Manhattan

 

 (Drivebycuriosity) - What is efficiency? It`s "Russian Circles", a instrumental rock/metal band consisting just of 2 guitarists and 1 percussionist (myspace). Last Monday the 3 musicians from Chicago performed at Bowery Ballroom in Manhattan`s trendy Lower East Side and delivered a magic moment.

 "Russian Circles" served complex pieces, which started atmospheric but were building up tension and augmented then into massive walls of sound. Sometimes their music was as heavy as a neutron star. Especially the very energetic drummer created gravity waves which attacked my ears like warships from the Klingons.

I also was captured by the performance of "Deafheaven", the support group (deafheaven.tumblr). This band, which comes from San Francisco, performed a zealous metal concert. The performance of George Clarke, their vocalist, was especially exalted and feverish. His voice seemed to be a power plant which could deliver energy for thousands of homes.

Both bands showed how powerful and stimluating rock music still could be. Wow!

Globalization: Consumers Of The World Unite

Europe is dragging the whole world down? We could get this impression if we believe the title lines in the media and the negative sentiment on the stock markets. But the economic reality is more complex and more bright.

Today we got news that the U.K. retail sales rose 0.6% M/M in October, well above a Bloomberg consensus forecast for a 0.2% decline (bloomberg). Food sales gained 0.6% in October from September, today’s data showed. Sales in the “other stores” category jumped 2.7%, led by computers and telecoms, sporting goods and toys, and jewelers. Excluding fuel, retail sales rose 0.6% on the month in October and were up 0.9% on the year.

In many other parts of the world the consumer spending also continues its solid growth. On Tuesday we got news that U.S. retail sales were up 0.5% from September to October (seasonally adjusted, after revisions), and sales were up 7.9% from October 2010. The U.S. consumer spending is supported by the strengthening job market  (weekly jobless claims fell on a 6 month low). On Monday we learned that the Russian retail sales jumped in October 9.2% from a year earlier. This is the biggest increase since October 2008. Last week China reported that there the retail sales grew 17%.

As long as the consumer spending, the engine of the economy, is doing well in many parts of the world, there is no risk of a global recession.

Oil/Financial Markets: Parallel Worlds?

The physicists are speculating: Are there more universes besides our universe, are there alternative or parallel worlds? It looks like the financial markets are confirming the parallel words thesis, at least there are two very conflicting movements at the moment.

The oil price jumped today another 3% and closed at $102 a barrel. The commodity has surged 36% since touching $74.95 a barrel on Oct. 4th. The stock market (S&P 500) moved in the opposite direction and again lost 1,6%.

The media explain the massive oil price rallies with the improving US economy, for example proven by rising industrial production, climbing retail sales and shrinking weekly jobless claims. As an explanation for the weak stock market we get the argument that the mess in Europe could spill over to the U.S. and this creates the danger of a global recession. Can we have both - an improving and a worsening economy at the same time?

Maybe there is another explanation for the conflicting trends. Both markets differ from the reality: The price of oil is driven by a hype fueled by many funds and other speculators who are invested in this commodity and manipulate public opinion. In the opposite direction, the stock market suffers from a general doom & gloom sentiment which ignores positive facts. Parallel worlds?

Movies: J. Edgar

 

(Drivebycuriosity) - Trust nobody! That was the moto of J. Edgar Hoover, who was director of the FBI for around 40 years. Clint Eastwood condensed the career and personal development of one of the most important U.S. personalities of the last century into the biographical drama film "J. Edgar" (script by Dustin Lance Black). The movie describes the life of a man who was regarded as the second most powerful person in the U.S. in his time and who was feared by even his presidents (imdb.com). Hoover was a person who liked to supervise anything and everybody and possessed the power to do it. Eastwood & his script writer deal also with speculations about the FBI director´s shielded private life, especially his alleged homosexuality and the assumed intimate relationship with his assistant Clyde Tolson.

I was impressed how Leonardo DiCaprio impersonated both Hoovers, the young, ambitious and ascending bureaucrat and then 40 years later the older power player who gradually got tired. I believe that if this actor can continue his development he could approach the level of Marlon Brando.

I was enthralled by the economical use of light, which granted the movie a nostalgic patina. The cinematographer (Tom Stern) kept the screen in the dark most of the time, and many scenes looked almost shot in black and white. The thrifty lighting helped me to focus on the actors and the plot.

I share the view of Chris Pandolfi from "Popzara" (popzara.com) who lauded the film, calling it "a well-researched period drama, complete with accurate costumes, convincing sets, and appropriately nostalgic lighting and color schemes".

My girlfriend was less impressed. She complained that the story was too dark and found the plot confusing because the story was told in too many flash-backs. She also disliked how Hoover was portrayed, especially when Eastwood showed him as a queer dressing in his mother's clothes.

As so often: Beauty lies in the eye of the beholder.

Investing: Better Late Than Never

Sometimes love comes late. This seemed to happen to Warren Buffett. The investment guru is famous for disliking technology. He preferred investments in railways, insurance, newspapers (Washington Post) and other businesses he claims to understand, the so-called "Old Economy".

But recently - in the age of 81-  the billionaire investor discovered his feelings for the so far neglected technology sector, the "New Economy". The media reported that his holding company Berkshire Hathaway took a $10.7 billion stake in International Business Machines Corp (IBM). Buffett/Berkshire also bought 9.3 millions shares of Intel. Both companies are bellwethers of the technology industry and focus on chips, IT consulting and other technology oriented services.

It looks like that Buffett now acknowledges the rising importance of the digital technologies. We live in a world where everything is accelerating. Therefore companies need to invest more and more in IT to deal with their competitors, to exploit chances in foreign markets and to adapt quickly to rapidly evolving markets. The business numbers from Intel & IBM show, that these companies are gaining access to the fast growing emerging markets, helped by technological progress which reduces prices for hardware continuously. Another boost comes from the booming global online community which uses connected devices, including PCs, smartphones, tablets, embedded devices, and smart TVs.

The technology industry should grow faster than the rest of the economy, meaning good long-term perspectives for stocks of their bellwethers.

Globalization: From Russia With Confidence

Sluggish growth in the U.S., recession danger in Europe? No problem. The global economy is doing well anyway. The emerging markets are rapidly growing up and are taking more responsibility for the world economy. BBC reports that the combined consumer demand of China, India, Brazil and Russia (the so-called BRICs) is almost the same size as the US when the data is adjusted for purchasing power parity (bbc.co.uk). Therefore rising consumer spending in the BRICs is compensating for the weakness in the traditional economies.

Today we get news that the Russian economy is gaining speed again. Gross domestic product in Russia expanded 4.8% from a year earlier, the fastest pace since the second quarter of 2010, reports Bloomberg (bloomberg). Encouraging is the 9.2% jump in retail sales. This is the biggest increase since October 2008 after the 7.8% gain in August (Bloomberg). The huge Russian economy benefits from the vast reserves of oil & gas and its powerful agriculture production.

The Russian news suits the recent reports from China, where the retail sales jump 17%. We can expect the strong consumer spending growth in these countries to continue for years to come because of rising incomes and a huge backlog demand compared to the U.S. and Europe.

Movies: In Time

 

(Drivebycuriosity) - Time is money. This cliché is taken literally in the movie "In Time". The film (by Andrew Niccol imdb.com ) describes a world where people could live forever and stay young all the time, but only if they are rich enough. The biological clock stops for everyone at the age of 25 and people stay then as they are. But this has a catch: Everyone gets just one other year of life time credited. Then the vital functions end abruptly, except one can earn, steal or borrow more time to live - no problems for the wealthy.

Therefore the minutes, hours and days to live are a currency in which everything is paid. A phone call costs a minute, a bus ticket an hour or two,  drinks in a bar can add up to a day, fancy hotels charge a month or more. Hookers sell you ten minutes for "an hour of your time". There are gangs on the streets, who rob life time, leaving  casualties dead on the ground. And everyone is around 25. It`s strange when your mother seems as old as your girlfriend.  

The film has lots of ideas to contemplate, but there isn`t enough time to develop the social, legal, economic and philosophical implications. This would need a huge book, probably in volumes. Instead Niccols, who also wrote the script, offers a very simple and naive view: The system, which is on the side of the "rich", controls the amount of time everyone has left and discriminates against the "poor". 

But anyway, the flick is entertaining. It has a hero and villains, action and even a car chase. The cast -  Amanda Seyfried, Justin Timberlake, Cillian Murphy and Vincent Kartheiser (from Mad Men) - does its job well.  "In Time" isn`t a masterpiece, but there are worse alternatives to waste time.

Books: Parallel Worlds, by Michio Kaku

The universe is weirder than you think. I got this perception from "Parallel Worlds", written by Michio Kaku, a professor of theoretical physics at the City University of New York (first published 2005).

The topic of the book (amazon.com) is the idea that our universe isn`t alone and unique. There could be many more universes or so-called parallel worlds. "Maybe our universe is just a bubble in an ocean, with new bubbles forming all the time" muses Kaku.

This is very speculative, of course, nobody can prove that. But there are indeed some logical and somewhat plausible arguments for the existence of parallel universes. Kaku points to the fact that life as we know it needs a lot of benign conditions, otherwise we wouldn´t exist. For instance we need just the right amount of sunlight and just the right amount of gravity (which holds just the right amount of atmosphere without crushing us). If our moon would be smaller or farther away, the course of the earth would be less stable, causing catastrophic climate changes. If the basic physical forces which keep the particles of the atoms together (the so-called weak and the strong force) would be a bit different, then the particles wouldn`t glue together and there would be no atoms and no molecules, therefore no matter. Is it just luck, that our universe is in a Goldilocks-zone where everything suits to our existence?

No, says Kaku. There could be a huge number of universes which don´t have the right conditions and are without life. These universes might have just fogs of electrons without suns and planets, thanks to different physical forces. The beneficial conditions which shape our universe could be the result of the "law of averages".  "If there is a large stock of clothing, you`re not surprised to find a suit that fits" explains the author using a quote from the astronomer Martin Rees from Cambridge Univerity.

Another rationale for the multiple universe theory delivers the quantum theory, which claims that the movements of electrons and others particles of atoms are random and not predictable (Heisenberg`s uncertainty principle) and electrons act both as a particle and as a wave.  "Once we introduce the possibility of applying the quantum principle to the universe, we are forced to consider parallel universes".  For instance the existence of parallel universes could explain Schrödinger`s famous example, that a cat could be either dead or alive, depending on the spectator (wikipedia). Maybe there is one universe where the feline is alive and another where the animal is dead, offers Kaku.

And he goes further. He claims that there could be so-called wormholes which allow traveling to the parallel worlds. These connections could be black holes, because their extreme gravity shapes the law of physics. Some of these black holes could be shaped like a ring and rotate around a centre (an idea from the physicist Roy Kerr from New Zealand). These black holes could rotate very fast and produce intense centrifugal force pushing outwards. These forces could cancel the inward force (extreme gravity) which would otherwise crush the traveller.

Albeit of all these speculative ideas the book is based on serious scientific theories. Kaku, who is an acclaimed physicist by himself, builds his arguments on theories and mathematical models developed in the last century by physicists & mathematicians like Einstein, Hawking, Heisenberg, Schrödinger, Dirac, Born, Gödel and a lot of others.

The author has the gift to explain sometimes bizarre considerations in a lively and narrative style. Kaku´s "Parallel Worlds" is therefore an open door into cutting edge physics, maybe a wormhole buy itself.

Globalization: China - Growing Up

The global economy is struggling. Growth in the U.S. is sluggish and Europe seems to be close to a recession. But just in time China is signaling that she is growing up. The giant is moving slightly away from an export dependent economy to a more consumer driven system, which will strengthen China`s role as an engine of the global economy.

Recently we got news that the Chinese exports growth is slowing down. In September shipments to foreign markets rose 17.1% compared to last year, down from 24.5% in August. Instead China`s retail sales, a large part of consumer spending, accelerated to 17.7% on a year-ago basis in September, after growing 17% in August.

These numbers show that the Chinese economy is ripening. Today the Chinese economy relies on export-led growth and the industry focuses on shipments to markets in Europe & U.S. Private consumption accounts for only a third of China`s economy.

This is very different from large modern economies like the U.S.. There, consumer spending is the engine of the economy and accounts for around 70% of GDP (national income). Dominance of exports is typical for small countries with tiny domestic markets and for emerging countries which need exports to build up an efficient and productive industry. China, which has a gigantic domestic market with around 1.2 billion people, is rapidly evolving to a modern economy.

This change is fueled by a rising affluent middle class and rapidly climbing salaries. China watchers also claim that the growth of the domestic consumer market is backed by the government. "The Communist Party knows very well that its legitimacy rests on delivering consistent annual increases in prosperity" writes Alessandro Magnoli Bocchi, Chief Economist of Kuwait China Investment Company (economonitor.com). Observers report that the government in Beijing is now working to reduce the export-dependence and favors the expansion of domestic private consumption (tax-policy) to reduce the economic dependence upon the U.S. and Europe.

This is good news for the global economy. The rapid growth of the Chinese consumer demand implies growing exports for U.S. and European companies and should boost the global economy.