More on unwinding of the carry trade

http://gregmankiw.blogspot.com/2008/05/is-yen-negative-beta-asset.html


Dr. Mankiw observes that the yen has been negatively correlated with the S&P 500 recently. He quote another economist:

Why the striking pattern in the last year? I think it's because during the liquidity crisis, the stock market has fallen at times when hedge funds and investment banks are deleveraging -- at such times, they cover the carry trade, that is, they buy yen and sell high-interest currencies such as the Australian dollar.

Competition from China

http://www.mckinseyquarterly.com/Strategy/Globalization/Competition_from_China_Two_McKinsey_Surveys_2147_abstract

The most relevant part of the survey is the number one obstacles given by Chinese Companies about their global ambition. Lack of managerial talent!

We really need to have good mandarin to capitalize on this opportunity.