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I came across Oscar Lai’s blog recently on Racial Profiling. He makes the argument, that it is in the public security interest that airplane passengers of certain religious background should be scrutinized more than others. Although it is likely that muslims or visitors from the Middle East may be more susceptible to terrorist manipulation, this can get very ugly very fast. What this implies is that if one group of minority is targeted and descriminated against, it will serve as a precedent for further descrimination. If Muslims have to pass through extra security measures at the airport today, will Africans going to America pass through more stringent STI tests tomorrow? Will Chinese visas be delayed due to prolonged background checks to cope with spying worries? As you can see, if one group begins to be singled out, many more may follow. And soon, we will have another WWII scenario where Japanese-Americans can legally have their properties confiscated and their kids denied education. Will Asian and Arab businessmen be happy doing business with a country that’s racially profiling them? I certainly won’t be.

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With Greece already defaulting on 50% of private investor’s bonds, and Portugese, Irish and Italian bond yields at record highs, what can Germany and Europe do to fight the fear of contagion? One proposal put forward is the Eurobond. However, Germany has been very clear that it does not want fiscally irresponsible Eurozone members like Greece to borrow at its expense.

So what next? A sound proposal by many analysts is suggesting an European Central Bank purchase of debts through the IMF. This is feasible in three ways. First, Germany, will not have its own bond yields rise. And second, it won’t have to buy the bonds directly, underwriting the risk to the ECB. Third, it will also give Europe more voting rights in the IMF.

There are problems. First, Germany will still be paying the bills (through the ECB and then through the IMF for indebted countries). And second, the emerging economies may worry about the Fund’s possible exposure to Europe’s turmoil. But if Germany is going to pay anyways, and the risk can be underwritten back to the ECB through a special mechanism, then this idea might just work.

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Bill Gates pops up whenever the word entrepreneurship comes to mind. One of the most important reasons is his passion for his dreams. Gates gave up his Harvard future to pursue operating software. His career started off when he developed the BASIC interpreter for MITS — for free! The partnership was then registered as the trademark “Microsoft.” But it wasn’t until IBM’s request for his BASIC interpreter that his success really began. He bought the 86-DOS (QDOS) from SCP and licensed it to IBM, rather then developing it himself, demonstrating his insight and talent in deciphering business’ needs.

The moral of the story, is that first, he was smart (scoring 1590/1600) on his SAT. Academic prowess is essential for successful entrepreneurship (although Jobs may be a rare exception). Secondly, his passion and fascination for operating software serves as his motivation which is also necessary. And lastly, his business decisions as demonstrated by his offer of free BASIC software to MITS and his swiftness in grasping his partnership with IBM, are also crucial for entrepreneurs. Overachieving all three requirements, Bill Gates in my opinion, is the greatest entrepreneur in the world.

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Of all the things I could be doing, I couldn’t resist commenting on rosebudmag.com’s blog on the declining porn industry. {external} As you might’ve guessed, porn is a discretionary product, or more accurately, paid-porn is. With the rise of online streaming sites like Redtube, Megaporn (you didn’t hear this from me) coupled with growing stinginess among consumers, the porn industry is faltering. USA Today’s John Swartz says the evil is with the general belief that “porn should be free.”

However, that’s not the problem. The root issue here is that the porn industry’s model is antiqued. Most porn actresses are not professionally trained. Moreover, there is no branding or product differentiation between rivals. And thus, enabled by steaming technology, competition is becoming fierce with “home-made videos” entering the industry. Therefore, we need filmakers like Shockporn which are adopting a model of production where they market their porn free, and collect revenue by arranging royalties with streamers and embedded advertisments to brand their product. Fighting the trend towards free porn is futile. However, the demand for porn won’t be going anywhere.

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Patrick Pascal’s article regarding declining console sales does outline the fact that console sales has been dropping. But his argument, namely, to discard the drop as insignificant is a faulted. His statement “Although the sales of more consoles would definitively boost revenue of directs sales of consoles and sales of games.” is not accurate. Consoles like the PS3 which costs $800 to produce only sells at $300. So why would Sony sell a bluray drive, state-of-the-art graphics processors and a 9-core central processor at a deficit? The reason is because without selling extra units of the console, there WILL be no demand for games and bluray discs. Therefore his earlier statement “Although the market for video game consoles is evidently dropping from the previous years, but I do not consider that a detrimental  threat to the gaming market.” is also false as it would refute Sony marketing strategy’s very purpose. One of the reasons why the PS3 is so successful is because its subsidized consoles are drawing demand for the games that play on it. If console demands fall, games will invariably.

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The State Food and Drug Administration of the People’s Republic of China has ordered its branches nationwide to investigate the source of cooking oil. This came after professor He Dong Ping, of Wuhan Polytechnic University found huge widespread use of recycled cooking oil in Wuhan, as much as 1 in every 10 meals!

This is a clear example of over-competition. As many suspects, the abundant presence of restaurants in China are competing not over food quality, but price. As such, restaurants across the country side have set up networks with underground mills using equipment for recycle cooking oil into disel fuel to recycle cooking oil for kitchen use, which can cause cancer.

But the main culprit behind this is not the unscrupulous nature of the restaurant owners but the disenchanted farmers and restaurant workers who have taken the brunt of the food inflation in China. In my opinion, the government has to take steps to increase restaurant trasparency by scrutinizing procedural steps when issuing restaurant licenses, and meanwhile, tackling the main problem of food inflation by subsidizing Chinese farmers, who are amongst the world’s poorest.

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A slew of bankruptcies plauged the American solar industry last month. The panel manufacturer bankruptcies, namely SpectraWatt,  Evergreen Solar, Solyndra and the manufacturing stoppage of BP solar represented a 20% reduction in America’s solar capacity. The reason, a few said was Solyndra and Evergreen’s pursue of tech that incoporated polysilicon in their products, however, the prices of the material had dropped by more than 80%, making the tech investment a game-ending failure.

So who’s the main culprit? Many analysts have expressed concerns that Chinese companies don’t have a labor cost advantage, as the expense is miniscule in such high tech industries but cheap state capital. These nearly interest-free capital and subsidized land, provides incentives for mass production capacity expansion. This significantly reduces the marginal cost of each solar panel.

For low cost, to overwhelm tech advantages held by retrenching German and American competitors is not a unseen phenomenon, as exemplified by Japan in the late 1960s. But the rate at which China is expanding its solar, wind and other green tech industries through state aid, should prompt us to do the same.

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An year ago, a slew of suicides were commited at the Chinese city of Chengdu. The company responsible, a Taiwan-based subcontracting giant, Foxconn had this to say:

“The suicides were due to personal issues, not work.”

This blasphemous response infuriated me and immediately dissolved my impressions of the company. It was clear, from accounts of the victims’ close working peers that they had lost their sense of “life.” The over-time hours and 6-work-day weeks had warped the workers’ minds, cultimating in the deaths of a dozen lonely and powerless youths. It is this very indifference companies like Foxconn and Apple demonstrate to its workers that will ultimately come back to haunt them. As consumer awareness gains momentum, I am confident that we can prevent such conducts, and treat production line workers akin to those in China as humans, instead of human capital — that can we can penalize Foxconn and Apple severely instead of forcing them to pay petty compensations to the victim’s families. We need to stamp out unethical labor practices by supporting communities like “Sweatfree,” which at a marginal price, evaluates the supply chain for labor abuse. This is our world and hopfully a progressively slave-free world.