Philip's blog

At the request of domestic solar energy industry, U.S Department of Commerce opened “anti dumping and anti subsidy Case” to regulate an influx of Chinese Solar Panels that had been imported to the United States.   Department of Commerce plans to impose anti-dumping tariff that would range  from 50 percent to 250 per solar panel imported, and it is also considering to put additional 100%  tariff to give extra protection against subsidization.  Because the chance of Chinese manufacturers winning the case is substantially low, they has been seeking alternative strategy in their production process.  They are preparing to manufacture their product through different supply chain–South Korea and Taiwan–to avoid tariffs, but this strategy is unlikely to let them get away with it.  Thus Chinese government is now planning to express its frustration through regulating U.S Poly-silicon, the main material used to produce solar energy.

I think both countries decisions are flawed.  In the perspective of economics, U.S government is generating massive amount of “Dead Weight Loss”, by reducing market’s incentive to buy and sell.  Chinese government’s decision is flawed as well; By regulating poly-silicon, it would now have to produce its own, which China is unable to do without bearing enormous opportunity coast.

Source:Davegrandlund Cartoon

Original Article: http://www.nytimes.com/2011/11/22/business/global/china-bends-to-us-complaint-on-solar-panels-but-also-plans-retaliation.html?pagewanted=1&ref=business

RISE, one of Southern UK’s most well known social enterprises that advocates and lobbies for social entrepreneurship both locally and nationally, has announced its bankruptcy.  The discussion regarding remaining assets of RISE were held at one of the major regional social entrepreneurship conferences.  Popular resolution was to transfer the assets to the Social Enterprise Mark company (which also possess nationwide membership), but this proposal has been rejected by members of RISE.   RISE is probably one of the victims that received most damage from the British government’s decision to decrease funding and eliminate regional development agencies.  Andrew North, chair of the RISE Board,  commented: ‘It is with great sadness that the rise Board of Directors has been tasked with the closure of Rise, but with the demise of the South West RDA and a lack of Government support for social enterprises, there is no other alternative”.  Under financial chaos, the British government’s decision to cut expenditures is understandable.  Nevertheless,   I think social enterprises  are the ones that are able to suggest innovative solutions with out causing any dead weight loses, as government intervention will often do.  They may have broader understanding to more regional problems than the government officials, and those who need the help, would find more intimacy to social enterprises like RISE, than the government.

souce: Rise Homepage

http://www.socialenterpriselive.com/section/news/csr/20110929/business-the-community-deloitte-and-bp-launch-olympic-social-enterprise-bi

“A boat that has too many sailors end up on a mountain”— This is an old Asian saying that nicely summarizes the problem that Goldman Sachs is dealing with; there are simply too many partners who are eating away Goldman Sachs’ s money. As a result, it has finally decided to start the process of delayering,  to cut down expenditures and boost the process of decision making.

photo credit:Scott Rubin

Under financial crisis that has reappeared in the market, Goldman Sachs has been striving to cut down costs anywhere it can.   It has succeeded to slash down $1 billion operational costs, and also saved a lot of money by laying approximately 1000 people off.  And this cost cutting is now approaching high ranked partners, who receive multiple times larger salaries than regular employees.   Under these pressure, Kevin Kennedy, a member of the firm’s executive committee, as well Jeff Resnick, the head of commodity trading, decided to resign.  More than dozen of partners have also announced their intentions of resignation, and these numbers are expected too escalate over period.   Although the company may shrink in its size, I think Goldman Sachs will able to adapt to the fast changing financial market with ease.

http://dealbook.nytimes.com/2011/11/14/a-wave-of-partner-retirements-at-goldman/?ref=business

“If you start a business with your friends, you lose your money as well as your friend.” This jinx may be true for some people, but certainly it is not for Axon Sleep Research Laboratories.  Similar to that of the guest speaker who talked about her entrepreneurship experience in Energy Power Tab, Axon Laboratory began with four student who only had ideas and little bit of love money from their parents.  One day, Brown University Student named Samee McDannel told her friends after an exam that a groggy morning had ruined her test.   And this ordinary conversation led to a sparkling idea of Smart Sleep Alarm clock was hatched.   Samee decided to create a device that would improve sleepy, bloodshot eyed mornings by monitoring a user’s sleeping cycle. Thus she began her career of entrepreneurship  with her friends, Eric Shashoua, Benjamin Rubin, and Jason Donahue, and In 2003, Salee’s Axon Labs won the Brown University Entrepreneurship Program Elevator Speech competition after pitching their SleepSmart product.  And since then, Axon Sleep Research Labs has been adding various new products, even beds and sleep helping accessories.

There are numerous external factors (inflation, stagnation, political problems etc.) that may hinder growth of a company. But these issues may not be as critical as internal problems, such as old corporate culture.  Only last week, Daio Paper,  Japan’s largest tissue producer, announced that it would file a criminal complaint against its former chairman Mototaka Ikawa, accusing him of illegally siphoning $140 million for gambling in Las Vagas.   Ikawa had been justifying his dubious payments as “capital for foreign exchange trading and stock investment”, but Daio Paper finally refused to acquiesce Ikawa’s misconduct any longer.  Akihiko Okudaira, a lawyer who led the panel’s investigation, stated,  “(Daio Paper) had a corporate culture that you can never raise an objection to the Ikawa family” and pointed out their working environment as a main reason for the delay in the dismissal of Ikawa family.   Incidents similar to Daio’s case have been constantly occurring in Japan, which indicates how Japan’s outdated corporate culture remains unchanged.  I think this is one of the major reason why Japan, which used to be like China in nowadays, is falling behind.

          http://ajw.asahi.com/article/behind_news/social_affairs/AJ2011102916079

On Wednesday October 19th, the Canadian government has awarded  $8 billion shipbuilding contracts to  Seaspan Marine, a  company stationed in North Vancouver.  The entire contract–$35 billion—  is the largest single military procurement in Canadian history, and the money will be distributed to Seaspan to build non-combat vessels.  Nevertheless, the biggest piece of the contract, which is worth $25 billion,  has been given to Irving shipyard in Halifax to build major military vessels like the Arctic Icebreakers.  This enormous contracts were expected to revive the local shipbuilding industry that has been stagnated by foreign competitors like South Korea, and was also anticipated to create 8000 more jobs at the peak of the project, with an average of 6000 workers over the range of 30 years.  Unfortunately, since British Columbia has failed to hit the jackpot,  only 4000 jobs are expected to form.   8 billion dollars,  although it is gigantic money as an individual, is not enough to revive shipbuilding industry in the West Coast.  The money would trickle through the market and create benefits, but final outcome is gloomy when it is looked upon in terms of a long run.   When the job is done, I think everything is likely to bounce back to its original position.

http://www.vancouversun.com/billion+benefits+from+ship+contract/5586222/story.html

source:Lots Shipping LTD

Steve Jobs, the visionary and an Icon of Apple who led IT as well as the culture of 21st century, died today.  He was only 56.  Despite the vigorous and enthusiastic attitude that he had demonstrated during his presentation of Iphone4, he was unable to overcome pancreatic cancer, the deadly illness that had made Jobs to struggle for past seven years.  His shocking death drew overflowing grief and tributes.  President Obama called Steve Jobs as “The greatest American Innovators”, and Mark Zurkerberg, Facebook’s founder,  stated “Steve, thank you for being a mentor and a friend. Thanks for showing that what you build can change the world. I will miss you”.

Now that Steve Jobs has passed away, what will happen to Apple?  Although people seem to be hesitant to discuss about Apple’s future so soon after Job’s death, most people are aware that the impact is likely to be negative.   Along with lawsuits, his death will further undermine Apple’s power, and perhaps it may end up like Black Berry someday.   Iphone 4s has already caused drop in Apple’s shares, and now that the icon of Apple is gone, the company will suffer even more, providing opportunities to its competitors like Samsung.

Germany, probably the most crucial member for the expansion of EU funds to bail out struggling neighbors (Greece, Spain, Ireland, Portugal, and Italy), finally voted in favor of advocating the plan.  German chancellor Merkel faced violent oppositions of many Germans, but she was able to procure  a large majority–315 deputies voting for her—which allowed Merkel to avoid the humiliation of asking the opposition party’s help to get the measure passed.  As the leader of Europe’s economy, Germany’s contribution to the plan is expected to drastically increase the quality of the fund.    But would this really make a change? Despite Germany’s decision to nearly double the Euros in support of the struggling neighbors, I think the situation is still not so optimistic. Among 17 nations that use Euros, only 10 nations has agreed to the plan, undermining its efficiency.  Whats more, Germany is as crippled as other countries are, and many critics argue that the first bailout did not improve Greece’s economy, it only made it worse.  

Jeff Bezos, the chief executive of Amazon, introduced “Kindle fire”–an upgraded tablet version of its original black and white e-reading device— on Wednesday, September 28th.  Along with its glossy 7 inch color touch screen and a dual core processor, Mr. Bezos put an emphasis on its price, which is less than half of the cheapest Ipad ($499)  on the market.  Amazon also established Fire’s web browser called “Amazon Silk”, which allow

Source: Digital Trends

the customers to get quick and easy access to numerous contents that Amazon provides.  Nevertheless, Amazon’strategy seems exceedingly provocative and risky in away.  If Amazon fails to break through the market dominated by Apple’s Ipad and Nook from Barnes & Noble, it will be nearly impossible to find a break even point with the trivial profit coming from e-books, movies, and television shows.

article link: http://www.bbc.co.uk/news/technology-15096655

The United States, increasingly threatened by the spill over effect of Greece’s financial crisis, has finally begun to apply direct pressure on European leaders by initiating intensive lobbying campaigns.  President Obama criticized the indecisiveness and optimism of European leaders, and urged  them to take stronger and more coordinated measures of action to the problem, addressing his desires eradicate this “shadow” hanging over the global economy.  Administration officials stated the unlikelihood of Europe’s immediate response, but suggested the possibility of  coming up with a solution in November, when leaders of G20 meet in Cannas, France.  The probability of Greece’s default is constantly increasing;  and this problem, which is still simply an “eyesore” for the United States, may rattle American economy and consequently lead to a global disaster.

http://www.nytimes.com/2011/09/24/business/us-pressures-europe-to-act-with-force-on-debt-crisis.html?pagewanted=all