Wolf Richter

Bait And Switch: California High-Speed Rail to Nowhere

High-speed rail works if it links big urban areas and has lots of riders. The most successful is the Tokyo-Osaka Shinkansen: 150 million passengers per year. Even Amtrak’s slower route between New York City and Washington DC is profitable, though the rest of Amtrak is not. In theory, California’s High-Speed Rail Project falls into that category. In Reality, it has turned into a scandal before construction has even started.

Merkel’s Desperate And Risky Gamble

After the German-French council of ministers in Paris, Chancellor Angela Merkel and President Nicolas Sarkozy gave a joint TV interview at the Elysée Palace, the official residence of the French president. Merkel berated François Hollande, Sarkozy’s top challenger in the upcoming presidential election. Then Sarkozy lashed out against him. Never before had a German chancellor campaigned so hard for a French president.

The Endgame: Japan Inc. Seeks Salvation Overseas

Japanese companies spent $70 billion on acquisitions overseas in 2011—a record. Armed with a ferociously strong yen, they’re going overseas to escape the pressures at home where electricity rationing has become part of corporate life, along with a stagnant economy and a dwindling working-age population. But they’re doing it just when Japan can least afford it.

Burnt-Rice Tea

Tokyo, April 1996. Cacophonous cawing of crows weaves itself disconcertingly into my dreams until it wakes me up altogether. It’s 5:45 a.m. Even the dual building walls of the love hotel fail to deaden the racket, and when you’re half asleep, it’s almost scary. But in front of my eyes is a tuft of black hair. She sleeps without sound, without movement, her arms contorted underneath her. I inhale her chemistry as if it were a controlled substance.

Now Even Greek Politicians Are Taking Cover

Greeks yanked €65 billion out of their bank accounts since 2009, the Finance Minister told parliament. “Of that, €16 billion was legally taken abroad,” he said. The rest? Stashed under mattresses or hauled to Switzerland via the land route. A whopping 20% of GDP! Capital flight of massive proportions. They see a forced conversion of their euros to drachmas. And politicians are planning for the “afterwards.”

Broke California: Give Us The Facebook Manna Now

California is broke again. The “balanced” budget last summer turned into a pile of overoptimistic assumptions. Out-of-money date is March 8. $3.3 billion must be dug up, pronto. Last fall, California had to borrow $21 billion to make it to April. Now all eyes are on Facebook. Its IPO will singlehandedly solve all budget problems forever—just like Google’s IPO had done.

A Forbidden Act

Tokyo, April 1996. Mr. Song has already left. Mr. Kim is watching a garish talk show on TV. The kitchen sink is full of dirty bowls, utensils, pots, and pans. Vapors of grease and kimchi hang in the air.
“I’m going to walk to school,” I tell Mr. Kim.
“Walk?”

Now he has what he has been looking for: incontrovertible proof that I’m crazy.

Facebook: The Value of Information in the Information Age

With IPO hype blowing like a maxed-out hairdryer into my face, I Googled … Friendster—the shining star of social networking that everyone had drooled over. Turns out, in 2009, Friendster was bought for a pittance by MOL Global, a Malaysian company. In 2011, it discontinued social networking activities and rebranded itself as a gaming site. But there is one valuable asset it still has: user information.

Exodus from the Eurozone Debt Crisis

Unemployment is a staggering problem in Eurozone countries that are at the core of the debt crisis. Spain’s jobless rate jumped to 22.8%. Among 16-24 year-olds, it’s an unimaginable 51.4%. In Greece, youth unemployment reached 46.6%. In Portugal, it’s 30.7%, in Italy 30.1%. But highly educated young people are leaving in massive numbers—with harsh long-term consequences for their heavily indebted countries.

The Fed’s Rain Dance at the Bottom of the Stairs

Apparently, Charles Plosser, president of the Philadelphia Fed, failed to check with his handlers when he said that the Fed might have to raise interest rates later this year—from practically zero to almost zero, I guess—though just last Thursday, the Fed had announced the extension of its zero-interest-rate policy through late 2014. The umpteenth extension since 2009. Now, the economy is addicted to free money, and the damage is severe.