During this financial crisis, many companies, especially those in the developing countries, which originally planned to raise capitals by issuing IPOs decided to postpone their IPO issuances or even cancelled them because their business volumes sank tremendously. They were also afraid that the plunging stock market will drag down their stock price substantially, thus negatively impacting their reputations.
Despite general fear, some companies in the developing countries are optimistic with the business outlook and entered the market when others stayed on the sideline. In particular, China has taken the lead in spreading its optimism in the stock market with the rest of the world. Its aluminum-product maker, China Zhongwang Holding Ltd., is the world’s biggest IPO ($1.26 billion) this year so far. It is followed by U.S. pediatric nutrition company, Mead Johnson Nutrition with $828 million.
Zhongwang entered the market at this time because it wants to take advantage of the Chinese government’s 4 trillion yuan stimulus program, which will spend a large portion on infrastructure construction. These railroad and transport-related projects will certainly increase the demand of Zhongwang’s aluminum products.
Hopefully, with Zhongwang’s big IPO issuance, other companies will feel more confident in the financial market outlook and resume their IPO issuances again in the rest of 2009.
Friday, May 8, 2009
Mr. Buffett took a hit!
The legendary investor, Warren Buffett’s insurance company, Berkshire Hathaway Inc. released its first quarter earnings today. Unexpectedly, Berkshire reported a loss of $1.5 billion in the first quarter.
According to the report, because more companies filed for bankruptcy in this quarter, Berkshire took a loss from its credit-default swap (CDS) portfolio. CDS is a form of insurance against the default of a loan.
In addition, the loss also contributed from its $3 billion preferred stock on Dow Chemical Co. What made it a bad investment because Dow Chemical lost the funding for an acquisition from Kuwait’s government; this immediately put Dow into a financial distress and further credit crunch. Since then, Dow’s share price plunged.
To many people, this news implies that nobody was immune from this financial crisis, even a legendary investor like Mr. Buffett also suffered a loss. But one thing that distinguishes Berkshire from other financial institution is that it did not take any TARP money from the government. Hence, it will be easier for Berkshire to return to profit in the coming quarter.
According to the report, because more companies filed for bankruptcy in this quarter, Berkshire took a loss from its credit-default swap (CDS) portfolio. CDS is a form of insurance against the default of a loan.
In addition, the loss also contributed from its $3 billion preferred stock on Dow Chemical Co. What made it a bad investment because Dow Chemical lost the funding for an acquisition from Kuwait’s government; this immediately put Dow into a financial distress and further credit crunch. Since then, Dow’s share price plunged.
To many people, this news implies that nobody was immune from this financial crisis, even a legendary investor like Mr. Buffett also suffered a loss. But one thing that distinguishes Berkshire from other financial institution is that it did not take any TARP money from the government. Hence, it will be easier for Berkshire to return to profit in the coming quarter.
Tuesday, May 5, 2009
A Protectionism Move by the U.S.
During the G20 meeting last month, many global leaders (U.S. was one of them) voiced their oppositions against the protectionism policies imposed by other countries. However, on Monday, the U.S. President Obama pushed out a protectionism policy: a tax proposal which will eliminate the off-shore tax-avoidance techniques used by multinational U.S companies, which will increase the government’s tax revenue.
Obama also wants to use this proposal to increase the U.S. employment. But I don’t think it is feasible. Will the U.S. multinational corporations scale back their overseas businesses to minimize their tax expenses and sacrifice the overseas business opportunities to other foreign companies? I doubt it would happen. Here are the reasons:
The current recession is not turning into a depression because a lot of manufacturing activities are supported by many multinational corporations such as Caterpillar, Procter & Gamble, Johnson & Johnson, 3M, etc. Their annual reports showed their profits over the past couple of years were mainly driven by an increasing growth in international businesses and sales, especially in Asia. On the other hand, corporations that do not have international businesses were struggling hard to maintain profit margins, and even suffering losses.
As the multinational corporations have to incur heavier tax expenses, their profits will be lowered. However, foreign companies who are not affected by this proposal will generate more profit, given all else equal. Therefore, Obama’s tax proposal will seriously drag down the U.S. multinational companies’ competitiveness in the global platform, and possibly increase unemployment from those multinational corporations.
Therefore, if Obama really wants to create jobs in his tenure, this tax proposal may not be the right one.
Obama also wants to use this proposal to increase the U.S. employment. But I don’t think it is feasible. Will the U.S. multinational corporations scale back their overseas businesses to minimize their tax expenses and sacrifice the overseas business opportunities to other foreign companies? I doubt it would happen. Here are the reasons:
The current recession is not turning into a depression because a lot of manufacturing activities are supported by many multinational corporations such as Caterpillar, Procter & Gamble, Johnson & Johnson, 3M, etc. Their annual reports showed their profits over the past couple of years were mainly driven by an increasing growth in international businesses and sales, especially in Asia. On the other hand, corporations that do not have international businesses were struggling hard to maintain profit margins, and even suffering losses.
As the multinational corporations have to incur heavier tax expenses, their profits will be lowered. However, foreign companies who are not affected by this proposal will generate more profit, given all else equal. Therefore, Obama’s tax proposal will seriously drag down the U.S. multinational companies’ competitiveness in the global platform, and possibly increase unemployment from those multinational corporations.
Therefore, if Obama really wants to create jobs in his tenure, this tax proposal may not be the right one.
Monday, May 4, 2009
The Overprotected U.S. Auto-Industry
Despite the U.S. Treasury’s effort in pumping so much money into the auto-industry to prevent them from failing, the talk between the U.S. Treasury and the lenders broke down last Thursday, which finally led Chrysler to file chapter 11.
Prior to Chrysler’s bankruptcy, besides constantly injecting funds to the auto-companies by the U.S. government, the government used an overprotective measure, by kept forcing the lenders to convert their debt into less amount of equity, meaning forcing the lenders to make a huge loss on their investments. This abrupt change in rules is extremely unfair to the lenders. At the same time, this is not a suitable solution for the problem. The problem is how to make the U.S. auto manufacturer more competitive.
When comparing to the Japanese auto manufacturer such as Honda, Toyota and Nissan, the U.S. auto-companies can feel that the Japanese auto-companies are taking up more market shares from the U.S.’s in the auto-market.
The labor union also contributed to the collapse of the auto manufacturer because the healthcare and other workers’ benefits are enormous. These excessive expenditures drained a large amount of cash out of the auto-companies. If the labor union wants to become more competitive and secure their jobs, instead of having prolonged strikes and delaying production, they should cooperate will the auto-companies’ restructure proposal by reducing those benefits.
Personally, I don’t think the bankruptcy of Chrysler is a bad think but is the opposite. Even though this event reflected the auto-industry is still in big liquidity crunch, Chrysler’s bankruptcy and subsequent operation by Fiat will make the auto industry more competitive in the future. Because now, with Ford and GM remaining, they really need to figure out how to be more competitive globally in order to survive in the auto-industry.
Prior to Chrysler’s bankruptcy, besides constantly injecting funds to the auto-companies by the U.S. government, the government used an overprotective measure, by kept forcing the lenders to convert their debt into less amount of equity, meaning forcing the lenders to make a huge loss on their investments. This abrupt change in rules is extremely unfair to the lenders. At the same time, this is not a suitable solution for the problem. The problem is how to make the U.S. auto manufacturer more competitive.
When comparing to the Japanese auto manufacturer such as Honda, Toyota and Nissan, the U.S. auto-companies can feel that the Japanese auto-companies are taking up more market shares from the U.S.’s in the auto-market.
The labor union also contributed to the collapse of the auto manufacturer because the healthcare and other workers’ benefits are enormous. These excessive expenditures drained a large amount of cash out of the auto-companies. If the labor union wants to become more competitive and secure their jobs, instead of having prolonged strikes and delaying production, they should cooperate will the auto-companies’ restructure proposal by reducing those benefits.
Personally, I don’t think the bankruptcy of Chrysler is a bad think but is the opposite. Even though this event reflected the auto-industry is still in big liquidity crunch, Chrysler’s bankruptcy and subsequent operation by Fiat will make the auto industry more competitive in the future. Because now, with Ford and GM remaining, they really need to figure out how to be more competitive globally in order to survive in the auto-industry.
Sunday, April 26, 2009
China and the Reserve Currency
As mentioned in Part 2 of The Global Strategy of the Dragon, in late March, China raised the heated debate of substituting the dominant currency status of the U.S. dollar with a new reserve currency. China’s central bank governor, Zhou Xiaochuan, called for moving toward a super-sovereign reserve currency, or one that doesn’t belong to any particular country, by expanding the Special Drawing Rights (SDR) – a kind of synthetic currency whose value is determined by a basket of major currencies – of the International Monetary Fund by including the Chinese yuan and currencies from other economies. This debate mainly revolves around China, Russia and the U.S., illustrating their concerns from multiple dimensions.
It began in March 2009, when Chinese Premier Wen Jiabao voiced his concern on the fact that China was holding about $2 trillion U.S. Treasury in its foreign reserves. China bought so much U.S. debt without diversifying its foreign reserve because of the low default rate of the liquid U.S. Treasury market. However, since the U.S. government has been printing and pumping money into its economy in this financial crisis, an economic recovery will inevitably generate inflation, which will depreciate the value of the dollar. As a result, holding too much U.S. Treasury will be detrimental to its value, and thus China’s foreign reserve. Therefore, according to Zhou, moving to a reserve currency that belongs to no individual nation would make it easier for all nations to manage their economies better because it would give the reserve-currency nations more freedom to shift monetary policy and exchange rates.
The proposal also allows China to regain face, especially in response to U.S. Treasury Secretary Timothy Geithner’s criticism of currency manipulation, or the notion that China artificially keeps the yuan weak against the dollar (even after Mr. Geithner declined to cite China as the currency manipulator in April). Peter Gries’s book, China’s New Nationalism, states that “face is fundamentally political, involving a contest over power” (Gries 26). Currently, the SDR is only composed of four major currencies in the world (G4): the U.S. dollar, the euro, the Japanese yen, and the British pound. If the IMF SDR program includes the Chinese yuan, it will certainly enhance national pride in China.
As a consequence of rising Chinese nationalism, the Chinese will “altercast the relationship between China and the U.S. as teacher and student, respectively” (Gries 33). The U.S. government (as the student) is busy implementing different economic stimulus solutions to rescue its economy, while China (as the teacher) is slowly preparing itself to teach the student a lesson by attempting to overtake the U.S., the single economic superpower. According to The Economist, “the crisis would severely weaken the economic, political, military and diplomatic power of developed countries. This would create a “historic opportunity” for China to strengthen its position. To do this, China should export capital to South-East Asian countries to strengthen their economies. Doing this would help prevent political turmoil and win strategic influence in the region (The Economist 28).
On the other hand, China has been continuously opening up its economy to the world since Deng Xiaoping became the leader of China in 1978. After Deng set up four Special Economic Zones in China, namely Shenzhen, Shantou, Zhuhai and Xiamen, China underwent rapid economic development. When Jiang Zemin became the new Chinese leader in the 90s, he greatly favored Shanghai and the Yangtze River Delta to become the next big economic regions in China. When Hu Jintao became president in 2002, he led China to increase its participation in developing the domestic front such as the “Open up the West” policy, the completion of the Three Gorges Dam, and the international economics affairs. Consequently, these actions would contribute more to the Chinese economy during his tenure.
If China wants to expand the international use of the yuan, in addition to having a low inflation rate in its economy and a huge GDP and export figures, China still needs to broaden its financial markets by increasing the yuan’s usability and convertibility. Due to this, China has been taking great steps to strengthen the importance of yuan in the foreign exchange market, even though China is still proposing a reserve currency under the IMF. China has not only set up tens of billions of dollars in currency swaps with Hong Kong, Malaysia and South Korea, which enabled those regions to settle their trade accounts with China in yuan, but in late March 2009, China also entered a 70 billion yuan currency swap deal with Argentina. This deal effectively allowed China to settle the trades with yuan, which further enhanced China’s influence in Argentina’s economy while strengthening China and Argentina’s geopolitical relationship. Hence, we can see China is slowly bypassing the dollar to settle its bills on the international trade platform.
Recently, on April 9, 2009, China picked five cities (Shanghai, Shenzhen, Guangzhou, Zhuhai, Dongguan) for the yuan settlement program. This program allows foreign trades to be conducted wholly in yuan rather than in conventional U.S. dollars in those cities. This is an innovative move, as the yuan settlement program not only reduces the risks of exchange-rate fluctuations for the Chinese companies, but also promotes the development of China’s currency investments products.
From China’s view, all these recent currency policies have shown that even if the Chinese yuan failed to be included in the reserve currency by the IMF, China’s new currency policies and political positioning are preparing the yuan to become an increasingly important global currency with implications for reducing the use of the U.S. dollar in the future.
Russia’s reaction may be a good implication on the strategic importance of China’s recent decisions. Once China released its reserve currency proposal, Russia echoed its terms and proposal change. Before the G20 meeting, Russia’s President Dmitri Medvedev supported the creation of strong regional currencies as a basis for a new reserve currency and the consideration of backing this currency by gold. According to Reuters, Russia said that the new international reserve currency, which dislodges the dollar, could curb the volatility of foreign exchange markets. In April 2009, the Kremlin’s chief economic adviser Arkady Dvorkovich also asked the IMF to study the risks and possibilities of the new global currency. These actions reflect how anxious Russia is to remove the primacy of the U.S. dollar.
In comparison to China, Russia’s economy is less export-oriented and Russia’s currency, the ruble, has been devalued by more than 35% since the commodity bubble burst in the summer of 2008. If the U.S. dollar is no longer a dominant currency, the ruble should appreciate against the dollar, which will increase its currency reserve.
In addition to Russia’s own benefits, Russia supports China because of their geopolitical relationship, since Russia and China share the same border and both countries have serious currency concerns over the potential depreciation in the value of the U.S. dollar that they are currently holding. In addition, Russia and China have important economic relations. China has been invested in Russia’s natural resources, such as the deal with the China Development Bank in February 2009, which I have mentioned in Part 1 of The Global Strategy of the Dragon.
From the U.S. standpoint, the U.S. does not want to lose the dominant status of its currency. The use of a country’s currency as an international store of value allows the country issuing it to benefit from seigniorage (the net revenue derived from the issuing of currency), and lower borrowing costs. In response to the reserve currency proposal, the U.S. President Barack Obama said the U.S. dollar still remains the primary global currency and there is no need for a new global currency. At the same time, since many commodities are denominated in dollars globally, changing the current system would take a lot of effort and time for a worldwide adaptation to occur.
On the other hand, even though a move towards global currency reform may detract from the dominance of the U.S. dollar in the foreign exchange market, it may not necessarily be a bad thing. Since China is an export-oriented country, if the U.S. dollar is no longer a dominant currency, the Chinese yuan will surely appreciate against the dollar and make Chinese exports relatively more expensive than those in other emerging markets. Moreover, as most of the Chinese exports are shipped to the U.S., Chinese goods will become more expensive than U.S.’s goods, which the U.S. will import less from China and consume more domestic goods. If this were to occur, it will hurt China’s economy while benefiting US’s domestic economy by reducing its trade imbalance and trade deficit.
From a global perspective, in the recent G20 meeting, the G20 leaders have announced plans under Point 19 of the communiqué to replace the role of U.S. dollar as the world reserve currency, which stated to support a general SDR allocation into the world economy and increase liquidity, which is not under the control of any sovereign body. The G20 leaders have activated the IMF’s power to create money and begin global ‘quantitative easing.’ The global leaders also agreed to increase IMF’s financial capacity to $1 trillion commitment.
Moreover, it is possible for China to first create a common currency among the East Asian countries that mirrors the euro, which was established in 1999 by the European Union. The euro’s position has becoming increasingly important since then. As of today, the euro is even more expensive than a dollar. However, critics argue that this process would require a tight trade agreement among the East Asian countries, which will potentially take a long time to become stabilized.
While it is still early to draw conclusions about whether the switch to a new reserve currency is technically feasible, it would take a long time for this global currency reform to take effect. We can also see that this new global currency proposal is a two-edge sword to China. However, this currency debate will surely mark the beginning of a new era when emerging markets, especially China, are developing the capabilities to lead major reforms in the international monetary system.
It began in March 2009, when Chinese Premier Wen Jiabao voiced his concern on the fact that China was holding about $2 trillion U.S. Treasury in its foreign reserves. China bought so much U.S. debt without diversifying its foreign reserve because of the low default rate of the liquid U.S. Treasury market. However, since the U.S. government has been printing and pumping money into its economy in this financial crisis, an economic recovery will inevitably generate inflation, which will depreciate the value of the dollar. As a result, holding too much U.S. Treasury will be detrimental to its value, and thus China’s foreign reserve. Therefore, according to Zhou, moving to a reserve currency that belongs to no individual nation would make it easier for all nations to manage their economies better because it would give the reserve-currency nations more freedom to shift monetary policy and exchange rates.
The proposal also allows China to regain face, especially in response to U.S. Treasury Secretary Timothy Geithner’s criticism of currency manipulation, or the notion that China artificially keeps the yuan weak against the dollar (even after Mr. Geithner declined to cite China as the currency manipulator in April). Peter Gries’s book, China’s New Nationalism, states that “face is fundamentally political, involving a contest over power” (Gries 26). Currently, the SDR is only composed of four major currencies in the world (G4): the U.S. dollar, the euro, the Japanese yen, and the British pound. If the IMF SDR program includes the Chinese yuan, it will certainly enhance national pride in China.
As a consequence of rising Chinese nationalism, the Chinese will “altercast the relationship between China and the U.S. as teacher and student, respectively” (Gries 33). The U.S. government (as the student) is busy implementing different economic stimulus solutions to rescue its economy, while China (as the teacher) is slowly preparing itself to teach the student a lesson by attempting to overtake the U.S., the single economic superpower. According to The Economist, “the crisis would severely weaken the economic, political, military and diplomatic power of developed countries. This would create a “historic opportunity” for China to strengthen its position. To do this, China should export capital to South-East Asian countries to strengthen their economies. Doing this would help prevent political turmoil and win strategic influence in the region (The Economist 28).
On the other hand, China has been continuously opening up its economy to the world since Deng Xiaoping became the leader of China in 1978. After Deng set up four Special Economic Zones in China, namely Shenzhen, Shantou, Zhuhai and Xiamen, China underwent rapid economic development. When Jiang Zemin became the new Chinese leader in the 90s, he greatly favored Shanghai and the Yangtze River Delta to become the next big economic regions in China. When Hu Jintao became president in 2002, he led China to increase its participation in developing the domestic front such as the “Open up the West” policy, the completion of the Three Gorges Dam, and the international economics affairs. Consequently, these actions would contribute more to the Chinese economy during his tenure.
If China wants to expand the international use of the yuan, in addition to having a low inflation rate in its economy and a huge GDP and export figures, China still needs to broaden its financial markets by increasing the yuan’s usability and convertibility. Due to this, China has been taking great steps to strengthen the importance of yuan in the foreign exchange market, even though China is still proposing a reserve currency under the IMF. China has not only set up tens of billions of dollars in currency swaps with Hong Kong, Malaysia and South Korea, which enabled those regions to settle their trade accounts with China in yuan, but in late March 2009, China also entered a 70 billion yuan currency swap deal with Argentina. This deal effectively allowed China to settle the trades with yuan, which further enhanced China’s influence in Argentina’s economy while strengthening China and Argentina’s geopolitical relationship. Hence, we can see China is slowly bypassing the dollar to settle its bills on the international trade platform.
Recently, on April 9, 2009, China picked five cities (Shanghai, Shenzhen, Guangzhou, Zhuhai, Dongguan) for the yuan settlement program. This program allows foreign trades to be conducted wholly in yuan rather than in conventional U.S. dollars in those cities. This is an innovative move, as the yuan settlement program not only reduces the risks of exchange-rate fluctuations for the Chinese companies, but also promotes the development of China’s currency investments products.
From China’s view, all these recent currency policies have shown that even if the Chinese yuan failed to be included in the reserve currency by the IMF, China’s new currency policies and political positioning are preparing the yuan to become an increasingly important global currency with implications for reducing the use of the U.S. dollar in the future.
Russia’s reaction may be a good implication on the strategic importance of China’s recent decisions. Once China released its reserve currency proposal, Russia echoed its terms and proposal change. Before the G20 meeting, Russia’s President Dmitri Medvedev supported the creation of strong regional currencies as a basis for a new reserve currency and the consideration of backing this currency by gold. According to Reuters, Russia said that the new international reserve currency, which dislodges the dollar, could curb the volatility of foreign exchange markets. In April 2009, the Kremlin’s chief economic adviser Arkady Dvorkovich also asked the IMF to study the risks and possibilities of the new global currency. These actions reflect how anxious Russia is to remove the primacy of the U.S. dollar.
In comparison to China, Russia’s economy is less export-oriented and Russia’s currency, the ruble, has been devalued by more than 35% since the commodity bubble burst in the summer of 2008. If the U.S. dollar is no longer a dominant currency, the ruble should appreciate against the dollar, which will increase its currency reserve.
In addition to Russia’s own benefits, Russia supports China because of their geopolitical relationship, since Russia and China share the same border and both countries have serious currency concerns over the potential depreciation in the value of the U.S. dollar that they are currently holding. In addition, Russia and China have important economic relations. China has been invested in Russia’s natural resources, such as the deal with the China Development Bank in February 2009, which I have mentioned in Part 1 of The Global Strategy of the Dragon.
From the U.S. standpoint, the U.S. does not want to lose the dominant status of its currency. The use of a country’s currency as an international store of value allows the country issuing it to benefit from seigniorage (the net revenue derived from the issuing of currency), and lower borrowing costs. In response to the reserve currency proposal, the U.S. President Barack Obama said the U.S. dollar still remains the primary global currency and there is no need for a new global currency. At the same time, since many commodities are denominated in dollars globally, changing the current system would take a lot of effort and time for a worldwide adaptation to occur.
On the other hand, even though a move towards global currency reform may detract from the dominance of the U.S. dollar in the foreign exchange market, it may not necessarily be a bad thing. Since China is an export-oriented country, if the U.S. dollar is no longer a dominant currency, the Chinese yuan will surely appreciate against the dollar and make Chinese exports relatively more expensive than those in other emerging markets. Moreover, as most of the Chinese exports are shipped to the U.S., Chinese goods will become more expensive than U.S.’s goods, which the U.S. will import less from China and consume more domestic goods. If this were to occur, it will hurt China’s economy while benefiting US’s domestic economy by reducing its trade imbalance and trade deficit.
From a global perspective, in the recent G20 meeting, the G20 leaders have announced plans under Point 19 of the communiqué to replace the role of U.S. dollar as the world reserve currency, which stated to support a general SDR allocation into the world economy and increase liquidity, which is not under the control of any sovereign body. The G20 leaders have activated the IMF’s power to create money and begin global ‘quantitative easing.’ The global leaders also agreed to increase IMF’s financial capacity to $1 trillion commitment.
Moreover, it is possible for China to first create a common currency among the East Asian countries that mirrors the euro, which was established in 1999 by the European Union. The euro’s position has becoming increasingly important since then. As of today, the euro is even more expensive than a dollar. However, critics argue that this process would require a tight trade agreement among the East Asian countries, which will potentially take a long time to become stabilized.
While it is still early to draw conclusions about whether the switch to a new reserve currency is technically feasible, it would take a long time for this global currency reform to take effect. We can also see that this new global currency proposal is a two-edge sword to China. However, this currency debate will surely mark the beginning of a new era when emerging markets, especially China, are developing the capabilities to lead major reforms in the international monetary system.
Thursday, April 16, 2009
RE: J. Frieboes's post: "Pirates, Pirates, Pirates..."
In response to J. Frieboes’s recent blog post “Pirates, Pirates, Pirates…,” Somalia’s pirates are definitely causing lots of sea-trade problems around the Gulf of Aden.
Even after the pirates were defeated in the Maersk-Alabama hijack, the pirates not only refused to scale back their hijack activities around the Gulf of Aden, but according to a recent report from the US Report, the pirates were also seeking revenge on the U.S. Navy after three of their pirates were shot and killed by the U.S. Navy’s snipers in the Maersk-Alabama rescue mission over the weekend.
The comment from the pirate also reminds me of what happened in Somalia in 1993, which was depicted in the Hollywood movie: Black Hawk Down, about a conflict between the U.S. Army and the Somalia militias. That event resulted in the death of more than a thousand Somalia militias and 19 American Soldiers. Eventually, the former U.S. President, Bill Clinton, decided to pull out the U.S. Army from Somalia.
Instead of a clash between the Somalia militia and U.S. Army similar to the one in 1993, would this conflict lead to another tragic event between the Somalia pirates and the U.S. Navy again?
Even after the pirates were defeated in the Maersk-Alabama hijack, the pirates not only refused to scale back their hijack activities around the Gulf of Aden, but according to a recent report from the US Report, the pirates were also seeking revenge on the U.S. Navy after three of their pirates were shot and killed by the U.S. Navy’s snipers in the Maersk-Alabama rescue mission over the weekend.
The comment from the pirate also reminds me of what happened in Somalia in 1993, which was depicted in the Hollywood movie: Black Hawk Down, about a conflict between the U.S. Army and the Somalia militias. That event resulted in the death of more than a thousand Somalia militias and 19 American Soldiers. Eventually, the former U.S. President, Bill Clinton, decided to pull out the U.S. Army from Somalia.
Instead of a clash between the Somalia militia and U.S. Army similar to the one in 1993, would this conflict lead to another tragic event between the Somalia pirates and the U.S. Navy again?
Tuesday, April 14, 2009
Bull-fight in Spain
Last week, I finally uploaded several bull-fight video clips that I took during my spring-break trip in Spain. This bull-fight took place in Las Ventas, the bull-fight arena in Madrid. I was amazed by the scenes as it was different from what I expected from reading magazines and watching bull-fights on television.
The first clip shows that the picadore, who was riding the armored horse, was rammed by the bull, and the picadore used the lance to stab the bull’s neck to weaken the bull’s muscle and draw the bull’s first blood.
The second clip shows three banderilleros stab the bull with three banderillas, which are sharp barbed sticks, onto the wound on the bull’s neck to further weaken the bull and cause more blood loss.
The third clip shows the bullfighter killed the bull with a final sword thrust, which penetrated the bull’s shoulder and heart. Even though the bull was still moving afterward, it didn’t take much longer for the bull to hit the ground in the end.
The last clip shows that after the bull was dead, it was dragged by the horses around the arena for a lap before exiting the arena.
The bull-fight was one of my favorite parts during the trip. In addition to the show, the bullfighters’ colorful costumes were beautiful and the bull-fight arena was also gorgeously constructed. All these characteristics reflected one of the important traditional cultures in Spain.
The first clip shows that the picadore, who was riding the armored horse, was rammed by the bull, and the picadore used the lance to stab the bull’s neck to weaken the bull’s muscle and draw the bull’s first blood.
The second clip shows three banderilleros stab the bull with three banderillas, which are sharp barbed sticks, onto the wound on the bull’s neck to further weaken the bull and cause more blood loss.
The third clip shows the bullfighter killed the bull with a final sword thrust, which penetrated the bull’s shoulder and heart. Even though the bull was still moving afterward, it didn’t take much longer for the bull to hit the ground in the end.
The last clip shows that after the bull was dead, it was dragged by the horses around the arena for a lap before exiting the arena.
The bull-fight was one of my favorite parts during the trip. In addition to the show, the bullfighters’ colorful costumes were beautiful and the bull-fight arena was also gorgeously constructed. All these characteristics reflected one of the important traditional cultures in Spain.
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