Iraq Archives

April 29, 2009

Iraq, investors... Pipes. / Middle East - Investors eye opportunity in Iraq

“What is risky these days? If you think about the people who were investing in AAA guaranteed paper only a few years ago, the concept of risk has changed fundamentally,” says Richard Blakesley, managing director of Fairfax, a London private equity fund planning to invest as much as $200m (€153m, £136m) in Iraq this year. With its eye on plastic pipes, concrete, asphalt and food production businesses – all areas where Iraq needs investment for import substitution – Fairfax plans to increase its Iraq fund to $1bn.

Aghhhhhhhhhhhhhhhhhhhhh. My beautiful pipes.

Powered by ScribeFire.

Posted by The Lounsbury at 12:30 AM | Comments (3) | TrackBack

March 22, 2008

US, Iraq & Bullying...

There is not much to say on this, other than the account seems about right and rather unsurprising in many ways given the demonstrated incompetence and public behaviour.

Posted by The Lounsbury at 06:29 PM | Comments (0) | TrackBack

December 29, 2007

American Idiocies & Reasons to Fear Left Bollocks

While I await with impatience the end of the current American administration, as its gross incompetence and sheer idiocy are in themselves reasons to see them off, this bit of blogging nonsense and the coverage from the Financial Times reminded me that the American left has its share of incompetent posturing morons, and not merely in blogging land. Leaving aside the blog partisan, whose silly ranting on about Mr Guilani's having done business with Qatar, and oh horrors a "Qataran" [the same author mocked 'poofed' up hair as an expression...] or rather Qatari minister of the responsible ministry having supposed connexions to al Qaeda. Insofar as the fellow is the Interior Minister of Qatar, and member of the Royal family which runs Qatar (a close US ally), the posturing is idiotic.

Or more directly, the harmlessness of the supposed measure which pretends to allow private American citizens to attempt to sue Sovereigns they pretend are state sponsors of terror [presumably defined by Americans] (never mind the potential of it having been overlooked, which does not strike one as impossible) is clearly false proposition.

The Iraqi government was quite right to object, and the US Presidency was right to veto this idiocy.

Continue reading "American Idiocies & Reasons to Fear Left Bollocks"

Posted by The Lounsbury at 11:50 AM | Comments (7) | TrackBack

October 24, 2007

Thinking of predictions

In cleaning up my hard drive I stumbled across some saved texts from my old discussion board days, about Iraq. 2002, to think I was thinking the Iraq fiasco would merely be slightly incompetent and a kind of Cairo on the Euphrates regime would emerge.

Now such a result would have to be characterised as a stunning reversal of negative trends. I wonder if I ever posted the text I wrote.... Anyone around from those days who can still access?

Posted by The Lounsbury at 02:14 PM | Comments (0) | TrackBack

August 27, 2007

Developing Private Markets, Promoting Growth etc: US & Iraq, how to fail miserably all around

In reading this article from the Washington Post entitled most charmingly, "U.S. Falters In Bid to Boost Iraqi Business, Few Products Sold To American Firms" I confess to having been a bit taken aback.

Just when I think the Americans can show no greater depth of utter incompetence in Iraq, along comes something new. What possessed the idiots in Baghdad to think they could get Iraq exporting directly to the United States when functioning emerging market economies have trouble penetrating with companies run by people actually skilled in... well commerce, well it utterly escapes me. The sheer incredible unrealism involved in these efforts is truly stunning.

Now, as context, I would like to share some rants (of many) on Iraq and economic development from 2003, a period I would remind readers where I was actively still working on a major equity investment in Iraq that thankfully never went ahead. I can thank the American occupation authority, the infelicitously named "CPA," for having saved me the losses that would have followed had they been competent enough to respond in a timely fashion to our various efforts. They were not, so no investment, and now four years later all involved thank their lucky stars.

But regardless, the historical review:
1) Encore Ideology over practicality, 5 August 2003;
2) Bring on the Clowns - CPA as circus, 24 August 2003;
3) Iraq and Responsibility 1 September 2003;
4) On Iraq & the Privatization "Rules" 29 September 2003;
5) Iraq Reconstruction: Stunning Political Idiocy, Stunning Miserliness and Stupidity;
6) Iraq: Economic Reforms Analysis 2 October 2003;
(7) Iraq: an analytical piece of interest

Continue reading "Developing Private Markets, Promoting Growth etc: US & Iraq, how to fail miserably all around"

Posted by The Lounsbury at 02:29 PM | Comments (2) | TrackBack

March 13, 2007

Iran Hype & Intel Ops

Not of the greatest real interest, but I thought I would share the following two artys from the FT on the recent blithering on about a claimed (in certain places) Iranian 'defector' which are mostly of interest to me as how spin works given the second hand adequately if credulously summed here. In particular given how an underlying Arabic arty (if I read the right one) reporting Israeli intel spin, got spun into an Arab report....

Posted by The Lounsbury at 08:36 PM | Comments (0) | TrackBack

March 07, 2007

Imperial America: Iran & Sanctions on 3rd Party Hydrocarbon Sector Investment

The Financial Times has an interesting, if infuriating (from its content, not writing) article on the Imperial American pretension to regulate other's investment in Iran. What irritates here especially is that I know from experience the slightest hint of similar actions by EU or similar parties touching on American interests provokes paroxysms of incoherent rage on the part of Americans. I confess readily knowledge of this, as well as my conviction that the US efforts here are posturing and will end up merely alienating without any real achievement, adds to my deep sense of irritation.

Now, mind you, the concept of the effort does not offend, and my snide swipe at Imperial America is most explicitly not from your usual Lefty whinging "evil capitalist America" tripe sort of point of view. No, It's about over-reaching, and clumsy over-reaching. I am a strong believer in avoiding too much obvious hypocrisy. One reason the overdone language the Americans and the French tends to engage in in their precious self-fellating rhetoric over their respective civilisations irritates.

Operationally, for many of the same reasons I predict that it will be the Chinese and similar parties that will reap the Iraqi hydrocarbons windfall, I strongly believe the US sanctions are an example of cutting off your nose to spite your face, which for some reason the current American administration seems to find to be a queerly enjoyable activity.

Continue reading "Imperial America: Iran & Sanctions on 3rd Party Hydrocarbon Sector Investment"

Posted by The Lounsbury at 06:43 PM | Comments (3) | TrackBack

January 29, 2007

Gullibility & Iraq

In reading this article on Iraq from The New York Times on the "Shiite Cult" and the claimed plans to storm Najaf, perhaps best read in context of articles like this from The Guardian two phrases came to mind: "settling of scores" and "useful idiots" - although perhaps "useful dupes" would be better.

I have, and I shall be charitable, a hard time giving credit to either the evolving spin around this operation (which was gone from Sunni to Shia as far as I can tell, and interesting numbers as well) or even the background story. The Shia cult I rather strongly suspect can be rephramed as "Stupid Rivals We Managed to Liquidate with the help of the useful dupes, the Americans."

It is painfully clear the Americans are being manipulated, and sadly, don't even understand-given their impoverished knowledge of the parties and lack of fundamental human capital resources to rectify- who or what is doing the manipulating.

And now they propose to lash out at the Iranians, which will only compound their problems, multiply their enemies and generally confirm an emerging sensation in the region that Americans only desire to kill Muslims, blindly.....

It is sad, terribly sad that the grotesque incompetence of the current American administration has led the US into this dark place, so eerily reminiscent of the Soviet's situation in Afghanistan - including the war crimes and useless, counter-productive brutality.

Posted by The Lounsbury at 06:44 PM | Comments (2) | TrackBack

January 28, 2007

Further to insane bollocks

In a follow-on to my note regarding the insanity that the Bush Administration is engaging in with respect to Iraq, I would like to endorse Eric Martin's note on the situation and in particular his mentioning the Kurd-Iranian connexions, which would in a more rational environment in a government, give pause to the madness of confrontation. But then Martin's obeservation, that it "would be generous to label this strategy as merely contradictory and incoherent, yet it is quintessential Bush administration fare" is sadly true.

Posted by The Lounsbury at 12:03 AM | Comments (2) | TrackBack

January 26, 2007

Oh Bollocks. These Bloody Bolshy Fuckers

Every time I think the Americans can not possibly get any stupider, any more completely retarded and incompetent, I am decieved. What possesses them to think that antognising yet more parties in the region can possibly help their sorry asses utterly escapes me - although I suppose in the lunatic ideological world of the Right Bolshevik World this is the equivalent of liquidating the Grasping Kulaks so as to prevent hoarding, as after all if the Kulaks are liquidated, obviously Socialist Bliss will result.

Continue reading "Oh Bollocks. These Bloody Bolshy Fuckers"

Posted by The Lounsbury at 07:37 PM | Comments (30) | TrackBack

January 20, 2007

The Talabani Al Hayat Interview

Talbani_01.jpg_200_-1.jpgKevin Drum posted a question with respect to a news item cited by Juan Cole, on what Iraqi President Jalal Talabani said on Iran - US - Iraq relations.

The article Cole worked off referred to an accompanying article of the interview w al-Hayat (what appears to be a partial transcript of the interview).

In that interview he responds to a question w respect to Iran and Syria:

Continue reading "The Talabani Al Hayat Interview"

Posted by The Lounsbury at 11:31 AM | Comments (5) | TrackBack

January 19, 2007

Iraqi Factories Arty

It becomes tedious in some ways to constantly harp on the sheer, mind-numbing incompetence of the Bush Administration (and in its own way, the Poodle's complicity in enabling such), however articles like this constantly remind me of the utter idiocy.

What is most painful is the degree to which this Right Bolshevism has given ammunition (rhetorically, not fundamentally factually) to attack free markets, etc. in a Naomi Klein sort of fashion.

Of course, the arty, on reviving the Iraqi state factories, includes this more depressing note:

There are also serious questions on whether officials in the focus of the United States presence in Iraq, within the fortified Green Zone in Baghdad, are ready to support factories that were seen as no more than relics of an era that American ingenuity and reconstruction were going to make forever obsolete.

I am sure. Bolsheviks live in a fantasy world.

Posted by The Lounsbury at 07:58 PM | Comments (2) | TrackBack

January 15, 2007

Odd, I would have thought his neck was stronger

But it popped. Messy, that, and very poor PR.

I had the fine experience, I might add, of having my business car surrounded by angry demonstrators this afternoon (apparently of a neo-Salafi persuasion by the dress and scruffy appearances) protesting this event. I was not aware of the head-popping-off (which actually somewhat amuses me at some sick level, although clearly is a PR disaster all around) incident, but my first thought was "this poor sad bastards would have been on Sadaam's gallows, yet they're protesting for him. Useful idiots as the phrase goes."

Iraq, regardless, is become a positive carnival of incompetence all around.

However, the car getting stopped was not terribly encouraging.

Posted by The Lounsbury at 10:19 PM | Comments (3) | TrackBack

January 13, 2007

Isolated or Changing Dynamics: Iraq, Sunni Arab, Sunni Shia and the Americans

An interesting article from The Guardian, which focuses on the journo's interviews with some Sunni insurgents, highlighting the nastiness of the evolving civil war, and the queer evolution of interests, such that some of the insurgents interviewed were looking to the Americans for potential support and protection agains the Shia death squads. This is surely a real evolution as other reporting has indicated that in Iraq it is the Sunni community in and around Baghdad that is most favourable to an American "surge."

It rather bodes ill for the bizarre American taste to take on Iranian interests in Iraq - which given the militias on the Shia side are relatively synonymous with Shia militias in Iraq. It is not hard to forsee the Americans having no friends (where friend means "not enemy") in Iraq at all - and worse, the US government not realising nor understanding.

Continue reading "Isolated or Changing Dynamics: Iraq, Sunni Arab, Sunni Shia and the Americans"

Posted by The Lounsbury at 02:25 PM | Comments (0) | TrackBack

December 30, 2006

Sadaam is Dead, Long Live Sadaam

Bad choice executing him before the Eid, rather too obviously Shi'a choice. Well, rather meaningless in the end. I expect much pointless whanking in the American press over this, all about navel gazing and Americans.

Posted by The Lounsbury at 12:18 PM | Comments (4) | TrackBack

October 10, 2006


I have little to add to this, draw to my attention by Roger Bigod, discussion of another book on the incompetent and frankly Bolshevik approach of the Bush Administration. The observations meet mine, and ones I made at the time when I worked on Iraq financing. However, I can add that Dan Senor's editorial is typical of that lying Right Bolshy ideologue scumbag. People like him caused Iraq to fail. His commentary is typical, either utterly mendacious or delusional. Or both.

Posted by The Lounsbury at 10:13 PM | Comments (3) | TrackBack

October 03, 2006

On Nation Building & American Magicalism

Prompted by an somewhat typical George Will column, The Leaders [Americans] Have

Aside from this amusing closing (whose connexion with the remainder of the opinion piece is a bit obscure)

"Where's the leader?" Bush, according to Woodward, has exclaimed in dismay about the Iraqi government's dithering. "Where's George Washington? Where's Thomas Jefferson? Where's John Adams, for crying out loud?" For a president to ask that question about Iraq, that tribal stew, is enough to cause one to ask it about the United States.
there is Will's foolish comment:

Continue reading "On Nation Building & American Magicalism"

Posted by The Lounsbury at 04:33 PM | Comments (6) | TrackBack

October 02, 2006

Iraq Despair, Bis: The American Revelations

Following up on my personal note regarding Iraq Despair as noted with respect to despair among specialists, I have been intrigued to see the explosion of materials documenting the Bush Adminstration's gross incomptence in Iraq and the Middle East. Quite an array of articles, from the BBC, The Guardian, The Independent, The Telegraph (which for my money in covering a reported Saudi massive security fence to wall out Iraq speaks for itself with respect to the Americans utterly delusional happy talk) although their article on Americans considering cutting off funding to Iraqi (Shia) police operating as death squads is almost as good in highlighting the swamp in which the Americans have blundered into, a swamp of their own making.

Perhaps at some point Americans will realise that to win their goals, they need to grapple with the world as it is, not as they would wish it to be. Of course that means getting rid of the Right Bolsheviks.

Posted by The Lounsbury at 12:17 AM | Comments (0) | TrackBack

September 27, 2006

Iraq Despair

I have to be careful here, but I was on the phone with an acquiantance in finance who is twiddling his thumbs in the Green Zone while pulling down a six digit salary "advising" the Americans on financial sector development. It was a depressing call, the sole take-away was his observation "no one seems to believe in success now, no one is going out on a limb because they all expect that they'll be leaving on a helo and facing inquiries as to how this managed to be so bad." Close paraphrase, from my scribbles.

It is time for the Americans to realise they have lost, again. Dragging this out for more years, pointlessly like they did in Vietnam, pointlessly like the French did in Algeria long after the failure was obvious to any rational observer does nothing. Nothing but waste resources and lives. At present the American administration is playing the role of the Allied generals at the Verdun and Somme, pushing ahead without any rational reflexion on its strategy, posturing that to question the American idiocy at present is to be soft on the neo-Salafi nihilists and their terror networks, denying the reality the problem is not that, but their failed conceptualisation and general incompetence.

Posted by The Lounsbury at 08:26 PM | Comments (9) | TrackBack

September 17, 2006

The CPA Iraq, A Reconfirmation

It would hardly seem news, but this Washington Post article on how the Americans staffed the occupation of Iraq is nevertheless interesting; I of course know - even fairly well - many of the persons alluded to (I met that "24 year old" political twit, for example). The article is spot on as far as I experienced the deluded fools on the ground, the news I suppose is the American side process that led to the fiasco.

It is for these reasons I began calling the "convservatives" in the US "Right Bolsheviks" - the approach, the mentality is Bolshevik, not old school practical of the democratic western right.

Posted by The Lounsbury at 08:45 AM | Comments (19) | TrackBack

August 13, 2006

And a short echo on cluelessness and navel-gazing

While were I not obliged to spend my time this weekend working on investment performance whanking (obliged meaning, choosing to as the said performance is not in any way related to me Titanic), I would have some amplifications on this note by Billmon with respect to a fine Op Ed in The Washington wondering why US military can't achieve the same street cred as Hezbullah on the ground.

Continue reading "And a short echo on cluelessness and navel-gazing"

Posted by The Lounsbury at 06:17 PM | Comments (6) | TrackBack

May 25, 2006

Lebanese Logic - Iraq's slide

Since the end of 2003 or perhaps early 2004 I have been stating that Iraq had entered "a Lebanese logic" where the dynamic of amred groups, with incentives and means to settle inter-ethnic disputes (or disputes that could be spun to be so) by violence, would slowly but surely tip the country into warring clans. Now, two years later, it appears that people are catching on to this development. Why in six months... (sorry, snide jab at Friedman and the Moustache of Wisdom)

Almost mechanical really. My personal evaluation is that a cynical power would pick a side and arm it to the teeth, and get the messiness over with quickly. Relative to what will happen.

Posted by The Lounsbury at 06:58 AM | Comments (16) | TrackBack

May 11, 2006

In the futility department: Iraq Investment

Running across this note in the FT, US urges investment in Iraq and finding the same idiotic promo agitprop re investing in Iraq that I was hearing back in 2003.

Longtime readers of course know that I was involved in various investment projects focused on Iraq then. Including a heartbreakingly beautiful steel project that dripped away into the sand thanks to the CPA-Iraq incompetence. I should be thankful of that on some level, I would have lost money.... Although on the other hand, I strongly feel that had CPA-Iraq not been so painfully incompetent and corrupt (in an incompetent way), Iraq might have turned out far better. Not the Bush Administration's utterly unrealistic vision, but not the utter disaster that it is now.

But let me share the part that really irritated me:

Continue reading "In the futility department: Iraq Investment"

Posted by The Lounsbury at 04:18 AM | Comments (0) | TrackBack

April 25, 2006

On Iraq and funny little investments.

Since the deal fell through and now is pushing up the daisies, I thought I might take a moment to illustrate and reflect on some recent news out of Iraq, notably the move of Shia militias into Kirkouk and the overall rise in tensions with the Kurds.

As longer term readers knew, I grew tired of commenting on the Iraq war after it reached the stage of what I named "no escape from the Lebanese logic."

I should say that my calling the development just about two years was not particularly prescient, all one had to do was be familiar with Lebanese style civil wars and the perverse incentives that drive factions towards escalating violence, as well as assess the ability of the security forces to stop the evolution. In terms of Iraq, if one was not being willfully blind, it was painfully clear as of early to mid 2004.

Continue reading "On Iraq and funny little investments."

Posted by The Lounsbury at 08:20 PM | Comments (1) | TrackBack

April 04, 2006

Iraq, Civil War, Leb Land Likeness.

From the FT, a quote that gets to the heart of things:

Among the Sunni, said Adnan Pachachi, a Sunni legislator and the temporary speaker of the new Iraqi parliament, "you have the [militant Islamic] Takfiris, the old Ba'athists, you have the people who feel they have been marginalised, you have Arab nationalists. If each of these groups is going to have its own militia, then God help us."

"Unfortunately," he added, "the last election showed one thing: in order to win, you have to have a lot of money and you have to have your own militia."

Now, any folks from Leb Land want to wax nostalgic about these sentiments (well observsations)?

Continue reading "Iraq, Civil War, Leb Land Likeness."

Posted by The Lounsbury at 04:00 AM | Comments (1) | TrackBack

January 10, 2006

More from the Investors Iraq Cretins

Again, for the amusement value, their little "newsletter" - presumably created to drum up fading interest in their pimp-their-dinars scheme:

(of note I draw your attention to the delusional response (but very limited) to the news that US Funds are drying up for Iraq. I recall when I tried to teach them - somewhat, one must confess, brutally - a bit about the market one of the favourite responses was that the US was going to do a new Marshal Plan for Iraq, couldn't fail..... Some bloody plan, that.)

Continue reading "More from the Investors Iraq Cretins"

Posted by The Lounsbury at 06:48 PM | Comments (0) | TrackBack

December 28, 2005

Juan Cole - Footballs and Realities

Shall try to elaborate on this latter, but thanks to the Glittering Eye (still hate that name), I note this fine post by Juan Cole on Iraq:

Top Ten Myths about Iraq in 2005

Posted by The Lounsbury at 07:28 AM | Comments (2) | TrackBack

December 26, 2005

Amusing Email

For those wanting to know how not to invest in frontier markets like Iraq, my old friends at investorsiraq and their illiterate delusions of massive revaluations of the Iraqi dinar, etc.

I share it with you for your amusement (or questions).

Continue reading "Amusing Email"

Posted by The Lounsbury at 12:12 AM | Comments (1) | TrackBack

September 05, 2005

Iraq, the silly Iraqi Dinar currency speculators again, more amusement

I stopped by what has become my weekly source of amusement, to see what sort of lies were being pimped to the gullible this week.

I was quite amused to see this: complete fabrication regarding Agency valuation of the currency, as of course the claim the Agency (which is hardly an economic analysis bureau) does not actually exist on said pages. Pure outright lying to the gullible. Amusing although sad in many ways.

Continue reading "Iraq, the silly Iraqi Dinar currency speculators again, more amusement"

Posted by The Lounsbury at 05:38 PM | Comments (0) | TrackBack

August 25, 2005

The Steven Vincent Tempest in a Tea Pot

I noted - by stumbling on Juan Cole's note in his Informed Comment - that there is a little mini-controversy in regards to some comments by Cole in regards to the journo Steven Vincent.

It's a queer little affaire, but seems to have set off the Right Bolshies a bit, as well as those easily offended, and the man's widow.

Well, like in the Nicholas Berg case, let me be my usual self and opine without regards to namby pambyism and faux concern.

Continue reading "The Steven Vincent Tempest in a Tea Pot"

Posted by The Lounsbury at 01:49 PM | Comments (6) | TrackBack

August 23, 2005

Iraq, Negotiations, Rights. A Brief Comment

Across the online world I note much moaning and gnashing of teeth about rights, about theocracy and the place of women in the context of the emerging Iraq.

I suppose ultimatley I will make a longer comment, but my note at the moment is that this was all lost a year ago. I am personally actually pleased that the Ibn Bush Al Bush Adminstration is showing cynical pragmatism rather than continuing to try to push for some khayali dream of a nice pretty little women respecting Iraq.

Pissing and moaning about womens rights and the like is idiocy, moaning about an abstraction. The reality is security, and everyone's lives in Iraq will be a world of shit until something resembling a passingly stable regime with some vague semblance of control over its territory emerges. That it will be an ugly Egypt on the Euphrates or (and I recall a year ago I told my readers that was the best case scenario, to some scepticism) an Iran on the Euphrates, well that is a foregone conclusion. The milk was spilled.

Posted by The Lounsbury at 02:55 PM | Comments (0) | TrackBack

August 19, 2005

Aqaba: New source of amusement, play the fire at US ships game

Repeating my comment on 'Aqoul, a small observation or two in re this:
Well, this news in the AM bemused me:

Missile Fired at U.S. Navy Ship in Jordan

It reports two missiles (in fact, it appears mortars, not quite the same thing, Mr. Halaby, or perhaps Katyusha rockets..... well something explosive in any case) were fired at US warships at Aqaba harbor.

Continue reading "Aqaba: New source of amusement, play the fire at US ships game"

Posted by The Lounsbury at 10:19 AM | Comments (2) | TrackBack

August 11, 2005

Market Madness or Brilliance? US Gov Private Equity for MENA Announced (cross from Aqoul main)

At the risk of descending into flackery or something approaching it, I thought a brief comment here might be fun.


Certainly this plays into my personal interests. (and in this cross post I indulge in them)

Continue reading "Market Madness or Brilliance? US Gov Private Equity for MENA Announced (cross from Aqoul main)"

Posted by The Lounsbury at 06:22 PM | Comments (7) | TrackBack

August 09, 2005

Iraq - Reconstruction - Knowing when to get out of the way [Cross from Aqoul]

This article from The Washington Post (Op Ed actually) struck me as if not important a useful point of reflection for a moment:
Less Is More in Iraq
By Michael Rubin
Tuesday, August 9, 2005; Page A17

Let us leave aside Rubin's sketchy history in regards to Iraq as part of what one might properly and non-abusively call a "Neo Conservative" circle in Washington re Iraq (and his direct and personal contribution to the fiasco via his work with CPA-Iraq). Let us leave aside as well the question of whether a US draw down of troops is a good or bad thing (I might argue either way on any given day). Rather, merely look at the question of the US contractor presence.

Continue reading "Iraq - Reconstruction - Knowing when to get out of the way [Cross from Aqoul]"

Posted by The Lounsbury at 05:46 PM | TrackBack

July 29, 2005

Iraq: Peculiar and Misunderstanding Journals

I got this comment on my brief comment on an Iraqi brokerage (, which somewhat puzzled me and certainly amused me at some level :

Continue reading "Iraq: Peculiar and Misunderstanding Journals"

Posted by The Lounsbury at 01:29 PM | Comments (0) | TrackBack

July 18, 2005

Stunningly bad

I had dinner with some senior finance and US officials this evening, and discussed with them a concept that is being batted about among US Gov re a equity fund for the region. I was in love with this until this evening. As I listened I went from being voluble to silence. It is so stunningly badly conceived as to take my breath away. Among the key snippets I share is the argument from the main US Gov mover on this, that they could use the proposed fund to lobby and force political change.

Continue reading "Stunningly bad"

Posted by The Lounsbury at 11:00 PM | Comments (0) | TrackBack

July 14, 2005

Iraq Brokerage Comment

Well, at the request of Jerry I had a look at the brokerage site of and company.

Interesting to be sure. My remarks are inherently superficial as I haven�t much time, but some initial thoughts.

Continue reading "Iraq Brokerage Comment"

Posted by The Lounsbury at 09:35 AM | Comments (0) | TrackBack

July 11, 2005

A Collounsbury Take on Frontier Investing

This was written for comments re investing in Iraq, thought I would reproduce as I rather like it on some level:

The Problems

That aside, 30 percent is a quality return, if and when you realise it. Thin illiquid markets can often show "quality returns" without being able to deliver the liquidity to realise. [In short, a market under buying pressure but little liquidity may appear to be delivering healthy returns, but when it comes sales time to realise, the same mechanics can make it impossible to sell without serious discounts, i.e. price decline - liquidity is the key, else one is trappe, many an emerging markets investor learned that in the gogo years of the emerging markets stock market boom of the mid-1990s.]

Further, electronic trading systems [noted in relationship with Iraq] have never stopped front running, playing with orders and the like. They make it a slight bit harder, but w/o oversight you have false confidence. Among the many things you need is delivery against payment with an operative guarantee system (still doesn't remove the risk as I have seen personally, but helps), and one has to be sure it is operative.

But what the fuck do I know, I've only seen it done in these markets under an electronic trading platform that was and is state of the art.

Finally on the underlying peg discussion, Frankel's theoretical proposal [in an article in the Financial Times suggesting a basked peg with roughly 1/3 Euro, 1/3 dollar, 1/3 weighted price of oil] is an interesting one as a variation on a crawling basket peg, although your online discussion takes his phrase rather far too literally in a classic case of seeking justification for a desired result. The obvious item, rather than the appreciation issue itself or false analogies to post-WW II Germany, to analyze is what a large appreciation means to the Iraqi economy. Any large, short term currency move is a shock to the real economy and few real world policy makers generally avoid such for very good reasons. In Iraq the play off is between current cost of consumption versus current income. That breaks out between consumption of domestic goods and that of tradeables - imports - although obviously some domestic goods depend on imported inputs. Immediately exporters lose the X percent of income, consumers of imports gain X percent of buying pozer, an implicit subsidy to consumption of imports and an implicit tax on domestic production that competes with imports. In short a penalty to the domestic producer economy ex-hydrocarbons.

Second of course, is the impact on real investment (in explicit contrast to speculative hot money such as yours). An X percent appreciation due to a revaluation on a peg immediately raises the cost faced by foreign currency investors for Iraqi assets, with no change in potential returns in the near term, insofar as no economic fundamentals, ex the penalty to real productive economy that is import competing (but with a boost to productive economy that has imported inputs, to the degree they are import factors and cost drivers). It is an effect a penalty to incoming money - as say for example the private equity fund I have consulted with which has USD 70 million in hard currency raised. [I of course did not touch on the disruptive effects of serious real price deflation]

Now, obviously Iraqi policy makers should be looking at these real economy choices, and not things that make hot money speculators happy. It may be that they will decide that subsidising current consumption of imports and current capital imports is more important than creating a stable real economic environment that is well-priced in regards to real assets and allows export competivity. Choosing near term "gifts" to urban consumers, who are heavier consumers of imported goods and services (running from food to white goods) than others typically in this kind of environment, and subsidising capital imports to the detriment of labour competivity is a frequent choice in these economies - certainly Egypt managed to do this ever so brilliantly over the last 30 years with a "strong pound" regime partially backed by its nat gaz and petrol exports.

I certainly hope they don't - but then to you this is merely being "negative." Contemptible speculation aside, I favour the real market and policies to grow it.

Posted by The Lounsbury at 10:07 AM | Comments (7) | TrackBack