Tag Archives: USA

Where QE Has Taken Us

The Central Bank Conundrum

In the past week, Mario Draghi put through the policy of negative interest rates. He said the idea was to push savings out and into investment. This has had scribes scribbling around the world as to exactly what it means, but parsing through the writing it appears the most dreaded thing for central banks is asset deflation. It appears that we’ve hit a point in history where we just can’t let asset prices fall because too many things are tied into the prices as they stand, even if they are bubble prices. In other words, the whole Zero Interest – and now Negative Interest policy has been a desperate attempt to keep everything in their leveraged positions.

To this end, central banks around the world have been running what amounts to a price-keeping-operation, partly through printing money, partly through bluff, but also by buying equities. It turns out central banks have bought 29trillion in equities around the globe. ‘Abenomics’ in Japan has been running a gambit where pension funds have been buying equities at the behest of the government. 29 trillion is a lot of money when you consider the size of the US economy is 17trillion. No wonder investors around the world have looked at prices of shares and said a bust is due. Yet amazingly share prices of blue chips have kept soaring. Well,they would if Central Banks are buying them with printed money.

Now I’m not one of those people that bangs on about the failing of the fiat currency but any way you look at that situation and you have to ask, should equities be a one-way bet? But the Central Banks do this because they need share prices to stay high.

Zero Interest rates have been in place for many countries and the effect of that has been to amplify the carry trade where the US Dollar has surged out to ’emerging economies’ in search of yield as well as re-inflate the property bubble in places like California and London. Once again, asset prices are getting supported over just about any other consideration. So much so that a hypothetical interest rate rise of 0.5%would jeopardise US$13trillion worth of derivative products. Again, we’re not talking chump change here.

The problems of falling asset prices would be the banks being unable to cover all the positions. Take Deutsche Bank, which has  200trillion dollars worth of exposure to derivatives as an example. If asset prices deflate even a little, there will be massive movements in those derivatives and would easily wipe out Deutsche Bank. And if Deutsche Bank should fail, the fallout form that would be a whole bunch of banks going down with it.

And so we’re stuck with Central Banks busily trying to re-inflate asset prices whether they be shares or property or bonds. They’re printing money to do it, which means inflation is going on pretty hard out there somewhere. The proper analytical explanation of inflation is going to be too much money chasing around too few things. If you print enough money there are too few things by definition. If the printed money is then used to buy the share market, it seems the inflationary effect will be amplified. Similarly if money is  printed to buy the bad debt derivatives from the subprime loans crisis, there will be too much money chasing around too few proper investment vehicles. What happens i the things that are affected the most are not houses and fancy commodities but things like grain and foodstuff? Doesn’t that sort of destroy the purchasing power of people living in the third world? Won’t this bring massive social stability around the globe? And still the Central Bankers are trying to re-inflate the asset bubbles.

It’s not the speculation that is the problem; it’s the process of simultaneously destroying value while preserving prices.

When the GFC came about, there was much discussion about moral hazard and the US TARP bill which was an emergency loan to banks to shore up their bottom lines. We threw precaution to the wind and supported TARP because without it, our banking and our  superannuation accounts would have been shot. Since then banks have received the mos support from Central Banks in order to set their books straight. The bankers even drew up  Basel II and Basel III agreements so that banks could be held to a standard to lessen systemic risk – or so the argument went. And yet the net effect of all this has bee the destruction of the middle class in America (with the possibility looming for Australia yet), with the super-rich getting ever richer. The guy on Main Street got taught a lesson moral hazard at his own expense, after having his life savings taken hostage. The guy on Wall Street simply got a green light to continue doing the stupid things that got all of us into such a sticky strait.

So 6years-going-on-7, I think it’s a good time as any to ask just how well all of this is working out. The debt of the world combined sits at 720trillion dollars. The world economy combined is somewhere around 70trillion. We’re not easily going to pay off that mountain any time soon. That being the case you wonder how long the whole charade is going to go on. We might have kicked the can down the road nicely back in 2008, but we’re running out of road.

Discounting Inflation

One of the more pernicious things that has happened since sometime in the 1970s is that governments have changed the way they measure inflation. The net result of doing so has been to under-measure the real inflation out in the market place and claim inflation has been tamed. Again, this was particularly true in Clintonian America of the 1990s, where they invented some strange practices, which have since been adopted by the rest of the world as a ‘standard’. The basket of goods used to measure CPI has changed so much since the 1970s that it really bears no relationship to the figures that have come before. It’s been made to look more palatable by adding in luxury goods as well as items imported from overseas instead of items produced in the first world, which of course means we’re importing the deflationary pressure from the third world.

Obviously it works out much better for Central Banks and governments if they can turn around and point at lower inflation figures. The problem is that we are printing money in an awful hurry in many parts of the world, and at the same time China is running out of cheap labour which meas there won’t be a whole lot more deflationary force to be imported from China, the world’s second largest economy. In fact the Australian Financial Review had a headline in the last week saying just that; that the RBA has erred on the side of too low an official interest rate.

This is of course kind of ironic because on the one hand central banks the world over are fighting to have more inflation and no deflation on asset prices. If they simply went back to measuring the CPI the old way, they can probably see just how much inflation there exist sin the current system. Also, by under-measuring inflation, they’re setting themselves up for lower interest rates and thus looser monetary policy which of course does lead to more inflation. The longer the low interest rate regime runs, in a sense we’re making real a greater inflation without having the means to measure it. We’re already way too comfortable with the low interest rates. Even without the discussion on moral hazards, you’d think the central banks have got to figure they have one on their hands.

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News That’s Fit To Punt – 17/Mar/2014

Why So Quiet?

Oh boy. I’ve just spent a week in snot hell and cough purgatory. This series of ‘flus I’ve been hit with one after another has just flayed me and slain me. it sucks to be laid out like this. The number of days one loses to this sort of thing makes one a little more than cranky.

Anyway, I’m slowly on the mend and I am merely in cough purgatory right now.

I Crane, You Crane, We All Crane Our Necks For Ukraine

All that rubber necking and neck-craning is about Ukraine and Crimea this week. It’s a weird story in that none of the participants are attractive and all of them could be accused of having ugly agendas. Underneath all of the rhetorical flourishes is a country that’s basically going backward with neglect and I do have a few things to say about this because like the Baltic states, Ukraine is probably owed something a bit more from the West than mere lip service. I won’t go into the horrible history of collectivisation in Ukraine under Stalin, which preceded the horrors of the German invasion, followed by the USSR sitting on the country like so much exploitative deadweight, and this was followed by the post-Soviet disintegration of what little economy existed in the place. Oh, and let’s not forget Chernobyl which also sits somewhere in that time line. For a nation of 50-odd million folks, it’s hardly had the sort of self-determination that other nations have had. It has arguably had much less than Poland, Czech Republic, and Hungary – and we know how those states fared under the Soviets.

And so this nation is cleft into two. The Ukrainians desperately want to join the West. The ethnic Russians want to stay close to Mother Russia. But the economy of Ukraine is a basket case. It is going to run out of its foreign reserves at some point this year and when it does it’s going to default. So the West would prefer not to have to let Ukraine into its club at the EU, having struggled through the issues of staving off Greece and the rest of the PIIGS defaulting on their bonds. Germany has been particularly conciliatory towards Russia because it buys gas from Russia as well as a fairly obvious desire not to have to bail out an impending financial crisis in Ukraine. After all, why adopt a stray dog with rabies?

Still, from the Ukrainian point of view, you can understand that they want to join the West, join NATO, rid themselves of Russian influence. The youth protesting in Kiev clearly want to join the EU so they can leave Ukraine and go live in Paris or London with an EU passport. And can one really blame them? And you can just hear them asking, why won’t the Americans come rescue us?

Just why won’t the Americans come and rescue them? The truth, is always historic. The Baltic States hoped beyond hope that the West would come rescue them from the yoke of the Soviets and that never happened during the Cold War for obvious nuclear reasons. The eastern marches beyond Poland are really distant places. It’s no place to be sending armies and every field rests upon the legacies of Napoleon and Hitler’s marches deep into Russia. You wouldn’t try it if you’ve war-gamed it, and if you’ve war-gamed it, you’ll know how hard that distance gets. So the Baltic States and Ukraine sit just outside the embrace of Europe, a sort of grey zone that fades from a civilised, cultured Europe into something more blunt, crude and Rus.

Naturally, the Obama Administration has threatened Putin with harsh language (much like Hans Blix in Team America threatens to do) and it’s had about as much effect as you can imagine. The Americans have no stomach for a war, they certainly have no stomach for a nuclear exchange with Russia and so they keep wagging their index finger on the grand stage. A Lithuanian tells me this is appeasement and the best thing Obama can do is to just nuke Crimea.

“Just nuke it!” he said.

“What about Mutually Assured Destruction?” I asked.

“What you don’t understand is that this isn’t the 1960s any more. All those Russian missiles are rusted in their silos. They can’t fly. The Americans can just blow them up and they won’t come back with anything!”

I share this, just so you know how the people from the Grey zone of the Eastern marches feel about all this. It’s very simple. To them, only a nuked Russian is a good Russian.

Obama might look like he’s losing this diplomatic stoush, but that’s the point. There’s no winning on the Eastern Marches against the Russians and at least this way, American casualties are limited. Shame about all those Ukrainians.

4K TV – Not Enough Content, Too Much Detail

Somewhere along the way I forgot to post this, but while we’re on the subject of Russians I thought of this.The gab this week is that 4k TV is too soon and not likely to reward Australian consumers because there’s simply no 4k content around. they would be correct. Nobody is broadcasting 4k (it’s hard enough getting1080p content regularly) and Blu-Ray isn’t coming out on 4k until later this year. You can’t download 4k content for the sheer size of the files and so 4k TV is just not well-endowed right now.

But there are unlikely things about the 4kTV format that’s quite surprising.

I was watching a 4kTV broadcast a little while ago in a shop. It was during Wimbledon and they were showing women’s tennis. Now, I’ve watched a lot of tennis in my lifetime so I can tell you if I’m seeing more or not. On screen at the Sony store, I was watching Maria Sharapova return serve, crouched, racquet at the ready, bouncing around on the balls of her feet, and white panties peeping from under the short skirt, which is the classic pervy shot you get in women’s tennis.

And here’s the thing. 4k TV is so good I could see her dimpled cellulite on the back of her thighs.

And I thought to myself, do I really need this much detail?

One Of Our Submarines

Without a doubt the weirdest sequence of news this week was the disappearance of flight MH370. It went from a straight up, “plane is missing, must have crashed” narrative to a convoluted narrative of mobile phone calls and engine pings to satellites to radar readings, hours after the plane went off view. they still don’t know what happened or where the plane is, and if it crashed somewhere int he South Indian Ocean, it might never be found because the depths there can go down to 7000m.

It’s all a little creepy because all kinds of scenarios have been tossed around including 2 stolen passports and a possible politically motivated hijacking, but the bottom line is that plane has gone missing with a big load of people, and nobody can explain it well.  In the absence of any kind of solid explanation all kinds of theories have flourished and they have been perversely interesting if only because the Malaysian Authorities have looked totally hapless in their search for this plane.

One thing is for sure. From here on in, this story is only going to get weirder and weirder.

Protesting Abbott

The March in March thing came and went and lots of people went and marched against the misgovernment of Tony Abbott. Being sick as a dog I missed it entirely, which is a bit of pattern with me. I think the last time there was a big protest thing against APEC, I was sick in bed and watched the whole thing from the couch. Anyway, I’m actually not a good protester type. I’m liable to do something crazy and who knows where that would land me? So it’s good to watch it far away from where the adrenaline could drive me to lunacy. 🙂

Jokes aside, it seems the placards presented at the marches have offended a number of people saying they’re much worse than ‘Ditch the Witch’ levelled at Julia Gillard. There are several thing that need to be said about that.

1. Not a single Federal ALP member was photographed making speeches next to a sign like this. It’s not so much that the sign said ‘Ditch the Witch’, it’s that Tony Abbott was willing to be photographed with such a sign, lending it credibility with his office of Opposition Leader.

2. It’s hard to take serious the offense taken by people who are looking to take offence. I mean, really. Those complainers are being wowsers, and nobody respects a wowser.

3. Yes, Tony is copping worse insults than than did Julia but that’s because he’s doing worse than Julia – That’s why the sobriquets are worse. Live with it. Tony does.

Ian Roberts, Champion Of Causes

Ian Roberts has been a remarkable man. Having competed at the top level in his sport – a very macho sport at that – he came out as gay. He then turned to acting, and he’s gone to NIDA and pushed ahead bravely with that. This month, he’s basically come out and said he is brain damaged, and that this damage was a result of all the concussions he suffered as a Rugby League player.

Even Matty “Bring-back-the-biff” Johns has recanted his denial of the concussion issue. In the face of the frank, unapologetic moral authority of Ian Roberts’ admission, what else can any sensible man do but put down the gauntlets and arms? It’s a landmark moment in a sport that’s been in denial about concussions for the last three years, if not the last 3 decades. Not only has Roberts forced the sport once to confront gender issues, he has now forced it to confront the occupational hazard of playing Rugby League.

He has to be one of the bravest people around. I am in awe.

China, Defaults, 2014

This week a solar company called Chaori defaulted on its bonds in Shanghai. The remarkable bit might have been that the Chinese government let it happen, because up until now, they’ve defended all these dodgy-bond moments by swooping in and making sure the bonds were paid out. This time, they simply let the company default. Ouch.

Get ready, there are going to be a whole bunch of these. The Chinese Communist Party narrative is that they’re going to let some of these companies default so that it sends a bit of realism back to the investors. If you think such a process can be controlled, then good luck. I think we’re beginning to see where China’s over-reach is going to bring down markets. This could get ugly folks.

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Forgetting Romnesia?

Mr. Romney’s Ready For His Close Up, Mr. Spielberg

Here’s something interesting out at the Economist about how the republicans are scapegoating Mitt Romney after his defeat.

Yet fair or unfair, the trashing of Mr Romney should be welcomed, because it shows signs of reflection among those now vying to lead the party. Mr Romney faces two main charges. First, he allowed the Republicans to be seen as a party of the rich. Second, he seemed to scorn social mobility. Exhibit A for both charges is the moment when Mr Romney was secretly filmed at a dinner with donors asserting that 47% of Americans are Democratic voters “no matter what” because they are dependent on government largesse, pay no federal income tax and are thus deaf to arguments about low taxes or personal responsibility.

In recent days, a string of grandees have singled out those comments for attack. Mitch Daniels, the outgoing governor of Indiana, calls the 47% incident a “self-inflicted fatal blow”, compounded shortly after the election when Mr Romney blamed defeat on voters greedy for government “gifts”. Ted Cruz, a senator-elect from Texas, claims (rather implausibly) that the 47% comments—rather than Republican hostility to immigration—explain Mr Romney’s dire showing among Latinos. Mr Romney’s running-mate, Paul Ryan, has let it be known that he “seethed” about his boss’s blunder.

The 47% incident pretty much sums up Romney campaign at this point in history, now that it’s all said and done. It was a colossal ‘blunder’ – or moment of frankness – because the Democrats were working pretty hard to paint Romney as a plutocrat, and he essentially served up his own credo to be put in stocks and be pelted.

This all got me to be thinking about the Obama Campaign’s campaign director Jim Messina and how he drew from a wide range of sources for his plan. The most inttersting bit in is that he consulted none other than Steven Spielberg:

Messina spent time with filmmaker Steven Spielberg, who briefed him on what messages got the attention of audience, and reportedly had input into a advertisement against Mitt Romney that highlighted his time at Bain Capital, a private equity firm that he co-founded.

“Romney had run on this business record of, ‘I’m a manager, I know how to turn things around’. And the Obama strategy over the summer was to turn that positive into a negative by running these ads in states like Ohio, talking about Romney’s record at Bain Capital – outsourcing, jobs, laying off workers,” Mr Freedman said.

While the negative ad was slammed and described as many commentators as unsuccessful, Mr Freedman said the campaign against the Republican challenger, who was at that time still pre-occupied with the primary, ultimately appeared to be effective in the swing states.

Obviously that bit stuck in my mind for months because it shows that in going for the jugular, they picked the mind of the man who was most attuned to putting an emotive message across, and the advice was decisive. When you consider the Republicans got Clint Eastwood to turn up at their convention to talk to a chair, you get the feeling that the Republicans were more than a little behind in how messages are put out to the public. The Democrats were making ads with Spielberg’s input to get the nuance exactly right while the Republicans were essentially waving symbols around – “Look, we got Clint Eastwood who used to be Dirty Harry!”. The level of abstraction and sophistication is so low it beggars belief.

It was certainly an interesting moment in history because the Democratic machine was coming at them with what can only be described as ‘applied Marshall McLuhan Communication Theory’ and the Republicans were essentially doing things that weren’t far removed from semaphore and cave paintings. Even if you don’t take into account the demographic shift going against the white establishment, you seriously wonder if the Republicans are going to be able to get their heads around this problem, because it’s not just who you talk to, but it’s how you talk to them and what you tell them in order to persuade them.

They can scapegoat Mitt Romney all they like, but it seems to me they had much deeper problems than Mitt Romney being a gaff-prone plutocrat.

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Why Don’t They Get Angry In Japan?

Explosive Allegations About Fukushima Plant

During this week it’s come to light that radioactive Iodine, Cesium and Tellurium were found in the areas around Namie and Ohkuma nearby the Fukushima plant on the 12th March this year. That is, they were detected shortly after the plant was hit by the Tsunami.

In the linked article Kenichi Ohmae argues (and remember, he studied nuclear physics so he’s as good as any commentator on this) that the only way the radioactive Tellurium could have ended up in those areas is if there was a meltdown of the reactor core immediately after the tsunami. What’s worse than that, it seems NISA – the Nuclear Industrial Safety Agency – knew about the meltdown of the reactor core but didn’t make it public. I can’t emphasise enough how absurd and malicious this omission is, given that the US immediately wanted a 50km exclusion zone around the Fukushima plant for its personnel during the short-lived Operation Tomodachi.

How could the US have jumped to that conclusion so early? What does this mean?

What Kenichi Ohmae is saying is that the US knew of the meltdown, either because it has expert means of detecting reactor cores and radiation leaks because it has developed tools to detect activities in places like North Korea, or because NISA told them but then didn’t tell the people of Japan. Think about that for a moment. It’s outright treachery. Then this week, NISA turn around and claim “we forgot to release this information. We had no intention of hiding this information.” Ohmae argues that the only reason they would say such a thing as they had no intention of hiding, is because it is exactly the intention that they had.

What kind of government organ fails to inform its people of such vital facts? But wait, there’s more.

Ohmae then goes to suspect that the only reason they would hide it is because if anything is a dead give away that the reactor core had melted down after the 11th, it would have been the radioactive isotopes of tellurium found in the neighbouring townships -and they must have known the meltdown of the core took place shortly after the tsunami event. Which mans the government as led by Naoto Kan knew about this and covered up this information. It’s a perfectly reasonable suspicion. Heck, it makes more sense than the actual sequence of events as described by the government. Which means all those workers getting the reactors under control were probably working in much worse radioactivity than first reported.

Hidehiko Nishiyama of the NISA was only put into his position of Assistant Vice-Minister of NISA after Koichiro Nakamura was fired from the same post for letting slip on 12th of March that there was a distinct possibility that the reactor core had indeed melted down. That is to say, they fired Nakamura because he wouldn’t “maintain the fiction” that there was no reactor core meltdown, and installed Nishiyama who would expediently play along with the Prime Minster’s office to cover up this vital fact.

I know he recently survived a motion of no confidence, but seriously, if members of the Diet knew about this cover up, then they seriously should look at putting in that motion again immediately. All this is quite an abnormal state of affairs, as Ohmae points out – but then again the chain of events and the susequent revelation of poor risk management has also been abnormal. This is beyond the pail. I don’t understand why there isn’t more fury and expressions of anger about this cover up. So the question is, why aren’t there people marching in the streets trying to get rid of Naoto Kan right now?

Oh I forgot, everybody’s indoors, afraid of the radioactive fallout.

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“Die Hans Brix!”

Team North Korea

Every few years, North Korea surfaces from the sludge of international relations to rattle its sabre and detonate half baked nukes and fire inaccurate missile tests. It’s quite a joke really if it weren’t for the fact that Kim Jong-Il seems pretty serious about his threats and nobody is willing to march in to North Korea to get themselves some regime-change-a-la-Iraq.

Thus it’s always a bad time when North Korea decides to announce that it’s detonated its second nuclear test, total contravention of anything discussed in the Six Nations talk. The Six Nations which include the 2 Koreas, China, Russia America and Japan have so far pleaded and begged and bribed with North Korea to stop its nuclear weapons program, but when they go and set off a 20kiloton nuke in a test, it’s time for some diplomatic strife.

KoreaIlThese fireworks follow the launch in April of a three-stage rocket over Japan and the Pacific. Until that point, it was still possible to argue that increasingly belligerent rhetoric from Mr Kim’s regime was just his way of catching the attention of President Barack Obama’s new administration. The pariah state had long said it wanted an accommodation with the United States that guaranteed its security. But engagement with the outside world now looks near the bottom of its priorities.

North Korea also says it has torn up the truce that ended the Korean war in 1953. This was provoked, it says, by South Korea’s decision to join the American-led Proliferation Security Initiative, a group that aims to block shipments of weapons of mass destruction and related contraband. South Korea was reacting to Mr Kim’s nuclear test; North Korea accused it of a “declaration of war”. With American and South Korean troops put on a higher alert, some kind of military clash looks possible.

North Korea has also said it is restarting its plutonium reprocessing plant at Yongbyon, closed since 2007 as part of a disarmament deal negotiated with America, South Korea, Japan, China and Russia. International nuclear inspectors have been kicked out of the country. There is also concern that North Korea will resume selling nuclear technology abroad.

Earlier this month North Korea told South Korean managers at the Kaesong industrial complex, not long ago seen as a symbol of warming ties on the peninsula, that they must sign new, costlier contracts for North Korean workers, or pack up and go. The chief North Korean negotiator of closer relations between North and South, once a confidant of Mr Kim, is rumoured to have been sent to a labour camp and even shot, possibly for taking bribes.

It’s an ongoing joke. Like the warlords of Afghanistan, Kim Jong-Il makes his money dealing Heroin. They sell arms to dictators in Africa, they deal in black diamonds and whatever portable wealth while their population is starving. The regime is repressive to the point of cruelty, and the people are totally brain-washed in to supporting this system because dear leader allegedly makes it so good. It’s like a whole nation that’s been held captive by a cult of personality trying to build an on-going dynastic system like some medieval king. And the fact that the rest of the 21st Century world actually has to take this nation more seriously because of its serious nuclear ambition is truly pathetic.

But deal with them we must.

Nobody seems to have a plan on how to get North Korea to quit being North Korea as it were. Are they merely essentially fucked up? Or is it that they work hard to be so fucked up? Or is that they get immense help and encouragement to be so fucked up?

The Chinese are too invested in having the nation as a bulwark ally facing off the …err… capitalist West at the 38th Parallel instead of on its own borders. It’s not unlike the anxiety Russia has about the Ukraine wanting to join NATO. China doesn’t ant North Korea to be absorbed into South Korea because suddenly the running dogs of the Capitalist West would be at their doorstep across the Yalu River.

Remember Douglas MacArthur’s great plan to drop 8 nukes north of that river to create a no-mans land forever which would keep the Chinese out of the Korean peninsula? Yes, the plan that got him sacked by Truman. It sure looks prescient today, if only because dealing with the Kim Regime in both its generations has been like pulling teeth without anaesthetics – a medieval sort of problem. That’s the Yalu River for you.

Perhaps we’re lucky that Truman’s notion of no further nuclear wars prevailed. China and Russia are still talking to the rest of the world, if with their own strategic concerns being their bug bears. That being said, most of these strategic concerns are a bit silly if it means in the case of Russia, the Ukraines cannot get energy supplies and in the case of North Korea, it continues the aggravation of this nuclear threat. And seeing that the Cold War is long over, you wonder why they let these Cold War Era politics continue locally to the detriment of their own reputations. I guess you can put this down to bloody-mindedness.

If it ever comes down to a military solution, it’s going to have to be China that digs out the Kims from their bunkers, and not the USA or the West or their allies in the far east. If nukes ever get exchanged, then you’d have to say MacArthur had it right in 1951.

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WBC Update 23/03/09

So Much For That

Japan beat the USA to advance to the final. I have mixed feelings about all this because either team winning would have been good for me – but my glass is half empty when one of them loses too. 🙂

LOS ANGELES (AP) — Daisuke Matsuzaka remained undefeated in the World Baseball Classic and defending champion Japan beat the United States 9-4 at Dodger Stadium on Sunday to reach the final against South Korea.
“Can you believe this? Look at the score. I feel so bad about this,” Tom Lasorda, Hall of Fame manager and WBC global ambassador, said from his seat behind home plate.
“I’m very, very disappointed. We had high hopes. This is the second time we were supposed to win. We taught these people the game.”
Instead, Japan gave the lessons on American soil.
Matsuzaka sent his country into Monday night’s title game against South Korea, a 10-2 winner over Venezuela in Saturday’s semifinal. Japan won the inaugural tournament in 2006, defeating Cuba in the final.
Akinori Iwamura’s RBI triple was the key hit in a five-run fourth inning against starter Roy Oswalt, and the U.S. absorbed its first loss to Japan in major international play since the 2005 World Cup. The Americans had won four in a row, including an 8-4 victory in the bronze medal game at the Beijing Olympics.
“We didn’t play as well defensively,” U.S. manager Davey Johnson said. “We made it a ballgame through seven innings, and made some mistakes, walked the leadoff hitter in the eighth, and that’s not the way you win ballgames.”

Oh well. Derek Jeter was the goat with his error in the 8th. Not happy about that at all.  This comment is disturbing:

Jimmy Rollins went 4-for-4 with a walk and a two-out triple in the seventh. Masahiro Tanaka struck out Wright to end the inning.
“We had a lot of fun being an underdog, knowing that we were at somewhat of a disadvantage as far as having time to prepare,” Rollins said. “It shows the support and passion these other countries have for baseball. In America, we have many sports, so our attention is at whichever sport season is going on at that time.”

Come on Jimmy, you’re the MLB! You can’t be underdogs in playing NPB Japan! On the other hand Daisuke Matsuzaka continues to amaze as he is now 6-0 in WBC games. He lives for this stuff. So now it’s Japan vs Korea part 5. *sigh*.

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Today’s WBC Update

Australia Thumps Mexico
Last time they did this WBC thing, Australia went home without making any impact on the world stage. This time, they have done some damage, to none other than Pool B 2nd favorites Mexico.

MEXICO CITY — Chris Snelling homered twice and Ben Risinger hit a three-run shot as Australia powered past Mexico 17-7 on Sunday in the World Baseball Classic.

The game was stopped after eight innings because of the 10-run mercy rule.
Risinger, Lake Hughes and Andrew Graham each drove in three runs for Australia, which has no players in the majors and was considered one of the underdogs in Pool A. The Australians will play Cuba on Tuesday for a berth in the second round in San Diego.
Mexico will face South Africa in an elimination game.

“The main objective is to move on to the next round, ” Mexico manager Vinicio Castilla said. “Today’s game holds us back, but we haven’t lost anything yet. We have to keep moving forward. … No one expected this. We are going to stick together and try to get the next one.”

Graham’s RBI single in the sixth inning scored Brett Roneberg and broke a 7-all tie. Daniel Berg and Trent Oeltjen followed with run-scoring hits to make it 10-7, and Australia’s lead was never in jeopardy the rest of the game.

That Andrew Graham, is Andrew Graham of the Kuringai Stealers, thank you very much! He\’s flying the green and old for both Ostraya and the Stealers. The 17-7 score line shows it was an utter slugfest in the late phases of the game, and amazingly, Australia got a mercy rule 8th inning win. Australia set a record for hits in a game for the fledgling WBC tournament on the way to the win. Now, all they have to do is beat Pool B Favorites Cuba or South Africa to get to round 2. Hey, why not?

Thanks to Walk-Off HBP, coach at the Stealers for that heads-up.

Now, is the Sydney Morning Herald reporting this historic win? No.

SMH NOT reporting the Aussie win in the WBC Round 1

UPDATE: Here’s The Australian’s take. It’s the AFP version.

USA Crushes Venezuela

It’s one of those games where you think the USA is doing to Venezuela what GWB wanted to do to Chavez. 🙂

It was an 87-mph fastball thrown by a 25-year-old Venezuelan right-hander who’s never sniffed the major leagues. And when Adam Dunn saw it, he smoked it, and then a small smirk pursed his lips as he looked into his home dugout.

“I thought that was going to hit the top of the dome,” second baseman Dustin Pedroia said.

It didn’t reach that high, but Dunn’s mammoth shot to right field in the seventh inning of this World Baseball Classic game seemed to be the punctuation mark in Team USA’s 15-6 win over Venezuela on Sunday night. The Americans will be advancing to the second round of this tournament, and in their first two games, they’ve proven they can win close in a hostile, playoff-like atmosphere in a packed dome, and via blowout before 13,000 people, most of whom were yelling, whistling and waving flags in support of Venezuela.

On Saturday, it was J.J. Putz closing a 6-5 win against Team Canada in front of a raucous, pro-Canada home crowd at the Rogers Centre, a scene that led Putz to say it was the most intense experience of his baseball career. A night later, it was a cumulative effort by a Team USA lineup that pumped out 16 hits and 15 runs against seven Venezuelan pitchers.

Now, if you really want to see a classic Derek Jeter interview, watch the video on the page. The Yankee captain and now Captain America actually mouths the classic ‘one-game-at-a-time’ cliche. Talk about Mr. Dependable.

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