Roy Ho’s Blog

http://news.yahoo.com/s/ap/20080303/ap_on_el_pr/democrats_nafta

Obama denied he back tracked the NAFTA through his economic adviser to Canadian diplomats.  Canadian Prime Minister Harper promised to investigate how this information got leaked – not denying that it happened.  The second part is the key.  So, Harper got what he needed: he discouraged the most anti-NAFTA candidate of the 2 Democrat candidates to have a conversation.  In fact, Harper got what he expected: Obama said he did not mean it.  

Now, why the leak?

Harper wanted to establish the fact that “Obama does not mean to re-negotiate NAFTA”.  Harper thought it was very likely that Obama would win Whitehouse.  Harper then decided to push Obama to promise that he would not because Obama has no chips to bargain back at this moment (one can only bargain when at strength).  That is why Harper said no, you do not want that.  On top of that, Harper wanted to make sure no one is getting away with it.  So, he decided to leak it.  Of course Harper expected Obama to deny it.  And so, an investigation ensured, which will drag on.  And this investigation will produce the result to the effect that “yes, it actually happened” with whatever memo, audio or video files necessary to put in front of Obama, if he ever one day decides to negotiate NAFTA.  That’s right.  This investigation will not end until Obama says “let’s re-negotiate.”  Harper just did not trust a much stronger neighbour, especially someone he did not even meet.  And Harper will not have much chips by then.   Harper got his Obama promise.  And he will have something to show for it before the Americans’ TV, just in case.  

This later package is what makes Harper feel comfortable about the promise.   Harper’s mission is accomplished.

Taiwan’s presidential debate was just held on 2008.03.09.  Poll results are also back and publicized.  DO NOT make decisions based on these results.  Loyal DPP supporters are known to either deceive the pollsters or maintain silence.  So, poll results tend to skew toward KMT more than the reality actually is.  However, the trend of the poll is in sync with the voter sentiment.  How will the March election affect anything?

Pay attention to the flat screen monitors and television manufacturers.  Taiwan is the largest manufacturers of these 2 items.  Taiwan continues to have problems with Mainland China.  Therefore, the separatist or unification movement will have a great impact to this industry.  Very few of these manufacturers are listed in LSE or NYSE.  So, one need not check every company in the industry and will be able to find a buy.  

Is it possible that it will have to be a sell decision?  Yes, it could be.  Taiwanese elections are as dramatic as Indian elections.  There was an attempt assassination in the last Taiwan presidential election.  No one figured out who directed the show.  That episode resulted in a win for the incumbent, DPP.  

Anyway, this election is widely expected a win for KMT.  The candidate is Ma Ying-jeou.  He is known to be corruption free.  Well, that is how DPP won elections after elections in the 1990’s.  If we go back further, this is how Communists won Mainland too.  

The integrity of Ma is superb.  He will be unable to keep all his political appointees in check all the time.  The problem with Republic of China (i.e. Taiwan) is public governance.  Only the federal government can sell gasoline, alcohol, cigarettes, and even sugar!  Federal government has stocks in banks.  And federal government has a board member in these banks, which is a political appointment of the president.  With so much political involvement in stock market and even daily operation decision, there is no end of temptation for political appointees.  And this will only lead to the elected officers. 

He may be infallible to financial scandals.  And he will have to put a structure in place to prevent other fallible politicians to fall into the same trap as others before him.  He has picked the right people to help him put the platform together.  He got the correct platform to rescue Taiwan from falling any further.  However, if he fails to repair this governance black hole of Taiwan, then his success will only be a glimpse of Taiwan’s history.