cynthia – Cynthia Taylor

Climate Change- Science is Calling Loud and Clear!

It would be an understatement to say that the IPCC (Intergovernmental Panel on Climate Change) report released this week after 7 years of research, is alarming. While reading it, I was so overwhelmed with sadness and fear that I had to walk away and have a look at the exquisite beauty of the panoramic view of the ocean here in Malibu. The thought that our lovely village community will likely be significantly affected by the effects of climate change over the next decade is mind numbing.

Needless to say, the report was absolute in its proclamation that continued emission of greenhouse gasses and warming caused by fossil fuel emissions will “increase the likelihood of severe, pervasive and irreversible impacts for people, species and ecosystems. Continued high emissions would lead to mostly negative impacts for… economic development and amplify risks for livelihoods and for food and human security.”

Even more alarming, the report states “climate change can indirectly increase risks of violent conflict by amplifying well documented drivers of these conflicts, such as poverty and economic shocks.”

It is loud and clear that we must act immediately, if we have any chance of substantially reducing greenhouse gas emissions by 2050, and eventually decreasing CO₂ levels to zero by the end of the century. This will involve “large-scale changes in energy systems and potentially land-use over the coming decades”, including a sharp reduction in energy generated by fossil fuels.

Not surprisingly, the report also states that “effective mitigation will not be achieved if individual agents advance their own interests”, which made me contemplate who these “individual agents” may be.

While deforestation is a huge contributor to greenhouse gas emissions, it is largely happening outside of our own backyard in both Asia and Latin America. Our “individual agents” here is the US are primarily oil and gas companies that are increasingly getting rich off the back of fracking technology.

Rather than looking at our “individual agents” as greedy sorts, it really bears thinking about how we personally would react if we were told that our whole livelihood and raison d’etre were evil and harmful to humanity. It would feel like an unjustified violet attack on everything we believed in, including our charitable efforts and inclination. I’m sure you would agree that attacking our fossil fuel energy producers in such a way would probably work quite aggressively against climate change mitigation. This can already be seen in views expressed by Senate Republicans.

Let’s have a look at this picture in a completely different light, and list all of the reasons how our “individual agents” can and will make a huge impact on saving our planet and society as we know it. Shall we just give it a try?

Climate Change- Wise Urgency

While I am not of Buddhist faith, I was recently sent an email from a friend in the Buddhist community encouraging me to dial into the Mindfulness and Climate Action conversations hosted and arranged by One Earth Sangha. Ever curious, I started by looking at their website, which directed me to a background paper on the topic. It was extremely well drafted by Lou Leonard, Vice President of Climate Change at the World Wildlife Fund and Kritee (Kanko) a Senior Scientist for the International Climate program at Environmental Defense Fund, referencing evidence and findings of world-renowned scientific institutions.

The numbers geek in me kept going deeper and deeper into the source references of the paper leading me to the conclusion that as they say “this may be the most important decade in human history”. As confirmed by the numbers in the research, without significant and immediate reductions in current levels of human-caused greenhouse gas emissions, such as carbon dioxide (CO2) caused by the burning of fossil fuels (oil, coal and natural gas) and the destruction of forests, released into the atmosphere, the environment as we know it today and on which our whole society and economic survival has been developed and structured, may completely self-destruct.

I’m not sure I can recall, at least in recent memory, a body of evidence so compelling and in plain view that I did not know existed at this order of magnitude, and with such likely negative implication for the world at large. I am still asking myself how it could be possible that I and most people I know have more or less overlooked the potential radical changes to the world as we know it within a generation, if human induced climate change is not addressed with an immediate and acute sense of urgency. In my view, addressing the root of climate change is first and foremost before we can even think about other philanthropic missions. The protection and stabilization of our environment, together with current day society, is the basis on which all other philanthropic missions, such as healthcare, education, housing and humanitarianism, can be embarked upon.

Perhaps the rational logic to why we seem to be in denial of such overwhelming evidence may be a fear so great that we simply feel the challenge is too big for us to overcome, and we just shut down entirely or cannot stay the course. I applaud the action of One Earth Sangha to bring climate change to the forefront of our awareness. As they so brilliantly observe, “by increasing our awareness of our emotional response to climate change, we can become more resilient and engage more consistently. These energies can be transformed into confidence, clarity and action.”

As we all have observed, recent climate change includes such phenomena as global warming, sea-level rise, increased drought and change in storm and precipitation patterns. Stay tuned as I dig into the scientific data and potential consequences of climate change. We don’t have much time to mitigate current levels of human contribution to planetary greenhouse gases before we all must pay the consequences, least of which are economic.

Taylor China Weekly September 24, 2014

It’s been sometime since my last posting, but overwhelming developments and trends in China have compelled me to set aside everything else to write down current observations. Tides are changing ever rapidly in our current times, and it may be a long time before we will be able to become too comfortable economically or politically.

Not surprisingly, the Hong Kong pro-democracy protests and slowdown of the Chinese economy are huge events with effects that reverberate around the world.

News of the Chinese inflation rate hitting a 5-year low in September, as well as the cooling property market is quite worrisome for not only the domestic Chinese economy, but global manufacturers and exporters of everything from commodities and building materials to luxury brands. I would have to agree that an economic environment, which stimulates such “creative” marketing initiatives as offering 1,000 live chickens to promote real estate sales, is sort of scary.

For the sake of the world economy, let’s hope that the Chinese government monetary and fiscal stimulus measures take effect soon. They appear to be making all the right moves with a 50 basis point quarterly reduction in bank reserve requirements projected over the next year, according to analysts at Nomura, as well as a central bank reduction in the 14 day repo rate signaling lower short term interest rates.

As for the Umbrella Revolution in Hong Kong, that is a bit trickier to predict the outcome, as well as the complicated motivations of the student protesters. As always, economic factors seem to raise their heads with local businesses lashing out at protesters as they are actually affecting sales.

Beijing appears to be wisely delaying any official government response, as it would be disastrous all the way around for China’s relations with the West if they were to send in PLA troops. Given the importance of Hong Kong as an intermediary for China’s trade, as well as its access to international capital, such confrontation would certainly have a negative economic impact.

While the acquisition of the world renown Waldorf Astoria in New York by the insurance group founded and chaired by the grandson-in-law of Deng Xiaoping, and the visual images of runners in the Beijing Marathon wearing gas masks to mitigate air pollution would not directly be connected with the economy or politics, nevertheless they are quite interesting observations.

Taylor China Weekly March 14, 2014

The week started with Panasonic, a huge Japanese global corporate, making not just a “cost of living adjustment” to salaries for its expats working in China, but actually a “cost of not living” adjustment to expat pay. What was most shocking in their announcement this week is that such a pay adjustment is not applicable to Chinese employees. I guess in their view, the life of a foreign expat is worth more than the life of a Chinese employee. Very scary indeed!

The saga of the non-bank lending continues, as apparently shadow lending in China ($7.62 trillion Q3 2013) has slowed significantly this month, due to active government intervention. Trust company shadow lending ticked up when local government investment companies and property developers were borrowing quite substantially, but were regarded as too risky by bank lenders due to the overall caps on bank lending imposed by the government, i.e. available funds went to the most credit worthy.

Mizuho Securities suggests that the efforts of the central bank to control the shadow banking sector are having results, which are reflected in the increase in on balance sheet bank loans that accounted for approximately 64% of new loans in China this year.

However, the big news this week for international markets was the warning by China’s premier, Li Keqiang, of potential bond or loan defaults by corporate borrowers. Historically most debt was quasi government guaranteed, as the government typically would bail out those who were over leveraged.

Needless to say, the world in on pins and needles waiting to see if new government deregulation allows defaults to occur, and potentially incite a “Lehman moment”. Although in the same breath, China’s premier was quick to say that China is projected to meet its 2014 GDP growth forecast of 7.5%.

Iron ore, the main commodity used to manufacture steel, prices tanked (Steel Index price reporting agency) this week as it was revealed that China steel mills have significant overcapacity and less than half of them are currently profitable. The fact that Haixin Steel, a privately owned steel mill, is technically in default of a bond repayment, certainly did not help support global iron ore prices or market values of the world’s biggest mining companies. China consumes around two-thirds of the world iron ore consumption.

Finally, the most exciting news this week is that the Yu’e Bao an online money market fund, managed by Alibaba Group, topped Rmb500 billion ($81.4 billion) in total deposits with its 6 per cent on demand interest rate. No wonder, it’s a slam dunk in comparison to the government imposed, on demand bank savings account rate of 0.35 per cent. Even the one-year bank deposit rate is only 3.3 per cent. The difference is truly “left over treasure” or Yu’e Bao.

Taylor China Weekly March 7, 2014

The question of how government economic reform will play out will certainly be an ongoing debate. There are the naysayers that say that the hugely debt perpetuated economic growth will eventually unravel and end in a severe economic downturn.

However, the Chinese communist government is still very powerful and very much in control. Unlike, other “free” economies, they still have the ability to counter balance destabilizing movements. Whoever said that transformation from an emerging economy to an economic leader would be smooth sailing.

The first ever, corporate bond default in China is nearly upon us. A solar cell maker, Shanghai Chaori Solar Energy, has announced that it will not be able to make an annual interest payment of Rmb89.8 million ($14.6 million) on bonds that it issued two years ago. Although this announcement should not be terribly unexpected, as the bond issue carries a CCC junk bond rating and trading was suspended last July.

Given the significant level of debt issuance from 2008 to 2013, which Standard and Poor’s estimates is around $12 trillion at year end 2013, defaults on riskier credits would be expected.

As us European high yield bond veterans recall back in the late 1990s, unsophisticated investors, such as the Italians of the day, just picked the names with the highest yields. Needless to say, it all went very badly for them when those risky, start up telecom issuers started to falter. An analyst at Moody’s claims the same is happening in the Chinese corporate bond market today. However, the difference here is that investors expect the Chinese government or other third parties to bail out the issuers in the end. Perhaps that will continue…

Buried somewhere in all the noise about the “slowing” Chinese economy, albeit the growth target for 2014 is still at 7.5 per cent, is the detail that the government must create enough jobs for 7.3 million university students graduating this year. Of course this number does not even include those students who are studying abroad and looking to return home after graduation. If only our government had an inclination to create new jobs for our college graduates.

Taylor China Weekly February 28, 2014

This week, it’s all about the renminbi.

Some say, Beijing has instigated the steepest fall in the value of its currency since the devaluation of 1994, when the export boom began. The main reason being to slow down the strengthening of the currency, which has hit a record high, and this could result in reducing China’s competitive position in the export market vis-à-vis other developing economies.

However, the central bank might also be attempting to control a more ominous activity of Chinese companies borrowing US dollars offshore, converting to renminbi, and shadow bank lending in China at loan shark rates. Or possibly investing in the ever rising, and likely unsustainable, Chinese property market. At the very least, the move could curtail betting on a stronger renminbi through the carry trade of borrowing in US dollars in Hong Kong at lower interest rates and taking the currency risk of converting to renminbi without hedging.

Assuming the renminbi continues to appreciate, the repayment of these loans would be even cheaper. Financial analysts at UBS have estimated that over the past year Hong Kong and Singapore have lent Chinese companies up to US$200 billion, the majority of which has been repatriated to the mainland.

On a more interesting note to us luxury handbag aficionados, an incredibly lucrative career as a daigou agent appears to be well established and growing with several hundred thousand now in business in Hong Kong. Essentially the role of a daigou is to acquire luxury products in foreign markets on behalf of wealthy Chinese individuals, and shuttle them over to the mainland at a great savings. China e-Commerce Research Centre suggests the daigou market reached RMB74 billion (US$12 billion) in 2013. Legal or illegal, it’s up for debate, but the Chinese government might accrue more customs duties by restricting individual border crossings to at least 10 a day.

Finally, having seen an Air Quality Index (www.aqicn.org) of over 500 in Beijing (greater then 300 rates as hazardous) and over 150 in Shanghai (greater than 150 rates as unhealthy), in comparison to 30 in London and 34 in New York, all of the above is completely insignificant in the index of humanity. If only those US dollar borrowings could be invested in a state of the art pollution conversion machine, generating off the charts green energy.

– Cynthia Taylor China Weekly

Pink Paradise

Last week I experienced one of the most aesthetically beautiful and rare acts of nature that I’ve ever had the pleasure of observing. As I’ve looked at most every masterpiece in the western world, I don’t say this lightly.

As I was doing my evening walk in Point Dume, I turned the corner and saw a pink painted sky. It was done in a painterly hand, with brilliantly coloured pink strokes of various shades. The florescent pink brush strokes were of a rare hue.

And in the midst of this exquisite sunset was a space that appeared to open to the divine. It was truly transcendental, which I suppose was the purpose of such a rarefied happening.

If only I had had my telephone with me, but then again, it would have negated such a divine and transcendental event.

Michelangelo’s David, Kanan and God

The other day as we were on the way to Trader Joe’s for grocery shopping, Max and Sabrina screamed out “there’s God!” Of course I looked around and asked “where” and they answered “over there”.

I thought nothing more about it, until the following week when we were driving over Kanan Road from Malibu to Agoura Hills, and they screamed yet again “there’s God!”

Now I’m thinking, is this divine intervention?? I suppose, of sorts.

As I was driving over Kanan (known in the Hebrew Bible as “the land which is God’s gift” and “the place of abundance”) one day on my own, low and behold I see the personification of God in this life, as a copy of Michelangelo’s David!

Needless to say, as an Italian Renaissance scholar, indeed it was divine intervention for me! Nothing so beautiful has ever been created on earth that could rival Michelangelo’s David.

Once again, all roads for me lead back to Firenze. God, Canaan and Michelangelo’s David…… Why am I not surprised when we live in God’s country here in California!

The Baby King and Madison

Twins 2 You’re probably wondering, how could these two possibly be connected! Leave it up to US magazine, featuring Kate with the baby Prince George on the front cover, and Million Dollar Listing on the back cover. Needless to say, Madison Hildebrand, the Renaissance man is featured in the center.

I cannot claim any credit for such an astute observation. It was actually my 4 year old daughter Sabrina, who saw the magazine on her teacher’s desk and proclaimed ‘There is the baby king. His name is King George. Did you know he was born in the same hospital (Lindo Wing at St. Mary’s) as Max and me? He was probably in the same room as us.’

Then she turns over the magazine and says ‘And that’s Madison. I gave him a pink dinosaur. He sold our old house.’

Her teacher did not know Madison or the show. She Googled him right away and was shocked to see that Sabrina was indeed correct. Madison Hildebrand was featured right in the middle of the back cover of US magazine for the upcoming season of Million Dollar Listing beginning August 7.

Max and Sabrina were born 4 years ago, nearly to the day of the birth of the baby prince. The sky was as grey and dreary then as it appeared in the television spot of the Duke and Duchess of Cambridge posing on the steps of the Lindo Wing upon their departure.

On a brighter note, the week before the birth of my twins was sublime in a rare burst of hot and sunny weather in London. Amongst many other things, memories of a lovely dinner on the eve of their birth with old friends from New York, as well as a visit from their godmother on the day of their birth after attending the Wimbledon Women’s Final are both well recorded in our history.

I am quite sure, the Duke and Duchess of Cambridge, Great Britain and all Global Royal Followers will always fondly remember the birth of the Baby King!

Kate-Middletons-first-week-as-a-new-mom-450x616 showposter