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De-coupling of OIL from world economy July 9, 2009

Posted by Bipin Agarwal in Future of transporation, Global Economy, IT Offshoring - Future Direction, IT offshoring and Real Estate development, Politics and economy, Quality of Living, Real Estate Development in Global Economy, Real Estate Development in India, Real Estate development in USA, Recession.
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OIL Power – OIL, the dominant source of energy has impacted the world economy and power struggle among countries for a long time.  The effect has been more visible for last twenty five years. Middle East, Russia, other Oil producing countries have enjoyed unprecedented boost to their economy and foreign reserve  because of high oil prices. We all know that it is not a pure supply and demand dynamics. This game has worked well because there was no other significant sources of energy that was easily and readily available.

Past Effort to Change – There have been lot of attempts to create new sources of energy including nuclear power, wind energy, bio-fuel, and clean coal. All of these efforts have been successful to some extent, but none of them significant enough to change the dynamic of world economy and power status. Lot of that has to be with the economics of the particular method (bio-fuel, clean coal), time it takes to set up the plan and disposal of waste (nuclear), predictability of the energy generation (wind). As a result, none of the method so far have emerged as a challenge to OIL energy.

Off-course like everything else, corporate interest and desire to maintain power status by countries has further compounded this challenge. Both OIL and defense industry (selling arms to protect the supply of OIL sources) has played a significant role in creating hurdles. Politics has played a big role as well. Keeping the OIL price high forces the poor country to spend their significant resources for buying oil, hence limits investment in other areas for productive growth. Further, the market for automobile has been too large for these corporate to let it go easily.

What Has Changed – It is fair question to ask. There is lot of new dynamic from developing countries to developed countries. Growth in the developing countries India and China have changed the market dynamics for Oil consumption. These countries cannot afford to import OIL they need to support the economic development.  Economic development is putting a lot of pressure on the politicians to find alternate source of energy. Developed countries, US and part of Europe have so much debt that they have to figure out a way to reduce OIL consumption. US is suffering the most from OIL dependence. There is lot of domestic pressure in US to end Oil dependence.

Solar, the GAME Changer – We all know that SUN is, as predictable a source of energy as far as humans are capable of visualizing. The capability to harvest this energy on a large scale in a economic way has been a major barrier to solar becoming a challenge to OIL.

Good news is that now we do have a scalable and reasonable economic solution to harvesting solar power.  Significant reason for this change is because we can cost effectively manufacture the devices capable of harvesting this energy as opposed to conventional means of either drilling (oil and gas), digging (coal), or changing the course of rivers (Hydro). Recent decision by US government to review sixty seven thousand acres of land for solar power generation is a further validation of the direction of solar based energy. Large corporation currently own large tract of land to participate in the opportunity, I call it SOLAR GOLD. Gold is not black any more.

Impact on World economy and Power – Every country will feel the impact of this change (SOLAR GOLD) differently. It is not possible to discuss every country in detail in this article, So I will talk about some regions, countries. If you would like to discuss a county of your choice, please send me a note @bagarwal.india@gmail.com

Middle East and Russia, there have been a lot of conversation that OIL at dollar eighty a barrel is what they need. It cost about couple of dollar to produce a barrel of oil. Why do you think world will come to the rescue of Middle east and Russia if Solar is available.  While Russia is better positioned then Middle east because of their defense capability, but that is not good enough.  President OBAMA is playing the card right by going to Russia, putting the arms control pact and engaging Russia for nuclear issues so that defense capability (industry) becomes a  non-issue. These are not well positioned for long term.

China & India – Both countries are heavily dependent on importing Oil and Gas currently. China has been pro-active in securing the oil supply like USA has done for decades. This does change the long term picture. Both countries will resort to using Solar in big way and this position them very well in the long term.  These two countries are currently not dependent on Oil Export for their economic prosperity and it will be huge advantage in the long term.

Other developing and emerging countries – This is a mixed bag. Some of the developing countries have OIL export in combination with other industries (Mexico – OIL and manufacturing). Other countries in this block have lot of domestic economy. It is unlikely that any of these countries will ever become a super power. There will be wide range from being no effect to significant impact for each of the country.

Europe – There is part of Europe that is well developed, West Germany, UK, France, Denmark, etc. then there is part of Europe that is still developing such as Eastern Europe. It is unlikely that any country in Europe will be a Super power in the long term, However Europe as a block (European block) has the potential to be a significant player, that is only if they can stay together which is very unlikely. It is human nature. US, China and for that matter some of the countries within Europe will do everything possible to make sure that Europe is divided and chances are that they will be successful.

USA -It is interesting. USA is a huge importer of OIL but also is superpower. How did that happen? Dollar as a world currency has helped USA more than anybody is willing to admit. Defense capability, other industries such as financial services, technology  helped USA to be the dominant world power. Immigration policy of USA to attract the brightest from all over world has played a key role. USA is also taking big steps to reduce dependence on the OIL. USA is pushing for electric car as a transport mechanism and pushing Solar to produce bulk of its electricity. Since all this is being done in the private sector with government incentives, USA is moving at a fast pace to maintain the Superpower status.

Summary

Every country will have to adjust to this reality of SOLAR GOLD over time. If you are a  country that is largely dependent on Oil export only, there is lot of work cut out for you.  Country currently importing huge amount  of Oil (USA, lot of European, developing countries), there is a significant opportunity for you to position yourself for success. It will require a focused effort, a combination of policy, investment, and incentives both in the area of energy production, education, and infrastructure.  A country with a population base (critical mass) will have an inherent advantage (USA, China, India) to play in the super power league.

You have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask.

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/abou

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Investment outlook for next twenty years May 22, 2009

Posted by Bipin Agarwal in Future of transporation, Global Economy, Politics and economy, Quality of Living, Real Estate Development in Global Economy, Real Estate Development in India, Real Estate development in USA, Recession.
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Where to invest? This is an age old question, answer to the question changes with time depending on the political environment, social and economic environment, and individual circumstance. Current political, economic  environment and social value system (individaul .vs. family) could not give more confusing, and conflicting messages.

Economic and Political Environment – Debt rating of so called rich countries are on credit watch with negative outlook. Recently UK was put on negative watch by S&P, US is next an dso are so many other countries.  China is focused on domestic spending, export monopoly, political turmoil, and desire to be on the top in next twenty years. Record number of war conflicts, from Iraq, Africa, to Asia, along with growing number of business bankruptcies, government sponsored stimulus adds further complexity to the decision of future of investments.

Investment Environment – There is lot of confusion about the area of investment. Everybody I talk to seems to be confused where to invest. Gold, real estate, retail, commodity, transporation, stock, bond, fixed deposit, or just cash?. Future economic environment will  be inflation, or deflation, or stagflation? There is no one answer that applies to every investment decision. It depends on your particular situation, net worth, objectives, lifestyle, risk appetite?.

This write-up is not a wealth management planning guide. Primary focus of this article is to outline the macro level investment opportunity for people who can take long term view of their investment and are looking for investment return much higher then, offered by fixed deposit and have the risk appetite. Again specific decision will have to take into account the political and financial system of the country.  Best way to decide about the macro ares of investments is to somewhat ignore all this confusion, and focus on fundamental needs of life. People need a place to live, they need to eat and also they need to move.  Somebody asked me, what about clothes, well this is not a future growth industry because of level of automation and consolidation that has happened in this industry. The three macro area of investing are:

  1. Real Estate
  2. Food
  3. Transportation

Real Estate – Real estate investing is not about just building the house and offices and expecting them to sell. After all, real estate valution is the cause of  the current economic issues. This has been the case across all the countries including developed, developing, and poor.  Key driver for real estate moving forward will be affordability.  Population is growing and will cross 7 billion by 2013. From cost and maintenance point of view it is impossible to build single family home (large or small) spread over large land.  Recent effort by TATA in India to build a small home for bottom 30% of the population for a cost of 10,000 dollars is a good step in the direction. However, key failure in this scheme is that every house is sitting on a land and there is no vertical construction. Another encouraging trend across the world is about apartment/condo living. This makes effective use of land and also offers lower maintenance cost. There are other effort such as what China is doing in building concentrated community (business and residents together), Eco-friendly community effort at different places, and ‘Twenty-Minute Lifestyle’ effort by REDHAWK investments.

Food – This is a tricky one. You may be thinking, what is wrong with me? Everybody needs  food, this is a obvious opportunity, what is so tricky about it. Well, size of this opportunity is dependent on the eating habits of the people. Most logical one, veg .vs. non-veg. We all know it takes five to six times of more raw food and water to feed a non-veg eater.  There is one exception when people eat fish. They are naturally grown and lot of people in Europe will not consider them non-veg.  In spite of the above debate, this opportunity is going to grow. Agriculture will be a large part of opportunity. We should expect that per capita spending on food will go up because of the limited fertile land that is available.  What Korea, and some other countries are trying to do by leasing large part of fertile land is because of two reason, 1) fear, to make sure food is available for their population. 2) future business opportunity.

Transportation – It is a human nature to move around.  People move  in search of better life, opportunity, curisity, and pleasure. Globalization, and disaprity in the wealth of rich and poor has further intensidied the desire to move. Migration from village to city, from city to bigger city, across the country, movement withing the city and across city, all requires some form of transportation, personal or public. Infratructure spending for transportation will surpass any other organized spending by government and people.  Given that government have limited resources, we will see increasing investment opportunity in the area of transportaion infrastructre by building road, rail link, airport and trasnporation serives.

Summary – Investment opportunity for future should not be confused with the wealth management.  There are lot of corporations that can give you wealth mangement advise based on your personal situation. This write-up is fcoused on business making investment decision and people investing in these business to create wealth. By definition, Investment should not be short term focused. Ability or need to create liquidity is a key data point while making investment decision.

You have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask.

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about

Globalization – Root cause of the financial problem April 29, 2009

Posted by Bipin Agarwal in Global Economy, IT offshoring and Real Estate development, Politics and economy, Quality of Living.
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Last few decades countries have created financial success by exporting their problem. Look at Japan, Korea, China, Middle east, USSR. We all know it looked good for some time, it has not been sustainable. This has been all done in the name of globalization.

Every country want to outsmart all other country by growing their export. Sounds great on paper, go little deeper and we will realize that it is not a sustainable solution in the long run and will cause enormous disruption.

My prediction is that the country that is in a best position to accelerate Glocalization will emerge from this financial turmoil. China, US, Europe (as a block) are in a strong position in that order.

Economy should be local for every country. I am not advocating socialist agenda, I am advocating a real solution to this financial chaos.

Simple rule to create a long term viable economy.

WTO (World trade organization) should mandate that trade gap between the countries should be zero (export = import).

or

Create a uniform single world currency and economy will adjust itself to reality of the world.

Alternative energy firm announced in UK that they will close their plant because government is not giving incentive. They can manufacture the wind turbine in China for 10 cents on dollar and send it to UK. Good business decision, bad decision for UK. It is fine to engage in such trade, if China will import from UK the goods or services of equal amount. If UK government does not bail out the Land Rover, TATA will shut plant there and take it low cost place. Great for TATA, bad for UK. should not be allowed to happen.

There should be pressure on each county to work hard, live within their means, and create a long term viable economy. If it is so simple, why do not people do it?

Every county thinks they are smarter then rest. Let us look at China, US and France. US can sell one F-18 to a country, provide them the loan for financing it. Now rest of people in that country can work hard for their life to pay for that F-18 which has no value for them. Why do politician in these country accept that, well that is how they become rich.

Business are obsessed with supply chain optimization by co-locating all the manufacturing into one location. Wrong focus. That is how justify producing a can of beans in a plant in China,  and waste three time the resources to deliver it to consumer. This destryes the local economy and kills job. Let there will simplification of supply chain. Is there really a reason for baby food to be consumed in US should be produced in China? none, what so ever.

Has anybody asked a question, why politician are always so rich? They do not get money by digging hole. They get money by mortgaging the future of the fellow country man. Sounds Harsh, Truth is not always pleasant.

Long run, Glocalization is where the world is headed. We will be in denial until this change has happened.

Reason Glocalization will happen is not because government or large corporation want it, it is because people will demand it. Check out the following link.

Glocalization will Kill Globalization

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about

Walk Score and Twenty Minute Lifestyle April 27, 2009

Posted by Bipin Agarwal in Global Economy, Quality of Living, Real Estate Development in Global Economy, Real Estate Development in India, Real Estate development in USA.
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April 26, 2009

Today there was a front page article in Denver Post on Walk Score, a Colorado based company. The site give you a walk score based on different facilities from your address. you can check out more at www.walkscore.com

This is a good start but only a small step based on the Twenty Minute Lifestyle (tm) concept promoted by Redhawk Investments Group.  All of the development based on Twenty Minute Lifestyle will have a top walk Score of 100.

Walk Score alone is not enough for quality living. Quality of  living for a family is based on distance, facilities, and factors such as:

  • Place of work
  • Long term viability of business and quality of job opportunities
  • Environment
  • School for kids
  • Health care facilities
  • Recreation
  • Retail
  • Affordability
  • Quality of infrastructure to support walk or bicyle
  • Quality of transportation infrastructure to City or other important
  • Quality of neighborhood (income profile and education profile)
  • Connectivity to Airport, Highway, Railway station, etc.

I want to thank Walk Score team for validating the concept we have been promoting world wide for almost three years.  True quality of living that is vibrant, sustainable, and environment friendly, will require top down approach to future of real estate. Walk score is only a bottom up approach, more useful for real estate brokers then business, families, and environment.

We all know that if you live in down town and you work there, you can walk to lot of facilities, however there are lot of reason that families will not live there or should not live there;  including affordability, quality of neighborhood, safety, lack of family interactions, etc. You may have a perfect walk score but totally unsuitable environment to live. There are lot of neighborhood, where Walk Score will be 100, but weather you should live there is a decision you need to make based on factors outside the scope of walk score.  In short, Walk Score, good as a selling point for your real estate broker, not good for family. It is these factors, that makes Walk Score a bottom up effort as opposed to Top Down approach of  Twenty Minute Lifestyle micro city.

River Walk, a development planned in Fort Collins at I-25 and Harmony, is a good example of Twenty-Minute Lifestyle.  Development is planning a suitable mix of commercial, residential, health care, recreation, retail, community supported agriculture (CSA), and other amenities.  There be a hub for connecting to public transport infrastructure. When you are living in a Twenty Minute Lifestyle, Walk Score will always be 100 plus so many others things that can not be measured using Walk Score. There are several other such micro city around the world.

Future of real estate in the world will be a cluster of Twenty-Minute Lifestyle micro cities built around the efficient public infrastructure.  President Obama announced a high speed train infrastructure for US. This is what China is doing, This is what other developing countries are also planning. To read more about US infrastructure follow the link.

https://twentyminutelifestyle.wordpress.com/2009/04/18/obama-master-stroke-high-speed-train-infrastructure/

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about

Obama Master Stroke – High speed Train infrastructure April 18, 2009

Posted by Bipin Agarwal in Global Economy, Politics and economy, Quality of Living, Real Estate Development in Global Economy, Real Estate development in USA.
2 comments

Updated April 29, 2009

Financial Times today carried an article, Bill Ford chairman of Ford is advocating the gas price of $3.50 to change the auto buying pattern of consumer. Thank you chairman for endorsing my position in the article I published on April 18th below.

In fact I had suggested, tax of $2 per gallon is more appropriate.  This will change the buying pattern, tax dollars help create the high speed train infrastructure, lead people to innovate to create personal urban transportation (Smart car, Nano, improved bicycle,  other less or non polluting transportation mechanism.

Thank you Chairman Bill Ford. Bipin Agarwal

April 18, 2009

Few days back President Obama announced the massive investments for building high speed train infrastructure for USA. I call it a Master Stroke. I have been advocating such an initiative for almost a year. This initiative will go a long way in making US energy independent and also reduce carbon foot print. This effort is also consistent with my forecast of accelerating glocalization. Biggest challenge for the government is, not try to do everything right but is to make sure that there is clear agenda (no right wing or left wing) and there is transparency.

I am no Dr.  Nouriel Roubini (famous and accidentally right) who has been branded as Dr. Doom. I would rather be focused on providing solution for USA  and be identified as Dr. Boom (does not matter that I do not have a formal Dr. designation).

Industry to loose – You should expect Oil, aircraft, and Auto industry to call it a wasteful spending with no ROI. This is expected, most of the industry is having a difficult time adjusting to new reality of USA. Easy way to stop all the pain of oil industry is to impose a energy Tax (two dollar per gallon). People will pay the same price they were paying a year back. However this money can be used to build the mass transit infrastructure. This money will also reduce the Fed deficit, in addition Fed will be able to raise the interest rate to avoid inflation as well.

Industry to win – Industrial Company, financial company, construction, real estate development, environment, alternative energy, and average worker will win big. Most important, USA will be the big winner. There will be lot of real estate development opportunities. GE, Hitachi will benefit a lot. New real estate development around the concept of Twenty-Minute Lifestyle will gain significant mind share.

Industry in the middle – There will be some industries that will not see any significant upside or downside.  Expect them to declare that economy is on a stand still or government stimulus plan is not enough. It happened today with CAT declaring that China is doing a better job on infrastructure then USA. That is great. US government need to spend the money based on the priority for the country not based on the need of specific company.

Great opportunity for Colorado – Colorado is the state for next twenty to fifty years. Several mid tier cities in Colorado are ready to grow but do not have the connectivity to each other. Colorado has a unique opportunity to grab this opportunity and layout a blue print for high speed train connectivity from Colorado spring, Denver, Fort Collins, Bolder, Grand Junction, etc. I undestand that these are long term plans, but we have to start now. Phase one could be the Fast train from Fort Collins (I-25/ Harmony junction ) to Denver to Colorado Spring. Colorado. Political leadership, wake up and  make it happen. All the best, Incredible Colorado!

https://twentyminutelifestyle.wordpress.com/2009/03/17/colorado-destination-for-twenty-minute-lifestyletm/

Reason Glocalization will happen is not because government or large corporation want it, it is because people will demand it.

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about

Florida does not get it – Real estate development April 12, 2009

Posted by Bipin Agarwal in Global Economy, Politics and economy, Quality of Living, Recession.
3 comments

Coming soon to the Sunshine state: the sunshine city.

There was a big announcement from sunshine state about a major real estate development. This will be an eighteen thousand (18000) acres development for eight thousand homes along with retail, work space and other amenities. Trying to put lipstick on this pig by announcing a 75 MW solar energy plan by the  Florida Power and light, utility industry for 400 million dollars. You can read more by following the link below.


http://news.yahoo.com/s/time/20090409/us_time/08599189030800

Real estate development claims that everything will be in walking distance including work, retail, and play. This will be model environment friendly city. A former sports player is involved in this development.

Florida does not seem to get it. Let us see, 18000 acres is about 100 plus sq miles. You can walk to every facility under a hot sun riding a fast horse. How else will you walk 10 miles and feel good about it? Even if you are ready to believe that they will keep half open space, there is probably 4000 acres of golf and park. How much water they will use for rich 8000 families?  They call it socially responsible and sustainable? Let us go ahead and put state of the art electric train system funded by government to make their life comfortable at the expense of Tax dollars. I sure hope they are not using any of the  energy independence dollars to turn their dream into reality. It seems like a scam not a sustainable real estate project.

The history of Florida is littered with spectacular, landscape-changing proposals that never made it past the drawing board. Real estate industry is flooded with so called old business, politicians, and sports star (including gambling). We all know if the project is not feasible on the economic basis, political connections are always there to help.

What they do not understand that world is changing. People are looking for great living experience, affordable, and environment friendly.

Real estate industry has to wake up and change for the new reality of the world.

Bipin Agarwal

Twenty Minute Lifestyle to accelerate Glocalization March 25, 2009

Posted by Bipin Agarwal in Global Economy, IT Offshoring - Future Direction, IT offshoring and Real Estate development, Politics and economy, Quality of Living, Real Estate Development in Global Economy.
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Glocalization is a key to recovery of the world economy.  As I have written before it is not a question of, if it will happen, it is matter of how long will it take to happen. There are lot of global organizations which would like to maintain the status quo of globalization, because it serves their purpose. In addition to above, corruption in the developing, under developed, and poor countries make it hard for glocalization to take root. Most of the government in these countries are not as transparent and people focused as they need to be to support local economy. However it will change because people will demand it.

Lack of infrastructure  is a one of the most common reason that companies are are not able to start there operation. Waiting for government to build infrastructure in the entire country in not feasible and possible in the time frame. Twenty Minute Lifestyle based micro-city development offers a unique opportunity for these countries to develop infrastructure in a focused manner to support local economy. Financial institution supporting these countries can see the result of their funding if the funding is used to develop these micro-cities.

I am here at Skoll Forum for social entrepreneurship at Oxford.  I had an opportunity to interact with people from all over the world and discuss the concept. I got a strong endorsement of the concept and they would like to see their country to adopt this approach. People from Africa, Hungary, Asia, central America, even developed world would like to see the quality of life offered by Twenty Minute Lifestyle to be made available.

One good example of Glocalization is the local restaurant industry in Europe including Rome, Vienna. You will find clean, good local shops owned by local people and running them as a successful business. People often give example of how a Wallmart creates up to 150 jobs and increases tax revenue as a example of the benefit of globalization. What they do not want you to know that actual tax revenue is less or same before Wallmart showed up. While there could be 100 small business and making respectable income, now there are 150 minimum wage jobs, with all the profit shifted to Corporate coffers and china. WAllmart is doing a great job of re-distributing the wealth, take money from local business and people and send it to corporate executives. Wallmart does deliver lower cost goods successfully at the expense of local business. Wallmart could easily be branded as a biggest destroyer of local business. STARBUCK, Mchonnald, Subway, Pizzahut, Domino, are no different. Government should force the chnage of ownership structure. It is OK if back end is centralized, local shops should be owened by local people.

One of the biggest gift of globalization is that it has destroyed the local culture and shopping experience of countries, state and community. You can now travel anywhere in the world and eat same food and buy from the same department store with no passion by the employees who are working for minimum wages.

Reason Glocalization will happen is not because government or large corporation want it, it is because people will demand it.

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about

Incredible Colorado – Destination for Twenty Minute Lifestyle(TM) March 17, 2009

Posted by Bipin Agarwal in Global Economy, IT offshoring and Real Estate development, Politics and economy, Quality of Living, Real Estate Development in Global Economy, Real Estate Development in India, Recession.
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Incredible Colorado – We have a time of great crisis. Individual states are competing to sustain and improve their share of GDP and population. At a time like this, political and business leaders have a great opportunity to provide a compelling story for businesses and people across America to stay in or move to Colorado and make it a destination state. Twenty Minute Lifestyle (TM), is that compelling vision. This vision supports the creation of communities where people can work, live, play, and have access to all the amenities for quality life within the community and cuts down the wasted effort expended in commuting. Thank you President Obama to come to Colorado to sign the bill and recognize Colorado as a Energy economy state.

America is going through a transformation. Every transformation in the history has resulted into dis-location of economic activity. Colorado has gone through oil bust, mining bust, and telecommunication bust. These experiences along with focus on infrastructure and education have created an opportunity such that next twenty years belong to Colorado as far as economic development and quality of living is concerned.

Colorado is uniquely positioned to participate in Energy economy, tourism, and technology innovation. That happens to be the focus of Obama administration as well. Great landscape, educated workforce, beautiful mountains, and a diversified population. Colorado has little bit of everything from telecommunication, mining, tourism, defense and now a big force in alternative energy.

There have been several attempts to create a distinct local identity and community experience in Boulder, Greenwood Village, Highlands Ranch, Stapleton, and others. Most of these communities have been designed around a commute based lifestyle and lack the inclusiveness needed to create a fully vibrant, stable, and viable community. The lack of a strategic vision in planning shows up in very fundamental ways – , Boulder (no planned affordable housing for young families), Highlands Ranch (more of residential commute based community only), Greenwood Village (only for upper middle class and rich). They all lacked strategic vision, planning and local government support to build an ecosystem and community that can withstand economic ups and downs and combine a earnings from and global economy with a fully integrated local spending economy.

A Twenty Minute Lifestyle community should comprehend that a vibrant community is created when a diverse community is created that can address the lifestyle requirements of young and old, single and married, rich, middle-class, and younger earners just starting out, and ensures that people will have ample outlets for spending their income in the local community. In order to support the income needs of this diverse, vibrant community the local government should attract big and small businesses which focus on the new economic paradigms of biotechnology, alternate energy as well as the tried and true staple businesses. Local government should ensure that retail areas are integrated into the communities (and not set up as strip malls) with access to pedestrians and cyclists, an ambience that encourages people to get out of their cars and walk and mingle with their neighbors, and creates foot traffic for retailers. In the end Americans will not give up their car based lifestyle unless the alternate is a more attractive and rich lifestyle.

Riverwalk development project near Fort Collins, a brainchild of STONERCO, and Turnky developments is a perfect model project. This 900 acres development will provide an environment for companies to have a walk to work environment, affordable housing for families, access to education, retail, health care, and sustainable living with a focus on environment. Earlier attempts by Stapleton, and Highlands Ranch while successful as real estate development are not in-line with the energy economy, and future reality of sustainability requirements, affordability, quality of living. Riverwalk will be the benchmark; defining how future real estate development (Twenty minute lifestyle micro-cities) will happen in Colorado, and across the world. Riverwalk will be the first model micro-city in Colorado.

Wish you all the best, Riverwalk, and Incredible Colorado!

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about

Will Glocalization kill Globalization? March 10, 2009

Posted by Bipin Agarwal in Global Economy, IT Offshoring - Future Direction, IT offshoring and Real Estate development, Politics and economy, Quality of Living, Recession.
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April 30, 2009 update

Today Chrysler announced bankruptcy. I think this is a good news for America. Rather then going through the pain every day, this will help the employees and company. Shareholders and debt holders will not get much.

Is GM next? This could a warning to bond holders of GM. Unlike Chrysler, until now no body has been lined up for GM. Nissan had expressed interest.

You should expect that there will more local manufacturing of car, irrespective of the owner. This is a great day for Glocalization.

As I had predicted, Glocalization will accelerate US economic recovery.

Bipin Agarwal

March 10, 2009  update

Discussion about Glocalization is over. It is going to happen. In fact, USA will be the biggest beneficiary of this trend in the short and medium term.Long term picture is not great.

Recent article in Financial Times by Krishna Guha and others called this trend as de-globalization.Thank you for endorsing it, even though they are late in expressing opinion.

Talk is cheap, while everybody including G-20 will talk about the open trade, free trade, etc. The fact that Bank of America (so called global bank) has to withdraw the offer letter from the MBA student studying in US is the real begining of what is coming.

Currently, US will benefit if any manufacturing, or service activity shifts to US.  With government involved in financial services, health care and manufacturing, it is given that activity has to happen in US.  Risk is that US will go too far into it. Recent action by Bank of America to withdraw the job offer to MBA student studying in US, who are not citizen, is alarming. Are we going to destroy our education industry?

Long term implication of  glocalization for US are not great. At the end of the day our behavior will encourage the other countries to follow the same policy. Demographic of the  population is in the favor of China, India, and other countries.

Glocalization will accelerate the decoupling of the rest of the world economy from west.  It will be good for our economic and political leaders to discuss this topic in detail and put the right policies in place as opposed to have the policy of the day with an eye on the next election.

Feb 2009 update

Debate about the Glocalization is over. Now it is a matter of execution. How long will it take for all the countries to put the regulation to make it happen.

It is true that some industry will feel the impact more then the others. International shipping, heavy manufacturing, energy, financial services will be more local. Technology industry will continue to be more global and will not be hit as hard from glocalization.

New budget proposal from the US administration has set the foundation for glocalization war around the world.

  • Government will start taxing the earning of foreign operation of the companies. This will have far reaching effect on the corporate structure and investors sentiment.
  • We should expect that there will be lot of pressure for creating local jobs across the world, meaning more protection centric policies.
  • GM will separate the Europe operation and SABB subsidiary, eventually leading to local government bailing them out. They are going to do this just to benefit US? Not really. There will be increase in import duty for luxury items such as cars, etc.
  • All the emerging countries, African nation, Eastern Europe will start shutting out China for production outsourcing in the future.
  • Banking industry will be much government owned – net result will be local financial services industry. US will create lot of noise, but no body will care.
  • UBS is the wild card. If this financial institution is shut, there will be lot of money that will go back to poor countries. Majority of illegal money belongs to politician and business people of poor or emerging countries.
  • US dollar will de-value significantly over next decade, making much of the out-sourcing irrelevant. US and Europe will continue to prosper because the quality of life is much better there.

Jan 2009 – I had written this before Obama budget was proposed.

World Economic Forum at Davos is in full swing. Politician, executives, policy makers, bankers are busy at Davos worrying about the impact of financial meltdown and how it may change the behavior of the countries to introduce protection, regulation mostly under pressure from the population, politician worried about getting re-elected, and domestic industry.

If governments are being expected to inject substantial amount of resources (tax dollars) to resurrect their economy, their new shareholders (the taxpayers) will demand that the resources are used to create local jobs.

Glocalization will be driven by people

There has been demand in US to force the companies to use local labor and products on stimulus related projects, There are protest across UK by energy workers against TOTAL bringing the foreign labor to build and operate plan in UK, Indonesia is taking the position that if pharma companies want to sell their drugs, they have to make them locally.  China, Russia mostly do not have to worry about this, because not only nobody is allowed to migrate there, but also because of the nature of their government. In any case mostly immigration is more prominent by the people in search of better  life style. Some countries will do more explicitly, some will do it softly and still preach the others that they should not do it depending on the local economic, and political environment.

Glocalization will accelerate the maturity of decoupling

One big lesson for the countries that have benefited in the last few years from the export economy, or commodity boom have learned that while you can generate surplus by sending your stuff to west, the IOU you get in return may not worth it.  Countries need to learn that they need to balance the export and import. Economic growth is not sustainable unless there is domestic consumption.

We all know that basic necessity of life can not be centralized. Is it possible to put all the clothes in a warehouse in China and every body in the world will feel dressed? Can you put all the food in storage in US and there will be no hunger anywhere in the world? Can you put all the cellphone in Nokia headquarter and everybody will be connected? Life demands Glocalization. Does it mean the era of globalization is over and the new era of Glocalization is about to start in a big way. Question is not if it will happen, it is just how long will it take for it to happen.

I sure hope big shots spend considerable time in Davos to discuss this issue rather then just rub shoulders.

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

How will America create 3M job in four years? March 5, 2009

Posted by Bipin Agarwal in Global Economy, IT Offshoring - Future Direction, IT offshoring and Real Estate development, Politics and economy, Quality of Living, Recession.
8 comments

Why Did America lost jobs and how the new jobs can be created. Everybody is asking.

America has lost more then  three million jobs in last two years. Everybody is worried about how many more jobs will be lost? What kind of jobs will be created by the Obama administration? Future economy will be energy economy, digital economy, or agriculture economy? Will job be created at all or it will be just political positioning? What effect the glocalization (not globalization) will have on US? Given that about fifty million jobs have been lost in the world and growing young population, is there a possibility of social unrest that will change the landscape of how world will look like in next few years?

Let us first look at  why and what kinds of jobs are being lost in America.

  1. Manufacturing Job Losses
  2. Service Job Losses
  3. Real estate construction
  4. Productivity Improvement
  5. Currency Arbitrage

Manufacturing Job Losses – Seems obivious to everybody. Low tech manufacturing jobs related to clothing, items of daily usage, applicance, what we use in kitchen, all these jobs are gone. Most of them moved to countries that have abundant labor and reasonable or good infrastructure. About a decade ago we started using high tech manufacturing, some of the R&D, etc to emerrging countries because of availability of talent in thouse countries, low cost primarily due to currency arbitrage, our concern for environment.

Service Job Losses – We started loosing service jobs about a decade ago.  It started with talent hortage such as Y2K and then expanded to broder area of Information Technology services, Call Center outsourcing, Business Process outsourcing. Key drivers for these job loss werer the availability of talent at much lower cost (currency arbitrage),  focus by business on bottom line, competition from global companies.

Real Estate Construction – Cheap credit combined with greed by business, home owners, failed regulation caused the real estate boom of unprecendent magnitude in America. Joe the Plumber, could make as much money as a college  graduate. Now that the construction has stopped, real estate (both commercial and residential)  is available for less then the cost of construction. Huge number of jobs have been lost. It will take at least five years to re-start the new construction activity at significant level unless there is dramatic change in the population, living style or some external unknown factures.

Productivity Improvement – There has been a great amount of productivity improvement as a result of technology changes that have occurred in last decade. Automation of supply chain, cell phone, IT applications have automated lot of task that were manual.  It had a big effect on corporate productivity and quality of life improved. Down side is that lot of job became redundant. Financial services company, health care company, retailer eliminated lot of jobs as a result of productivity improvement.

Currency Arbitrage – We in America enjoy the benefit of dollar as a world currency. We are able to afford more toys, electronics, cloths because they are made in the countries where currency is not strong compared to dollars. Corporation had no choice but to move these jobs offshore (read job loss) to give us the luxury.

What kind of Job American Can create? I have identified several different areas that will create the proclaimed 3M jobs in four years.

  1. Changing Family Structure
  2. Alternative Energy – production and maintenance
  3. Housing renovation – Energy efficiency
  4. Manufacturing – Next generation automobile
  5. Small business focus
  6. Real Estate & Infrastructure Development
  7. Information Highway
  8. Rural development – Agriculture economy

Changing Family structure – West pride itself into being a productive society with equal rights. What about responsibility, and duties. Is the purpose of life is just to get a job? what about family. West lot of unemployment is because both parents want a job. We all want to have a house and not home. A  family centric society will make our life experience more full filling, more time for kids, friend, and community. We will need less job.

Alternative Energy (production and maintenance) – renewable energy production based on solar and wind will not only reduce our dependence on imported oil but also create local jobs for creation and maintenance of these facilities.  This coupled with investment in energy infrastructure (smart-grid) will create significant jobs.

Housing renovation – Energy efficiency – Improvement in technology for solar energy combined with government incentives is making it feasible to install solar panel in houses and commercial buildings.  Retrofitting of existing real estate with solar panel and on-going maintenance will create jobs.

Manufacturing – Next generation automobile – Our Automobile industry that has been captive to oil industry and union is going through a much needed transformation. Since the government is investing significant money (tax dollars), we can expect that next generation automobile and associated will be produced in the country. Foreign company also realize this that is why they are setting up plants in America. After the restructuring, it should lead to new job creation.

Small Business Focus – Our capital market structure encourages big business at any cost. recent merger of Pfizer, wall mart, three big banks, are just few example.  We need to create more focus on small and medium business with local ownership. One Wall mart mega store can pretty much give you most of daily needs, is run by twenty to fifty employees earning low wages and busy making money for jet flying executives.  If each of the store is split into different departments and was locally owned with wall mart was just being the back end, that will keep more of the money at local level and create more jobs. What Wallmart has done to local store, Starbuck has done to local coffee shops, Inbev has done to local brewing, Best Buy to local electronic shops. Let America create more small and medium business that creates more local jobs and prosperity.

Real Estate & Infrastructure Development – Obama administration is allocating lot of money for highways and public transportation. People have learned that living in house where you have to pay big maintenance cost irrespective to your income, is not a great idea. We should see lot of interest in community living based on condos and apartment. This will be the next real estate boom. This will create jobs in construction industry.

Information Highway -We all appreciate the impact of highways that connected the different part of the country. People could see each other and caused a boom in travel, tourism, and movement of good. Same is true for information highway. Impact of information highway on our economy is not well understood yet. Productivity improvement, ability of people to think different is huge. Look at what Akamai and iPhone did to entertainment and publishing.  Look at what Ebay did to auction and Amazon did to books. Potential to create lot of new jobs.

Rural development – Agriculture economy – This is one of the area that has received the least attention in the 20th century.  Over crowded cities as a result of pursuing a dream of quick richness and fast lifestyle.  If you have a tractor, solar energy, access to information highway, few acres of land, few cows, opportunity to interact with friends and community. This is how large part of unemployed should be made productive. In the dream of Mahatma Gandhi, this was called village. American need to make rural area attractive and respectful. Creating a rich life using a Rural economy will be key to creating employment.

Conclusion – We need change at individual, community, business, and government level. We can create more jobs and at the same time, change our thinking and family structure so we do not  need so many jobs.  One of the significant reason that both member of the family have to work is because without that you can not pay your house mortgage, car mortgage, insurance (house, car, health care). If we align our needs based on family centric society, we will be much more happy family, community, and country. Sustainable community, sustainable business will create a lasting happiness.

If you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about