Reuters (February 15)
China has endorsed Kim Jong-il’s succession plans. China’s public security minister, Meng Jianzhu, publicly congratulated Kim’s youngest son Jong-un on his recent promotion to vice-chairman of the Central Military Commission. China’s endorsement of the North Korean dynasty appears to spring from “worries that any regime change in the North could cause a flood of refugees to cross its border, precipitate reunification of the peninsula on the South’s terms and bring American influence right up to its border.”
Tags: China, Jong-un, Kim Jong Il, North Korea, Succession
Bloomberg (February 14)
The proposed merger of Deutsche Börse and NYSE Euronext is “more desperation than love.” When NYSE merged with Euronext in June 2007, the two companies executed 64% of all trades in NYSE-listed stocks and ETFs. By January 2011, the figure had dropped to 33.9%. There is little to guarantee this newest merger proposal will be any more successful in reviving the fortunes of either exchange.
Tags: Desperation, Deutsche Börse, Exchanges, NYSE Euronext
New York Times (February 12)
“The Egyptian protesters inspire us all.” Largely peaceful protests achieved “a stunning accomplishment” in the resignation of Egyptian President Hosni Mubarak. Even as the world cheers this peaceful revolution, worries arise about the next phase. “The cheering won’t last long if the military council does not quickly follow through on its pledges.” The U.S. and other countries need to provide their full support and stand “ready to press for full democratic change.”
Economist (February 10)
3D printing “is likely to disrupt every field it touches.” Also known as additive printing this technology could upend traditional manufacturing. 3D printing “makes it as cheap to create single items as it is to produce thousands and thus undermines economies of scale.” For runs of up to 1,000 items, 3D printing is “already competitive with plastic injection-moulding.” Just as personal computers and conventional printers made it possible for anybody to become a publisher, 3D printing promises to empower individuals with manufacturing capabilities. This revolution may unfold rapidly. Basic 3D printers now cost less than laser printers did in 1985.
Wall Street Journal (February 9)
Cheating is not “a new phenomenon in Japan’s national sport,” but the current scandal rocking the sumo world is different because “hard evidence in this case is forcing Japanese to confront the reality and seriousness of the problem.” The reality is the incentive structure needs to be changed. One possible solution is pay sumo wrestlers with prize purses, “like boxers, far more if they win than lose, rather the current system of giving them monthly salaries plus relatively small incentive payments.”
Washington Post (February 8)
The results of the National Highway Safety Traffic Administration into sudden acceleration found no link to a supposed software flaw in the Toyota Prius. “In short, human error, mechanical errors that Toyota repaired and a dose of politically induced hysteria were to blame.” The hearings by Congress lacked restraint and placed Toyota officials “in an impossible situation, since blaming Toyota customers – though this was true in many cases – would have been a public relations disaster.”
Time (February 7)
Inspiration comes from the unexpected, as President Obama’s growing interest in Ronald Reagan illustrates. “At a glance, it’s hard to imagine a President who had less in common with Reagan than the Ivy League lawyer from Hawaii who seeks larger federal investments, a bigger social safety net and new regulations for Wall Street and Big Oil.” Yet Obama is looking to Reagan as a role model because of the persona he was able to create and the transformational change he was able to realize.
New York Times (February 5)
Bank of America lost $2.2 billion, but awarded CEO Brian Moynihan $9 million in restricted stock. At Goldman Sachs, Lloyd Blankfein scored even more. In fact, pay and benefits set a new record of $135.5 billion at the top 25 publicly traded Wall Street banks and security firms. The New York Times is not impressed. “More needs to be done to tame bankers’ appetite for high-risk financial strategies that shower them with profit in good times and leave the taxpayers holding the bag when their bets go bad.”
Tags: Bank of America, Goldman Sachs, Pay, Reward, Risk
Bloomberg (February 4)
Japan is no longer the belle of the global investment ball, but not everyone’s counting her out. At a price-to-book value of 1.1, the Topix is trading at roughly half of 2006 levels. The Topix looks even cheaper compared to the S&P 500’s price-to-book ratio of 2.3. Balance sheets are generally strong and many are poised to prosper on growing demand from China. Goldman Sachs expects “corporate profits in Japan this year will approach 2007 highs.” Deutsche Bank is forecasting returns exceeding 20% for Japanese stocks in the first half of 2011 alone.
Japan is no longer the belle of the global investment ball, but not everyone’s counting her out. At a price-to-book value of 1.1, the Topix is trading at roughly half of 2006 levels. The Topix looks even cheaper compared to the S&P 500’s price-to-book ratio of 2.3. Balance sheets are generally strong and many are poised to prosper on growing demand from China. Goldman Sachs expects “corporate profits in Japan this year will approach 2007 highs.” Deutsche Bank is forecasting returns exceeding 20% for Japanese stocks in the first half of 2011 alone.
Tags: Deutsche Bank, Equity, Goldman Sachs, Investment, Japan
Economist (February 3)
Prime Minister Naoto Kan “seemed likely to follow his predecessors into the dustbin of history.” Instead, “he has put together a package of proposed reforms more radical than anything attempted during two decades of economic malaise.” If he succeeds with his bold, “almost recklessly ambitious” agenda, he may go down in the history books for bringing real change to Japan.
