6/11 Issue
Super Mario again rode to the rescue of the EU. As the economy sputters and several countries teeter on the brink of deflation, the EU Central Bank took innovative measures to stimulate the economy. There appeared to be wide-spread support for the new measures. The Wall Street Journal writes Mario Draghi was right to do more, but it was wrong of the political leaders to force his hand through their own inaction. There are limits to what the central bank can achieve through monetary policy and Europe still wants for “pro-growth economic reform.”
There is less consensus, but lots of commotion, about whether Seattle is doing the right thing by gradually raising its minimum wage to $15 an hour, the highest in the nation. The Washington Post reports that most economists, unlike most commentators, are honest about the likely results: nobody really knows. Moreover, what ultimately happens in Seattle’s relatively strong economy may not be indicative of what would result in other situations.
Speaking of commotion, Institutional Investor reports that Chinese authorities are trying to ensure there is absolutely no commotion over the 25 year anniversary of Beijing’s Tiananmen Square incident. Time is in their favor. In China, the younger generation has little awareness of the iconic events that once unfolded there.
Since Tiananmen, China has enjoyed remarkable growth and stability. The transformation that has taken place is underscored by an update from the World Advertising Research Center showing China will lead the way in digital advertising in Asia. Digital advertising already accounts for 40% of ad spend and is expected to reach 55% in China by 2018. By that date, digital advertising is also expected to approach half of ad spend in South Korea (46%) and Australia (43%), with some of the growth at the expense of print and mass media.
The Financial Times is calling on Fifa’s corporate sponsors to force the governing body to “mend its ways.” With the World Cup set to begin, Fifa has been attracting unwanted attention for allegations of bribery in the selection of Qatar for the 2022 games. But this is hardly Fifa’s first incident of failed governance and corruption, the newspaper “demands a complete overhaul,” and rather unrealistically hopes the U.S. Congress will take the lead.
The normally staid Financial Times was also calling into question the data behind Thomas Piketty’s recent blockbuster, Capital in the Twenty-First Century. Writing in the Washington Post, Robert Samuelson sides with both a bit, asserting that “inequality isn’t as great now as in the ’20s,” but that doesn’t mean the debate over current inequality is unimportant.
German car makers have run away with the lead in the premium car market. The Economist points out that this niche provides an outsized share of the automakers profits, but Japan’s premium motor brands “are missing out on pots of potential profit.”
Japan is, however, once again capturing a tourism pot of gold. The Financial Times reports that for the first time in 44 years, “Japan’s aggregate tourism-related revenues exceeded expenditures.” Benefiting from an influx of Asian tourists, Japan took in Y17.7 billion ($172 million) more than it spent on tourism in April.
****
To see the overseas media’s takes on these and other developments, you can browse Global News highlights below or at http://www.irken.jp/gn/. Links to the original sources are provided above, but please note these are frequently updated. Links that were valid at publication may later be broken.
6/4 Issue
Global investors remain firmly focused on Asia, despite harboring some concerns. Euromoney reports that market volume in Asia for dollar-denominated debt capital hit a new high in April.
The coup in Thailand, however, may have raised additional concerns. The New York Times urges the military regime to set a schedule for elections if it really means to deliver “genuine democracy.”
Tension also rose to the fore in Singapore where the annual Shangri-La Dialogue on Asian security took place. The Wall Street Journal notes that Chinese officials accused the U.S. and Japan of doing exactly what most attendees thought China was doing: “using coercion and acting hegemonically.”
And The Economist recalls that it’s been 25 years since China overcame a potentially existential crisis in the form of Tiananmen and went on to create the most stable period in modern China. But prolonged stability should not belie the potential for political risk.
Elsewhere, USA Today notes that risk taking entrepreneurs may benefit the economy tremendously, but they aren’t typically job creators. The disruptive services they offer, benefit consumers, but sometimes eliminate the need for entire swaths of middle class jobs.
Speaking of risk takers, Britain’s GDP is set to grow by £10 billion as some law-breaking activities, e.g. sales of illegal drugs and prostitution, will now be included in calculations made by the Office for National Statistics. The Financial Times observes that Britain is just one of many European countries adjusting their GDP calculation methods to include figures for illegal, but mutually agreed transactions.
Thomas Piketty is under more than a bit of fire for some of the statistics underlying his hit book, Capital in the Twenty-First Century. The premise, that inequality has reached new heights, resonates with many and the Washington Post notes it could make the case better without “misleading and overwrought rhetoric.”
****
To see the overseas media’s takes on these and other developments, you can browse Global News highlights below or at http://www.irken.jp/gn/. Links to the original sources are provided above, but please note these are frequently updated. Links that were valid at publication may later be broken.
5/28 Issue
The EU elections dominated much of the news cycle. Leading up to the event, the New York Times worried that voter apathy would allow “the election of fringe parties whose ultimate goal is to dismantle the very union they’re supposed to be serving.”
Populist candidates did ultimately do very well, especially in France. The Wall Street Journal lamented that France “produced a spectacle of nihilism that damages the West and delights Vladimir Putin.”
The Washington Post said the vote should serve as a wakeup call to a bureaucracy bogged down in crisis management. They need to rediscover the EU’s higher purpose to ensure “the very real benefits” of the union continue.
The Financial Times perceives that Asia has also been transformed by elections. “Each of Asia’s four most powerful nations is now led by a combative nationalist.” And the move from multilateralism to power struggles may likely have global implications as well.
Despite all the talk of oligopolistic pricing, Euromoney finds that customers are benefiting as increased competition and other changes in trading fixed income, currencies and commodities tighten margins and squeeze banks, who are not surprisingly less enthusiastic about this transformation.
According to Institutional Investor, upstart businesses that succeed in disrupting traditional businesses target “multiple industries at once.” Companies like Tesla and Uber leave traditional companies threatened as they “seek to fill customers’ every need.” They skirt barriers and “work themselves into new markets however possible.”
China is also trying to skirt barriers. The New York Times asserts China bears responsibility for “the most aggressive effort by any country to steal secrets from some of the most prominent and successful American companies.” And the recent U.S. indictment of five PLA members appears to have done little to thwart China’s economic espionage.
The more things change… well sometimes they don’t. The Economist finds that despite the turbulence of the Great Recession, the Great Moderation has resumed as volatility returns to extremely low levels. This raises a troubling question. Will this prompt “a return of the sort of risk-taking that produced the crisis” in the first place?
****
To see the overseas media’s takes on these and other developments, you can browse Global News highlights below or at http://www.irken.jp/gn/. Links to the original sources are provided above, but please note these are frequently updated. Links that were valid at publication may later be broken.
5/21 Issue
Institutional Investor released its annual research rankings for Japan, with Mizuho and Nomura sharing top honors in 2014 for best sell-side analysts. Nomura held the coveted position alone in 2013, and Mizuho rose dramatically from third place.
Investment Week posits Japan’s economy has more momentum than suggested by recent concerns over the consumption tax hike. Extremely low unemployment and the approaching Olympics should foster inflation through upward wage pressure. In fact, Japan’s GDP may be one of very few, indeed just three countries worldwide, to exceed OECD forecasts during 2014.
The world’s largest democracy appears set to gain new momentum with the election of Narendra Modi. Institutional Investor reported that in anticipation of his victory, the stock market rallied even before the votes were counted. Following his election, the Wall Street Journal held rapturously high expectations that Modi, unburdened by a coalition, would be able to improve economic opportunities and governance while reining in welfare, patronage, corruption and protectionism.
In contrast, momentum collapsed in efforts to create the world’s largest advertising firm. The Economist believes the failure of the planned Publicis /Omnicom merger was providential. It had been touted as a merger of equals which historically are the “most notorious failures.”
European judges threw a wrench at search engines that could transform the results of our internet interactions. The ruling which requires search engines not to link to certain sensitive information is being hailed by some as a victory for personal privacy. The Los Angeles Times, however, said the court was “creating an entitlement to censor history, or at least to make parts of the public record harder to find.”
The big foreign exchange houses may be wishing some of their records were harder to find. Following the LIBOR scandal, investigators have moved onto possible manipulation of the foreign exchange market. According to Euromoney, managers are living “in fear of what analysis of hundreds of millions of calls and emails will unearth.”
****
To see the overseas media’s takes on these and other developments, you can browse Global News highlights below and or at http://www.irken.jp/gn/. Links to original sources are provided above, but please note these are frequently updated. Links that were valid at publication may later be broken.
5/14 Issue
There is near certainty to “the collapse of the giant West Antarctica ice sheet,” but the inevitable won’t happen overnight. The Washington Post observes the massive impact on global sea levels won’t be fully felt for the 200 years or more the collapse takes to unfold.
A boom year in M&A also looks fairly certain. Institutional Investor reports that “global deals this year have already hit $1 trillion as of the end of March, one of the highest quarterly levels since 1998 and almost double the level announced for the same period a year ago.”
Less certain is the “business sense” to Pfizer’s proposed takeover. The Financial Times urges AstraZeneca’s directors to proceed with caution as Pfizer has destroyed tremendous value through previous mergers.
The world would, however, benefit if the pharmaceutical industry could unleash some new antibiotics. The last new class was introduced nearly three decades ago. The New York Times observes that both standard and last-resort antibiotics are increasingly failing due to growing resistance.
Thailand offers another immediate crisis. The country has been all but rent in half and, according to the Economist, now stands at an “abyss.” It’s been a stunning reversal of fortunes for a country that was once held up as an exemplar of success.
The U.S. may be more stable, but its K-12 education program is under-performing counterparts worldwide. Some of the problem may be teacher pay, but the Washington Post asserts a solution must involve the “selectivity of education programs, the rigor of their preparation and the continuing education and feedback they receive.”
And the Wall Street Journal reports that Tokyo topped New York, London, Shanghai and other major cities, becoming the world’s largest commercial real estate market during the first quarter of 2014. Transactions surpassed $10 billion, increasing more than 70%.
****
To see the overseas media’s takes on these and other developments, you can browse Global News highlights below and also at http://www.irken.jp/gn/. Links to the original sources are provided above, but please note these are frequently updated. Links that were valid at publication may later be broken.
5/07 Issue
The Wall Street Journal reports good news from Latin America where Juan Carlos Varela, the anti-corruption underdog, clinched Panama’s presidential election. Strike one for good government. The New York Times, however, strikes one against meddling French officials intent on scuttling G.E.’s acquisition of Alstom’s energy business.
That deal is just one example of booming M&A. According to the Economist, that boom can either be a good sign (businesses are making bold moves in a strengthening economy) or a bad sign (businesses can’t grow organically so they’re merging to create growth, minimizes taxes or cut other costs). Take your pick.
Pfizer is looking to reduce taxes through its proposed acquisition of AstraZeneca, which USA Today asserts provides a warning: “You know something is wrong when major U.S. companies are fleeing to Europe to pay less in taxes.”
The Financial Times notes that globalization is reaching a new stage. No longer is it confined to manufacturing and production. Knowledge intensive flows have now expanded to $12.6 trillion, accounting for half of all cross border flows.
In the U.S., states jockey to attract businesses. Though California recently lost the headquarters for Toyota and Occidental Petroleum to Texas, the Los Angeles Times observes that Golden State continues to create more jobs than almost any other state.
REITs are often thought of as real estate investments providing flexibility and diversification benefits. According to Real Estate Investment Today, they do much more. A recent study has shown that REITs help stabilize the commercial realty market by providing transparency and liquidity.
****
To see the media’s takes on these and other developments from around the globe, you can browse Global News highlights below and also at http://www.irken.jp/gn/. Links to the original sources are provided above, but please note these are frequently updated. Links that were valid at publication may later be broken.
4/30 Issue
Donald Sterling, owner of the LA Clippers, managed to offend just about everybody with his abhorrent racist remarks. The Wall Street Journal cheered the response, especially that of NBA Commissioner Adam Silver who meted out a severe sentence, banning Sterling for life from the NBA.
A developing diabetes epidemic in India and China requires a new response, according to the New York Times. Solutions that work in affluent communities with a strong medical infrastructure just don’t suit the realities of many people at risk of falling prey to this disease. Unless there are new approaches, the number of diabetics is expected to skyrocket to 100 million in India and more than 140 million in China within 2 decades.
Across the globe, firm responses are essential to accommodate an aging population and escape secular stagnation. The Economist notes that within two decades the population aged 65 or older will double. Skilled workers have already begun extending their professional lives, but less skilled workers need to be convinced to continue working.
A new response may also be in order given that so many large banks are offloading their commodities businesses to strengthen their balance sheets. According to Institutional Investor, the smaller trading companies snapping up many of these commodities operations will have potential conflicts of interest and may lack the deep pockets to provide market liquidity.
The Washington Post asserts NASA should take a more practical approach to achieve its mission. Embracing unmanned exploration could accomplish more with less.
The Wall Street Journal reports that in the U.S. a newly introduced economic measure called gross output could provide more insight than the widely known GDP. By including intermediary value, gross output should provide a more comprehensive and accurate measure of the economy.
And, lastly, NBC News points out that Chinese tourist have become the new super shoppers, reporting that they account for 60% of sales on Rodeo Drive.
****
Links are provided to the original source so you can get further detail, but please note these are frequently updated and links that were valid at publication may later be broken. To see the media’s takes on these and other developments from around the globe, you can browse Global News highlights below and also at http://www.irken.jp/gn/.
4/23 Issue
With President Obama’s visit approaching, Asia was much in the news. The New York Times suggested the President should use the chance to clarify that America’s strategic tilt will not make Asia its only priority, but rather a top priority. Other parts of the world will continue to demand attention.
The Financial Times observes that the security alliance between Japan and the U.S. has provided the “bedrock of Asian security.” With the alliance showing signs of strain, his trip to Japan “could help determine” its future.
The Wall Street Journal notes that Japan has surpassed the rest of the world in aging, with over a quarter of its population now over 65. At 21%, however, Germany and Italy, are not so far behind.
Countries throughout ASEAN look much more resilient today, having taken the lessons of the late 1990s crisis to heart. Investor confidence in the region shows and Institutional Investor observes that over 42% of Japan’s foreign direct investment (FDI) is now in Southeast Asia, surpassing even China’s footprint in the region.
While the financial system throughout the ASEAN region appears much more stable, Euromoney notes that continuing massive investment in infrastructure will be needed. Based on estimates from the Asian Development Bank, necessary investment could total $60 billion annually through 2020.
Not only in Asia, but around the world, coal will remain a fuel of choice. Despite its drawbacks, the Economist asserts that dirty coal will regrettably “be the fuel of the future.”
And despite tilt to Asia, Russia and Ukraine did not escape notice. The Washington Post points out that the Russians instigating invasion and insurrection are “entirely flexible” in the short-term though their eye is firmly fixed on annexing eastern and southern Ukraine in the long term.
****
Links are provided to the original source so you can get further detail, but please note these are frequently updated and links that were valid at publication may later be broken. To see the media’s takes on these and other developments from around the globe, you can browse Global News highlights below and also at http://www.irken.jp/gn/.
4/16 Issue
The UK’s Gordon Brown is not just blowing his own horn but America’s as well. Writing in the Wall Street Journal, the Chancellor of the Exchequer is confident that both the UK and U.S. economies are recovering and that fears of secular stagnation are exaggerated.
As the economies of India and China continue to grow, albeit more slowly, both countries seek new energy sources. Both are investing in research into the use of thorium reactors, with plans for at least one working prototype next year. Thorium is tricky, the U.S. axed its research program in the 1970s, but the Economist believes it promises major benefits in terms of abundance and safety.
To end its destabilizing activities, the Financial Times contends Europe must be willing to hit the Russian economy where it hurts. This may also inflict some pain in Europe, but strong economic consequences are the most effective tool to persuade Putin.
The Los Angeles Times warns that the pervasive Heartbleed bug should remind us that it’s not just about the geeks writing code. Websites and service providers need to be vigilant that patches and upgrades are installed on a timely basis so their systems remain secure for users.
The European Central Bank is making progress in eliminating “fudges” to strengthen the regulatory framework, according to Euromoney. On the other hand, the Chicago Tribune believes John Kerry should quit trying to make progress in peace talks between Israel and Palestine. The talks are collapsing because neither party is motivated to overcome their divisions.
And the New York Times urges the new Mayor Bill de Blasio to back off on his plans to rid the city of horse-drawn carriages. Seeing that the horses are well treated is admirable. Eliminating this distinctive feature from the city is not.
As always, links are provided to the original source so you can get further detail, but please note these are frequently updated and links that were valid at publication may later be broken. To see the media’s takes on these and other developments from around the globe, you can browse Global News highlights below and also at http://www.irken.jp/gn/.
4/9 Issue
From this week’s stories one might infer prevailing thought is frequently overblown.
The Financial Times suggests optimism for the eurozone may be overblown. Draghi has done a commendable job, but underlying weaknesses remain to be addressed by political and other leaders. Victory is neither achieved nor assured.
Institutional Investor suggests fears over the impact of the rising sales tax are overblown. If the slowdown proves temporary and Japan’s economy has the momentum to overcome the tax increase, overseas investors may regret the withdrawals they have been making since the start of the year.
Throughout history, doom and gloom population scenarios resurface periodically, but the New York Times believes alarm over falling fertility is overblown. Instead “slower population growth creates enormous possibilities for human flourishing.”
An overblown hand may have wasted Putin’s long-term advantage. With his bellicose short-term successes, Putin ultimately provided a wake up to the rest of Europe, which The Economist believes will now work to winnow its energy dependence on Russia.
Talk of empowerment and other progress tends to be overblown. It still takes until April 8 for the average woman to earn what the average would have earned in 2013. The Washington Post calls on companies to move beyond lip service toward real progress.
If, however, you hear about throngs of Chinese tourists flooding Korea, the Financial Times suggests this might not be overblown. They’re flocking to South Korea for shopping and even driving schools, where they can get a license in a sixth of the time it would take in China.
Perhaps with a vague sense of self-awareness, CNN points to the overblown speculation regarding the fate of Malaysia Airlines Flight 370. Three weeks later, there are still no real clues.
As always, links are provided to the original source so you can get further detail, but please note these are frequently updated and links that were valid at publication may later be broken. For your chance to see the media’s takes on these and other developments from around the globe, you can browse Global News highlights below and also at http://www.irken.jp/gn/.
