LIVE: Biden holds press conference with leaders of South Korea and Japan...NBC News - YouTube - starts at 7:11

NATO Secretary General with the 🇺🇸 US Secretary of State Antony J. Blinken O8 FEB 2023

Investing Outlook for 2016

Money managers are setting their sights on the 2016 investment picture.
For us,it's the Euro-zone and Japan,which are benefitting from quantitative easing,said Kevin Nicholson,CFA,of Riverfront Investments in Richmond,Virginia.The US is going to have single-digit returns in 2016.When you look at Europe,they out-earned the US for the first time in a long time.We think that's going to continue.*
We like banks.We believe their low loan losses are beneficial and wages are starting to pick up.As consumer confidence builds,banks' confidence builds.*
We're staying away from energy at the moment,Mr.Nicholson noted.*
Philip White,President and CEO of Sotheby's International Realty Affiliates LLC,a Realogy Holdings subsidiary,said it's taken a long time to get to this recovery point.We've had a very good year,where we've outpaced the market-by two to one,actually.We have seen fairly stable pricing.
I think the luxury market is even stronger than before the crash.It's stable,less erratic.We are seeing a little drop-off in international buyers.We don't think this will be a long period of time,but they are a very important factor in the luxury market,and they will continue to be,according to Mr.White.*
Robert Plaza of Key Private Bank likes Walmart.Most of the bad news is already priced in,Mr.Plaza said.We think the risk-reward profile is promising.I see little earnings risk going into 2016.With only five buy recommendations on it,they're speed bump-high expectations at this point.*
Realogy Holdings Corp (RLGY),Walmart Stores Inc (WMT),iShares MSCI Japan ETF (EWJ),iShares Europe ETF (IEV)

Russia and the Impact on Markets

BP has done a good job of getting cash flow out of their asset base,said Matthew Beeseley of Henderson Global Investors.We hold some of it.The company is throwing off lots of cash,but there are risks in their partnership with Russian energy titan Rosneft.*
For now,the markets have thrown off Russia/Ukraine and Syria.We're certainly concerned about the low levels of volatility across the markets.It's not normal,and at some point,one would expect the markets to normalise.The optimism has really been found in the US and the emerging markets.The glass has been half empty in Europe and Japan.*
We're exposed to a company called Epam Systems Inc,a computer outsourcing firm.It has one third of its workers in Ukraine.We want a high level of conviction about our holdings.Across parts of Russia,it's hard to invest because of the lack of a high level of conviction.*
Current sanctions on Russia are on future debt and equity.Sanctions on present debt and equity would have a major impact.*
Investors are being paid to be complacent,and when the Fed raises rates in six months to a year,geopolitical risk will begin to be factored in,Mr.Beeseley cautioned.

East Asia:Facing the Missile Threat

The Atlantic Council recently brought together a number of thought leaders at its fourth annual Global Missile Defense Conference in Washington on 28 May.
We face a big threat and a small threat in East Asia,said David Gompert,RAND Corporation Adjunct Senior Fellow and former Principal Deputy Director of National Intelligence from 2009-10.North Korea is the small threat.I don't think North Korea will be suicidal with nuclear weapons,but would use them as their best option.Their reflex is to strike out when under severe pressure,so we cannot have confidence in adequate deterrence.
South Korea,Japan and the US are threatened by expansion of the short and medium range missile threat.This calls for a trilateral approach:an adequate,integrated trilateral missile defence.The US should hammer home there is little room for error in the adequacy of missile defence.
Both the US and South Korea agreed to the four d's:detect,disrupt,degrade and destroy.Japanese Prime Minister Abe appreciates the threat from North Korean missiles.That's why they're going from four to eight Aegis destroyers;the Global Hawk unmanned aerial vehicle;upgrading of F-15s;procuring point defence for the 20-30 km range.*
China is the big problem.They believe in a minimal defence.China gets upset about any upgrade of defence in its area.
We do need a bigger rethink of information to enable us to make decisions before a crisis occurs.To defend our forces in the Pacific against China's short and medium range missiles is mind-boggling.China has too many upgrades that they haven't yet pursued.I worry less about the ICBMs than the expansion of the short and medium range arsenals.We need greater trilateral contingency planning.We need to help overcome political hurdles.
Taiwan needs to acquire an anti-access area denial strategy to deal with mines and submarines.*
North Korea has lots of artillery and rockets.Ballistic missiles could reach well into South Korea,but the aspect of Weapons of Mass Destruction is the greater concern.*
China's conventional ballistic and cruise missiles are the core of its power projection,added Randall Schriver,former Deputy Secretary of State for East Asia.*
We really don't know how useful and effective the new rail gun and laser technologies will be,so we can't rely on them to counter the threat,Patrick Cronin of the Center for a New American Security pointed out.*
The Atlantic Council is a nonpartisan think tank that defines its mission as promoting constructive leadership and engagement in international affairs based on the central role of the Atlantic Community in meeting global challenges.It has ten regional centres.

Just In Time:Countering Beijing's Move

China's recent declaration of a new Air Defence Identification Zone through established international airspace over the East China Sea has been bitterly criticised in the Asia Pacific region and elsewhere;not to mention challenged by US Air Force B-52H bombers.It was critical for the Air Force to quickly assert its right to be in the airspace,analysts point out,lest China's claim to the airspace be legitimised through inaction.*
The bombers were deployed to Guam in August to further America's pivot to the Pacific strategy.What we do day to day with this presence mission is show our ability to fly our airplanes around the Pacific theatre and support whatever contingincies we might be asked to do,said Lieutenant Colonel Scott Mayhan,USAF,commander of the 20th Bomber Squadron based at Barksadale Air Force Base,Louisiana.The continuous bomber presence maintains long term strike capability in theatre,so our national decision makers have assets that they can use sould they ever need to,the commander added.*
In the event,China did not launch fighter aircraft to intercept the unarmed bombers when the Air Force declined to file a flight plan with China under the new zone requirements;nor has Beijing commented to Washington about the incident.This does not mean China will not eventually ramp up its response in defence of its claim.China plays a long haul game,analysts point out,and may just be waiting for a while before taking aggressive action to defend its perceived territory.It will also continue building up its naval and air power beyond what is needed to defend the mainland,a trend that has alarmed the international community for some years now.*
US Secretary of Defence Chuck Hagel said the new zone will not in any way change how the United States conducts miltary operations in the region.We see this development as a destabilising attempt to alter the status quo in the region.This unilateral action increases the risks of misunderstanding and miscalculations.Mr.Hagel's remarks were echoed by new US Ambassador to Japan Caroline Kennedy on Wednesday.*
Vice President Joe Biden will be visiting China next week,as well as US allies Japan and South Korea.He will empahsise that America is and always will be there for its allies in the region,while seeking a new and better way to get along with China,a senior administration official said.

News Notes:Tesla Motors;Caroline Kennedy

Tesla Motors has been upgraded to outperform by Webush Securities,with a price target of $240.00.Their cost structure in batteries beats the competition,said analyst Craig Irwin.I see them cutting their battery cost in half.If they can do it,they've got a winner,and that's why I'm raising it.*
Ths MSCI Asia Pacific index was up 0.80% in early Thursday trading,responding to President Barack Obama's signing of a bill that resolves the recent budget impasse and government shutdown for the next few months at least,averting the prospect of an unprecedented default.*
The trajectory for the market is onward and upward,said Andrew Economos of JP Morgan Asset Management.What we're doing is buying enough time for markets and economies to take hold.What the emerging markets are thinking is,we've got to reduce our dependence on America.
I think the dollar stays here;I don't think it gets stronger.If you have a weakening currency,you buy exporters;if you have a strong currency,you buy importers.It's a big,level one switch in assets,a re-risking.*
Caroline Kennedy has been unanimously confirmed by the US Senate to be Ambassador to Japan.It is the first time the late President John F. Kennedy's daughter,a sentimental favourite of many Americans,has held a government post.*
Tesla Motors(TSLA)

News Notes August 2013

The US is accelerating;Europe is improving,said Tom Lee,chief US equity strategist at JP Morgan.There's a case for higher earnings.If they start thinking rates are going up,hopefully the money goes into equities.Seek companies with topline growth,the cyclicals.I think Europe is tracking towards an acceleration.I actually think you would be better off buying US blue chips exposed to Europe,but also to US private expansion.*AIG is reinstating a 0.10 a share dividend and a 1.0 billion dollar buyback.Its Q2 earnings were 1.12 a share versus an 0.85 estimate,while revenue was 8.35 billion dollars versus an 8.62 billion estimate.*If you really want to be contarian,buy European stocks,said Nick Colas of Convergex Group.There are better opportunities around the world,than there are here in the US.*Japan is joining negotiations to form the Trans-Pacific Patnership.The TPP will be the world's largest free trade zone,also including the US,Canada,Mexico,Peru,Chile,Malaysia,Vietnam,Singapore,Brunei,Australia and New Zealand.Besides free trade,the TPP will produce a common framework for dealing with the services trade;foreign investment;government procurement;domestic regulations;and intellectual property.It is expected to have a huge impact on both global trade and investment patterns.

Citigroup:Growth and Reallocation

Citigroup is looking to double or triple the number of branches in China over the next few years.We think China will grow about 7%,transitioning from exports to a domestic-led economy,said Citigroup CEO Michael Corbat.That transition seems to be going well.
I'm excited to go to Japan.Their officials and executives are quite excited.It's gonna take some time to play out.They've got to try Abenomics to reflate the economy.
Japan's Prime Minister Shinzo Abe is jump-starting the economy through monetary easing and asset purchases.
We've identified 21 countries where we can get more out of the resources we have there.We'll move those resources to where we can get more out of them.It's a rebalancing,shifting them to places our customers and clients want to grow.The emerging markets, in particular the Asia Pacific,has been a big recipient of those shifted resources,Mr.Corbat noted.
Brazilian bank Itau has purchased Citigroup's Brazilian credit card unit for 1.37 billion dollars.
Citigroup(C)

AIG Makes Strong Effort;AIA Spinoff Prospers

We are now putting in a concerted effort to reestablish AIG throughout the world,said CEO Robert Benmosche.We have AIU and American Home in Japan,as well as Lexington on the commercial side.
The US government was an excellent partner.It was only difficult when we dealt with compensation.We always are looking at market data.You want to be competitive.We've had a very good relationship with the Treasury and the Federal Reserve.
We are attracting and keeping talent.In property casualty 2012,we didn't achieve our profit goals.We made great progress,but were down moderately from target.Sales of fixed annuities came down.They came in at the mid-eighties,rather than one.
I think I make a lot of money-about 10.5 million.It pays the bills.It's good.Pay didn't cause the crisis.When you lose 100 billion,you're entitled to take those losses and offset future taxes.That's the law-nothing special for AIG.
We are hiring and we are going to continue to hire.We want to be able to take a lap internally.We have centers set up around the country and world in low cost locations.We see our headcount going up,and our expenses going down.
All along ,we've been thinking about business continuity,hardening our technology and where we put our people.New York is a huge center of capabilities around data mining to help us underwrite our insurance better.
I'm feeling very good,although my diagnosis was pretty rough and the initial chemo didn't work.They found a targeted pill.I'm still negative.They're surprised and pleased,but I still run 3-4 days a week 3 miles at a time.
We'll go through 2014 and they'll take a look at it.I'll be 70,and if I still have the energy to stay on and they want me to,I'd be happy to do it,Mr.Benmosche indicated.
There was a better than expected 89% increase in 2012 net profit at AIA Group Ltd,which was spun off from AIG in October 2010,on market value gains and product improvements.New business was up 27% to a record 1.19 billion dollars.AIA is the third largest Asia-based insurer by market value.
American International Group(AIG),AIA Group Ltd(AAIGF:US)

Asset Allocation:A Standard Chartered View

We believe the U.S. economy is stronger than most people believe it to be,said Steve Brice,Chief Investment Strategist at Standard Chartered Bank.We do believe we're in a more constructive risk environment,but it's not gonna be a straight line,in our opinion.
We are overweight global equities.The dividend yield in the U.S.,Japan and Germany is significantly above government bond rates.It makes total sense from a global equities perspective.We are also overweight corporate debt.We are overweight the U.S.,China and Korea.We do see high dividend yields in Malaysia,Mr.Brice added.
The case for buying Europe is based on the sentiment being awful;cheap valuations;shares trading at a 49% discount,versus a 20% premium in the U.S.;and the dividend yield at a 320 point spread to the German bund,according to Katie Koch of Goldman Sachs Wealth Management.The smart thing is to initiate or add to positions;but keep some dry powder.Up to 25% could be in emerging markets;the other 75% will include some exposure to emerging markets,which means you will have over half of your return from emerging markets,Ms.Koch explained.

Co-CEO:Logistics Business Strong

We've built a multi-billion dollar business in Japan,said Hamid Moghadam,Co-CEO and Chairman of Colorado-based industrial real estate firm Prologis.There is a need for modern large logistics buildings.As the market leader,we continue to be very optimistic about our prospects in Japan.We're promoting our high seismic standards of newer facilities that we build securely.There is increased demand from reconstruction.Even incomplete facilities are 70% leased.China is in the very early innings of building infrastrcture for logistics.I can see our business prospering in China for the next 20-30 years.The market is pretty remarkable.Recovery is probably most advanced in the U.S.There's 10% more people today than at the beginning of the financial crisis.We're growing rents in certain European markets.Latin America is simply on fire,and we cannot keep up with the demands of our customers,Mr.Moghadam observed.Prologis(PLD)

Power Woes Continue for Japan

Still ailing from the 2011 earthquake and tsunami,Japan may face rolling blackouts this summer,according to Penn Bowers,Asia-Pac Power Company Analyst at Credit Agricole.The severity of them is the big question.If they are unable to distinguish among big electricity users such as hospitals,there could be a big backlash. Power companies have been eating the costs of the disaster,cutting dividends in the process.Dominant utility TEPCO,the Tokyo Electric Power Company,has been taken over by the Japanese government,which is giving it a one trillion yen bailout to deal with its crippled nuclear plants. If Japan's 50 nuclear power plants don't restart,there will be a lot of pressure on the government to reduce the cost burden of alternative fuels such as gas and oil,Mr.Bowers predicted.TEPCO is actively seeking a permanent solution to its generation shortfall,engaging in talks for a 4.4 billion dollar stake in a Chevron Australia liquified natural gas project called Wheatstone.TEPCO has asked multinational conglomerate Mitsubishi Corporation and shipping company Nippon Yusen KK to participate in the deal,fearful that China will come in with a higher bid for the Wheatstone LNG field stake. Chevron(CVX),iShares MSCI Japan Index Fund(EWJ)

Scoping The Rare Earth Issue

Chinese dominance of rare earth metal production,and its alleged hoarding of the materials,has drawn the attention of governments and businesses worldwide.There are 17 of the metallic chemicals,which are essential to the manufacture of sophisticated national security and consumer products,such as precision weapons and important information and automotive technology.
Matt Gerthner,senior China analyst at Stratfor,says what is really scaring people is these shortages in the short term.It takes several years to ramp up production of the strategic substances.In the long term,these concerns may start to peter out,since rare earth is found in other places besides China.
Japan has been concerned about access to the metals because it has a territorial dispute with China,but China's monopoly is not forever,Mr.Gerthner believes.
For instance,Japan has recently entered into an agreement with Vietnam to discover and produce the elements.
China has had problems reigning in illegal rare earth mining,which often leaves an enormous black footprint of environmental degradation.In North America,a Vancouver,B.C. firm,Rare Element Resources,Ltd.,is seeking to develop a rare earth mine in Wyoming.
Rare Element Resources,Ltd.(REE)

China's Strategy Turns Slightly

China has begun buying quantities of Japanese government bonds recently.According to Yifan Hu,Chief Global Economist at Citic Securities,China's overall strategy is:
1.Buy more commodities.
2.Make direct investments in natural resources.
3.Buy Treasuries and European bonds,as well as some Japanese bonds-but that's not a trend.The U.S. dollar will still be relatively strong,at least in the medium term.U.S. growth will still be better than Japan's,with their aging population and other problems,so Treasuries will still be bought.As well,China cannot afford to harm the U.S. economy,which would happen should she suddenly stop buying Treasuries.
Ms.Hu doesn't expect high Chinese export numbers,with the U.S. and European economies being slow.The tightening talk by Beijing has been toned down.The Chinese currency,the Yuan,has started to appreciate again.This is bound to instigate more calls by U.S. politicians for retaliatory action to be taken against China,whose trade advantage is linked to the rising Yuan.

Shanghai Expo Drawing Near

The Shanghai World Expo,a major business event,will soon begin.The expo runs from May 1,2010 till October 31.It's theme is "better city,better life."China carried out a 45 billion dollar makeover to enhance Shanghai's reputation as a trade and transport hub.Hundreds of factories and thousands of families were moved to make way for the expo,including a shipyard with 10,000 workers.
The 162 countries participating spent varying amounts on their pavilions.Saudi Arabia spent 162 million dollars,followed by Japan at 140 million,France,at about 70 million,and the U.S. at 60 million-privately raised.Some 70 million visitors are expected.One Chinese man,Xu Wei,said it was not a trade fair,but an excellent chance to impress the Chinese people.They have to come here.It's a must.

China's Growth

The latest figures show that China's Gross Domestic Product rose 10.7%.Apartment sales in Beijing support this data,with people signing up to reserve unbuilt units.China's 580 billion dollar stimulus program is judged to have been the most effective in the world,with the spending concentrated on advanced infrastructure.China is on track to overtake Japan as the world's second-largest economy,behind the United States.Nonetheless,Chinese earnings are only a fraction of the West's.More than 150 million Chinese earn a dollar a day.
The International Monetary Fund has just raised its global growth forecast for 2010 by 0.8% to 3.9%.The U.S. is projected to grow 2.7%.The IMF says that the global financial system remains fragile.Fiscal policies need to remain supportive.

Canadian GDP Declines

Canada's Gross Domestic Product for Q4 2008 registered a drop of 3.4%.It was the greatest decline since 1991.The estimate for Q4 GDP had been a 3-4% drop.Canada fared better than the U.S. and Japan,where the GDP fell 6.2 and 12.7%,respectively.In response to economic rumblings,the Bank of Canada has cut its key interest rate to 0.5%.The U.S. Federal Reserve had earlier cut its main rate to a very low 0-0.25%.Bell Canada is finding opportunity in the financial crisis.It has acquired the Canadian operations of U.S.-based Circuit City,an electronics retailer which filed for bankruptcy in November 2008.The deal is expected to close in Q3 2009,but the terms were not disclosed.

China's Exports Drop

China's exports dropped 2.8% in December,following a 2.2% slip in November.The December result was the worst in 10 years.Foreign purchases have fallen sharply in the financial crisis,generating big layoffs.Chinese exports had grown 26.7% in January of 2008,but the situation is so bad now,it threatens social stability.Meanwhile,in Japan,Sony may report an operating loss of as much as 1.1 billion dollars in March,as the crisis crimps sales,business daily The Nikkei said.Sony says it will soon announce a restructuring plan,including layoffs,to deal with the downturn.

Oriental Travel Route Opened

Free passage across the Taiwan Strait,which divides Taiwan from mainland China,is once again possible for both aircraft and ships.The trip is about 100 miles,or 160.93 kilometers.Negotiators reached the agreement by limiting talks to economic matters.Political disagreement continues to separate the neighbors.China regards Taiwan as a breakaway province,while Taiwan sees itself as an independent nation.The direct route will abolish lengthy detours to Hong Kong and Okinawa,Japan that were necessitated by the closure of the Taiwan Strait,reducing the cost of commerce in both time and money.