Crazy Rich Asians

By |2018-09-04T08:21:12+00:00September 4th, 2018|Global Market Update|

Is Asia the future for wealth management? Photo: Erwin Soo. Source: Wikimedia One of the most popular movies this summer has been “Crazy Rich Asians,” a charming romantic comedy set in the city-state of Singapore with echoes of “Guess Who’s Coming to Dinner.” Asia has certainly seen dramatic growth in its wealth management business, with over China having over 1.2 million individuals who have more than $1 million in investments. For comparison, the US has about 5.3 million individuals who are millionaires. Singapore, the [...]

The Future that Happened?

By |2018-08-29T08:56:59+00:00August 29th, 2018|Global Market Update|

Will demographics doom China? Traffic in Beijing. Source: Wikimedia. People use to worry about overpopulation. You still see the bumper stickers: “Two’s Company, 7 Billion’s a Crowd.” But not so much anymore. Global population growth has slowed dramatically. Urban lifestyles, better health care, and birth control have dramatically reduced population growth just about everywhere. In the 1960’s, the world’s population was growing at over 2% per year. Now the growth rate is just over 1%, and it’s likely to keep falling to just above [...]

The Heavy Down Under

By |2018-08-07T14:18:21+00:00August 7th, 2018|Global Market Update|

Is Australia doing some heavy lifting? Australian Paralympic powerlifter. Source: Wikimedia In the world of bilateral national relationships, the US-China nexus is tops. Together, our two countries constitute almost a third of global production, and our combined economic growth creates the equivalent of a new Australian economy every year. But the Australia-China relationship is also critical. Australia exports the raw materials that China needs to build its roads, factories, and ports. This connection allowed Australia to avoid a recession during the global financial crisis. [...]

Getting Shanghaied?

By |2018-07-13T09:09:41+00:00July 13th, 2018|Global Market Update|

Is Tesla turning Chinese? Photo: John Cummings. Source: Wikimedia Tesla says that it plans to set up its first non-US factory in Shanghai. It’s a logical next step for the electric vehicle maker. China is the number one electric car market in the world, with almost half a million in vehicle sales – more than twice the level in the US. Next year, Beijing will require that every automaker that sells gasoline-powered cars in China also offer electric vehicles, or else purchase credits from [...]

Long Term Ownership?

By |2018-06-12T07:56:38+00:00June 12th, 2018|Global Market Update|

What kind of bosses are Chinese owners? Photo: Photo Mix. Source: Pixabay 3,500 employees of Genworth Financial are about to find out. Genworth is the successor company to the old Life of Virginia, a Richmond-based life insurer founded in 1871. In the 1980s, they went through various business combinations, mergers, divestitures, and spin-offs. In 1996 they were bought by GE and sold back into the public markets about a decade later. Their principal products are annuities, mortgage insurance, and long-term care insurance. The mortgage [...]

Revolution and Flood

By |2018-05-22T06:29:51+00:00May 22nd, 2018|Global Market Update|

Where did we come from? “Washington Crossing the Delaware” by Emanuel Leutze. Source: Metropolitan Museum of Art Every society has stories of its founding. In school, we learned about the American Revolution, how a rag-tag band of settlers were able to hold the field against the strongest army in the world. This story has given Americans a sense of identity and direction. My own family came to America from Scandinavia in the 19th century and settled in the Midwest. The gradual settlement and development [...]

Lessons from Global Conflicts

By |2018-05-16T05:40:54+00:00May 16th, 2018|Global Market Update|

What is the “Thucydides Trap”? Map of Ancient Greece. Source: Wikipedia Thucydides was an ancient Athenian general who wrote about the Peloponnesian War between Sparta and Athens. Sparta had been the dominant power in Greece. They had a harsh military culture built around their seemingly invincible army. Athens was a rising power, commercially and at sea. They had built the most powerful navy in the Mediterranean Sea. War between the two city-states was inevitable, according to Thucydides, because Athens’ growth challenged Sparta’s dominance. An [...]

By Their Belt-Straps

By |2018-05-08T07:04:28+00:00May 8th, 2018|Global Market Update|

What is the Belt-Road Initiative? Illustration: Lommes. Source: Wikimedia In 2013, China’s President Xi Jinping announced plans to connect East Asia and Europe via a network of rail, road, and sea routes to facilitate trade, cultural exchange, and open flows of capital and people. Shortly thereafter, China announced that over $160 billion of infrastructure projects were in planning or construction along the way, projects like a 700 MW hydropower station near Islamabad, Pakistan, or extending the current Eurasian Landbridge – a 7,000 mile rail [...]

Visions of Greatness (Part 5): A New Direction

By |2018-05-04T06:00:58+00:00May 4th, 2018|Global Market Update|

How do you deal with a rising Great Power? Photo: Victor Hancek. Source: Picjumbo For decades, the US held a policy of “constructive engagement” towards China. By giving China “Most Favored Nation” status, encouraging trade and cultural exchange, Washington hoped to draw China into – if not the West – at least the broader family of nations. We would look the other way with human rights abuses, and try to avoid major trade disputes. Now, four decades of constructive engagement led to a massive [...]

Visions of Greatness (Part 4)

By |2018-05-03T06:24:57+00:00May 3rd, 2018|Global Market Update|

Can China build a great economy? Victoria Harbor and Hong Kong skyline. Photo: Samuel Louie. Source: Wikimedia In some ways, this seems like a foolish question. China’s economy is already huge. They’re the second largest economy in the world: $10 trillion, about half the size of the US. They’re a major player in trade, manufacturing, consumer goods, and the internet. But their stock market is tiny. They’re only 3% of global equity markets – about the size of France. And their bond market is [...]