Not Turning Japanese?

By | 2017-07-17T12:22:11+00:00 January 14th, 2016|Global Market Update|

Japan. The Vapors Cover Art. © United Artists. Source: Wikipedia. That’s the market that should scare all the investors, financial planners, asset managers, and market mavens out there. The Japanese stock market has been in a bear market for the past 25 years—down 2% per year, even after dividends. By contrast, the US has grown 9% per year. And Europe is in the middle: the UK is up 4%; Germany is up 7%; France has grown 3% per year. Source: Bloomberg The divergence is [...]

Rising Dollar, Rising Markets?

By | 2017-07-17T12:23:01+00:00 March 17th, 2015|Global Market Update|

What does a strong dollar mean for the rest of the world? Source: Digital Juice Over the past six months the trade-weighted dollar has risen 25%. A strengthening labor market here, monetary stimulus by the Bank of Japan, Q€ in Europe, falling oil prices in Canada, and a slowdown in China have depressed those currencies relative to ours. […]

Rising Sun?

By | 2017-07-17T12:23:12+00:00 November 24th, 2014|Economics|

Is Japan in a recession? Source: Wikipedia It is if you believe the most recent news. Japan’s economy contracted last quarter, after falling the quarter before that. Two successive quarters of declining GDP are usually enough to be considered a recession. The bad news led Prime Minister Shinzo Abe to delay another sales tax hike scheduled for next year, and to call for new parliamentary elections as a sort-of national referendum on his economic policies, “Abenomics.” […]

Japan: Off the Charts

By | 2017-07-17T12:23:14+00:00 November 3rd, 2014|Global Market Update|

What does Japan’s new stimulus package mean? Source: Wikipedia On Friday the Bank of Japan announced it would expand its asset-buying program by $750 billion per year, buying stocks and real-estate funds as well as bonds. The central bank could be buying more than twice the amount of new bonds issued by the government. At the same time, the Government Pension Fund said it would raise its share of stock investments by over $100 billion. […]

Turning Japanese?

By | 2013-10-23T09:42:51+00:00 October 23rd, 2013|Uncategorized|

Is Abenomics working? Almost one year ago, Abenomics surfaced in Japan. Last November Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda unveiled a strategy of monetary reflation, fiscal stimulus, and structural reforms aimed at ending deflation and reinvigorating a sclerotic economy. How’s it going? The strength of the recovery in the first half of the year has been striking. The stock market is up 41% in Yen terms year-to-date, and the Yen has fallen 26% from its level a year ago. [...]

Turning Japanese (Part 4)

By | 2017-07-17T12:34:39+00:00 June 21st, 2013|Global Market Update|

Where is Japan going? To answer that question, you have to know where Abenomics is going. Economists around the world have been supportive of Mr. Abe and his “three arrows”—easy monetary policy, fiscal stimulus, and structural reforms. The theory is that the first two can promote growth in the short run, which will provide political cover for the third: changes in labor laws and other regulations that can promote private sector investment-led growth. Because to return to stable, solid growth Japan’s economy must become [...]

Turning Japanese (Part 3)

By | 2013-06-19T09:43:15+00:00 June 19th, 2013|Global Market Update|

Does Japan even matter anymore? Twenty years ago Japan’s economy, was the second-largest in the world. Their export machine dominated global trade. Europe was an afterthought—divided and struggling with “Eurosclerosis.” But now it’s Japan’s economy that’s mired in stagnation. China grew past them as the second-largest individual economy years ago, and the united Euro-zone has more potential than either. Japan’s population is ageing and declining. With an insular economy and an overvalued currency, today Japan seems mainly useful as a cautionary study in the [...]

Turning Japanese (Part 2)

By | 2013-06-18T09:39:08+00:00 June 18th, 2013|Global Market Update|

What is Japan trying to do? On the face of it, end deflation, weaken the yen, and revitalize the economy. Abenomics is the fiscal and monetary policy package put together by Prime Minister Shinzo Abe and BOJ Governor Haruhiko Kuroda. It consists of monetary reflation, deficit spending, and labor market reforms. For years, Japan was regarded as the sick man of Asia. But if Abenomics can get their economy moving again, that won’t be the case anymore. As stock prices shot up and the [...]

Turning Japanese (Part 1)

By | 2013-06-17T10:27:42+00:00 June 17th, 2013|Global Market Update|

Has Japan turned around? During the ‘80s Japan’s market was booming. Their export-led economy was capitalizing on the growth in world trade, their stock market grew 10-fold from 1974 to 1989, and the market value of the imperial palace in Tokyo was supposedly greater than that of the State of California. Japan, Inc. was considered an economic juggernaut—a model of targeted subsidies and managerial expertise that could dominate any market it chose to. Then the bubble burst and things went into a tailspin. Even [...]

The China Card (Part 1)

By | 2017-07-17T12:34:39+00:00 May 22nd, 2013|Global Market Update|

Has China lost its mojo? During the late ‘90s and early ‘00s the country became a manufacturing powerhouse, using inexpensive labor and managerial skill to surpass Japan, Germany, and the US in global exports. The value of its stock market soared, growing 5-fold between 1999 and 2007. China’s economy, and especially its coastal areas, have become boom-towns. But since the Financial Crisis that market has been in decline. Stocks have fallen 60%, led by Chinese oil companies and banks. While other indices have gone [...]