Intervention Redefined: Japan Gov't Holds Half of All ETFs

♠ Posted by Emmanuel in at 10/29/2015 09:28:00 PM
Japan's central bank literally has a 'majority' stake in the JPY-denominated ETF market. Imagine if Janet Yellen and the Federal Reserve held half of all monies invested in US-based, dollar-dominated exchange-traded funds (ETFs): BlackRock, Fidelity, State Street, Vanguard, and the rest of them. You can bet that US lawmakers, especially those of the Tea Party persuasion, would be up in arms about the unprecedented levels of market intervention the government was engaged in. "Such a distortion of markets has never been seen!" you can almost hear them shout. Well, actually, something like that is already occurring in Japan....
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World Bank's Kim on Migration's Economic Case

♠ Posted by Emmanuel in , at 10/28/2015 12:07:00 AM
The World Bank president prescribes migration to cure a slowing world economy. There's some good commentary from World Bank President Jim Yong Kim on how migration can help support faltering global economic growth. The notions are fairly simple and understood economically: Legions of elderly in the developed world are not productive and pose a strain on national resources insofar as they have sizable guaranteed pension and health care benefits. Meanwhile, as recent headlines from Europe demonstrate, there are also vast numbers of migrants from poor countries eager to work in rich countries given the opportunity. Not only...
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Macau Mauling: Steve Wynn Takes On the Communist Party

♠ Posted by Emmanuel in , at 10/25/2015 07:50:00 PM
The PRC humbles the capitalistic Steve Wynn. If nothing else, casino legend Steve Wynn is a brave man. Yes, I know, he's also a very rich man, but as of late, his fortune has been eroded by the Chinese Communist Party's anti-fun campaign against Macau. Efforts to prevent Communist Party officials siphoning state funds to gamble in Macau has involved limiting the money Chinese can move from the mainland to Macau. However, Wynn claims that the drive to diversify Macau's revenues away from revenues towards dining, shows and other attractions has also had the effect of dampening Macau's core business: Billionaire Steve Wynn...
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Hi-Speed Rail Diplomacy: China vs. Japan

♠ Posted by Emmanuel in ,, at 10/22/2015 11:30:00 PM
Coming to an Asian country near you...or will that be the Chinese equivalent? With China eclipsing Japan as the world's second largest economy in 2007, the latter has been keen to maintain its global influence and prestige--especially here in Asia. While both countries compete in nearly all things that are even remotely exportable, the competition has been particularly fierce in infrastructure. Obviously, the Chinese see foreign markets as outlets for expertise gained in constructing massive domestic infrastructure projects, especially now that grandest ones at home are becoming fewer due to the PRC slowing down economically....
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Whew! TPP Won't Kill Off Cosplay

♠ Posted by Emmanuel in ,, at 10/18/2015 06:15:00 PM
TPP preserves your rights to dress like a cartoon character...to an extent. I have always enjoyed featuring fringe stories from the world of international economic relations, and this one should fill the bill for this month. There is a very large, globe-spanning community that enjoys dressing up as famous cartoon/comic/video game characters known as the "cosplay" crowd. As you would expect, they dress in their, er, finest for conventions of the aforementioned media. While elder Japanese were probably fretting about agricultural and automobile imports during the TPP negotiations, younger Japanese cosplay fans in Japan worried...
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If ISIS is a 'State', Do Gas Sales Make It an 'NOC'?

♠ Posted by Emmanuel in ,, at 10/16/2015 03:28:00 PM
Like selling relics, ISIS funds itself by selling energy supplies. Here's another terminology-stretching exercise for you to contemplate: Despite virtually no nation-state recognizing the so-called "Islamic State in Iraq and Syria," ISIS designates itself as such. ISIS knows Westphalia. Unbeknownst to many, that ISIS occupies considerable amounts of "Iraqi" and "Syrian" territory has resulted in an uneasy bargain between the Assad regime and the ISIS forces that occupy gas-producing regions: Isis and the Assad regime remain battleground enemies, but on Syria’s gasfields the need for electricity has forced them into...
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Avast, Computers! PRC vs. Algorithmic Trading

♠ Posted by Emmanuel in , at 10/13/2015 01:30:00 AM
The rather spectacular fall of the Chinese stock markets midyear--after the PRC acted as a cheerleader in driving it up, it must be said--prompted an official witch hunt for scapegoats. Western brokerages got their share of the heat, but the focus has arguably turned from who to what caused the plunge in stock prices. Cue today's stock market pantomime villains [mwa-ha-ha!]: the ever-so-vile algorithmic traders: Chinese regulators are planning to increase their oversight of algorithmic traders, extending a campaign to stabilize the equity market that some analysts say has resulted in shrinking volumes and an exodus by foreign...
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Believe: Can Japan Really Become a Rugby Power?

♠ Posted by Emmanuel in , at 10/11/2015 09:57:00 PM
The Brave Blossoms have been the breakthrough team of the Rugby World Cup. Despite Fox Sports Asia broadcasting it here, I haven't been able to follow the ongoing Rugby World Cup in England all that much (grrr). In particular, I am dismayed about not having watched the shocking upset of the mighty South African Springboks by, wait for them...Japan. While the Japanese are famously good at almost anything they put their minds to, we still have stereotypes that they weren't built for this sport. Unfortunately, the Brave Blossoms became the first team to win 3 out of 4 group stage matches but not advance to the knock-out stages....
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FIFA Fines HK for Booing PRC National Anthem

♠ Posted by Emmanuel in , at 10/09/2015 01:30:00 AM
"Let's jeer the Chinese national anthem; it certainly ain't ours!" Given how much the Hong Kong economy depends on that of mainland China--consider the many HK-listed stocks of Chinese companies--it has always surprised me how much animosity Hong Kong residents have for their "motherland." Yes, the Communist Party leadership continually frustrating substantial moves towards self-governance has been a constant sticking point, but at the end of the day, you have to realize who butters your bread, right? Well, some prefer not to. Since the 1997 handover by the British to the Chinese, the "March of Volunteers"--China's national...
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Utterly Predictable: Candidate H Clinton 'Opposing' TPP

♠ Posted by Emmanuel in ,, at 10/08/2015 01:37:00 PM
The general rule for modern Democratic candidates is to voice skepticism for trade agreements in the run-up to elections, and then warm up to them once in office. The electoral dynamics are simple: organized labor remains strong within the Democratic party even if they are a much-diminished force in the overall picture Stateside. I bring this up because there are so many articles coming out about how Hillary Clinton has allegedly changed her position on the Trans-Pacific Partnership enlargement. Here is a representative quote: Hillary Clinton said Wednesday she opposes the 12-nation Trans-Pacific Partnership, marking...
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Early Winners and Losers From TPP Enlargement

♠ Posted by Emmanuel in ,,, at 10/06/2015 08:15:00 PM
Get ready to see lots more of these sorts of plants in Vietnam (read why below). Bloomberg has an initial rundown of countries expected to win and lose from the conclusion of the Trans-Pacific Partnership (TPP) enlargement. When I pointed out earlier that there is a potential for very significant carve-outs for important TPP participants, I definitely had Japan in mind. True enough, one of the remarkable bits of agricultural protectionism that remains intact concerns rice. Despite the staple food becoming an ever-smaller part of the Japanese diet, rice farmers remain a core Liberal Democratic Party constituency. How so?...
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A Done Deal? Trans-Pacific Partnership is Inked

♠ Posted by Emmanuel in , at 10/05/2015 05:09:00 PM
The international trade deal is signed; individual nations ratifying it remains. This comes as a bit of a surprise to me: the Trans-Pacific Partnership has, at long last, been completed. I had expected divisive issues to hold it up--agriculture and automobiles especially--but it seems I was mistaken. There are APEC economies starved for further trade deals including, much to my surprise, Japan, which I had expected to complicate matters over its closed markets for the aforementioned goods. While the full text of TPP is yet to be released, here is the summary from the USTR: On October 4, 2015, Ministers of the 12 Trans-Pacific...
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What China Gets From Giving Venezuela $45B

♠ Posted by Emmanuel in ,,,, at 10/05/2015 01:30:00 AM
The largest Venezuelan note is now worth 12 cents. Next week, the IMF is holding meetings in Lima, Peru in the region that has suffered as much as any other from the global slump in commodities. It's not bound to be a happy occasion for many of those gathered. Despite everything, some commodity exports have managed to accumulate substantial foreign exchange reserves precisely in anticipation of these lean years. Others, meanwhile, have tried to lessen dependence on commodity exports to literally fuel growth. As you would expect, Venezuela has done none of these things as it amassed very little in reserves--preferring to...
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Do Computers 'Taming' Volatility Make it Worse?

♠ Posted by Emmanuel in at 10/02/2015 07:02:00 PM
'I'm sorry Dave, volatility...must...be...controlled.' The story of computers or robots doing their masters wrong when they were supposed to work to the benefit of humanity has a very long lineage in science fiction. In Carnegie Mellon's "Robot Hall of Fame," there is the fictional HAL 9000 that tried to kill off astronauts on board the spaceship Recovery in the legendary 2001: A Space Odyssey. Not having mastered space flight to such a degree fourteen years after the year that movie was set, however, it seems we still have machines trying to kill off our...investments. You see, the recent turbulence in global financial...
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First Time Ever: PRC Reports Reserve Holdings to IMF

♠ Posted by Emmanuel in ,, at 10/01/2015 01:30:00 AM
Sucking up to the IMF in all sorts of ways--now including reporting on forex reserves. "Transparency" and "Chinese officialdom" are strangers to one another. That said, the PRC seems to be making improvements in one regard: After years of obfuscation, PRC authorities have only just begun reporting reserve data to the IMF Composition of Foreign Exchange Reserves (COFER). Previously, they furnished no data whatsoever--nada, zilch, zip, diddly-squat. But, all that changed recently with China partially--repeat, partially--reporting on its reserves. How "partial" are we talking about? In aggregate, total reported reserves to...
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