Asian News

[Ichiro]

Thanks, sponsor and pyriel for your input!

To keep everything simple, let me say this---As you all probably know, most US and foreign companies are moving into other countries especially the emerging growth countries to increased their net profit. That is why many foreign companies are setting up their manufacturing plants in both China and India because of the potential for big profit. Why? They are slowly moving from a third world country to a mightly economic power. And as you all probably know everything is based on supply and demand (I mean microeconomics). Evenually, most middle class people in China and India will be driving a car due to their increased economic wealth....and guess which companies will benefit from all this.. GM, Ford, Toyota, BMW, etc. Why do I know this---I not only search the net to find info but also I travel to some of these emerging countries (China, Hong Kong, Thailand, Singapore and Mayalsia) every year. I saw a big change in their life style and the economics growth which made me change my investment plan to emphasis more in the international funds. The bottonline for me is that it is a no brainer that the stock prices of the companies in the international funds will increase substantially in the next three or four years. I know for a fact that nothing goes up forever based on my 25 stock investment experience but I will take a portion of the profit while it last..

Now, i do have substantial investments in US stocks also. I have a stock that I had invested for the past 25 years. Which company is that-- the duck... I mean AFLAC. It is not doing too well these days but my initial investment is already up 125X. Besides, when I retire from Dod FED, my dividends from aFLAC will be more than my FED monthly retirement pay. I also have investments in Johnson and Johnson, Clorox, Wrilgley gum, etc. I have gained lots of knowledge from joining the local chapter of the Better Investing club and also by reading books on Mr. Warren Buffett.

Pyriel, you are making a very smart move as far as your real estate investment in Guam. It is like the old Hawaii when a house in Hawaii cost only $35K in 1970 and now the market is $650K and up. It is basically supply and demand (again, microecomics). The land is limited but the demand is increasing because of the increase in the troops (air force and army). Very smart move...

 

[Ichiro]

6jan-bloomberg-European Bonds Post Weekly Fall on Signs Growth Is Accelerating

By Anchalee Worrachate

Jan. 6 (Bloomberg) -- ""European bonds declined for a fifth consecutive week after reports showed confidence in the euro region economy stayed close to a six-year high in December and unemployment fell to a record low.

Debt has slid, pushing two-year yields to the highest since July 2002, on signs German growth is quickening. An index of optimism among executives and consumers in the region fell to 110.1 from 110.3 in November, the European Commission said yesterday. Debt was also hurt after a report showed the U.S. economy added more jobs last month than economists forecast.

``The euro zone bond market probably has more downside to come,'' said John Maskell, head of European rates fund management at Barclays Global Investors in London said. ``We've got very good data during Christmas and we've got relentless rhetoric from the ECB that suggested rates are headed higher.''

The yield on the two-year note rose 2 basis points to 3.91 percent at 4:40 p.m. yesterday in London. The price of the 3.75 percent bond due December 2008 fell 0.07 or 70 euro cents per 1,000 euro ($1,309) face amount, to 99.70. The 10-year yield rose 2 basis points to 3.98 percent. ""

for info:

http://www.bloomberg.com/apps/news?pid=20601087&sid=a7pyNnBM48wc&refer=worldwide

 

[Ichiro]

6jan-bloombeg-China Raises Bank Reserve Requirement to Cool Lending (Update3)

By Nipa Piboontanasawat

Jan. 5 (Bloomberg) --"" China told banks to set aside more money as reserves for the fourth time in seven months to prevent a rebound in lending and investment in the world's fastest- growing major economy.

Banks must put aside 9.5 percent of deposits starting on Jan. 15, up from 9 percent, the Beijing-based People's Bank of China said today on its Web site.

China, which raised interest rates twice last year to reach 6.12 percent, wants to prevent cash generated by a record trade surplus from being channeled through bank lending into investments. The U.S. and Europe have accused China of keeping its currency undervalued to make its exports cheaper and have threatened sanctions.

``This is not the end,'' said Huang Yiping, chief Asia economist at Citigroup Inc. in Hong Kong. ``We expect investment growth to rebound and the central bank will continue efforts to tighten liquidity.'' He expects the central bank to raise interest rates in the middle of this year. ""

for info:

http://www.bloomberg.com/apps/news?pid=20601068&sid=aGh_QKaQdKI8&refer=economy

 

[Ichiro]

7jan-bloomberg-European Retail Growth Slows in December, PMI Shows (Update3)

By Dara Doyle

Jan. 5 (Bloomberg) --"" European retail sales grew in December at the slowest pace in nine months, a sign that economic expansion is easing, the Bloomberg purchasing managers index showed.

An index of retail sales in the euro economy fell to a seasonally adjusted 52.1 from 53.7 in November, a survey of more than 1,000 retail executives compiled for Bloomberg LP by NTC Economics Ltd. showed today. A level above 50 indicates growth.

The retail index is the third survey this week suggesting economic expansion is ebbing from the fastest pace in six years. The services and manufacturing industries unexpectedly lost momentum last month. The slowdown indicates the highest interest rates in five years restrained Christmas shopping as Germany raised sales taxes on Jan. 1.

``Consumers will be more cautious, especially in the first half of the year,'' said Sebastian Wanke, an economist at Deka Bank in Frankfurt. ``German spending in particular may be weaker, and the economy overall won't be as strong in 2007 as last year.'' ""

for info:

http://www.bloomberg.com/apps/news?pid=20601068&sid=aROg7Hpm7dvM&refer=economy

 

[Ichiro]

7jan-bloomberg--Something Has Got to Give on Japanese Economy: William Pesek (I think that Japan's economy is slowing adn that PM Abe is in big trouble)

By William Pesek

Jan. 5 (Bloomberg) --"" A look at Japan-related headlines doesn't inspire confidence in the economy as 2007 gets under way.

Some predict the Tokyo Stock Price Index will climb to the highest level since the bubble economy ended in 1989. Other headlines wonder why consumers aren't spending more. Elsewhere, one reads of how bond traders are bracing for a Bank of Japan interest-rate increase, even though there's no inflation.

Something has got to give. Either Japan's longest expansion since World War II will gain momentum, boosting corporate profits and wages, or it will shift into a lower gear, disappointing investors once again.

My money is on the latter risk, and, if I'm right, the policy priorities of Prime Minister Shinzo Abe will be largely to blame.

It may not have occurred to many outside Tokyo yet, but Abe is in trouble. His approval ratings plunged last month as two members of his government resigned in separate scandals. His bigger failing is the lack of a clear and convincing strategy for Asia's biggest economy.

Speaking at a New Year's press conference yesterday, Abe did lay out his big initiative for the year: legislation to revise Japan's pacifist constitution for the first time since its adoption 60 years ago. Abe's other big push is to tweak the education system to make youngsters more patriotic.

That's all fine, yet Abe seems distracted from the vital issue of bringing Japan's recovery to the next level. For example, he talks about trimming a public debt that the Organization for Economic Cooperation and Development puts at 170 percent of gross domestic product, yet he doesn't say how he will offset that fiscal tightening.""

info:

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=acYVqTKZG9e4

 

[Ichiro]

7jan-bloomberg--Surprise, Surprise! China Economy May Accelerate: William Pesek (China may be growing in excess of the offical growth rate)

By William Pesek

Jan. 4 (Bloomberg) -- ""The biggest economic surprise of 2006 -- a Chinese economy that refused to slow -- will probably repeat itself this year.

As predictions go, more of the same is never exciting. Yet in 2007, the odds favor China accelerating rather than trying to cool down the world's fastest-growing major economy.

``The slowdown steps are likely largely over,'' says Donald Straszheim, chairman of Newport Beach, California-based Roth Capital Partners. The consensus view -- that China will slow, partly a result of policy steps taken to date, further tightening to come and a slower U.S. economy -- is wrong, he says.

On the one hand, officials in Beijing realize things aren't overheating as expected. On the other, they may fear a slowdown would do more harm than good. Straszheim thinks Chinese growth will accelerate to 11 percent this year from 10 percent in 2006.

Two important caveats are worth mentioning here. First, China may be growing far in excess of official numbers anyway. Suspicions come from the fact China's 31 provinces often report higher growth rates than the national one. Also, many China-based executives suspect official figures are off the mark. """

for info:
http://www.bloomberg.com/apps/news?pid=20601039&sid=aXO3ftOe_qFQ&refer=columnist_pesek

 

[airlift]

Now I understand. Thank you.

Those are not his opinions. Like Birch, he's just doing a copy/paste of the articles, hence the links below them. These articles provide insights to the OSMs and their currencies' direction.

 

[Ichiro]

7jan-Investment Outlook-Bill Gross | January 2007 (from the bond guru)
The 5% Solution


""Is the Fed impotent now – a 110-pound weakling getting sand kicked in its face by the global financial community as it creates massive liquidity? Or to put it more politely, can Bernanke continue to control the U.S. economy and inflation – or is he, like everyone else, at the mercy of the recycling of Asian and BRIC reserves, the reinvestment of petro-dollars, and the hardnosed capitalistic proclivities of hedge funds and investment banks? It’s not an outrageous question you know, and its answer may help guide asset managers in their quest for profits in 2007 and beyond. Even the Fed itself has admitted that it sometimes resembles Nicole Richie as opposed to Arnold Schwarzenegger these days. After all it was Ben Bernanke who coined the phrase “global savings glut” and used it to explain why intermediate and long-term yields in the U.S. (and by implication worldwide) were as much as 1% lower than they should be. Still, while a case can be made that much of the U.S. and other global yield curves have been almost permanently reshaped by yield insensitive recycling of U.S. balance of payment deficits, it seems to me that the Fed actually has a stronger hand to play in 2007 than it has for several years now and that determining where the future Fed Funds rate should be is a key for bond and stock market performance in the months and quarters ahead. With Asian central banks more concerned about currency levels than reinvestment returns, petrodollar recipients more worried about parking their burgeoning wealth in perceived safe haven bond markets than debating whether the U.S. 10-year belongs at 4.7% or 5.7%, and multinational corporations still leery of deploying their huge cash reserves in capital spending alternatives, the one and perhaps only major player that is particularly price sensitive is the Fed. If 5¼% is the right rate for a goldilocks economy then there it will stay. If it generates accelerating inflation then it’ll go up; if accelerating unemployment then it’ll go down. And because the Fed is the most price-sensitive participant in the credit markets they, not private market players, will guide other yields upward or downward much like the North Star has guided mariners for centuries. Where, then, will Fed Funds be at the end of 2007?""

for info:
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2007/IO+Janaury+2007.htm

 

[Ichiro]

13jan-daily fx-- Daily FX-US Dollar (USD) Becomes Exhausted Despite Strong Retail Sales
Friday January 12, 3:52 pm ET
By Kathy Lien, Chief Strategist strategist@dailyfx.com

• US Dollar (USD) Becomes Exhausted Despite Strong Retail Sales
• British Pound (GBP) Looks Ahead to Strong Inflation Data Next Week
• Japanese Yen (JPY) Faces 50-50 Chance of Interest Rate Hike



""US Dollar- US retail sales were very strong in the month of December, but after a week of solid gains it seems that there just weren’t enough buyers out there to take the currency even higher. Across the board, it appears that the dollar’s rally has become exhaustive as the EUR/USD hits a critical support level while USD/JPY reaches resistance. This morning's retail sales report should have convinced any remaining dollar bulls sitting on the sidelines to join the party. Consumer spending was stronger across the board with both headline retail sales rising 0.9 percent and ex autos rising by 1.0 percent. Recent data indicates that many economy watchers have underestimated the strength of the US economy. Last week’s jump in non-farm payrolls and this week’s improvement in the trade balance along with the rise in retail sales will be enough to cause widespread revisions to fourth quarter GDP forecasts. It will also keep the Federal Reserve on hold for the foreseeable future. They have no reason to shift gears and the market expects the same as future contracts continue to price in a less than 50 percent chance of a rate hike in the first half of the year. In addition to the rise in retail sales, import prices also jumped 1.1 percent due to the beginning of the month increase in crude prices. Inflation is on the Fed’s radar and this number only confirms the recent hawkishness by Fed officials. Next week, inflation will continue to be a primary theme in the markets with producer and consumer prices due for release. The Treasury will also be releasing their report on net foreign purchases of US securities. Given the improvement in the trade deficit, foreign inflows should have no problem covering the same month’s trade related outflows. Volatility should continue in the currency market, but with the US closed on Monday for Martin Luther King Jr. day, that vitality may not come until Wednesday when PPI is due for release.""

For inof:

http://biz.yahoo.com/fxcm/070112/1168638808494.html?.v=1

 

[Ichiro]

13jan-dialy fx-- Daily FX-Yuan and Hong Kong Dollar Reach Parity - But What About the Yen

By Boris Schlossberg, Senior Currency Strategist strategist@dailyfx.com

""In a true sign of economic irony, Hong Kong merchants who used to raise their noses at yuan bearing tourists from the mainland are now eagerly accepting the Chinese currency at their establishments while their counterparts in Shanghai are now far less happy to accept Hong Kong dollars in return. What has prompted such a turnabout of action?

For the first time in a 13 years, the Chinese yuan exchange rate has exceeded the Hong Kong dollar exchange rate. China's central bank set the yuan's mid-point against the US dollar on Thursday at 7.7977, pushing the unit above 7.8, the level at which Hong Kong has pegged its currency to the US dollar for the first time since 1994. The news may have some interesting ramifications for Hong Kong and China, but it also carries some major implications for the Japanese yen.

Less Hong Kong More China?

If nothing else, the surge in the Chinese yuan symbolizes the country’s stature as the new economic power in the world. China’s stock market has risen to exceed $1 Trillion in capitalization making it the third largest equity market in Asia behind Japan and Hong Kong. In fact, Chinese equity market growth has been so strong that authorities have temporarily clamped down on issuance of any new mutual funds for fear of triggering a stock market bubble. The near term effects of a strong yuan may cause some problems for Hong Kong which has long enjoyed the cheap imports from the mainland and has served as the primary gateway between China and the rest of the world. With the ascension of the yuan, Hong Kong’s role as the financial intermediary for China may begin to diminish as capital flows directly to the mainland.""

for info:

http://biz.yahoo.com/fxcm/070112/1168630109448.html?.v=1

 

[Ichiro]

13jan-reuters--BOJ likely to raise interest rates next week-media

""The Bank of Japan will likely raise the key overnight call rate to 0.5 percent from the current 0.25 percent at its next policy board meeting on Jan. 17-18, Japanese newspapers reported on Saturday.

The Asahi newspaper said the central bank is heading towards lifting rates as the majority of its nine-member board seems to have judged that economic conditions are good enough for a rate hike.

A similar report by the Mainichi newspaper also said board members are increasingly convinced that personal consumption remains on a rising trend after government data showed late last month that the pace of declines in household spending slowed for the second months in a row in November.

The Yomiuri newspaper also reported the central bank would likely raise rates next week, saying central bankers are now in full-fledged negotiations for a policy shift.


Speculation has been growing the BOJ would move next week, although some traders think the BOJ could wait for a while longer given recent sluggishness in consumption and tame growth in prices.""

for info:

http://yahoo.reuters.com/news/artic...-01-13_01-54-14_T277231&type=comktNews&rpc=44

 

[Ichiro]

13jan-retuers--GLOBAL MARKETS-Stocks rise, bonds fall after robust retail sales

"" U.S. stocks rose for a third day on Friday, driving the Dow to another record high and ending the week up as energy shares rebounded with oil prices and data showing surprisingly robust December retail sales underscored optimism about economic growth.

U.S. retail sales grew in December at the fastest pace since July. Sales excluding autos, considered a more reliable gauge of consumer spending, jumped 1.0 percent, above a median forecast of a 0.5 percent gain and the sharpest climb since January of last year. For details see [ID:nN12465502]

That pushed down U.S. Treasury prices, lifting yields to their highest levels since late October, after the data supported the view the Federal Reserve will not cut interest rates soon.

The sales data added to recent evidence that U.S. economic growth may not have slowed in recent months as much as many investors had estimated, which has left the central bank with little impetus to cut rates to stimulate the economy.

"The whole market is re-estimating when the Fed may ease. It may be on hold for quite awhile," said Jim Cusser, portfolio manager at Waddell & Reed Investment Management in Overland Park, Kansas.""

for info:

U.S. stocks rose for a third day on Friday, driving the Dow to another record high and ending the week up as energy shares rebounded with oil prices and data showing surprisingly robust December retail sales underscored optimism about economic growth.

U.S. retail sales grew in December at the fastest pace since July. Sales excluding autos, considered a more reliable gauge of consumer spending, jumped 1.0 percent, above a median forecast of a 0.5 percent gain and the sharpest climb since January of last year. For details see [ID:nN12465502]

That pushed down U.S. Treasury prices, lifting yields to their highest levels since late October, after the data supported the view the Federal Reserve will not cut interest rates soon.
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The sales data added to recent evidence that U.S. economic growth may not have slowed in recent months as much as many investors had estimated, which has left the central bank with little impetus to cut rates to stimulate the economy.

"The whole market is re-estimating when the Fed may ease. It may be on hold for quite awhile," said Jim Cusser, portfolio manager at Waddell & Reed Investment Management in Overland Park, Kansas.

 

[Ichiro]

13jan-bloomberg-European Stocks Rise for 3rd Week; Aegon, Deutsche Boerse Gain

By Adria Cimino

Jan. 13 (Bloomberg) -- ""European stocks this week capped the longest winning streak since October after European Central Bank President Jean-Claude Trichet signaled he's in no hurry to raise interest rates and investors speculated takeovers will rise.

Trichet's comments ``put off an interest rate increase and this is very good,'' said Vafa Ahmadi, a fund manager at CPR Asset Management in Paris, which oversees $26 billion in assets. ``Merger-and-acquisition activity will continue. If companies consider share prices affordable, there's no reason for us to think the opposite.''

Credit Agricole SA and Aegon NV paced gains by banks and insurers, among the most sensitive to changes in rates. Deutsche Boerse AG led exchanges higher on expectations the industry will benefit from takeovers. Altadis SA rose to a record amid speculation Imperial Tobacco Group Plc may bid for the cigarette maker.

The Dow Jones Stoxx 600 Index added 1.7 percent this week, climbing to a six-year high. The index advanced for a third week. The Stoxx 50 rose 1.3 percent, and the Euro Stoxx 50, a gauge for the 13 nations using the euro, climbed 1.1 percent.

Air France-KLM Group and Ciba Specialty Chemicals AG led airlines and chemical makers higher as oil prices fell to a 19- month low. Energy companies were the worst-performing stocks.

National benchmarks rose in all 18 western European markets except Austria and Ireland. Germany's DAX gained 1.7 percent, France's CAC 40 added 1.8 percent and the U.K.'s FTSE increased 0.3 percent.

Rates on Hold

Credit Agricole, France's second-biggest bank by assets, climbed 3.9 percent. Aegon, the second-largest Dutch insurer, advanced 7.7 percent.

Trichet, at a press conference in Frankfurt on Jan. 11, noted that he was not using the words ``strong vigilance'' to describe the bank's current monitoring of prices development. He has used the phrase in the past to signal that a rate increase is imminent.

Policy makers kept the benchmark rate on hold at 3.5 percent on Jan. 11. The Bank of England the same day unexpectedly raised its key rate by a quarter point to 5.25 percent. The U.S. Federal Reserve's target rate currently stands at 5.25 percent. ""

for info:

http://www.bloomberg.com/apps/news?pid=20601087&sid=ayEfUc4ezUOQ&refer=worldwide

 

[Ichiro]

13jan-bloomberg--apan's Hokkaido Rocked by 8.2 Quake; Tsunami Warning Canceled

By Hiroshi Suzuki and Steven Bodzin

Jan. 13 (Bloomberg) -- ""About three hours after a magnitude 8.2 earthquake struck off Japan's northern island of Hokkaido, the U.S. Joint Tsunami Warning Center canceled a warning for much of the Pacific Ocean, including coastal areas of Russia, Japan and Hawaii.

A tsunami warning issued by Japan's Meteorological Agency was still in effect for the eastern coast of Hokkaido. A wave about 20 centimeters high (8 inches) was observed at Nemuro at 4:33 p.m. local time, the agency said. Some local governments of cities in eastern of Hokkaido, including Nemuro and Kushiro, had issued evacuation recommendations, Japan's NHK TV reported.

A tsunami, or wave generated by an underwater earthquake or volcanic eruption, can travel hundreds of miles an hour. A warning means there is an imminent threat of a tsunami from an undersea quake or that a tsunami is under way.

The magnitude 8.2 quake was centered 1,060 miles (1,705 km) northeast of Tokyo and 310 miles south-southwest of Severo- Kuril'sk in Russia's Kuril Islands, at a depth of 6.2 miles (10 kilometers) at about 1:23 p.m. Japan time, the U.S. Geological Survey said. "

for info:

http://www.bloomberg.com/apps/news?pid=20601087&sid=a7N1Ol5r7d34&refer=worldwide

 

[Ichiro]

13jan-bloomberg--Bird Flu Kills 2 Indonesians, Raises Resurgence Fear (Update1)

By Aloysius Unditu and Jason Gale

Jan. 13 (Bloomberg) --"" Bird flu killed two Indonesian women as health officials prepare for a seasonal resurgence in poultry outbreaks similar to last year, when the virus spread to more than 30 countries in the first quarter.

A 22-year-old from a western part of Java island died early today, two days after she was admitted to Jakarta's Persahabatan hospital, said Joko Suyono, an official at the Health Ministry's avian flu emergency center. She was positive for the H5N1 strain of the virus, the World Health Organization said. A 26-year-old from South Jakarta died late yesterday, Suyono said.

The cases bring to at least four the number of infections recorded in the Southeast Asian nation this year after a hiatus of almost two months. Japan, South Korea, Vietnam and Nigeria have confirmed or reported suspected poultry outbreaks the past month, while China and Egypt found new human cases, providing more chances for H5N1 to mutate into a pandemic form. "

for info:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aHtbzznfBReY&refer=worldwide

 

[Ichiro]

13jan-Asian Stocks Have Biggest Weekly Drop in Four Months; SET Gains

By Ian C. Sayson

Jan. 13 (Bloomberg) -- ""Asian stocks had their biggest weekly drop in four months. China Petroleum & Chemical Corp., PetroChina Co. and Singapore Petroleum Co. led declines by energy companies after oil tumbled to a 19-month low.

``The weakness in crude prices is negative for the oil and gas sector,'' said Steven Lim, who helps manage $300 million at Daiwa SB Investments in Singapore. ``We could see further consolidation this month as fund managers adjust their holdings.''

Cathay Pacific Airways Ltd. and Malaysian Airline System Bhd. jumped on speculation lower fuel costs will boost earnings. Sony Corp. surged after the world's biggest maker of video-game consoles said it met its PlayStation 3 shipment target in the U.S. last year.

The Morgan Stanley Capital International Asia-Pacific Index fell 0.7 percent to 138.70 this week, its biggest loss since the five days to Sept. 15. Crude oil dropped 5.9 percent this week to $52.99, the lowest since May 2005.

Japan's Nikkei 225 Stock Average slid 0.2 percent. Fast Retailing Co. plunged after Asia's largest clothing retailer cut earnings estimates, prompting UBS AG and Goldman Sachs Group Inc. to recommend investors sell the stock."

for info:

http://www.bloomberg.com/apps/news?pid=20601080&sid=asIJdpIAgEA4&refer=asia

 

[Ichiro]

13jan-bloomberg--What Thailand's Woes Say About Asia's Outlook: William Pesek

By William Pesek

Jan. 12 (Bloomberg) -- ""The leaders of many of the world's fastest-growing economies are gathered on the Philippine island of Cebu this week to consider Asia's future.

Issues up for discussion at the annual summit of the Association of Southeast Asian Nations, or Asean, include the outlook for growth, integrating the region's economies, terrorism, geopolitical risks, the pros and cons of globalization and imbalances imperiling global stability.

Weighty stuff, indeed. And yet, I'm blowing off Asean this year. Hundreds of journalists attend the gabfest with the best of intensions. Aside from a few nice meals in interesting locales, we tend to have little to show for our time. Ambiguously worded communiques and hollow promises rarely make for good copy.

Instead, I decided to come to Thailand, a place dealing with many of the problems Southeast Asian leaders should be stepping up efforts to fix -- and aren't.

Let's start with terrorism. New Year's Eve bomb blasts in Bangkok that killed three people and injured 42 pierced the veneer of safety and stability that investors came to enjoy from the Asia-Pacific region's ninth-biggest economy. As this nation of 64 million people buzzes about who was behind the attacks, investors are wondering who is in charge.

The bombings followed a Sept. 19 coup that removed Prime Minister Thaksin Shinawatra from power. The military junta that replaced him has bungled its handling of the economy to comic proportions, reminding investors that even the most-favored emerging markets can be unpredictable places.

Risks Abound

First, Thailand's military leaders unveiled plans to create a ``self-sufficiency economy,'' without explaining what that is. That was followed by a flip-flop on capital controls aimed at taming currency speculation, an episode that spooked markets. This week brought even more confusion about government efforts to restrict foreign investment. ""

for info:



http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=aYh1nlX_jB.8

 

[Ichiro]

13jan-fsu-- WHEN, WHY AND HOW STOCKS WILL FALL
by Thomas P. Au, CFA
Author & Market Analyst
January 12, 2007

""I read with interest the recent debate between Doug Kass and Michael Comeau on the street.com. As a bear second only to Doug, I see the potential for a major drop in stock prices. But I’d agree with Michael that “sounding ‘last call’ now seems premature,” mainly because of timing issues. My best guess it that a combination of the U.S. presidential election cycle and the Chinese preparations for the 2008 Olympics will keep the wolf at bay for one more year. These and other positive drivers listed in the next paragraph won’t carry as much force next year, so I’ll have to revisit the bear case then. My views could best be summed up by saying, “stocks will soon fall, but not this year.”

Things are still good for now, but it’s also hard not to see the handwriting on the wall. Earnings growth still appears to be strong, but it figures to weaken during the course of 2007. The Fed is probably done tightening, although other central banks may have just begun. The U.S. housing market appears to have stabilized for now, but the ARM resets are beginning in large numbers this year. A number of elections took place relatively peacefully in Latin America and elsewhere in the developing world last year, even in Venezuela, although the winners of some of them are now starting to rattle the cages.

There are two mean reversion arguments regarding valuations; that U.S. stocks are fairly valued today, relative to trend or as Comeau put it, “stocks today are not terribly overvalued,” and that stocks are well above trend. These arguments are equally valid—depending on which time frame you use. The first applies in comparison to the past ten years or so. The second, and “Kassian” argument applies over a whole “long cycle” of 30-plus years, consisting of a depressed decade between 1975-1984, a middling decade from 1985-1994, and an exuberant decade of 1995-the present. What has happened in past bear markets is that there is a catalyst that yanks stock prices out of their ten (plus) year trend, and toward (and even below) their 30-year trend line.

When I published my year-end piece saying that the bulls were “on serve” because markets almost always go up the year before a Presidential election, Doug then emailed me “Et tu, Brute,” thus accusing me of deserting him. Fair enough, but he hadn’t been making the argument that would have kept me in his camp in 2007. His call for lumpy, mediocre growth,” 1970s style (which I endorse), is a bearish argument, but one that doesn’t cut it in a pre-Presidential election year; 1967, 1971, 1975, and 1979, the analogous years of the last secular bear market, were all up. The real bear argument is that 2007 will shortly become the modern 1931. If that’s the case, the market will go down this year, pre-election year or not. ""

for info:

http://www.financialsense.com/editorials/au/2007/0112b.html

 

[Ichiro]

14jan-ap-- AP-Asian Leaders Create Free Trade Zone

By Eric Talmadge, Associated Press Writer
Southeast Asian Leaders Agree to Turn Their Region Into a Free-Trade Zone by 2015

CEBU, Philippines (AP) -- ""Southeast Asian leaders agreed at their annual summit Saturday to create a tighter political bloc, turn their region into a free-trade zone by 2015 and fight harder against terrorism and poverty.

In a major break with its consensus-based past, the 10-country body has agreed to discuss a plan that would form a more cohesive organization able to sanction or even expel members that do not follow its rules.

The leaders also signed a counterterrorism pact legally binding their countries to share information and training aimed at stemming terror and cross-border crime.

The host of the summit, Philippine President Gloria Macapagal Arroyo, stressed the need to bolster free trade within ASEAN, which includes the Philippines, Malaysia, Laos, Cambodia, Vietnam, Thailand, Singapore, Myanmar, Brunei and Indonesia.

"ASEAN is committed to expanding its trade forum to become the largest in the world," she said in opening the meeting, held under heavy security following three deadly explosions in the southern Philippines days before.

The leaders want to establish the free trade zone by 2015, five years earlier than previously proposed. It will be adopted in two stages, with the six richer nations -- including wealthy Singapore and oil-rich Brunei -- starting the integration in 2010 and the others following later.

China, Japan and South Korea, who will be participating in an expanded summit Sunday involving ASEAN's six "dialogue partners," hope to join the Southeast Asian grouping's economic circle. The other dialogue partners are Australia, New Zealand and India.

"Up until now, we have never had a charter," said former Indonesian Foreign Minister Ali Alatas, a member of the group that drafted the recommendations. "We will see how the implementation will go."""

for info:

http://biz.yahoo.com/ap/070113/asean_summit.html?.v=2

 

[Ichiro]

14jan-ap-- AP--China Foreign Currency Reserves Pass $1T

China Foreign Currency Reserves Passed $1 Trillion in November, Central Bank Researchers Say

BEIJING (AP) -- ""China's foreign currency reserves, already the world's largest, passed US$1 trillion at the end of November, two central bank researchers said in a paper released Saturday.

China's reserves have skyrocketed as the bank drains money from the economy by issuing bonds in an effort to contain inflationary pressures amid a flood of export revenues. The growth has prompted debate in China over how the country should use the mountain of money.

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Reserves reached $1.039 trillion at the end of November, researchers Jiao Jinpu and Liu Xiangyun said in a paper released at a conference in Beijing, according to Dow Jones Newswires.

Outside experts had estimated earlier that China's reserves passed the $1 trillion mark in November. Since then, the reserves are believed to have risen to at least $1.1 trillion.

The central bank officially announces the size of its reserves only four times a year, and said in its last quarterly report they had risen to $987.9 billion by the end of September.

That mountain of money is equal to about 40 percent of China's annual economic output and accounts for half of all Asian reserves. Japan has the world's second-biggest foreign reserves, which stood at $875 billion at the end of December.""

for info:

http://biz.yahoo.com/ap/070113/china_foreign_reserves.html?.v=1