Labor Day Envy!

Labor Day in the US and I'm envious.  Actually, given how easy US markets have been (relative to Asia, specifically China), I think I deserve to be a bit jealous.  After all, it's those of us here in Asia that have been having a bit of a mare while the US seems to be chugging along.

Accordingly, Ben Bernanke set everyone up for a restful Labor Day with his benign address at the FOMC meeting in Jackson Hole.  While not being specific, he made the case for further easing to help the US economy.  Interesting that everyone's so quick to believe Ben.  Meanwhile China's governments (both at local and national levels) have earmarked over RMB20T in economic stimulus and the market can't catch a bid.  Pretty discouraging as RMB20T is a massive sum - in fact, it's roughly 40% of China's GDP.   Tough times for those who subscribe to the theory of 'just throwing money at the problem'.  For now, China's acting more like the oft-cited complaint 'mo money, mo problems'.      

    

I want to go to Jackson Hole!

The Fed's Annual Symposium kicks off in Jackson Hole, Wyoming this week.  Incidentally, have you been to Jackson Hole?  I've never been there but it's definitely on my list of places to ski.  Actually, do you notice how many of the serious high-brow conferences take place in cool ski destinations?  I suppose the Sundance Film Festival in Park City comes to mind first but it extends beyond Hollywood.  There is the World Economic Forum in Davos; Allen & Co Sun Valley Conference and now the Fed's Annual Symposium in Jackson Hole.  All supposed to be stunning locations with lots of outdoor activities and very accommodating airports (a requisite given they'll be handling fleets of private jets).

Anyway, I hope everyone got a nice little nap on their ride over because I hear there is actually a lot of work done at these conferences.  I also imagine a fair amount of 'play' but will suspend my skepticism.  Getting back on track - The Fed's Annual Symposium kicks off this week in Jackson Hole.  It's a highly anticipated event as Fed Chairman Ben Bernanke will speak and there's huge debate around  the likelihood of further US stimulus.  Until then, markets are kind of wait and see.  Just wish I was waiting/seeing in the picturesque landscape of Jackson Hole!

EU Summit Ends

Hong Kong holiday and boy do we deserve it!!  It was a tough week but actually ended in a surge of optimism.  Euro zone leaders completed their summit and agreed to take emergency action to help banks in Spain and Italy.  They also announced Euro area rescue funds could be used to help a countries' debt markets without having to adopt extra austerity measures.  Details are still missing and skepticism is high (especially in Germany) but markets reacted well.  Still too early to say we're out of the woods but let's take it one day at a time.  Thankfully this week it's only four days!  

6 Weeks of GUARANTEED Vaca!!

Crunch time for  EU policy makers.  Later this week, they'll be meeting in Brussels to figure out what they can do to help the Euro.  That said, it looks like there are no easy solutions.  Trying to impose austerity isn't going to be an easy sell.  Frankly it's a bit culturally inconsistent with a lot of European habits.  For example, note that a European court just ruled that if you get sick during your guaranteed six week vacation, you can take another.  How awesome is that?!?!  Very, right?  Yes and no.  In terms of work/life balance, we really have to hand it to the Europeans.  However, such leisurely lifestyles isn't so conducive to resuscitating an economy on life support.    


 

Aaaarrrrgg-entina!!! - This time we're crying

Aaaargg-entina!!!  If they were to make a musical about the country now, it would be called Evicta and this time you're the one making everyone else cry.  The drama right now has to do with the Argentinian government's plan to take control of the country's biggest oil company YPF.  Except, YPF is majority owned by Spanish Repsol.  Poor Repsol - they are basically getting chased out of a company they own.  And understandably they are plenty pissed off about it.  It gets even more dangerous as everyone starts to second-guess their Argentinian investments.  Hard to blame them, right?  Would you be invested in a country where someone can just take away your ownership rights?

Couldn't come at a worse time for Spain with their financial problems now economic Ground Zero.  Frankly it actually looks pretty bleak for Spain right now.  That said, I've spent quite a bit of time holidaying in Spain and it never ever feels bleak.  Guess that's what the combination of good weather, great food and attractive people does.  I've never been to South America but hope Argentina has the same going for it because they are struggling to win friends right now.

Short but not easy...

Short week with Easter Holidays and Qingming holiday in China.  However markets are acting tricky.  Minutes from the last Fed meeting was released on Tuesday and it was sobering (literally).  Now increasing concerns that all the cheap money the Fed has been plowing into the economy may be coming to an end.   Hard to be the Fed right now - they're kind of stuck between a rock and a hard place.   Many are arguing the FED must stay loose as the US economy is still weak.  Conversely the other argument being that the US economy is sufficiently revived and the Fed needs to step back.


Just like it sucks when a party runs out of libations, it's always tough for markets when the Fed starts acting more prudent.  Guess it's wait and see.  Accordingly, I would recommend you do a brush up on US banks.  If we do see interest rates in the US start to rise, you'll want to know your banks.          

Off to Toks...

Last post of the week.  I'm off to Tokyo.  I really owe you guys a Japan post.  Promise I'll get that to you when I return.  A quick summary for you.  Much like the US Fed (and unlike China), the Bank of Japan (BOJ) has been vocal and committed to stimulating the economy.  Basically they are sick and tired of the deflationary hell  that has plagued them for decades.


All right enough negative talk.  Short week and I'm going on holiday.  Quick uplifting note on one of my favorite sectors right now.  I saw Dick Bove (a well followed banks expert) promoting US banks citing they are in the best shape in three decades!  What a nice compliment - wish I could say the same for myself!  Although I did manage a chin-up at the gym yesterday.  How cool is that?  Have a great weekend and speak when I get back.

I miss election years...

Sick of watching American politics?!?!  Well things can be worse.  In China it's a transition year.  Note that's very different from an election year.  Happens once a decade and it's truly a lame duck year.  While US politicians are busy at working trying to win your favor and get re-elected, Chinese politicians are in wait and hold.  Partially explains why the Chinese Government has been so quiet as of late.  Meanwhile just last night Fed Chairman Bernanke commits to further helping the economy if necessary. 


Yes indeed the strong silent type can make for fun early dates.  However the prolonged silent treatment also runs the risk of exasperation.  That's kind of what we're seeing in markets.  China's making it too hard.  That explains why US markets are +30% over the last 18 months while China hasn't done anything!  Plus, you get the extra holiday on election day.  How I miss election years...

The importance of being CLEAR...

Diet is over.  I lost a few pounds but the goal of cutting a perfect Angelina Jolie silhouette remains elusive.  Although, while she's HOT (and I covet her man), why does she act so strange at the Oscars?  Yes, the bizarre 'bossy hooker' pose she struck on stage this year, but remember when she open- mouth kissed her brother in 2000?   Whatever - she is with Brat Pitt - she can do no wrong.  


Diet behind me, indulge I did last night. I stayed out way too late!  Speaking of partying, remember my post 'Make it rain'?  It was my explanation of the US Fed.  They are the guys who say how the US will be spending (or not spending)!  I likened them to the dudes in the club saying 'make it rain.'


Now some people are starting to worry the party is getting out of control and want the Fed to tighten things up.  Indeed all that money they are throwing around isn’t free and can't go on forever.  The argument being that the economy is picking up and we should start sobering up. Otherwise, we could face inflation problems.  Rising prices when a lot of people are still struggling financially is not a good predicament.  Well, the jury is still out and Wednesday Fed Chairman Ben Bernanke was noticeably a bit vague.


And markets appreciate an unclear Fed about as much as we enjoy mixed signals from our boyfriend.  On that note, I'll finish up here.  I'm sorry if I'm a bit vague myself today.  It was a late night! 

Deflation - worst thing EVER

Markets are largely trading well (US hits 2008 highs) but I have two days til this diet is over and I hate every second of it.  I do, however, have a very special occasion coming up in London that I am excited about.   Today a bunch of my HK girlfriends and I all confirmed tickets for glorious ECO (Non-UPGRADABLE) 13-hour flights to Heathrow.  I'm normally fine (or as fine as one can be) with flying Eco except it’s a 72 hour trip and I have to work immediately upon landing back in HK.  When I tactfully suggested the upgradable fare (without sounding like a brat), I was swiftly reminded that we (like Greece) are submitting to austerity measures.  I didn't remember to argue those U$895 Jbrand leather jeans she bought on shopbop aren’t so AUSTERE!!    

I digress (and pray my friend doesn't kill me).  What I should have argued is that US / HK and UK are not in a recession (we don't have any Euro-zone friends on this trip).  Actually we were all out of the recession by the end of 2009.  I actually thought (or felt) it lasted a lot longer, didn't you?   Not according to the technical definition for recession, which is simply a period of slowing economic activity (ie jobs, incomes, GDP etc) that last more than a few months. A totally normal/natural (albeit not awesome) part of the economic cycle.  Certainly not the end of the world.  Can actually be great time for bargain hunting (origin of the word recession-ista).  I got my leather pants in the recession at a 50% discount to the above-mentioned U$XXX (Intermix Sale 2009).  

Now why do we want recessions to be short lived?  Well, because prolonged they can spiral into deflation.  And the reason Deflation-ista will never catch-on is because Deflation sucks and nothing's cute about it.  The definition of deflation is simple: a general decline in prices (opposite of inflation).  But the problem is that it literally paralyzes the economy. Deflation essentially tells everyone to hunker down and wait. Instead of buying cars, houses, vacations, consumers wait for prices to fall further.   More seriously, companies delay hiring because they know they can get you cheaper and plants shut down because the price of the goods they make are just too cheap.  You get my point.

I realize it's actually impossible to discuss deflation without referencing Japan (and we will), just not on a day when I've only had 800 calories.

       

Single but not alone

Ever been to Mexico City?  Nope neither have I.  Although maybe I should as I would go almost anywhere for good Mexican food (side note I had the most amazing pork belly taco at Heirloom Saturday and it was INSANE).  Anyway back to Mexico City - leaders from the major 20 economies (G20) are hanging out there discussing ways to help Eurozone.  Talk is of a whopping U$2T - Umm..Germany might need some strong Tequila to wash that down.


Nice-ish weekend here in HK -  Ate well although rainy weather.  Kind of an apt description of markets.  Markets did pretty well as US hit levels not seen since 2008 but then crude oil hit $109/barrel.  Uuugghh!  Sucks because we just saw good US consumer confidence numbers - let's hope oil doesn't ruin this.   Anyway it's Monday so let's keep it short and light.   Heard a funny joke at work recently.  Why are divorces so expensive?  Because they're so F%cken worth it.  Told by a male colleague and all the guys laughed.  However, I wanted to say - Hey, your wife should be the one making that joke!

More and more women are ending up single.  Divorces, yes, but also just women being single.  We can debate if they are choosing to do so or if it's a doomed destiny (this is better done with a bottle of Chardonnay) but the reality is that single women are on the rise.  I remember first reading this in the Economist and I was kind of shocked but seems this structural shift is global.  This has huge implications for family structure, world demographics and of course the economy.  Advertisers know it - Companies know it - And guess we should realize it too (even if it can be a little depressing).


Without sounding too 'I am woman, hear me roar' (most of us shriek and whine more than roar, right?),  but it's a great time for women entrepreneurs.  Who understands us better than us?  I am currently trying to convince a very good friend to start blogging features about women who have built businesses.  Personally I love reading about them and much prefer to read about the girls who put Juicy on so many well-toned butts than Lloyd Blankein's rise at Goldman.  Maybe if you keep reading/ forwarding/liking, maybe even start commenting, she'll be convinced.  I've had one comment on this blog so far and it's from my GUY friend Ben.  Please don't make me rename my blog to Ben and the Biz.  

Make it rain (or not)

Greece is not out of the dog house but looks like they are getting it together and coupled with better employment numbers, US markets soared.  Speaking of soaring, a real Linderella story.   I’ve caught it too.  Yeah, I’m Asian, but, in general seems like such a good dude.  You see,  thankfully (sarcastic emoticon here), my God-fearing mom has flooded my inbox with ‘Jeremy Lin on Faith’ youtubes.  UUGH- just when I finally cleared my inbox of all those Tebow prayer cards she forwarded.

Like Lin-mania, US Fed (FOMC) (led by Ben Bernanke) remains biggest name in town.   That’s because they tell you how the US government is going to spend their money.  So rest of the world tracks/studies/stalks them as frantically as I do a 50% off shopbop sale.  Thankfully, (like Jeremy Lin)  no disappointments yet. Their most recent game-winnning shot came in a Jan 25 comment.  Basically announcing ‘Chill - we’ll stay ‘loose’ and plan to keep pumping money into the economy til 2014’.   Another interpretation: Go spend-spend-spend  because saving will earn you ZERO-ZIP-NADA.  Some of you may have heard Ben Bernanke nicknamed Helicopter Ben.  No, he wasn't a pilot, but, think of him more a club-goer with a reputation to 'make it rain' when the party starts to slow.   Quite literally encouraging us to buy – Definitely a Starbucks frappuccino and manicures but more importantly property/stocks & yes, Diamonds too! 

Quickly let’s just run thru the other major big-shots. PBOC (People’s Bank of China); BOJ (Bank of Japan);  ECB (European Central Bank) and BoE (Bank of England).  And finally , think of the IMF (International Monetary Fund) as the Boy Scouts where delegates from everywhere come together. Funny - Dom Strauss-Kahn was in charge of these boy-scouts until he acted SKETCH.

Right now the major agenda at these meetings is bailing out Europe. They are still debating how to do this but generally boyscouts (from all countries) think we need to keep it raining.

However the Americans in the club are divided right now. Some want the FOMC to stop making it rain ASAP (complaining it’s on their tab) while others are arguing it’s only 9pm and insisting stay loose and make it rain more.   Watch this space – if the Krug stops and music fades – mood can change fast. 

CHINA- Why all the drama??

Are you fully invested in the market right now?  I’m not. (uugh!!)  Thankfully/Regretfully we’re not alone -  Stock trading around the world fell to the lowest level since at least 2006 even as global equities have been climbing higher. Barton Biggs (another super smart guy) saying this means we have further to go.  HELLZ YEA!!

Ok ladies be prepared – there will be loads of press on China inflation now (so basically pork on mainland is getting PRICEY!).  Jan inflation at 4.5% and market wanted 4%.  Now reason this sucks is because China’s economic growth is also normalizing and they need to inject some adrenaline into the economy.  Now if inflation is going up (and poor peeps are already stressing about food costs) it's hard to inject this ‘adrenaline.’  Because as much as the China government dudes want their hot wives (as well as sketchy mistresses) to buy more Louis Vuitton, they don't want to see poor peasants going nuts Tiananmen style. Unlike a lot of what our pro-democracy history teachers taught us (mine used to wear an Amerian flag pin on the lapel of his SEARS ROEBUCK SUIT) – they weren’t protesting for democracy – it was a peasant revolt on soaring food costs.      

Some people in the press are now going to say China’s going to COLLAPSE.  Now these people are as silly as the people who said the US is going to collapse like Japan (US demographics totally different to Japan - thank TEEN PREGNANCY and the CATHOLIC CHURCH) and culturally we’re way different (look at images of Katrina vs 2011 Tsunami).  Now back to China – unlike the US where the government is like SANTA CLAUS and encouraging you to spend your cash, China can't really do that.  It’s over 1 BILLION people (imagine how big that is – that's 3x the size of the US) and when people think things are getting expensive – they will hoard.  Kind of like what I saw in the Sak’s Jan shoe rampage which was pretty ridiculous and shut the whole store down.

Now do I think china is going to collapse? No.  First of all, the US is back – China really struggled when fat Americans stopped being able to afford  cheap ‘Made in China’ Walmart T-shirts and DVD players.  Thankfully we’re back and binging to buy more Tebow gear at our local Walmarts.  Also, what is China doing right now? They are quietly loosening – staying flexible on lending and injecting money into the economy. Unlike the US Fed, which like Santa Claus is asking us to SPEND, China is doing it quietly.  It’s going to take a long time to see how this plays out.  Be patient and just like that annoying boyfriend that’s always so mysterious – China’s making us work at it and read between the lines.