Salient to Investors: William Pesek writes: Another 1997-like Asian crisis is highly unlikely because exchange rates are now more flexible, foreign-currency debt is lower, banks are healthier, countries are sitting on trillions of dollars of reserves, and economies are far more transparent. The same can’t be said of 1994, when the
READ MORE... →Salient to Investors: Asia’s role as the world’s growth engine is waning as economies across the region weaken and investors pull out billions of dollars in favor of nascent recoveries in the US and Europe. Economists forecast Malaysia will post its second straight quarter of sub-5 percent growth this week.
READ MORE... →Salient to Investors: William Pesek writes: A week after Japan’s debt reached the 1 quadrillion yen ($10.28 trillion) mark, yields have actually declined. BOJ Governor Kuroda is winning bondland’s full obedience with two forms of trickery: essentially transferring money via monetary policy from citizens to the government, and outright monetization of public debt. The
READ MORE... →Salient to Investors: William Pesek writes: History will judge Abe by what he did, or did not do, to end the worst nuclear crisis since Chernobyl. It’s mind-boggling how disengaged Japan’s leaders have been since the near-meltdown at the Fukushima Dai-Ichi nuclear plant, just 135 miles from Tokyo. Nuclear regulators remain more
READ MORE... →Salient to Investors: Japan’s national debt is larger than the economies of Germany, France and the UK combined, more than twice the size of the economy, and its fiscal deficit will expand to 10.3 percent of GDP in 2013. Moody’s Investors Service warned that a worsening of finances would erode confidence in government bonds. Thomas
READ MORE... →Salient to Investors: William Pesek writes: China is very susceptible to Japanization, and only bold and creative action can avoid it. However, for every pledge to cut excess production capacity, audit government borrowings and tolerate sub-8 percent growth, two others assure markets that growth won’t be allowed to slow too much. Japan
READ MORE... →Salient to Investors: William Pesek writes: The nightmare for Japan is that it took Abe this long to step in to help Tokyo Electric Power to deal with tons of radioactive groundwater spilling into the Pacific Ocean. Most people still have no idea how close we came to losing Tokyo in
READ MORE... →Salient to Investors: William Pesek writes: Former George Soros advisor Takeshi Fujimaki said Abe delaying increasing Japan’s sales tax would worsen Japan’s debt profile, while Fed tapering would cause a fresh credit crunch that would slam Japan’s bond market. When Li Ka-Shing, Asia’s richest man, is turning to Europe as Hong Kong
READ MORE... →Salient to Investors: Takeshi Fujimaki said: A delay in increasing the sales tax and reduction of Fed stimulus could cause Japan’s government bond bubble to burst. Japan will not be able to avoid default and hyper-inflation with the tax increase, but that is no excuse not to go ahead with it. Japan’s fiscal
READ MORE... →Salient to Investors: William Pesek writes: Asia sits on almost $7 trillion in currency reserves, much of it in dollars as its central banks engaged in a kind of financial arms race after a 1997 crisis. Asia now has more weapons against market unrest than it knows what to do with
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