Tag: America

America Taking Pride in Economy Again

The US has definitely had its issues with its economy in the last few years.  But now it seems that things are looking up, especially when analyzing economic activity over the last year.  The country’s S&P 500 Index is said to be doing better than its counterparts in Frankfurt, Hong Kong, Sao Paulo, Shanghai and Tokyo by at least 15 percent.  As well, Dow industrials increased 135.63 points on housing and employment.  In addition, figures for overall employment are good too with less Americans filing jobless claims.

The Only Way is Up

In truth, things were looking pretty dreary for the American economy a few years ago.  It all started to go disastrously wrong in 2007 with the mortgage crisis. Thereafter, there was the plummet in stocks.  This was followed by high levels of unemployment, and the collapse of the motor industry.  Banks closed, and it seemed at one point that it was becoming almost impossible to hang on to any job. So, truthfully, the situation had no place else to go but up.

Asia Helping America

Today, in 2011-12, America’s economy is definitely going in the right direction.  This is in spite of Europe’s debt crisis. Further, since there are now worries about inflation along with a drop in growth in Asia, this is positive for America’s economy too.  Japan’s auto industry is suffering somewhat since until recently it was a world leader. This changed due to the overpriced Japanese Yen.  But again, this is good  news for America as Honda has decided to move four of its manufacturing units out of the country, to America and Mexico.  And what this has translated to, is sales of Honda (in America) being just a tad behind those of Korean Hyundai vehicles.  Great news for Americans working with Asians leading to the hope of more business deals ahead.

 

Asia’s High End Art Market

Hong Kong has been instrumental in boosting Asia’s art market over the last few years, especially with its 300 percent increase between 2009-10.  This is thanks to the wealthy Chinese who have been enthusiastically purchasing art, resulting in Hong Kong becoming a global art sales center.  It seems like art and other alternative investment options – such as wine – have in general been on the rise irrespective of global financial misfortunes such as the collapse of Lehman Brothers three years ago.

Asia’s Rich Getting Richer

It seems that the wealthy individuals in the Asia region are just increasing their financial worth.   For example, the region is even beating Europe, standing at $10.7tr., whereas Europe is only up to $10.2tr.  Art investment definitely has a lot going for it, being a little different, enjoyable and having pretty good returns. As well what is also good news for Asia is that vis-à-vis the art market, it has not been impacted by the Euro Zone debt crisis.  Indeed, the Mei Moses Global Art Index found almost a 12 percent increase in 2011 to November.

One art consultant, Bobby Mohseni, noted, “it may not be a good time for sellers but it's an excellent time for buyers. During late 2008 and 2009, I highly advised clients to buy. With Chinese contemporary art, some prices have gone exceptionally high and that's just over a decade … so it's best to look at upcoming or mid-tier artists.”

In addition, confidence in China’s contemporary art market remains quite high, even though the same confidence is lacking in the European and American counter markets.  In other words, Asia does not have to feel the negative impact of what is going on in the western world – as has been seen through its art market.

Japan Enters Europe

Panasonic Plans to Globalize Phones

Panasonic is planning on entering the European market with its smartphone in March 2012.  As well, over the next four years, the company hopes to ensure 15 million units are ready for overseas sales, with Europe being the start of its entry into the world market.

Panasonic has made this decision on reflection of how the cellphone market is increasingly moving toward smartphone use globally.  In this frame, it seems that expectations for growth overseas are quite substantial.  Panasonic is not intending to miss out.  In addition, the company has created a new smartphone business model and in the future will be expanding its offerings.  The company hopes that its sales hit 1.5m in Europe in the next fiscal year and over the next four years for 15 million units to reach Europe, Asia and America.

In light of this goal, a few months ago, Panasonic established the Systems & Communications Company (SNC). Via this branch, the electronics firm will be able to fully expand its internal resources, such as the factory it has in Malaysia. At the moment, this is where the phones are made for the Japanese market, which will now be the primary manufacturer for Panasonic’s first global model.

Asia Impacting US Stocks

Again, America needs to count on Asia.  American stock prices at the end of last week encountered mega-instability once global markets were concerned that financial worries in the east may end up in the west, in particular Europe and America.

No country stands alone.  It’s not just Asia and America/Europe.  Right now, concerns have spread to Argentina and Brazil over potential Venezuelan currency devaluation.  This could result in a huge crisis for the entire Latin American region.

But still it’s Asia that has the power to result in worldwide economic problems.  Due to what’s been going on in the financial sphere in the eastern part of the region, huge instability could engulf US and European countries and even result in an abandonment of capitalism.

Further, if American lawmakers are unable to agree on necessary budgetary cuts, the country could end up encountering another credit downgrade.  While there is fear of limited growth in Asia, there is the possibility that mining and energy companies could go into decline.  One trader from London Capital Spreads said that it is likely markets will open lower due to Europe and America’s sovereign-debt concerns…

Europe Versus China

Are Europe’s Financial Woes Hurting China?

It’s bad enough that Europe is in a huge financial crisis, but when it starts impacting countries halfway around the world, then something has to be done. This is exactly what is happening right now.  Still, it’s not all bad news since China recently had some good results vis-à-vis its stocks rising.  There are many factors that will affect a country’s stock and it seems that currently, the focus is on inflation which is getting better.  With this in mind, the country’s policymakers could be set to reduce its tight grip on monetary policies.  This will definitely be helpful.  Nonetheless, there is a great amount of recovery in Europe that is needed for the citizens living there and for its impact on Asia and the whole of the eastern region.

China’s Power Producers

According to the 21st Century Business Herald, the cabinet in China is reviewing the possibility of raising the price of electricity that is paid to power plants.  This resulted in a rally led by Huaneng Power International Inc.  But the International Monetary Fund (IMF) has asked for there to be an increase in banking supervision as there are now greater risks with lending along with a jump in property prices.

China’s Presence in the West

Still, China is not being put off and is developing a true presence in the west.  The country currently  holds 25 percent of US Treasury Bonds (reserved for foreigners) and is busy pushing its way into Europe as well. It is exercising caution though.  While at one time it was the main capitals like Frankfurt, London, Paris and Washington which were taking  the main role, it now seems China is stepping on these financial centers’ toes.  So when Europe and other parts of the west start encountering issues that are too problematic to solve alone, it might just be the case that it will be China to come to its rescue.

Free-trade US-Asia Agreements

It has to be good news for everyone. When the recent free-trade agreement came into effect between America, Colombia, Panama and South Korea, it had to be welcomed by everyone in the east and west.  Clearly this will encourage trade from east to west and vice versa.  When there are no longer trade fees, it has to be a huge incentive to make additional purchases.

The organization Club for Growth would for sure welcome this news.  This body works hard for less government intervention and more freedom for the people.  Free trade is good for all the countries involved.  Many other organizations such as the U.S. International Trade also see the benefit in this law as it will open many new doors for America and is likely to lead to a growth in the country’s exports by up to $10.9bn in the first year following the law’s implementation.  Furthermore, the new trade law is expected to save a staggering 38,000 jobs in America, according to the country’s Chamber of Commerce.

There is the flip side of the coin though.  And of course the law is coming under some sort of criticism. Others see that the disadvantages outweigh the benefits as American clothe-manufacturers are losing out to their Chinese counterparts who can get away with paying lower wagers.  Still, ultimately it’s best for the consumer as prices are kept to a minimum. And if it happens to be China, then China will get the work and Americans will have to find other ways to compete if they want to stay in the game.  Plus, in time China may increase their wages as well as Chinese shoppers become wealthier, which will bring the west back into a competitive mode.

No matter what disadvantages there are, this trade agreement is ultimately beneficial to both east and west markets and that is what all economic critics ultimately must realize.  Even if it does come with some problems (what economic modern law doesn’t?) it still has too much to offer for it be fought against.

East Markets Up; West, Down

European Crisis

Stocks and shares in the east are faring well again, but in the west – particularly Europe – the situation isn’t as good.  The upcoming Euro leader meeting could be partly to blame.  While European leaders and executives were not anticipating a total recovery to their large debt issues, they remain somewhat helpful that the meeting will provide some assistance towards a strengthening of the EuroZone Rescue Fund.  While the Euro crisis will be discussed, it doesn’t seem that any decisions will be made quickly although France and Germany both seek to begin negotiations sooner rather than later.

Japan’s Market

The Nikkei stock average in Japan opened down 0.04 percent.  Europe is definitely having an impact.  According to SMBC Nikko Securities Equity Division GM Hioichi Nishi, “until the European plan takes shape and investors are reassured, it's difficult for markets to make major moves, and trading should stick to recent ranges.”  While the Euro is not faring too badly against the dollar, stealthily moving up 0.2 percent against it, (and the Australian dollar went up 0.3 percent too), it still looks like it won’t be moving all that much given that there is caution about taking any major steps before the meeting.  The entire Asian region is definitely standing back somewhat vis-à-vis activity within its markets with European shares declining last week and American stocks increasing.  This was good news as it indicated that fears of American’s economy once again falling into a recession, were relieved.