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Where oil goes, so goes the market

 

Stocks had a tough week. All averages are now negative for the year once again and will continue to go lower until oil finds a bottom or the market disconnects from energy prices. The problem with that scenario is that no one knows if and when that will occur. read more…

Did the digital Grinch steal Christmas

Ever notice that however hard you try, the Christmas season is simply not what it once was? The routines and traditions you remember so fondly from your youth have somehow faded away. The digital age has transformed the holidays, and for some of us, the experience has been a mixed blessing. read more…

Markets swoon as ECB disappoints

What was supposed to be a sure deal by the European Central Bank to apply more stimulus to European economies turned out to be less than expected. Both U.S. and European markets declined as a result and the Euro soared. read more…

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Make a Financial Resolution this year

 

As most of us resolve to lose weight, quit smoking or in some other way change our lives this year, don’t forget to reevaluate where you stand financially. There are some simple steps you can take that will reshape your fortunes for years to come. read more…

Japan embraces Bushido

It was a word rarely spoken in post-War Japan. “Bushido” or the “Way of the Warrior,” evoked too many embarrassing and shameful memories culminating in the horror of Hiroshima and Nagasaki.  But times have changed. 

On December 26th, Prime Minister Shinzo Abe did the unthinkable. Defying the Koreas, China and the U.S., he visited the Yasukuni War Shrine. It is where the memories of 2.4 million Japanese war dead from three wars are remembered. His 30 minute visit sparked outrage from Japan’s neighbors who view the shrine as a symbol of Japan’s imperial military past.

Last Tuesday the Japanese government further confirmed my thesis presented to readers six months ago.  Japan announced a significant increase in its defense spending over the next five years amounting to 24.6 trillion yen ($237 billion). That’s an increase over the current plan and, in my opinion, the defense budget will be increased again and again as time goes by.

They will use the money to acquire surveillance drones, 28American F-35A fighter jets, 17 Osprey aircraft, five naval destroyers, six submarines plus amphibious vehicles. That’s not all. Japan’s existing Self Defense force will be beefed up with a new amphibious unit (similar to the U.S. Marine Corp) whose job would be to re-take islands captured by the enemy.

Abe also announced the establishment of a U.S.-style National Security Council and gained support for changing the country’s constitution, specifically Article 9, which prevents Japan from “collective self-defense” (coming to the aid of its allies).

Clearly, Japan is rebuilding its defense capability. This sea change will have long-term repercussions for the Japanese economy and the balance of geopolitical power in Southeast Asia. It also adds to U.S. security while reducing our costs as we begin to share the role of the world’s policeman.

In my last column back in August “Japan’s new frontier,” I argued that this island nation was on the eve of re-inventing itself. I predicted that as part of an economic renaissance, Prime Minster Abe and his cabinet was preparing to expand its defense capabilities. Re-armament, in my opinion, would address several issues simultaneously.

An expanding defense industry would provide a large number of highly-skilled, highly-paid jobs for the country’s workforce. It would also be an easy avenue for the government to provide spending and additional stimulus to the economy. It would answer the U.S. government’s on-going request that Japan shoulder more responsibility in policing their side of the globe, specifically Southeast Asia. And finally, the return of the Samurai in the form of a stronger army, navy and air force would provide a strong detriment against encroachment from China, North Korea and someday possibly a more aggressive Russia under Putin.

Recent events have played into the hands of Abe in martialing support in his quest towards Bushido. China’s arbitrary declaration of an exclusive “air defense identification zone,” covering the disputed Senkaku Islands recently lent credence to Abe’s argument that Japan must be willing and able to protect its own territory or else others would take it from them.

This argument reverberates in other parts of Asia.  Vietnam and the Philippines have their own disputes with China over territory. It is no accident that Japan, using last month’s typhoon damage in the Philippines, dispatched troops, ships and generous amounts of aid while China did next to nothing. It was the largest deployment of Japanese forces since 1945.

Most readers are aware that I have been bullish on Japan, its economy and stock market for the last two years. Everything I see convinces me that my investment stance is correct.

 

Fed Saves the Santa Rally

 

This week the Federal Reserve Bank announced it would begin to taper in January by $10 billion a month.  Most investors expected the markets to drop on the news but the opposite occurred. Why? read more…

What the Fed Taper means for you

 

This week the Federal Reserve Bank announced the beginning of the end of its years-long support of the financial markets.  Granted, $10 billion per month of reduced purchases is a baby first step, but over the next year, the Fed is hoping they can reduce its bond buying altogether. read more…

Coal in your stocking?

 

The bulls can’t muster enough strength to push stocks to new highs. Bears lack the conviction to stage a meaningful decline. It appears we are in a stand-off, but for how long? read more…

IRA Distribution Time

 

Information abounds on why and when you should contribute to a tax-deferred savings plan such as an Individual Retirement Account (IRA). Less is known about what happens in retirement when you have to take money out of these plans. For those who turned 70 ½ years or older in 2013, pay attention, because it’s distribution time. read more…

Good news is bad news

U.S. economic growth in the third quarter surged higher by 3.6%, while jobless claims plunged by 23,000 to 298,000 as layoffs slowed. That’s great news, right, so why is the stock market falling? read more…

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About Bill

Bill Schmick was born in a blue-collar neighborhood of Philadelphia, just a few blocks north of “Rocky Balboa” territory where most of his Catholic schoolmates grew up to be either cops or criminals. He narrowly escaped both professions by volunteering to fight in Vietnam as a U.S. Marine... Read More

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