a blog about investing
Wall Street is awash with statistics on any given day. Some are useful while others simply add to the level of noise, but on occasion we do get some hints of where the markets are going by looking at past data. read more…
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…
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.
Most years, at about this time, investors begin to anticipate a so-called “Christmas Rally”. So far investors have received nothing but coal in their stockings. I counsel patience. Most investors appear to be jumping the gun.
Why everyone should have a will
“I’m not old enough to worry about a will,” said one of my clients recently.
Looking at him, you might agree, At 25, he is as healthy as the horses he shoes. As a Ferrier with his own business, he works hard and plays hard. Life is his oyster right now but if he dies, I reminded him, the state gets everything.
How many times in the past year have we been faced with binary events that were either “do or die” moments for the markets? Some turned out to be “dos” but others definitely failed to meet investors’ expectations. Yet, armageddon did not occur. read more…
It is no accident that a growing number of Senators and Congressmen are supporting an end to insider trading among Washington lawmakers. Given the dismal approval ratings of the nation’s politicians, anything that can raise ratings is at least being considered. But don’t count on the passage of this bill.
It was the week that was. The stock market regained practically all of its losses of the last three weeks and then some. If you were not already invested, you missed the move. But don’t fret, I think there is more upside in the weeks ahead.
On Wednesday, global markets rallied more than at any time since March 2009. The news was positive and enough to trigger a stampede by short sellers to cover their positions. The moral of this tale is don’t bet against the world’s central bankers. read more…
Global Investors are convinced that unless something changes and soon, the Euro and the nations that use it are toast. They are exerting as much selling pressure as possible on worldwide markets to force those changes. So far all it has done is make us all poorer. read more…