Economist Feb 8th 2014

《The worldwide wobble》

  • Necessary correction of market
  • More like a wobble than a tumble
  • No reason to expect a sudden spending slump
  • Slowing rather than slumping china
  • More easing on Europe and Japan

《Goldilocks and the bears》

  • Increase in short rates far from imminent
  • The worst-hits have been those with specific problems
  • As money flows back to US, let exchange rate slide and risk inflation, or increase interest rates and risk a recession?
  • No sign of problems in corporate results yet
  • Equities look expensive, positive for government bonds

《My country is right or righter》

  • NHK seek to follow the government’s line
  • For Abe and LDP, rebooting the media is a strategic priority
  • Pacifism still remains popular at home

《Search over》

  • How link works: Google Shopping scored 36.7% of clicks, against 5% for rivals;
  • Now it will show links to rivals alongside;

《News you can lose》

  • CNN: no glory in the role of unbiased “referee” between partisan networks (left-leaning MSNBC, and conservative Fox News); “Nobody goes to the game to see the ref.”
  • More people turning to the internet: “there is a ‘ceiling’ to how many people are getting their news from television today.”
  • what works today is entertainment;
  • CNN’s costs are also high: it has more bureaus than MSNBC and Fox News; “in produce business,” “News comes and goes so quickly.”

《Countervailing motion》

  • Fed’s shift to less expansionary monetary policy is only half the story: Central bank in Euro area and Japan are still moving in the opposite direction – “not conducting synchronized tightening”;
  • “If Japan is confronting the ghost of deflation past, the euro zone is spooked by deflation yet to come.”
  • BOJ started asset purchase $70bn a month, far greater relative to Japan’s economy – pushed up headline inflation to 1.6%, with core inflation (energy and food) entering into positive territory and rising at fastest pace since 1998;
  • Abe’s resuscitation plan – encourage hiring and raise wages;
  • Turmoil from EM: as global investors seek refuge in financial havens, the yen has started to appreciate again – make Abe nervous about raising the consumption tax;
  • Euro zone: core inflation only 0.8%, one notch up from the record low 0.7% at the end of 2013;

《Down to 1.4 and 17》

  • 20% of performance fees and 2% of management fees down to 17% and 1.4%;
  • Hedge funds as a whole undershot just about any benchmark in recent years;
  • Another factor: rush of new investors (pension funds, endowments, sovereign funds), greater negotiating power

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