Opinion

The Great Debate

from The Great Debate UK:

Development of the risk trade

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- Jane Foley is research director at Forex.com. The opinions expressed are her own.-

A willingness to differentiate between risk on a country or at a regional level is an important part of the repair process in financial markets.

Credit worthiness is at the core of any assessment of risk and naturally credit worthiness can sort "risk" into a hierarchy which should be instrumental to the pricing of assets and currencies.

At the start of this year, fear and uncertainly herded investors in and out of "risky" investments fairly indiscriminately. Even though the overall rally in risk since the spring suggests that broad based fear has been dispersing, strong correlations between some of these "risky" assets persist.

Forecasts of slow levels of growth for most of the G10 in 2010 suggests that there are still a few more negative shocks in store for the markets in the coming months.

China must avoid a Japanese-style bubble

WeiGucrop.jpg – Wei Gu is a Reuters columnist. The opinions expressed are her own –

Everyone agrees that China’s economy must be rebalanced, but few have bothered to delve into the costs. Japan’s experience has shown that even well-meant changes could sow the seeds for a bubble.

China cannot stay with its current economic model forever. But as the economy has become extremely unbalanced, to some extent even more so than Japan’s in the 1980s, rocking the boat too much risks tipping it over. Instead of rushing into changes, it would be better to make reforms gradually.

Japan, nominally lost, not really so

Al Breach was Russia economist with UBS and Goldman Sachs and is currently managing partner of TheBrowser.com. The views expressed are his own.

albreachHOSTENTAL, Switzerland – How bad was Japan’s “lost decade”? As we look east for clues as to the possible fate of western economies, it is worth dwelling on what actually happened, and not just how it was reported.

Japan’s stock market bubble burst at the end of 1989, and house prices started to fall about a year later. Asset prices at the peak were wildly inflated. Stock prices were trading at ratios of well above 50 times boom-time earnings, while the total value of housing represented around 300 percent of GDP.

from Commentaries:

Japan takes a kinder approach to growth

The victorious Democratic Party of Japan did not put economic growth at the heart of its electoral sales pitch. The party's manifesto mentions "growth" only once. The word "support", by contrast, appears 19 times.

Even so, there are reasons for optimism that the DPJ's softer and more nurturing policies are just what the economy needs.

The global slump provided a painful reminder of the dangers of Japan's export-oriented growth strategy. Output has fallen even faster than in other rich countries, leaving national income at roughly the same level as in the early 1990s.

from The Great Debate UK:

Japan: The election that might change everything

debito- Arudou Debito, is a columnist for the Japan Times, activist, blogger at debito.org, and Chair of the NPO Foreign Residents and Naturalized Citizens Association. The opinions expressed are his own -

Japan's famous mantra is that things don't change much or very quickly.  But I have a feeling that this approaching Lower House parliamentary election on August 30 just might prove that wrong.

But first some background.  Japan has been ruled essentially by one party since the end of World War II -- the Liberal Democrats (LDP).  That's longer than in any other liberal democracy, competing with other countries that have no other parties to choose from.

Forget Microsoft, Yahoo’s value is overseas

– Eric Auchard is a Reuters columnist. The opinions expressed are his own –

eric_auchard_columnist_shot_2009_june_300_px2The fate of Yahoo Inc has become intertwined in the public’s imagination with the success or failure of its dealings with Microsoft Corp in recent years.

That’s despite the fact that as much as 70 percent of the value investors put on Yahoo’s depressed shares are tied up in its international assets or cash holdings — factors that have nothing to do with Microsoft.

from The Great Debate UK:

Making the most of the Commonwealth’s potential

d2- Danny Sriskandarajah is Director of the Royal Commonwealth Society. The opinions expressed are his own -

In recent years the Commonwealth has become an easily derided organisation. From its inception as a clever way of easing de-colonisation to the heady 1970s and 1980s when the association showed a radical dynamism on issues like Apartheid, the international association has shown itself to be unique and useful.

However, today, the Commonwealth risks being drowned out in a more crowded field of international organisations, many with a clearer sense of purpose, more collective will and better resources.

The ugly attraction of fast shrinking Japan

James Saft Great Debate – James Saft is a Reuters columnist. The opinions expressed are his own –

Sure, seeing your economy shrink at a 15 percent annual clip is depressing, quite literally, but if you believe in even a tepid global economic recovery in the second half, then Japan is actually attractive.

There is no way to sugar coat the first quarter Japanese gross domestic product figures released on Wednesday: they are breathtakingly bad viewed from virtually any angle.

Fighting deflation globally ain’t easy

James Saft Great Debate – James Saft is a Reuters columnist. The opinions expressed are his own –

With the U.S., Japan and Britain — nearly 40 percent of the global economy — facing the threat of deflation, it’s going to be just too easy for one, two or all three of them to get the policy response horribly wrong.

The global economy is so connected, and our experience with similar situations so limited that the scope for error is huge.

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