Opinion

James Saft

Shrinking Japan asks for more of the same: James Saft

Nov 13, 2012 05:00 UTC

Nov 13 (Reuters) – Japan is shrinking again and its
government thinks the answer lies in more of the same policy the
Bank of Japan has been unsuccessfully implementing for 17 years.

Japan’s economy contracted by 0.9 percent in the third
quarter, data showed on Monday, reversing earlier quarters of
growth and taking the country into a nosedive equating to a 3.5
percent annual decline.

Inevitably, this has economists and policy-makers fretting
over whether Japan is sinking into a recession, technically
defined as two successive quarters of economic contraction.

“I cannot deny the possibility that Japan has fallen into a
recession phase,” Japan’s economy minister Seiji Maehara said.

As if there could be a more beside-the-point question; this
is akin to an alcoholic thinking their big problem is whether
they will lose their job. Japan’s issue isn’t whether it is
sinking into its fifth recession in 15 years – as if recessions
were somehow discrete phenomena like colds – but why it is now
20 years into an economic malaise.

Post election, banks may get real: James Saft

Nov 8, 2012 21:28 UTC

By James Saft

(Reuters) – Banking shares are down sharply since the election, but the threat of tough regulation now moving markets might hold a kernel of hope for investors.

The re-election of Barack Obama and the victory of several high-profile supporters of tough financial regulation – notably Massachusetts Senator-elect Elizabeth Warren – have cemented expectations of an increasingly difficult operating environment.

Although not far off 52-week highs, the KBW bank index is about 4 percent lower than just before the election. Morgan Stanley is 8 percent lower, while Citigroup Inc is down about 4 percent.

Europe, not election, the driver: James Saft

Nov 7, 2012 20:15 UTC

Nov 7 (Reuters) – Obsess exclusively over the fiscal and
monetary impact of the U.S. election at your peril: the real
news may be coming out of the euro zone.

An election producing a split Congress and a second Barack
Obama term was greeted on Wednesday with a sharp divergence in
financial markets, with stocks falling and Treasuries and the
dollar rallying sharply.

Since most of us in the U.S. have spent nearly every waking
hour in recent weeks being bombarded by news, advertisements,
images, lies, statistics and still more lies it is no wonder
that most analysis of the market is attributing the moves to the
election’s implications.

Europe needs a weak euro: James Saft

Nov 6, 2012 05:00 UTC

Nov 6 (Reuters) – While the world is transfixed by the
outcome of the U.S. elections, the euro zone is busily imploding
economically.

And this time the difficulty isn’t so much being driven by
the troubles in Greece, Spain and elsewhere but is reflecting a
stark underlying weakness which will complicate already thorny
structural problems. Recent data on bank lending – still central
to the European economy – shows an old-fashioned, flat-out
recession deepening, with banks and borrowers both backing away
from credit as quickly as their little legs will carry them.

The situation cries out for action to weaken the euro from
the European Central Bank, which is widely expected to do
exactly nothing at its policy meeting this Thursday. Perhaps the
only good news is that the markets, recognizing the issues, are
trading the value of the euro lower, making some slight
difference in competitiveness and external demand.

Rod, the Yankees and a lesson in sunk costs

Nov 1, 2012 20:55 UTC

By James Saft

(Reuters) – The New York Yankees and their aging and highly paid third baseman Alex Rodriguez illustrate a problem all investors face and few completely conquer: sunk costs.

You too, like the Yankees, probably own a security you paid more for than it is now worth, and you too may well find it perplexingly hard to sell and accept your loss.

Rodriguez, for those of you who don’t follow baseball, is a likely hall of famer whose skills, at least based on the statistical record, have slipped sadly recently. Things came to a head in the baseball playoffs when the Yankees benched Rodriguez, the man they will pay $29 million in 2012.

SAFT ON WEALTH:A-Rod, the Yankees and a lesson in sunk costs

Nov 1, 2012 20:36 UTC

Nov 1 (Reuters) – - The New York Yankees and their aging and
highly paid third baseman Alex Rodriguez illustrate a problem
all investors face and few completely conquer: sunk costs.

You too, like the Yankees, probably own a security you paid
more for than it is now worth, and you too may well find it
perplexingly hard to sell and accept your loss.

Rodriguez, for those of you who don’t follow baseball, is a
likely hall of famer whose skills, at least based on the
statistical record, have slipped sadly recently. Things came to
a head in the baseball playoffs when the Yankees benched
Rodriguez, the man they will pay $29 million in 2012.

Sandy shows liquidity may be over-rated: James Saft

Oct 31, 2012 18:36 UTC

Oct 31 (Reuters) – Maybe liquidity isn’t all it’s cracked up
to be.

Trading in U.S.-traded stocks re-opened on Wednesday after a
rare two-day hiatus, as exchanges struggled to cope with the
aftermath of Hurricane Sandy.

Given the fact that everyone was prevented unexpectedly for
two trading sessions from turning their stocks into cash, much
less into other stocks, trading was amazingly tepid and calm.

Is China making the consumption transition?: James Saft

Oct 30, 2012 12:00 UTC

(James Saft is a Reuters columnist. The opinions expressed are his own)

By James Saft

(Reuters) – Consumption is increasingly driving China’s economy, perhaps marking the country’s much-needed transition to a more sustainable model.

But even if China is moving away, slowly, from its old model based on saving, investing, building and exporting, it is important to realize that the change brings with it new uncertainty, risks and the potential for disappointing growth.

China’s economy grew 7.4 percent in the third quarter, down from 7.6 percent in the preceding three months and marking the seventh consecutive quarterly slowing in growth. Underlying figures, however, gave some cause for optimism, particularly a 14.2 percent rise in September retail sales, a rise of a full point from the month before.

Earnings and revenues can’t diverge forever: James Saft

Oct 25, 2012 21:01 UTC

By James Saft

(Reuters) – Corporate earnings and revenues can’t, as they are doing this earnings season, diverge forever.

Just about halfway through the U.S. third-quarter corporate reporting season and we find that 59 percent of S&P 500 companies have beaten their earnings estimates, down a bit from last quarter but still an upbeat number.

And yet about 60 percent have missed their sales targets, meaning that corporate America is somehow extracting more profit than promised despite bringing less money into the tills than expected.

Bernanke, the election and risk assets: James Saft

Oct 24, 2012 19:48 UTC

By James Saft

(Reuters) – Now we have the pre-election Federal Reserve meeting out of the way, we can go back to worrying about the real issue.

Not who will be president, but who that president will slot in to park in Ben Bernanke’s parking spot when his term as Federal Reserve Chairman runs out in January 2014.

The New York Times this week reported Bernanke telling friends he is unlikely to stand for a third term as Fed chief, opening up the likelihood of a new person in the role in 2014 no matter who is elected president.

  •