Tuesday, October 29, 2013

In Depth:US-Pakistan Relations,part 1

Last Wednesday,President Barack Obama and Prime Minister Nawaz Sharif of Pakistan had a wide-ranging discussion on matters of mutual interest to the two countries.They acknowledged the substantial progress in the bilateral relationship over the past year and noted its resiliency,the White House said.President Obama conveyed appreciation for Pakistan's internal and regional security challenges and affirmed that a peaceful,prosperous and democratic Pakistan was an essential partner for the United States in the advancement of shared goals of peace,security and socioeconomic development in South Asia.
Both Leaders welcomed the resumption of the US-Pakistan Strategic Dialogue and reaffirmed its importance as the suitable framework for guiding the bilateral relationship.Secretary Kerry will host the forthcoming Ministerial-level Strategic Dialogue by March 2014.They also decided the strategic priorities for the working groups,including:1.Law Enforcement and Counterterrorism 2.Economics and Finance 3.Energy 4.Security,Strategic Stability,and Non-Proliferation;and 5.the Defense Consultation Group.
Taking note of the robust bilateral defense cooperation between the two countries-including recent miltary engagements,exercises and consultations on regional security-President Obama and Prime Minister Sharif expressed satisfaction with the positive momentum achieved in defense realtions and reaffirmed that this partnership should continue to grow and endure.
The two Leaders noted with satisfaction that the Ground Lines of Communication(GLOCs) are facilitating the movement of US and ISAF cargo through Pakistan.The US plans to continue providing assistance and support,including training and equipment to Pakistan's military and security services.The two Leaders decided to strengthen their cooperation,including in regional maritime security.President Obama noted Pakistan's positive efforts to counter IED's and both leaders resolved to continue working together to disrupt the threat posed by these devices.

Monday, October 28, 2013

Asia This Day:Pakistan-US Relations;Indian Grand Prix

Pakistani Prime Minister Nawaz Sharif concluded several days of dialogue in Washington when he met with President Barack Obama on Wednesday.Mr.Sharif,63,had begun his unprecedented third term as Prime Minister on June 5,2013 following a smooth democratic process.A noted businessman,he owns the industrial conglomerate Ittefaq Group.
Speaking at the White House,the two Leaders assessed their talks for the news media in a serious yet relaxed atmosphere.To see a peaceful transition was an enormous milestone for Pakistan and a testament to the Pakistani people's desire for democracy,the President said.The United States considers Pakistan to be an important strategic partner.
We discussed how the United States could potentially be helpful on energy projects and infrastructure projects.The Prime Minister emphasized how trade can be a powerful engine for growth as well.
We talked about security.We agreed we need to find constructive ways to partner together,in ways that respect both countries.Both the Pakistani people and the American people have suffered from terrorism in the past.It can be a source of strength for our two countries to work together in this way.I pledged to fully brief the Prime Minister and his government as we make progress not only for the Afghan elections,but to long term progress in the region.
The resources India and Pakistan are spending on arms would be better spent on social programs,for the good of the world.We want want to be fully supportive of continued progress in Pakistan.As a young man,I had the opportunity to visit Pakistan,the President recalled warmly.
Despite occasional misunderstanding and tensions,the fundamental good will between the American and Pakistani people will be reflected in our governmental relations,President Obama said.*
I have just had a most cordial exchange of views with the President,Prime Minister Sharif said.Over the past 65 years,our two nations have traveled together.I advised him of our domestic and foreign policy priorities:the economy;education;and combating extremism.We both agreed focusing on these areas is indispensable.
Pakistan and the United States have a strong ongoing counterterrorism cooperation.I raised the issue of drones and the need to end these strikes.Let there be no doubt about our commitment for a peaceful and stable Afghanistan.I told President Obama about my sincere commitment to build a peaceful relationship with India.I also assured the President as a responsible nuclear state,Pakistan would continue to act with restraint.
I look forward to welcoming you and Mrs.Obama to Pakistan,Mr.Sharif concluded.*
In sport,Red Bull Racing scored their fourth straight double victory at the Formula One Indian Grand Prix in New Delhi Sunday,taking both the constructor's title and the world driving championship with Sebastian Vettel,who seemed to be quite the fan favourite in India.It was Vettel's tenth win of the season,and his sixth straight,as he enters the upper echelon of drivers in the history of the sport.
Vettel,26,was beside himself with joy,ignoring his instructions to follow the staid post-race protocol of F1.Instead,he made several donuts with his car to the delight of the fans,then got out of the car and made prostrations to the crowd.Their were no boos such as he faced in Europe as he mounted the podium;only chants of approval from his legion of Indian followers.
For me to join people like Prost,Fangio and Michael(Shumacher) is unbelievable,Vettel said.So many people I have to thank that have been teaching me a lot.I don't feel old.Maybe in 10 years' time I'm a little bit better at understanding what we have done this far,the German driver reflected.At his age,the great Alain Prost had yet to achieve his first Grand Prix win.*
In golf,the CIMB Classic at Kuala Lumpur Golf and Country Club,Malaysia,the historic first ever PGA Tour event in Asia,was won by American Ryan Moore,30,in a playoff with his compatriot Gary Woodland.It was Moore's third career victory and his second in twelve months.He has played on the PGA Tour for nine years.
Next weekend,the PGA Tour moves on to Shanghai for its second and final Asian stop of the 2013-14 season.It is generally recognised as being the pre-eminent tour in professional golf.*

Friday, October 25, 2013

Distraction: Laughing kookaburra-Australian bird

Live and Let Die - PAUL McCARTNEY & WINGS

China Gets It,Indian Prime Minister Says

Indian Prime Minister Manmohan Singh expressed satisfaction with his four day visit to China Thursday as he spoke aboard Air India One on his flight back home.There is a commitment on the part of both China and India that peace and tranquility on the border is a pre-requisite for progress in our relationship,Dr.Singh remarked.So I am reasonably satisfied that the Chinese leadership is as serious as we are in ensuring peace and tranquility on the India-China border.*
The Border Defence Cooperation Agreement was signed during the visit.It stipulates that both sides will notify the other of border patrols,and that military leaders will establish better communication with their counterparts on the other side.They will also avoid the practice of having patrols tail one another,in order to prevent antagonism.The two countries have never formally defined their border.*
A pact on the two nations' trans-border river system was also signed.I raised the issue again and there is incremental progress,the prime minister reported.They have agreed to provide data for more number of days.Also they have recognised that the behaviour of the trans-border river system is of interest to all riparian states.So our concerns have been put on the table.I hope there will be more progress in the years to come,Prime Minister Monmohan Singh said.*
In sum,it seems that India's interests were vigorously represented to China,and some significant agreements protecting them signed,over the course of the extensive dialogue between the two nuclear powers.*

Tuesday, October 22, 2013

Singh,Putin Focus On Terrorism;Pakistani PM in Washington

The focus of Monday's meeting between Indian Prime Minister Manmohan Singh and Russian President Vladimir Putin was on terrorism and those who are not vigilant enough about it on their territory,i.e.,Pakistan,even as Pakistani Prime Minister Nawaz Sharif is on a four day visit to Washington.Following their talks,the two leaders strongly condemned countries that tolerate terrorists within their borders.States that provide aid,abetment and shelter for such terrorist activities are themselves as guilty as the actual perpetrators of terrorism.They need to irreversibly shut down terrorist networks,organisations and infrastructure,and show tangible movement in investigating and bringing quickly to justice those responsible for acts of terrorism.*
Singh and Putin expressed opposition to Pakistan's attempts to rehabilitate Taliban militants,and concern about Afghanistan's future post-2014,when NATO and coalition forces will have largely departed the war-torn country.Anti-Taliban sanctions should be maintained,the Indian and Russian leaders agreed.The sides considered it necessary to extend the sanctions regime introduced by the UN Security Council against the Taliban as one of the most important tools of fighting terrorism.They also said the Mumbai attacks were acts of terror whose perpetrators must be brought to book-referring to Lashkar-e-Tayibba in Pakistan,whose efforts to arrest and try the militants are seen to be anemic by Russia and India.*
Agreement on the building of units 3 and 4 at the Kudankula nuclear power plant on India's southern coast was not ready for signing at the meeting between Singh and Putin.India has enacted tough new safety requirements in light of the Fukushima nuclear disaster in Japan in 2011.
Even as Putin and Singh were meeting,Pakistani Prime Minister Nawaz Sharif was in Washington for four days of high level talks with US officials,including President Barack Obama on Wednesday,as well as Secretary of State John Kerry and Members of Congress.It is the third meeting between Sharif and Kerry in the last three months;it continued the robust dialogue on our shared goal of a stable,secure and prosperous Pakistan,the State Department said.*
Mr.Sharif tried to draw the US into the Kashmir territorial dispute between Pakistan and India while he was in London,describing it as a nuclear flashpoint.The US rebuffed him,however,saying Kashmir was strictly a matter for the two South Asian nations to resolve among themselves.*
The US has quietly resumed military and economic aid to Pakistan in recent days,following a period of tension after the unauthorised US raid and killing of Osama bin Laden on Pakistani territory in May 2011,as well as a US drone strike that mistakenly killed two dozen Pakistani troops in November 2011.*

Monday, October 21, 2013

Asia This Day:Indian Prime Minister Departs for Russia,China

Indian Prime Minister Manmohan Singh has embarked on a five day journey to Russia and China.While in China,he will be discussing the Border Defence Cooperation Agreement the two countries have been negotiating to avoid clashes over extensive sections of their 4,000 kilometer border.Mr.Singh will also attempt to improve trade with both Russia and China,including energy and defence projects.*
The scope of our relationship with Russia is unique,the Prime Minister said,encompassing strong and growing cooperation in areas such as defence,nuclear energy,science and technology,hydrocarbons,trade and investment.*
India and China have historical issues and there are areas of concern,Mr.Singh continued.The two governments are addressing them with sincerity and maturity,without letting them affect the overall atmosphere of friendship and cooperation.I will be discussing some of these issues as part of strategic communication between leaders with a forward-looking and problem-solving approach.*
Besides arms purchases from Russia,while in Moscow he will also discuss completion of a nuclear reactor Russia has been building on India's southern coast that has caused safety concerns.*
In April,Indian and Chinese troops faced off for three weeks in a remote Himalayan desert region,when India accused Chinese soldiers of intruding 20 kilometers/12 miles into Indian territory.Another standoff occurred in August.*
China's Fosun International is buying 1 Chase Manhattan Plaza in New York City for 725 million dollars.It is the largest ever NYC purchase by a Chinese buyer.JP Morgan Chase will relocate most of its employees from the iconic 60 storey tower,which has 2.2 million square feet of office space,to other sites in the city.The US is China's number one choice for real estate investing;Canada is second.*
In golf,South Korean Jin Jeong won the European Tour's ISPS Handa Perth International in Australia Sunday,defeating England's Ross Fisher in a playoff.Australians Brody Ninyette and Dimitrios Papadatos,along with Englishman Danny Willett,tied for fifth place.*
JP Morgan Chase(JPM)

Friday, October 18, 2013

Howard Jones - No One Is To Blame

Autistic New York Boy Still Missing

The disappearance of Avonte Oquendo,14,from his Queens high school on the afternoon of October 4 has become a major incident as police and rescue personnel in New York and other states comb the region for the missing autistic teen.Metropolitan Transit Authority police are thoroughly searching subway stations at the beginning of each shift,and many volunteers have joined in the effort.Avonte is reportedly fond of trains,and police suggest he may have boarded one.
There is a $77,500 reward for information on where Avonte is.Police and rescue vehicles are playing a recording of his mother's voice asking him to approach the flashing lights on the vehicles.A school safety officer told Avonte to go back upstairs when he approached the front door of Center Boulevard School in Long Island City.Avonte,who does not speak,turned and went down another hallway,exiting the school by a side door,surveillance video shows.
It is common for autistic children to wander,throwing their families into an uproar.The Oquendo family has filed a Notice of Claim-the first step in a lawsuit against the City of New York.
Avonte is described as being black,five-foot-three inches tall and weighing about 120 pounds,and was last seen wearing a grey striped shirt,black jeans and black sneakers.If you know anything about him,please call the NYPD Crime Stoppers Hotline at 800-577-TIPS.

Tuesday, October 15, 2013

Yellen's Qualities;Default's Consequences

Janet Yellen will likely be confirmed as chairman of the Federal Reserve,said Senator Bob Corker,R-Tennessee.*
Experience,independence,collegial leadership:Janet Yellen embodies these things,according to Professor Glenn Hubbard of Columbia University.She is the right choice.I don't expect material differences from the Bernanke Fed.*
Yellen would be the first female chairman in the Fed's 100 year history.Indeed,she would be the first woman to head a central bank in the world.*
One of the challenges for her is how to clearly communicate the Fed's policy to the market and the public.When you look at her voting record,she was three times to vote for a rate hike;then a rate cut,said David Rosenburg,chief economist and strategist at Gluskin Sheff&Associates.She was consistently one of the most thoughtful people around that table.She absolutely nailed the 2007 recession.
She's a very distinguished scholar and has practical experience applying her work.She's a very collegial leader and brings groups together,Mr.Rosenberg pointed out.*
I think default's got long term as well as short term consequences,said David Kovacevich,chairman emeritus of Wells Fargo.America is where people went for safety.We're losing that image and confidence.We just cannot let that happen.We just can't have a default.We have the resources to pay our bills;we just don't have the will.
It's much more serious than the fiscal cliffs.People are fed up with both sides of the aisle.They want to see a solution for the American people,not politicising every issue that comes up.
People cannot invest in defaulted currencies.It's more serious than people think.If you really get into the details of this,you get very scared of what could happen,Mr.Kovacevich warned.*
Wells Fargo Corporation(WFC)

Monday, October 14, 2013

Asia This Day:India Craves Growth;US Default Impacts

Tapering will have an impact globally,and India cannot escape,said Chandra Kochhar,CEO of ICICI Bank.India's growth rate has come down 4.5%.We have to take India's growth rate back.If we don't,investors will stand there waiting for growth to come back.*
There's a virtuous cycle that can start if you bring the growth rate back.The investment story has fallen off currently.We need to make sure projects are approved and the approval is constant,and not withdrawn,Ms.Kochhar advised.*
India's trade with the US was 92.5 billion dollars last year.*
Japan,Indonesia and Hong Kong markets are closed today for holidays.The MSCI Asia-Pacific index fell 0.14% in early Monday trading on more than estimated Chinese consumer price inflation,and less than estimated Chinese exports,as well as the US debt impasse.In Australia,stocks were also hurt by Oz Minerals cutting its full year output forecast and the recent decline in gold prices.*
India's Nifty Fifty futures index was down 0.13%.*
Japan holds 1.14 trillion of US Government debt.Finance Minister Tara Aso said Treasury Secretary Jack Lew and the US Government has an understanding of what default would mean;but we must question whether Congress does.Nonetheless,we expect an agreement to be reached.*
The consequences of the US defaulting on its debt are just unthinkable,said Sacha Tihanyi of Scotiabank.What would happen?A massive risk-off event across the world.A massive outflow of funds from the equity and bonds space.Asian currencies would fare the worst.
It's a good idea to diversify away from the US dollar as the world's reserve currency the way China has called for,but they can't just wholesale run away from US Treasuries.Diversifying has to be a gradual process.
China's looking OK.I'm still constructive on the currency.The CPI inflation was food-driven.I'm not worried about that.Imports remain fairly robust-a testament to the health of the Chinese economy,Mr.Tihanyi observed.*
In sport,Sebastian Vettel of Germany won the Formula One Japanese Grand Prix at Suzuka City on Sunday,with Australia's Mark Webber second,and Romain Grosjean of France third on the podium.
The Sime Darby LPGA Malaysia in Kuala Lumpur was won by American teenager Lexi Thompson,18,while China's Shanshan Feng was second,and Suzanne Petterson of Norway finished third.*
Bank of Nova Scotia(BNS)

Tuesday, October 8, 2013

Should You Invest in the PIMCO Total Return Fund

The policy rate is the key going forward,said PIMCO founder and co-CIO Bill Gross,the "Bond King."We at PIMCO think it's gonna stay low for a long,long time.We think that unemployment of 6.5% is their target.We think the policy rate is the key, and has to stay down there to anchor and keep other rates low.*
Every week that we keep the government shut down subtracts 0.10% from GDP.Ultimately,the possibility of default is a million to one.The uncertainty going forward is not good for the Treasury rate.Every month,the Treasury brings in 300 billion dollars,and pays out 45 billion.It wouldn't even think about defaulting.*
The Total Return Fund suffered rather significant outflows,but September was a magical month,and investors are coming back.*
As for overseas investing,Brazil has particular problems in terms of its infrastructure and pension payments.It's not the paradise many investors had thought,Bill Gross observed.*
Despite outflows for five consecutive months,PIMCO's Total Return Fund is regarded as a core bond holding by many.It is the world's largest mutual fund.It saw 5.4 billion dollars of outflows in September,and 28.7 billion of outflows year to date.That's -10.1% of assets under management.This decline in popularity is pegged to a Wall Street notion that the Federal Reserve will soon begin hiking rates-a belief that hasn't been supported by the continuing slow pace of the recovery from the financial crisis and the drag of fiscal uncertainty.
The fund closed at 10.82 a share on Monday,down 0.09%.Nonetheless,Morningstar Associates gives it an outstanding five star rating.The fund has very low expenses of 0.46%,and bonds are still considered an essential element of a balanced portfolio.Over the long term,you are better off having significant exposure to the bond market.Among bond mutual funds,Total Return remains the clear favourite.*
PIMCO Total Return Fund(PTTRX),PIMCO Total Return ETF(BOND)

Monday, October 7, 2013

Asia This Day:APEC Summit;Petronas Plans for British Columbia

US Secretary of State John Kerry and Secretary of Commerce Penny Pritzker are in Bali,Indonesia for the Asia-Pacific Economic Cooperation summit of Pacific Rim nations.President Barack Obama was supposed to be a participant there as well,but political conflict in Washington is preventing him from attending.It is the third time since 2010 the president has had to cancel a trip to the region because of domestic concerns.
This is damaging America's reputation.The Jakarta Globe's Saturday edition depicts the president on its cover with the headline "Diminishing Superpower."There is a train of thought that says that China and Russia will fill the gap of the president's absence,reveling in the attention.If the US cannot manage its domestic affairs,how can it be a credible influence in the Asia Pacific?
John Rice,Vice Chairman of General Electric,said the general theme is,the US shutdown is disappointing,with a lot of unproductive rhetoric in Washington.American companies at the summit are disappointed the president is not here,but they also understand there are political issues at home.There are great leaders here:John Kerry and Penny Pritzker.
I think the US is showing commitment to Asia.We have to see what happens in the next couple of weeks and months,not just focus on one meeting the president missed.I'm optimistic about a resolution of the debt ceiling.Everyone knows how serious that would be.
The impacy of tapering is on exchange rates,but we can't make decisions based on currency moves that take place over six months.Companies like ours have to put capital and expertise on these infrastructure projects.We expect infrastrucutre requirements to go up an average of 15% over the next 5-10 years.Hundreds of millions of people need it.They want the same things you and I want.
We see health care deals and energy deals.If you don't have electricity,you can't provide for your people,Mr.Rice pointed out.*
Commerce Secretary Penny Pritzker said it's about a diversifying relationship with the Asia-Pacific:an economic;national security;commercial relationship.American companies are eager to come to Asia,and there is tremendous receptivity by Asian economies to receive American business.*
Malaysia's state energy firm Petronas plans to build a 35 billion dollar liquid natural gas plant and pipeline in British Columbia to export shale gas.The terminal would be completed by 2018.*
The MSCI Asia Pacific index fell 0.84% in early Monday trading,on fears around the US budget impasse.*
Petronas Gas BHD(PTG:Bursa Malaysia)

Friday, October 4, 2013

Violent America:Second Washington Incident Reinforces Image

The second high profile violent incident in less than a month in Washington,DC reinforces America's image of being a deeply troubled and violent country divided against itself,rocked by both external and internal forces.The rough seas continued in the DC Metropolitan area on Thursday afternoon as Miriam Carey,34,of Stamford,Connecticut went on a high speed,crazy ride with her baby daughter down Pennsylvania Avenue,careening into other vehicles,running red lights and injuring a Secret Service and US Capitol Police officer in the process,and ultimately resulting in her own death when she was fired on by police.Both injured officers are recovering well,and her year-old daughter,Erica,is in good condition in protective custody.*
The suspect's mother said she had been hospitalised with post partum depression,an affliction that bedevils some women after childbirth,a few months after Erica's birth in August 2012.Miriam Carey was a dental hygenist who was described by her employer,Dr.Steven Oken,as being a non-political type who was always happy.I am floored it would be her,Dr.Oken said.A neighbour at her condo complex affirmed that Carey was mentally ill,however,and said that Carey's tyres had recently been slashed in Connecticut.Police obtained a search warrant and combed Carey's condo for evidence Thursday,where she reportedly lived with the child's father.*
The incident began at the outer security perimeter of the White House at 2:12 pm,where Carey struck a temporary black security fence at a checkpoint and refused to obey uniformed Secret Service officers,later striking a Secret Service vehicle and injuring an officer as she fled down Pennsylvania Avenue.No shots were fired at the White House itself,said DC Metropolitan Police Chief Cathy Lanier.There were several crime scenes and shots fired along the route,Lanier added,although Carey was not herself armed.A lot of things happened that were not on videos the media were showing,Lanier said.The incident showed that the security perimeters worked and did exactly what they were supposed to do.*
At one point during the high speed chase,police had managed to stop Carey's car,but she backed up and sped off again,oblivious to a hail of gunfire.
The incident came to its fatal conclusion as Carey crashed into a second checkpoint in the 100 block of Maryland Avenue near the Capitol,where she was shot dead by police,who discovered the child then and removed her from the car for medical evaluation.
Soon after the crime,correspondent Chuck Todd of NBC News remarked that he began getting the same old highly partisan emails from politicians again,although they were more politely worded this time.

Tuesday, October 1, 2013

The Shutdown Begins:What It Means To You

There have been 17 US Government shutdowns since 1970,and the last one was 17 years ago,in 1996 under President Bill Clinton.At that time,18.6% of government workers were furloughed,and it lasted for 21 days-the longest shutdown to date.
Before that one,there were two shutdowns in 1995.The first of those shutdowns resulted in a market rally.The second 1995 shutdown caused a market plunge,then a flattening out.
According to Tom Switzer of the US Studies Centre in Sydney,the last shutdown,in 1996,cost the Republican party dearly at the polls.In the end,it also led to significant compromise that resulted in economic prosperity.
This time around,the debt ceiling issue in about two weeks' time is even more important than the shutdown.If that goes unresolved,it'll probably spike an economic downturn.Now it's a very polarised environment.A dysfunctional hegemon will be bad for the US and for world markets.*
On a practical level,essential services such as national security and law enforcement,as well as air traffic control and pension payments,will continue to be provided.National parks will close,however,and 800,000 government workers will be laid off,crimping retail sales and tax revenue.The shutdown will untimately cost the government 300 million dollars a day,IHS calculated,and Bank of America said a two week shutdown would shave a half percent off GDP growth.*
US stock futures rose slightly,along with Asian stocks,immediately the shutdown began at the stroke of midnight Tuesday.Apparently everyone who wanted to sell the news had already done so by the time it actually happened.In the commodities markets,gold was flat and oil declined about a half percent.*
If the US Government is dysfunctional,the Japanese government is anything but.The Japanese Tankan survey showed soaring business confidence;and the Abe government announced it will raise the sales tax from 5% to 8% in April 2014,then to 10% in 2015.There will also be a 50 billion dollar stimulus package to cushion the effect of the sales tax increase.