Stock Preacher

3D technology looks set to hit the home consumer market next year, with Sony today announcing plans to sell 3D televisions globally by the end of 2010. Sony’s decision to throw its weight behind the technology will be an important boost for the 3D industry, which has so far focused mainly on cinemas. British Sky Broadcasting has said it would introduce a 3D satellite channel in the UK next year, but it had been unclear whether there would be equipment available to view it on. Speaking at the IFA technology trade show in Berlin, Sir Howard Stringer Sony chief executive, will announce plans not only to sell 3D Bravia television sets, but to make Sony’s Vaio laptop computers, PlayStation3 games consoles and Blu-ray disc players compatible with the technology. Read more

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In China the Government owns the Banks; the bankers do not own the Government. China’s stimulus plan is working better than in the US and the UK because the government is using the banks for public ends, rather than allowing the banks to use the government for private ends. In the USA, the banks are the most powerful lobby on Capitol Hill; they own the Government.

The USA is spending trillions of greenbacks to bail out its banking system, leaving its economy to languish, as China, now called a “miracle economy,” decoupled from the rest of the world, is maintaining a phenomenal 8% annual growth rate. That, by the way, is being questioned by lots of Pols, commentators, economists and other talking heads, as they ask how that growth is possible, when other countries relying heavily on exports have suffered major downturns and remain in the doldrums. Read more

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Japan’s gross domestic product (GDP) achieved the first growth in five quarters in the Q-2, indicating that the world’s second largest economy has climbed out of recession. According to a preliminary report released by the cabinet office Monday, the Japanese economy grew by an annualized 3.7% in real terms in the April-June period, the first rise since the Q-3 Y 2008 when Japan, along with the 15-nation Euro-zone, sank into its first recession in seven years as the global financial crisis took a heavy toll on the world’s second largest economy and curbed demand for its exports.. The expansion in GDP, which was lifted by consumer and government spending, came following a revised annualized 11.7% plunge in the previous quarter and a revised 13.1% dive in the October-December quarter of 2008. On a quarter-on-quarter basis, the economy rose 0.9% in the Q-2, said the office in a preliminary report. Meanwhile, consumer spending was up 0.8%quarter-on-quarter in real terms while corporate capital spending dipped 4.3 percent, according to the report. Public investment jumped 8.1% , pushed by the government’s fiscal stimulus packages to fight the recession, compared with a 9.5% fall in housing investment.

Popularity: 2% [?]

General Motors Corp has reached a preliminary agreement to sell its Saturn brand to Penske Automotive Group in a deal that could preserve more than 350 dealerships and 13,000 jobs, the companies said on Friday. The deal for Saturn, which the companies hope to complete in the third quarter, would be the second sale of a brand announced by GM since it filed for bankruptcy on Monday in an effort to drop unprofitable lines and leave court protection as a leaner company. Penske, the No. 2 US auto dealership group, would acquire rights to the Saturn brand and other assets, while bankrupt GM would continue production of the Saturn Aura, Vue and Outlook on a contract basis if the transaction were completed, GM and Penske said. Terms were not disclosed. “This is a day that we have all been hoping would come together, since probably the end of November when GM made its first viability plan,” said Todd Ingersoll, a Saturn dealer from Connecticut and a member of the Saturn dealer steering group. GM created Saturn in 1984 to compete with Japanese vehicles in terms of quality and service and initiated no-haggle flat-price sales for its models. The Saturn brand has languished for the last decade, and GM said in February that it would either be spun off or shut.

Popularity: 5% [?]

Crude Oil rose to a six-month high above US$66 per barrel on Friday, marking its largest monthly percentage gain in more than a decade, after U.S., Japanese and Indian data suggested the economic downturn may be easing. Crude Oil prices jumped around 30 percent this month, the largest monthly rise since March 1999, buoyed by expectations of a global economic recovery later this year, which helped push stock markets higher. US Crude Oil for July delivery settled up US$1.23 at US$66.31, its highest settlement since November 4, after earlier hitting US$66.47, the highest intraday trade since November 5.London Brent crude settled up US$1.13 at US$65.52, its highest settle since November 4. The US$ hit a five-month low against a basket of other currencies. A weak US$ makes Crude Oil cheaper for holders of other currencies and tends to support prices

Popularity: 3% [?]

The United States and Europe have committed a lot of money to rescuing ailing banks to date. Japan’s veterans have just two words of advice: More and Faster.

The Japanese have experience as they endured a decade of economic stagnation in the 1990’s, because their banks struggled under crippling debt, and successive governments wasted trillions of yen on half measures to restore them.

In 2003 the Japanese government finally took actions that led to a recovery: forcing major banks to submit to merciless audits and declare their bad debts; spending two trillion yen, or US$22.23B at today’s rates. Thus effectively nationalizing a major bank at the expense of shareholders; and allowing weaker banks to fail.

But by the time that went into effect the Nikkei 225 stock index dropped by about 75% from its highs. Prices for real estate ultimately fell for 15 consecutive years, and public debt grew to exceed gross domestic product as deflation took hold. Some scholars of the Japanese debacle see the USA heading to a similar fate.

“I thought America had studied Japan’s failures,” said Hirofumi Gomi, a top official at the Japanese Financial Services Agency during the crisis. “Why is it making the same mistakes?”
Some US critics of the plan announced last week by US Treasury Secretary Timothy Geithner said it lacked details. Experts on Japan found it timid at best, especially given the size of the banking crisis the Obama administration faces.

“I think they know how big it is, but they don’t want to say how big it is,” said John Makin, an economist at the American Enterprise Institute, referring to administration officials. “It’s so big they can’t acknowledge it.”He added: “The lesson from Japan in the 1990s was that they should have stepped up and nationalized the banks.”

Instead, the Japanese first tried many of the same remedies that the administration of President George W. Bush tried and the administration of President Barack Obama is trying, i.e., low interest rates, fiscal stimulus and ineffective cash infusions, among other things.
The Japanese also tried to tap private capital to buy some of the bad assets from banks, as Geithner proposed.

One of the reasons Japan was so timid was fear of public outrage, which grew with each act of the bailout, but the Japanese experience shows that resolving the mess will require a firm government hand and will be extremely expensive. Delay in doing it now will only cause the cost to soar, and the bank rescue will determine the fate of the wider US economy. While President Obama has prioritized his stimulus plan, no stimulus is likely to succeed unless the banking sector is repaired, and the United States probably will not be able to count on a growing demand for its products as the global economy worsens. A further lesson is that the bank rescue will determine the fate of the wider economy. While Obama has prioritized his stimulus plan, no stimulus is likely to succeed unless the banking sector is repaired.

“The way things are going right now the U.S. taxpayers’ burden will keep going up and up.” said Takeo Hoshi, an economics professor at the University of California at San Diego.

Popularity: 7% [?]