Japan's Democratic party wins over Taro Aso's LDP - Historic

The political landscape of the world's second largest economy has been redrawn.

The Conservative LDP has been in power ever since the post-war recovery in Japan, a period of over 50 years. It formed a so-called "iron triangle" consisting of itself, the bureaucracy and Japanese business. Defeated LDP president and PM, Taro Aso, said he would step down as party leader. Among the criticisms levelled at the LDP was that it was "sluggish" to respond to the economic crisis.

Japan has a bicameral Parliament (i.e. two houses). e.g. US -> House of Representatives, House of Councillors (upper house), UK -> House of Commons, House of Lords. (one house to represent aristocracy, one house to represent commoners - concept was the aristocrats are wealthier and wiser than the commoners).

Together they are known as the National Diet of Japan.

Latest Land Registry Results show Rise in UK House Prices, Lloyds Rumours

The Land Registry in the UK (aka Her Majesty's Land Registry) has been a government department since 1862 that keeps a register of title to freehold and leasehold land in England and Wales. Scottish land titles are maintained by RoS ("Registers of Scotland"). LR said prices rose by 1.7% in July, the biggest monthly leap in 5 years, though prices are overall 11% lower than last year.

LloydsTSB is rumoured to be ruminating a sale of businesses following its bailout, including Scottish Widows, its insurance and money management division, and Clerical Medical.

BGI is now Blackrock Global Investors!! (BlackRock + ETFs)

BGI-Blackrock - following deal with BGI (Barclays asset management), Blackrock will oversee about $3 trillion in assets. The board of Barclays recommended shareholders accept Blackrock's $13.5 billion cash and share offer for BGI. The new entity will take the name "Blackrock Global Investors".

Win for Blackrock, Win for Barclays

* PLUS POINTS FOR BLACKROCK
This gives Blackrock exposure to the ETF business, allowing investors to invest in areas which may otherwise be difficult to acquire, like precious metals or foreign stocks.

* PLUS POINTS FOR BARCLAYS
Provides much-needed capital to boost the balance sheet. (Barclays previously relied on Middle Eastern governments to effectively "bail it out" of credit crunch).

Negatives?

Blackrock rejects the initial offer from CVC Capital Partners to acquire its ETF business.

A-shares versus H-shares and Australia's Biggest Ever Trade Deal

Asia's largest oil company, PetroChina (Energize, Harmonize. Realize.), did a deal worth AUD 50bn to buy LNG from Western Australia. Ossie PM Kevin Rudd said the deal would create up to 6,000 jobs.

PetroChina issued H-shares in April 2000. H-shares are shares of companies incorporated in mainland China but listed on HKSE or any other foreign exchange. A-shares are similar but trade on mainland Chinese exchanges e.g. Shanghai, Shenzhen. Generally, only mainland citizens can invest in A-shares.

The Economist's "Jack Welch MBA" - Bad Use of Off Balance Sheet Financing? Pros and Cons? What does off-balance-sheet financing really mean?

The Economist in Jun 09 came out with an article called "The Jack Welch MBA" which describe how a hypothetical MBA program would be run if it was run by Jack Welch (in response to his $12m investment in Chancellor University in Ohio).

Performance Principles/Targets:
1. If a business in a given industry is not first or second, should be sold or closed.
2. Fire the worst performing managers annually (bottom 10%).

More controversial principles, to manipulate the apparent performance/liquidity/financial state etc of the company:
3. Accounting - prolific use of off-balance sheet vehicles
4. Opaque finanical arm, GE Capital, used to top up profits in bad years

Taking a closer look at GE's financing, here...

First, a "Sesame Street" definition of off-balance sheet financing. You want to keep large capital expenditures off the balance sheet, e.g. since you want a low debt/equity ratio.

A lot of Enron's problems were due to off-balance-sheet financing. Enron is worthy of further study. The scandal destroyed accounting firm Arthur Andersen (the firm founded by Arthur Andersen and Clarence DeLany in 1913).

Blackberries and Blu-Rays - Technology Defies Recession

RIM - Blackberry Curve is top-selling smartphone in US.

Sigma Designs ("Powering the Digital Media Generation") is a successful chipmaker for Blu-ray players. One catchphrase they use is "SoC" solutions ("system-on-chip"). Why would you buy Blu-Ray instead of normal DVD - well, it has 5 times the storage capacity of DVD - which makes it suitable for storing HD video. Blu-ray has industry support, since it was developed by manufacturers like Apple, Dell, Hitachi, Samsung, Sharp, Sony, TDK. Where does the name Blu-Ray come from? It comes from the blue laser, as opposed to red laser used for DVD. The light from blue laser has a much shorter wavelength so the laser spot can be focused with greater precision.

Does Further QE make sense? What's the impact on cable?

Three major economic issues:
1. Ballooning fiscal deficit (projected to exceed 12% of GDP, the highest amongst all industrialised nations)
2. Quantitative easing (what you do when you can't lower interest rates any further, flooding banks with excess liquidity). QE was used in the US in the 1930s and by the Bank of Japan in 2001 to stimulate the country's stagnant economy).
3. Deepest recession since Second World War
The rise in QE has undermined sterlings rally.

Calyon is targetting $1.75 in cable by year-end 2009 and $1.90 by 2010 year-end.

RBS - Focusing on Home Markets, ANZ - expanding in Asia

RBS has sold off its Asia businesses to ANZ for a paltry $550m. This makes ANZ more able to compete with rivals HSBC and Standard Chartered in the fast-growing markets of Asia. ANZ will get closer to its goal of generating a fifth of its revenue from Asia by 2012.