Category: General

The start of the Chinese lunar year, the Year of the Rooster, is here.  My rooster picture is from a window display in Tokyo’s Ginza district.

These days, every time a news headline message from the Washington Post, CNN or the New York Times pops up on my phone, I think ‘What has he done now?’ (President Trump).  I should stop looking, if only it were not so unsettling.

There’s the in my opinion =stupid executive order for building the Mexican border wall, estimated to be at least $20 billion. Where will the money come from?  (Mexico will not pay for it, as Trump promised in his campaign).  Oh, ‘We could put an import tax of 20% on Mexican goods’. Then someone pointed out to the White House that the USA imports 3 million cars a year from Mexico, and lots of oil.  So now American consumers will foot the bill?

Another one: freezing the hiring of US government workers.  (There has been virtually no increase in the number of workers the last eight years, but spokesman Sean Spicer cites a ‘huge’ increase). No sooner was it signed, or the US War Veterans Association asks ‘How do we hire doctors and nurses?’ (for the VA).  So the ban had to be rescinded for the VA.

One more : the order Trump signed for halting US immigration from seven countries (see MSNBC screen shot). Of all the terrorist attacks in the USA going back and including 9/11, none were by citizens of any of the seven countries listed in the ban.   It makes no sense.

Alright .. so the Dow-dy Jones Industrial Index crossed 20,000 today!  What took it so long?, asked some analysts, saying it underperformed expectations from say, 10 years ago. (Of course: there was that global financial crisis in 2008). The Trump Administration was quick to take credit for Dow 20k.   Well .. not so fast, said Robert Reich, former US Labor Secretary on CNBC.

‘Donald Trump is treating the world economy as a zero-sum game, the assumption being ‘make America first, we win or they win,’ Reich said. ‘He’s talking down NATO, the European community. He’s making it seem as if trade is really bad for the United States and therefore we are going to put up trade barriers.’

‘This is not the kind of talk that will inspire confidence in global markets,’ said Reich, a professor of public policy at the University of California, Berkeley. ‘And so I don’t think this so-called rally, this Trump rally, is going to continue much longer.’

“From this day forward, it’s going to be only America first, America first,” President Trump declared in a forceful 16-minute Inaugural Address, not making an attempt to reach out to the 54% of voters that did not vote for him.

Reported by the New York Times :
“One of the most radical inaugural speeches we’ve ever heard,” marveled Jake Tapper of CNN.
“It felt as if he almost was insulting every living president that was sitting next to him in very personal ways,” said Chuck Todd on NBC.
“He basically took the hide off everybody,” said Bob Schieffer on CBS.
Even Brit Hume, one of Fox News’s stalwart conservatives, ventured a measured account. “Not poetic, but quite strong,” Mr. Hume said. “Very much Trump.”

So this was not a normal hand-over of power.  (Then, is anything ‘normal’ any more in today’s world?).  Some 200 people were arrested in Washington DC (by comparison during President George W. Bush’s somewhat controversial start to his presidency in 2001, 9 protesters were arrested).

Attendance to the inauguration was light.  The New York Times reports that attendance numbers were not immediately available, but Washington’s transit system released ridership numbers.  As of 11 a.m., Metro logged 193,000. Four years ago, there were 317,000 at the same point on Inauguration Day.  At Mr. Obama’s first inauguration, the number was 513,000.

Well, here it is – the end of the eight years of the Obama presidency.
The empty White House pictures from David Nakamura’s tweet are a little haunting!

Some wry responses to this tweet read :
> What time does the gold plating, gold filigree applicator arrive, to cover the walls?
> Less than 24 hours until our nuclear code is changed to “Password”!
> Bet the giant shirtless portrait of Putin is on its way, too.

P.S. Check out www.washingtonpost.com .. the whole web site with great reporting has free access through Saturday, USA time. ‘Donald Trump has assembled the worst Cabinet in American history’, writes Paul Waldman in an opinion piece.

One could ask the question if a new Cold War is under way with Russia, with the Russian diplomats already kicked out of the country.  Now, for the first time since WWII, American troops have been sent to Norway (and to other NATO countries), at their request. President Obama actually moved up their deployment by a few months.  Since President-elect Trump is sworn in on Friday, what will he do? Order the US troops back?

[From Google’s home page].
King was born in Atlanta in 1929. He began his pastoral career in Montgomery, Alabama, in 1954, a year before Rosa Parks famously refused to give up her seat. Montgomery’s community leaders chose King to organize the resulting bus boycott. From then on, his was the most powerful and lyrical voice in the effort to end segregation in the United States. King’s message of nonviolence and love — delivered in magnificent speeches and masterful writing — shaped the American civil rights movement and inspired activists worldwide. He was awarded the Nobel Peace Prize in 1964.

Today’s Doodle, by guest artist Keith Mallett, captures one of the major themes of King’s speeches and writing: unity. “All life is interrelated,” he said. “We are all made to live together.” King urged Americans of all races to keep “working toward a world of brotherhood, cooperation, and peace.”

Martin Luther King Jr. may seem like the sort of leader who comes along only once every century or so, but King himself would disagree with that notion. He taught that we are all capable of lighting the way to “the bright daybreak of freedom and justice,” and that we can unite to show that “love is the most durable power in the world.”

Another SpaceX Falcon 9 rocket rocket launch was attempted on Saturday, with a payload of 10 satellites to put into low-Earth orbit for the Iridium satellite communications company.  I am sure the countdown was more nerve-wracking than usual for the engineers and executives, given the rocket explosion in Sept. of last year*.   Anyway, the launch from Vandenberg Air Force Base in California went very well, and as an added bonus, the spent rocket was successfully landed on a drone shop for re-use!  Check out the webcast here.

*The Falcon 9 rocket exploded on the launch pad while being fueled for a test fire. The cause? The liquid oxygen propellant froze into a solid while being fed into the tank, which also had liquid helium cylinders, kept at minus 269 °C.  (That is only 4 °C above the fantastically cold, coldest temperature that is physically possible; a temperature called absolute zero : minus 273.15 °C).

Friday the 13th was a series of horror movies. Well, this week was a political horror movie of sorts. Was it for real?   It’s too much to write about in one blog post, but I will go ahead and describe what was important to me.

► President Barack Obama gave his final address to the nation.
► An unverified dossier with salacious scandals was released this week about President-elect Donald Trump and his relationship with Russia, prompting continued hostility from the President-elect toward the intelligence community.
► The intelligence community (CIA, FBI) was also in hot water with the Democrats. It now appears that there may have been FBI investigations into the Trump campaign’s ties with Russia (we don’t know, it’s classified information), but FBI Director Comey made no mention of it in public. So did he apply a double standard when he broke protocol and talked publicly about the investigation into Hillary Clinton’s mishandling of classified e-mails?
► There was the contentious press conference President-elect Trump had on Wednesday.  Trump to CNN reporter: ‘You don’t get a question. You’re fake news’.
► Trump announced that he would not divest his businesses (let his sons run it), and that ‘I could actually run my business and run Government at the same time’. Whoah. That prompted the Office of Government Ethics to raise a big red flag, saying this falls far short of the ethics standards set for US Government officials and Presidents.
► The Republicans continued their moves to repeal the Affordable Health Care Act/ Obamacare. So no, I guess Americans cannot have affordable health insurance. In an über-capitalistic society it’s more important that the health-care industry make lots of money. Sadly, it’s very clear from interviews with people that many (most?) voters vote with their gut, and not with their brains. CNN had a cancer patient on that admitted he was very much against Obamacare, until he signed up for health insurance that saved his life. As for the President-elect : he apparently believes the massive health care law can be repealed and replaced at the same time – in a matter of weeks! – sort of at the stroke of a pen and a signature.

Forget about 2016. 2017 is going to be a banner year for political journalists.

I recently took a big box of accumulated polystyrene foam chunks, plastic bubble wrap and poly-ethylene foam sheets to a recycler in Kent, south of Seattle today.

Polystyrene foam is the light but solid white stuff that all kinds of products and especially electronic products are shipped in, and that some food containers and coffee cups are made of.  Polystyrene foam is commonly called Styrofoam®, but Styrofoam® is a trademark of the Dow Chemical company and really describes a blue insulation product used in homes and industrial buildings.

The city of San Francisco has banned the use of polystyrene foam for retail sales for a wide range of products including packing peanuts, ice chests, dock floats and those famous to-go coffee cups.  The stuff is incredibly slow to break down in landfill, and many times end up in the oceans where will it leach chemicals into the water.   But all is not lost : scientists have found a mealworm that can actually subsist on a diet of polyethylene foam, with bacteria in the worm’s gut biodegrading the plastic as part of its digestive process.

The Goldman Sachs Investment Strategy Group’s 90-page report for January 2017 is out, here.  it is packed with graphics of GDP and productivity and many other metrics.  I don’t understand all of it, and so I went straight to the Key Takeaways at the end of the report, which are listed below (stay invested in US equities, but expect a modest return).

The report does highlight that China is barreling toward a financial crisis, probably in 2018 or 2019.  The red line for China in the graph below is already in the high-risk range, and moving up further. ‘An astounding $1.3 trillion of capital has flowed out of China since August 2015’, says the report, and ‘The US now accounts for 20% of the stock of all foreign direct investment. Yet, despite all these major advantages, it did not avert a financial crisis in 2008. It defies logic to assume that China will be the one major country that avoids a financial crisis and a hard landing when it does not enjoy such advantages’.

Key Takeaways

As we mentioned in last year’s Outlook, forecasting is difficult under the
best of circumstances but particularly so in the last innings of an eight-
year-long economic expansion and bull market. This year brings the
additional challenge of a new president whose policies are likely to follow an
unconventional script.

Nevertheless, there are seven key takeaways from our 2017 Outlook:

• Improving growth: We expect global economic activity to accelerate
this year, with modestly higher GDP growth rates in the US, Eurozone,
Japan and many emerging market economies. We expect a small
slowdown in China.
• Low recession risk: Favorable monetary and fiscal policies substantially
reduce the probability of a recession in key developed and emerging
market countries.
• Still accommodative monetary policy: US monetary conditions will still
be relatively easy because of the slow and steady pace of tightening of
the federal funds rate by the Federal Reserve. At the same time, other
developed central banks are still expanding their balance sheets.
• Remain vigilant: Despite a favorable economic and policy backdrop, there
is no shortage of global risks, including rising populism in Europe, growing
geopolitical tensions, the spread of terrorism and the proliferation of
serious cyberattacks.
• China concerns: China is the biggest source of uncertainty given its growing debt burden, accelerating capital outflows and potential for a
notable deterioration in the US-China relationship driven by changing US
trade and foreign policy toward China.
• Stay invested: The collective impact of these various risks is not yet sizable
enough to undermine our core view: that we are in a longer-than-normal
US recovery that supports equity returns, which are likely to exceed those
of cash and bonds. Thus, we recommend staying invested in US equities
with some tactical tilts to US high yield bonds and European equities.
• Modest returns: While we recommend clients remain invested, we
have modest return expectations. We expect that a moderate-risk well-
diversified taxable portfolio will have a return of about 3% in 2017.

Here’s another ‘souvenir’ acquisition I made in Japan – these from a hardware store called Tokyu Hands in Tokyo.  (I have a little thing for pure metal objects or ingots). The cubes and cone casts are made of brass*, pure copper and pure aluminum.  I think these are made available for science class in schools, more than anything else.  There was a pure lead ingot for sale as well, but lead is poisonous and I did not want that in my house.

*Brass is basically an alloy of copper and zinc.  Some types of brass alloys have small amounts of tin, aluminum, nickel or iron added in as well.

We’ve had cold weather here in Seattle ever since I got back on Monday. (And much, much colder temperatures in eastern Washington, such as 0 and 1. That’s -17°C ). The little bit of New Year’s Day snow in the shadows around my house just never melted this week.  So we’re actually looking forward to reaching a ‘balmy’ high of  43°F/ 6°C on Sunday here in the city.

Elsewhere in the United States on Friday, there were several bad-news stories.
1.  Gunman shoots dead 5 people at the baggage claim, wounds 8, causes all-day mayhem at Ft Lauderdale International airport in Florida.
2.  Massive winter storm bringing snow and ice, stretches across the country from San Francisco into Raleigh, impacting 73 million people.
3.  President-elect Trump briefed on evidence of Russia and Putin’s involvement in influencing the outcome of the US election; issues statement and tweets with denials and lies in, as a response.
4.  Dow Jones Industrial Average tries again to breach 20,000, fails. (Maybe this is a good thing).

On Monday night, I got to dig out the little souvenirs I bought on my trip, tucked into the clothes in my suitcases.  Check out these colorful eraser sets that I found on the stationary floor at the Yodobashi store in Akihabara.

It’s midnight in Japan, and so it’s officially 2017.  My hotel here in Tokyo organized a countdown party with a little brass band downstairs for us, to ring in the new year.   I wish everyone health and happiness for the new year ahead.

Wishing a Merry Christmas to everyone !

When did the tradition of Christmas trees get started?  From history.com, this explanation: The fierce Vikings in Scandinavia thought that evergreens were the special plant of the sun god, Balder. Germany is credited with starting the Christmas tree tradition as we now know it in the 16th century when devout Christians brought decorated trees into their homes.   It took a while before Christmas trees were adopted by early Americans, though. To the New England Puritans, Christmas was sacred, with no place for decorated trees – which were seen as part of ‘heathen traditions’.