Bob Blandeburgo

China's Exports to Return to Growth Next Year, but How Much Will It Matter?

Shipments from the Red Dragon were hit hard in the first 11 months this year, falling 18.8% compared to a year earlier, but are expected to bounce back and grow 6% in 2010, China's State Information Center said today (Tuesday).

However, exports from China, which is largely considered to be the world's manufacturing floor, are becoming less and less relevant as the Red Dragon moves toward a more balanced economy.

For instance, imports are expected to grow 11% next year, reflecting a shift toward more domestic consumption. And while the country is known for its massive spending on infrastructure, its service sector is growing twice as fast as its construction and infrastructure sectors, according to Money Morning Chief Investment Strategist Keith Fitz-Gerald, who says exports account for only 20% of China's gross domestic product (GDP).

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Japan's Measures to Fight Deflation Struggle to Show Progress

For Japan's central bank and government, there are no easy answers to a growing deflation problem. A loose monetary policy so far has been ineffective and extra stimulus comes with the dire consequence of adding to the nation's debt burden.

As expected, the Bank of Japan (BOJ) held interest rates at 0.1% Friday as the budding recovery in the world's second-largest economy is showing signs of slowing.

"The BOJ felt compelled to show that it doesn't accept deflation and is committed to fighting it," Yasunari Ueno, chief market economist at Mizuho Securities Co. Ltd. told Bloomberg News. "It's reinforcing the view that interest rates will stay very low."

Weak international demand for Japanese goods and a strengthening yen prompted deflation earlier this year, and the nation's consumer price index (CPI) – excluding fruit, vegetable and seafood prices but not oil products – is expected show a decline of 1.7% in November according to a median estimate of 25 analysts surveyed by Bloomberg. The CPI fell 2.2% in October and 2.3% in September.

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Is Incoming Bank of America CEO Moynihan "More of the Same?"

Bank of America Corp.'s (NYSE: BAC) decision to appoint Brian Moynihan as its next president and chief executive officer puts the pressure on Moynihan and the bank's board of directors to prove to investors that the company is serious about changing direction.

Moynihan joined Bank of America via its 2004 merger with FleetBoston Financial and has held several positions since. While technically an insider, Moynihan sits outside BofA's executive circle in Charlotte, N.C.

"This is a real break with the past," Tony Plath, a finance professor at the University of North Carolina and a close follower of BofA's many executive "tribes" told The Wall Street Journal. "It signals to the market that the FleetBoston guys are in charge of the bank now."

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Low November Job Losses Shock, but The Jobless Recovery Continues

November payrolls fell by much less than expected – declining by just 11,000 – and the unemployment rate fell to 10.0%, the U.S. Department of Labor said Friday. But while it's becoming more apparent that the U.S. job market is closer to growth, caution is still the buzzword as the jobless recovery continues.

When growth does return the consensus is that getting back the roughly 7.2 million jobs lost since the recession began in December 2007 won't be an overnight phenomenon.

"I think it's a little bit premature for champagne, but after enduring two years of really bad news, let's enjoy this one," Jay Bryson, an economist with Wells Fargo Securities (NYSE: WFC) told "You've got to walk before you start running. I don't think we're walking yet, but we're starting to get back up on our feet."

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With NBC Deal Done, Comcast Becomes the New Cable Juggernaut

Comcast Corp. (Nasdaq: CMCSA) will acquire a 51% stake in General Electric Co.’s (NYSE: GE) NBC Universal Inc. for $13.75 billion in cash and assets, giving the cable giant lucrative cable channels including SyFy, Bravo and the USA Network, as well as Universal Pictures and its related theme parks in California, Florida and Japan.

But for GE, the deal is a precursor to and eventual exit from the media business.

"This isn’t just one of the biggest media deals, this is arguably one of the biggest M&A deals in years," Wunderlich Securities Inc. analyst Matthew Harrigan, who recommends buying Comcast shares, told Bloomberg News.

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GM's Search for CEO Won't Likely Be Part of the "Old Guard"

The circumstances surrounding the resignation of General Motors (NYSE: GRM) Chief Executive Officer Fritz Henderson are still unclear. But it's likely that whoever succeeds Henderson will no doubt have a turnaround plan more compatible with that of the company's board, and will likely come from outside of GM's ranks.

Henderson, who resigned Tuesday, was a longtime GM veteran who joined the company's treasurer's office in 1984. The Detroit-born Henderson is the son of a former GM executive. He became CEO in March after the Obama administration ousted then-CEO Rick Wagoner.

And therein was the problem: Henderson was so firmly entrenched in GM and its old culture that it was trying to shake, the board lost confidence in his ability to transform the company that would one day emerge from years of declining market share, a tainted consumer perception, and ultimately, bankruptcy.

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South Korea's Exports Rise, but Future Looks Murky

Year-over-year exports from South Korea rose for the first time in 13 months amid higher shipments to two of the world's largest economies. However, future sustainability of the export-based economy is made uncertain by questions surrounding the removal of global stimulus measures.

Overall shipments rose 18.8% to $34.3 billion in the first 20 days of November, Korea's Ministry of Knowledge Economy said yesterday (Tuesday). Roughly one-third of shipments were to the stimulus-backed economies of China and the United States, where exports increased by 52% and 6.1%, respectively.

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As Bank Failures Grow, FDIC Options Narrow

The Federal Deposit Insurance Corp. (FDIC) will likely have tap its credit line with the U.S. Treasury or impose more special premiums on banks, to ensure U.S. banks are fully supported.

While FDIC-insured banks reported a net income of $2.8 billion in the third quarter, bank lending fell by 2.8%, the most since records were first kept in 1984 and the fifth consecutive quarter loan balances declined. The FDIC's Deposit Insurance Fund (DIF) went into the red at the end of September and the bank insurer today (Tuesday) revealed just how steep the loss it was when the quarter ended: $8.2 billion.

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U.S. Economy Will Grow Faster Than Expected, Jobs to Return to Growth Next Year, Economists Say

The U.S. economy will grow faster than expected next year, but job growth will begin later than previously thought, according to a survey of business economists.

A panel of 48 economists surveyed by the National Association for Business Economics (NABE) showed gross domestic product (GDP) in the United States will grow by 3.2%, but job losses won't bottom until the first quarter of next year. A previous NABE forecast said employers would add 12,000 to payrolls in that quarter.

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Obama Commits to Free Trade Deal With South Korea, But Auto Trade Remains Sticking Point

On the last leg of his four-nation tour in Asia, U.S. President Barack Obama revived the issue of a still-pending free-trade agreement signed in 2007 with South Korea (KORUS FTA), but an auto trade imbalance will continue to be a major obstacle to Congressional approval. At a news conference in Seoul, President Obama and Korean […]

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