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.
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."
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 CNNMoney.com. "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."
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.
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.
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.
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.
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.
Lazard Puts Future in M&A with New CEO
In a signal of confidence for the future of mergers-and-acquisitions (M&A), Lazard Ltd. (NYSE: LAZ) appointed Kenneth Jacobs as its chairman and chief executive officer following the unexpected death of famed dealmaker Bruce Wasserstein.
Jacobs, a 21-year company veteran, was most recently CEO of Lazard North America and has a history of leading M&A advisory teams.
“Jacobs is clearly qualified for the position because he has run the North American operations of the company,” Dick Bove, vice president and equity research analyst at Rochdale Securities LLC told Bloomberg Television. “It should be positive for Lazard.”
Japan's Economic Growth Accelerates, but Deficit Raises Concerns
Stimulus measures in Japan helped the world's second-largest economy grow at its fastest pace in more than two years, but it's unlikely policymakers will reduce spending despite the nation's rapidly growing debt.
Gross domestic product (GDP) in Japan grew at 4.8% annual rate in the third quarter, surpassing all the forecasts of 20 economists polled by Bloomberg News. That follows a revised gain of 2.7% in the three months ended June 30, according to Japan's Cabinet Office. Japan's economy grew 1.2% on a quarterly basis.
"The turnaround in public investment has definitely contributed to the rebound in GDP, so if they do start to cut it'll weigh on growth,” Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG (NYSE ADR: CS), told Bloomberg.