• Home/
  • Global Middle Class

David Fuller and Eoin Treacy's Comment of the Day
Category - Global Middle Class

    The Internet's Next Big User Group

    This video from the Wall Street Journal may be of interest to subscribers. 

    Email of the day on diet and South African politics:

    On diet. I have followed the recent discussions on diet with great interest. Having been in the veterinary profession for the last 50 years my own experience may be of interest. Two dictums I have always followed. You are what you eat and moderation in everything. For the last few million years or so humans have been omnivores and have a gut designed with that in mind, so a diet of vegetables, nuts, berries, meat and fish is ideal. 

    When I joined a small animal practice on the North Yorkshire border so long ago I was given a tip by my then boss who incidentally was a great friend of James Herriott and was featured in his books. He had observed the huge beneficial effects that certain formulations of the antioxidant Vitamin E had on elderly canines prone to mini strokes and heart problems. Some forty years ago I decided to take a daily dose myself. At any rate, I have reached the age of 76 (David's vintage) Mild blood pressure, normal cholesterol and in possession of all my original joints in good working order. I now have a pretty stress-free life spent for the most part in South Africa and the only thing now that tends to affect my blood pressure is the politics of the place!

    Read entire article

    Asia - Enjoying external support

    Thanks to a subscriber for this note from Standard Chartered which may be of interest to subscribers. Here is a section:

    Asia is enjoying better growth so far this year versus 2016. Of the 11 countries we track in Figure 1, seven registered faster growth in 2017 (based either on Q1 or H1 GDP data). China leads the pack, growing 6.9% in H1 – we now think China may register faster growth in 2017 than 2016; this would be the first time that annual growth has not slowed since 2010. Of the three economies that underperformed versus 2016, India was due to demonetisation, the Philippines was slower versus a high base and Korea’s Q2-2016 growth was boosted by budget front-loading.   

    The region is benefiting from a pick-up in external demand. All the economies we track above are enjoying faster export growth. As a whole (excluding China, Indonesia and Vietnam), exports rose 13% y/y in 5M-2017. A caveat is that 32% of the increase went to China. This is reflected in the export broadness index above, which shows a relatively narrow export destination profile for the region so far this year. We expect Asia’s export performance to ease in H2 on the back of growth moderation in China and less favourable price base effects.  
    Comparatively, domestic economic activity appears more divergent across the region. Credit growth remains soft in several economies, reflecting still-cautious domestic sentiment. Government-led infrastructure in places such as Indonesia and Thailand will be needed to mitigate soft private investment. 

     

    Read entire article

    On Target June 26th 2017

    Thanks to Martin Spring for his topical newsletter. Here is a section on the potential for a military strike against North Korea:

    The diplomatic route that is being pursued by Donald Trump, as it was by his presidential predecessors, is not going to work. China is never going to take actions tough enough to force Pyongyang to give a “victory” to the US-led coalition.

    Secondly, because the consequences of another war in Korea, even if brief and limited, would not be catastrophic for Americans... only for Koreans, and perhaps Japanese.

    Thirdly, US willingness to act so decisively would convey the strongest possible message to a potentially much more dangerous would-be nuclear power, Iran, to forget the whole idea and behave.

    Fourthly, foreign adventures are a classical method for national leaders to divert attention from political difficulties at home. “Trump, facing ever-expanding scandals, continually-low polling numbers, and even potential impeachment proceedings, may decide that a pre-emptive strike on North Korea is worth the costs and consequences,” Micah Zenko writes in Foreign Policy.

    Much-respected analyst George Friedman of Geopolitical Futures concludes that the US continues to be “on the path to war.”

    The US is not likely to unleash an attack until it has a casus belli, or a challenge from North Korea that it can point to as a defensible cause for going to war.

    That hasn’t happened yet. But the situation could change very quickly if the US becomes convinced that the North has developed intercontinental ballistic missiles. Sudden falls in the South Korean and Japanese stock-markets would be an early warning of pending military conflict.

     

    Read entire article

    Foxconn Dangles $10 Billion Tech Investment to Create U.S. Jobs

    This article by Bloomberg News may be of interest to subscribers. Here is a section:

    The billionaire however focused primarily on Hon Hai’s plans for the longer term. Apple’s main manufacturing partner, which does most production in China, makes everything from smartphones to PCs with a growing clout that has seen it courted by governments around the world.

    Gou promised to ramp up investment in the U.S., possibly helping with a rust-belt economic revival. Dubbed “Flying Eagle,” Foxconn’s plan to build a U.S. facility could create tens of thousands of American jobs during Trump’s first year in office. The company is considering a joint investment with Sharp, but details have yet to be hammered out.

    In the nearer term, Hon Hai’s shares are riding high as Apple prepares to unveil its latest iPhone -- one of the most- anticipated devices of 2017. The shares closed little changed in Taipei after reaching a record earlier this week.

    Hon Hai reported first-quarter earnings short of estimates after a stronger Taiwan dollar squeezed profit in the lull before the new iPhone. That came after a year in which smartphone shipments grew at their slowest pace on record and PC demand continued to flounder. In 2016, Hon Hai’s sales fell 2.8 percent while net income rose just 1.2 percent. Gou said Thursday that revenue and profit this year would be better.
    Over the longer term, Gou is re-tooling Foxconn for the future, installing robots to offset rising labor costs in China.

    It’s also investing in emergent fields from virtual reality to artificial intelligence.
    Hon Hai makes a wide range of electronic devices from HP laptops and Xiaomi handsets to Sony PlayStation game consoles.

    But Apple is by far its most important client, yielding roughly half the company’s revenues.

     

    Read entire article

    Amazon to Buy Whole Foods in $13.7 Billion Bet on Groceries

    This article by Nick Turner and Selina Wang for Bloomberg may be of interest to subscribers. Here is a section:

    Amazon.com Inc. will acquire Whole Foods Market Inc. for $13.7 billion, a bombshell of a deal that catapults the e-commerce giant into the supermarket business with hundreds of stores across the U.S.

    Amazon agreed to pay $42 a share in cash for the organic- food chain, including debt, a roughly 27 percent premium to the stock price at Thursday’s close. John Mackey, Whole Foods’ outspoken co-founder, will continue to run the business -- providing a lifeline to the embattled executive after a fight with activist investor Jana Partners.

    The deal sends a shockwave across both the online and brick-and-mortar industries, uniting two brands that weren’t seen as obvious partners. But Whole Foods came under pressure to find a buyer this year after Jana acquired a more than 8 percent stake and began pushing for a buyout. Jana’s move irked Mackey, who has referred to Whole Foods as his “baby.” By enlisting Amazon, he gets to keep his job as chief executive officer of the grocery chain.

    Whole Foods shares jumped 27 percent to $41.99 as of 10 a.m. in New York, bringing them close to the transaction price. Amazon shares gained 3.2 percent to $995.

     

    Read entire article

    Miners Drop as South Africa Escalates Black Ownership Rules

    This article by Paul Burkhardt and Kevin Crowley for Bloomberg may be of interest to subscribers. Here is a section: 

    South African regulators unveiled a new mining charter to force companies to give more ownership to black shareholders, sparking a selloff across the industry.

    Anglo American Plc and Sibanye Gold Ltd. shares tumbled after the Department of Mineral Resources introduced requirements that local companies must ensure 30 percent of their shareholders are black, up from a previous level of 26 percent. Several of South Africa’s biggest mining companies may have to sell new stakes, raising the risk of dilution for existing owners.

    The new rules “could pull the rug right from under the industry’s feet,” said Andy Pfaff, chief investment officer of Vanguard Derivatives, a South Africa-based broker. “It’s certainly not going to help with attracting foreign investment into South Africa.”

     

    Read entire article

    Pulses, Indian Beef. Bullish Corn

    Thanks to a subscriber for this report by Ned Schmidt which may be of interest. Here is a section:

    Ten years ago India was not a topic of a lot of interest. This month we find ourselves again talking about India twice, on pulses and beef. And when we look at corn we have some optimism to offer up.

    Pulses are basically dry beans, lentils, and peas. Few of us ever thought about them being grown in North America. U.S. and Canada have become major growers, exporting to India and other nations from the Middle East to India. Bottom graph is of U.S. acreage planted in pulses. While expansion has been irregular, roughly 1.5 million acres have been added in last fifteen years. Canada is a major source of pulses. Roughly 65% of world’s lentils are grown in that nation. Acreage dedicated to these crops is probably approaching 10 million acres. Apparently Canada is an ideal place to grow them, and then send them to India, et al

    India is becoming a major customer for world’s food system. Second, world will grow what customers want. Farmers are looking to produce alternative crops in search for profits. The “corn vs. soybean” farmer, while essential, may increasingly become “outdated”.

    Read entire article

    U.K. Pollsters See May Upping Majority Even as Lead Shrinks

    This article by Tim Ross for Bloomberg may be of interest to subscribers. Here is a section:

    May is set for a healthy majority of at least 50 seats which could become a landslide of as many as 200. “In this type of election, which has switched back to two-party politics, once you start polling in the 40s you can win big.” Tony Blair won his landslide in 1997 with 43 percent of the vote. The "numbers behind the polls” -- such as the relative ratings of the leaders and who’s best to manage the economy -- all still favor May.

    Joe Twyman, head of political polling at YouGov
    May should get a majority of 40 to 60 seats. “A lot could still happen. The Tories have not had a good campaign. Labour have had a better one, but started from a low base. Turnout will be crucial given how age is now such an important social cleavage in Britain.”

    Adam Drummond, senior research manager at Opinium
    May is on course to win a majority of 72, based on the latest data. Even if the Tory lead narrows further, she should still have a majority of 50 to 70, partly because the party’s so far ahead of Labour among older voters "who always go out to vote."

    Read entire article

    Brazil crisis deepens with probe of president, top senator

    This article by Peter Prengaman and Mauricio Savarese for the Associated Press may be of interest to subscribers. Here is a section:

    Brazil's political crisis deepened sharply on Thursday with corruption allegations that threatened to topple the president, undermine reforms aimed at pulling the economy from recession and leave Latin America's largest nation rudderless.

    Stocks plunged, both chambers of Congress cancelled sessions and President Michel Temer's office canceled his planned activities Thursday in the wake of a Globo newspaper report that he had been taped endorsing bribery of a former lawmaker.

    Protests were planned in several cities and opposition politicians took to Twitter and local news channels to call for Temer to resign or be impeached, arguing his government no longer had legitimacy

    "I can't see how Temer survives this," said David Fleischer, a political science professor at the University of Brasilia. "There are just too many people against him now."

     

    Read entire article