U.S. downgrade a crossroads for S&P
By Katie Benner August 6, 2011: 3:12 PM ET
The rating agency's move to downgrade U.S. debt could make it a leader among rating agencies or blow up in its face.
FORTUNE -- In the rating move heard 'round the world, Standard & Poor's lowered the credit rating of the United States, saying that the country could someday miss a debt payment due to its deeply divided government. The move not only creates a huge amount of uncertainty for investors waiting to see how this plays out when markets open on Monday, it is a big gamble for S&P.
The downgrade could give S&P the distinction of being the only firm willing to honestly assess the creditworthiness of a country whose politicians publicly (and flagrantly) toyed with the idea of voluntarily defaulting on debt obligations. Or the move could unleash a backlash. Investors could shun the firm and, more broadly, the government could retaliate by moving rating agency reform from the backwaters of the Wall Street regulatory overhaul to the top of the agenda.
Behind the curve
The longstanding criticism of the big three rating agencies -- Fitch, Moody's (MCO), and Standard & Poor's -- has been that they fall down on the job with terrible results for bond investors. The agencies are supposed to assess the likelihood that a bond issuer might not pay back the money it has borrowed, but in a handful of high profile cases the companies have said that bonds are virtually risk-free nearly up to the day that the issuers default.
Take for example the massive corporate defaults of the early aughts. Stock market darlings Enron and WorldCom were given the highest ratings possible -- AAA, which is often referred to as the risk-free rating -- only to default under the weight of accounting chicanery and management lies. Bear Stearns wasn't downgraded until the day it went under. Then there was the mortgage-backed securities debacle, when agencies bestowed AAA ratings on bonds backed by subprime mortgages, as well as the alphabet soup of structured products (ABS, CDOs, CLOs, CDO-squareds) that were issued en masse by banks during the credit bubble. Those securities were downgraded after investors lost much more money than they would have expected from a AAA-rated bond.
The agencies have fought to repair their tarnished credibility in the wake of the financial crisis by fiddling with their ratings criteria and their corporate cultures. And they have been downgrading shaky looking creditors ahead of potential defaults, slashing ratings for Europe's distressed sovereign debt issuers.
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S&P's decision to downgrade the U.S. from AAA to AA+ (with an outlook negative, meaning another downgrade could be in the cards), is widely perceived as part of the larger campaign of reputation repair. Some have said that the company doesn't have the credibility to pass judgment on the U.S. And while Warren Buffett argues that the country is actually a quadruple-A credit, there are many people who think that S&P wasn't wrong to downgrade the U.S.
"How could any sentient being think that, given all that we've gone through over the last few months, that the U.S. is AAA," says Lawrence White, a professor at NYU's Stern School of Business who has been a harsh critic of the rating agencies. "In some sense, I'm surprised it took them so long."
"The world has known for awhile we're not AAA," says Harry Rady, the founder of Rady Asset Management. "If you look at the U.S. balance sheet as you would any corporation, we're not a risk free credit. This is just another acknowledgement that if the government can't manage its affairs, the market will force it."
If the market accepts, albeit grudgingly, that S&P is correct about its assessment of the country's creditworthiness, the the company will be ahead of the curve on the world's most important bond issuer, the U.S. We could then see other rating agencies acknowledge that S&P was right. "Fitch and Moody's have said they won't downgrade the U.S., but never say never," says Professor White.
Backlash?
The immediate reaction to the downgrade was that S&P can be ignored, particularly given that the rating agency made a $2 trillion mathematical error when it made its original downgrade calculations. ("A judgment flawed by a $2 trillion error speaks for itself," a Treasury representative told the Wall Street Journal.)
And it seems that the downgrade could have little effect on pricing for U.S. government debt. Asian countries have said that they will continue to hold Treasuries (although China wasted no time in using the downgrade to question the dollar's position as the world's reserve currency). The Federal Reserve has said that a downgrade wouldn't impact capital requirements for banks, and the U.S. is still perceived by many as the strongest economy in a world that is struggling to recover from the global recession. "We're the best house in a bad neighborhood, even though nobody has walked inside to notice the small grease fire in the kitchen," says Bill Laggner, co-founder of credit hedge fund Bearing Asset Management.
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But there is a chance that some investors and politicians in the U.S. will want to chasten, rather than ignore, S&P. In the wake of Friday's downgrade, a few credit market participants said that bond issuers may now choose to have their bonds rated by Fitch and Moody's, rather than S&P, for issuing a downgrade that to them seems political and unfair.
Some hope that S&P's decision to downgrade the U.S. will create the political will necessary to compel politicians and regulators to strip raters of the protections that have long allowed them to profit even when they misrate securities.
The rating agencies insist that they merely issue opinions that one can take or leave, a position that is absurd given the fact that laws and regulations force institutional investors and banks to rely on ratings to make investment decisions. After the financial crisis, when many people would have been happy to never use the big three firms again, bond issuers still had to pay them for ratings because most institutional investors must own rated securities. By law, investors and banks still used ratings to determine what bonds they could and could not hold.
Stripping references to rating agencies out of regulation (which has been proposed by the SEC and the Dodd-Frank reform bill) has been stymied by bank regulators like the Federal Reserve, the FDIC, and the Office of the Comptroller of the Currency (OCC), according to Professor White, because they do not want to have to take on the responsibility of deciding whether investments held by banks are safe. "It is much easier for regulators to outsource the job of deciding what is safe for banks to own to the rating agencies," he says.
And so finance ministers around the world are now scrambling to respond to the single opinion of a company whose reputation has been laid low by years of high profile mistakes. The jury is still out on whether U.S. political intransigence (which compelled S&P to downgrade the U.S.) will continue to protect the rating agencies from any attempt to curb their power and influence.
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アップルがエクソンモービルをわずかに超えて、アメリカ１位の規模に。
Apple briefly passes Exxon as largest U.S. company
On Tuesday August 9, 2011, 2:18 pm
By Poornima Gupta and Rodrigo Campos
SAN FRANCISCO/NEW YORK (Reuters) - Apple Inc briefly edged past Exxon Mobil Corp to become the most valuable company in the United States after days of volatile stock market action.
The technology giant's market value rose on Tuesday to $341.5 billion, just above Exxon's $341.4 billion, even though the oil major's annual revenue is four times that of Apple's.
Exxon quickly regained the No. 1 spot as its shares rose and Apple's shed some of their gains, with stocks globally remaining volatile because of soft economic data and the downgrading of the United States' sovereign credit on Friday.
At 1:50 p.m. EDT Exxon's market cap was $339.3 billion while Apple's dipped to $338.8 billion.
Tuesday's move by Apple, which ended Exxon Mobil's run of more than five years at the top, capped a remarkable turnaround for a company that once teetered on the brink before Apple's Steve Jobs returned to resuscitate the company he co-founded.
Thirteen years ago, some analysts said Apple's value consisted of real estate holdings and cash on hand.
Apple joined, albeit briefly, a small group of companies that have held the top spot in the S&P 500, including General Electric, General Motors, IBM, Microsoft Corp and AT&T, according to Standard & Poor's Index Analytics
Since July 1, Apple's market capitalization has risen by more than $20 billion, fueled by optimism that a new version of its best-selling iPhone will lead to a monstrous second half of 2011.
Exxon's market cap, on the other hand, has slipped nearly $60 billion in the same period due to volatile crude oil prices.
Men walk past an advertisement for Apple's iPad2 in front of an electronic shop in Tokyo May 5, 2011. S REUTERS/Kim Kyung-Hoon
(Additional reporting by Anna Driver in Houston; Editing by Steve Orlofsky)
米格付け会社スタンダード・アンド・プアーズ（Ｓ＆Ｐ）に対する批判
S&P Slammed After U.S. Downgrade
By Yahoo! News | Daily Ticker – 18 hours ago
By Zachary Roth
Days after Standard & Poor's downgraded the United States' credit rating, a powerful backlash has set in against the move. Washington leaders of both parties, as well as investors, have seemed to shrug off the ratings agency's verdict--and some analysts have even raised questions about S&P's basic competence and credibility.
On Friday, S&P lowered its rating for long-term debt issued by the U.S. Treasury by one notch, from Triple A--its highest rating--to AA+. Explaining the move, it said Washington hadn't done enough to reduce the long-term deficit, and expressed doubt about the ability of political leaders to work together to solve the problem.
After the recent crisis over raising the debt ceiling, those concerns--especially the latter--appear valid. But by lowering the U.S. rating, S&P is saying that it now sees an increased chance that the Treasury won't repay its debts in the future--even though Congress did ultimately vote to raise the ceiling, avoiding a default.
And that's where many observers differ with S&P. Take a look at the financial markets: It's true that, so far this week, Wall Street and foreign markets have nosedived. But that descent began last week, before the downgrade. More important, far from running away from U.S. Treasury bonds, investors are flocking to them, suggesting that they see the chances of a default as slimmer than ever.
"The downgrade of U.S. sovereign credit by S&P on Friday reflects facts that have been well known to the market for some time," said Blackrock, the world's largest asset management firm, in a statement Monday. "So, it does not imply a fundamental increase in risk, and we don't believe that investors should change their behavior based solely on the downgrade."
President Obama appears to agree. "No matter what some agency may say, we've always been and always will be a AAA country," he declared Monday.
Former Federal Reserve chair Alan Greenspan, too, said Sunday on NBC's "Meet the Press" that he sees no risk in investing in U.S. Treasuries--though the judgment of the economic planner known as "the maestro" hasn't always proved infallible.
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Many economists argue, essentially, that the United States isn't going to fail to pay its debts. "The debt is issued in dollars. That means it is payable in dollars. The U.S. government prints dollars," wrote Dean Baker of the liberal Center for Economic and Policy Research Saturday. "This means that if for some reason the government was unable to tax or borrow to raise the money to pay its debt then it could always print it. This may carry a risk of inflation, but S&P is not in the business of making inflation predictions, they are in the business of assessing the likelihood that debt will be repaid."
S&P is the world's largest ratings agency. In most cases, its business model is based on charging the issuers of debt--private corporations, local and state governments, for instance--in exchange for a rating. The issuer then uses a positive rating to give investors confidence in the solidity of the investment. But S&P also rates the debt of 126 countries. And, like many of the countries whose debt is rated by S&P, the United States neither requests nor pays for its rating.
S&P had warned earlier last month that if the debt ceiling negotiations failed to result in a deficit-reduction package worth at least $4 trillion, it would downgrade the U.S. rating. And now that the agency has delivered on that threat, S&P's critics argue that the credit raters are digging in on what amounts to a self-fulfilling prophecy. The decision "smacked of an institution starting with a conclusion and shaping any arguments to fit it" declared Gene Sperling, a top White House economics adviser, over the weekend.
It hasn't helped S&P's credibility that the Obama administration pointed out what it calls a "$2 trillion error" in how the ratings agency calculated the deficit over the next decade. "They've shown a stunning lack of knowledge about basic U.S. fiscal budget math," said Treasury Secretary Tim Geithner.
But David Beers, who runs the S&P unit that rates government debt, told ABC News Monday he "absolutely" does not have second thoughts about the move.
Geithner, said Beers, "acknowledged the damage that was done to the U.S. reputation because of the controversy over the debt ceiling ... He also acknowledged that the underlying public finances of the U.S. government are on an unsustainable path."
"So we have this paradox here," Beers continued, "where the Treasury Secretary seems to agree with the thrust of our analysis, he just rejects [our rating]."
It's true that the administration's stance in some ways fits awkwardly with its previous position. For months, the White House had argued that Republicans' unwillingness to consider tax increases was jeopardizing the country's long-term fiscal health. In its report on the downgrade, S&P made clear that it shares that view, noting that the downgrade came about in part because "the majority of Republicans in Congress continue to resist any measure that would raise revenues." But now the administration appears to reject the notion that the GOP's uncompromising stance threatens future U.S. solvency.
Still, it's not just Team Obama that isn't lining up behind S&P. Rep. Eric Cantor, the number two Republican in the House, urged his colleagues Monday to maintain a hard line against tax increases, despite S&P's clear statement that it acted in part because of Republican intransigence on the issue.
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Other critics have sought to undercut S&P by noting its key role, along with the other leading ratings agencies, in inflating the housing bubble and paving the way for the financial crisis. S&P and other credit-rating agencies slapped AAA ratings on a slew of non-prime mortgage deals, long after their true value had become clear to many analysts--perhaps because they're paid by the banks whose deals they're rating, giving them an apparent incentive to offer favorable assessments. "It could be structured by cows and we would rate it," one S&P analyst wrote to another in 2007.
"I don't know what makes them experts at this," said Rep. Brad Sherman, a California Democrat and frequent critic of credit-rating operations, in a statement issued Monday in response to the downgrade. "Obviously, they got it pretty wrong in mortgage-backed securities."
And S&P hasn't just missed the mark in sizing up the viability of toxic mortgage assets. As Nate Silver of the New York Times noted Monday, the agency's assessments of the likelihood of various countries defaulting on their debt in recent years also appear shaky. Silver, a respected statistical analyst, called S&P's ratings "substandard and porous."
Elsewhere in the blogosphere, there have even been questions about S&P's basic competence. "To say that S&P analysts aren't the sharpest tools in the drawer is a massive understatement," writes one prominent finance blogger and former lawyer for an investment bank, who claims to have had "extensive" experience with all three major ratings agencies. "These guys personify amateur hour."
And Monday, Moody's, the second largest ratings agency, released its own report, confirming that it's maintaining the United State's triple-A rating. The country, said Moody's, enjoys "unmatched access to financing, meaning that the U.S. government can support higher debt levels than other governments."
Moody's added that it expects to see more progress made toward cutting the deficit. "Although the political process has been considerably more contentious than usual in the past few months, it finally did produce an agreement. We expect further fiscal measures over time, albeit with vigorous debate over the particulars."
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注1＝“Monthly GDP estimates for inter-war Britain”, www.niesr.ac.uk.
注2＝Is the British economy supply constrained? www.cbr.cam.ac.uk.
By Martin Wolf
（翻訳協力 JBpress）
(c) The Financial Times Limited 2011. All Rights Reserved. The Nikkei Inc. is solely responsible for providing this translated content and The Financial Times Limited does not accept any liability for the accuracy or quality of the translation.
中国２３社、韓国８社、インド７社、日本はゼロ−フォーブズ雑誌によるアジアトップ企業５０
Japan companies shut out of Forbes list of Asia's top 50
Tuesday, Sep. 13, 2011Kyodo
SINGAPORE — The business magazine Forbes has released its 2011 roster of Asia's top 50 publicly listed firms, which for the first time includes no Japanese companies.
"Japan, which led the pack with 13 companies six years ago, had no companies this year for the first time, partly a result of the March 11 earthquake," Forbes said in its latest issue, now available at newsstands.
This year's "Fab 50" list is topped by China with 23 companies, up from 16 last year, followed by South Korea with eight companies and India with seven.
Japan had two companies on the list last year — Nintendo Co. and Rakuten Inc. — compared with 2005 when Japan topped the list with 13 companies such as Toyota Motor Corp. and Nissan Motor Co.
The firms were picked from among more than 1,000 in the Asia-Pacific region with at least $3 billion in revenue or market capital and judged on their financial performance over the last five years, excluding those with too much debt or where the government owns at least half the shares.
ダウとサウジ石油会社が同意書にサイン−世界的に１、２を競う大規模な化学工場をサウジアラビアに
Dow, Saudi oil company sign accord for $20B plant
Dow Chemical, Saudi oil company sign accord advancing $20B chemical plant in Saudi Arabia
Marcy Gordon, AP Business Writer, On Saturday October 8, 2011, 5:48 pm EDT
FILE - In this Sept. 22, 2011 photo, Andrew Liveris, Chairman and CEO of Dow Chemical, speaks at the Clinton Global Initiative, in New York. Dow Chemical Co. and the Saudi Arabian Oil Co. said Saturday, Oct. 8, 2011, that they signed an agreement that advances their plan to build one of the world's biggest chemical plants in Saudi Arabia. The $20 billion complex is expected to begin production in 2015. (AP Photo/Mark Lennihan, File)
Dow Chemical Co. and the Saudi Arabian Oil Co. said Saturday that they signed an agreement that advances their plan to build one of the world's biggest chemical plants in Saudi Arabia. The $20 billion complex is expected to begin production in 2015.
The two companies agreed to a joint venture for Sadara Chemical Co., which will own the plant being built in the desert kingdom. The companies estimate it will generate about $10 billion in revenue annually within a few years of operation.
Dow and Saudi Aramco together are investing about $12 billion, and a portion of Sadara will be sold to shareholders in a public offering in 2013 or 2014. The complex, with 26 manufacturing units, will be the largest integrated chemical facility ever built in one go, the companies said.
It will make chemicals and plastics for the energy, transportation and consumer products industries. The companies are looking to sell the products in fast-growing markets such as China, the Middle East, Eastern Europe and Africa. Once completed, the complex will have capacity to produce 3.3 million tons a year of chemical products for use in an array of items including auto parts and food packaging.
Dow and Saudi Aramco, which is owned by the kingdom's government, announced in July that their boards had authorized them to set up the joint venture for the plant in Jubail Industrial City. The site is 60 miles (100 kilometers) northwest of the eastern Saudi city of Dammam.
Dow, based in Midland, Mich., will have access to Saudi Arabia's relatively cheap hydrocarbons, which will be used to make chemicals at the plant. The company has adopted a strategy of moving away from its basic plastics business and toward specialty materials used in consumer electronics and other products.
For Saudi Arabia, the plant will bolster its push to diversify its industrial base, reducing reliance on oil production, the companies said. The Sadara project and related investments are expected to produce thousands of new jobs, they said.
アメリカが大不況に入っても株価は緩やかに落ちるとする予想記事。株価を急降下させるバブルの破裂する要素がない、すでに厳しいビジネス環境だから。もしアメリカの消費能力が激減し日本商品が売れ残れば、日本の経済はますます厳しくなる。日本ビジネスは政治不安の第3世界に市場を拡大しようと必死だけど、新興国の価格競争で苦しい戦いを強いられている。製造業やサービスの海外移転。国内の仕事減少と就職難や人員整理。働く家庭のペイカット等収入減。歳入の低下。国や自治体の財政赤字の深刻化。自殺増。円高から円安にいずれは向かうだろう。いまだ伝統という枠に縛り付けられて、国際化社会に適応できない日本の将来は暗澹たるもの。
****
How bad can it get if the US falls into recession?
Investors worry stocks will get crushed in a recession; Here's how they did in past downturns
Bernard Condon, AP Business Writer, On Sunday October 9, 2011, 12:36 pm EDT
NEW YORK (AP) -- Are investors overreacting to the prospect of a recession?
The slightly better jobs report on Friday notwithstanding, the odds of a recession appear to be climbing, and that's bringing back scary memories. Though stocks may look cheap thanks to record corporate profits, that was also true the last time the U.S. was heading into a downturn. Based on recent recessions, profits could fall a third if the economy crumbles.
Investors have been worried about a new recession for months. Headlines last week ratcheted up the fear.
On Tuesday, the Federal Reserve Chairman Ben Bernanke testified to Congress that the recovery is "close to faltering." Goldman Sachs said Europe could fall into recession by the end of the year, and push the U.S. "to the edge" of one itself. A co-founder of the Economic Cycle Research Institute, a forecasting firm that called the last three downturns, made the rounds of TV news shows to say a U.S. recession was all but inevitable.
With memories of the Great Recession so fresh, investors are understandably spooked. A year after that downturn began in Dec. 2007, profits at companies in the Standard & Poor's 500 index turned into losses. Three months after that, stocks hit bottom at half their pre-recession peak.
But recessions come in many varieties, and most are less scary than the last one. A review of past ones shows that:
-- Profit drops range widely. From peak to trough, profits at S&P 500 companies, excluding financial firms, fell an average 32 percent in the past five recessions, according to Adam Parker, U.S. equity strategist at Morgan Stanley. He excludes financial firms because their record write-offs in the last recession turned S&P profits into losses, and would exaggerate the drop at the average company in the index.
The biggest fall in profits: 57 percent from the peak before the 2001 dot-com recession. Profits during the 1981-82 recession fell 17 percent.
-- Recessions usually last less than a year. A recession that began in January 1980 was over in six months. The Great Recession that ended June 2009 lasted 18 months, the longest since the Great Depression. The 11 recessions since World War II averaged 11 months.
-- Stock investors can get clobbered, but not always. Bear markets that accompany recessions have pulled stocks down an average 38 percent in the last five downturns, based on data from Sam Stovall, chief investment strategist at Standard & Poor's. From their October 2007 peak before the last recession, stocks fell 57 percent. But in the bear market during the recession that began in July 1990, they fell only 20 percent.
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-- By the time the economy falls into recession, much of the damage to stocks is usually over. The stock market famously looks forward six to nine months, and that's mostly true on the cusp of downturns, too. Stocks had been dropping for a year by the time the 2001 recession began. That's worth remembering if another recession is coming. The S&P 500 is already down 15 percent from its recent peak in April.
Problem is, not even experts who study downturns can predict exactly what kind of recession may come next. "Everyone wants a recession playbook, but there aren't enough similarities with prior cycles to know which one to pick," says Morgan Stanley's Parker.
To be sure, most Wall Street analysts and economists think one isn't even likely now. Jim Paulsen, chief investment strategist at Wells Capital Management, notes that recessions are typically preceded by what he calls "excesses" that need to be purged from the economy. He doesn't think that's true today.
"Have banks been aggressively overextending loans? Has anyone been borrowing too much lately? Are companies overstaffed?" Paulsen writes in a recent report. "It's hard to see why the U.S. would experience a recession when almost nothing requires a correction."
Even if he's wrong, investors bracing for a downturn on the scale of the last one may be pleasantly surprised.
In the Great Recession, the output of many countries shrank at the same time, punishing earnings of U.S. companies that had hoped sales abroad would soften the blow from lower U.S. sales. Fear spread that banks wouldn't make good on their own loans, and that led them to stop making loans to businesses of all kinds. Companies cut more than 600,000 workers a month for six months in a row. With fewer jobs, people had less money to spend and companies sold less, which led them to cut more jobs.
How likely is a repeat?
Banks have fatter cushions against losses now than before the financial crisis. Companies in the S&P 500 are making more money than ever, and squirreling away some as cash reserves, a sort of rainy-day fund. They've laid off so much staff and are running so lean, it won't be as easy to cut jobs like they did in the last recession.
The government reported Friday that non-farm payrolls rose 103,000 in September, better than expected but not enough to lower the unemployment rate. That rate held steady at 9.1 percent.
So if a recession is coming, how bad might it get? That depends on whether the U.S. falls into one alone or together with other countries as it did the last time.
Parker, of Morgan Stanley, is a sort of grim optimist. He doesn't think stocks are the bargains that Wall Street analysts claim. But he doesn't think a worldwide downturn that would send them plummeting is likely, either. If a U.S. recession is coming, he thinks the odds favor a garden-variety one. He says profits for S&P 500 companies could fall to maybe $85 per share in 2012, a quarter below the $112 that analysts expect now.
That could still hurt stocks. But since they're down already, the fall from here might qualify more as a slide than a crash.
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KOFU, Yamanashi Pref. — Among the 47 prefectures, the March disasters and ensuing nuclear crisis have apparently hit foreign tourism hardest in Yamanashi Prefecture, which traditionally attracts hundreds of thousands of visitors to Mount Fuji on its southern border.
Takeo Nishioka
Yamanashi suffered a 91 percent fall in visitors in the April-June quarter from a year earlier, even worse than the dropoff in the Tohoku region, where the damage was greatest.
Tourism officials, who have touted Mount Fuji as the symbol of Japan, believe foreign guests stayed away because of the accident at the Fukushima No. 1 nuclear plant, even though the country's highest peak is around 300 km away and hardly anyone in Japan believes the accident had a serious impact on Yamanashi Prefecture.
According to data released Oct. 25 by the Japan Tourism Agency, Yamanashi had 19,730 foreign guests at accommodations in the second quarter, less than one-tenth of the 219,270 seen a year earlier.
The drop of 91 percent compares with an 87.9 percent plunge for Fukushima Prefecture, 89.7 percent for Iwate Prefecture and 71.1 percent for Tokyo.
Seen from abroad, the nuclear disaster appeared to affect a much larger area than it really did, the officials said.
"As Yamanashi is considered part of eastern Japan, the number of foreign guests is still low," said Yoshiaki Togawa, president of the Tominoko Hotel in Kawaguchiko, Yamanashi Prefecture.
"It's impossible to do business with foreigners unless it is perceived to be a safe area. I really wish the government would soon issue a safety declaration."
Togawa's hotel, which offers a magnificent view of Mount Fuji, targets foreign guests, especially tourists from China, where visa requirements for travel to Japan have been eased. The fall in customers following March 11 forced the hotel to shut down from mid-March through April.
After reopening in May, it had 420 foreign guests, one-tenth of the 4,034 it welcomed a year earlier. The hotel says foreign guests in August grew to 2,016, mainly from Hong Kong and Taiwan, though the number was still half the year-earlier level.
Tokyo Electric Power Co., the operator of the Fukushima No. 1 power plant, has said it will offer compensation for lost revenue due to cancellations by foreign visitors through May 31. Togawa said he has filed a claim for a total of \330 million covering Tominoko and three other hotels he runs.
The Yamanashi Prefectural Government is also feeling a sense of crisis. In July, Gov. Shomei Yokouchi published advertisements in tourism magazines in Hong Kong and Taiwan with the message that Yamanashi, also known for its wineries, vineyards, peach farms and the Yatsugatake highland region, is free from quake damage and radiation.
スロー経済下でのマネーマネジャーの動向と新興マーケットの動きの相関関係
Brazil, China and other emerging markets trail US
Emerging markets have stronger growth, but their stocks lag behind those in the US
Matthew Craft, AP Business Writer, On Sunday November 6, 2011, 12:12 pm EST
NEW YORK (AP) -- It sounded like a can't-miss proposition: Buy the winners, drop the losers.
Developing countries from Brazil to China are expanding much faster than aging economies in the U.S. and Europe, where borrowing during the boom years has been a drag on growth. So the smart money bought stocks in emerging markets, expecting that rapid economic expansion there would provide better rewards. This year, that bet hasn't worked out.
The broadest measure of U.S. stocks, the Standard & Poor's 500 index, is down just 0.4 percent this year. Markets in Brazil, China and the like have lagged far behind, even though their economies are still growing faster than the U.S.
"If you were anywhere in the world other than in the S&P 500 this year, you got crushed," said Greg Peterson, director of research at Ballentine Partners, an investment advisory firm.
The main reason emerging market stocks have suffered deeper losses isn't because their economies are suddenly sluggish. Analysts say it's because people have been worried about the European debt crisis and a possible recession in the U.S. It may seem unfair, but when fear of another financial crisis strikes money managers, they tend to flee emerging markets and stay closer to home.
This summer, panicked money managers dropped the most risky investments first. That meant bonds from deeply indebted countries like Italy and Portugal, small companies in the U.S and emerging market stocks got hit the hardest. Even gold, an asset normally considered safe, dropped as traders shifted money into dollars.
"There was a globalization of fear," says Nathalie Wallace, a senior portfolio manager at Batterymarch Financial Management.
The same thing happened when the U.S. financial crisis hit in 2008. The S&P 500 fell 38.5 percent for the year. But the MSCI Emerging Market index, made up of countries where the banks didn't peddle subprime mortgage bonds, plummeted 47.3 percent.
"Anytime you see risk and fear coming, you see emerging markets get hit a bit more," Wallace says. "It doesn't mean the underlying fundamentals of the economy have changed."
Consider the collection of emerging-market rising stars known as the BRICs, which stands for Brazil, Russia, India and China. All have economies whose growth exceeds the U.S.
-- Brazil: The economy has expanded 3.1 percent over the past year. The benchmark Bovespa has lost 15.3 percent.
-- Russia: Economic growth of 5.1 percent. The Micex has dropped 11.1 percent this year even after a 10 percent rebound in the past month.
-- India: Economic growth of 7.7 percent. The BSE Sensex index is down 14.4 percent.
-- China: Economic growth of 9.1 percent. The Shanghai Composite has slumped 10 percent this year.
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By contrast, the U.S. economy has expanded 1.6 percent over the past 12 months. That's sluggish compared to the developing world's stars. And worries that the U.S. could slip into a recession, or that Europe's debt crisis could tip it into one, have weighed on investors for months. Even after those fears dragged down stocks nearly 20 percent in a month, the S&P 500 outshines indexes in nearly all of the world's fastest growing economies.
In fact, if you rank the U.S. against emerging markets this year, it places ahead of 20 countries and behind just one, Indonesia.
China and other emerging markets long relied on shipping toys, timber and other goods to consumers in the U.S. and Europe. Trade helped them grow. But that has a downside, says Tim Morris, a portfolio manager at J.P. Morgan's asset management unit. When a small country hitches its fortunes to U.S. shoppers, it's bound to suffer when the U.S. economy slows down.
A related problem for many emerging market countries is that they're dominated by energy and material producers, the type of companies most vulnerable to a global slowdown. Todd Henry, an emerging markets equity specialist at T. Rowe Price, points to Brazil, a country that isn't as dependent on exports for growth. "It's a relatively closed economy," Henry says. "But commodity and energy companies make up a large part of their stock market. So if the world is slowing down, that gets priced in."
The largest company in Brazil's stock index is the oil giant Petrobras. When the U.S. economy looks weak, the price of oil falls and the companies that sell oil fall, too. That pushes down Petrobras, which tugs on the Bovespa. In other words, when the U.S. has the sniffles, Brazil's stock market still catches a cold.
"Americans tend to think our problems are limited to the U.S.," says Richard Bernstein, chief executive officer of Richard Bernstein Advisors LLC. "But our problems are their problems, too."
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