The John Batchelor Show

Wednesday 10 April 2013

Air Date: 
April 10, 2013

Photo, above:  a puppet prince. See:  Hour 2, Block C, Steve Herman, VOA News, Seoul, anent Eun's unacceptable and belligerent remarks


Co-hosts: Gordon Chang,; David Livingston, The Space Show; Patrick Chovanec, Managing Director and Chief Strategist at Silvercrest Asset Management

Hour One

Wednesday  10 April  2013 / Hour 1, Block A: Charles Burton, professor of political science at Brock University, in re:  The pronouncement with an imperialist whiff:  "No one should be allowed to throw Asia into chaos: Xi Jinping warns  In a veiled criticism of its long-time ally North Korea, new Chinese President Xi Jinping today warned that no one should be allowed to create chaos for selfish gains and asked all nations to contribute their share in maintaining peace. Responding to regional worries over North Korea's bellicose threats, Xi said, "No one should be allowed to throw a region and even the whole world into chaos for selfish gains."  "While pursuing its own interests, a country should accommodate the legitimate interests of others," Xi said without naming any country. "Peace, like air and sunshine, is hardly noticed when people are benefiting from it. But none of us can live without them," he said. "Countries, whether big or small, strong or weak, rich or poor, should all contribute their share to maintain and enhancing peace. Rather than undercutting each other's efforts, countries should complement each other and work for joint progress," Xi said.

---An oracular statement – which RenMinJrbao then claimed was criticizing the USA.  A nuclearized Korean peninsula is nothing that China wants to see. The hysterical infant's threat to blow up Austin, Texas, is not encouraging. "Close as lips and teeth" isn’t quite how it is now. However, Beijing holds all the cards to shut the DPPRK down. CCP is highly miffed that Kim would defy it.  If Washington treated Canada like  this, things would not go well – yet the increasingly arrogant PRC acts as though it's in charge of all Asia.  Infant Kim has not gone to Beijing to pay obeisance; Han Chinese are clear that they’re racially and culturally superior to the mere Koreans (and everyone else).  Pressing: alienation of regime from populace, gap between rich and poor, grave economic problems: Xi not addressing the serious issues; is presiding over he beginning of the end of this form of govt there. XI demands kowtowing and compliance; Kim's insurrection is impossible for PRC to swallow, If DPRK and ROK joined, that'd throw and impossible problem in Xi's lap.  The new boss of China, Xi.

Xi's made these comments in his speech at the Boao Forum for Asia (BFA) attended by Australian Prime Minister Julia Gillard and nine other heads of government, Corporate Affairs Minister Sachin Pilot and over 1500 business leaders, including Microsoft founder Bill Gates.  Xi's statement came in the backdrop of heightened tension in the Korean Peninsula after China's close ally Pyongyang increased war preparedness threatening nuclear war following a joint war games by the US and South Korea.  Earlier, Chinese Foreign Minister, Wang Yi told the United Nations Secretary-General Ban Ki-moon that China would not allow "trouble-making" at its doorstep by any party.  US is pressuring China to act tough against North Korea. Chinese officials believe that North Korea's new ruler Kim Jong Un is drifting from China's influence ever since he succeeded his father in 2011.  Xi's call for stability in Asia also comes in the backdrop of maritime disputes between China and Japan over islands and China and South East Asian countries over South China Sea besides border dispute with India.  Xi said while China safeguards its sovereignty and territorial interests, it would also work for peace and stability in the region. [Economic Times of the India Times]

Wednesday  10 April  2013 / Hour 1, Block B:  Nury Turkel, Esq., former president of Uighur American Association, in re: China has sentenced 20 ethnic Uighur men to a jail term of up to life in prison on charges of terrorism and separatism.  The Kashgar and Bayingol courts said the men had their "thoughts poisoned by religious extremism," and that they used cell phone and DVDs "to spread Muslim religious propaganda."  The court report said that some of them bought weapons in order to kill police officers as part of a jihad and spread propaganda about the banned East Turkestan Islamic Movement. It is not known if the Uighur men pled guilty or not but, regardless, acquittals in China's court system, which is Party-run, are rare.

The accusation, as always, is "terrorism" – connecting them to an obscure group named the East Turkistan Islamic Movement.  The extremely modest deeds of the men are visibly unconnected to any possible terrorist organization.  Prosecutors, judge and defense council all are one in China. Not an independent judiciary.  Dilax Raxit, of the German-based World Uighur Congress, said the punishments were uncalled for and were being used to suppress the ethnic Muslim Uighurs. Raxit said the 20 Uighurs only did things like listen to Radio Free Asia and forward videos downloaded from YouTube, which they had done to spread religious knowledge and preserve their culture and lifestyle. "China has completely deprived the Uighurs of their rights to use the Internet to express different opinions and to obtain information," Raxit said in a statement.  As for a new administration in Beijing – no sign of any shift. No acknowledgment that their policies have been abject failures.  No Chinese leader seems to realizes that it's their policies that cause ethnic tensions.   New pipeline from Siberia: through Xinjiang. Obliterate Uyghurs to accommodate the pipeline?  Xinjiang is a valuable piece of real estate, both carrying new pipelines and being a trade route to Central Asia, Pakistan, Afghanistan and even India. Ergo, fresh suppression of Uyghurs: both to carry pipelines and to complete cultural genocide, esp in Kashgar: Chinese govt destroyed priceless historic relics for no reason (said "to modernize"). With 1.3 bil Chinese people, the number of Uyghrs is comparatively small.  Also, they see Uyghurs as a religiously-independent group – a deep threat to the Communist Party.  Han Chinese mean to take it all.

More from GlobalPost: Chinese racial tensions flare over overpriced nut cake

Wednesday  10 April  2013 / Hour 1, Block C: Hotel Mars, episode n.  Don Kessler, astrophysicist and former NASA scientist known for his studies of space debris, and David Livingston, The Space Show, in re: space debris and mitigation efforts.  US headed for 'perfect storm' in space    The government is tracking about 23,000 pieces of space debris, but there are estimated to be more than 500,000 bits up there, many of which...

Forbidden by law to go after someone else's satellite without their permission.

Tether? Can easily collide with things and make it worse. Only thing we've done in the past was to send a shuttle up to take stuff designed to be grabbed.

A new EU-wide system to track satellites could help reduce collisions with orbiting space debris, crashes that cost operators millions and ...  

Addressing the challenges of space debris, part 3: policy

 Methodologies and instrumentation used to remove space debris from orbit could also be used to deorbit a vital functioning satellite belonging [more]

Wednesday  10 April  2013 / Hour 1, Block D:  LouAnn Hammond,, in re: Imperial Japan's conduct across China when it invaded during WWII, with its headquarters in Manchukuo, is still vivid among Chinese people.  All parents who survived the war have told their children of the terrifying abuse in ghastly detail.  However, recent Chinese leaders are symptoms of a weak state: have stirred up anti-Japanese sentiment.   Senkaku/Diaoyutai: sales of Japanese cars decreased, but now are slowly increasing.  Much anti-Japanese sentiment formerly – a Toyota dealership was burned; sign: "We'll kill all Japanese even if we have to die doing so."

Japanese autos and Senkaku.   Also: Ford Focus Grabs Global Sales Crown as World Buys Small

Hour Two

Wednesday  10 April  2013 / Hour 2, Block A:  Stephen Yates, chief executive officer of D.C. International Advisory, in re: Secy Kerry's visit to Asia: no Kerry doctrine; it'd be unusual for a second-term Secy of State to break with previous policies.  Climat change as a major discussion point during a time like this?  The Obama Admin at its apex of power formerly tried to ake this a major issue; less than zero change that something substantive will occur. Is govtl wonkishness.  Pressing natl security concerns need to be at the top.  John Kerry is a perfect American princeling – princeling to princeling in Beijing;  the two fair-haired boys meet.  Usu, visiting Americans try to  be down to earth – Secy Lew ate dumplings.   Obama's chief of staff will be in Beijing soon – why not just move the whole administration to China and be done with it?  A spring break for Cabinet officials -200+ people moving around.  This is not like the Cold War, where opposing sides would sit and actually speak; agreement not necessary, but real discussion is.  GC: You’re a friend either of North Korea, or of us, but not both. And as for Iran: don't even think of helping it any more.  SY: North Korea has gone form worse to worse.

Wednesday  10 April  2013 / Hour 2, Block B:  Patrick Chovanec, Managing Director and Chief Strategist at Silvercrest Asset Management, in re:  Fitch downgrades China’s credit rating  China’s sovereign credit rating has been cut by Fitch, which warned that the world’s second-largest economy faces a bumpy road ahead as it seeks to change its growth model.  Fitch on Wednesday downgraded the country’s long-term local currency rating from AA- to A+, citing a number of “underlying structural weaknesses” in the Chinese economy, including low average incomes, lagging standards of governance, and a rapid expansion of credit.   “China’s growth since the relaunch of market-based economic reform in 1992 has been globally as well as domestically transformative. However, the investment-led growth model faces tightening constraints as the share of investment in gross domestic product approaches the level of domestic savings. The process of rebalancing the economy towards consumption could lead to the economy’s performance becoming more volatile”, Fitch said in a statement explaining the decision. The agency also warned of the growing risks from the rise of shadow banking, and said that total credit in China may have reached 198 per cent of gross domestic product by the end of last year, up from 125 per cent in 2008.  “The proliferation of other forms of credit beyond bank lending is a source of growing risk from a financial stability perspective,” said Fitch.

Fitch’s sovereign rating for China sits a notch below those of rival agencies Moody’s and Standard & Poor’s, which both upgraded their views on the economy in late 2010. The difference means that Moody’s and S&P believe China has a very strong ability to repay debts, while Fitch believes it is more susceptible to risks. Fitch already rated China’s foreign currency debt as A+.  China has faced concerns over debt levels since 2009 when state-owned banks unleashed a surge of loans to power the economy through the global financial crisis. The credit wave succeeded in keeping Chinese growth on track, but it led to bubbly housing prices and also saddled local governments with mountains of loans that they are still struggling to repay.  Beijing has spent the past three years trying to manage these problems. It has waged a long campaign to rein in the real estate sector, raising mortgage downpayments and barring people from buying second homes in the hottest markets. Partly as a result, China recorded its lowest annual growth rate for a decade last year.  To stop local governments from accumulating more debt, it has stamped out the previously widespread practice of their using financing vehicles to circumvent restrictions on borrowing from banks.  But some analysts are concerned that a big rise in financing through the shadow banking system, from corporate bonds to trust loans, has damped the effect of the government’s policy controls. Overall credit flows in the economy have remained extremely strong, rising 23 per cent last year, even as Beijing has capped the increase in formal bank lending.  In explaining its downgrade, Fitch also said that China had a “less favourable record on inflation management” than its A-rated peers, although data released on Wednesday showed a sharp drop in price rises in March. 

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Wang Ping, a “researcher in Japanese studies at the Chinese Academy of Social Sciences”:

“Japan has been playing up the ‘China threat’ theory with an ulterior motive: to use it as a ruse to transform itself into a ‘military power’. To help push forward the ‘pivot to Asia’ policy of the United States, Japan (and the Republic of Korea) has held frequent joint military exercises with the US in recent years, posing a serious threat to security in East Asia.”

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Wednesday  10 April  2013 / Hour 2, Block C:  . Steve Herman, VOA News, Seoul, in re: Eun's ratchet. Unacceptable and belligerent remarks from the puppet infg. Mobile missile  launchers moved around but no mobilization or even motion of the Peoples Liberation Army, South Korea: not focused on infantry clash; rather, mobile missile launcher is not in a raised position; expect firing of something between now an 15 April, birthday of Kim Il-sung, the first tyrant of DPRK.   Fifty thousand DPRK workers withdrawn from Kae Song industrial zone; 123 South Korean factory owners affected.  If DPRK won’t let Kae Song go on, no one from the outside world will invest.  General Motors relies on South Korea, but concern in this matter is premature. North Asian life continues as though DPRK doesn’t exist.   Pres Park of South Korea is relatively conservative (doesn't favor the old Sunshine Policy) . First time ever that he head of NATO will visit ROK; Secy Kerry may be there at the same time. Launch while Kerry is in Seoul? If so, Kim wd be daring China to do something about it.  DPRK has the legal (intl) right to test short-range missiles; but if it fires a Musudan (3,000 km), over Japan, for example, that's quite a different event.  If a missile does go over Japan or Guam, US might shoot it down.  US won’t take the thing out on its launch pad; only in air. Japan, also, ready to shoot a Musudan down. Until here's all-out war, South Korea calls the shots in a confrontation with DPRK.

Wednesday  10 April  2013 / Hour 2, Block D:  Abheek Bhattacharya, columnist, Heard on the Street, WSJ (in Hong Kong), in re: India dismissing pharma major Novartis's cancer-drug patent [1], which is the wrong case to focus on if you're worried about Indian drug innovation. The Bank of Japanhas lit financial markets across Asia on fire, but probably won't be able to do more. [2]   The makeover between the Ambani brothers [3] as they signed a deal in telecom -- note that the real importance of this agreement is for India's beleaguered telecom industry.  India's oil & gas industry;  the Philippines' sovereign credit upgrade, a major event for the developing country. Reasons to Bond with India  India's national govt is still a bit mired in Congress party/ineffectual socialist policy, but some states, esp Gujarat, are more independent.  Much autarchic thinking. By now the BJP may be a fresh face – but not necessarily pro-market.

Hour Three

Wednesday  10 April  2013 / Hour 3, Block A:  Gordon Chang,, in re: Emerging Asian Economies on Track for Solid Growth, Report Finds  Developing countries are unlikely to see double-digit growth, the Asian Development Bank says in a report, but can expect to expand 6 to 7 percent a year over the next decade.

Wednesday  10 April  2013 / Hour 3, Block B:  .Jeff Bliss, The Bliss Index, in re: Gov. Brown Announces Oakland Waterfront Development Deal with China Investor.  Jerry Brown, supplicant to the emperor, looking for business from China into California.  Starting with Oakland: $1.5bil commitments for the Brooklyn basin - a major West Coast port to be developed with bldgs, parks, et al.  Called "a firm commitment."  Oakland is a troubled place; the 10,000 jobs to be created will be excellent, but merely scratches the surface.    Brown travelled on the Chinese high-speed rail; a year ago, a portion of a trestle just collapsed, killed many - and the Party ordered that the cars simply be buried, including all the  the injued and dead.

Photo: U.S. Ambassador to China Gary Locke (R) shakes hands with California Governor Jerry Brown (L) as Chinese Vice Minister of Commerce Wang Chao (C) looks on during a Trade and Investment reception at the U.S. Embassy on April 10, 2013 in Beijing. (Andy Wong-Pool/Getty Images)

Gov. Jerry Brown has unveiled $1.5 billion investment partnership between an Oakland-based developer and a China-based investor which will create 10,000 jobs in the state according to the governor’s press office. Gov. Brown was joined by U.S. Ambassador to China Gary Locke, as well as Chinese dignitaries in Beijing Wednesday to announce the development deal in which the city of Oakland stands to benefit greatly. From the deal, Oakland will see the creation of 3,100 units, 200,000 square feet of retail and commercial space as well as 30 acres of parks and open space. Ground breaking for the project is expected to begin in 2014. The Brooklyn Basin investment deal between China’s Zarsion Holdings Co. Ltd. and Signature Development Group will “dramatically improve Oakland’s waterfront” according to Gov. Brown.

Brown had supported Zarsion Holdings during his tenure as Oakland’s mayor, although a press release issued by Brown’s office credited Oakland’s current Mayor Jean Quan as being instrumental in connecting the investors and developers involved. On Wednesday, Brown also signed symbolic agreements on boosting trade between California and China and helping the world’s most populous nation improve its air quality. On Thursday, Brown will highlight California’s interest in infrastructure projects by traveling from Beijing to Shanghai on China’s high-speed rail system, which is the longest in the world.

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President Xi Jinping made an unprecedented visit to fishermen who spend most of their working lives in disputed waters in the South China Sea in what analysts said was a move aimed at sending a strong message to China's neighbours.  Xi's visit to Tanmen, a fishing village in the city of Qionghai in Hainan, on Monday came a few days after the People's Liberation Army Navy's South Sea Fleet finished a 16-day drill and patrol mission in the South China Sea.  The PLA Daily published an interview yesterday with fleet commander Rear Admiral Jiang Weilie who said naval training on the high seas would become routine for the navy.

The visit was given wide coverage by state media outlets, including Xinhua, with Xi quoted as asking fishermen whether they felt safe going out into the South China Sea.  "I am very impressed [after hearing your stories]. You guys have done a good job!" Xinhua quoted Xi as saying when he boarded the Qiong-Qionghai 09045. The 30-metre deep-sea fishing boat was stopped by Palau police a year ago in an illegal fishing confrontation and one fisherman was shot dead.   . . . "Our government will make more efforts to take care of you guys … and I wish you all the best when you go fishing - have good harvests and catch more big fish."  [more]

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Wednesday  10 April  2013 / Hour 3, Block C:  . John Burns NYT , in re:   Lawmakers Debate Thatcher Legacy   A parliamentary session called to commemorate Mrs. Thatcher was unusual because of its expected duration and because lawmakers were recalled from recess.   Britons Reflect on Divided Views of Thatcher Legacy  City Room: Steinem on Thatcher

Wednesday  10 April  2013 / Hour 3, Block D:   Tod Lindberg, Hoover, in re:   Thatcher began modern political polarization She was certain not only that her opponents would revile her, but that her supporters would rally to her cause. The polarization of modern politics is part of her legacy as well To the many accomplishments for which the late Margaret Thatcher is now rightly being celebrated, let us add one that is usually less remarked but no less remarkable: she inaugurated the era of modern political polarization. They called her Margaret Torture and "Thatcher the Milk Snatcher." In the Washington Monthly in May 1988, Polly Toynbee asked, "Is Margaret Thatcher a Woman?" The singer-songwriter Elvis Costello perhaps summed it up best in Tramp the Dirt Down: "there's one thing I know/ I'd like to live / Long enough to savor/ That's when they finally put you in the ground/ I'll stand on your grave and tramp the dirt down." It's not one of his catchier nor more popular offerings, but it's heartfelt. And it's printable, unlike the lyrics from many a Brit punk rocker on the subject of Thatcher.

       Political hatred, of course, predates Margaret Thatcher. Nixon-hatred had a pedigree in the United States dating back to the 1950s. But then again, Nixon got his comeuppance, resigning the presidency in disgrace as the Watergate cover-up unraveled.  Most important, few were those who had any genuine affection for Nixon. What distinguishes the modern era from the incivility of the past is its polarized character. No one denies that Thatcher was widely hated in the UK for retooling the economy, breaking the trade unions and going to war over the Falkland Islands. But she was also widely loved, and on the basis of the same set of facts. One side sees her as a destroyer of communities and families and a betrayer of the egalitarian premise of democracy. The other side celebrates her for her commitment to the revitalization of Britain at home and abroad. Beginning with Thatcher, the more your opponents hate you, the more your supporters love you.

     The lovers even have a name for what afflicts the haters: It's called "derangement syndrome." The idea is that the opponents of a favored politician have become so passionate in their hatred that they have lost their marbles, throwing aside coherence in favor of rhetorical hissing and spitting.  The partisans of each side readily embrace the view that their opposite numbers have gone mad. Thus we have had, variously, "Bush Derangement Syndrome," "Obama Derangement Syndrome," "Palin Derangement Syndrome," and "Hillary Derangement Syndrome." My research is still ongoing, but Jonathan Chait, writing in the New Republic in 2003 on "Why I Hate George W. Bush," may have been the index case for what defenders of the 43rd president regarded as an outbreak of derangement among Democrats. Chait's biggest contribution to our understanding of the workings of derangement syndrome consisted in his reveling in his hatred of Bush. But surely the only reason that "Clinton Derangement Syndrome" refers to the former Secretary of State, not her husband, is that the diagnosis was not codified until after Bill Clinton left office. That its symptoms were presenting among Republicans in the 1990s is not in doubt.

Hour Four

Wednesday  10 April  2013 / Hour 4, Block A:  Lauren Tara LaCapra, Reuters, in re:

Analysis: How Goldman's dollar-store bet reaped a fortune.  - Goldman Sachs Group Inc has likely generated around $1.2 billion of revenue over six years from its dealings with discount retailer Dollar General Corp. Just don't expect the investment bank to boast about it

Wednesday  10 April  2013 / Hour 4, Block B:  Bruce Bartlett, NYT (Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul; author of The Benefit and the Burden: Tax Reform – Why We Need It and What It Will Take, in re:   America’s Most Profitable Export Is Cash

Two things I’ve heard my whole life that always seem within reach but have never occurred are that we'll move to paperless offices and a cashless society. In theory, it seems simple enough; computers and the Internet should obviate the need for paper, and credit and debit cards and electronic bill pay should make cash superfluous.  . . . 

Wednesday  10 April  2013 / Hour 4, Block C:  Robert Zimmerman,, in re: From a global warming advocate: Global warming: time to rein back on doom and gloom?

Prediction, as they say, is tough, especially when it’s about the future – and that’s especially true when it comes to the climate, whose complexity we only partially understand. It is, as we all know, naturally immensely variable. And the effect of human intervention is subject to long timelags: it will be decades, even centuries, before the full consequences of today’s emissions of carbon dioxide become clear. As a result, scientists and policymakers draw on the past to predict the future. Until now, they have therefore placed much weight on the rapid temperature increases in the Eighties and Nineties. But for at least a decade, these have dramatically slowed, even as carbon dioxide emissions have continued to increase.   Or, as I like to say, every climate model proposed by every global warming scientist has been proven wrong. They all predicted the climate would warm in lockstep with the increase in CO2. It hasn’t. This is not to say the climate hasn’t warmed in the past five centuries (though some of the data used in for the past 150 years is sadly suspect). What isn’t clear is why. It might be the rise in carbon dioxide. It might also simply be the lingering warming the Earth is experiencing as the last ice age ends. Or it might be because of the Sun.

The field of climate science is very complex, confusing, and in its infancy. We just don’t know yet, and anyone who says he does is not a good scientist.

Wednesday  10 April  2013 / Hour 4, Block D:   Tyler Rogoway, AviationIntel, in re: HOW TO DOWN THE MOST ADVANCED AIR FORCE IN THE WORLD WITHOUT FIRING A SHOT…  …by literally turning the budget that makes that air force fly into a smoking hole in the ground.

HISTORIC ANNOUNCEMENT: We are our own worst enemy. Our fiscal policy will get us long before the big bad Russian Bear, the Chinese Dragon or some AK-47 packing boogeyman living in a mud hut in the middle of nowhere. Literally, sequester will take about 40% of the USAF’s combat punch off operational status and will gut complex training. Our leadership, in Congress, in the White House, and in the Pentagon, is a joke. This is not about partisan politics (Bush got this insanity rolling, I count him as one of the worst executives of all time, so don’t troll this into a R v D sideshow, get over your harmful “sports team”

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1. "India Overdoses on Regulation" India's decision not to grant a patent for the cancer drug Glivec is, "a setback for patients that will hinder medical progress," according to the drug's maker, Novartis. Hyperbole? Certainly.  But there are good reasons to believe India's pharmaceutical sector faces serious headwinds. The decision against Novartis is based on a part of India's eight-year-old patent law that aims to prevent companies from getting new patents for making only incremental changes to existing drugs. The court ruled Glivec wasn't different enough from earlier versions of the treatment, so it doesn't deserve its own patent protection.

The decision doesn't have much direct impact on Novartis's bottom line; the company says most of the Indian users of the drug get it free. Shares in Novartis' Indian unit initially slumped more than 6% after the decision, but regained most of the lost ground.  It is hard to tell if the ruling has wider implications. But the Glivec decision certainly comes against a worrying regulatory backdrop for big pharma in India.  India's pharmaceutical sector offers much potential. PricewaterhouseCoopers says the market could reach $74 billion in revenues by 2020, from $12 billion in 2010. But New Delhi has made no secret of its intention to lower the cost of patented drugs and favor cheaper generic versions.  Notably, domestic drug manufacturer Natco Pharma was granted permission last year to sell a generic version of Bayer's Nexavar, another cancer treatment. New Delhi said it favored Natco because the German company's drug was too expensive. Bayer fought to block Natco, but lost before a patent appeals body last month. While the Novartis ruling has been carefully tracked by the industry, it is the Bayer decision that should be most worrying. Price is the wrong foundation for patent law that should be used to protect investment in research and development.  The Bayer decision signals that getting cheap generic drugs onto the market is New Delhi's top priority. A setback indeed for major pharmaceutical companies.

2. "For BOJ, Moving Markets Is the Easy Part"  The Bank of Japan has ignited the financial markets. But it may not light a fire under Japan's real economy. The BOJ's announcement that it will substantially increase the purchase of Japanese government bonds, and venture into equities and other assets, had an immediate impact. Japanese shares gained 2.74% Friday and the yen fell sharply against the dollar after the bank said Thursday it will unleash an additional Y50 trillion ($523 billion) of liquidity in each of the next two years. JGB prices also swung wildly and some other Asian markets fell, with investors perhaps looking to reallocate funds to Japan--Hong Kong's Hang Seng lost 2.73%, for instance. Traders might cheer the volatility, though it's far from certain the BOJ can hit its intended targets: stoking inflation and reviving growth.

Doubling the monetary base--the narrow money supply which is under the central bank's control--may not stimulate actual investment and boost growth, says Hiroaki Muto, senior economist at Sumitomo Mitsui Asset Management. The problem is that base-money creation has to pass through to the broader economy to make a difference. The last time Tokyo embarked on a program of quantitative easing, between 2001 and 2006, Japan's banks sat on the base money and investment didn't get a lift. The U.S. experience helps illustrate the challenge. The Fed expanded U.S. base money by 247% between September 2008 and March 2013, but broader money supply increased only 34% in that period. To date, the impact of Abenomics on Japan's economy has been limited. The country's exporters will benefit from being able to sell their goods more cheaply thanks to the yen's slide. But so far, the weaker yen has mostly just resulted in a higher energy import bill and a widening trade deficit, says Royal Bank of Canada's Adam Cole. For some investors, the BOJ's policies are providing plenty of volatility and the opportunity to make a profit. For Abenomics to sustain genuine economic growth, however, Tokyo needs to provide more than just monetary policy fireworks.

3. "Bonding Helps Ambani Brothers"  Everybody loves a family reunion. India's Ambani brothers have set the tone for increased collaboration between their telecommunications companies, a move that should strengthen their position in the sector. A deal announced Tuesday sees Mukesh Ambani's Reliance Jio Infocomm pay a one-time fee of 12 billion rupees ($221 million) to use the optic-fiber network of Anil Ambani's Reliance Communications Ltd. Importantly, though, Reliance Communications called the deal "the first in an intended comprehensive framework of business cooperation." That makes sense. Reliance Industries Ltd., which owns Reliance Jio, had about $14.7 billion in cash and equivalents sitting on its balance sheet at the end of December. By contrast, Reliance Communications was weighed by about $6 billion in debt at the same date. Reliance Jio can save costs by accessing Reliance Communications' existing telecoms infrastructure. For the rest of India's telecoms sector, though, the prospect of further Ambani collaboration is a concern.

India's telecoms have suffered from intense competition that has squeezed margins. A multiyear scandal concerning the government's auction of wireless spectrum has also weighed on the industry. Last year saw some signs the outlook was improving. Spectrum auctions drew few bidders and some smaller players exited the industry altogether, suggesting competition concerns were waning. That raised the possibility of higher mobile-phone tariffs and better margins. But optimism has waned recently. Daiwa analyst Ramakrishna Maruvada notes that competition is still tough, with at least eight players accounting for 78% of India's wireless revenue. Spectrum license charges are also expected to increase as the government tightens the process around license renewals, adding to the cost for telecoms companies. Higher spectrum-related charges will take a significant bite out of cash flow at major players Bharti Airtel Ltd. and Idea Cellular Ltd. over the next two years, Mr. Maruvada says. India's telecom industry offers huge potential, though the sector's also beset by challenges. Tougher regulation will weigh on all telecom stocks. By banding together, the Ambani brothers are on a sounder footing.

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