Barron's Weekend Edition

Barron's had several really great article in their weekend edition.  Their cover story talked about the  end of cash as we move towards a plastic society vs. cash.  There are two big winners in this story which are Visa V and MasterCard MA (Full disclosure I own personal shares of Visa). Both V and MA only process transactions rather than lending money and being exposed to credit default risks.  V and MA virtually trade in tandem with each other and we would be buyers of either or both given any significant pull back.

• Cash's disappearance has been slow but inexorable. Upscale merchants are doing away with cash registers in favor of hand-held devices, like the ones that are ubiquitous in Apple stores. Web-based retailers don't take cash at all. And on the highways, even toll booths are fading. Waiting in the wings is a generation of kids that have grown up with debit cards, prepaid cards, and iTunes accounts. The ATM is now as foreign to teenagers as bank tellers were to their parents.
• Thirty years from now, if recent trends continue, cash could fall to just 10% of U.S. retail purchases.

In an interview with Ian Bremmer, founder of New York-based Eurasia Group, a political-risk consultancy, he describes a world in which the US is no longer the leader nor does it want to be due to growing domestic issues as home.  It has been widely discussed here in the US as to why america has to or needs to be the policeman to the world?

• It is a world that is more difficult to navigate. The U.S. is no longer interested in or willing to provide the kind of leadership it has historically. It doesn't want to be the world's policeman or the lender of last resort or the driver of globalization. No one else is willing to do it, either. G-Zero replaces the U.S.-led flat world. It means a lot more volatility in the markets, since you'll have a lot of different standards, types of trade flows, gravitational centers.
• Companies need to hedge, to be able to pivot, so they don't end up underperforming. You see Japan's difficulties because of the conflict with China. In a flat world, in the absence of G-Zero, a Japanese exporter like Nissan goes where the economics are good and doesn't pay a lot of attention to governments. In a G-Zero world, politics matter more. Suddenly, the China-Japan conflict is enormously important, and exports to China fall off a cliff. Nissan used to sell 25% of its cars to China. Now half of that is gone. Likewise, Facebook (ticker: FB) thought it was in a flat world; it isn't. Facebook's goal is to sell to the seven billion people in the world, [with] a big connect to the first billion. But the world's largest Internet market, China, has no interest in Facebook. They want their own. That's not a flat world.