Whether one believes Christine Day resigned as Lululemon's CEO or was pushed out after her five-and-a-half year tenure, she is leaving not only at the right time but in the manner a true leader should.

Shortly after the announcement three months ago that Lululemon would recall the now infamous, see-through black Luon yoga pants, Chief Product Officer Sheree Waterson resigned. She was responsible for product quality, and her leaving at that time undoubtedly reinforced a culture where accountability means something.

Day's duty extended to far more than damage control from "Sheergate." She had to stabilize Lululemon, to quickly protect the brand and stay on a growth trajectory.

Lululemon's first quarter ended May 5. In the press release announcing Day's exit, the company also said it had posted a 21 percent gain in net revenue year over year, highlighted by 7 percent growth in same-store sales.

Those numbers illustrate that Day successfully completed her mission, accepting the consequences of a massive product recall while overseeing an orderly transition to her successor.

Some of the 9 hours of "unscripted" talks between the U.S. President Barack Obama and the Chinese President Xi Jinping in a balmy California desert over the weekend could have been used to give American companies a better opportunity to compete in the Middle Kingdom's booming economy.

Selling more American goods and services in expanding markets of nearly half a billion middle-class consumers could be a win-win proposition for both countries: it would serve China's goal of economic modernization while boosting America's growth through smaller trade deficits.

But not much was heard about trade. That is in sharp contrast with the Chinese Prime Minister Li Keqiang's recent visit to Germany, where trade was hailed as part of the Sino-German "Dream Team." And dream it is. Last year, the German trade shortfall with China came in at less than 5 percent of the whopping $315 billion U.S. trade deficit with Beijing. U.S. and German exports to China were roughly comparable in 2012, but U.S. imports from China were 4.4 times bigger than what Germany bought in China.

This year the U.S. trade deficit with China will probably be even worse. China's moderating economic growth will slow down its import demand, but the continuing recovery of the U.S. economy will provide expanding markets for Chinese exports.

US Gets the Heartburn, Allies Get the Sweets

In spite of that, there are no reports that the U.S. was seriously talking trade with China during what White House called a "unique" summit meeting. We just got all those extremely contentious issues like North Korean nukes, Iranian suspected nukes, intractable conflicts in Central Asia and territorial spats in the Sea of Japan and the East and South China Seas.

All the topics that (a) exacerbate our adversarial tensions with China, (b) lead to extremely dangerous intrusions into each other's cyber space and (c) prompt our security strategists to move nearly two-thirds of our naval assets into China's neighborhood.

(Read More: This China Downturn May Be the 'Most Drawn-Out')

And then we want to build trust with China. Don't bother, say the Chinese. In a tense debate between the top American and Chinese military officials during the conference organized by the International Institute for Strategic Studies in Singapore May 31-June 2, 2013 (the "Shangri-La Dialogue"), the Chinese Major General Yao Yunzhu (she is also director of the Center for China-America Defense Relations at the People's Liberation Army) firmly declared that the U.S. policy of "rebalancing" (or "pivoting") to Asia was intended to contain China.

No wonder the Chinese want a "dream team" with Germany. During his visit to Berlin two weeks ago, Prime Minister Li urged closer cooperation in manufacturing and said that China would give Germany preferential treatment for investments in logistics, education and healthcare. That is in addition to the huge local production of German cars and top-of-the-line machinery imports, in exchange for Chinese exports of textiles, electrical goods and toys.

Interestingly, before visiting Germany, Mr Li stopped off in Switzerland to sign the framework of a free-trade agreement, the first with a west European economy. China is looking for Swiss pharmaceutical products, watches, precision machinery and food processing technology. Mr. Li also said that China envisages to make Switzerland its preferred financial center for offshore yuan trading – a piece of business fiercely contested by London and Paris, and a dig at the U.S. at a time when Washington is dismantling Switzerland's centuries old bank secrecy laws and practices.

(Read More: China Data Highlights Weak Economy, Remedies in Focus)

China Doesn't Do "Unscripted" Business

This, too, is "unscripted," as our strategic analysts would say?

Nothing is "unscripted" in Chinese global political and economic strategy. Those who think that the Chinese president came for "unscripted" talks with his chief geopolitical adversary should think again. As the Singapore "Shangri-La Dialogue" showed, Beijing has clear strategic markers about Sino-American relations. And all these "red lines" come from the Politburo - China's highest policy making forum.

Here is another detail for those who need to understand the long arm of China's party bosses. The Politburo held a special session on the economy in mid-April, instructing the government that "China needs to cement its economic growth momentum and guard against potential risks in financial sectors," adding that "macro-economic policies should be stabilized while loosening micro controls in some sectors."

These are clear marching orders – and performance evaluation criteria - for both the current economic management and economic reforms presently under way and those to come.

(Read More: Stop Fixating on Data, China Doing Fine, Says Roach)

Clearly, strategic considerations and development programs are at the heart of China's quest for a "dream team" with Germany and a preferred offshore financial center in Switzerland. Apart from the fact that Germany is eager to sell the technology China needs, and that Switzerland has the expertise and the financial infrastructure to help China's gradual introduction of the yuan as a global currency, neither country is Beijing's strategic adversary.

And here is what that means. When Mr Xi talks about new world power relationships, he clearly has in mind China's key (i.e., dominant) position in Asia. But that is the position the U.S. holds and is unwilling to relinquish. In fact, the whole "rebalancing" to Asia is part of Washington's intention to remain a dominant Asia-Pacific power. China is unlikely to mount a military challenge to the U.S. for the time being, but Mr Xi's frequent visits to various army units are assorted with impatient and widely reported exhortations to "get ready to fight and to win wars," with particular emphasis on the need "to win regional warfare under conditions shaped by information technologies."

That is a clear collision course. President Obama wants to manage that course by attempting to put an end to cyber intrusions, and by dissolving the Korean crisis through an uncertain cooperative effort to get rid of North Korean nuclear arms.

(Read More: Hard Issues On Table at Obama, Xi 'Informal' Summit)

But that is crisis management rather than a mutually acceptable and sustainable Sino-American modus vivendi. "Unscripted" summits and multi-level bilateral talking shops may be useful only if – and that may be a big if -- they are underpinned by a deeper, broader and more balanced economic engagement of the world's two largest economies.

A good place to start testing this proposition would be a fully scripted agreement at the highest level to swiftly rebalance the U.S. trade relationship with China, and to ensure a more open access for American companies to Chinese markets.

It is unfortunate that these two problems were glossed over in California.

Michael Ivanovitch is president of MSI Global, a New York-based economic research company. He also served as a senior economist at the OECD in Paris, international economist at the Federal Reserve Bank of New York and taught economics at Columbia.

For the Pentagon, information technology and software are emerging as the new acquisition frontier. Weapons systems and personnel will always have their place as necessary components of any military operation, but shaping the modern day battle space with functional and effective information technology and software platforms will be no less critical to America's future combat success.

Observers of the Pentagon's acquisition process have witnessed costly failures and delays on developing systems that are already designated as centerpieces of U.S. national defense. For instance, the benefits of the Navy's Littoral combat ship are consistently overshadowed by persistent structural and technical breakdowns, while the F-35 joint strike fighter, with its complicated software configuration, is over budget and behind schedule.

As presidents Barack Obama and Xi Jinping meet this weekend, China's aggressive actions and halting cooperation on a growing list of issues undermine the U.S. economy and national security.

Diplomacy has not yielded satisfactory results.

Beijing has not stopped manipulating its currency, pirating intellectual property or handicapping U.S. private investment in China. As a consequence, the United States has a whopping $320 billion trade deficit with China, which costs American workers about 5 million jobs and slows U.S. growth by about 50 percent.

China's actions violate its international obligations. However, American advocates of finger-pointing—such as formally calling China a currency manipulator—and of more diplomacy—such as establishing yet another framework for bi-lateral talks—fail to recognize that China won't change behavior that advantages its economy but entails few risks of retaliation.

When confronted, Beijing alibis, as an emerging economy,that it should not be required to offer U.S. exports and investment reciprocity in China. For example, to obtain U.S. food processing know-how, Shuanghui International Holdings is purchasing 100 percent of Smithfield Foods; whereas Ford Motor and General Motors are permitted only limited stakes in their Chinese joint ventures.

Yet, on major geo-political issues and even regional conflicts, such as North Korea's nuclear program and China's territorial aspirations in the East and South China Sea, Beijing expects the United States to treat it as a co-equal superpower. American recognition of such status is what President Xi is most seeking from President Obama.

To respond to Chinese challenges to the interests of Asia allies, such as Japan and the Philippines, President Obama is shifting U.S. naval resources to the Pacific. However, American influence in the region and money are necessary to implement this policy.

Asian states see the success of Chinese state-directed capitalism, relative to the floundering American performance, and that will make them increasingly reluctant to afford the U.S. Navy the bases and cooperation ultimately needed to succeed. And with the U.S. economy growing so slowly, the United States will not be able to afford the naval resources needed to counter Chinese challenges stretching from the Eastern Pacific to the Indian Ocean.

Here is why rising U.S. bond yields are arguably the most meaningful policy feedback the Federal Reserve might be looking for.

It is the correct market response to an extraordinarily loose monetary policy in a growing economy. Unfolding portfolio shifts are reflecting changing views of asset valuations. And, perhaps most importantly, expectations of rising capacity utilization rates in labor and product markets – shown by increasing nominal returns on fixed income assets – are setting up clear markers for future credit policy changes.

Briefly put, the Fed is getting a reliable signal that its policy is working.

This subtle dance offers an important advantage: Markets can continue to adjust in anticipation of a policy change without major disruptions, especially if the Fed encourages, and guides, these adjustments with occasional hints of policy intent.

Winks and Nods

That is what the Fed has been doing ever since its commitment to no policy change before the unemployment rate was brought down to 6.5 percent in 2015 began to look increasingly tenuous. As dissenting views about that got louder and more frequent within the Fed's interest rate setting forum (Federal Open Market Committee – FOMC), the recent reaffirmation of the usual data-driven policy procedures became inevitable.

Obviously, that was not lost on bond markets. They were now back on the same page with the Fed, reading the same price and activity indicators, with attention focused on employment numbers.

The hurricane season officially starts today (June 1). Ominously, the National Oceanic and Atmospheric Administration predicts an "extremely active" season with a 70 percent probability of 3 to 6 major hurricanes.

Our country is still reeling from a devastating EF5 tornado in Moore, Oklahoma and the memories of Superstorm Sandy causing $65 billion of damage and 150 deaths last fall. Indeed, after grappling with Hurricane Irene and Superstorm Sandy in successive years, Governor Cuomo commented: "We have a 100-year flood every two years."

So Jeremy Siegel says the Dow could go to 17,000; I think that's a real possibility. But before we get too euphoric, it probably makes a bit of sense to step back and try to refresh our memories on past asset rallies and collapses. It's important as investors you are not drawn into unbridled euphoria; that's just not realistic.

Remember in 1999 when the tech market was red-hot and it was obvious to experts and investors alike that the market was going to continue straight up. Remember NASDAQ 5000? Do you recall during a 3 year period the market dropped as measured by the S&P 500 over 50%? Or, the NASDAQ dropping 65 percent ?

(Read More: 5% Pullback 'Just a Matter of Time': S&P's Stovall)

Perhaps that's too long ago to recall. Remember when real estate was red-hot in 2006 and everyone was mortgaging their houses to buy rental properties on the confidence that real estate couldn't possibly go down. Real estate proceeded to drop over 50% in value in many parts of the country. So much for guaranteed appreciation.

Okay, how about something even more recent. Remember when Ben Bernanke went on 60 Minutes to reassure the world that the U.S. economy was not falling apart. He was not only reassuring the world about the economy but investors who had just endured yet another 50 percent drop in the markets.

Remember when Apple was at $700 a share? Even with a low PE ratio and $140 billion of cash, the stock still corrected downward. Understand that I'm a believer that Apple will rebound, but even we were surprised at the intensity of the downturn based on collapsing sentiment. Such is the nature of the market.

(Read More: This Chart Shows Dow Should Be Lower...a Lot Lower)

I don't mean to throw cold water on market enthusiasm or even suggest that an impending gigantic correction is inevitable. What I do want to point out is that just when the world thinks that it is inevitable that the market will go one particular direction, it sometimes goes the other way. The cry always is that this time it is different. Frankly, it's never different. History tends to repeat itself.

So with this litany of recent disasters in mind, how should one invest in today's market?

I recently wrote an article for CNBC about why I thought gold was going down. It was a pretty straightforward article, I thought, maybe even a bit dull with its echoes of Economics 101.

Well, I couldn't have imagined the response I got, which were mostly negative and angry. The experience made me wonder: why were so many people so upset with me for trying to explain why gold has been going down?

Gold peaked in September 2011 and the decline has accelerated recently, with the price down over 20 percent since last October. This is a fact. You would think that investors in gold would want to understand why it's falling so that they can decide whether to get out now or, if they think the reasons for the decline are wrong, buy more. So why get so upset? The answer to that has a lot to do with what makes someone a good investor. It's a lesson that everyone should learn if they are going to invest in anything.

(Read More: What the Silver Chart Is Telling You About Gold)

The reason is what behavioural finance calls cognitive dissonance. Cognitive dissonance is what you experience when you find out something that goes against your beliefs. The best example is the typical TV news interview with a murderer's mother. She always says what a good boy her son is, he would never do anything like that, he loves his mother, he loves his dog, etc. etc. This is normal. When faced with some new information that goes against our long-held beliefs, most people prefer to ignore the new information or rationalize it away rather than change their beliefs.

(Read More: Even Another Cyprus-Style Crisis Can't Save Gold)

The more time and effort people have invested in those beliefs, and the more costly it would be for them to admit that the new information is true, the greater the dissonance that they experience and the greater the need that they feel to reduce it. Reduce it not by changing their beliefs, but by ignoring or discrediting the new information.

So a mother, who's spent years and years raising her son and does love him, would naturally just refuse to believe that he's a murderer. And an investor who owns a lot of gold, subscribes to newsletters about gold, talks about gold with his friends, and has made a lot of money in gold in recent years, is likely to refute or reject any new information that says now might not be the best time to buy gold.

The number of ultra-high net worth individuals (UHNW) with assets of $30 million and above in Asia has increased exponentially over the past three decades, more so than in any other area. In fact 42,895 UHNW individuals in the region have a combined net worth of approximately $6.3 trillion, according to Wealth-X.

With UHNW individuals so abundant in Chinese-speaking countries, many have begun to speculate about the likelihood of the wealth management language of choice shifting from the usual English or German (or Swiss-German), to Mandarin.

(Read More: Asia Growth Drives Up Number of 'Super Rich')

Given the current financial crisis that left its mark on even the most astute of European economies, it is a real possibility. For instance, according to the International Monetary Fund (IMF), countries such as the United Kingdom, France and Germany have gross domestic product of $2.4 trillion, $2.6 trillion and $3.4 trillion, respectively, while China's is an impressive $8.2 trillion.

It is true that Chinese growth has been slowing and private banks have voiced their concern. Wealth-X points to a 2.1 percent decrease of UHNW Asian individuals since 2011; that is 915 individuals who missed the latest 2012/2013 rankings.

While it was already clear in the 1990s that the Social Security program would be facing serious financial problems, millions of state and local government workers outside of Social Security could boast that their government-provided retirement plans were doing just fine. No more. Now, most of those plans are in even worse shape than Social Security.

Government management of retirement assets has been an unmitigated disaster. The State of Illinois has an approximately $100 billion underfunded pension liability; New Jersey is looking at $47 billion gap; and California's state and local pensions are facing a $128 billion shortfall—which could grow to $327 billion if financial ratings service Moody's changes how it evaluates such plans, as it has proposed.

The city of Stockton, California, recently filed for Chapter 9 bankruptcy protection because it needs $900 million that it doesn't have to cover its pension obligations. And we will undoubtedly see many more such failures in the near future, as state and local governments rob from education and other state budgets, raise taxes or jiggle the books in an effort to fund (or hide) their massive unfunded pension obligations.