More on the BAML survey: Just 14% of respondents expect the Chinese economy to be stronger a...

More on the BAML survey: Just 14% of respondents expect the Chinese economy to be stronger a year from now, representing "one of the sharpest falls in this reading in the survey's history." The thinking is behind a shift out of emerging equity markets (EEM. DEM, VWO) and into developed - notably the U.S. and Japan. It also coincides with a sharp correction in Chinese stocks (FXI, CAF) over the last month.

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  • tr4head
    , contributor
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    Never heard of this survey - can you tell us who sponsored and paid for it? I suspect that it is from folks scared to death of the coming massive transfer of wealth from Developed World to EMs. The view that is projected is exactly wrong and not supported by anything other than sentiment being pushed by Wall Street. The sad fact for us and Europe is that we are in a long term state of decline vis a vis EMs and their growing middle class (ours is shrinking).


    The Developed world is losing and will continue to lose long term because of massive debt and lazy citizens wanting largess from people that work. Not to mention the fact that our kids don't hold a candle to Asia in education and ability.


    China's "slowing" GDP growth rate is something we can only dream of. If you invest in the Developed world you invest in ongoing recession, more debt and massive structural changes that are unstoppable.


    The shift out of EMs has been done by institutions in the Developed world for one purpose - to slow capital flight from us to them. Shanghai composite is flat YTD while ETFs that invest in China are down 7%. This is not sustainable and the reverse correction to fundamentals cannot be stopped, now is a great opportunity to buy FXI. You cant hold it down for long, the squeeze is coming.


    Make no mistake - this so-called poll is nothing more than propoganda fostered by people in the US and Europe that want you to think EMs are too "risky". The facts are a stubborn thing and the fact is that EMs are less risky now than at anytime in history. We are going to lose the war against the "developing" world. So, if you want to make money now and in the future, short the Developed world (esp Europe) and buy EMs (esp Asia).
    19 Mar 2013, 11:31 AM Reply Like
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