theobannion

Emerging Markets and the Global Monetary Merry-Go-Round

I find it stunning that the US is bending over backwards to do business with China, one of the world's worst human rights abusers, while keeping in place a blockade on Cuba because "it's a communist country."

I guess there are communists, and there are COMMUNISTS, some offering bigger markets than others.

SOB.

On Oct 06 09:25 PM derryl wrote:

> "I’m less sanguine than they are about decoupling – in the absence
> of a safety net it is hard to see how domestic consumer spending
> ramps up in China – but the monetary point is a fair one."
>
> The lack of a safety net is certainly a constraint but I would suggest
> that nations like China have time on their side in the effort to
> switch from exports to domestic consumption. About a billion Chinese
> still live like they have for thousands of years, poor but fairly
> self-sufficient. China plans to introduce pensions for these people
> which provides them some money to participate in the consumer economy.
> If the Chinese fund these pensions by taxing those who are currently
> using their recent riches to bid up asset prices, then bubbles can
> be constrained at the same time as the consumer base is massively
> (albeit shallowly) broadened.
>
> Decoupling was never going to be sharp and total, but I believe the
> trend will be supported by fairly intelligent Chinese fiscal policy.
> I don't know how long the monetary merry-go-round can spin either,
> but when it stops China had better be prepared to do some serious
> import buying with its newly valuable currency backed by large fx
> reserves.

Emerging Markets and the Global Monetary Merry-Go-Round

Too many northern investors see the third world (aka "emerging mkts," "develooping nations," etc.) as small USA's when we were just coming out of the depression. They have no idea how different these cultures can be from what North Americans are accustomed to. For example, after 150 years of capitalism, countries amazingly rich in resources like Peru & Argentina remain largely backwaters of poverty, despite the recent gains in their economies & their bolsas. In the former, Alberto Fujimori, a ten year "president," left the country with an estimated $919,000,000 from the national treasury. His predecessor left the country to avoid prosecution for having stolen millions from said treasury. Addicted to documenting everything, Fujimori video-taped his right-hand man, Vladimir Montessinos, shoveling huge stacks of bills out of a bag to the owners of the networks. In the US, in contrast, the networks are happy to go along w/ Washington for nothing more than the privilege and benefits of being one of the partners in the plutocracy. (I will leave you to consult your history books to see who the present president of Peru is. Hint: Discredited ex-presidents can run for office if they can sneak back into the country.)

You can go to jail for life in some of these countries for "political crimes," while men convicted of multiple homicides regularly get out after 2 or 3 years. Hard to believe I know, but it's just a matter of having your lawyer find the right judge. Often enough, the police will let you miraculously escape immediately, for a consideration of course.

I read recently how cheap Russia was at a mere 6x earnings! It had dropped to 3x at the bottom of its decline. LOL.

Russia is run by gangsters, misnamed in the press as "the Russian mafia." I doubt very much that any reputable auditor would find that the managements in these countries aren't cooking the books.

My father in law had a pile of his savings in a local bank, paying a stunning 12% interest! I told him to take it out immediately; he thought I was a very funny guy. When he finally went to make a withdrawal, he was told that he would have to wait for his money. That was almost a year ago. He's still waiting. Has the government closed the bank? Arrested someone for fraud? Is the bank offering much less on your savings?

No. Situation normal - AFU.

Best of lulck,
SOB.


Economists refuse to allow cultural elements into their prognostications, but unfortunately for unwary investors, it's necessary for their survival that they do so.

Tuesday Outlook: Commodities, Global Markets

More "rats" in DC.

SOB.


On Sep 15 08:33 AM David Fry wrote:

> ur2smart4me: Good point about the rat droppings but most seem to
> be occurring in and around Washington DC, no? Besides each state
> has Dept of Health officials counting those droppings.........those
> dirty rats!!!! And, our new Regulatory Czar thinks those rats should
> have legal representation since these counts are no doubt an invasion
> of their privacy.
>
> 86999: good point! my staff has been urging me to do this but I'm
> just a creature of habit but will now yield to what's seems the popular
> way.
>
> Re Ryu Mei: yes HAL is doing that doo-doo that he does so well.

Tuesday Outlook: Commodities, Global Markets

Sorry to keep butting in, but I should add that a lot of the presidents in these "democracies" can change the constitution with virtually the stroke of a pen. Pinochet, Washington's boy in Chile, made himself a senator for life before he "retired" from office (for disappearing thousands of his political enemies). Ain't "democracy" grand?

SOB.

Tuesday Outlook: Commodities, Global Markets

You should live in South America, David, & the US will look great w/ regard to patronage. The average public employee (related to a politician, which is how he got his job) earns 10 times what his "civilian" counterpart earns for the same job. Which is one half the reasons why pols became pols. The other half is to pocket millions in bribes and steal millions from the treasury. (Okay, so that's thirds, but you get the idea.)

LOL
SOB.

Wednesday Outlook: Commodities, Global Markets

It's good to hear someone I respect agree w/ me that we are in, and probably have been in, a manipulated mkt since mid-April at the latest - possibly since the end of March. Given any number of indicators with a high degree of correspondence with the direction of the averages, this mkt should have rolled over the second wk in April. But the heavy, and coordinated, buying of a handful of stocks can move indices regardless that the rank-and-file of stocks have been plummeting. Consider the normal drop in the COMPQ for any drop, X, in the percent of NASDAQ stocks above 50 SMA. Do the same for the normal drop for a given drop in the Bullish percent index. As for the handful of stocks: IBM represents 9% of the variance in the Dow. Four stocks dominate the NDX, which dominates the COMPQ. And many issues are listed on more than one index. IBM also figures in the S&P 500 & 100, for example. Ditto BAC. And both figure in their respective sector indices.

I was reading this AM about a head and shoulders forming in the S&P. Similar pattern in any number of other indices, based on my own work. But don't hold your breath for a break below the neckline. If one should come, proceed w/ caution, because more than likely it will be a bear trap, and the unsuspecting bear will be squeezed by the elephant members of the FOP clan - the Friends of Paulson.

"But who shall punish them, Mother?"
"Why, the GOOD people, of course."

A little Shakespeare (probably misquoted) lends a little class.

Best,
Seamus O'Bannion.

Friday Outlook: Commodities, Global Markets

If a small investor (account value less than $25,000.00) who had been labelled a "pattern day trader" had bought FAZ at 9:30 AM, liking the first half-hour's action, and wanted to cut his losses that afternoon when the price went to a new daily low, he would have been prohibited from doing so and would have had to wait until the next morning.

Isn't it great how Cox's SEC looked out for the little guy? So far, Schapiro has done nothing about the rule prohibiting the little guy from day-trading.

Most traders don't even know the rule exists.

Best,
SOB.

Stocks on the Verge of... Something

On the money. I love the amount of energy (& time) we waste listening to politicians, from their speeches to their debates. Haven't we agreed long ago that they're all liars?

SOB.


On Mar 11 04:18 AM mrbill wrote:

> "Wasn’t it the CEO of Bank of America (seekingalpha.com/symbo...)
> who said they had plenty of capital, but took billions in TARP —
> who then said the dividend was safe, but then cut it in half — who
> subsequently said the dividend is now safe, but cut it again to one
> penny?"
>
> Good point. Sadly most people, especially in the US have short term
> memories. In the US, not only can you fool us once, but several more
> times, and then some.

Global Market Performance: Nowhere to Hide

Dear Hue101,

Your EWZ has a good chance of bouncing here, as it just tagged its 200 day moving average. Target might be the fifty day MA, about 10 pints up. Then probably down again. Big inflation in Brazil & rest of SA, with increasing interest rates - never propitious for stocks. EWZ has also been underperforming the DJ Wilshire 5000 since late may.

Best,
Seamus O'Bannion.