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The Problem With BRIC in 2008

Thomas. Right on Enron China.

Well Washington going haywire and real cause of current state of affairs obviously. This is like Mr Bean running the United states or even worse. In fact If Mr Bean was at helm we would have at least a good economy despite all gaffes.

Now despite Mr Bean running washington US markets will by pass the washingtonian corruption. Washingon is not the capital of the USA but Iraq currently. The moment the US market makers know that fact things can improve in hours. When in bad times, they say, the common sense, gets eclipsed by panic.

The Problem With BRIC in 2008

Question is not that BRIC will implode and will have serious downfall, but when. BRIC is not following the US markets as you see, which used to be the traditional case. However despite all US markets behaviour still does impact the world markets. Once the US institutionals bring some of the world market funds back to the US, which will happen sooner than later, it will strengthen the US markets and the talk of recession will fade away.
US markets will boom very shortly. We will write about the timing on our site soon and possibly share at seekingalpha.com

Now coming back to BRIC once the US markets turn back to bullish, BRIC will have some spectacular falls.

“Chindia”: A Misleading Portfolio Concept

BRIC or Chindia are merely convenient terms but can never be considered equals. The writer is right that investors should treat each of them on their own criteria and not homogeneously.

However on longer term both have somewhat hot economies which some people think are like bubbles about to explode. But I think all these new BRIC economies and some other smaller ones will sustain a managable level of growth which will be slightly more than highly developed nations. No doubt about that.

Now expecting them to remain as hot as they are today is naive. There is certainly great economic activity in almost all developing countries specially Russia, Brazil, India and China but keep in mind that only a portion of China is really the cause of the industrial boom, which is closer to Hong Kong, more specially the next door Guangdong province. Most of the rest of the China is not growing so feverishly.

I do expect that sooner than later China will have serious political crisis and that will hinder or suddenly put a burst on all this economic boom. This will be triggered by the Chinese hegemonistic attitude towards neighbouring areas like Taiwan, Myanmar, Vietnam, India, Pakistan and Indo China and perhaps Korea. Chinese are also expected to have major political implosions internally over the next 24 months due to increasing gap between the haves and have nots.

Over all nothing is certain anywhere. Eventually the United States will emerge as the best emerging market for next 2/3 years.
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